UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM 8-K
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 11, 2000
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Cordant Technologies Inc.
(Exact name of registrant as specified in its charter)
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Delaware
(State or other jurisdiction of incorporation)
1-6179 36-2678716
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Commission File Number (IRS Employer Identification No.
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15 W. South Temple, Suite 1600, Salt Lake City, UT 84101-1532
(Address of principal executive offices) (Zip Code)
(801) 933-4000
----------------------
Registrant's Telephone Number
<PAGE>
ITEM 5 OTHER EVENTS
The following news release was issued on February 11, 2000.
CORDANT REPORTS 16 PERCENT INCREASE IN ANNUAL EARNINGS
Salt Lake City, Utah, February 11, 2000 - Cordant Technologies Inc.
reported net income of $164.4 million, or $4.39 per diluted share, for the
year ended December 31, 1999, a 16 percent increase compared to $142
million, or $3.79 per diluted share, last year. Excluding the special items
detailed in the attached schedule, earnings per diluted share from
continuing operations were $4.15, a 12 percent increase over last year.
James R. Wilson, Chairman and Chief Executive Officer, commented, "Over the
past several years, we have strategically diversified the Company so that
earnings could continue to grow in spite of downturns in the historically
cyclical commercial aircraft market. The 1999 results reflect the virtue of
that strategy as earnings grew 16 percent versus 1998 in spite of a greater
than anticipated downturn in commercial aircraft. Cordant's industrial
markets, led by Industrial Gas Turbines (IGT) continued at record levels.
The focus on lean manufacturing and customer satisfaction resulted in
outstanding operating margins at all units. During the year, we continued
to consolidate our aerospace fastener operations, significantly reducing
operating costs. We further broadened our industrial fastener product
offering with the acquisition of Continental/Midland.
"Thiokol Propulsion completed a highly successful year with record margins,
a 100 percent launch record, and a lengthy list of technical achievements
which provide a stable business base entering next year.
"The future is very bright. Cordant is well positioned in a number of
attractive markets, and we expect 2000 to be another record year."
Quarterly Net Income
Net income for the quarter ended December 31, 1999, was $36.6 million or
$.98 per share, a 24 percent increase over last year's quarterly earnings
of $29.6 million or $.80 per share. Excluding the special items in the
attached schedule, earnings per share of $.94 increased 3 percent over the
prior year's quarter earnings per share of $.91.
2
<PAGE>
Summary unaudited financial information for the twelve-months ended
December 31, follows:
<TABLE>
<CAPTION>
Better
(in millions, except per share data) 1999 1998 (Worse) Percent
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales:
Investment Castings $1,459.7 $1,350.6 $ 109.1 8
Fastening Systems 465.2 433.3 31.9 7
Propulsion Systems 588.0 643.0 (55.0) (9)
- ------------------------------------------------------------------------------------------------------------
Total sales $2,512.9 $2,426.9 $ 86.0 4
- ------------------------------------------------------------------------------------------------------------
Operating income:
Investment Castings $ 204.7 $ 185.8 $ 18.9 10
Fastening Systems 52.8 65.2 (12.4) (19)
Propulsion Systems 87.9 82.1 5.8 7
Unallocated corporate expense (25.8) (24.4) (1.4) (6)
- ------------------------------------------------------------------------------------------------------------
Total operating income 319.6 308.7 10.9 4
Interest income 7.4 12.8 (5.4) (42)
Interest expense (42.9) (28.3) (14.6) (52)
Other, net (3.5) (3.8) .3 8
Income taxes (93.4) (107.6) 14.2 13
- ------------------------------------------------------------------------------------------------------------
Income before minority interest 187.2 181.8 5.4 3
Minority interest (22.8) (39.8) 17.0 43
- ------------------------------------------------------------------------------------------------------------
Net income $ 164.4 $ 142.0 $ 22.4 16
============================================================================================================
Net income per share:
Basic $ 4.49 $ 3.89 $ .60 15
Diluted $ 4.39 $ 3.79 $ .60 16
<FN>
Results for the current year include Continental/Midland's operations which
was purchased in October 1999, the additional 22.6 percent of Howmet
ownership purchased in February 1999 and Jacobson's operations, which was
purchased in mid-June 1998.
</FN>
</TABLE>
3
<PAGE>
Summary unaudited financial information for the three-months ended December
31, follows:
<TABLE>
<CAPTION>
Better
(in millions, except per share data) 1999 1998 (Worse) Percent
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales:
Investment Castings $ 362.1 $ 354.9 $ 7.2 2
Fastening Systems 121.9 126.0 (4.1) (3)
Propulsion Systems 150.3 159.6 (9.3) (6)
- -------------------------------------------------------------------------------------------------------------
Total sales $ 634.3 $ 640.5 $(6.2) (1)
- -------------------------------------------------------------------------------------------------------------
Operating income:
Investment Castings $ 43.8 $ 31.5 $ 12.3 39
Fastening Systems 9.6 20.4 (10.8) (53)
Propulsion Systems 21.1 21.4 (.3) (1)
Unallocated corporate expense (4.5) (8.8) 4.3 49
- -------------------------------------------------------------------------------------------------------------
Total operating income 70.0 64.5 5.5 9
Interest income 1.6 2.0 (.4) (20)
Interest expense (11.9) (7.3) (4.6) (63)
Other, net (1.5) (1.0) (.5) (50)
Income taxes (16.6) (21.4) 4.8 22
- -------------------------------------------------------------------------------------------------------------
Income before minority interest 41.6 36.8 4.8 13
Minority interest (5.0) (7.2) 2.2 31
- -------------------------------------------------------------------------------------------------------------
Net income $ 36.6 $ 29.6 $ 7.0 24
=============================================================================================================
Net income per share:
Basic $ 1.00 $ .81 $ .19 23
Diluted $ .98 $ .80 $ .18 23
<FN>
Results for the current quarter include Continental/Midland's operations
which was purchased in October 1999, and the additional 22.6 percent of
Howmet ownership purchased in February 1999.
</FN>
</TABLE>
4
<PAGE>
The Company's management views continuing operations by excluding special
items that are not expected to have an impact on future operations. The
special items are detailed in the following schedules and do not qualify
for separate treatment under Generally Accepted Accounting Principles
(GAAP) and are not intended to replace the discussion of GAAP financial
statements. Rather, it is management's desire to disclose material events
that have had an impact on reported operations.
<TABLE>
<CAPTION>
Year Ended December 31
1999 1999 1998 1998
After-tax Earnings After-tax Earnings
(in millions, except per share data) Income Per Share Income Per Share
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Reported net income $164.4 $4.39 $142.0 $3.79
Special items
Howmet CDD stock option benefit (1.1) (.03)
7 percent tax dividend reversal (7.1) (.19)
Retroactive two-percent tax
rate change (5.6) (.15)
Tax refund (2.6) (.07)
Tax interest (1.8) (.05)
Huck relocation-Lakewood 3.1 .08
Huck relocation-Japan 1.9 .05
Huck relocation-Branford 1.8 .05
- ------------------------------------------------------------------------------------------------------------------
Income without special items $155.6 $4.15 $139.4 $3.72
==================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended December 31
1999 1999 1998 1998
After-tax Earnings After-tax Earnings
(in millions, except per share data) Income Per Share Income Per Share
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Reported net income $36.6 $ .98 $29.6 $.80
Special items
Retroactive two-percent tax
rate change (5.6) (.15)
Reverse 3rd Qtr Howmet SAR and
CDD stock option benefit 2.4 .06 3.9 .11
Huck relocation-Japan 1.9 .05
- ------------------------------------------------------------------------------------------------------------------
Income without special items $35.3 $ .94 $33.5 $.91
==================================================================================================================
</TABLE>
(End of News Release)
5
<PAGE>
Following are Cordant Technologies Inc.'s consolidated statements of
income, balance sheets, statements of cash flows, and statements of
stockholders' equity. The complete statements including footnotes will be
included in the Company's 2000 Notice of Annual Meeting and Proxy
Statement.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Year Ended December 31
-------------------------------------------------
(in millions, except per share data) 1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $ 2,512.9 $ 2,426.9 $ 1,070.1
Operating expenses:
Cost of sales 1,944.5 1,894.4 861.3
Selling, general and administrative 215.4 193.6 90.3
Research and development 33.4 30.2 14.8
- -----------------------------------------------------------------------------------------------------------------------
Total operating expenses 2,193.3 2,118.2 966.4
Income from operations 319.6 308.7 103.7
Equity income of affiliates 35.3
Interest income 7.4 12.8 7.0
Interest expense (42.9) (28.3) (4.0)
Other, net (3.5) (3.8) (2.2)
- -----------------------------------------------------------------------------------------------------------------------
Income before income taxes, minority interest and
extraordinary item 280.6 289.4 139.8
Income taxes (93.4) (107.6) (41.4)
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Income before minority interest and
extraordinary item 187.2 181.8 98.4
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Minority interest (22.8) (39.8) (1.8)
- -----------------------------------------------------------------------------------------------------------------------
Income before extraordinary item 164.4 142.0 96.6
Extraordinary item - loss on early retirement of debt (7.1)
- -----------------------------------------------------------------------------------------------------------------------
Net income $ 164.4 $ 142.0 $ 89.5
=======================================================================================================================
Income per share before extraordinary item:
Basic $ 4.49 $ 3.89 $ 2.64
Diluted $ 4.39 $ 3.79 $ 2.57
Net income per share:
Basic $ 4.49 $ 3.89 $ 2.45
Diluted $ 4.39 $ 3.79 $ 2.38
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
December 31
------------------------------------
(in millions) 1999 1998
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 37.1 $ 45.3
Receivables 238.0 240.0
Inventories 261.7 252.3
Deferred income taxes and prepaid expenses 67.2 60.8
Restricted Trust (a) 716.4
- ---------------------------------------------------------------------------------------------------------------------
Total Current Assets 604.0 1,314.8
Property, Plant and Equipment
Land 36.8 36.9
Buildings and improvements 365.0 311.2
Machinery and equipment 857.9 768.6
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Total Property, Plant and Equipment 1,259.7 1,116.7
Less allowances for depreciation (504.7) (444.4)
- ---------------------------------------------------------------------------------------------------------------------
Net Property, Plant and Equipment 755.0 672.3
Other Assets
Costs in excess of net assets of businesses acquired, net 903.8 561.7
Patents and other intangible assets, net 104.7 128.3
Other noncurrent assets 114.5 132.8
- ---------------------------------------------------------------------------------------------------------------------
Total Other Assets 1,123.0 822.8
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
Total Assets $ 2,482.0 $ 2,809.9
=====================================================================================================================
<FN>
(a) The Restricted Trust held a note receivable from Pechiney, S.A. and
related letters of credit that secured Pechiney, S.A.'s agreement to
repay the Pechiney Notes. Pechiney S.A. (Howmet's previous owner) paid
the notes on January 4, 1999, and the Restricted Trust was terminated.
No Howmet or Cordant Technologies funds were used in the payment of
the Notes.
</FN>
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
December 31
------------------------------------
(in millions) 1999 1998
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Short-term debt $ 83.6 $ 80.1
Accounts payable 137.6 139.8
Accrued compensation 102.3 81.6
Other accrued expenses 216.9 202.1
Pechiney Notes (a) 716.4
- ---------------------------------------------------------------------------------------------------------------------------
Total Current Liabilities 540.4 1,220.0
Noncurrent Liabilities
Accrued retiree benefits 174.1 169.0
Deferred income taxes 61.5 52.3
Accrued interest and other noncurrent liabilities 211.6 234.2
Long-term debt 601.3 324.5
- ---------------------------------------------------------------------------------------------------------------------------
Total Noncurrent Liabilities 1,048.5 780.0
Commitments and contingent liabilities
Minority interest 77.0 142.0
Stockholders' Equity
Common stock (par value $1.00 per share) Authorized - 200 shares
Issued - 41.1 at December 31, 1999 and 1998
(includes treasury shares) 41.1 41.1
Additional paid-in capital 48.0 47.4
Retained earnings 808.5 658.8
Accumulated other comprehensive income (loss) (10.0) (3.9)
- ---------------------------------------------------------------------------------------------------------------------------
887.6 743.4
Less common stock in treasury, at cost
(4.4 and 4.6 shares at December 31, 1999 and 1998, respectively) (71.5) (75.5)
- ---------------------------------------------------------------------------------------------------------------------------
Total Stockholders' Equity 816.1 667.9
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $ 2,482.0 $ 2,809.9
===========================================================================================================================
<FN>
(a) The Restricted Trust held a note receivable from Pechiney, S.A. and
related letters of credit that secured Pechiney, S.A.'s agreement to
repay the Pechiney Notes. Pechiney S.A. (Howmet's previous owner) paid
the Notes on January 4, 1999, and the Restricted Trust was terminated.
No Howmet or Cordant Technologies funds were used in the payment of
the Notes.
</FN>
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Year Ended December 31
------------------------------------------------
(in millions) 1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income $ 164.4 $ 142.0 $ 89.5
Adjustments to reconcile net income to net cash
provided by operating activities:
Extraordinary item 7.1
Minority interest 22.8 39.8 1.8
Depreciation 80.1 71.9 33.8
Amortization 38.5 30.1 12.5
Equity income (35.3)
Deferred income taxes (9.9) 1.4 (3.4)
Changes in operating assets and liabilities:
Receivables 9.1 28.1 25.2
Inventories .5 14.6 (1.5)
Accounts payable and accrued expenses (15.5) .3 5.1
Income taxes 12.1 18.4 (12.1)
Advance on accounts receivable 40.0
Other - net 23.9 6.6 (12.1)
- ------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 366.0 353.2 110.6
INVESTING ACTIVITIES
Acquisitions (468.8) (277.0) (156.6)
Purchases of property, plant and equipment (152.0) (114.7) (36.3)
Proceeds from disposal of assets 1.8 4.7 1.7
- ------------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (619.0) (387.0) (191.2)
FINANCING ACTIVITIES
Net change in short-term debt 8.6 57.9 1.4
Issuance of long-term debt 550.0 336.4 336.2
Repayment of long-term debt (300.0) (337.9) (213.5)
Premiums paid on early retirement of debt (13.7)
Purchase of common stock for treasury (14.4) (7.9)
Stock option transactions 4.6 4.8 6.1
Dividends paid (14.7) (14.6) (14.1)
- ------------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 248.5 32.2 94.5
Foreign currency rate changes (3.7) 1.3 (1.0)
- ------------------------------------------------------------------------------------------------------------------------
(Decrease) increase in cash and cash equivalents (8.2) (.3) 12.9
Cash and cash equivalents at beginning of year 45.3 45.6 32.7
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year $ 37.1 $ 45.3 $ 45.6
========================================================================================================================
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
Accumulated
Additional Other Total
Common Paid-In Retained Treasury Comprehensive Stockholders'
(in millions) Stock Capital Earnings Stock Income Equity
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1996 $20.5 $44.3 $476.6 $(61.0) $480.4
- -----------------------------------------------------------------------------------------------------------------------------
Comprehensive income
Net income 89.5 89.5
Other comprehensive income $(3.5) (3.5)
--------------
Cumulative translation adjustment 86.0
--------------
Total comprehensive income
Dividends paid (14.1) (14.1)
Treasury stock purchases (7.9) (7.9)
Stock options exercised and related
income tax benefits 1.7 4.4 6.1
- -----------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1997 20.5 46.0 552.0 (64.5) (3.5) 550.5
- -----------------------------------------------------------------------------------------------------------------------------
Comprehensive income
Net income 142.0 142.0
Other comprehensive income
Minimum pension liability (3.1) (3.1)
Cumulative translation adjustment 2.7 2.7
--------------
Total comprehensive income 141.6
--------------
Dividends paid (14.6) (14.6)
Stock split 20.6 (20.6)
Treasury stock purchases (14.4) (14.4)
Stock options exercised and related
income tax benefits 1.4 3.4 4.8
- -----------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1998 41.1 47.4 658.8 (75.5) (3.9) 667.9
- -----------------------------------------------------------------------------------------------------------------------------
Comprehensive income
Net income 164.4 164.4
Other comprehensive income
Minimum pension liability 3.4 3.4
Unrealized gains on securities 1.2 1.2
Cumulative translation adjustment (10.7) (10.7)
--------------
Total comprehensive income 158.3
--------------
Dividends paid (14.7) (14.7)
Stock options exercised and related
income tax benefits .6 4.0 4.6
- -----------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1999 $41.1 $48.0 $808.5 $(71.5) $(10.0) $816.1
=============================================================================================================================
</TABLE>
10
<PAGE>
Following is additional unaudited supplemental information:
Cash Flow Data
The following tables provide cash flow data for both Cordant Technologies
and Howmet as neither company has access to the other's cash balances.
<TABLE>
<CAPTION>
Selected Financial Data
For the three months ended December 31
1999 1998
-----------------------------------------------------------------------------------------------
(in millions) Cordant Howmet Consolidated Cordant Howmet Consolidated
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net cash provided by
operating activities $61.1 $108.4 $169.5 $49.3 $97.3 $146.6
Capital expenditures (11.7) (25.2) (36.9) (8.5) (28.3) (36.8)
Dividends (3.7) (3.7) (3.6) (3.6)
- -----------------------------------------------------------------------------------------------------------------------------
$45.7 $83.2 $128.9 $37.2 $69.0 $106.2
=============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Selected Financial Data
For the twelve months ended December 31
1999 1998
-----------------------------------------------------------------------------------------------
(in millions) Cordant Howmet Consolidated Cordant Howmet Consolidated
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net cash provided by
operating activities $133.1 $232.9 $366.0 $145.8 $207.4 $353.2
Capital expenditures (39.1) (112.9) (152.0) (31.7) (83.0) (114.7)
Dividends (14.7) (14.7) (14.6) (14.6)
- -----------------------------------------------------------------------------------------------------------------------------
$ 79.3 $120.0 $199.3 $ 99.5 $124.4 $223.9
=============================================================================================================================
Total debt(a) $639.2 $ 45.7 $684.9 $313.6 $ 91.0 $404.6
Less cash & cash
Equivalents (2.3) 39.4 37.1 7.7 37.6 45.3
- -----------------------------------------------------------------------------------------------------------------------------
$641.5 $ 6.3 $647.8 $305.9 $ 53.4 $359.3
=============================================================================================================================
<FN>
(a) Excludes Pechiney note payable from 1998 data.
</FN>
</TABLE>
11
<PAGE>
Book to Bill Ratios
Fastening Systems book-to-bill ratios, defined as period orders divided by
period shipments, for the quarter ended December 31, were as follows:
<TABLE>
<CAPTION>
1999 1998
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Aerospace .91 .72
Industrial .98 1.05
Total .96 .92
</TABLE>
Fastening Systems book-to-bill ratios, for the twelve months ended December
31, were as follows:
<TABLE>
<CAPTION>
1999 1998
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
Aerospace .82 .84
Industrial .99 1.00
Total .94 .93
</TABLE>
Book to bill ratios are used as an indicator of future sales, but as with
all indicators, has inherent limitations and actual results may be
different. This is not a GAAP disclosure, and other companies may calculate
this ratio differently and utilize the ratio for different purposes.
SUMMARY OF OPERATIONS BY BUSINESS SEGMENT
Investment Castings Contribution up 74 Percent
Howmet contributed income, after minority interest and taxes, of $113.9
million, or $3.04 per share, a 74 percent increase compared to $65.6
million, or $1.75 per share, last year. The increase is due primarily to
the Company's ownership increase from 62 percent last year to 84.6 percent
in February 1999, and to Howmet's 24 percent increase in net income.
Howmet's sales increased eight percent over the prior year due to increased
component demand for large industrial gas turbines (IGT) used for
electrical power generation. The increase in net income resulted from the
higher IGT sales, improved operating margins, and lower interest expense.
12
<PAGE>
Fastening Systems
Huck Fastening Systems sales for the year increased by $31.9 million, or 7
percent, from the prior year reflecting the additional sales provided by
the Continental/Midland (acquired on October 1, 1999) and Jacobson
(acquired on June 11, 1998) acquisitions. Sales in the industrial market
increased 11 percent over the prior year excluding the additional sales
provided by the Continental/Midland and Jacobson acquisitions. Sales in the
aerospace market decreased 30 percent from the prior year primarily from
weak domestic aerospace demand. Excluding the additional sales provided by
the Continental/Midland and Jacobson acquisitions, Fastening Systems total
sales decreased 11 percent from the prior year.
During the fourth quarter a $3 million pre-tax relocation charge was taken
to close and relocate the selling and marketing office in Japan to an
existing marketing office in Australia. Excluding the additional operating
income provided by the Continental/Midland and Jacobson acquisitions, the
current year's $5 million pre-tax charge to close and relocate the
Lakewood, California facility, the $3 million pre-tax Japan relocation
charge, and the prior year's $3 million pre-tax charge to close and
relocate an industrial fastener facility, Fastening Systems operating
income decreased $17 million or 29 percent from last year. The lower
operating income resulted primarily from lower aerospace sales and margins.
Operating margins for the year were 13.1 percent, compared to 15.7 percent
last year, excluding the relocation charges in both years.
Propulsion Systems Operating Income Up 7 Percent
Propulsion Systems sales decreased $55 million or 9 percent for the year
ended December 31, 1999, compared to last year, primarily from lower sales
in the Space Shuttle Reusable Solid Rocket Motors (RSRM), commercial launch
motor, and Trident programs. The lower RSRM sales resulted from the
transition to the Buy 4 contract from the Buy 3 contract. Operating income
increased $5.8 million or 7 percent over the prior year. Higher income from
increased RSRM and ordnance program margins were partially offset by lower
commercial launch motor and Trident operating income. Propulsion systems
operating margins were 15 percent compared to 12.8 percent in 1998.
13
<PAGE>
General
Interest expense increased $14.6 million over the prior year period, due to
the increased debt used to finance the Jacobson and Continental/Midland
acquisitions and Howmet common stock purchases. Unallocated corporate
expense in the current quarter was $4.3 million lower than last year's
quarter primarily from lower advertising expenditures.
Income Taxes
In 1999, the Company had an effective income tax rate of 33.3 percent,
compared with 37.2 percent in 1998. The lower tax rate in the current year
resulted from higher foreign sales corporation benefits and the reversal of
the $7.1 million or $.19 per share tax on accumulated dividends previously
accrued on the Company's share of Howmet income. Beginning in February
1999, Howmet's taxable income has been included in the Company's
consolidated Federal income tax return, and the dividend tax is no longer
required on the Company's share of Howmet's income. Results for the fourth
quarter include a two-percent retroactive tax rate change of $5.6 million
or $.15 per share resulting from the higher foreign sales corporation
benefits and from legislation extending the research and development tax
credit to June 2004.
Line of Credit Announcement
On February 9, 2000 the Company terminated its senior bank credit
facilities and replaced them with a new $1 billion revolving bank credit
facility. The new facility will be used to refinance existing bank debt and
for general corporate purposes. The credit facility matures in February
2001, ($400 million) and February 2005 ($600 million). Approximately $500
million was drawn on the long-term facility on February 9, 2000. The
interest rate on the facility is based on London Interbank Offered Rate
(LIBOR) plus a spread and was 6.6 percent on February 9, 2000. This new
credit line agreement resulted in reclassifying $300 million of current
portion of long-term debt to long-term debt at December 31, 1999.
Year 2000 Remediation
The Company did not experience any significant production or information
disruption as a result of Year 2000.
14
<PAGE>
This Form 8-K includes or incorporates by reference forward-looking
statements within the meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act. Forward-looking statements, which are
based on assumptions and describe the Company's future plans, strategies
and expectations, are generally identifiable by the use of the words
"anticipate," "believe," "estimate," "expect," "intend," "project," or
similar expressions. These forward-looking statements are subject to risks,
uncertainties, and assumptions about the Company. Important factors that
could cause actual results to differ materially from the forward-looking
statements made in this document are set forth under the caption "Risk
Factors" and elsewhere in the Company's filings with the Securities and
Exchange Commission. If one or more of these risks or uncertainties
materialize, or if any underlying assumptions prove incorrect, the
Company's actual results, performance or achievements may vary materially
from any future results, performance or achievements expressed or implied
by these forward-looking statements. All forward-looking statements
attributable to the Company, or persons acting on the Company's behalf, are
expressly qualified in their entirety by the cautionary statements in this
paragraph. The Company undertakes no obligation to publicly update or
revise any forward-looking statements to reflect future events or
developments.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS ON FORM 8-K
EXHIBITS
Exhibit 10 Material Contracts
10.0 5-Year Revolving Credit Agreement, dated as of February 9, 2000
among CORDANT TECHNOLOGIES INC., the Lenders, BANK ONE, NA and
the Administrative Agent, ABN AMRO BANK N.V. and WACHOVIA BANK,
N.A., as Co-Documentation Agents.
10.1 364-Day Revolving Credit Agreement, dated as of February 9, 2000
among CORDANT TECHNOLOGIES, INC. the Lenders, BANK ONE, NA, as
Administrative Agent, ABN AMRO BANK N.V., as Syndication Agent
and BANK OF AMERICA, N.A. and WACHOVIA BANK, N.A., as
Co-Documentation Agents.
15
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
CORDANT TECHNOLOGIES INC.
(Registrant)
By: /S/ Richard L. Corbin
-------------------------
Richard L. Corbin
Executive Vice President and
Chief Financial Officer
Date: February 11, 2000
16
<PAGE>
EXECUTION COPY
===========================================================================
===========================================================================
5-YEAR REVOLVING
CREDIT AGREEMENT
Dated as of February 9, 2000
among
CORDANT TECHNOLOGIES INC.
THE INSTITUTIONS FROM TIME TO TIME
PARTIES HERETO AS LENDERS,
BANK ONE, NA,
as Administrative Agent
ABN AMRO BANK N.V.,
as Syndication Agent
and
BANK OF AMERICA, N.A.
and
WACHOVIA BANK, N.A.,
as Co-Documentation Agents
BANC ONE CAPITAL MARKETS, INC.,
as Lead Arranger and Sole Book Manager
and
ABN AMRO BANK N.V.,
BANK OF AMERICA, N.A.
and
WACHOVIA BANK, N.A.
as Co-Arrangers
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SIDLEY & AUSTIN
Bank One Plaza
10 South Dearborn Street
Chicago, Illinois 60603
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TABLE OF CONTENTS
ARTICLE I: DEFINITIONS...................................................1
ARTICLE II: THE CREDITS.................................................18
2.1. COMMITMENT....................................................18
2.2. SWING LINE LOANS..............................................18
2.3. REQUIRED PAYMENTS; TERMINATION................................20
2.4. RATABLE LOANS.................................................20
2.5. TYPES OF ADVANCES.............................................20
2.6. FACILITY FEE; REDUCTIONS IN AGGREGATE COMMITMENT..............20
2.7. UTILIZATION FEE...............................................21
2.8. MINIMUM AMOUNT OF EACH ADVANCE................................21
2.9. OPTIONAL PRINCIPAL PAYMENTS...................................21
2.10. METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR NEW
ADVANCES.....................................................21
2.11. CONVERSION AND CONTINUATION OF OUTSTANDING ADVANCES..........22
2.12. CHANGES IN INTEREST RATE, ETC................................22
2.13. RATES APPLICABLE AFTER DEFAULT...............................23
2.14. METHOD OF PAYMENT............................................23
2.15. NOTELESS AGREEMENT; EVIDENCE OF INDEBTEDNESS.................24
2.16. TELEPHONIC NOTICES...........................................24
2.17. INTEREST PAYMENT DATES; INTEREST AND FEE BASIS...............24
2.18. NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND
COMMITMENT REDUCTION.........................................25
2.19. LENDING INSTALLATIONS........................................25
2.20. NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT.............25
2.21. REPLACEMENT OF CERTAIN LENDERS...............................26
ARTICLE III: THE LETTER OF CREDIT FACILITY..............................26
3.1. OBLIGATION TO ISSUE...........................................26
3.2. TYPES AND AMOUNTS.............................................27
3.3. CONDITIONS....................................................27
3.4. PROCEDURE FOR ISSUANCE OF FACILITY LCS........................28
3.5. FACILITY LC PARTICIPATION.....................................28
3.6. REIMBURSEMENT OBLIGATION......................................29
3.7. CASH COLLATERAL...............................................29
3.8. FACILITY LC FEES..............................................29
3.9. LC ISSUER REPORTING REQUIREMENTS..............................30
3.10. INDEMNIFICATION; EXONERATION.................................30
ARTICLE IV: YIELD PROTECTION; TAXES.....................................31
4.1. YIELD PROTECTION..............................................31
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4.2. CHANGES IN CAPITAL ADEQUACY REGULATIONS.......................32
4.3. AVAILABILITY OF TYPES OF ADVANCES.............................33
4.4. FUNDING INDEMNIFICATION.......................................33
4.5. TAXES.........................................................33
4.6. LENDER STATEMENTS; SURVIVAL OF INDEMNITY......................34
ARTICLE V: CONDITIONS PRECEDENT.........................................35
5.1. INITIAL CREDIT EXTENSIONS.....................................35
5.2. EACH CREDIT EXTENSION.........................................36
ARTICLE VI: REPRESENTATIONS AND WARRANTIES..............................37
6.1. EXISTENCE AND STANDING........................................37
6.2. AUTHORIZATION AND VALIDITY....................................37
6.3. NO CONFLICT; GOVERNMENT CONSENT...............................38
6.4. FINANCIAL STATEMENTS..........................................39
6.5. MATERIAL ADVERSE CHANGE.......................................39
6.6. TAXES.........................................................39
6.7. LITIGATION AND CONTINGENT OBLIGATIONS.........................39
6.8. SUBSIDIARIES..................................................39
6.9. ERISA; FOREIGN PENSION PLAN MATTERS...........................40
6.10. ACCURACY OF INFORMATION......................................40
6.11. SECURITIES ACTIVITIES........................................40
6.12. MATERIAL AGREEMENTS..........................................40
6.13. COMPLIANCE WITH LAWS.........................................40
6.14. OWNERSHIP OF PROPERTIES......................................41
6.15. PLAN ASSETS; PROHIBITED TRANSACTIONS.........................41
6.16. ENVIRONMENTAL MATTERS........................................41
6.17. INVESTMENT COMPANY ACT.......................................41
6.18. PUBLIC UTILITY HOLDING COMPANY ACT...........................41
ARTICLE VII: COVENANTS..................................................41
7.1. FINANCIAL REPORTING...........................................41
7.2. USE OF PROCEEDS...............................................43
7.3. NOTICE OF DEFAULT.............................................44
7.4. CONDUCT OF BUSINESS...........................................44
7.5. TAXES.........................................................44
7.6. INSURANCE.....................................................44
7.7. COMPLIANCE WITH LAWS..........................................45
7.8. MAINTENANCE OF PROPERTIES.....................................45
7.9. INSPECTION....................................................45
7.10. SUBSIDIARY INDEBTEDNESS......................................45
7.11 MERGER........................................................46
7.12. SALE OF ASSETS...............................................46
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7.13. INVESTMENTS AND ACQUISITIONS; NEW SUBSIDIARIES;
DOCUMENTATION BY HOWMET COMPANIES............................47
7.14. LIENS........................................................49
7.15. AFFILIATES...................................................52
7.16. FINANCIAL CONTRACTS..........................................52
7.17. NON-GUARANTOR OR PLEDGED SUBSIDIARIES........................52
7.18. FINANCIAL COVENANTS..........................................52
7.19. SUBSIDIARY COVENANTS.........................................53
ARTICLE VIII: DEFAULTS..................................................53
ARTICLE IX: ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES...............56
9.1. ACCELERATION..................................................56
9.2. AMENDMENTS....................................................56
9.3. PRESERVATION OF RIGHTS........................................57
ARTICLE X: GENERAL PROVISIONS...........................................58
10.1. SURVIVAL OF REPRESENTATIONS..................................58
10.2. GOVERNMENTAL REGULATION......................................58
10.3. HEADINGS.....................................................58
10.4. ENTIRE AGREEMENT.............................................58
10.5. SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT..............58
10.6. EXPENSES; INDEMNIFICATION....................................58
10.7. NUMBERS OF DOCUMENTS.........................................59
10.8. ACCOUNTING...................................................60
10.9. SEVERABILITY OF PROVISIONS...................................60
10.10. NONLIABILITY OF LENDERS.....................................60
10.11. CONFIDENTIALITY.............................................61
10.12. NONRELIANCE.................................................61
10.13. SUBORDINATION OF INTERCOMPANY INDEBTEDNESS..................61
ARTICLE XI: THE ADMINISTRATIVE AGENT....................................62
11.1. APPOINTMENT; NATURE OF RELATIONSHIP..........................62
11.2. POWERS.......................................................63
11.3. GENERAL IMMUNITY.............................................63
11.4. NO RESPONSIBILITY FOR LOANS, RECITALS, ETC...................63
11.5. ACTION ON INSTRUCTIONS OF LENDERS............................63
11.6. EMPLOYMENT OF ADMINISTRATIVE AGENTS AND COUNSEL..............64
11.7. RELIANCE ON DOCUMENTS; COUNSEL...............................64
11.8. ADMINISTRATIVE AGENT'S REIMBURSEMENT AND INDEMNIFICATION.....64
11.9. NOTICE OF DEFAULT............................................64
11.10. RIGHTS AS A LENDER..........................................65
11.11. LENDER CREDIT DECISION......................................65
11.12. SUCCESSOR ADMINISTRATIVE AGENT..............................65
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11.13. AGENTS' AND ARRANGERS' FEES.................................66
11.14. DELEGATION TO AFFILIATES....................................66
11.15. EXECUTION OF COLLATERAL DOCUMENTS...........................66
11.16. COLLATERAL AND GUARANTY RELEASES............................66
ARTICLE XII: SETOFF; RATABLE PAYMENTS...................................67
12.1. SETOFF.......................................................67
12.2. RATABLE PAYMENTS.............................................67
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS.........67
13.1. SUCCESSORS AND ASSIGNS.......................................67
13.2. PARTICIPATIONS...............................................68
13.3. ASSIGNMENTS..................................................69
13.4. DISSEMINATION OF INFORMATION.................................70
13.5. TAX TREATMENT................................................70
ARTICLE XIV: NOTICES....................................................70
14.1. NOTICES......................................................70
14.2. CHANGE OF ADDRESS............................................71
ARTICLE XV: COUNTERPARTS................................................71
ARTICLE XVI: CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY
TRIAL......................................................71
16.1. CHOICE OF LAW................................................71
16.2. CONSENT TO JURISDICTION......................................71
16.3. WAIVER OF JURY TRIAL.........................................72
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SCHEDULES AND EXHIBITS
PRICING SCHEDULE
COMMITMENT SCHEDULE
SCHEDULE 1 Litigation and Contingent Obligations
SCHEDULE 2 Subsidiaries
SCHEDULE 3 Indebtedness and Liens
SCHEDULE 4 Investments
SCHEDULE 5 Transactions with Affiliates
EXHIBIT A Form of Note
EXHIBIT B Form of Pledge Agreement
EXHIBIT C Form of Subsidiary Guaranty
EXHIBIT D Form of Assignment Agreement
EXHIBIT E Money Transfer Instructions
EXHIBIT F Form of Compliance Certificate
EXHIBIT G Form of Swing Line Note
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5-YEAR REVOLVING CREDIT AGREEMENT
This 5-Year Revolving Credit Agreement, dated as of February 9, 2000,
is among CORDANT TECHNOLOGIES INC., a Delaware corporation, the Lenders,
BANK ONE, NA, having its principal office in Chicago, Illinois, as an LC
Issuer, the Swing Line Lender and the Administrative Agent, ABN AMRO BANK
N.V., as Syndication Agent and BANK OF AMERICA, N.A. AND WACHOVIA BANK,
N.A., as Co-Documentation Agents. The parties hereto agree as follows:
ARTICLE I: DEFINITIONS
As used in this Agreement:
"ACCOUNTING CHANGE" is defined in SECTION 10.8 hereof.
"ACQUISITION" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which
the Borrower or any of its Subsidiaries (i) acquires any going business
concern or all or substantially all of the assets of any firm, corporation
or limited liability company, or division thereof, whether through purchase
of assets, merger or otherwise or (ii) directly or indirectly acquires (in
one transaction or as the most recent transaction in a series of
transactions) at least a majority (in number of votes) of the securities of
a corporation which have ordinary voting power for the election of
directors (other than securities having such power only by reason of the
happening of a contingency) or a majority (by percentage or voting power)
of the outstanding ownership interests of a partnership or limited
liability company.
"ADMINISTRATIVE AGENT" means Bank One, NA, in its capacity as
contractual representative of the Lenders pursuant to ARTICLE XI, and not
in its individual capacity as a Lender, and any successor Administrative
Agent appointed pursuant to ARTICLE XI.
"ADVANCE" means a borrowing hereunder (or conversion or continuation
thereof) consisting of the aggregate amount of the several Syndicated Loans
made on the same Borrowing Date (or date of conversion or continuation) by
the Lenders to the Borrower of the same Type and, in the case of Eurodollar
Advances, for the same Interest Period.
"AFFILIATE" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with such
Person. A Person shall be deemed to control another Person if the
controlling Person owns 10% or more of any class of voting securities (or
other ownership interests) of the controlled Person or possesses, directly
or indirectly, the power to direct or cause the direction of the management
or policies of the controlled Person, whether through ownership of stock,
by contract or otherwise.
"AGENTS" means the Administrative Agent, the Syndication Agent and the
Co-Documentation Agents.
"AGGREGATE COMMITMENT" means the aggregate of the Commitments of all
the Lenders, as reduced from time to time pursuant to the terms hereof. The
initial Aggregate Commitment is Six Hundred Million and 00/100 Dollars
($600,000,000).
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"AGGREGATE OUTSTANDING LC EXPOSURE" means, as of any day, the
aggregate of the Outstanding LC Exposure of all the Lenders.
"AGGREGATE OUTSTANDING CREDIT EXPOSURE" means, as of any day, the
aggregate of the Outstanding Credit Exposure of all the Lenders.
"AGREEMENT" means this 5-Year Revolving Credit Agreement, as it may be
amended, modified, supplemented or restated and in effect from time to
time.
"AGREEMENT ACCOUNTING PRINCIPLES" means generally accepted accounting
principles as in effect in the United States from time to time, applied in
a manner consistent with that used in preparing the financial statements of
the Borrower referred to in SECTION 6.4 hereof, PROVIDED, HOWEVER, except
as provided in SECTION 10.8, with respect to the calculation of financial
ratios and other financial tests required by this Agreement, "Agreement
Accounting Principles" means generally accepted accounting principles as in
effect in the United States as of the date of this Agreement, applied in a
manner consistent with that used in preparing the financial statements of
the Borrower referred to in SECTION 6.4 hereof.
"ALTERNATE BASE RATE" means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day and (ii) the sum of
the Federal Funds Effective Rate for such day plus 1/2% per annum.
"ANNUAL AUDITED FINANCIAL STATEMENTS" is defined in SECTION 7.1(I)(A).
"APPLICABLE FACILITY FEE RATE" means, at any time, the percentage rate
per annum at which Facility Fees are accruing on the Aggregate Commitment
(without regard to usage) at such time as set forth in the Pricing
Schedule.
"APPLICABLE LC FEE PERCENTAGE" means, at any time, the percentage rate
per annum equal to the Applicable Margin with respect to Eurodollar
Advances in effect on such date as set forth in the Pricing Schedule.
"APPLICABLE MARGIN" means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.
"ARRANGERS" means Banc One Capital Markets, Inc., as lead arranger and
sole book manager and ABN AMRO Bank N.V., Bank of America, N.A. and
Wachovia Bank, N.A., as co-arranger, and their successors.
"ARTICLE" means an article of this Agreement unless another document
is specifically referenced.
"AUTHORIZED OFFICER" means any of the President, the Chief Financial
Officer or the Treasurer of the Borrower, acting singly.
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"AVAILABLE AGGREGATE COMMITMENT" means, for any day, the Aggregate
Commitment then in effect MINUS the sum of (i) the aggregate outstanding
principal amount of the Advances; (ii) the aggregate outstanding principal
amount of the Swing Line Loans; and (iii) the Aggregate Outstanding LC
Exposure.
"BANK ONE" means Bank One, NA, in its individual capacity, and its
successors.
"BORROWER" means Cordant Technologies Inc., a Delaware corporation,
and its successors and assigns.
"BORROWING DATE" means a date on which an Advance or Swing Line Loan
is made hereunder.
"BORROWING NOTICE" is defined in SECTION 2.10.
"BUSINESS DAY" means (i) with respect to any borrowing, payment or
rate selection of Eurodollar Advances, a day (other than a Saturday or
Sunday) on which banks generally are open in Chicago and New York for the
conduct of substantially all of their commercial lending activities and on
which dealings in United States dollars are carried on in the London
interbank market and (ii) for all other purposes, a day (other than a
Saturday or Sunday) on which banks generally are open in Chicago for the
conduct of substantially all of their commercial lending activities.
"CAPITALIZED LEASE" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such
Person prepared in accordance with Agreement Accounting Principles,
consistently applied.
"CAPITALIZED LEASE OBLIGATIONS" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as
a liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles, consistently applied.
"CASH EQUIVALENT INVESTMENTS" means, as to any Person, (i) securities
issued or directly and fully guaranteed or insured by the United States or
any agency or instrumentality thereof (PROVIDED that the full faith and
credit of the United States is pledged in support thereof) having
maturities of not more than one year from the date of acquisition, (ii)
time deposits and certificates of deposit of any investment grade
commercial bank having, or which is the principal banking subsidiary of an
investment grade bank holding company organized under the laws of the
United States, any State thereof, the District of Columbia or any foreign
jurisdiction having capital, surplus and undivided profits aggregating in
excess of $500,000,000, with maturities of not more than one year from the
date of acquisition by such Person, (iii) repurchase obligations with a
term of not more than 90 days for underlying securities of the types
described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (ii) above, provided that such
repurchase obligations are secured by a first priority security interest in
such underlying securities which have, on the date of purchase thereof, a
fair market value of at least 100% of the amount of the repurchase
obligations, (iv) commercial paper issued by any Person incorporated in the
United States rated at least A-1 or the equivalent thereof by S&P or at
least
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P-1 or the equivalent thereof by Moody's and in each case maturing not more
than one year after the date of acquisition by such Person, (v) investments
in money market funds substantially all of the assets of which are
comprised of securities of the types described in clauses (i) through (iv)
above and (vi) demand deposit accounts maintained in the ordinary course of
business.
"CHANGE" is defined in SECTION 4.2.
"CHANGE IN CONTROL" means:
(i) any "person" or "group" (as such terms are used in SECTIONS 13(D)
and 14(D) of the Securities Exchange Act of 1934), is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, except that a person shall be deemed to
have "beneficial ownership" of all securities that such person has the
right to acquire, whether such right is exercisable immediately or only
after the passage of time), directly or indirectly, of thirty percent
(30.0%) or more of the combined voting power of the Borrower's capital
stock ordinarily having the right to vote at an election of directors;
(ii) during any period of twelve consecutive calendar months,
individuals (a) who were directors of the Borrower on the first day of such
period, or (b) whose election or nomination for election to the board of
directors of the Borrower was recommended or approved by at least a
majority of the directors then still in office who were directors of the
Borrower on the first day of such period, or whose election or nomination
for election was so approved, shall cease to constitute a majority of the
board of directors of the Borrower;
(iii) any "Change of Control" (or similar definition) under and as
defined in any credit agreement, note, indenture or similar agreement or
instrument where the principal amount outstanding aggregates at least
$20,000,000 shall occur provided the effect of such "Change of Control"
thereunder is to cause, or to permit the holder or holders of such
Indebtedness to cause, such Indebtedness or any part thereof to become due
prior to its stated maturity, to cause or permit the holder or holders
thereof to require such Indebtedness to be prepaid or repurchased or a
sinking fund established therefor or any such Indebtedness shall as a
result thereof be declared to be due and payable or required to be prepaid
or repurchased or a sinking fund established therefor prior to the stated
maturity thereof.
"CLOSING DATE" means the date on which the initial Loans are advanced
hereunder.
"CODE" means the Internal Revenue Code of 1986, as amended, reformed
or otherwise modified from time to time.
"COLLATERAL DOCUMENTS" means, collectively, each of the Pledge
Agreements, together with the documents, instruments and agreements
executed in connection therewith.
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"COMBINED COMMITMENT" means the sum of (1) the Aggregate Commitment
hereunder and (2) the "Aggregate Commitment" under and as defined in the
364-Day Credit Agreement.
"COMBINED UTILIZED AMOUNT" means the sum of (1) the aggregate
principal amount of all Loans and LC Obligations hereunder and (2) the
aggregate principal amount of all "Loans" under and as defined in the
364-Day Credit Agreement.
"COMMITMENT" means, for each Lender, the obligation of such Lender to
make Syndicated Loans and participate in Facility LCs and Swing Line Loans
in the aggregate not exceeding the amount set forth opposite its name on
the Commitment Schedule attached hereto and made a part hereof or as set
forth in any Notice of Assignment relating to any assignment that has
become effective pursuant to SECTION 13.3.2, as such amount may be modified
from time to time pursuant to the terms hereof.
"CONSOLIDATED ADJUSTED EBITDA" means, for any period, Consolidated
EBIT plus, to the extent deducted from revenues in determining Consolidated
Net Income, all amortization of intangibles and depreciation, all
calculated for the Borrower and its Consolidated Subsidiaries on a
consolidated basis in accordance with Agreement Accounting Principles,
consistently applied, adjusted with respect to permitted Acquisitions, on a
pro forma basis, using unadjusted historical financial statements with
respect to the business acquired.
"CONSOLIDATED EBIT" means, for any period, Consolidated Net Income
PLUS, to the extent deducted from revenues in determining Consolidated Net
Income, (i) Consolidated Interest Expense and (ii) expense for income taxes
paid or accrued, all calculated for the Borrower and its Consolidated
Subsidiaries on a consolidated basis in accordance with Agreement
Accounting Principles, consistently applied.
"CONSOLIDATED INTEREST EXPENSE" means, with reference to any period,
the interest expense of the Borrower and its Consolidated Subsidiaries for
such period, ADJUSTED by adding thereto the amount of all Receivables
Facility Financing Costs (to the extent not otherwise included), all
calculated for the Borrower and its Consolidated Subsidiaries on a
consolidated basis in accordance with Agreement Accounting Principles,
consistently applied.
"CONSOLIDATED NET INCOME" means, with reference to any period, the net
after-tax income (or loss) of the Borrower and its Consolidated
Subsidiaries calculated on a consolidated basis for such period, all
calculated for the Borrower and its Consolidated Subsidiaries on a
consolidated basis in accordance with Agreement Accounting Principles,
consistently applied.
"CONSOLIDATED SUBSIDIARY" means any Subsidiary that is consolidated on
a balance sheet of the Borrower in accordance with Agreement Accounting
Principles, consistently applied.
"CONSOLIDATED TOTAL DEBT" means the sum, without duplication, of (a)
all Indebtedness of the Borrower and its Consolidated Subsidiaries which,
on the date of determination, would be required to be shown on the
Borrower's consolidated balance sheet prepared in accordance with Agreement
Accounting Principles, consistently applied, PLUS (b) all Receivables
Facility Attributed Indebtedness of the Borrower and its Consolidated
Subsidiaries on the date of
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determination regardless of its treatment under Agreement Accounting
Principles, PLUS (c) all Off Balance Sheet Liabilities of the Borrower and
its Consolidated Subsidiaries on the date of determination regardless of
its treatment under Agreement Accounting Principles.
"CONVERSION/CONTINUATION NOTICE" is defined in SECTION 2.11.
"CONTROLLED GROUP" means all members of a controlled group of
corporations or other business entities and all trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower or any of its Subsidiaries, are treated as a single employer under
SECTION 414(B), (C), (M) or (O) of the Code.
"CREDIT EXTENSION" means either the funding of an Advance or Swing
Line Loan or the issuance of a Facility LC hereunder.
"CREDIT EXTENSION DATE" means the Borrowing Date for an Advance or the
issuance date for a Facility LC.
"DEFAULT" means an event described in ARTICLE VIII.
"ENVIRONMENTAL LAWS" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions,
grants, franchises, licenses, agreements and other governmental
restrictions relating to (i) the protection of the environment, (ii) the
effect of the environment on human health, (iii) emissions, discharges or
releases of pollutants, contaminants, hazardous substances or wastes into
surface water, ground water or land, or (iv) the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, hazardous substances or wastes or the clean-up or
other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations issued thereunder.
"EURODOLLAR ADVANCE" means an Advance which bears interest at the
applicable Eurodollar Rate.
"EURODOLLAR BASE RATE" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the applicable London interbank offered rate
for deposits in U.S. dollars appearing on Reuters Screen FRBD as of 11:00
a.m. (London time) two Business Days prior to the first day of such
Interest Period, and having a maturity approximately equal to such Interest
Period. If no London interbank offered rate of such maturity then appears
on Reuters Screen FRBD, then the Eurodollar Base Rate shall be equal to the
London interbank offered rate for deposits in U.S. dollars maturing
immediately before or immediately after such maturity, whichever is higher,
as determined by the Administrative Agent from Reuters Screen FRBD. If
Reuters Screen FRBD is not available, the applicable Eurodollar Base Rate
for the relevant Interest Period shall be the rate determined by the
Administrative Agent to be the rate at which Bank One offers to place
deposits in U.S. dollars with first-class banks in the London interbank
market at approximately 11:00 a.m. (London time) two Business Days prior to
the first day of
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such Interest Period, in the approximate amount of Bank One's relevant
portion of the Eurodollar Advance and having a maturity approximately equal
to such Interest Period.
"EURODOLLAR LOAN" means a Syndicated Loan which bears interest at the
applicable Eurodollar Rate.
"EURODOLLAR RATE" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar
Base Rate applicable to such Interest Period, divided by (b) one minus the
Reserve Requirement (expressed as a decimal), if any, applicable to such
Interest Period, plus the Applicable Margin. The Eurodollar Rate shall be
rounded to the next higher multiple of 1/100 of 1% if the rate is not such
a multiple.
"EXCLUDED TAXES" means, in the case of each Lender or applicable
Lending Installation and the Administrative Agent, taxes imposed on its net
income, and franchise taxes imposed on it, by (i) the jurisdiction under
the laws of which such Lender or the Administrative Agent is incorporated
or organized or any political combination or subdivision or taxing
authority thereof or (ii) any jurisdiction in which the Administrative
Agent's or such Lender's principal executive office or such Lender's
applicable Lending Installation is located or in which, other than as a
result of the transaction evidenced by this Agreement, the Administrative
Agent or such Lender otherwise is, or at any time was, engaged in business.
"EXHIBIT" refers to an exhibit to this Agreement, unless another
document is specifically referenced.
"EXISTING CREDIT AGREEMENTS" means (a) that certain Credit Agreement
dated as of May 23, 1996 among the Borrower (formerly known as Thiokol
Corporation), the financial institutions parties thereto as lenders, and
Bank One, NA (formerly known as The First National Bank of Chicago), as
Administrative Agent, as the same has been amended from time to time; (b)
that certain Credit Agreement dated as of November 20, 1997 among the
Borrower (formerly known as Thiokol Corporation), the financial
institutions parties thereto as lenders and Bank One, NA (formerly The
First National Bank of Chicago), as Agent; (c) that certain Credit
Agreement dated as of December 16, 1997 among Howmet Corporation, the
financial institutions parties thereto as lenders, ABN AMRO Bank N.V. and
Bankers Trust Company, as Co-Documentation Agents and Bank One, NA
(formerly The First National Bank of Chicago), as Swing Line Lender, LC
Issuer and Agent, as the same has been amended from time to time; and (d)
that certain Credit Agreement dated as of February 5, 1999 among the
Borrower, the financial institutions from time to time parties thereto as
lenders and Bank One, NA (formerly known as The First National Bank of
Chicago), as Administrative Agent.
"FACILITY FEE" is defined in SECTION 2.6.
"FACILITY LC" means each Letter of Credit issued under ARTICLE III.
"FACILITY TERMINATION DATE" means February 8, 2005 or any earlier date
on which the Aggregate Commitment is reduced to zero or otherwise
terminated pursuant to the terms hereof.
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"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, an interest rate
per annum equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published for such day (or, if such
day is not a Business Day, for the immediately preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations at
approximately 10:00 a.m. (Chicago time) on such day on such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by the Administrative Agent in its sole
discretion.
"FINANCIAL CONTRACT" of a Person means (i) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other
financial instrument with similar characteristics or (ii) any agreements,
devices or arrangements providing for payments related to fluctuations of
interest rates, exchange rates or forward rates, including, but not limited
to, interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency, interest rate options or other Rate Hedging Agreements.
"FLOATING RATE" means, for any day, a rate per annum equal to the
Alternate Base Rate for such day, in each case changing when and as the
Alternate Base Rate changes.
"FLOATING RATE ADVANCE" means an Advance which bears interest at the
Floating Rate.
"FLOATING RATE LOAN" means (a) the Swing Line Loans and (b) a
Syndicated Loan which bears interest at the Floating Rate.
"FOREIGN PENSION PLAN" means any employee pension benefit plan (as
defined in Section 3(2) of ERISA) which (i) is maintained or contributed to
for the benefit of employees of (a) the Borrower, (b) any Subsidiary of the
Borrower incorporated under the laws of any jurisdiction in the United
States, (c) any Material Foreign Subsidiary or (d) any other foreign
Subsidiary 65% of the stock of which is pledged pursuant to a Pledge
Agreement, (ii) is not covered by ERISA pursuant to Section 4(b)(4) thereof
and (iii) under applicable local law, is required to be funded through a
trust or other funding vehicle.
"GOVERNMENTAL ACTS" is defined in SECTION 3.10.
"GUARANTY" of any Person means any agreement by which such Person
assumes, guarantees, endorses, continently agrees to purchase or provide
funds for the payment of, or otherwise becomes liable upon, the obligation
of any other Person, or agrees to maintain the net worth or working capital
or other financial condition of any other Person or otherwise assure any
creditor of such other Person against loss, and shall include, without
limitation, the contingent liability or reimbursement obligation of such
Person under or with respect to any letter of credit or similar instrument
(other than letters of credit utilized for non-financial obligations (i.e.,
performance on contracts, workers' compensation, to support self-insurance
programs and for the benefit of governmental entities in connection with
environmental clean-up activities)) which is issued upon the application of
such Person or upon which such Person is an account party or for which such
Person is in any way liable.
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"HOWMET COMPANIES" means Howmet International Inc. and each of its
Consolidated Subsidiaries.
"HOWMET DOCUMENTATION DATE" means the date that is sixty (60) days
following the date on which the Borrower first owns greater than 90% of the
issued and outstanding capital stock of Howmet International Inc.
"INDENTURE" means the Indenture by and between the Borrower and Harris
Trust and Savings Bank, as Trustee, dated as of March 3, 1998, as the same
has been amended or supplemented prior to the effective date hereof.
"INDEBTEDNESS" of any Person means, without duplication, (a) the
obligations of such Person (i) for borrowed money, (ii) under or with
respect to notes payable and drafts accepted which represent extensions of
credit (whether or not representing obligations for borrowed money) to such
Person, (iii) reimbursement obligations with respect to letters of credit
issued for the account of such Person (other than letters of credit
utilized for non-financial obligations (i.e., performance on contracts,
workers' compensation, to support self-insurance programs and for the
benefit of governmental entities in connection with environmental clean-up
activities)) or (iv) for the deferred purchase price of property or
services other than current accounts payable arising in the ordinary course
of business on terms customary in the trade, (b) the obligations of others,
whether or not assumed, secured by Liens on property of such Person or
payable out of the proceeds of or production from property now or hereafter
owned or acquired by such Person, (c) the Capitalized Lease Obligations of
such Person, (d) the obligations of such Person under Guaranties by such
Person of any Indebtedness (other than obligations for borrowed money
incurred to finance the purchase of property leased to such Person pursuant
to a Capitalized Lease of such Person) of any other Person, (e) all
Receivables Facility Attributed Indebtedness of such Person on the date of
determination and (f) Off Balance Sheet Liabilities of such Person.
"INSOLVENCY EVENT" is defined in SECTION 10.13.
"INTERCOMPANY INDEBTEDNESS" is defined in SECTION 10.13.
"INTEREST PERIOD" means, with respect to a Eurodollar Advance, a
period of one, two, three, six or (subject to availability) nine months
commencing on a Business Day selected by the Borrower pursuant to this
Agreement. Such Interest Period shall end on the day which corresponds
numerically to such date one, two, three, six or nine months thereafter,
PROVIDED, HOWEVER, that if there is no such numerically corresponding day
in such next, second, third, sixth or ninth succeeding month, such Interest
Period shall end on the last Business Day of such next, second, third,
sixth or ninth succeeding month. If an Interest Period would otherwise end
on a day which is not a Business Day, such Interest Period shall end on the
next succeeding Business Day, PROVIDED, HOWEVER, that if said next
succeeding Business Day falls in a new calendar month, such Interest Period
shall end on the immediately preceding Business Day.
"INVESTMENT" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in
the ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms
9
<PAGE>
customary in the trade) or contribution of capital by such Person; stocks,
bonds, mutual funds, partnership interests, notes, debentures or other
securities owned by such Person; any deposit accounts and certificate of
deposit owned by such Person; and structured notes, Financial Contracts,
derivative financial instruments and other similar instruments or contracts
owned by such Person.
"JOINT VENTURE" means any Affiliate of the Borrower which is accounted
for by the Borrower on the equity method of accounting.
"LC DOCUMENTS" is defined in SECTION 3.3(I).
"LC DRAFT" means a draft, or other form of demand, drawn or made on an
LC Issuer pursuant to a Facility LC.
"LC INTEREST" is defined in SECTION 3.5.
"LC ISSUER" means (i) Bank One in its capacity as an LC Issuer
hereunder with respect to each Facility LC issued by Bank One and (ii) any
Lender (other than Bank One) reasonably acceptable to the Administrative
Agent, in such Lender's capacity as an LC Issuer hereunder with respect to
any and all Facility LCs issued by such Lender in its sole discretion upon
the Borrower's request. All references contained in this Agreement and the
other Loan Documents to the "LC Issuer" shall be deemed to apply equally to
each of the institutions referred to in CLAUSES (I) and (II) of this
definition in their respective capacities as LC Issuer of any and all
Facility LCs issued by each such institution.
"LC OBLIGATIONS" means, without duplication, an amount equal to the
sum of (i) the aggregate of the amount then available for drawing under
each of the Facility LCs, (ii) the face amount of all outstanding LC Drafts
corresponding to the Facility LCs, which drafts have been accepted by the
applicable LC Issuer, (iii) the aggregate outstanding amount of all
Reimbursement Obligations at such time and (iv) the aggregate face amount
of all Facility LCs requested by the Borrower but not yet issued (unless
the request for an unissued Facility LC has been denied).
"LENDERS" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns.
"LENDING INSTALLATION" means, with respect to a Lender, LC Issuer or
the Agents, the office, branch, subsidiary or affiliate of such Lender or
LC Issuer or Agents listed on the signature pages hereof or on a Schedule
or otherwise selected by such Lender or LC Issuer or the Administrative
Agent pursuant to SECTION 2.19.
"LETTER OF CREDIT" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon
which such Person is an account party or for which such Person is in any
way liable.
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"LEVERAGE RATIO" means, as of any date of calculation, the ratio of
(i) Consolidated Total Debt outstanding on such date to (ii) Consolidated
Adjusted EBITDA for the Borrower's then most-recently ended four fiscal
quarters.
"LIEN" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any
kind or nature whatsoever (including, without limitation, the interest of a
vendor or lessor under any conditional sale, Capitalized Lease or other
title retention agreement).
"LOAN(S)" means, with respect to a Lender, such Lender's Syndicated
Loan, and in the case of the Swing Line Lender, any Swing Line Loan made
pursuant to SECTION 2.2 hereof, and collectively all Syndicated Loans and
Swing Line Loans, whether made or continued as or converted to Floating
Rate Loans or Eurodollar Loans.
"LOAN DOCUMENTS" means this Agreement and Notes, if any, issued
pursuant to SECTION 2.15, the Collateral Documents and the Subsidiary
Guaranties.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of
operations, or prospects of the Borrower and its Subsidiaries taken as a
whole, (ii) the ability of the Borrower and its Subsidiaries taken as a
whole to perform their obligations under the Loan Documents to which they
are a party, or (iii) the validity or enforceability of any of the Loan
Documents or the rights or remedies of the Agents, the LC Issuers or the
Lenders thereunder.
"MATERIAL DOMESTIC SUBSIDIARY(IES)" means each Consolidated Subsidiary
of the Borrower (a) incorporated under the laws of any jurisdiction in the
United States and (b) the total assets of which exceed, as at the end of
any calendar quarter or, in the case of consummation of a Permitted
Acquisition, at the time of consummation of the Permitted Acquisition,
three percent (3.0%) of the consolidated total assets of the Borrower and
its Consolidated Subsidiaries.
"MATERIAL FOREIGN SUBSIDIARY(IES)" means each Consolidated Subsidiary
of the Borrower (a) incorporated under the laws of any foreign jurisdiction
and (b) the total assets of which exceed, as at the end of any calendar
quarter or, in the case of consummation of a Permitted Acquisition, at the
time of consummation of the Permitted Acquisition, three percent (3.0%) of
the consolidated total assets of the Borrower and its Consolidated
Subsidiaries; PROVIDED, HOWEVER, in the event that one or more of such
Consolidated Subsidiaries are owned through another foreign Subsidiary,
then the Administrative Agent shall notify the Borrower whether the
"Material Foreign Subsidiary" shall be the holding company foreign
Subsidiary or such holding company's Subsidiary or Subsidiaries, it being
the intention of the parties that the Administrative Agent and the Lenders
shall be provided with the maximum collateral protection without resulting
in the net income of any foreign Subsidiary being deemed to have been
repatriated under the provisions of the Code.
"MATERIAL INDEBTEDNESS" is defined in SECTION 8.5.
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"MOODY'S" means Moody's Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer
is obligated to make contributions.
"NEW SUBSIDIARY" is defined in SECTION 7.13(B).
"NON-U.S. LENDER" is defined in SECTION 4.5(IV).
"NOTE" means any promissory note issued at the request of a Lender
pursuant to SECTION 2.15 in the form of EXHIBIT A and the Swing Line Note.
"NOTICE OF ASSIGNMENT" is defined in SECTION 13.3.2.
"OBLIGATIONS" means all Loans, advances, debts, liabilities,
obligations, covenants and duties owing by the Borrower to either of the
Agents, any Lender, any affiliate of either of the Agents or any Lender,
the Swing Line Lender, any LC Issuer, or any indemnitee under the
provisions of SECTION 10.6 or any other provisions of the Loan Documents,
in each case of any kind or nature, present or future, arising under this
Agreement, any Facility LC application agreements, the Collateral Documents
or any other Loan Document, whether or not evidenced by any note, guaranty
or other instrument, whether or not for the payment of money, whether
arising by reason of an extension of credit, loan, guaranty,
indemnification, or in any other manner, whether direct or indirect
(including those acquired by assignment), absolute or contingent, due or to
become due, now existing or hereafter arising and however acquired. The
term includes, without limitation, all interest, charges, expenses, fees,
attorneys' fees and disbursements, paralegals' fees (in each case whether
or not allowed), and any other sum chargeable to the Borrower under this
Agreement or any other Loan Document.
"OBLIGOR GROUP" shall mean (a) the Borrower, (b) the Subsidiary
Guarantors, (c) each Subsidiary the stock of which has been pledged
pursuant to a Pledge Agreement and (d) each Subsidiary of the Borrower that
is a party to a Pledge Agreement, as a pledgor.
"OFF-BALANCE SHEET LIABILITY" of a Person means (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any liability under any Sale and
Leaseback Transaction which does not create a liability on the balance
sheet of such Person, (iii) any liability under any financing lease or
so-called "synthetic lease" transaction entered into by such Person, or
(iv) any obligation arising with respect to any other transaction which is
the functional equivalent of or takes the place of borrowing but which does
not constitute a liability on the balance sheets of such Person, but
excluding Operating Leases.
"OPERATING LEASE" of a Person means any lease of Property (other than
a Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option
of the lessor) of one year or more.
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"OTHER TAXES" is defined in SECTION 4.5(II).
"OUTSTANDING CREDIT EXPOSURE" means, as to any Lender at any time, the
sum of (i) the aggregate principal amount of its Loans outstanding at such
time plus (ii) its Outstanding LC Exposure at such time.
"OUTSTANDING LC EXPOSURE" means, as to any Lender at any time, an
amount equal to its Percentage of the LC Obligations at such time.
"PARTICIPANTS" is defined in SECTION 13.2.1.
"PAYMENT DATE" means the last day of each March, June, September and
December.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"PERCENTAGE" means, with respect to each Lender, the percentage that
such Lender's Commitment constitutes of the Aggregate Commitment.
"PERMITTED ACQUISITION" is defined in SECTION 7.13(A)(VI).
"PERMITTED RECEIVABLES TRANSFER" means (i) a sale or other transfer by
the Borrower or any of its Subsidiaries to a SPV of Receivables and Related
Security under any Receivables Purchase Agreement, in accordance with the
terms thereof and/or (ii) a sale by a SPV to purchasers of such assets in
accordance with the terms of the Receivables Purchase Documents.
"PERSON" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or
other entity or organization, or any government or political subdivision or
any agency, department or instrumentality thereof.
"PLAN" means 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 Code as to which the
Borrower or any member of the Controlled Group may have any liability.
"PLEDGE AGREEMENT" means a Pledge Agreement, containing substantially
the terms set forth in EXHIBIT B hereto, duly executed and delivered by the
Borrower (or the applicable Subsidiary of the Borrower) to and in favor of
the Administrative Agent, the LC Issuers and the Lenders, as it may from
time to time be amended, supplemented or otherwise modified with respect to
sixty-five percent (65%) of the outstanding capital stock of each of the
Borrower's Material Foreign Subsidiaries, modified as deemed reasonably
acceptable by the Administrative Agent to reflect foreign law provisions,
customs and practices, in each case as amended, modified, supplemented or
restated from time to time.
"PRICING SCHEDULE" means the Schedule attached hereto identified as
such.
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"PRIME RATE" means a rate per annum equal to the prime rate of
interest announced from time to time by Bank One or its parent (which is
not necessarily the lowest rate charged to any customer), changing when and
as said prime rate changes.
"PROPERTY" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets
owned, leased or operated by such Person.
"PURCHASERS" is defined in SECTION 13.3.1.
"QUARTERLY FINANCIAL STATEMENTS" is defined in SECTION 7.1(I)(B).
"RATE HEDGING AGREEMENT" means an agreement, device or arrangement
providing for payments which are related to fluctuations of interest rates,
exchange rates or forward rates, including, but not limited to,
dollar-denominated or cross-currency interest rate exchange agreements,
forward currency exchange agreements, interest rate cap or collar
protection agreements, forward rate currency or interest rate options, puts
and warrants.
"RATE HEDGING OBLIGATIONS" of a Person means any and all
obligations of such Person, whether absolute or contingent and howsoever
and whensoever created, arising, evidenced or acquired (including all
renewals, extensions and modifications thereof and substitutions therefor),
under (i) any and all Rate Hedging Agreements, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any
Rate Hedging Agreement.
"RECEIVABLES AND RELATED SECURITY" means (i) "Receivables" and
"Related Security" as such terms are defined in the Receivables Purchase
Agreement to which Blade Receivables Corporation is a party and (ii) any
similarly defined terms as utilized in any other Receivables Purchase
Agreement entered into by the Borrower and/or one of its Subsidiaries and a
SPV.
"RECEIVABLES FACILITY ATTRIBUTED INDEBTEDNESS" means the amount of
obligations outstanding under a receivables purchase facility on any date
of determination that would be characterized as principal if such facility
were structured as a secured lending transaction rather than as a purchase.
"RECEIVABLES FACILITY FINANCING COSTS" means such portion of the cash
fees, service charges, and other costs, as well as all collections or other
amounts retained by purchasers of receivables pursuant to a receivables
purchase facility, which are in excess of amounts paid to the Borrower and
its Consolidated Subsidiaries under any receivables purchase facility for
the purchase of receivables pursuant to such facility and are the
equivalent of the interest component of the financing if the transaction
were characterized as an on-balance sheet transaction. For sake of clarity,
it is understood and agreed that the calculation of the Receivables
Facility Financing Costs shall be made consistent with the way in which the
Receivables Facility Financing Costs have been calculated under the
Existing Credit Agreements.
"RECEIVABLES PURCHASE AGREEMENTS" means (a) that certain Receivables
Purchase Agreement dated as of December 13, 1995, among Howmet Corporation,
certain of its Subsidiaries and Blade Receivables Corporation, pursuant to
which Howmet Corporation and
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such Subsidiaries sell to Blade Receivables Corporation certain of their
Receivables and Related Security, as such agreement has been or may
hereafter be amended, restated or otherwise modified from time to time, or
any replacement or substitution therefor and (b) any other similarly
structured receivables purchase agreement among the Borrower, one or more
Subsidiaries of the Borrower and one or more SPVs, pursuant to which the
Borrower and such Subsidiaries sell to such SPVs certain of their accounts
receivables and related security (the scope and structure of such
transactions to be in all material respects like the transaction involving
Blade Receivables Corporation), as such agreement may be amended, restated
or otherwise modified from time to time, or any replacement or substitution
therefor.
"RECEIVABLES PURCHASE DOCUMENTS" means the Receivables Purchase
Agreements and the other documents, instruments and agreements executed in
connection therewith.
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor
thereto or other regulation or official interpretation of said Board of
Governors relating to reserve requirements applicable to member banks of
the Federal Reserve System.
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or
other regulation or official interpretation of said Board of Governors
relating to the extension of credit by banks for the purpose of purchasing
or carrying margin stocks applicable to member banks of the Federal Reserve
System.
"REIMBURSEMENT OBLIGATIONS" means, at any time, the aggregate of all
obligations of the Borrower then outstanding under ARTICLE III to reimburse
the LC Issuers for amounts paid by the LC Issuers in respect of any one or
more drawings under Facility LCs.
"REPLACEMENT LENDER" is defined in SECTION 2.21 hereof.
"REPORTABLE EVENT" means a reportable event as defined in SECTION 4043
of ERISA and the regulations issued under such section, with respect to a
Plan, excluding, however, such events as to which the PBGC has by
regulation waived the requirement of SECTION 4043(A) of ERISA that it be
notified within 30 days of the occurrence of such event, PROVIDED, HOWEVER,
that a failure to meet the minimum funding standard of SECTION 412 of the
Code and of SECTION 302 of ERISA shall be a Reportable Event regardless of
the issuance of any such waiver of the notice requirement in accordance
with either SECTION 4043(A) of ERISA or SECTION 412(D) of the Code.
"REPORTS" is defined in SECTION 10.6.
"REQUIRED LENDERS" means Lenders in the aggregate having at least 51%
of the Aggregate Commitment or, if the Aggregate Commitment has been
terminated, Lenders in the aggregate holding at least 51% of the Aggregate
Outstanding Credit Exposure.
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"RESERVE REQUIREMENT" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on
"Eurocurrency liabilities" (as defined in Regulation D).
"RISK-BASED CAPITAL GUIDELINES" is defined in SECTION 4.2.
"S&P" means Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.
"SALE AND LEASEBACK TRANSACTION" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.
"SCHEDULE" refers to a specific schedule to this Agreement, unless
another document is specifically referenced.
"SECTION" means a numbered section of this Agreement, unless another
document is specifically referenced.
"SPV" means, (a) Blade Receivables Corporation, a Nevada corporation,
and its successors and assigns and (b) any other special purpose entity
established for the purpose of purchasing receivables in connection with a
receivables securitization transaction permitted under the terms of this
Agreement.
"SUBSIDIARY" of a Person means (i) any corporation more than 50% of
the outstanding securities having ordinary voting power of which shall at
the time be owned or controlled, directly or indirectly, by such Person or
by one or more of its Subsidiaries or by such Person and one or more of its
Subsidiaries, or (ii) any partnership, limited liability company,
association, joint venture or similar business organization more than 50%
of the ownership interests having ordinary voting power of which shall at
the time be so owned or controlled. Unless otherwise expressly provided,
all references herein to a "Subsidiary" shall mean a Subsidiary of the
Borrower.
"SUBSIDIARY GUARANTORS" means (a) (i) all of the Borrower's Material
Domestic Subsidiaries as of the Closing Date and (ii) all of the Borrower's
domestic Consolidated Subsidiaries as of the Closing Date which become
Material Domestic Subsidiaries as at the end of any calendar quarter and
which have satisfied the provisions of SECTION 7.13(D), in each case, other
than the SPVs and the Howmet Companies, (b) all of the Howmet Companies
which are Material Domestic Subsidiaries as of the Howmet Documentation
Date and which have satisfied the provisions of SECTION 7.13(C) and (c) any
other New Subsidiaries (other than foreign corporations) which are Material
Domestic Subsidiaries as at the end of any calendar quarter (or if acquired
in connection with a Permitted Acquisition, at the time of the consummation
of such Permitted Acquisition) and which have satisfied the provisions of
SECTION 7.13(B), and in each case their respective successors and assigns.
"SUBSIDIARY GUARANTY" means a Subsidiary Guaranty, substantially in
the form of EXHIBIT C hereto, duly executed by the Subsidiary Guarantors in
favor of the Administrative
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Agent, for the ratable benefit of the Agents, the Swing Line Lender, the LC
Issuers and the Lenders, as it may be amended, modified, supplemented
and/or restated (including to add new Subsidiary Guarantors), and as in
effect from time to time.
"SUBSIDIARY GUARANTY SUPPLEMENT" means a supplement to the Subsidiary
Guaranty, substantially in the form of ANNEX I attached to the Subsidiary
Guaranty.
"SUBSTANTIAL PORTION" means, with respect to the Property of the
Borrower and its Subsidiaries, Property which represents more than 10% of
the consolidated assets of the Borrower and its Consolidated Subsidiaries
as would be shown in the consolidated financial statements of the Borrower
and its Consolidated Subsidiaries as at the beginning of the twelve-month
period ending with the month in which such determination is made.
"SWING LINE COMMITMENT" means the obligation of the Swing Line Lender
to make Swing Line Loans up to a maximum principal amount of $15,000,000 at
any one time outstanding.
"SWING LINE LENDER" means Bank One or any other Lender as a successor
Swing Line Lender.
"SWING LINE LOAN" means a Loan made available to the Borrower by the
Swing Line Lender pursuant to SECTION 2.2 hereof.
"SWING LINE NOTE" means a promissory note, in substantially the form
of EXHIBIT G hereto, duly executed by the Borrower and payable to the order
of the Swing Line Lender in the amount of its Swing Line Commitment,
including any amendment, restatement, modification, renewal or replacement
of such Swing Line Note.
"SYNDICATED LOAN(S)" means, with respect to a Lender, that portion of
any Advance made by such Lender pursuant to SECTION 2.1 hereof, as
applicable.
"TAXES" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities
with respect to the foregoing, but EXCLUDING Excluded Taxes.
"364-DAY CREDIT AGREEMENT" means that certain 364-Day Revolving Credit
Agreement of even date herewith among the Borrower, the institutions from
time to time parties thereto as lenders, Bank One, NA, as Administrative
Agent, ABN AMRO Bank N.V., as Syndication Agent and Bank of America, N.A.
and Wachovia Bank, N.A., as Co-Documentation Agents, as the same may be
amended, modified, supplemented and/or restated and as in effect from time
to time.
"TRANSFEREE" is defined in SECTION 13.4.
"TYPE" means, with respect to any Advance, its nature as a Floating
Rate Advance or a Eurodollar Advance.
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"UNFUNDED LIABILITIES" means the amount (if any) by which the present
value of all vested and unvested accrued benefits under all Plans exceeds
the fair market value of all such Plan assets allocable to such benefits,
all determined under and in accordance with Financial Accounting Standard
Board Statement 87.
"UNMATURED DEFAULT" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"UTILIZATION FEE" is defined in SECTION 2.7.
"WHOLLY-OWNED SUBSIDIARY" of a Person means (i) any Consolidated
Subsidiary all of the outstanding voting securities of which (other than
directors' qualifying shares) shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, limited liability
company, association, joint venture or similar business organization 100%
of the ownership interests of which shall at the time be so owned or
controlled.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II: THE CREDITS
2.1. COMMITMENT. From and including the date of this Agreement and
prior to the Facility Termination Date, each Lender severally agrees, on
the terms and conditions set forth in this Agreement, to make Syndicated
Loans to the Borrower from time to time; PROVIDED, that upon giving effect
to each such Syndicated Loan, the sum of (i) the aggregate outstanding
principal amount of all Syndicated Loans made by such Lender PLUS (ii) such
Lender's Outstanding LC Exposure, shall not exceed such Lender's
Commitment. Subject to the terms of this Agreement, the Borrower may
borrow, repay and reborrow Syndicated Loans at any time prior to the
Facility Termination Date. The Commitments to lend hereunder shall expire
automatically on the Facility Termination Date.
2.2. SWING LINE LOANS. (a) AMOUNT OF SWING LINE LOANS. Upon the
satisfaction of the conditions precedent set forth in SECTION 5.1 and 5.2,
from and including the date of this Agreement and prior to the Facility
Termination Date, the Swing Line Lender agrees, on the terms and conditions
set forth in this Agreement, to make swing line loans to the Borrower from
time to time, in Dollars, in an aggregate amount outstanding at any time
not to exceed the Swing Line Commitment (each, individually, a "SWING LINE
LOAN" and collectively, the "SWING LINE LOANS"); PROVIDED, HOWEVER, at no
time shall the Aggregate Outstanding Credit Exposure exceed the Aggregate
Commitments; and PROVIDED, FURTHER, that at no time shall the sum of (a)
the outstanding amount of the Swing Line Loans, PLUS (b) the outstanding
amount of Syndicated Loans made by the Swing Line Lender pursuant to
SECTION 2.1 (after giving effect to any concurrent repayment of Loans) PLUS
(c) the Swing Line Lender's Outstanding LC Exposure, exceed the Swing Line
Lender's Commitment at such time. Subject to the terms of this Agreement,
the Borrower may borrow, repay and reborrow Swing Line Loans at any time
prior to the Facility Termination Date.
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(b) BORROWING NOTICE; APPLICABLE INTEREST RATE; MINIMUMS. The Borrower
shall deliver to the Administrative Agent and the Swing Line Lender a
notice of borrowing, signed by it, not later than 11:00 a.m. (Chicago time)
on the Borrowing Date of each Swing Line Loan, specifying (i) the
applicable Credit Extension Date (which shall be a Business Day), and (ii)
the aggregate amount of the requested Swing Line Loan. The Swing Line Loans
shall bear interest at such rate as shall have been agreed to between the
Borrower and the Swing Line Lender or if no such rate has been agreed to,
at the Floating Rate but shall otherwise be subject to the terms applicable
to Floating Rate Loans hereunder. The Swing Line Loans shall be in an
amount not less than $1,000,000 and multiples of $100,000 in excess
thereof.
(c) MAKING OF SWING LINE LOANS. Promptly after receipt of the
Borrowing Notice under SECTION 2.2(B) in respect of Swing Line Loans, the
Administrative Agent shall notify each Lender by telex or telecopy, or
other similar form of transmission, of the requested Swing Line Loan. Not
later than 2:00 p.m. (Chicago time) on the applicable Borrowing Date, the
Swing Line Lender shall make available its Swing Line Loan, in funds
immediately available in Chicago to the Administrative Agent at its address
specified pursuant to ARTICLE XIV. The Administrative Agent will promptly
make the funds so received from the Swing Line Lender available to the
Borrower at the Administrative Agent's aforesaid address.
(d) REPAYMENT OF SWING LINE LOANS. The Swing Line Loans shall be
evidenced by the Swing Line Note, and each Swing Line Loan shall be paid in
full by the Borrower on or before the fifth Business Day after the
Borrowing Date for such Swing Line Loan. The Borrower may at any time repay
or prepay, without penalty or premium, all outstanding Swing Line Loans or,
in a minimum amount of $1,000,000 (with increments of $100,000 in excess
thereof), any portion of the outstanding Swing Line Loans, upon notice to
the Administrative Agent and the Swing Line Lender. Swing Line Loans may be
repaid with the proceeds of a new Swing Line Loan. In addition, the
Administrative Agent may at any time in its sole discretion with respect to
any outstanding Swing Line Loan require each Lender (including the Swing
Line Lender in its capacity as a Lender) to make a Syndicated Loan under
SECTION 2.1 in the amount of such Lender's Percentage of such Swing Line
Loan, for the purpose of repaying such Swing Line Loan. Not later than 3:00
p.m. (Chicago time) on the date of any notice received pursuant to this
SECTION 2.2(D), each Lender shall make available its required Syndicated
Loan or Syndicated Loans, in funds immediately available in Chicago to the
Administrative Agent at its address specified pursuant to ARTICLE XIV.
Syndicated Loans made pursuant to this SECTION 2.2(D) shall initially be
Floating Rate Loans and thereafter may be continued as Floating Rate Loans
or converted into Eurodollar Rate Loans in the manner provided in SECTION
2.10 and subject to the other conditions and limitations therein set forth
and set forth in this ARTICLE II. Unless a Lender shall have notified the
Swing Line Lender, prior to its making any Swing Line Loan, that any
applicable condition precedent set forth in SECTIONS 5.1 and 5.2 had not
then been satisfied, such Lender's obligation to make Syndicated Loans
pursuant to this SECTION 2.2(D) to repay Swing Line Loans shall be
unconditional, continuing, irrevocable and absolute and shall not be
affected by any circumstances, including, without limitation, (A) any
set-off, counterclaim, recoupment, defense or other right which such Lender
may have against the Administrative Agent, the Swing Line Lender or any
other Person, (B) the occurrence or continuance of a Default or Unmatured
Default, (C) any adverse change in the condition (financial or otherwise)
of the Borrower or any
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of its Subsidiaries, or (D) any other circumstances, happening or event
whatsoever. In the event that any Lender fails to make payment to the
Administrative Agent of any amount due under this SECTION 2.2(D), the
Administrative Agent shall be entitled to receive, retain and apply against
such obligation the principal and interest otherwise payable to such Lender
hereunder until the Administrative Agent receives such payment from such
Lender or such obligation is otherwise fully satisfied. In addition to the
foregoing, if for any reason any Lender fails to make payment to the
Administrative Agent of any amount due under this SECTION 2.2(D), such
Lender shall be deemed, at the option of the Administrative Agent, to have
unconditionally and irrevocably purchased from the Swing Line Lender,
without recourse or warranty, an undivided interest and participation in
the applicable Swing Line Loan in the amount of such Syndicated Loan, and
such interest and participation may be recovered from such Lender together
with interest thereon at the Federal Funds Effective Rate for each day
during the period commencing on the date of demand and ending on the date
such amount is received. On the Facility Termination Date, the Borrower
shall repay in full the outstanding principal balance of the Swing Line
Loans.
2.3. REQUIRED PAYMENTS; TERMINATION. This Agreement shall be effective
until the Facility Termination Date. Any outstanding Loans and all other
unpaid Obligations shall be paid in full by the Borrower on the Facility
Termination Date and the Borrower shall cause the beneficiaries to cancel
all Facility LCs or shall otherwise provide cash collateral or other credit
support therefor on terms and conditions acceptable to the LC Issuers and
the Required Lenders. Notwithstanding the termination of this Agreement on
the Facility Termination Date, until all of the Obligations (other than
contingent indemnity obligations) shall have been fully paid and satisfied,
all financing arrangements among the Borrower and the Lenders shall have
been terminated and all of the Letters of Credit shall have expired, been
canceled or terminated (or credit support provided therefor as set forth
above), all of the rights and remedies under this Agreement and the other
Loan Documents shall survive and the Administrative Agent shall be entitled
to retain its security interest in and to all existing and future
collateral.
2.4. RATABLE LOANS. Each Advance hereunder shall consist of Syndicated
Loans made from the several Lenders ratably in proportion to the ratio that
their respective Commitments bear to the Aggregate Commitment.
2.5. TYPES OF ADVANCES. The Advances may be Floating Rate Advances or
Eurodollar Advances, or a combination thereof, selected by the Borrower in
accordance with SECTIONS 2.10 and 2.11.
2.6. FACILITY FEE; REDUCTIONS IN AGGREGATE COMMITMENT. The Borrower
agrees to pay to the Administrative Agent for the ratable benefit of the
Lenders a facility fee ("FACILITY FEE") at a per annum rate equal to the
Applicable Facility Fee Rate multiplied by the Aggregate Commitment from
the date hereof to and including the Facility Termination Date, payable on
each Payment Date hereafter and on the Facility Termination Date. The
Borrower may permanently reduce the Aggregate Commitment in whole, or in
part ratably among the Lenders in integral multiples of $25,000,000, upon
at least three Business Days' written notice to the Administrative Agent,
which notice shall specify the amount of any such reduction, PROVIDED,
HOWEVER, that the amount of the Aggregate Commitment may not be reduced
below the aggregate principal amount of the Aggregate Outstanding Credit
Exposure. Without limiting the
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foregoing, all accrued Facility Fees shall be payable on the effective date
of any termination of the obligations of the Lenders to make Syndicated
Loans hereunder.
2.7. UTILIZATION FEE. If, at the end of any fiscal quarter, the
average daily Combined Utilized Amount during such quarter exceeded
thirty-three percent (33.0%) but was less than or equal to sixty-seven
percent (67.0%) of the average daily amount of the Combined Commitment
during such quarter, the Borrower will pay to the Administrative Agent for
the ratable benefit of the Lenders a utilization fee of 0.125% on the
average daily Combined Utilized Amount during such quarter. If, at the end
of any fiscal quarter, the average daily Combined Utilized Amount during
such quarter was greater than sixty-seven percent (67.0%) of the average
daily amount of the Combined Commitment during such quarter, the Borrower
will pay to the Administrative Agent for the ratable benefit of the Lenders
a utilization fee of 0.25% on the average daily Combined Utilized Amount
during such quarter. The fees owing pursuant to this SECTION 2.7 (the
"UTILIZATION FEE") shall be payable on each Payment Date hereafter and on
the Facility Termination Date.
2.8. MINIMUM AMOUNT OF EACH ADVANCE. Each Advance (other than an
Advance to repay Swing Line Loans pursuant to SECTION 2.2(D) or a
Reimbursement Obligations pursuant to SECTION 3.6) shall be in the minimum
amount of $25,000,000 (and in multiples of $5,000,000 if in excess
thereof), PROVIDED, HOWEVER, that any Floating Rate Advance may be in the
amount of the Available Aggregate Commitment.
2.9. OPTIONAL PRINCIPAL PAYMENTS. The Borrower may from time to time
pay, without penalty or premium, all outstanding Floating Rate Advances,
or, in a minimum aggregate amount of $25,000,000 or any integral multiple
of $5,000,000 in excess thereof, any portion of the outstanding Floating
Rate Advances upon one Business Day's prior notice to the Administrative
Agent. The Borrower may from time to time pay, subject to the payment of
any funding indemnification and breakage cost amounts required by SECTION
4.4 but without penalty or premium, any or all outstanding Eurodollar
Advances upon three Business Days' prior notice to the Administrative
Agent.
2.10. METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR NEW ADVANCES.
The Borrower shall select the Type of Advance and, in the case of each
Eurodollar Advance, the Interest Period applicable thereto from time to
time; PROVIDED, that there shall be no more than eight (8) Interest Periods
in effect with respect to all of the Syndicated Loans at any time, unless
such limit has been waived by the Administrative Agent in its sole
discretion. The Borrower shall give the Administrative Agent irrevocable
notice (a "BORROWING NOTICE") not later than 11:00 a.m. (Chicago time) at
least one Business Day before the Borrowing Date of each Floating Rate
Advance and three Business Days before the Borrowing Date for each
Eurodollar Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of such
Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
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(iv) in the case of each Eurodollar Advance, the Interest Period
applicable thereto.
Promptly after receipt of any Borrowing Notice, the Administrative Agent
shall provide the Lenders with notice thereof. Not later than 1:00 p.m.
(Chicago time) on each Borrowing Date, each Lender shall make available its
Syndicated Loan or Syndicated Loans in funds immediately available in
Chicago to the Administrative Agent at its address specified pursuant to
ARTICLE XIV. The Administrative Agent will make the funds so received from
the Lenders available to the Borrower at the Administrative Agent's
aforesaid address.
2.11. CONVERSION AND CONTINUATION OF OUTSTANDING ADVANCES. Each
Floating Rate Advance shall continue as Floating Rate Advances unless and
until such Floating Rate Advances are converted into Eurodollar Advances
pursuant to this SECTION 2.11 or are repaid in accordance with SECTION 2.9.
Each Eurodollar Advance shall continue as a Eurodollar Advance until the
end of the then applicable Interest Period therefor, at which time such
Eurodollar Advance shall be automatically converted into a Floating Rate
Advance unless (x) such Eurodollar Advance is or was repaid in accordance
with SECTION 2.9 or (y) the Borrower shall have given the Administrative
Agent a Conversion/Continuation Notice (as defined below) requesting that,
at the end of such Interest Period, such Eurodollar Advance continue as a
Eurodollar Advance for the same or another Interest Period. Subject to the
terms of SECTION 2.11, the Borrower may elect from time to time to convert
all or any part of a Floating Rate Advance into a Eurodollar Advance. The
Borrower shall give the Administrative Agent irrevocable notice (a
"CONVERSION/CONTINUATION NOTICE") of each conversion of any Floating Rate
Advance into a Eurodollar Advance or continuation of a Eurodollar Advance
not later than 11:00 a.m. (Chicago time) at least three Business Days prior
to the date of the requested conversion or continuation, specifying:
(i) the requested date, which shall be a Business Day, of such
conversion or continuation,
(ii) the aggregate amount and Type of the Advance which is to be
converted or continued, and
(iii) the amount of such Advance which is to be converted into or
continued as a Eurodollar Advance and the duration of the Interest Period
applicable thereto.
Promptly after receipt of any Conversion/Continuation Notice, the
Administrative Agent shall provide the Lenders with notice thereof.
2.12. CHANGES IN INTEREST RATE, ETC. Each Floating Rate Advance and
Swing Line Loan shall bear interest on the outstanding principal amount
thereof, for each day from and including the date such Advance or Swing
Line Loan is made or is automatically converted from a Eurodollar Advance
into a Floating Rate Advance pursuant to SECTION 2.11, to but excluding the
date it is paid or, for Floating Rate Advances, is converted into a
Eurodollar Advance pursuant to SECTION 2.11 hereof, at a rate per annum
equal to the Floating Rate for such day or, in the case of the Swing Line
Loans, such other rate as shall have been agreed to between the Borrower
and the Swing Line Lender. Changes in the rate of interest on any Floating
Rate Advance and each
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Swing Line Loan bearing interest by reference to the Floating Rate will
take effect simultaneously with each change in the Alternate Base Rate.
Each Eurodollar Advance shall bear interest on the outstanding principal
amount thereof from and including the first day of the Interest Period
applicable thereto to (but not including) the last day of such Interest
Period at the interest rate determined by the Administrative Agent as
applicable to such Eurodollar Advance based upon the Borrower's selections
under SECTION 2.10 and 2.11 and otherwise in accordance with the terms
hereof. Changes in the rate of interest on any Eurodollar Advance will take
effect simultaneously with each change in the Applicable Margin. No
Interest Period may end after the Facility Termination Date.
2.13. RATES APPLICABLE AFTER DEFAULT. Notwithstanding anything to the
contrary contained in SECTION 2.10 or 2.11, during the continuance of a
Default the Administrative Agent or the Required Lenders may, at their
option, by notice to the Borrower (which notice may be revoked at the
option of the Required Lenders notwithstanding any provision of SECTION 9.2
requiring unanimous consent of the Lenders to changes in interest rates),
declare that no Advance may be made as, converted into or continued as a
Eurodollar Advance. During the continuance of a Default, the Administrative
Agent or the Required Lenders may, at their option, by notice to the
Borrower (which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of SECTION 9.2 requiring unanimous consent of
the Lenders to changes in interest rates), declare that (i) each Advance
shall bear interest at the then highest Floating Rate or Eurodollar Rate
(utilizing the highest Applicable Margin as reflected on the Pricing
Schedule) in effect from time to time plus 2% per annum and (ii) the fees
payable with respect to Letters of Credit pursuant to SECTION 3.8 shall be
increased to the highest Applicable LC Fee Percentage plus 2% per annum,
PROVIDED that, during the continuance of a Default under SECTIONS 8.2, 8.6
or 8.7, the interest rate described in CLAUSE (I) above and the letter of
credit fee described in CLAUSE (II) above shall be applicable without any
election or action on the part of the Administrative Agent or any Lender.
2.14. METHOD OF PAYMENT. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Administrative Agent at the Administrative Agent's
address specified pursuant to ARTICLE XIV, or at any other Lending
Installation of the Administrative Agent specified in writing by the
Administrative Agent to the Borrower, by noon (local time) on the date when
due and shall be applied ratably by the Administrative Agent among the
Lenders. Each payment delivered to the Administrative Agent for the account
of any Lender shall be delivered promptly by the Administrative Agent to
such Lender in the same type of funds that the Administrative Agent
received at its address specified pursuant to ARTICLE XIV or at any Lending
Installation specified in a notice received by the Administrative Agent
from such Lender. The Administrative Agent is hereby authorized to charge
the account of the Borrower maintained with Bank One for each payment of
principal, interest and fees as it becomes due hereunder. Each reference to
the Administrative Agent in this SECTION 2.14 shall also be deemed to
refer, and shall apply equally, to a LC Issuer, in the case of payments
required to be made by the Borrower to such LC Issuer pursuant to ARTICLE
III. Notwithstanding anything herein to the contrary, neither the
Administrative Agent nor any LC Issuer shall be permitted to charge the
account of the Borrower maintained with Bank One for any payment of any
amounts payable pursuant to CLAUSE (IV) of SECTION 3.8.
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2.15. NOTELESS AGREEMENT; EVIDENCE OF INDEBTEDNESS. (i) Each Lender
shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender resulting from
each Loan made by such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
(ii) The Administrative Agent shall also maintain accounts in which it
will record (a) the amount of each Loan made hereunder, the Type thereof
and the Interest Period with respect thereto, (b) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (c) the amount of any sum received by
the Administrative Agent hereunder from the Borrower and each Lender's
share thereof.
(iii) The entries maintained in the accounts maintained pursuant to
paragraphs (i) and (ii) above shall be PRIMA FACIE evidence of the
existence and amounts of the Obligations therein recorded; PROVIDED,
HOWEVER, that the failure of the Administrative Agent or any Lender to
maintain such accounts or any error therein shall not in any manner affect
the obligation of the Borrower to repay the Obligations in accordance with
their terms.
(iv) Any Lender may request that its Loans be evidenced by a
promissory note (a "NOTE"). In such event, the Borrower shall execute and
deliver to such Lender a Note payable to the order of such Lender in a form
supplied by the Administrative Agent. Thereafter, the Loans evidenced by
such Note and interest thereon shall at all times (including after any
assignment pursuant to SECTION 13.3) be represented by one or more Notes
payable to the order of the payee named therein or any assignee pursuant to
SECTION 13.3, except to the extent that any such Lender or assignee
subsequently returns any such Note for cancellation and requests that such
Loans once again be evidenced as described in paragraphs (i) and (ii)
above.
2.16. TELEPHONIC NOTICES. The Borrower hereby authorizes the Lenders,
the Swing Line Lender and the Administrative Agent to extend, convert or
continue Advances and Swing Line Loans, effect selections of Types of
Advances and to transfer funds based on telephonic notices made by any
person or persons the Administrative Agent, the Swing Line Lender or any
Lender in good faith believes to be acting on behalf of the Borrower. The
Borrower agrees to deliver promptly to the Administrative Agent a written
confirmation, if such confirmation is requested by the Administrative
Agent, the Swing Line Lender or any Lender, of each telephonic notice
signed by an Authorized Officer. If the written confirmation differs in any
material respect from the action taken by the Administrative Agent, the
Swing Line Lender and the Lenders, the records of the Administrative Agent,
the Swing Line Lender and the Lenders shall govern absent manifest error.
2.17. INTEREST PAYMENT DATES; INTEREST AND FEE BASIS. Interest accrued
on each Floating Rate Advance and Swing Line Loan shall be payable on each
Payment Date, commencing with the first such date to occur after the date
hereof and at maturity. Interest accrued on each Eurodollar Advance shall
be payable on the last day of its applicable Interest Period, on any date
on which the Eurodollar Advance is prepaid, whether by acceleration or
otherwise, and at maturity. Interest accrued on each Eurodollar Advance
having an Interest Period longer than three months shall also be payable on
the last day of each three-month interval during such
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Interest Period. Interest accrued on Eurodollar Advances, fees payable with
respect to Facility LCs, Facility Fees, Utilization Fees and Floating Rate
Advances and Swing Line Loans where the basis for calculation is the
Federal Funds Effective Rate shall be calculated for actual days elapsed on
the basis of a year of 360 days, and interest accrued on Floating Rate
Advances and Swing Line Loans where the basis for calculation is the Prime
Rate shall be calculated for actual days elapsed on the basis of a year or
365, or when appropriate 366, days. Interest shall be payable for the day
an Advance or Swing Line Loan is made but not for the day of any payment on
the amount paid if payment is received prior to noon (local time) at the
place of payment. If any payment of principal of or interest on an Advance
or Swing Line Loan or any fee shall become due on a day which is not a
Business Day, such payment shall be made on the next succeeding Business
Day and, in the case of a principal payment, such extension of time shall
be included in computing interest in connection with such payment.
2.18. NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND
COMMITMENT REDUCTIONS. Promptly after receipt thereof, the Administrative
Agent will notify each Lender of the contents of each Aggregate Commitment
reduction notice, Borrowing Notice, Conversion/Continuation Notice, and
repayment notice received by it hereunder. The Administrative Agent will
notify each Lender of the interest rate applicable to each Eurodollar
Advance promptly upon determination of such interest rate and will give
each Lender prompt notice of each change in the Alternate Base Rate.
2.19. LENDING INSTALLATIONS. Each Lender may book its Loans at any
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to
any such Lending Installation and the Loans and any Notes issued hereunder
shall be deemed held by each Lender for the benefit of such Lending
Installation. Each Lender may, by written notice to the Administrative
Agent and the Borrower in accordance with ARTICLE XIV, designate
replacement or additional Lending Installations through which Loans will be
made by it and for whose account Loan payments are to be made.
2.20. NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT. Unless the
Borrower or a Lender, as the case may be, notifies the Administrative Agent
prior to the date on which it is scheduled to make payment to the
Administrative Agent of (i) in the case of a Lender, the proceeds of a Loan
or (ii) in the case of the Borrower, a payment of principal, interest or
fees to the Administrative Agent for the account of the Swing Line Lender
or any of the Lenders, that it does not intend to make such payment, the
Administrative Agent may assume that such payment has been made. The
Administrative Agent may, but shall not be obligated to, make the amount of
such payment available to the intended recipient in reliance upon such
assumption. If such Lender or the Borrower, as the case may be, has not in
fact made such payment to the Administrative Agent, the recipient of such
payment shall, on demand by the Administrative Agent, repay to the
Administrative Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date
such amount was so made available by the Administrative Agent until the
date the Administrative Agent recovers such amount at a rate per annum
equal to (x) in the case of payment by a Lender, the Federal Funds
Effective Rate for such day or (y) in the case of payment by the Borrower,
the interest rate applicable to the relevant Loan.
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2.21. REPLACEMENT OF CERTAIN LENDERS. In the event a Lender ("AFFECTED
LENDER") shall have: (i) failed to fund its pro rata share of any Advance
requested by the Borrower, or to fund a Syndicated Loan in order to repay
Swing Line Loans pursuant to SECTION 2.2(D) or Reimbursement Obligations or
participations with respect to Letters of Credit pursuant to SECTION 3.5 or
SECTION 3.6, which such Lender is obligated to fund under the terms of this
Agreement and which failure has not been cured, (ii) requested compensation
from the Borrower under SECTIONS 4.1, 4.2 or 4.5 to recover Taxes, Other
Taxes or other additional costs incurred by such Lender which are not being
incurred generally by the other Lenders, (iii) delivered a notice pursuant
to SECTION 4.3 claiming that such Lender is unable to extend Eurodollar
Rate Loans to the Borrower for reasons not generally applicable to the
other Lenders or (iv) has invoked SECTION 10.2, then, in any such case, the
Borrower or the Administrative Agent may make written demand on such
Affected Lender (with a copy to the Administrative Agent in the case of a
demand by the Borrower and a copy to the Borrower in the case of a demand
by the Administrative Agent) for the Affected Lender to assign, and such
Affected Lender shall assign pursuant to one or more duly executed
assignments and acceptances in substantially the form of EXHIBIT D five (5)
Business Days after the date of such demand, to one or more financial
institutions that comply with the provisions of SECTION 13.3.1 which the
Borrower or the Administrative Agent, as the case may be, shall have
engaged for such purpose ("REPLACEMENT LENDER"), all of such Affected
Lender's rights and obligations under this Agreement and the other Loan
Documents (including, without limitation, its Commitment, all Loans owing
to it, all of its participation interests in existing Letters of Credit,
and its obligation to participate in additional Letters of Credit
hereunder) in accordance with SECTION 13.3. With respect to such
assignment, the Affected Lender shall not be obligated to effect such an
assignment unless it has concurrently received, in cash, all amounts due
and owing to the Affected Lender hereunder or under any other Loan
Document, including, without limitation, the aggregate outstanding
principal amount of the Loans owed to such Lender, together with accrued
interest thereon through the date of such assignment, amounts payable under
SECTIONS 4.1, 4.2 and 4.5 with respect to such Affected Lender and
compensation payable under SECTION 2.6 in the event of any replacement of
any Affected Lender under CLAUSE (II) or CLAUSE (III) of this SECTION 2.21;
PROVIDED that upon such Affected Lender's replacement, such Affected Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of SECTIONS 4.1, 4.2, 4.4, 4.5 and 10.6, as well as to any fees
accrued for its account hereunder and not yet paid, and shall continue to
be obligated under SECTION 11.8 with respect to amounts not reimbursed by
the Borrower, expenses or other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
imposed on, incurred by or asserted against the Administrative Agent in any
way relating to matters which occurred prior to such assignment. The
Administrative Agent agrees, upon the occurrence of such events with
respect to an Affected Lender and upon the written request of the Borrower,
to use its reasonable efforts to obtain commitments from one or more
financial institutions to act as a Replacement Lender.
ARTICLE III: THE LETTER OF CREDIT FACILITY
3.1. OBLIGATION TO ISSUE. Subject to the terms and conditions of
this Agreement and in reliance upon the representations, warranties and
covenants of the Borrower herein set forth, Bank One agrees to issue and
each other LC Issuer hereby agrees to issue for the account of the
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Borrower through such LC Issuer's branches as it and the Borrower may
jointly agree, one or more Letters of Credit as Facility LCs in accordance
with this ARTICLE III, from time to time during the period, commencing on
the date hereof and ending on the Business Day prior to the Facility
Termination Date.
3.2. TYPES AND AMOUNTS. No LC Issuer shall have any obligation to and
no LC Issuer shall:
(i) issue any Facility LC if on the date of issuance, before or after
giving effect to the Facility LC requested hereunder, (a)
Aggregate Outstanding Credit Exposure at such time would exceed
the Commitments at such time, or (b) the Aggregate Outstanding LC
Exposure would exceed $50,000,000;
(ii) issue any Facility LC which has an expiration date later than the
date which is one (1) year after the date of issuance thereof;
PROVIDED that any Facility LC with a one-year tenor may provide
for the automatic extension of the expiration date for successive
periods of up to one-year (which shall in no event extend beyond
the date set forth in clause (iii) below);
(iii)issue any Facility LC which has an expiration date later than
five (5) Business Days immediately preceding the Facility
Termination Date; or
(iv) issue any Facility LC denominated in any currency other than U.S.
Dollars
3.3. CONDITIONS. In addition to being subject to the satisfaction of
the conditions contained in SECTIONS 5.1 and 5.2, the obligation of a LC
Issuer to issue any Facility LC is subject to the satisfaction in full of
the following conditions:
(i) the Borrower shall have delivered to the applicable LC Issuer
(with copies delivered simultaneously to the Administrative
Agent) at such times and in such manner as such LC Issuer may
reasonably prescribe, a request for issuance of such Facility LC
in such form as shall be reasonably required by such LC Issuer,
duly executed applications for such Facility LC, and such other
customary documents, instructions and agreements as may be
required pursuant to the terms thereof (all such applications,
documents, instructions, and agreements being referred to herein
as the "LC DOCUMENTS"), and the proposed Facility LC shall be
reasonably satisfactory to such LC Issuer as to form and content;
and
(ii) as of the date of issuance no order, judgment or decree of any
court, arbitrator or governmental authority shall purport by its
terms to enjoin or restrain the applicable LC Issuer from issuing
such Facility LC and no law, rule or regulation applicable to
such LC Issuer and no request or directive (whether or not having
the force of law) from a governmental authority with jurisdiction
over such LC Issuer shall prohibit or request that such LC Issuer
refrain from the issuance of Facility LCs generally or the
issuance of that Facility LC.
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To the extent that any provision of any LC Document cannot reasonably be
construed to be consistent with this Agreement, requires greater collateral
security or imposes additional obligations not reasonably related to
customary letter of credit arrangements, such provision shall be invalid
and this Agreement shall control.
3.4. PROCEDURE FOR ISSUANCE OF FACILITY LCS. (a) Subject to the terms
and conditions of this ARTICLE III and provided that the applicable
conditions set forth in SECTIONS 5.1 and 5.2 hereof have been satisfied,
the applicable LC Issuer shall, on the requested date, issue a Facility LC
on behalf of the Borrower in accordance with such LC Issuer's usual and
customary business practices and, in this connection, such LC Issuer may
assume that the applicable conditions set forth in SECTION 5.2 hereof have
been satisfied unless it shall have received notice to the contrary from
the Administrative Agent or a Lender or has knowledge that the applicable
conditions have not been met.
(b) Immediately upon such issuance, the applicable LC Issuer shall
give the Administrative Agent written or telex notice, or telephonic notice
confirmed promptly thereafter in writing, of the issuance of a Facility LC,
PROVIDED, HOWEVER, that the failure to provide such notice shall not result
in any liability on the part of such LC Issuer. Promptly after receipt
thereof, the Administrative Agent shall provide the Lenders with any such
notice from any LC Issuer.
(c) No LC Issuer shall extend or amend or otherwise modify any
Facility LC unless the requirements of this ARTICLE III are met as though a
new Facility LC was being requested and issued.
3.5. FACILITY LC PARTICIPATION. Immediately upon the issuance of each
Facility LC hereunder, each Lender shall be deemed to have automatically,
irrevocably and unconditionally purchased and received from the applicable
LC Issuer an undivided interest and participation in and to such Facility
LC, the obligations of the Borrower in respect thereof, and the liability
of such LC Issuer thereunder (collectively, an "LC INTEREST") in an amount
equal to the amount available for drawing under such Facility LC multiplied
by such Lender's Percentage. Each LC Issuer will notify each Lender
promptly upon presentation to it of an LC Draft or upon any other draw
under a Facility LC. On or before the Business Day on which a LC Issuer
makes payment of each such LC Draft or, in the case of any other draw on a
Facility LC, on demand by the Administrative Agent, each Lender shall make
payment to the Administrative Agent, for the account of the applicable LC
Issuer, in immediately available funds in an amount equal to such Lender's
Percentage of the amount of such payment or draw. The obligation of each
Lender to reimburse the LC Issuers under this SECTION 3.5 shall be
unconditional, continuing, irrevocable and absolute. In the event that any
Lender fails to make payment to the Administrative Agent of any amount due
under this SECTION 3.5, the Administrative Agent shall be entitled to
receive, retain and apply against such obligation the principal and
interest otherwise payable to such Lender hereunder until the
Administrative Agent receives such payment from such Lender or such
obligation is otherwise fully satisfied; PROVIDED, HOWEVER, that nothing
contained in this sentence shall relieve such Lender of its obligation to
reimburse the applicable LC Issuer for such amount in accordance with this
SECTION 3.5.
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3.6. REIMBURSEMENT OBLIGATION. The Borrower agrees unconditionally,
irrevocably and absolutely to pay immediately to the Administrative Agent,
for the account of the Lenders, the amount of each advance which may be
drawn under or pursuant to a Facility LC or an LC Draft related thereto
(such obligation of the Borrower to reimburse the Administrative Agent for
an advance made under a Facility LC or LC Draft being hereinafter referred
to as a "REIMBURSEMENT OBLIGATION" with respect to such Facility LC or LC
Draft). If the Borrower at any time fails to repay a Reimbursement
Obligation pursuant to this SECTION 3.6, the Borrower shall be deemed to
have elected to borrow Syndicated Loans from the Lenders, as of the date of
the advance giving rise to the Reimbursement Obligation, equal in amount to
the amount of the unpaid Reimbursement Obligation. Such Syndicated Loans
shall be made as of the date of the payment giving rise to such
Reimbursement Obligation, automatically, without notice and without any
requirement to satisfy the conditions precedent otherwise applicable to an
Advance. Such Syndicated Loans shall constitute a Floating Rate Advance,
the proceeds of which Advance shall be used to repay such Reimbursement
Obligation. If, for any reason, the Borrower fails to repay a Reimbursement
Obligation on the day such Reimbursement Obligation arises and, for any
reason, the Lenders are unable to make or have no obligation to make
Syndicated Loans, then such Reimbursement Obligation shall bear interest
from and after such day, until paid in full, at the interest rate
applicable to a Floating Rate Advance.
3.7. CASH COLLATERAL. Notwithstanding anything to the contrary herein
or in any application for a Facility LC, after acceleration of the
Obligations pursuant to SECTION 9.1, the Borrower shall, upon the
Administrative Agent's demand, deliver to the Administrative Agent for the
benefit of the Lenders and the LC Issuers, cash, or other collateral of a
type satisfactory to the Required Lenders, having a value, as determined by
such Lenders, equal to the aggregate outstanding LC Obligations. Any such
collateral shall be held by the Administrative Agent in a separate interest
bearing account appropriately designated as a cash collateral account in
relation to this Agreement and the Facility LCs and retained by the
Administrative Agent for the benefit of the Lenders and the LC Issuers as
collateral security for the Borrower's obligations in respect of this
Agreement and each of the Facility LCs and LC Drafts. Such amounts shall be
applied to reimburse the LC Issuers for drawings or payments under or
pursuant to Facility LCs or LC Drafts, or if no such reimbursement is
required, to payment of such of the other Obligations as the Administrative
Agent shall determine. If such acceleration of the Obligations shall be
rescinded, amounts (including interest income) remaining in any cash
collateral account established pursuant to this SECTION 3.7 which are not
to be applied to reimburse a LC Issuer for amounts actually paid or to be
paid by such LC Issuer in respect of a Facility LC or LC Draft, shall be
returned to the Borrower (after deduction of the Administrative Agent's
reasonable expenses incurred in connection with such cash collateral
account).
3.8. FACILITY LC FEES. The Borrower agrees to pay (i) on each Payment
Date and on the Facility Termination Date, in arrears, to the
Administrative Agent for the ratable benefit of the Lenders, a letter of
credit fee at a rate per annum equal to the Applicable LC Fee Percentage on
the weighted average daily outstanding face amount available for drawing
under all issued standby Facility LCs, (ii) on each Payment Date and on the
Facility Termination Date, in arrears, to the Administrative Agent for the
sole account of each LC Issuer, a letter of credit fronting fee on the
weighted average daily outstanding face amount available for drawing under
all Facility
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LCs issued by such LC Issuer in an amount or at a rate as agreed to between
the Borrower and such LC Issuer, (iii) on each Payment Date and on the
Facility Termination Date, in arrears, to the Administrative Agent for the
ratable benefit of the Lenders, a letter of credit fee at a rate per annum
equal to one-half of the Applicable LC Fee Percentage on the weighted
average daily outstanding face amount available for drawing under all
issued commercial Facility LCs, and (iv) to the Administrative Agent for
the benefit of each LC Issuer, all customary fees and other issuance,
amendment, document examination, negotiation and presentment expenses and
related charges in connection with the issuance, amendment, presentation of
LC Drafts, and the like customarily charged by such LC Issuer with respect
to standby and commercial Facility LCs, payable at the time of invoice of
such amounts.
3.9. LC ISSUER REPORTING REQUIREMENTS. In addition to the notices
required by SECTION 3.4(B), each LC Issuer shall, no later than the tenth
Business Day following the last day of each month, provide to the
Administrative Agent, upon the Administrative Agent's or any Lender's
request, schedules, in form and substance reasonably satisfactory to the
Administrative Agent, showing the date of issue, account party, amount,
expiration date and the reference number of each Facility LC issued by it
outstanding at any time during such month and the aggregate amount payable
by the Borrower during such month. In addition, upon the request of the
Administrative Agent, each LC Issuer shall furnish to the Administrative
Agent copies of any Facility LC and any application for or reimbursement
agreement with respect to a Facility LC to which the LC Issuer is party and
such other documentation as may reasonably be requested by the
Administrative Agent. Upon the request of any Lender, the Administrative
Agent will provide to such Lender information concerning such Facility LCs.
3.10. INDEMNIFICATION; EXONERATION. (a) In addition to amounts payable
as elsewhere provided in this ARTICLE III, the Borrower hereby agrees to
protect, indemnify, pay and save harmless the Administrative Agent, each LC
Issuer and each Lender from and against any and all liabilities and costs
which the Administrative Agent, such LC Issuer or such Lender may incur or
be subject to as a consequence, direct or indirect, of (i) the issuance of
any Facility LC other than, in the case of the applicable LC Issuer, as a
result of its gross negligence or willful misconduct, as determined by the
final judgment of a court of competent jurisdiction, or (ii) the failure of
the applicable LC Issuer to honor a drawing under a Facility LC as a result
of any act or omission, whether rightful or wrongful, of any present or
future DE JURE or DE FACTO governmental authority (all such acts or
omissions herein called "GOVERNMENTAL ACTS").
(b) As among the Borrower, the Lenders, the Administrative Agent and
the LC Issuers, the Borrower assumes all risks of the acts and omissions
of, or misuse of such Facility LC by, the beneficiary of any Facility LCs.
In furtherance and not in limitation of the foregoing, subject to the
provisions of the Facility LC applications and Facility LC reimbursement
agreements executed by the Borrower at the time of request for any Facility
LC, neither the Administrative Agent, any LC Issuer nor any Lender shall be
responsible (in the absence of gross negligence or willful misconduct in
connection therewith, as determined by the final judgment of a court of
competent jurisdiction): (i) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of the Facility LCs, even
if it should in fact prove to be in any or all respects invalid,
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insufficient, inaccurate, fraudulent or forged; (ii) for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign a Facility LC or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason; (iii) for failure of the beneficiary of a
Facility LC to comply duly with conditions required in order to draw upon
such Facility LC; (iv) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex,
or other similar form of teletransmission or otherwise; (v) for errors in
interpretation of technical trade terms; (vi) for any loss or delay in the
transmission or otherwise of any document required in order to make a
drawing under any Facility LC or of the proceeds thereof; (vii) for the
misapplication by the beneficiary of a Facility LC of the proceeds of any
drawing under such Facility LC; and (viii) for any consequences arising
from causes beyond the control of the Administrative Agent, the LC Issuers
and the Lenders, including, without limitation, any Governmental Acts.
(c) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by any LC
Issuer under or in connection with the Facility LCs or any related
certificates shall not, in the absence of gross negligence or willful
misconduct, as determined by the final judgment of a court of competent
jurisdiction, put the applicable LC Issuer, the Administrative Agent or any
Lender under any resulting liability to the Borrower or relieve the
Borrower of any of its obligations hereunder to any such Person.
(d) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower
contained in this SECTION 3.10 shall survive the payment in full of
principal and interest hereunder, the termination of the Facility LCs and
the termination of this Agreement.
ARTICLE IV: YIELD PROTECTION; TAXES
4.1. YIELD PROTECTION. If, on or after the date of this Agreement, the
adoption of any law or any governmental or quasi-governmental rule,
regulation, policy, guideline or directive (whether or not having the force
of law), or any change in the interpretation or administration thereof by
any governmental or quasi-governmental authority, central bank or
comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender, LC Issuer or applicable Lending
Installation with any request or directive (whether or not having the force
of law) of any such authority, central bank or comparable agency:
(i) subjects any Lender or LC Issuer or any applicable Lending
Installation to any Taxes, or changes the basis of taxation of
payments (other than with respect to Excluded Taxes) to any
Lender in respect of its Loans, its LC Interests, the Facility
LCs or other amounts due hereunder or
(ii) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against
assets of, deposits with or for the account of, or credit
extended by, any Lender, Swing Line Lender, LC Issuer or any
applicable Lending Installation (other than reserves and
assessments
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taken into account in determining the interest rate applicable to
Eurodollar Advances), or
(iii)imposes any other condition the result of which is to increase
the cost to any Lender, Swing Line Lender, LC Issuer or any
applicable Lending Installation of making, funding or maintaining
its Loans, LC Interests or the Facility LCs or reduces any amount
receivable by any Lender or any applicable Lending Installation
in connection with its Loans, LC Interests or the Facility LCs or
requires any Lender or any applicable Lending Installation to
make any payment calculated by reference to the amount of Loans,
LC Interests or Facility LCs held or interest received by it, by
an amount deemed material by such Lender,
and the result of any of the foregoing is to increase the cost to such
Lender or applicable Lending Installation of making or maintaining its
Loans, LC Interests, Facility LCs or Commitment or to reduce the return
received by such Lender or applicable Lending Installation in connection
with such Loans, LC Interests, Facility LCs or Commitment, then, within 15
days of demand by such Lender, the Borrower shall pay such Lender such
additional amount or amounts as will compensate such Lender for such
increased cost or reduction in amount received.
4.2. CHANGES IN CAPITAL ADEQUACY REGULATIONS. If a Lender, Swing
Line Lender or LC Issuer determines the amount of capital required or
expected to be maintained by such Lender, Swing Line Lender or LC Issuer,
any Lending Installation of such Lender or any corporation controlling such
Lender, Swing Line Lender or LC Issuer is increased as a result of a
Change, then, within 15 days of demand by such Lender, Swing Line Lender or
LC Issuer, the Borrower shall pay such Lender, Swing Line Lender or LC
Issuer the amount necessary to compensate for any shortfall in the rate of
return on the portion of such increased capital which such Lender, Swing
Line Lender or LC Issuer determines is attributable to this Agreement, its
Loans, Swing Line Loans, LC Interests, Facility LCs or its Commitment to
make Loans or Swing Line Loans hereunder (after taking into account such
Lender's, Swing Line Lender's or LC Issuer's policies as to capital
adequacy). No Lender, Swing Line Lender or LC Issuer shall be entitled to
demand payment under this SECTION 4.2 to the extent that such payment
relates to a period of time more than 90 days prior to the date upon which
such Lender, Swing Line Lender or LC Issuer first notified the Borrower of
the occurrence of the event entitling such Lender, Swing Line Lender or LC
Issuer to such payment. "CHANGE" means (i) any change after the date of
this Agreement in the Risk-Based Capital Guidelines or (ii) any adoption of
or change in any other law, governmental or quasi-governmental rule,
regulation, policy, guideline, interpretation, or directive (whether or not
having the force of law) after the date of this Agreement which affects the
amount of capital required or expected to be maintained by any Lender,
Swing Line Lender, the LC Issuers or any Lending Installation or any
corporation controlling any Lender, Swing Line Lender or LC Issuer.
"RISK-BASED CAPITAL GUIDELINES" means (i) the risk-based capital guidelines
in effect in the United States on the date of this Agreement, including
transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States
implementing the July 1988 report of the Basle Committee on Banking
Regulation and Supervisory Practices Entitled "International Convergence of
Capital Measurements and
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Capital Standards," including transition rules, and any amendments to such
regulations adopted prior to the date of this Agreement.
4.3. AVAILABILITY OF TYPES OF ADVANCES. If any Lender determines that
maintenance of its Eurodollar Loans at a suitable Lending Installation
would violate any applicable law, rule, regulation, or directive, whether
or not having the force of law, or if the Required Lenders determine that
(i) deposits of a type and maturity appropriate to match fund Eurodollar
Advances are not available or (ii) the interest rate applicable to a Type
of Advance does not adequately or fairly reflect the cost of making or
maintaining such Advance and the Borrower, the Administrative Agent and the
Lenders shall not have entered into a written agreement providing to the
Lenders compensation satisfactory to the Lenders for such inadequate or
unfairly reflected cost, then the Administrative Agent shall suspend the
availability of the affected Type of Advance and require any affected
Eurodollar Advances to be repaid or converted to Floating Rate Advances,
subject to the payment of any funding indemnification amounts required by
SECTION 4.4.
4.4. FUNDING INDEMNIFICATION. If any payment of a Eurodollar Advance
occurs on a date which is not the last day of the applicable Interest
Period, whether because of acceleration, prepayment or otherwise, or a
Eurodollar Advance is not made on the date specified by the Borrower for
any reason other than default by the Lenders, the Borrower will indemnify
each Lender for any loss or cost incurred by it resulting therefrom,
including, without limitation, any loss or cost in liquidating or employing
deposits acquired to fund or maintain such Eurodollar Advance.
4.5. TAXES. (i) All payments by the Borrower to or for the account of
any Lender, Swing Line Lender, LC Issuer, or the Administrative Agent
hereunder or under any Note shall be made free and clear of and without
deduction for any and all Taxes. If the Borrower shall be required by law
to deduct any Taxes from or in respect of any sum payable hereunder to any
Lender, Swing Line Lender, any LC Issuer or the Administrative Agent, (a)
the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums
payable under this SECTION 4.5) such Lender, Swing Line Lender, LC Issuer,
or the Administrative Agent (as the case may be) receives an amount equal
to the sum it would have received had no such deductions been made, (b) the
Borrower shall make such deductions, (c) the Borrower shall pay the full
amount deducted to the relevant authority in accordance with applicable law
and (d) the Borrower shall furnish to the Administrative Agent the original
copy of a receipt evidencing payment thereof within 30 days after such
payment is made.
(ii) In addition, the Borrower hereby agrees to pay any present or
future stamp or documentary taxes and any other excise taxes, charges or
similar levies, in each case other than Excluded Taxes, which arise from
any payment made hereunder or under any Note or from the execution or
delivery of, or otherwise with respect to, this Agreement or any Note
("OTHER TAXES").
(iii) The Borrower hereby agrees to indemnify the Agents, the Swing
Line Lender, the LC Issuers and each Lender for the full amount of Taxes or
Other Taxes (including, without
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limitation, any Taxes or Other Taxes imposed on amounts payable under this
SECTION 4.5) paid by the Agents, the Swing Line Lender, the LC Issuer or
such Lender and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto. Payments due under this
indemnification shall be made within 30 days of the date the applicable
Agent, the Swing Line Lender, such LC Issuer or such Lender makes demand
therefor pursuant to SECTION 4.6.
(iv) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof (each a "NON-U.S. LENDER") agrees that
it will, not less than ten Business Days after the date of this Agreement
or the date it becomes a Lender hereunder deliver to each of the Borrower
and the Administrative Agent a United States Internal Revenue Form W-8 or
W-9, as the case may be, and certify that it is entitled to an exemption
from United States backup withholding tax. Each Non-U.S. Lender further
undertakes to deliver to each of the Borrower and the Administrative Agent
(x) renewals or additional copies of such form (or any successor form) on
or before the date that such form expires or becomes obsolete, and (y)
after the occurrence of any event requiring a change in the most recent
forms so delivered by it, such additional forms or amendments thereto as
may be reasonably requested by the Borrower or the Administrative Agent.
All forms or amendments described in the preceding sentence shall certify
that such Lender is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal income taxes,
UNLESS a 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 Lender from duly
completing and delivering any such form or amendment with respect to it and
such Lender advises the Borrower and the Administrative Agent that it is
not capable of receiving payments without any deduction or withholding of
United States federal income tax.
(v) For any period during which a Non-U.S. Lender has failed to
provide the Borrower with an appropriate form pursuant to CLAUSE (IV),
above (unless such failure is due to a change in treaty, law or regulation,
or any change in the interpretation or administration thereof by any
governmental authority, occurring subsequent to the date on which a form
originally was required to be provided), such Non-U.S. Lender shall not be
entitled to indemnification under this SECTION 4.5 with respect to Taxes
imposed by the United States; PROVIDED that, should a Non-U.S. Lender which
is otherwise exempt from or subject to a reduced rate of withholding tax
become subject to Taxes because of its failure to deliver a form required
under CLAUSE (IV), above, the Borrower shall take such steps as such
Non-U.S. Lender shall reasonably request to assist such Non-U.S. Lender to
recover such Taxes.
(vi) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any Note
pursuant to the law of any relevant jurisdiction or any treaty shall
deliver to the Borrower (with a copy to the Administrative Agent), at the
time or times prescribed by applicable law, such properly completed and
executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate.
4.6. LENDER STATEMENTS; SURVIVAL OF INDEMNITY. To the extent
reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its Eurodollar Loans to reduce any liability
of the Borrower to such Lender under SECTIONS 4.1, 4.2 and 4.5 or to avoid
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the unavailability of Eurodollar Advances under SECTION 4.3, so long as
such designation is not, in the judgment of such Lender, disadvantageous to
such Lender. Each Lender, Swing Line Lender or LC Issuer, as applicable,
shall deliver a written statement of such Lender, Swing Line Lender or LC
Issuer to the Borrower (with a copy to the Administrative Agent) as to the
amount due, if any, under SECTION 4.1, 4.2, 4.4 or 4.5. Such written
statement shall set forth in reasonable detail the calculations upon which
such Lender, Swing Line Lender or LC Issuer determined such Lender, LC
Issuer or Swing Line Lender determined such amount and shall be final,
conclusive and binding on the Borrower in the absence of manifest error.
Determination of amounts payable under such Sections in connection with a
Eurodollar Loan shall be calculated as though each Lender funded its
Eurodollar Loan through the purchase of a deposit of the type and maturity
corresponding to the deposit used as a reference in determining the
Eurodollar Rate applicable to such Loan, whether in fact that is the case
or not. Unless otherwise provided herein, the amount specified in the
written statement of any Lender, Swing Line Lender or LC Issuer shall be
payable on demand after receipt by the Borrower of such written statement.
The obligations of the Borrower under SECTIONS 4.1, 4.2, 4.4 and 4.5 shall
survive payment of the Obligations, termination or expiration of the
Facility LCs and termination of this Agreement.
ARTICLE V: CONDITIONS PRECEDENT
5.1. INITIAL CREDIT EXTENSIONS. The Lenders shall not be required to
make the initial Advance hereunder, the Swing Line Lender shall not be
required to make the initial Swing Line Loan and the LC Issuers shall not
be required to issue the initial Facility LC hereunder, unless (a) the
representation and warranty contained in SECTION 6.5 is true and correct as
of such date and (b) the Borrower has furnished to the Administrative Agent
(with sufficient copies for the Lenders):
(i) Copies of the articles or certificate of incorporation of each of
the Borrower, each of its Material Domestic Subsidiaries (other
than the Howmet Companies) and each Material Foreign Subsidiary
(other than the Howmet Companies), together, in each case, with
all amendments, and certificates of good standing, each certified
by the appropriate governmental officer in its jurisdiction of
incorporation.
(ii) Copies, certified by the Secretary or Assistant Secretary of each
member of the Obligor Group, of its by-laws, articles or
certificate of incorporation and of its Board of Directors'
resolutions and of resolutions or actions of any other body
authorizing the execution of the Loan Documents to which it is a
party.
(iii)An incumbency certificate, executed by the Secretary or Assistant
Secretary of each member of the Obligor Group, which shall
identify by name and title and bear the signatures of the
Authorized Officers and any other officers of the members of the
Obligor Group authorized to sign the Loan Documents to which the
Borrower or any of its Consolidated Subsidiaries is a party, upon
which certificate the Administrative Agent, the Swing Line
Lender, the LC Issuers, and the Lenders shall be entitled to rely
until informed of any change in writing by the Borrower.
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(iv) A certificate, signed by the chief financial officer of the
Borrower, stating that on the initial Borrowing Date there exists
no Default or Unmatured Default.
(v) A written opinion of counsel to each member of the Obligor Group,
addressed to the Administrative Agent, the LC Issuers, the Swing
Line Lender and the Lenders in form and substance reasonably
acceptable to the Administrative Agent.
(vi) Any Notes requested by any Lender pursuant to SECTION 2.15
payable to the order of each such requesting Lender and the Swing
Line Note.
(vii)Written money transfer instructions, in substantially the form of
EXHIBIT E, addressed to the Administrative Agent and signed by an
Authorized Officer, together with such other related money
transfer authorizations as the Administrative Agent may have
reasonably requested.
(viii) The Subsidiary Guaranty executed by each of the Borrower's
Material Domestic Subsidiaries other than the Howmet Companies.
(ix) Documentation evidencing the arrangement for the termination of
the Existing Credit Agreements and repayment of all obligations,
indebtedness and liabilities outstanding thereunder from the
proceeds of the initial Loans hereunder.
(x) Pledge Agreements with respect to each of the Borrower's Material
Foreign Subsidiaries other than the Howmet Companies, if any,
together with applicable stock certificates, stock powers or
other applicable documentation.
(xi) A written opinion of foreign counsel with respect to each Pledge
Agreement, if any, addressed to the Administrative Agent, the LC
Issuers and the Lenders, in form and substance acceptable to the
Administrative Agent.
(xii)A form U-1 signed by the Borrower together with such information
as shall permit the Administrative Agent to complete the
provisions of such form U-1.
(xiii) Such other documents as the Administrative Agent, any Lender or
its counsel may have reasonably requested.
5.2. EACH CREDIT EXTENSION. The Lenders shall not be required to make
any Advance, the Swing Line Lender shall not be obligated to make a Swing
Line Loan and no LC Issuer shall be required to issue any Facility LC,
unless on the applicable Credit Extension Date, both immediately prior to,
and immediately after giving effect to, such Credit Extension:
(i) Either (a) in the case of an Advance, the Administrative Agent
shall have received a Borrowing Notice in compliance with SECTION
2.10 , (b) in the case of a Swing Line Loan, the Swing Line
Lender shall have received a notice of borrowing in compliance
with SECTION 2.2(B) and (c) in the case of a Facility LC, the LC
Issuer shall have received a request for the issuance of a
Facility LC in compliance with
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SECTION 3.3(I) (together with any Facility LC application
agreement requested by the LC Issuer pursuant to SECTION 3.3(I)).
(ii) The Aggregate Outstanding Credit Exposure does not and would not
exceed the Aggregate Commitment.
(iii) There exists no Default or Unmatured Default.
(iv) The representations and warranties contained in ARTICLE VI (other
than SECTION 6.5) are true and correct as of such Borrowing Date
except to the extent any such representation or warranty is
stated to relate solely to an earlier date, in which case such
representation or warranty shall have been true and correct on
and as of such earlier date.
(v) All legal matters incident to the making of such Credit Extension
shall be satisfactory to the Lenders, the Swing Line Lender and
the LC Issuers and their counsel.
Each Borrowing Notice with respect to each such Advance, each notice
of borrowing with respect to any Swing Line Loan and each request for the
issuance of a Facility LC pursuant to ARTICLE III, shall constitute a
representation and warranty by the Borrower that the conditions contained
in SECTIONS 5.2(I) and (II) have been satisfied. Any Lender, the Swing Line
Lender or any LC Issuer may require a duly completed compliance certificate
in substantially the form of EXHIBIT F as a condition to making an Advance
or issuance of a Facility LC (with the financial covenant calculations
contained therein being as of the most recently ended fiscal quarter for
which the Borrower has been required to have filed its financial statements
with the Securities and Exchange Commission).
ARTICLE VI: REPRESENTATIONS AND WARRANTIES
In order to induce the Agents, the Swing Line Lender, the LC Issuers
and the Lenders to enter into this Agreement and to make the Credit
Extensions to the Borrower described herein, the Borrower represents and
warrants as follows to each Lender, each LC Issuer, the Swing Line Lender
and the Agents as of the Closing Date, and thereafter on each date as
required by SECTION 5.2:
6.1. EXISTENCE AND STANDING. Each member of the Obligor Group is a
corporation or (in the case of Consolidated Subsidiaries only) a
partnership or limited liability company duly and properly incorporated or
organized, as the case may be, validly existing and (to the extent such
concept applies to such entity) in good standing under the laws of its
jurisdiction of incorporation or organization and has all requisite
authority to conduct its business in each jurisdiction in which its
business is conducted unless the failure so to qualify would not be
reasonably expected to have a Material Adverse Effect.
6.2. AUTHORIZATION AND VALIDITY. Each of the Borrower and its
Consolidated Subsidiaries has the power and authority and legal right to
execute and deliver the Loan Documents to which
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it is a party and to perform its obligations thereunder. The execution and
delivery by each of the Borrower and its Consolidated Subsidiaries of the
Loan Documents to which it is a party and the performance of each of its
obligations thereunder have been duly authorized by proper corporate
proceedings (or in the case of Consolidated Subsidiaries, partnership or
company proceedings), and the Loan Documents to which each of the Borrower
and its Consolidated Subsidiaries is a party constitute legal, valid and
binding obligations of the Borrower and its Consolidated Subsidiaries
enforceable against the Borrower and its Consolidated Subsidiaries in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally.
6.3. NO CONFLICT; GOVERNMENT CONSENT. Neither the execution and
delivery by the Borrower of the Loan Documents to which it is a party, nor
the consummation of the transactions therein contemplated, nor compliance
with the provisions thereof will violate (i) any law, rule, regulation,
order, writ, judgment, injunction, decree or award binding on the Borrower
or (ii) the Borrower's articles or certificate of incorporation or by-laws
or (iii) the provisions of any indenture, loan agreement, credit agreement,
mortgage or deed of trust, or any other material contract, agreement or
instrument to which the Borrower is a party or is subject, or by which it,
or its Property, is bound, or conflict with or constitute a default
thereunder, or result in, or require, the creation or imposition of any
Lien in, of or on any material Properties of the Borrower pursuant to the
terms of any such indenture, loan agreement, credit agreement, mortgage,
deed of trust or other material contract, agreement or instrument other
than pursuant to the Collateral Documents. Neither the execution and
delivery by the Borrower or any of its Subsidiaries of the Loan Documents
to which it is a party, nor the consummation of the transactions therein
contemplated, nor compliance with the provisions thereof will violate in
any material respect (i) any material law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on any of the Borrower's
Subsidiaries or (ii) any articles or certificate of incorporation,
partnership agreement, certificate of partnership, articles or certificate
of organization, or by-laws, or operating or other management agreement, as
the case may be, of any Subsidiary of the Borrower or (iii) the provisions
of any material indenture, loan agreement, credit agreement, mortgage or
deed of trust, or any other material contract, agreement or instrument to
which any of the Borrower's Subsidiaries is a party or is subject, or by
which such Subsidiaries, or any of their Property, is bound, or conflict in
any material respect with or constitute a default thereunder, or result in,
or require, the creation or imposition of any Lien in, of or on any
material Properties of any of the Borrower's Subsidiaries pursuant to the
terms of any such material indenture, loan agreement, credit agreement,
mortgage, deed of trust or other material contract, agreement or instrument
other than pursuant to the Collateral Documents. No order, consent,
adjudication, approval, license, authorization, or validation of, or
filing, recording or registration with, or exemption by, or other action in
respect of any governmental or public body or authority, or any subdivision
thereof, which has not been obtained by the Borrower or any of its
Subsidiaries, is required to be obtained by the Borrower or any of its
Subsidiaries in connection with the execution and delivery of the Loan
Documents, the borrowings under this Agreement, the payment and performance
by the Borrower of the Obligations or the legality, validity, binding
effect or enforceability of any of the Loan Documents.
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6.4. FINANCIAL STATEMENTS. The September 30, 1999 unaudited
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries heretofore delivered to the Lenders were prepared in
accordance with generally accepted accounting principles in effect on the
date such statements were prepared and fairly present the consolidated
financial condition and operations of the Borrower and its Consolidated
Subsidiaries at such date and the consolidated results of their operations
for the period then ended, subject to normal year-end audit adjustments.
6.5. MATERIAL ADVERSE CHANGE. Since September 30, 1999 and up to the
date of the initial Credit Extension hereunder, there has been no change in
the business, Property, prospects, condition (financial or otherwise) or
results of operations of the Borrower or its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect.
6.6. TAXES. The Borrower and its Subsidiaries have filed all United
States federal tax returns and all other tax returns which are required to
be filed and have paid all taxes due pursuant to said returns or pursuant
to any assessment received by the Borrower or any of its Subsidiaries,
except such taxes, if any, as are being contested in good faith and as to
which adequate reserves have been provided in accordance with Agreement
Accounting Principles and as to which no Lien exists. The United States
income tax returns of the Borrower and its Subsidiaries have been audited
by the Internal Revenue Service through the fiscal year ended June 30,
1995. Except as provided in SECTION 7.14(III), no tax liens have been filed
and no claims are being asserted with respect to any such taxes. The
charges, accruals and reserves on the books of the Borrower and its
Subsidiaries in respect of any taxes or other governmental charges are
adequate.
6.7. LITIGATION AND CONTINGENT OBLIGATIONS. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or,
to the knowledge of any of their officers, threatened against or affecting
the Borrower or any of its Subsidiaries which could reasonably be expected
to have a Material Adverse Effect or which seeks to prevent, enjoin or
delay the making of any Loans. Other than any liability incident to any
litigation, arbitration or proceeding which could not reasonably be
expected to have a Material Adverse Effect and other than as set forth on
SCHEDULE 1, the Borrower has no material contingent obligations not
provided for or disclosed in the financial statements referred to in
SECTION 6.4.
6.8. SUBSIDIARIES. SCHEDULE 2 contains an accurate list of all
Subsidiaries (identifying which of those Subsidiaries are Consolidated
Subsidiaries) of the Borrower as of the date of this Agreement, setting
forth their respective jurisdictions of organization and the percentage of
their respective capital stock or other ownership interests owned by the
Borrower or other Subsidiaries together with a calculation, in the case of
foreign Subsidiaries, as of the quarter ended immediately prior to the
Closing Date of such Subsidiaries' total assets as a percentage of the
consolidated total assets of the Borrower and its Consolidated Subsidiaries
. All of the issued and outstanding shares of capital stock or other
ownership interests of such Subsidiaries have been (to the extent such
concepts are relevant with respect to such ownership interests) duly
authorized and issued and are fully paid and non-assessable. After the
formation or acquisition of any New Subsidiary permitted under SECTION
7.13(B), if requested by the Administrative Agent or any Lender, the
Borrower shall provide a supplement to SCHEDULE 2 to this Agreement.
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6.9. ERISA; FOREIGN PENSION PLAN MATTERS. The sum of (a) the Unfunded
Liabilities of all Plans and (b) the present value of the aggregate
unfunded liabilities to provide the accrued benefits under all Foreign
Pension Plans do not in the aggregate exceed an amount equal to the sum of
(i) five percent (5.0%) of the value (as of any date of determination) of
all Plan assets allocable to Plan benefits guaranteed by ERISA and (ii)
five percent (5.0%) of the fair market value of the assets held in trust or
other funding vehicles for accrued benefits under all Foreign Pension
Plans. Each Plan and each Foreign Pension Plan complies in all material
respects with all applicable requirements of law and regulations, no
Reportable Event has occurred with respect to any Plan, neither the
Borrower nor any other member of the Controlled Group has withdrawn from
any Multiemployer Plan or initiated steps to do so, and no steps have been
taken to terminate any Plan, other than such non-compliance, Reportable
Events, withdrawals, and terminations which, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect.
6.10. ACCURACY OF INFORMATION. No factual information, exhibit or
report furnished by the Borrower or any of its Subsidiaries to the
Administrative Agent, the Arranger, the Swing Line Lender, any LC Issuer or
to any Lender, including, without limitation the January 2000 Confidential
Information Memorandum entitled "Cordant Technologies $1,000,000,000 Senior
Credit Facilities", in connection with the negotiation of, or compliance
with, the Loan Documents contained any material misstatement of fact or
omitted to state a material fact or any fact necessary to make the
statements contained therein not misleading. The projections furnished by
the Borrower and its Subsidiaries to the Administrative Agent, the Swing
Line Lender, the LC Issuers and the Lenders prior to and in connection with
the execution of this Agreement were prepared in good faith and, at the
time of the preparation thereof, based on good faith estimates and
assumptions believed by management of the Borrower to be reasonable,
subject to the uncertainties inherent in projections.
6.11. SECURITIES ACTIVITIES. The Borrower and its Subsidiaries are in
compliance with Regulations T, U and X. Neither the Borrower nor any of its
Subsidiaries is engaged principally, or as one of its important activities,
in the business of extending credit for the purpose of purchasing or
carrying "margin stock" (as defined in Regulation U).
6.12. MATERIAL AGREEMENTS. Neither the Borrower nor any Subsidiary is
a party to any agreement or instrument or subject to any charter or other
corporate restriction which could reasonably be expected to have a Material
Adverse Effect. Neither the Borrower nor any Subsidiary is in default in
the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any agreement to which it is a party,
which default could reasonably be expected to have a Material Adverse
Effect.
6.13. COMPLIANCE WITH LAWS. The Borrower and its Subsidiaries have
complied in all respects with all applicable statutes, rules, regulations,
orders and restrictions of any domestic or foreign government or any
instrumentality or agency thereof having jurisdiction over the conduct of
their respective businesses or the ownership of their respective Property,
except for non-compliance therewith which individually or in the aggregate
could not reasonably be expected to have a Material Adverse Effect.
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6.14. OWNERSHIP OF PROPERTIES. Except as set forth on SCHEDULE 3, on
the date of this Agreement, the Borrower and its Consolidated Subsidiaries
will have good title, free of all Liens other than those permitted by
SECTION 7.14, to all of the Property and assets reflected in the Borrower's
most recent consolidated financial statements provided to the
Administrative Agent as owned by the Borrower and its Consolidated
Subsidiaries.
6.15. PLAN ASSETS; PROHIBITED TRANSACTIONS. The Borrower is an
"operating company" within the meaning of 29 C.F.R. ss. 2510.3-101 and
neither the execution of this Agreement nor the making of Loans hereunder
gives rise to a prohibited transaction within the meaning of SECTION 406 of
ERISA or SECTION 4975 of the Code.
6.16. ENVIRONMENTAL MATTERS. In the ordinary course of its business,
the officers of the Borrower and its Subsidiaries consider the effect of
Environmental Laws on the business of the Borrower and its Subsidiaries, in
the course of which they identify and evaluate potential risks and
liabilities accruing to the Borrower and its Subsidiaries due to
Environmental Laws. On the basis of this consideration, the Borrower has
concluded that Environmental Laws cannot reasonably be expected to have a
Material Adverse Effect. Neither the Borrower nor any Subsidiary has
received any notice to the effect that its operations are not in material
compliance with any of the requirements of applicable Environmental Laws or
are the subject of any federal or state investigation evaluating whether
any remedial action is needed to respond to a release of any toxic or
hazardous waste or substance into the environment, which non-compliance or
remedial action could reasonably be expected to have a Material Adverse
Effect.
6.17. INVESTMENT COMPANY ACT. Neither the Borrower nor any Subsidiary
is an "investment company" or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as
amended.
6.18. PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Borrower nor any
Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
ARTICLE VII: COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
7.1. FINANCIAL REPORTING. (i) The Borrower will maintain, for itself
and each Consolidated Subsidiary, a system of accounting
established and administered in accordance with generally
accepted accounting principles and shall cause to be filed with
the Securities and Exchange Commission in electronic format
available to the Lenders:
(a) Within 90 days after the close of each of its fiscal years,
an unqualified audit report certified by independent
certified public accountants of nationally recognized
standing or otherwise acceptable to the Lenders,
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prepared in accordance with Agreement Accounting Principles
on a consolidated basis for itself and its Consolidated
Subsidiaries, including balance sheets as of the end of such
period, related profit and loss and reconciliation of
surplus statements, and a statement of cash flows (the
"ANNUAL AUDITED FINANCIAL Statements"); and
(b) Within 45 days after the close of each of the first three
quarters in each fiscal year, for itself and its
Consolidated Subsidiaries, consolidated unaudited balance
sheets as at the close of each such period and consolidated
profit and loss and reconciliation of surplus statements and
a statement of cash flows for the period from the beginning
of such fiscal year to the end of such quarter (subject in
each case to normal year-end audit adjustments) (the
"QUARTERLY FINANCIAL STATEMENTS").
(ii) The Borrower will furnish to the Administrative Agent (copies of
which the Administrative Agent shall forward to the Lenders):
(a) Within 10 Business Days after filed with the Securities and
Exchange Commission, the Annual Audited Financial
Statements, accompanied by (1) any management letter
prepared by said accountants and (2) a certificate of said
accountants that, in the course of their examination
necessary for their certification of the foregoing, they
have obtained no knowledge of any Default or Unmatured
Default under the financial terms contained in SECTION 7.10,
7.12, 7.13, 7.14, 7.17 or 7.18, or if, in the opinion of
such accountants, any such Default or Unmatured Default
shall exist, stating the nature and status thereof.
(b) Within 10 Business Days after filed with the Securities and
Exchange Commission, the Quarterly Financial Statements,
certified by its chief financial officer or treasurer.
(c) As soon as available, but in any event within 90 days after
the beginning of each fiscal year of the Borrower, beginning
with the fiscal year commencing January 1, 2001, a copy of
the plan and forecast (including a projected consolidated
balance sheet, income statement and funds flow statement) of
the Borrower and its Consolidated Subsidiaries for such
fiscal year.
(d) Together with the financial statements required under
SECTIONS 7.1(II)(A) and 7.1(II)(B), a compliance certificate
in substantially the form of EXHIBIT F signed by its chief
financial officer or treasurer showing the calculations
necessary to determine compliance with this Agreement and
stating that no Default or Unmatured Default exists, or if
any Default or Unmatured Default exists, stating the nature
and status thereof.
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(e) As soon as practicable after receipt thereof by the Borrower
but in any event within 365 days after the close of each
plan year for each Plan, a statement of the Unfunded
Liabilities of such Plan, certified as correct by an actuary
enrolled under ERISA.
(f) As soon as possible and in any event within 30 days after
the Borrower knows that any Reportable Event has occurred
with respect to any Plan, or any material unfunded liability
has arisen with respect to any Foreign Pension Plan, a
statement, signed by the chief financial officer or
treasurer of the Borrower, describing said Reportable Event
or material unfunded liability and the action which the
Borrower proposes to take with respect thereto.
(g) As soon as possible and in any event within 30 days after
receipt by the Borrower, a copy of (1) any notice or claim
to the effect that the Borrower or any of its Subsidiaries
is or may be liable in any material amount to any Person as
a result of any material release by the Borrower, any of its
Subsidiaries, or any other Person of any toxic or hazardous
waste or substance into the environment, and (2) any notice
alleging any material violation of any federal, state or
local environmental, health or safety law or regulation by
the Borrower or any of its Subsidiaries.
(h) Promptly upon the furnishing thereof to the shareholders of
the Borrower, copies of all financial statements, reports
and proxy statements so furnished.
(i) Promptly upon the filing thereof, copies of all registration
statements or other regular reports not otherwise provided
pursuant to this SECTION 7.1(II) which the Borrower or any
of its Consolidated Subsidiaries files with the Securities
and Exchange Commission.
(j) Promptly after the execution thereof, copies of all material
amendments to any of the Receivables Purchase Documents.
(k) Such other information (including non-financial information)
as the Administrative Agent or any Lender may from time to
time reasonably request.
7.2. USE OF PROCEEDS. The Borrower will, and will cause each
Subsidiary to, use the proceeds of the Loans for working capital, capital
expenditures, Permitted Acquisitions and other general corporate purposes
(which may include refinancing certain existing indebtedness, backstopping
commercial paper, or to repay outstanding Loans in accordance with the
terms of SECTION 2 or Reimbursement Obligations in accordance with the
terms of ARTICLE III). The Borrower shall (a) use the proceeds of Advances
in compliance with all applicable legal and regulatory requirements and any
use shall not result in a violation of any such applicable regulatory
requirements, including, without limitation, Regulation U, and the
Securities Act of
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1933 and the Securities Exchange Act of 1934 and the regulations
thereunder and (b) not, nor will it permit any Subsidiary to, use any
of the proceeds of the Advances to make any Acquisition other than a
Permitted Acquisition. In connection with Advances to be used for the
purpose of purchasing or carrying any "margin stock" (as defined in
Regulation U) or to consummate any other Acquisition, such purchase or
Acquisition shall be disclosed by the Borrower promptly upon execution
and delivery of a letter of intent or comparable agreement with
respect thereto. With respect to any Loan the proceeds of which shall
be used to purchase or carry "margin stock" (as defined in Regulation
U), the Borrower shall (a) include in the Notice of Borrowing for such
Borrowing (i) a representation that "margin stock" (as defined in
Regulation U) (after consummating such purchase) constitutes less than
25% of the value of those assets of the Borrower and its Subsidiaries
which are subject to any limitation on sale, pledge, or other
restriction hereunder or (ii) if such a representation cannot be made,
such information (including, without limitation, information regarding
the current market value of the margin stock being purchased, all debt
securities convertible into margin stock and the current market value
of such margin stock, and the other assets of the Borrower and its
Subsidiaries, together with a signed Form U-1 (or any replacement
form) or other form required to be completed under the provisions of
Regulations T, U or X) as shall enable the Administrative Agent to
reasonably determine that the Lenders and the Borrower are in
compliance with Regulations T, U and X.
7.3. NOTICE OF DEFAULT. The Borrower will, and will cause each
Subsidiary to, give prompt notice in writing to the Lenders of the
occurrence of any Default or Unmatured Default and of any other
development, financial or otherwise, which could reasonably be expected to
have a Material Adverse Effect.
7.4. CONDUCT OF BUSINESS. The Borrower will carry on and conduct its
business in the manner of a diversified industrial manufacturing company
and will cause each Subsidiary to conduct its business in a manner
consistent with the Borrower's objectives as such. The Borrower will, and
will cause each Subsidiary to, do all things necessary to remain duly
incorporated or organized, validly existing and (to the extent such concept
applies to such entity) in good standing as a corporation, partnership or
limited liability company in its jurisdiction of incorporation or
organization, and maintain all requisite authority to conduct its business
in each jurisdiction where, because of the nature of its activities or
properties, such authority is required and the failure to maintain such
authority would materially and adversely affect its business, assets,
financial condition, operations or prospects.
7.5. TAXES. The Borrower will, and will cause each Subsidiary to,
timely file complete and correct United States federal and applicable
foreign, state and local tax returns required by law and pay when due all
taxes, assessments and governmental charges and levies upon it or its
income, profits or Property, except those which are being contested in good
faith by appropriate proceedings and with respect to which adequate
reserves have been set aside in accordance with Agreement Accounting
Principles.
7.6. INSURANCE. The Borrower will, and will cause each Consolidated
Subsidiary to, maintain insurance in such amounts and covering such risks
as is consistent with sound business practice.
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7.7. COMPLIANCE WITH LAWS. The Borrower will, and will cause each
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject
including, without limitation, all Environmental Laws, except for
non-compliance therewith which individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect.
7.8. MAINTENANCE OF PROPERTIES. The Borrower will, and will cause each
Subsidiary to, do all things necessary to maintain, preserve, protect and
keep its Property in good repair, working order and condition, and make all
necessary and proper repairs, renewals and replacements, except for
Property no longer used or useful in the respective businesses of the
Borrower or such Subsidiary.
7.9. INSPECTION. To the extent permitted by applicable law and not in
violation of any agreements of the Borrower or its Subsidiaries with any
third party regarding confidential, proprietary or secret information, the
Borrower will, and will cause each Consolidated Subsidiary to, permit the
Administrative Agent and the Lenders, by their respective representatives
and agents, to inspect any of the Property, books and financial records of
the Borrower and each Consolidated Subsidiary, to examine and make copies
of the books of accounts and other financial records of the Borrower and
each Consolidated Subsidiary, and to discuss the affairs, finances and
accounts of the Borrower and each Consolidated Subsidiary with, and to be
advised as to the same by, their respective officers at such reasonable
times and intervals as (i) the Administrative Agent may designate or (ii)
any Lender may designate if at the time of such designation by such Lender
a Default or an Unmatured Default has occurred and is continuing (or such
Lender has a reasonable basis for believing such a Default or Unmatured
Default may have occurred and is continuing).
7.10. SUBSIDIARY INDEBTEDNESS. The Borrower will not permit any
Consolidated Subsidiary to, create, incur or suffer to exist any
Indebtedness, except:
(i) The Subsidiary Guaranties.
(ii) Guaranties executed by any Subsidiary Guarantor with respect to
any Indebtedness of the Borrower provided such Indebtedness is
not incurred by the Borrower in violation of this Agreement.
(iii)Indebtedness existing on the date hereof and described in
SCHEDULE 3.
(iv) Indebtedness incurred in connection with the Receivables Purchase
Documents; PROVIDED that Receivables Facility Attributed
Indebtedness incurred in connection therewith does not exceed in
$200,000,000 in the aggregate at any time.
(v) Intercompany Indebtedness between (i) the Borrower and any of its
Consolidated Subsidiaries or (ii) any Consolidated Subsidiaries
provided any Intercompany Indebtedness extended by any member of
the Obligor Group to any Subsidiary not part of the Obligor Group
shall be extended on reasonable terms in the ordinary course of
business.
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(vi) Other Indebtedness in addition to that referred to elsewhere in
this SECTION 7.10 incurred by the Borrower's Consolidated
Subsidiaries; PROVIDED that no Default or Unmatured Default shall
have occurred and be continuing at the date of such incurrence or
would result therefrom; and PROVIDED FURTHER that the aggregate
outstanding amount of all Indebtedness incurred by the Borrower's
Consolidated Subsidiaries (other than Indebtedness incurred
pursuant to clauses (i), (ii), (iv) and (v) of this SECTION 7.10)
shall not at any time exceed $225,000,000.
7.11 MERGER. The Borrower will not, nor will it permit any
Consolidated Subsidiary to, merge, amalgamate, or consolidate with or into
any other Person, except that a Consolidated Subsidiary may merge,
amalgamate or consolidate into the Borrower or a Wholly-Owned Subsidiary or
with any other Person in connection with a Permitted Acquisition. The
Borrower will not permit the stock of any Material Subsidiary to be the
subject of any spin-off transaction except in connection with an asset sale
transaction permitted pursuant to the terms of SECTION 7.12 below.
7.12. SALE OF ASSETS. Other than in connection with transactions
expressly permitted by SECTIONS 7.11 (other than the last sentence
thereof), 7.13 and 7.14, the Borrower will not, nor will it permit any
Consolidated Subsidiary to, lease, sell or otherwise dispose of its
Property to any other Person, except:
(i) Sales of inventory in the ordinary course of business.
(ii) Sales, assignments, transfers, leases, conveyances or other
dispositions of other assets (other than pursuant to clause (i)
above or clauses (iii) or (v) below) if such transaction (a) is
for not less than fair market value, and (b) when combined with
all such other transactions (each such transaction being valued
at book value) (i) during the immediately preceding twelve-month
period, represents the disposition of not greater than ten
percent (10%) of the Borrower's consolidated assets at the end of
the fiscal year immediately preceding that in which such
transaction is proposed to be entered into, and (ii) during the
period from the Closing Date to the date of such proposed
transaction, represents the disposition of not greater than
twenty-five percent (25%) of the Borrower's consolidated assets
at the end of the fiscal year immediately preceding that in which
such transaction is proposed to be entered into.
(iii)Any transfer of an interest in accounts or notes receivable on a
limited recourse basis under the Receivables Purchase Documents,
PROVIDED that such transfer qualifies as a legal sale and as a
sale under Agreement Accounting Principles and that the amount
Receivables Facility Attributed Indebtedness does not exceed
$200,000,000 at any one time outstanding.
(iv) Sale and Leaseback Transactions; PROVIDED that the aggregate
amount of Off-Balance Sheet Liabilities incurred in connection
therewith shall not at any time exceed an aggregate amount in
excess of five percent (5.0%) of consolidated assets of the
Borrower and its Consolidated Subsidiaries.
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(v) Any sale, lease, or other disposition of equipment by the
Borrower to any of its Consolidated Subsidiaries or by any
Consolidated Subsidiary to the Borrower or any other Consolidated
Subsidiary.
7.13. INVESTMENTS AND ACQUISITIONS; NEW SUBSIDIARIES; DOCUMENTATION BY
HOWMET COMPANIES. (a) INVESTMENTS. The Borrower will not, nor will it
permit any Consolidated Subsidiary to, make or suffer to exist any
Investments (including without limitation, loans and advances to, and other
Investments in, Subsidiaries), or commitments therefor, or to become or
remain a partner in any partnership or joint venture, or to make any
Acquisition of any Person, except:
(i) Cash Equivalent Investments.
(ii) Existing Investments in Consolidated Subsidiaries and other
Investments in existence on the date hereof and described in
SCHEDULE 4.
(iii)Investments in Consolidated Subsidiaries (other than Joint
Ventures).
(iv) Investments in the Joint Ventures as set forth in this CLAUSE
(IV); PROVIDED the aggregate amount of such Investments shall not
at any time exceed an aggregate amount in excess of ten percent
(10.0%) of consolidated assets of the Borrower and its
Consolidated Subsidiaries; PROVIDED, FURTHER, for purposes of
calculating the Investments in any particular Joint Venture or
group of Joint Ventures under this CLAUSE (IV), the Investment
shall equal (1) the aggregate amount of the Investments MINUS (2)
the aggregate amount of all distributions received by the
Borrower and its Consolidated Subsidiaries from such Joint
Venture or group of Joint Ventures.
(v) Investments in the SPVs required in connection with the
Receivables Purchase Documents.
(vi) Acquisitions meeting the following requirements (each such
Acquisition constituting a "PERMITTED ACQUISITION"):
(a) No Default or Unmatured Default shall have occurred and be
continuing or would result from such Acquisition or the
incurrence of any Indebtedness in connection therewith;
(b) The businesses being acquired shall be consistent with the
Borrower's objective to carry on and conduct its business in
the manner of a diversified industrial manufacturing
company;
(c) The purchase is consummated pursuant to a negotiated
acquisition agreement on a non-hostile basis pursuant to an
acquisition agreement approved by the board of directors or
other applicable governing body of the Seller prior to the
commencement thereof;
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(d) To the extent such Permitted Acquisition involves a New
Subsidiary, the Borrower is in compliance with the terms set
forth below and after taking into account the Acquisition,
the Borrower is in compliance with the terms of SECTION 7.17
below;
(e) After giving effect to such Acquisition, the representations
and warranties set forth in the Credit Agreement shall be
true and correct in all material respects on and as of the
date of such Acquisition with the same effect as though made
on and as of such date; and
(f) The Borrower shall have determined that after giving effect
to such Acquisition and the incurrence of any Indebtedness
under the Credit Agreement or otherwise in connection
therewith, on a PRO FORMA basis, as if the Acquisition and
such incurrence of Indebtedness had occurred on the first
day of the twelve-month period ending on the last day of the
Borrower's most recently completed fiscal quarter, the
Borrower would have been in compliance with all of the
covenants contained in this Agreement.
(vii)Investments resulting from Financial Contracts entered into
in the ordinary course of business and which do not violate
the terms of SECTION 7.16.
(b) NEW SUBSIDIARIES. The Borrower will not, nor will it permit any
Consolidated Subsidiary to, create or acquire a Subsidiary (a "NEW
SUBSIDIARY") other than in connection with a Permitted Acquisition or
pursuant to any transaction that is permitted by or not otherwise
prohibited by this Agreement; PROVIDED that: (1) upon the creation or
acquisition of each New Subsidiary which is a Material Domestic Subsidiary
other than a SPV, or if necessary to remain in compliance with the terms of
SECTION 7.17, the Borrower shall cause each such New Subsidiary to promptly
(but in any event within 30 days following the creation or acquisition
thereof) deliver to the Administrative Agent an executed counterpart of a
Guaranty Supplement to become a Subsidiary Guarantor under the Subsidiary
Guaranty in the form of ANNEX I to the form of Subsidiary Guaranty attached
as EXHIBIT C hereto; (2) upon the creation or acquisition of each New
Subsidiary which is a Material Foreign Subsidiary, or if necessary to
remain in compliance with the terms of SECTION 7.17 the Borrower shall or
shall cause its applicable domestic Subsidiary promptly (but in any event
within 60 days following the creation or acquisition thereof) to execute a
Pledge Agreement with respect to 65% of the stock of such Material Foreign
Subsidiary; and (3) in either case, shall deliver appropriate certified
constituting and governing documents, corporate resolutions, opinions,
stock certificates, stock powers and other documentation in form and
substance satisfactory to the Administrative Agent in connection therewith.
(c) HOWMET COMPANIES. On or prior to the Howmet Documentation Date,
the Borrower shall: (1) cause each Howmet Company which is a Material
Domestic Subsidiary, other than any SPV, to deliver to the Administrative
Agent an executed counterpart of a Guaranty Supplement to become a
Subsidiary Guarantor under the Subsidiary Guaranty in the form of ANNEX I
to the form of Subsidiary Guaranty attached as EXHIBIT C hereto; (2) cause
the applicable Howmet Companies to execute and deliver to the
Administrative Agent a Pledge
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Agreement with respect to 65% of the stock of each Howmet Company which is
a Material Foreign Subsidiary; and (3) in either case, shall deliver
appropriate corporate resolutions, opinions, stock certificates, stock
powers and other documentation in form and substance satisfactory to the
Administrative Agent in connection therewith.
(d) ADDITIONAL MATERIAL DOMESTIC SUBSIDIARIES AND MATERIAL FOREIGN
SUBSIDIARIES. If any Consolidated Subsidiary of the Borrower (other than a
New Subsidiary, a Howmet Company or an SPV) becomes a Material Domestic
Subsidiary or a Material Foreign Subsidiary as at the end of any calendar
quarter, (1) the Borrower shall cause any such Material Domestic Subsidiary
to promptly (but in any event within 30 days following the end of such
calendar quarter) deliver to the Administrative Agent an executed
counterpart of a Guaranty Supplement to become a Subsidiary Guarantor under
the Subsidiary Guaranty in the form of ANNEX I to the form of Subsidiary
Guaranty attached as EXHIBIT C hereto; (2) the Borrower shall or shall
cause its applicable domestic Subsidiary promptly (but in any event within
60 days following the end of such calendar quarter) to execute a Pledge
Agreement with respect to 65% of the stock of any such Material Foreign
Subsidiary; and (3) in either case, shall deliver appropriate certified
constituting and governing documents, corporate resolutions, opinions,
stock certificates, stock powers and other documentation in form and
substance satisfactory to the Administrative Agent in connection therewith.
7.14. LIENS. The Borrower will not, nor will it permit any
Consolidated Subsidiary to, create, incur, assume or suffer to exist any
Lien in, of or on the Property of the Borrower or any of its Consolidated
Subsidiaries , or assign any right to receive income or permit the filing
of any financing statement under the UCC or any other similar notice of
Lien under any similar recording or notice statute, except:
(i) Liens in favor of (a) the Administrative Agent, for the benefit
of itself, the Swing Line Lender, the LC Issuers and the Lenders,
granted pursuant to any Collateral Document or (b) the
Administrative Agent under the 364-Day Credit Agreement for the
benefit of itself and the Lenders thereunder, granted pursuant to
any "Collateral Documents" under and as defined therein.
(ii) Liens arising under the Receivables Purchase Documents.
(iii)Inchoate Liens for taxes, assessments or governmental charges or
levies not yet due and payable or Liens for taxes, assessments or
governmental charges or levies being contested in good faith and
by appropriate proceedings for which adequate reserves have been
established in accordance with Agreement Accounting Principles
(or the equivalent thereof in any country in which a foreign
Consolidated Subsidiary is doing business, as applicable);
(iv) Liens in respect of property or assets of the Borrower or any of
its Consolidated Subsidiaries imposed by law, which were incurred
in the ordinary course of business and do not secure Indebtedness
for borrowed money, such as carriers', warehousemen's,
materialmen's and mechanics' liens and other similar Liens
arising in the ordinary course of business, and (x) which do not
in the aggregate
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materially detract from the value of the property or assets of
the Borrower or the Borrower and its Subsidiaries taken as a
whole, or materially impair the use thereof in the operation of
the business of the Borrower or the Borrower and its Subsidiaries
taken as a whole or (y) which are being contested in good faith
by appropriate proceedings, which proceedings (or orders entered
in connection with such proceedings) have the effect of
preventing the forfeiture or sale of the property or assets
subject to any such Lien;
(v) Liens in existence on the Closing Date which are listed, and the
property subject thereto described, in SCHEDULE 3, but only to
the respective date, if any, set forth in such SCHEDULE 3 for the
removal and termination of any such Liens, plus renewals and
extensions of such Liens to the extent set forth on SCHEDULE 3,
PROVIDED that (x) the aggregate principal amount of the
Indebtedness, if any, secured by such Liens does not increase
from that amount outstanding at the time of any such renewal or
extension and (y) any such renewal or extension does not encumber
any additional assets or properties of the Borrower or any of its
Consolidated Subsidiaries;
(vi) Licenses, leases or subleases granted to other Persons in the
ordinary course of business not materially interfering with the
conduct of the business of the Borrower or the Borrower and its
Subsidiaries taken as a whole or materially diminishing the
aggregate value of any collateral for the Obligations;
(vii)Easements, rights-of-way, restrictions (including zoning
restrictions), encroachments, protrusions and other similar
charges or encumbrances, and minor title deficiencies, in each
case whether now or hereafter in existence, not securing
Indebtedness, not materially interfering with the conduct of the
business of the Borrower or the Borrower and its Subsidiaries
taken as a whole and not materially diminishing the aggregate
value of any collateral for the Obligations;
(viii) Liens arising from precautionary UCC financing statement
filings regarding Operating Leases entered into by the Borrower
or any of its Consolidated Subsidiaries in the ordinary course of
business;
(ix) Liens arising out of the existence of judgments or awards not
constituting an Event of Default under SECTION 8.9, PROVIDED that
no cash or property is deposited or delivered to secure the
respective judgment or award (or any appeal bond in respect
thereof);
(x) Statutory and contractual landlords' liens under leases or
subleases to which the Borrower or any of its Consolidated
Subsidiaries is a party created in the ordinary course of
business for amounts not yet due or which are being contested in
good faith by appropriate proceedings properly instituted and
diligently conducted and with respect to which adequate reserves
or other appropriate provisions are being maintained in
accordance with Agreement Accounting Principles;
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(xi) Any interest or title of a lessor, sublessor, licensee or
licensor under any lease or license agreement permitted by this
Agreement; provided that Liens in connection with Capitalized
Leases shall be permitted only to the extent that the
Indebtedness secured thereby together with the liabilities
secured pursuant to Liens under clause (xvii) below would not
exceed the limitation set forth in such clause (xvii);
(xii)Liens in favor of customs and revenue authorities arising as a
matter of law to secure the payment of customs duties in
connection with the importation of goods;
(xiii) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the manufacture or sale
of goods entered into by the Borrower or any of its Consolidated
Subsidiaries in the ordinary course of business in accordance
with the past practices of the Borrower and its Consolidated
Subsidiaries prior to the Closing Date;
(xiv)Deposits made to secure statutory obligations in the form of
excise taxes;
(xv) Liens upon specific items of inventory or other goods and
proceeds thereof granted in favor of any Person (but not directly
or indirectly securing any Indebtedness) to facilitate the
purchase, shipment or storage of such inventory or other goods in
the ordinary course of business;
(xvi)Liens securing Indebtedness assumed in connection with a
Permitted Acquisition and not prohibited under this Agreement
with respect to property acquired by the Borrower or any of its
Subsidiaries after the Closing Date (and not created in
contemplation of such Acquisition) pursuant to a Permitted
Acquisition; PROVIDED, that (y) the aggregate outstanding amount
of Indebtedness so secured shall not at any time exceed
$50,000,000 for all such Indebtedness, and (z) such Liens shall
extend only to the property so acquired; and
(xvii) Liens not otherwise permitted by the foregoing clauses (i)
through (xvi) to the extent attaching to properties and assets
with an aggregate fair value not in excess of, and securing
liabilities which when aggregated with Capitalized Leases secured
pursuant to clause (xi) above do not exceed five percent (5.0%)
of the consolidated assets of the Borrower and its Subsidiaries,
in the aggregate at any time outstanding;
PROVIDED, HOWEVER, notwithstanding anything else to the contrary, no
Liens on any capital stock of any Subsidiary of the Borrower shall
be permitted other than as permitted in clause (i) above.
In addition, neither the Borrower nor any of its Consolidated Subsidiaries
shall become a party to any agreement, note, indenture or other instrument,
or take any other action, which would prohibit the creation of a Lien on
any material portion of its Property in favor of the Administrative Agent
for the benefit of itself, the Swing Line Lender, the Lenders and the LC
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Issuers, as collateral for the Obligations except for the prohibitions
existing in the Indenture as of the date of this Agreement applicable to
debt securities issued under the Indenture and prohibitions no more
restrictive than such existing prohibitions applicable to debt securities
to be issued under the Indenture.
7.15. AFFILIATES. Except as set forth on SCHEDULE 5, the Borrower will
not, and will not permit any Consolidated Subsidiary to, enter into any
transaction (including, without limitation, the purchase or sale of any
Property or service) with, or make any payment or transfer to, any
Affiliate except (a) in the ordinary course of business and pursuant to the
reasonable requirements of the Borrower's or such Consolidated Subsidiary's
business and upon fair and reasonable terms no less favorable to the
Borrower or such Consolidated Subsidiary than the Borrower or such
Consolidated Subsidiary would obtain in a comparable arms-length
transaction, (b) Permitted Receivables Transfers and (c) Intercompany
Indebtedness incurred pursuant to SECTION 7.10(V).
7.16. FINANCIAL CONTRACTS. The Borrower shall not and shall not permit
any of its Consolidated Subsidiaries to enter into any Financial Contract,
other than interest rate, foreign currency or commodity exchange, swap,
collar, cap or similar Rate Hedging Agreements entered into by the Borrower
or such Consolidated Subsidiaries pursuant to which the Borrower or such
Consolidated Subsidiary hedged its actual or anticipated interest rate,
foreign currency or commodity exposure existing or anticipated at the time
thereof.
7.17. NON-GUARANTOR OR PLEDGED SUBSIDIARIES. The Borrower will not as
of the end of any calendar quarter permit the aggregate assets of all of
the Borrower's domestic Consolidated Subsidiaries (other than the SPVs)
which are not parties to the Subsidiary Guaranty plus the aggregate assets
of all of the Borrower's foreign Consolidated Subsidiaries in connection
with which the Administrative Agent has not received a Pledge Agreement (or
Pledge Agreement with respect to its parent corporation) to exceed fifteen
percent (15%) of consolidated total assets of the Borrower and its
Consolidated Subsidiaries (other than the SPVs) as at the end of such
quarter; provided it shall not be a violation hereof if, (y) within 30 days
of the end of such calendar quarter the Borrower has delivered all guaranty
documentation necessary to bring itself back into compliance with the 15%
limitation set forth above or (z) within 60 days of the end of such
calendar quarter the Borrower has delivered all pledge documentation
necessary to bring itself back in compliance with the 15% limitation set
forth above (such documentation, in each case, to be of the type described
in SECTION 7.13(B) with respect to New Subsidiaries). Notwithstanding the
foregoing, prior to the Howmet Documentation Date, the provisions of
SECTION 7.13(C) shall govern the timing of guaranty and pledge
documentation with respect to the Howmet Companies.
7.18. FINANCIAL COVENANTS.
7.18.1. INTEREST COVERAGE RATIO. The Borrower will not permit the
ratio, determined as of the end of each of its fiscal quarters for the
then most-recently ended four fiscal quarters, of (i) Consolidated
EBIT to (ii) Consolidated Interest Expense to be less than 2.50 to
1.0.
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7.18.2. LEVERAGE RATIO. The Borrower will not permit its Leverage
Ratio, determined as of the end of each of its fiscal quarters and
calculated as set forth in the definition thereof, to be greater than
3.00 to 1.0.
7.19. SUBSIDIARY COVENANTS. Except for encumbrances or restrictions
existing under or by reason of (i) applicable law, (ii) this Agreement or
the other Loan Documents, (iii) the Receivables Purchase Documents, (iv)
customary provisions restricting subletting or assignment of any lease
governing a leasehold interest, (v) restrictions imposed by the holder of
any Lien permitted under SECTION 7.14 on the transfer of the assets subject
thereto and (vi) restrictions existing in the Indenture as of the date of
this Agreement applicable to debt securities issued under the Indenture and
restrictions no more restrictive than such existing restrictions applicable
to debt securities to be issued under the Indenture, the Borrower will not,
and will not permit any Consolidated Subsidiary to, create or otherwise
cause to become effective or permit to exist any consensual encumbrance or
restriction of any kind on the ability of any Consolidated Subsidiary to
pay dividends or make any other distribution on its stock, redeem or
repurchase its stock, make any other similar payment or distribution, pay
any Indebtedness or other Obligation owed by the Borrower or any other
Consolidated Subsidiary, make loans or advances or other Investments in the
Borrower or any other Consolidated Subsidiary, or sell, transfer or
otherwise convey any of its property to the Borrower or any other
Consolidated Subsidiary.
ARTICLE VIII: DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
8.1. Any representation or warranty made or deemed made by or on
behalf of the Borrower or any of its Subsidiaries to the Lenders, the Swing
Line Lender, the LC Issuer or the Administrative Agent under or in
connection with this Agreement, any Credit Extension, or any certificate or
information delivered in connection with this Agreement, any Credit
Extension or any other Loan Document shall be materially false on the date
as of which made.
8.2. Nonpayment of principal of any Loan or Reimbursement Obligation
when due, or nonpayment of interest upon any Loan or of any Facility Fee,
Utilization Fee, letter of credit fee or other obligations under any of the
Loan Documents within five days after the same becomes due.
8.3. The breach by the Borrower of any of the terms or provisions of
SECTION 7.1 (only as to clauses (i), (ii)(a) and (ii)(b) thereof), SECTION
7.2 (only as to the last sentence thereof), 7.3, 7.9, 7.10, 7.11, 7.12,
7.13, 7.14, 7.15, 7.17 or 7.18.
8.4. The breach by the Borrower (other than a breach which constitutes
a Default under another Section of this ARTICLE VIII) of any of the terms
or provisions of this Agreement which is not remedied within thirty days
after the earlier to occur of (a) the date on which written notice from the
Administrative Agent or any Lender is received by the Borrower of such
breach and (b) the date on which the senior management of any member of the
Obligor Group had knowledge of the existence of such breach or when any
member of the senior management of the Obligor Group should have known of
the existence of such breach.
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8.5. Failure of the Borrower or any of its Consolidated Subsidiaries
to pay when due any Indebtedness aggregating in excess of $20,000,000
("MATERIAL INDEBTEDNESS"); or the default by the Borrower or any of its
Consolidated Subsidiaries in the performance (beyond the applicable grace
period with respect thereto, if any) of any term, provision or condition
contained in the 364-Day Credit Agreement or any agreement under which any
Material Indebtedness was created or is governed, or any other event shall
occur or condition exist, the effect of which default or event is to cause,
or to permit the lenders under the 364-Day Credit Agreement or the holder
or holders of such Material Indebtedness to cause, the Indebtedness under
the 364-Day Credit Agreement or such Material Indebtedness to become due
prior to its stated maturity; or the Indebtedness under the 364-Day Credit
Agreement or any Material Indebtedness of the Borrower or any of its
Consolidated Subsidiaries shall be declared to be due and payable or
required to be prepaid or repurchased (other than by a regularly scheduled
payment) prior to the stated maturity thereof; or the Borrower or any of
its Consolidated Subsidiaries shall not pay, or admit in writing its
inability to pay, its debts generally as they become due.
8.6. The Borrower or any of its Consolidated Subsidiaries shall (i)
have an order for relief entered with respect to it under the Federal
bankruptcy laws or other applicable bankruptcy laws as now or hereafter in
effect, (ii) make an assignment for the benefit of creditors, (iii) apply
for, seek, consent to, or acquiesce in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for it or any
Substantial Portion of its Property, (iv) institute any proceeding seeking
an order for relief under the Federal bankruptcy laws or other applicable
bankruptcy laws as now or hereafter in effect or seeking to adjudicate it a
bankrupt or insolvent, or seeking dissolution, winding up, liquidation,
reorganization, arrangement, adjustment or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors or fail to file an answer or other pleading denying the
material allegations of any such proceeding filed against it, (v) take any
corporate or partnership action to authorize or effect any of the foregoing
actions set forth in this SECTION 8.6 or (vi) fail to contest in good faith
any appointment or proceeding described in SECTION 8.7.
8.7. Without the application, approval or consent of the Borrower or
any of its Consolidated Subsidiaries, a receiver, trustee, examiner,
liquidator or similar official shall be appointed for the Borrower or any
of its Consolidated Subsidiaries or any Substantial Portion of its
Property, or a proceeding described in SECTION 8.6(IV) shall be instituted
against the Borrower or any of its Consolidated Subsidiaries and such
appointment continues undischarged or such proceeding continues undismissed
or unstayed for a period of 60 consecutive days.
8.8. Any court, government or governmental agency shall condemn, seize
or otherwise appropriate, or take custody or control of, all or any portion
of the Property of the Borrower and its Consolidated Subsidiaries which,
when taken together with all other Property of the Borrower and its
Consolidated Subsidiaries so condemned, seized, appropriated, or taken
custody or control of, during the twelve-month period ending with the month
in which any such action occurs, constitutes a Substantial Portion.
8.9. The Borrower or any of its Consolidated Subsidiaries shall fail
within 30 days to pay, bond or otherwise discharge any judgment or order
for the payment of money in excess of $25,000,000, which is not stayed on
appeal.
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8.10. The sum of (a) the Unfunded Liabilities of all Plans and (b) the
present value of the aggregate unfunded liabilities to provide the accrued
benefits under all Foreign Pension Plans exceeds in the aggregate an amount
equal to the sum of (i) five percent (5.0%) of the value (as of any date of
determination) of all Plan assets allocable to Plan benefits guaranteed by
ERISA and (ii) five percent (5.0%) of the fair market value of the assets
held in trust or other funding vehicles for accrued benefits under all
Foreign Pension Plans, or any Reportable Event shall occur in connection
with any Plan.
8.11. The Borrower or any other member of the Controlled Group has
incurred withdrawal liability or become obligated to make contributions to
a Multiemployer Plan in an amount which, when aggregated with all other
amounts required to be paid to Multiemployer Plans by the Borrower or any
other member of the Controlled Group, could reasonably be expected to have
a Material Adverse Effect.
8.12. The Borrower or any of its Consolidated Subsidiaries shall (i)
be the subject of any proceeding or investigation pertaining to the release
by the Borrower, any of its Consolidated Subsidiaries or any other Person
of any toxic or hazardous waste or substance into the environment, or (ii)
violate any Environmental Law, which, in the case of an event described in
CLAUSE (I) or CLAUSE (II), could reasonably be expected to have a Material
Adverse Effect.
8.13. Any Change in Control shall occur.
8.14. The occurrence of any "default", as defined in any Loan Document
(other than this Agreement) or the breach of any of the terms or provisions
of any Loan Document (other than this Agreement), which default or breach
shall continue for a period of 30 days after the earlier of the Borrower's
knowledge thereof or the Borrower received notice thereof from the
Administrative Agent or any Lender.
8.15. The Subsidiary Guaranty shall fail to remain in full force or
effect with respect to each Subsidiary Guarantor or any action shall be
taken to discontinue or to assert the invalidity or unenforceability of the
Subsidiary Guaranty, or any Subsidiary Guarantor shall fail to comply with
any of the terms or provisions of the Subsidiary Guaranty, or any
Subsidiary Guarantor shall deny that it has any further liability under the
Subsidiary Guaranty, or shall give notice to such effect.
8.16. Any of the following shall occur: (i) any Collateral Document
shall for any reason fail to create a valid and perfected first priority
security interest in any collateral purported to be covered thereby, except
as permitted by the terms of any Collateral Document, (ii) any Collateral
Document shall fail to remain in full force or effect, (iii) any action
shall be taken to discontinue or to assert the invalidity or
unenforceability of any Collateral Document, or (iv) the Borrower or any of
its Subsidiaries shall fail to comply with any of the terms or provisions
of any Collateral Document, and, in the case of clauses (i), (ii) and (iv),
such occurrence shall continue for a period of 30 days after the earlier of
the Borrower's knowledge thereof or the Borrower received notice thereof
from the Administrative Agent or any Lender.
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8.17. An "Early Amortization Event," "Servicer Default" or event shall
occur resulting in the termination of purchases and/or funding under any
Receivables Purchase Agreement, or Howmet Corporation or the Borrower shall
cease to act as "Servicer" under the Amended and Restated Pooling and
Servicing Agreement dated as of April 18, 1996 executed in connection with
the Receivables Purchase Agreement executed by Blade Receivables
Corporation, as the same may have been or may hereafter be amended,
modified, supplemented or restated or the Borrower shall cease to act as
the servicer under any pooling and servicing agreement executed in
connection with any other Receivables Purchase Agreement, as the same may
be amended, modified, supplemented or restated.
ARTICLE IX: ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
9.1. ACCELERATION. (a) If any Default described in SECTION 8.6 or 8.7
occurs with respect to the Borrower, the obligations of the Lenders to make
Loans hereunder, the obligation of the Swing Line Lender to make Swing Line
Loans and the obligation of the LC Issuers to issue Facility LCs shall
automatically terminate and the Obligations shall immediately become due
and payable without any election or action on the part of the
Administrative Agent, the Swing Line Lender, the LC Issuers or any Lender.
If any other Default occurs, the Required Lenders (or the Administrative
Agent with the consent of the Required Lenders) may terminate or suspend
the obligations of the Lenders to make Loans hereunder, the obligations of
the Swing Line Lender to make Swing Line Loans and the obligation of the LC
Issuers to issue Facility LCs, or declare the Obligations to be due and
payable, or both, whereupon the Obligations shall become immediately due
and payable, without presentment, demand, protest or notice of any kind,
all of which the Borrower hereby expressly waives.
(b) In addition, the Borrower agrees that upon the occurrence and
during the continuance of any Default, it shall, if requested at any time
by the Administrative Agent upon instruction from the Required Lenders, pay
(and, in the case of any of the Defaults specified in SECTION 8.6 or 8.7
with respect to the Borrower, forthwith, without any demand or the taking
of any other action by the Administrative Agent or any Lender, it shall
pay) to the Administrative Agent an amount in immediately available funds
equal to the then aggregate amount of the LC Obligations to be held as
security therefor for the benefit of the Lenders and the LC Issuer.
(c) If, within 30 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans
hereunder, the obligation of the Swing Line Lender to make Swing Line Loans
and the obligation of the LC Issuers to issue Facility LCs as a result of
any Default (other than any Default as described in SECTION 8.6 or 8.7 with
respect to the Borrower) and before any judgment or decree for the payment
of the Obligations due shall have been obtained or entered, the Required
Lenders (in their sole discretion) shall so direct, the Administrative
Agent shall, by notice to the Borrower, rescind and annul such acceleration
and/or termination.
9.2. AMENDMENTS. Subject to the provisions of this ARTICLE IX, the
Required Lenders (or the Administrative Agent with the consent in writing
of the Required Lenders) and such member(s) of the Obligor Group which are
parties thereto may enter into agreements which add
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or modify any provisions to the Loan Documents or change in any manner the
rights of the Lenders or the Borrower hereunder or thereunder or waive any
Default hereunder; PROVIDED, HOWEVER, that no such supplemental agreement
shall, without the consent of all of the Lenders:
(a) Reduce the principal of or rate of interest on any Loan, any
Reimbursement Obligation or any fees hereunder; or
(b) Postpone the date fixed for any payment of principal of or
interest on any Loan, any Reimbursement Obligation or any fees
hereunder; or
(c) Extend the Facility Termination Date, or otherwise extend the
term of the Commitment of any Lender; or
(d) Change the definition of Required Lenders or the percentage of
the Commitments, the Outstanding Credit Exposures or the
Outstanding LC Exposures or of the aggregate unpaid principal
amount of the Notes, or the number of Lenders, which shall be
required for the Lenders or any of them to take any action under
this Section or any other provision of the Loan Documents; or
(e) Permit the Borrower to assign any of its rights or obligations
under this Agreement;
(f) Other than in connection with any transactions which shall be
permitted by the terms hereof or of any other Loan Document or
which shall otherwise have been approved in writing by the
Required Lenders (or, if required by the other terms of SECTION
9.2, all of the Lenders), release any Subsidiary from all or any
portion of its guaranty liability under the Subsidiary Guaranty;
or
(g) Other than in connection with any transactions which shall be
permitted by the terms hereof or of any other Loan Document or
which shall otherwise have been approved in writing by the
Required Lenders (or, if required by the other terms of SECTION
9.2, all of the Lenders), release any of the collateral pledged
pursuant to the Pledge Agreements; or
(h) Amend or waive any of the provisions of this SECTION 9.2.
No amendment of any provision of this Agreement relating to the
Administrative Agent, the Swing Line Lender or the LC Issuers shall be
effective without the written consent of the Administrative Agent, the
Swing Lender or the LC Issuers, as applicable. The Administrative Agent may
waive payment of the fee required under SECTION 13.3.2 without obtaining
the consent of any other party to this Agreement. For all purposes under
this Agreement and the other Loan Documents, a Default shall be deemed to
be continuing until waived in accordance with the terms of this SECTION
9.2.
9.3. PRESERVATION OF RIGHTS. No delay or omission of the Lenders, the
Swing Line Lender, LC Issuers or the Administrative Agent to exercise any
right under the Loan Documents
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shall impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Loan notwithstanding the
existence of a Default or the inability of the Borrower to satisfy the
conditions precedent to such Loan shall not constitute any waiver or
acquiescence. Any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any other
right, and no waiver, amendment or other variation of the terms, conditions
or provisions of the Loan Documents whatsoever shall be valid unless in
writing signed by the Lenders required pursuant to SECTION 9.2, and then
only to the extent in such writing specifically set forth. All remedies
contained in the Loan Documents or by law afforded shall be cumulative and
all shall be available to the Administrative Agent and the Lenders until
the Obligations have been paid in full.
ARTICLE X: GENERAL PROVISIONS
10.1. SURVIVAL OF REPRESENTATIONS. All representations and warranties
of the Borrower contained in this Agreement shall survive the making of the
Credit Extensions herein contemplated.
10.2. GOVERNMENTAL REGULATION. Anything contained in this Agreement to
the contrary notwithstanding, no Lender, Swing Line Lender or LC Issuer
shall be obligated to extend credit to the Borrower in violation of any
limitation or prohibition provided by any applicable statute or regulation.
10.3. HEADINGS. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of
any of the provisions of the Loan Documents.
10.4. ENTIRE AGREEMENT. The Loan Documents embody the entire agreement
and understanding among the Borrower, the Agents, the Swing Line Lender,
the LC Issuers and the Lenders and supersede all prior agreements and
understandings among the Borrower, the Agents, the Swing Line Lender, the
LC Issuers and the Lenders relating to the subject matter thereof other
than the fee letters described in SECTION 11.13.
10.5. SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT. The respective
obligations of the Lenders hereunder are several and not joint and no
Lender shall be the partner or agent of any other (except to the extent to
which the Administrative Agent is authorized to act as such). The failure
of any Lender to perform any of its obligations hereunder shall not relieve
any other Lender from any of its obligations hereunder. This Agreement
shall not be construed so as to confer any right or benefit upon any Person
other than the parties to this Agreement and their respective successors
and assigns, PROVIDED, HOWEVER, that the parties hereto expressly agree
that the Arrangers shall enjoy the benefits of the provisions of SECTIONS
10.6, 10.10 and 11.11 to the extent specifically set forth therein and
shall have the right to enforce such provisions on its own behalf and in
its own name to the same extent as if it were a party to this Agreement.
10.6. EXPENSES; INDEMNIFICATION. (i) The Borrower shall reimburse the
Agents and the Arrangers for any reasonable costs, internal charges and
out-of-pocket expenses (including reasonable attorneys' fees and time
charges of attorneys for either of the Agents, which attorneys
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may be employees of either of the Agents) paid or incurred by the Agents or
the Arrangers in connection with the preparation, negotiation, execution,
delivery, syndication, review, amendment, modification, and administration
of the Loan Documents. The Borrower also agrees to reimburse the Agents,
the Arrangers, the Swing Line Lender, the LC Issuers and the Lenders for
any costs, internal charges and out-of-pocket expenses (including
attorneys' fees and time charges of attorneys for the Agents, the
Arrangers, the Swing Line Lender, the LC Issuers and the Lenders, which
attorneys may be employees of the Agents, the Arrangers, the Swing Line
Lender, the LC Issuers or the Lenders) paid or incurred by the Agents, the
Arrangers, the Swing Line Lender, the LC Issuer or any Lender in connection
with the collection and enforcement of the Loan Documents. Expenses being
reimbursed by the Borrower under this Section include, without limitation,
costs and expenses incurred in connection with the Reports described in the
following sentence. The Borrower acknowledges that from time to time Bank
One may prepare and may distribute to the Lenders (but shall have no
obligation or duty to prepare or to distribute to the Lenders) certain
audit reports (the "REPORTS") pertaining to the Borrower's assets or
business for internal use by Bank One from information furnished to it by
or on behalf of the Borrower, after Bank One has exercised its rights of
inspection pursuant to this Agreement.
(ii) The Borrower hereby further agrees to indemnify each of the
Agents, each of the Arrangers, the Swing Line Lender, each of the LC
Issuers and each Lender, its directors, officers, agents, attorneys and
employees against all losses, claims, damages, penalties, judgments,
liabilities and expenses (including, without limitation, all expenses of
litigation or preparation therefor whether or not the Agents, the
Arrangers, the Swing Line Lender, any LC Issuer or any Lender is a party
thereto) which any of them may pay or incur arising out of or relating to
this Agreement, the other Loan Documents, the transactions contemplated
hereby or the direct or indirect application or proposed application of the
proceeds of any Loan , Swing Line Loan or Facility LC hereunder except to
the extent that they are determined in a final judgment by a court of
competent jurisdiction to have resulted from the gross negligence or
willful misconduct of the party seeking indemnification. The obligations of
the Borrower under this SECTION 10.6 shall survive the termination of this
Agreement.
(iii) Each indemnitee, with respect to any action against it in
respect of which indemnity may be sought under this Section, shall give
written notice of the commencement of such action to the Borrower within a
reasonable time after such indemnitee is made a party to such action. Upon
receipt of any such notice by the Borrower, unless such indemnitee shall be
advised by its counsel that there are or may be legal defenses available to
such indemnitee that are different from, in addition to, or in conflict
with, the defenses available to the Obligor Group, the Borrower may
participate with the indemnitee in the defense of such indemnified matter,
including the employment of counsel consented to by such indemnitee (which
consent shall not be unreasonably withheld); PROVIDED, HOWEVER, nothing
provided herein shall entitle (a) the Borrower or any other member of the
Obligor Group to assume the defense of such indemnified matter or (b) any
indemnitee to effect any settlement in respect of any indemnified matter
without the Borrower's consent, such consent not to be unreasonably
withheld.
10.7. NUMBERS OF DOCUMENTS. All statements, notices, closing
documents, and requests hereunder shall be furnished to the Administrative
Agent with, if requested by the Administrative
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Agent, sufficient counterparts so that the Administrative Agent may furnish
one to each of the Lenders.
10.8. ACCOUNTING. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement
Accounting Principles. If any changes in generally accepted accounting
principles are hereafter required or permitted and are adopted by the
Borrower or any of its Subsidiaries with the agreement of its independent
certified public accountants and such changes result in a change in the
method of calculation of any of the financial covenants, tests,
restrictions or standards herein or in the related definitions or terms
used therein ("ACCOUNTING CHANGES"), the parties hereto agree, at the
Borrower's request, to enter into negotiations, in good faith, in order to
amend such provisions in a credit neutral manner so as to reflect equitably
such changes with the desired result that the criteria for evaluating the
Borrower's and its Subsidiaries' financial condition shall be the same
after such changes as if such changes had not been made; PROVIDED, HOWEVER,
until such provisions are amended in a manner reasonably satisfactory to
the Administrative Agent and the Required Lenders, no Accounting Change
shall be given effect in such calculations and all financial statements and
reports required to be delivered hereunder shall be prepared in accordance
with Agreement Accounting Principles without taking into account such
Accounting Changes. In the event such amendment is entered into, all
references in this Agreement to Agreement Accounting Principles shall mean
generally accepted accounting principles as of the date of such amendment.
10.9. SEVERABILITY OF PROVISIONS. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable,
or invalid without affecting the remaining provisions in that jurisdiction
or the operation, enforceability, or validity of that provision in any
other jurisdiction, and to this end the provisions of all Loan Documents
are declared to be severable.
10.10. NONLIABILITY OF LENDERS. The relationship between the Borrower
on the one hand and the Lenders, the Swing Line Lender, the LC Issuers and
the Agents on the other hand shall be solely that of borrower and lender.
Neither the Agents, the Arrangers, the Swing Line Lender, the LC Issuers,
nor any Lender shall have any fiduciary responsibilities to the Borrower.
Neither the Agents, the Arrangers, the Swing Line Lender, the LC Issuers,
nor any Lender undertakes any responsibility to the Borrower to review or
inform the Borrower of any matter in connection with any phase of the
Borrower's business or operations. The Borrower agrees that neither the
Agents, the Arrangers, the Swing Line Lender, the LC Issuers nor any Lender
shall have liability to the Borrower (whether sounding in tort, contract or
otherwise) for losses suffered by the Borrower in connection with, arising
out of, or in any way related to, the transactions contemplated and the
relationship established by the Loan Documents, or any act, omission or
event occurring in connection therewith, unless it is determined in a final
judgment by a court of competent jurisdiction that such losses resulted
from the gross negligence or willful misconduct of the party from which
recovery is sought. Neither the Agents, the Arrangers, the Swing Line
Lender, the LC Issuers nor any Lender shall have any liability with respect
to, and the Borrower hereby waives, releases and agrees not to sue for, any
special, indirect or consequential damages
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suffered by the Borrower in connection with, arising out of, or in any way
related to the Loan Documents or the transactions contemplated thereby.
10.11. CONFIDENTIALITY. Each Lender, the Swing Line Lender, each LC
Issuer and each of the Agents agrees to hold any confidential information
which it may receive from the Borrower pursuant to this Agreement in
confidence, except for disclosure (i) to its Affiliates and to other
Lenders, the Swing Line Lender, the LC Issuers, or the Agents and their
respective Affiliates, (ii) to legal counsel, accountants, and other
professional advisors to that Lender, Swing Line Lender, LC Issuer, the
Agent or to a Transferee, (iii) to regulatory officials, (iv) to any Person
as requested pursuant to or as required by law, regulation, or legal
process, (v) to any Person in connection with any legal proceeding to which
that Lender, Swing Line Lender, LC Issuer or the Administrative Agent is a
party, and (vi) permitted by SECTION 13.4.
10.12. NONRELIANCE. Each Lender, Swing Line Lender and LC Issuer
hereby represents that it is not relying on or looking to any margin stock
(as defined in Regulation U) for the repayment of the Loans provided for
herein.
10.13. SUBORDINATION OF INTERCOMPANY INDEBTEDNESS. The Borrower agrees
that any and all claims of the Borrower against any of its Subsidiaries
that is a Subsidiary Guarantor with respect to any "Intercompany
Indebtedness" (as hereinafter defined), any endorser, obligor or any other
guarantor of all or any part of the Obligations, or against any of its
properties shall be subordinate and subject in right of payment to the
prior payment, in full and in cash, of all Obligations; PROVIDED that, and
not in contravention of the foregoing, so long as no Default has occurred
and is continuing the Borrower may make loans to and receive payments in
the ordinary course with respect to such Intercompany Indebtedness from
each such Subsidiary Guarantor to the extent permitted by the terms of this
Agreement and the other Loan Documents. Notwithstanding any right of the
Borrower to ask, demand, sue for, take or receive any payment from any
Subsidiary Guarantor, all rights, liens and security interests of the
Borrower, whether now or hereafter arising and howsoever existing, in any
assets of any Subsidiary Guarantor shall be and are subordinated to the
rights of the holders of the Obligations and the Administrative Agent in
those assets. The Borrower shall have no right to possession of any such
asset or to foreclose upon any such asset, whether by judicial action or
otherwise, unless and until all of the Obligations (other than contingent
indemnity obligations) shall have been fully paid and satisfied (in cash)
and all financing arrangements pursuant to any Loan Document among the
Borrower and the holders of the Obligations (or any affiliate thereof) have
been terminated. If all or any part of the assets of any Subsidiary
Guarantor, or the proceeds thereof, are subject to any distribution,
division or application to the creditors of such Subsidiary Guarantor,
whether partial or complete, voluntary or involuntary, and whether by
reason of liquidation, bankruptcy, arrangement, receivership, assignment
for the benefit of creditors or any other action or proceeding, or if the
business of any such Subsidiary Guarantor is dissolved or if substantially
all of the assets of any such Subsidiary Guarantor are sold, then, and in
any such event (such events being herein referred to as an "INSOLVENCY
EVENT"), any payment or distribution of any kind or character, either in
cash, securities or other property, which shall be payable or deliverable
upon or with respect to any indebtedness of any Subsidiary Guarantor to the
Borrower ("INTERCOMPANY INDEBTEDNESS") shall be paid or delivered directly
to the Administrative Agent
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for application on any of the Obligations, due or to become due, until such
Obligations (other than contingent indemnity obligations) shall have first
been fully paid and satisfied (in cash). Should any payment, distribution,
security or instrument or proceeds thereof be received by the Borrower upon
or with respect to the Intercompany Indebtedness after an Insolvency Event
prior to the satisfaction of all of the Obligations (other than contingent
indemnity obligations) and the termination of all financing arrangements
pursuant to any Loan Document among the Borrower and the holders of
Obligations, the Borrower shall receive and hold the same in trust, as
trustee, for the benefit of the holders of the Obligations and shall
forthwith deliver the same to the Administrative Agent, for the benefit of
such Persons, in precisely the form received (except for the endorsement or
assignment of the Borrower where necessary), for application to any of the
Obligations, due or not due, and, until so delivered, the same shall be
held in trust by the Borrower as the property of the holders of the
Obligations. If the Borrower fails to make any such endorsement or
assignment to the Administrative Agent, the Administrative Agent or any of
its officers or employees are irrevocably authorized to make the same. The
Borrower agrees that until the Obligations (other than the contingent
indemnity obligations) have been paid in full (in cash) and satisfied and
all financing arrangements pursuant to any Loan Document among the Borrower
and the holders of the Obligations have been terminated, the Borrower will
not assign or transfer to any Person (other than the Administrative Agent)
any claim the Borrower has or may have against any Subsidiary Guarantor.
ARTICLE XI: THE ADMINISTRATIVE AGENT
11.1. APPOINTMENT; NATURE OF RELATIONSHIP. Bank One, NA is hereby
appointed by each of the Lenders, the Swing Line Lender and the LC Issuers
as its contractual representative (herein referred to as the
"ADMINISTRATIVE AGENT") hereunder and under each other Loan Document, and
each of the Lenders, the Swing Line Lender and each of the LC Issuers
irrevocably authorizes the Administrative Agent to act as the contractual
representative of such Lender, Swing Line Lender and LC Issuer with the
rights and duties expressly set forth herein and in the other Loan
Documents. The Administrative Agent agrees to act as such contractual
representative upon the express conditions contained in this ARTICLE XI.
Notwithstanding the use of the defined term "Administrative Agent," it is
expressly understood and agreed that the Administrative Agent shall not
have any fiduciary responsibilities to any Lender, Swing Line Lender or LC
Issuer by reason of this Agreement or any other Loan Document and that the
Administrative Agent is merely acting as the contractual representative of
the Lenders, the Swing Line Lender and the LC Issuers with only those
duties as are expressly set forth in this Agreement and the other Loan
Documents. In its capacity as the Lenders', Swing Line Lender's and LC
Issuers' contractual representative, the Administrative Agent (i) does not
hereby assume any fiduciary duties to any of the Lenders, Swing Line Lender
or LC Issuers (ii) is a "representative" of the Lenders, Swing Line Lender
and LC Issuers within the meaning of SECTION 9-105 of the Uniform
Commercial Code and (iii) is acting as an independent contractor, the
rights and duties of which are limited to those expressly set forth in this
Agreement and the other Loan Documents. Each of the Lenders, the Swing Line
Lender and the LC Issuers hereby agrees to assert no claim against the
Administrative Agent on any agency theory or any other theory of liability
for breach of fiduciary duty, all of which claims each Lender, Swing Line
Lender and each LC Issuer hereby waives.
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11.2. POWERS. The Administrative Agent shall have and may exercise
such powers under the Loan Documents as are specifically delegated to the
Administrative Agent by the terms of each thereof, together with such
powers as are reasonably incidental thereto. The Administrative Agent shall
have no implied duties to the Lenders, the Swing Line Lender or the LC
Issuers or any obligation to the Lenders, the Swing Line Lender or the LC
Issuers to take any action thereunder except any action specifically
provided by the Loan Documents to be taken by the Administrative Agent.
11.3. GENERAL IMMUNITY. Neither the Administrative Agent nor any of its
directors, officers, agents or employees shall be liable to the Borrower,
any Lender, Swing Line Lender or any LC Issuer for any action taken or
omitted to be taken by it or them hereunder or under any other Loan
Document or in connection herewith or therewith except to the extent such
action or inaction is determined in a final judgment by a court of
competent jurisdiction to have arisen from the gross negligence or willful
misconduct of such Person.
11.4. NO RESPONSIBILITY FOR LOANS, RECITALS, ETC. Neither the
Administrative Agent nor any of its directors, officers, agents or
employees shall be responsible for or have any duty to ascertain, inquire
into, or verify (a) any statement, warranty or representation made in
connection with any Loan Document or any borrowing hereunder; (b) the
performance or observance of any of the covenants or agreements of any
obligor under any Loan Document, including, without limitation, any
agreement by an obligor to furnish information directly to each Lender,
Swing Line Lender or LC Issuer; (c) the satisfaction of any condition
specified in ARTICLE V, except receipt of items required to be delivered
solely to the Administrative Agent; (d) the existence or possible existence
of any Default or Unmatured Default; (e) the validity, enforceability,
effectiveness, sufficiency or genuineness of any Loan Document or any other
instrument or writing furnished in connection therewith; (f) the value,
sufficiency, creation, perfection or priority of any Lien in any collateral
security; or (g) the financial condition of the Borrower or any guarantor
of any of the Obligations or of any of the Borrower's or any such
guarantor's respective Subsidiaries. The Administrative Agent shall have no
duty to disclose to the Lenders, the Swing Line Lender or the LC Issuers
information that is not required to be furnished by the Borrower to the
Administrative Agent at such time, but is voluntarily furnished by the
Borrower to the Administrative Agent (either in its capacity as
Administrative Agent or in its individual capacity).
11.5. ACTION ON INSTRUCTIONS OF LENDERS. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from
acting, hereunder and under any other Loan Document in accordance with
written instructions signed by the Required Lenders, and such instructions
and any action taken or failure to act pursuant thereto shall be binding on
all of the Lenders, the Swing Line Lender and the LC Issuers. The Lenders,
the Swing Line Lender and the LC Issuers hereby acknowledge that the
Administrative Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this
Agreement or any other Loan Document unless it shall be requested in
writing to do so by the Required Lenders. The Administrative Agent shall be
fully justified in failing or refusing to take any action hereunder and
under any other Loan Document unless it shall first be indemnified to its
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satisfaction by the Lenders pro rata against any and all liability, cost
and expense that it may incur by reason of taking or continuing to take any
such action.
11.6. EMPLOYMENT OF ADMINISTRATIVE AGENTS AND COUNSEL. The
Administrative Agent may execute any of its duties as Administrative Agent
hereunder and under any other Loan Document by or through employees,
agents, and attorneys-in-fact and shall not be answerable to the Lenders,
the Swing Line Lender or the LC Issuers, except as to money or securities
received by it or its authorized agents, for the default or misconduct of
any such agents or attorneys-in-fact selected by it with reasonable care.
The Administrative Agent shall be entitled to advice of counsel concerning
the contractual arrangement between the Administrative Agent and the
Lenders, the Swing Line Lender and the LC Issuers and all matters
pertaining to the Administrative Agent's duties hereunder and under any
other Loan Document.
11.7. RELIANCE ON DOCUMENTS; COUNSEL. The Administrative Agent shall
be entitled to rely upon any Note, notice, consent, certificate, affidavit,
letter, telegram, statement, paper or document believed by it to be genuine
and correct and to have been signed or sent by the proper person or
persons, and, in respect to legal matters, upon the opinion of counsel
selected by the Administrative Agent, which counsel may be employees of the
Administrative Agent.
11.8. ADMINISTRATIVE AGENT'S REIMBURSEMENT AND INDEMNIFICATION. The
Lenders agree to reimburse and indemnify the Administrative Agent ratably
in proportion to their respective Commitments (or, if the Commitments have
been terminated, in proportion to their Commitments immediately prior to
such termination) (i) for any amounts not reimbursed by the Borrower for
which the Administrative Agent is entitled to reimbursement by the Borrower
under the Loan Documents, (ii) for any other expenses incurred by the
Administrative Agent on behalf of the Lenders, the Swing Line Lender or the
LC Issuers in connection with the preparation, execution, delivery,
administration and enforcement of the Loan Documents (including, without
limitation, for any expenses incurred by the Administrative Agent in
connection with any dispute between the Administrative Agent and any
Lender, the Swing Line Lender or LC Issuer or between two or more of the
Lenders, Swing Line Lender and LC Issuers) and (iii) for any liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Administrative Agent in any
way relating to or arising out of the Loan Documents or any other document
delivered in connection therewith or the transactions contemplated thereby
(including, without limitation, for any such amounts incurred by or
asserted against the Administrative Agent in connection with any dispute
between the Administrative Agent and any Lender, Swing Line Lender or LC
Issuer or between two or more of the Lenders, Swing Line Lender and LC
Issuers), or the enforcement of any of the terms of the Loan Documents or
of any such other documents, PROVIDED that no Lender shall be liable for
any of the foregoing to the extent any of the foregoing is found in a final
judgment by a court of competent jurisdiction to have resulted from the
gross negligence or willful misconduct of the Administrative Agent. The
obligations of the Lenders under this SECTION 11.8 shall survive payment of
the Obligations and termination of this Agreement.
11.9. NOTICE OF DEFAULT. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Unmatured
Default hereunder unless the
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Administrative Agent has received written notice from a Lender or the
Borrower referring to this Agreement describing such Default or Unmatured
Default and stating that such notice is a "notice of default". In the event
that the Administrative Agent receives such a notice, the Administrative
Agent shall give prompt notice thereof to the Lenders.
11.10. RIGHTS AS A LENDER. In the event the Administrative Agent is a
Lender, the Swing Line Lender or LC Issuer, the Administrative Agent shall
have the same rights and powers hereunder and under any other Loan Document
with respect to its Commitment and its Loans as any Lender, Swing Line
Lender or LC Issuer and may exercise the same as though it were not the
Administrative Agent, and the term "Lender" or "Lenders," "Swing Line
Lender" and "LC Issuer" or "LC Issuers" shall, at any time when the
Administrative Agent is a Lender, Swing Line Lender or LC Issuer, unless
the context otherwise indicates, include the Administrative Agent in its
individual capacity. The Administrative Agent and its Affiliates may accept
deposits from, lend money to, and generally engage in any kind of trust,
debt, equity or other transaction, in addition to those contemplated by
this Agreement or any other Loan Document, with the Borrower or any of its
Subsidiaries in which the Borrower or such Subsidiary is not restricted
hereby from engaging with any other Person.
11.11. LENDER CREDIT DECISION. Each Lender, the Swing Line Lender and
LC Issuer acknowledges that it has, independently and without reliance upon
the Agents, the Arrangers or any other Lender, the Swing Line Lender or LC
Issuer and based on the financial statements prepared by the Borrower and
such other documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement and the other
Loan Documents. Each of the Lenders, the Swing Line Lender and LC Issuers
also acknowledges that it will, independently and without reliance upon the
Agents, the Arrangers or any other Lender, the Swing Line Lender or LC
Issuer, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Loan
Documents.
11.12. SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign at any time by giving written notice thereof to the Lenders and the
Borrower, such resignation to be effective upon the appointment of a
successor Administrative Agent or, if no successor Administrative Agent has
been appointed, forty-five days after the resigning Administrative Agent
gives notice of its intention to resign. The Administrative Agent may be
removed at any time with or without cause by written notice received by the
Administrative Agent from the Required Lenders, such removal to be
effective on the date specified by the Required Lenders. Upon any such
resignation or removal, the Borrower may nominate a successor
Administrative Agent provided the Required Lenders shall have the right to
appoint, on behalf of the Borrower and the Lenders, such successor
Administrative Agent. If the successor Administrative Agent appointed by
the Required Lenders is not the successor nominated by the Borrower, the
Borrower shall have the right to consent to such appointment, such consent
not to be unreasonably withheld or delayed; PROVIDED, no such consent of
the Borrower shall be required if a Default or Unmatured Default has
occurred and is continuing. If no successor Administrative Agent shall have
been so appointed by the Required Lenders (and consented to, if so
required, by the Borrower) within thirty days after the resigning
Administrative Agent's giving notice of its
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intention to resign, then the resigning Administrative Agent may appoint,
on behalf of the Borrower and the Lenders, the Swing Line Lender and the LC
Issuers, a successor Administrative Agent. Notwithstanding the previous
sentence, the Administrative Agent may at any time without the consent of
the Borrower or any Lender, Swing Line Lender or LC Issuer, appoint any of
its Affiliates which is a commercial bank as a successor Administrative
Agent hereunder. If the Administrative Agent has resigned or been removed
and no successor Administrative Agent has been appointed, the Lenders may
perform all the duties of the Administrative Agent hereunder and the
Borrower shall make all payments in respect of the Obligations to the
applicable Lender, Swing Line Lender and LC Issuer and for all other
purposes shall deal directly with the Lenders, the Swing Line Lender and
the LC Issuers. No successor Administrative Agent shall be deemed to be
appointed hereunder until such successor Administrative Agent has accepted
the appointment. Any such successor Administrative Agent shall be a
commercial bank having capital and retained earnings of at least
$100,000,000. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the resigning or removed
Administrative Agent. Upon the effectiveness of the resignation or removal
of the Administrative Agent, the resigning or removed Administrative Agent
shall be discharged from its duties and obligations hereunder and under the
Loan Documents. After the effectiveness of the resignation or removal of an
Administrative Agent, the provisions of this ARTICLE XI shall continue in
effect for the benefit of such Administrative Agent in respect of any
actions taken or omitted to be taken by it while it was acting as the
Administrative Agent hereunder and under the other Loan Documents. In the
event that there is a successor to the Administrative Agent by merger, or
the Administrative Agent assigns its duties and obligations to an Affiliate
pursuant to this SECTION 11.12, then the term "Prime Rate" as used in this
Agreement shall mean the prime rate, base rate or other analogous rate of
the new Administrative Agent.
11.13. AGENTS' AND ARRANGERS' FEES. The Borrower agrees to pay to the
Agents and the Arrangers the fees agreed to by the Borrower pursuant to
those certain letter agreements dated December 17, 1999, or as otherwise
agreed from time to time.
11.14. DELEGATION TO AFFILIATES. The Borrower, the Lenders, the Swing
Line Lender and the LC Issuers agree that the Administrative Agent may
delegate any of its duties under this Agreement to any of its Affiliates.
Any such Affiliate (and such Affiliate's directors, officers, agents and
employees) which performs duties in connection with this Agreement shall be
entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Administrative Agent is entitled under
ARTICLES X and XI.
11.15. EXECUTION OF COLLATERAL DOCUMENTS. The Lenders, the Swing Line
Lender and the LC Issuers hereby empower and authorize the Administrative
Agent to execute and deliver to the Borrower on their behalf the Pledge
Agreement(s) and all related agreements, documents or instruments as shall
be necessary or appropriate to effect the purposes of the Pledge
Agreement(s).
11.16. COLLATERAL AND GUARANTY RELEASES. The Lenders, the Swing Line
Lender and the LC Issuers hereby empower and authorize the Administrative
Agent to execute and deliver to the
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Borrower or the applicable Subsidiary on behalf of the Lenders, the Swing
Line Lender and LC Issuers any agreements, documents or instruments as
shall be necessary or appropriate to effect any releases of any entities'
liability with respect to the Subsidiary Guaranty or release of any
collateral pledged pursuant to any Pledge Agreement in connection with any
transactions which shall be permitted by the terms hereof or of any other
Loan Document or which shall otherwise have been approved in writing by the
Required Lenders (or, if required by the terms of SECTION 9.2, all of the
Lenders), and the Administrative Agent shall be obligated to execute and
deliver to the Borrower such releases in connection with any such permitted
transactions.
ARTICLE XII: SETOFF; RATABLE PAYMENTS
12.1. SETOFF. In addition to, and without limitation of, any rights of
the Lenders, the Swing Line Lender or the LC Issuers under applicable law,
if the Borrower becomes insolvent, however evidenced, or any Default
occurs, any and all deposits (including all account balances, whether
provisional or final and whether or not collected or available) and any
other Indebtedness at any time held or owing by any Lender, the Swing Line
Lender LC Issuer or any Affiliate of any Lender, the Swing Line Lender or
LC Issuer to or for the credit or account of the Borrower may be offset and
applied toward the payment of the Obligations owing to such Lender or LC
Issuer whether or not the Obligations, or any part hereof, shall then be
due.
12.2. RATABLE PAYMENTS. If any Lender, whether by setoff or otherwise,
has payment made to it upon its Obligations (other than payments received
pursuant to SECTION 4.1, 4.2, 4.4 or 4.5) in a greater proportion than that
received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a portion of the Loans held by the other Lenders so that after
such purchase each Lender will hold its ratable proportion of Loans. If any
Lender, Swing Line Lender or LC Issuer, whether in connection with setoff
or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligations or such amounts which
may be subject to setoff, such Lender, Swing Line Lender or LC Issuer
agrees, promptly upon demand, to take such action necessary such that all
Lenders, the Swing Line Lender and LC Issuers share in the benefits of such
collateral ratably. In case any such payment is disturbed by legal process,
or otherwise, appropriate further adjustments shall be made.
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
13.1. SUCCESSORS AND ASSIGNS. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower
and the Lenders, the Swing Line Lender, the LC Issuers, the Agent, the
Arrangers and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under
the Loan Documents and (ii) any assignment by any Lender must be made in
compliance with SECTION 13.3. Notwithstanding CLAUSE (II) of this Section,
any Lender, Swing Line Lender or LC Issuer may at any time, without the
consent of the Borrower or the Administrative Agent, assign all or any
portion of its rights under this Agreement and any Note to a Federal
Reserve Bank; PROVIDED, HOWEVER, that no such assignment to a Federal
Reserve Bank shall release the transferor Lender, Swing Line Lender or LC
Issuer from its obligations hereunder. The Administrative Agent may treat
the Person which made any Loan or which holds any Note as the owner thereof
for all purposes hereof unless and until such Person complies with SECTION
13.3 in
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<PAGE>
the case of an assignment thereof or, in the case of any other transfer, a
written notice of the transfer is filed with the Administrative Agent. Any
assignee or transferee of the rights to any Loan or any Note agrees by
acceptance of such transfer or assignment to be bound by all the terms and
provisions of the Loan Documents. Any request, authority or consent of any
Person, who at the time of making such request or giving such authority or
consent is the owner of the rights to any Loan (whether or not a Note has
been issued in evidence thereof), shall be conclusive and binding on any
subsequent holder, transferee or assignee of the rights to such Loan.
13.2. PARTICIPATIONS.
13.2.1 PERMITTED PARTICIPANTS; EFFECT. Any Lender may, in the ordinary
course of its business and in accordance with applicable law, at any time
sell to one or more banks or other entities ("PARTICIPANTS") participating
interests in any Loan owing to such Lender, any Note held by such Lender,
any Commitment of such Lender, any LC Interest or any other interest of
such Lender under the Loan Documents. In the event of any such sale by a
Lender of participating interests to a Participant, such Lender's
obligations under the Loan Documents shall remain unchanged, such Lender
shall remain solely responsible to the other parties hereto for the
performance of such obligations, such Lender shall remain the owner of its
Loans and the holder of any Note issued to it in evidence thereof for all
purposes under the Loan Documents, all amounts payable by the Borrower
under this Agreement shall be determined as if such Lender had not sold
such participating interests, and the Borrower and the Administrative Agent
shall continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under the Loan Documents.
13.2.2. VOTING RIGHTS. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other than
any amendment, modification or waiver with respect to any Loan or
Commitment in which such Participant has an interest which forgives
principal, interest or fees or reduces the interest rate or fees payable
with respect to any such Loan or Commitment, extends the Facility
Termination Date, postpones any date fixed for any regularly-scheduled
payment of principal of, or interest or fees on, any such Loan or
Commitment, releases any guarantor of any such Loan or releases all or
substantially all of the collateral, if any, securing any such Loan.
13.2.3. BENEFIT OF SETOFF. The Borrower agrees that each Participant
shall be deemed to have the right of setoff provided in SECTION 12.1 in
respect of its participating interest in amounts owing under the Loan
Documents to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under the Loan Documents, PROVIDED
that each Lender shall retain the right of setoff provided in SECTION 12.1
with respect to the amount of participating interests sold to each
Participant. The Lenders agree to share with each Participant, and each
Participant, by exercising the right of setoff provided in SECTION 12.1,
agrees to share with each Lender, any amount received pursuant to the
exercise of its right of setoff, such amounts to be shared in accordance
with SECTION 12.2 as if each Participant were a Lender.
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<PAGE>
13.3. ASSIGNMENTS.
13.3.1. PERMITTED ASSIGNMENTS; SUBSTITUTION OF A LENDER.
(a) PERMITTED ASSIGNMENTS. Any Lender may, in the ordinary
course of its business and in accordance with applicable law, at any
time assign to one or more banks or other entities ("PURCHASERS") all
or any part of its rights and obligations under the Loan Documents.
Such assignment shall be substantially in the form of EXHIBIT D or in
such other form as may be agreed to by the parties thereto. The
consent of the Borrower and the Administrative Agent shall be required
prior to an assignment becoming effective with respect to a Purchaser
which is not a Lender or an Affiliate thereof; PROVIDED, HOWEVER, the
consent of the Borrower shall not be required if (i) a Default or
Unmatured Default has occurred and is continuing or (ii) if such
assignment is to another Lender or an Affiliate of any Lender. Such
consent shall not be unreasonably withheld or delayed. Unless the
Borrower and the Administrative Agent otherwise consent (PROVIDED,
HOWEVER that if a Default has occurred and is continuing, the consent
of the Borrower shall not be required), each such assignment shall be
in an amount not less than the lesser of (i) $5,000,000 or (ii) the
remaining amount of the assigning Lender's Commitment (calculated as
at the date of such assignment).
(b) SUBSTITUTION OF A LENDER. The Borrower may, at its sole
expense and effort, require any Lender to transfer and assign, without
recourse (in accordance with this SECTION 13.3) all (but not less than
all) of its interests, rights and obligations under this Agreement to
an assignee which shall assume such assigned obligations (which
assignee may be another Lender, if a Lender accepts such assignment);
PROVIDED, that (i) such assignment shall not conflict with any law,
rule or regulation or order of any court or other governmental
authority, (ii) the Borrower shall have received a written consent of
the Administrative Agent in the case of an entity that is not a
Lender, which consent shall not be unreasonably withheld, (iii) the
Borrower or such assignee shall have paid to the assigning Lender in
immediately available funds the principal of and interest accrued to
the date of such payment on the Loans made by it hereunder and all
other amounts owed to it hereunder and the fee payable to the
Administrative Agent pursuant to SECTION 13.3.2 and (iv) nothing in
the foregoing is intended or shall be construed as obligating the
Administrative Agent or any Lender to locate such an assignee.
13.3.2. EFFECT; EFFECTIVE DATE. Upon (i) delivery to the
Administrative Agent of a notice of assignment, substantially in the
form attached as EXHIBIT 1 to EXHIBIT D (a "NOTICE OF ASSIGNMENT"),
together with any consents required by SECTION 13.3.1, and (ii)
payment of a $3,500 fee to the Administrative Agent for processing
such assignment (including assignments to other Lenders, but excluding
assignments from a Lender to an Affiliate of such Lender), such
assignment shall become effective on the effective date specified in
such Notice of Assignment. The Notice of Assignment shall contain a
representation by the Purchaser to the effect that none of the
consideration used to make the purchase of the Commitment, LC
Interests and Loans under the applicable assignment agreement are
"plan assets" as defined under ERISA and that the rights and
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interests of the Purchaser in and under the Loan Documents will not be
"plan assets" under ERISA. On and after the effective date of such
assignment, such Purchaser shall for all purposes be a Lender party to
this Agreement and any other Loan Document executed by or on behalf of
the Lenders and shall have all the rights and obligations of a Lender
under the Loan Documents, to the same extent as if it were an original
party hereto, and no further consent or action by the Borrower, the
Swing Line Lender, the Lenders or the LC Issuers or the Administrative
Agent shall be required to release the transferor Lender with respect
to the percentage of the Aggregate Commitment and Loans assigned to
such Purchaser. Upon the consummation of any assignment to a Purchaser
pursuant to this SECTION 13.3.2, the transferor Lender, the
Administrative Agent and the Borrower shall, if the transferor Lender
or the Purchaser desires that its Loans be evidenced by Notes, make
appropriate arrangements so that new Notes or, as appropriate,
replacement Notes are issued to such transferor Lender and new Notes
or, as appropriate, replacement Notes, are issued to such Purchaser,
in each case in principal amounts reflecting their respective
Commitments, as adjusted pursuant to such assignment.
13.4. DISSEMINATION OF INFORMATION. The Borrower authorizes each
Lender to disclose to any Participant or Purchaser or any other Person
acquiring an interest in the Loan Documents by operation of law (each a
"TRANSFEREE") and any prospective Transferee any and all information in
such Lender's possession concerning the creditworthiness of the Borrower
and its Subsidiaries, including without limitation any information
contained in any Reports; PROVIDED that each Transferee and prospective
Transferee agrees to be bound by SECTION 10.11 of this Agreement.
13.5. TAX TREATMENT. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the
transferor Lender shall cause such Transferee, concurrently with the
effectiveness of such transfer, to comply with the provisions of SECTION
4.5(IV).
ARTICLE XIV: NOTICES
14.1. NOTICES. Except as otherwise permitted by SECTION 2.16 with
respect to borrowing notices, all notices, requests and other
communications to any party hereunder shall be in writing (including
electronic transmission, facsimile transmission or similar writing) and
shall be given to such party: (x) in the case of the Borrower and the
Administrative Agent, at its address or facsimile number set forth on the
signature pages hereof, (y) in the case of any Lender, Swing Line Lender or
LC Issuer at its address or facsimile number set forth below its signature
hereto or (z) in the case of any party, at such other address or facsimile
number as such party may hereafter specify for the purpose by notice to the
Administrative Agent and the Borrower in accordance with the provisions of
this SECTION 14.1. Each such notice, request or other communication shall
be effective (i) if given by facsimile transmission, when transmitted to
the facsimile number specified in this Section and confirmation of receipt
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 (or, in the
case of electronic transmission, received) at the address specified in this
Section; PROVIDED that notices to the Administrative Agent under ARTICLE II
shall not be effective until received.
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<PAGE>
14.2. CHANGE OF ADDRESS. The Borrower, the Administrative Agent, the
Swing Line Lender, any LC Issuer and any Lender may each change the address
for service of notice upon it by a notice in writing to the other parties
hereto.
ARTICLE XV: COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower, the
Administrative Agent and the Lenders and each party has notified the
Administrative Agent by facsimile transmission or telephone that it has
taken such action.
ARTICLE XVI: CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
16.1. CHOICE OF LAW. THE ADMINISTRATIVE AGENT ACCEPTS THIS AGREEMENT,
ON BEHALF OF ITSELF, THE LENDERS AND THE LC ISSUERS, AT CHICAGO, ILLINOIS
BY ACKNOWLEDGING AND AGREEING TO IT THERE. ANY DISPUTE BETWEEN THE BORROWER
AND THE AGENT, ANY LENDER OR ANY LC ISSUER OR OTHER HOLDER OF OBLIGATIONS
ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS (OTHER THAN THOSE EXPRESSLY CONTAINING A
CONTRARY CHOICE OF LAW PROVISION), AND WHETHER ARISING IN CONTRACT, TORT,
EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL
LAWS (INCLUDING 735 ILCS 105/5-1 ET SEQ. BUT OTHERWISE WITHOUT REGARD TO
THE CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF ILLINOIS, BUT GIVING
EFFECT TO APPLICABLE FEDERAL LAWS.
16.2. CONSENT TO JURISDICTION. (A) EXCLUSIVE JURISDICTION. EXCEPT AS
PROVIDED IN SUBSECTION (B), EACH OF THE PARTIES HERETO AGREES THAT ALL
DISPUTES AMONG THEM ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH,
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS WHETHER ARISING IN
CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED EXCLUSIVELY BY
STATE OR FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS, BUT THE PARTIES
HERETO ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD
BY A COURT LOCATED OUTSIDE OF CHICAGO, ILLINOIS. EACH OF THE PARTIES HERETO
WAIVES IN ALL DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE
DISPUTE.
(B) OTHER JURISDICTIONS. THE BORROWER AGREES THAT THE ADMINISTRATIVE
AGENT, THE SWING LINE LENDER, ANY LENDER OR ANY
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LC ISSUER SHALL HAVE THE RIGHT TO PROCEED AGAINST THE BORROWER OR ITS
PROPERTY IN A COURT IN ANY LOCATION TO ENABLE SUCH PERSON TO (1) OBTAIN
PERSONAL JURISDICTION OVER THE BORROWER OR (2) REALIZE ON ANY COLLATERAL
FOR THE OBLIGATIONS OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED
IN FAVOR OF SUCH PERSON. THE BORROWER AGREES THAT IT WILL NOT ASSERT ANY
PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY SUCH PERSON TO
REALIZE ON ANY COLLATERAL FOR THE OBLIGATIONS OR TO ENFORCE A JUDGMENT OR
OTHER COURT ORDER IN FAVOR OF SUCH PERSON. THE BORROWER WAIVES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH SUCH
PERSON HAS COMMENCED A PROCEEDING DESCRIBED IN THIS SUBSECTION (B).
16.3. WAIVER OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT,
THE SWING LINE LENDER, THE LC ISSUERS AND EACH LENDER HEREBY WAIVE TRIAL BY
JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING
OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP
ESTABLISHED THEREUNDER.
<PAGE>
IN WITNESS WHEREOF, the Borrower, the Lenders, the Swing Line Lender,
the LC Issuers and the Administrative Agent have executed this Agreement as
of the date first above written.
CORDANT TECHNOLOGIES INC.
By:
Title:
Notice Address:
Attention:
Telephone:
FAX:
S-1
<PAGE>
BANK ONE, NA (Main Office Chicago),
Individually as a Lender, as Administrative Agent, Swing
Line Lender and as the LC Issuer
By:
Title:
Notice Address:
Attention:
Telephone:
FAX:
S-2
<PAGE>
ABN AMRO BANK N.V.
Individually as a Lender and as Syndication Agent
By:
Title:________________________________
By:_________________________________
Title:________________________________
Notice Address:
Attention:
Telephone:
FAX:
S-3
<PAGE>
[OTHER LENDERS]
By:
Title:________________________________
Notice Address:
Attention:
Telephone:
FAX:
S-4
<PAGE>
<TABLE>
<CAPTION>
PRICING SCHEDULE
- ---------------------- ------------------ -------------------- -------------------- ------------------ ------------------
LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
- ---------------------- ------------------ -------------------- -------------------- ------------------ ------------------
<S> <C> <C> <C> <C> <C>
APPLICABLE FACILITY 0.125% 0.175% 0.20% 0.225% 0.25%
FEE RATE
- ---------------------- ------------------ -------------------- -------------------- ------------------ ------------------
- ---------------------- ------------------ -------------------- -------------------- ------------------ ------------------
APPLICABLE MARGIN 0.50% 0.70% 0.80% 0.90% 1.125%
AND APPLICABLE LC
FEE PERCENTAGE
- ---------------------- ------------------ -------------------- -------------------- ------------------ ------------------
</TABLE>
For the purposes of this Schedule, the following terms have the
following meanings, subject to the final paragraph of this Schedule:
"LEVEL I STATUS" exists at any date if, on such date, the Borrower's
S&P Rating is BBB+ or better OR the Borrower's Moody's Rating is Baa1 or
better.
"LEVEL II STATUS" exists at any date if, on such date, (i) the
Borrower has not qualified for Level I Status and (ii) the Borrower's S&P
Rating is BBB OR the Borrower's Moody's Rating is Baa2.
"LEVEL III STATUS" exists at any date if, on such date, (i) the
Borrower has not qualified for Level I Status or Level II Status and (ii)
the Borrower's S&P Rating is BBB- and the Borrower's Moody's Rating is
Baa3.
"LEVEL IV STATUS" exists at any date if, on such date, (i) the
Borrower has not qualified for Level I Status, Level II Status or Level III
Status and (ii) (a) the Borrower's S&P Rating is BBB- and the Borrower's
Moody's Rating is Ba1 OR (b) the Borrower's S&P Rating is BB+ and the
Borrower's Moody's Rating is Baa3.
"LEVEL V STATUS" exists at any date if, on such date, the Borrower has
not qualified for Level I Status, Level II Status, Level III Status or
Level IV Status.
"MOODY'S RATING" means, at any time, the rating issued by Moody's and
then in effect with respect to the Borrower's senior unsecured long-term
debt securities without third-party credit enhancement.
Pricing Schedule Page 1
<PAGE>
"S&P RATING" means, at any time, the rating issued by S&P, and then in
effect with respect to the Borrower's senior unsecured long-term debt
securities without third-party credit enhancement.
"STATUS" means Level I Status, Level II Status, Level III Status,
Level IV Status or Level V Status.
The Applicable Margin and Applicable Fee Rate shall be determined in
accordance with the foregoing table based on the Borrower's Status as
determined from its then-current Moody's and S&P Ratings. The credit rating
in effect on any date for the purposes of this Schedule is that in effect
at the close of business on such date. If at any time the Borrower has no
Moody's Rating or no S&P Rating, Level V Status shall exist. If the
Borrower is split-rated and the ratings differential is one level, the
higher rating will apply. If the Borrower is split-rated and the ratings
differential is two levels or more, the rating level one below the higher
level will apply.
Pricing Schedule Page 2
EXECUTION COPY
===========================================================================
===========================================================================
364-DAY REVOLVING
CREDIT AGREEMENT
Dated as of February 9, 2000
among
CORDANT TECHNOLOGIES INC.
===========================================================================
THE INSTITUTIONS FROM TIME TO TIME
===========================================================================
===========================================================================
PARTIES HERETO AS LENDERS,
===========================================================================
BANK ONE, NA,
as Administrative Agent
ABN AMRO BANK N.V.,
as Syndication Agent
and
BANK OF AMERICA, N.A.
and
WACHOVIA BANK, N.A.,
as Co-Documentation Agents
BANC ONE CAPITAL MARKETS, INC.,
as Lead Arranger and Sole Book Manager
and
ABN AMRO BANK N.V.,
BANK OF AMERICA, N.A.
and
WACHOVIA BANK, N.A.
as Co-Arrangers
===========================================================================
SIDLEY & AUSTIN
===========================================================================
Bank One Plaza
10 South Dearborn Street
Chicago, Illinois 60603
TABLE OF CONTENTS
ARTICLE I: DEFINITIONS...................................................1
ARTICLE II: THE CREDITS.................................................16
2.1. Commitment....................................................16
2.2. Required Payments and Termination; Extension of Syndicated Loan
Termination Date; Conversion to Term Loans....................17
2.3. Ratable Loans.................................................18
2.4. Types of Advances.............................................18
2.5. Facility Fee; Reductions in Aggregate Commitment..............18
2.6 Utilization Fee................................................18
2.7. Minimum Amount of Each Advance................................19
2.8. Optional Principal Payments...................................19
2.9. Method of Selecting Types and Interest Periods for New
Advances......................................................19
2.10. Conversion and Continuation of Outstanding Advances..........19
2.11. Changes in Interest Rate, Etc................................20
2.12. Rates Applicable After Default...............................20
2.13. Method of Payment............................................21
2.14. Noteless Agreement; Evidence of Indebtedness.................21
2.15. Telephonic Notices...........................................22
2.16. Interest Payment Dates; Interest and Fee Basis...............22
2.17. Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions........................................22
2.18. Lending Installations........................................22
2.19. Non-Receipt of Funds by the Administrative Agent.............23
2.20 Replacement of Certain Lenders................................23
ARTICLE III: RESERVED...................................................24
ARTICLE IV: YIELD PROTECTION; TAXES.....................................24
4.1. Yield Protection..............................................24
4.2. Changes in Capital Adequacy Regulations.......................25
4.3. Availability of Types of Advances.............................25
4.4. Funding Indemnification.......................................25
4.5. Taxes.........................................................26
4.6. Lender Statements; Survival of Indemnity......................27
ARTICLE V: CONDITIONS PRECEDENT.........................................28
5.1. Initial Credit Extensions.....................................28
5.2. Each Credit Extension.........................................29
<PAGE>
ARTICLE VI: REPRESENTATIONS AND WARRANTIES..............................30
6.1. Existence and Standing........................................30
6.2. Authorization and Validity....................................30
6.3. No Conflict; Government Consent...............................30
6.4. Financial Statements..........................................31
6.5. Material Adverse Change.......................................31
6.6. Taxes.........................................................31
6.7. Litigation and Contingent Obligations.........................31
6.8. Subsidiaries..................................................32
6.9. ERISA; Foreign Pension Plan Matters...........................32
6.10. Accuracy of Information......................................32
6.11. Regulation U.................................................33
6.12. Material Agreements..........................................33
6.13. Compliance With Laws.........................................33
6.14. Ownership of Properties......................................33
6.15. Plan Assets; Prohibited Transactions.........................33
6.16. Environmental Matters........................................33
6.17. Investment Company Act.......................................34
6.18. Public Utility Holding Company Act...........................34
ARTICLE VII: COVENANTS..................................................34
7.1. Financial Reporting...........................................34
7.2. Use of Proceeds...............................................36
7.3. Notice of Default.............................................36
7.4. Conduct of Business...........................................37
7.5. Taxes.........................................................37
7.6. Insurance.....................................................37
7.7. Compliance with Laws..........................................37
7.8. Maintenance of Properties.....................................37
7.9. Inspection....................................................37
7.10. Subsidiary Indebtedness......................................38
7.11 Merger........................................................38
7.12. Sale of Assets...............................................38
7.13. Investments and Acquisitions; New Subsidiaries...............39
7.14. Liens........................................................41
7.15. Affiliates...................................................44
7.16. Financial Contracts..........................................44
7.17. Non-Guarantor or Pledged Subsidiaries........................44
7.18. Financial Covenants..........................................45
7.18.1. Interest Coverage Ratio................................45
7.18.2. Leverage Ratio.........................................45
7.19 Subsidiary Covenants..........................................45
<PAGE>
ARTICLE VIII: DEFAULTS..................................................45
ARTICLE IX: ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES...............48
9.1. Acceleration..................................................48
9.2. Amendments....................................................48
9.3. Preservation of Rights........................................49
ARTICLE X: GENERAL PROVISIONS...........................................50
10.1. Survival of Representations..................................50
10.2. Governmental Regulation......................................50
10.3. Headings.....................................................50
10.4. Entire Agreement.............................................50
10.5. Several Obligations; Benefits of this Agreement..............50
10.6. Expenses; Indemnification....................................50
10.7. Numbers of Documents.........................................51
10.8. Accounting...................................................52
10.9. Severability of Provisions...................................52
10.10. Nonliability of Lenders.....................................52
10.11. Confidentiality.............................................52
10.12. Nonreliance.................................................53
10.13. Subordination of Intercompany Indebtedness..................53
ARTICLE XI: THE AGENT...................................................54
11.1. Appointment; Nature of Relationship..........................54
11.2. Powers.......................................................54
11.3. General Immunity.............................................54
11.4. No Responsibility for Loans, Recitals, etc...................55
11.5. Action on Instructions of Lenders............................55
11.6. Employment of Administrative Agents and Counsel..............55
11.7. Reliance on Documents; Counsel...............................55
11.8. Administrative Agent's Reimbursement and Indemnification.....56
11.9. Notice of Default............................................56
11.10. Rights as a Lender..........................................56
11.11. Lender Credit Decision......................................57
11.12. Successor Administrative Agent..............................57
11.13. Agents and Arrangers' Fees..................................58
11.14. Delegation to Affiliates....................................58
11.15. Execution of Collateral Documents...........................58
11.16. Collateral and Guaranty Releases............................58
ARTICLE XII: SETOFF; RATABLE PAYMENTS...................................58
12.1. Setoff.......................................................58
12.2. Ratable Payments.............................................58
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ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS.........59
13.1. Successors and Assigns.......................................59
13.2. Participations...............................................60
13.2.1 Permitted Participants; Effect..........................60
13.2.2. Voting Rights..........................................60
13.2.3. Benefit of Setoff......................................60
13.3. Assignments..................................................60
13.3.1. Permitted Assignments..................................60
13.3.2. Effect; Effective Date.................................61
13.4. Dissemination of Information.................................62
13.5. Tax Treatment................................................62
ARTICLE XIV: NOTICES....................................................62
14.1. Notices......................................................62
14.2. Change of Address............................................63
ARTICLE XV: COUNTERPARTS................................................63
ARTICLE XVI: CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER.............63
16.1. CHOICE OF LAW................................................63
16.2. CONSENT TO JURISDICTION......................................63
(A) EXCLUSIVE JURISDICTION.....................................63
(B) OTHER JURISDICTIONS........................................64
16.3. WAIVER OF JURY TRIAL.........................................64
<PAGE>
SCHEDULES AND EXHIBITS
PRICING SCHEDULE
COMMITMENT SCHEDULE
SCHEDULE 1 Litigation and Contingent Obligations
SCHEDULE 2 Subsidiaries
SCHEDULE 3 Indebtedness and Liens
SCHEDULE 4 Investments
SCHEDULE 5 Transactions with Affiliates
EXHIBIT A Form of Note
EXHIBIT B Form of Pledge Agreement
EXHIBIT C Form of Subsidiary Guaranty
EXHIBIT D Form of Assignment Agreement
EXHIBIT E Money Transfer Instructions
EXHIBIT F Form of Compliance Certificate
<PAGE>
364-DAY REVOLVING CREDIT AGREEMENT
This 364-Day Revolving Credit Agreement, dated as of February 9,
2000, is among Cordant Technologies Inc., a Delaware corporation, the
Lenders, Bank One, NA, having its principal office in Chicago,
Illinois, as Administrative Agent, ABN AMRO Bank N.V., as Syndication
Agent and BANK OF AMERICA, N.A. and WACHOVIA BANK, N.A., as
Co-Documentation Agents. The parties hereto agree as follows:
ARTICLE I: DEFINITIONS
As used in this Agreement:
"Accounting Change" is defined in Section 10.8 hereof.
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by
which the Borrower or any of its Subsidiaries (i) acquires any going
business concern or all or substantially all of the assets of any
firm, corporation or limited liability company, or division thereof,
whether through purchase of assets, merger or otherwise or (ii)
directly or indirectly acquires (in one transaction or as the most
recent transaction in a series of transactions) at least a majority
(in number of votes) of the securities of a corporation which have
ordinary voting power for the election of directors (other than
securities having such power only by reason of the happening of a
contingency) or a majority (by percentage or voting power) of the
outstanding ownership interests of a partnership or limited liability
company.
"Administrative Agent" means Bank One, NA, in its capacity as
contractual representative of the Lenders pursuant to Article XI, and
not in its individual capacity as a Lender, and any successor
Administrative Agent appointed pursuant to Article XI.
"Advance" means a borrowing hereunder (or conversion or
continuation thereof) consisting of the aggregate amount of the
several Syndicated Loans made on the same Borrowing Date (or date of
conversion or continuation) by the Lenders to the Borrower of the same
Type and, in the case of Eurodollar Advances, for the same Interest
Period.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with
such Person. A Person shall be deemed to control another Person if the
controlling Person owns 10% or more of any class of voting securities
(or other ownership interests) of the controlled Person or possesses,
directly or indirectly, the power to direct or cause the direction of
the management or policies of the controlled Person, whether through
ownership of stock, by contract or otherwise.
"Agents" means the Administrative Agent, the Syndication Agent
and the Co-Documentation Agents.
"Aggregate Commitment" means the aggregate of the Commitments of
all the Lenders, as reduced from time to time pursuant to the terms
hereof. The initial Aggregate Commitment is Four Hundred Million and
00/100 Dollars ($400,000,000).
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"Aggregate Outstanding Credit Exposure" means, as of any day, the
aggregate of the Outstanding Credit Exposure of all the Lenders.
"Agreement" means this 364-Day Revolving Credit Agreement, as it
may be amended, modified, supplemented or restated and in effect from
time to time.
"Agreement Accounting Principles" means generally accepted
accounting principles as in effect in the United States from time to
time, applied in a manner consistent with that used in preparing the
financial statements of the Borrower referred to in Section 6.4
hereof, provided, however, except as provided in Section 10.8, with
respect to the calculation of financial ratios and other financial
tests required by this Agreement, "Agreement Accounting Principles"
means generally accepted accounting principles as in effect in the
United States as of the date of this Agreement, applied in a manner
consistent with that used in preparing the financial statements of the
Borrower referred to in Section 6.4 hereof.
"Alternate Base Rate" means, for any day, a rate of interest per
annum equal to the higher of (i) the Prime Rate for such day and (ii)
the sum of the Federal Funds Effective Rate for such day plus 1/2% per
annum.
"Annual Audited Financial Statements" is defined in Section
7.1(i)(a).
"Applicable Facility Fee Rate" means, at any time, the percentage
rate per annum at which Facility Fees are accruing on the Aggregate
Commitment (without regard to usage) at such time as set forth in the
Pricing Schedule.
"Applicable Margin" means, with respect to Advances of any Type
at any time, the percentage rate per annum which is applicable at such
time with respect to Advances of such Type as set forth in the Pricing
Schedule.
"Arrangers" means Banc One Capital Markets, Inc., as lead
arranger and sole book manager and ABN AMRO Bank N.V., Bank of
America, N.A. and Wachovia Bank, N.A., as co-arrangers, and their
successors.
"Article" means an article of this Agreement unless another
document is specifically referenced.
"Authorized Officer" means any of the President, the Chief
Financial Officer or the Treasurer of the Borrower, acting singly.
"Available Aggregate Commitment" means, for any day, the
Aggregate Commitment then in effect minus the aggregate outstanding
principal amount of the Advances.
"Bank One" means Bank One, NA, in its individual capacity, and
its successors.
"Borrower" means Cordant Technologies Inc., a Delaware
corporation, and its successors and assigns.
"Borrowing Date" means a date on which an Advance is made
hereunder.
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"Borrowing Notice" is defined in Section 2.9.
"Business Day" means (i) with respect to any borrowing, payment
or rate selection of Eurodollar Advances, a day (other than a Saturday
or Sunday) on which banks generally are open in Chicago and New York
for the conduct of substantially all of their commercial lending
activities and on which dealings in United States dollars are carried
on in the London interbank market and (ii) for all other purposes, a
day (other than a Saturday or Sunday) on which banks generally are
open in Chicago for the conduct of substantially all of their
commercial lending activities.
"Capitalized Lease" of a Person means any lease of Property by
such Person as lessee which would be capitalized on a balance sheet of
such Person prepared in accordance with Agreement Accounting
Principles, consistently applied.
"Capitalized Lease Obligations" of a Person means the amount of
the obligations of such Person under Capitalized Leases which would be
shown as a liability on a balance sheet of such Person prepared in
accordance with Agreement Accounting Principles, consistently applied.
"Cash Equivalent Investments" means, as to any Person, (i)
securities issued or directly and fully guaranteed or insured by the
United States or any agency or instrumentality thereof (provided that
the full faith and credit of the United States is pledged in support
thereof) having maturities of not more than one year from the date of
acquisition, (ii) time deposits and certificates of deposit of any
investment grade commercial bank having, or which is the principal
banking subsidiary of an investment grade bank holding company
organized under the laws of the United States, any State thereof, the
District of Columbia or any foreign jurisdiction having capital,
surplus and undivided profits aggregating in excess of $500,000,000,
with maturities of not more than one year from the date of acquisition
by such Person, (iii) repurchase obligations with a term of not more
than 90 days for underlying securities of the types described in
clause (i) above entered into with any bank meeting the qualifications
specified in clause (ii) above, provided that such repurchase
obligations are secured by a first priority security interest in such
underlying securities which have, on the date of purchase thereof, a
fair market value of at least 100% of the amount of the repurchase
obligations, (iv) commercial paper issued by any Person incorporated
in the United States rated at least A-1 or the equivalent thereof by
S&P or at least P-1 or the equivalent thereof by Moody's and in each
case maturing not more than one year after the date of acquisition by
such Person, (v) investments in money market funds substantially all
of the assets of which are comprised of securities of the types
described in clauses (i) through (iv) above and (vi) demand deposit
accounts maintained in the ordinary course of business.
"Change" is defined in Section 4.2.
"Change in Control" means:
(i) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934), is or becomes
the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, except that a person shall be deemed
to have "beneficial ownership" of all securities that such person has
the right to acquire, whether such right is exercisable immediately or
3
<PAGE>
only after the passage of time), directly or indirectly, of thirty
percent (30.0%) or more of the combined voting power of the Borrower's
capital stock ordinarily having the right to vote at an election of
directors;
(ii) during any period of twelve consecutive calendar months,
individuals (a) who were directors of the Borrower on the first day of
such period, or (b) whose election or nomination for election to the
board of directors of the Borrower was recommended or approved by at
least a majority of the directors then still in office who were
directors of the Borrower on the first day of such period, or whose
election or nomination for election was so approved, shall cease to
constitute a majority of the board of directors of the Borrower;
(iii) any "Change of Control" (or similar definition) under and
as defined in any credit agreement, note, indenture or similar
agreement or instrument where the principal amount outstanding
aggregates at least $20,000,000 shall occur provided the effect of
such "Change of Control" thereunder is to cause, or to permit the
holder or holders of such Indebtedness to cause, such Indebtedness or
any part thereof to become due prior to its stated maturity, to cause
or permit the holder or holders thereof to require such Indebtedness
to be prepaid or repurchased or a sinking fund established therefor or
any such Indebtedness shall as a result thereof be declared to be due
and payable or required to be prepaid or repurchased or a sinking fund
established therefor prior to the stated maturity thereof.
"Closing Date" means the date on which the initial Loans are
advanced hereunder.
"Code" means the Internal Revenue Code of 1986, as amended,
reformed or otherwise modified from time to time.
"Collateral Documents" means, collectively, each of the Pledge
Agreements, together with the documents, instruments and agreements
executed in connection therewith.
"Combined Commitment" means, on any date, the sum of (1) the
Aggregate Commitment hereunder on such date (or, from and after the
earlier of the Conversion Date or the Commitment Termination Date, the
Aggregate Outstanding Credit Exposure on the Conversion Date) and (2)
the "Aggregate Commitment" under and as defined in the 5-Year Credit
Agreement on such date.
"Combined Utilized Amount" means, on any date, the sum of (1) the
aggregate principal amount of all Loans hereunder on such date and (2)
the aggregate principal amount of all "Loans" and "LC Obligations"
under and as defined in the 5-Year Credit Agreement on such date.
"Commitment" means, for each Lender, the obligation of such
Lender to make Syndicated Loans in the aggregate not exceeding the
amount set forth opposite its name on the Commitment Schedule attached
hereto and made a part hereof or as set forth in any Notice of
Assignment relating to any assignment that has become effective
pursuant to Section 13.3.2, as such amount may be modified from time
to time pursuant to the terms hereof.
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<PAGE>
"Commitment Termination Date" means the Syndicated Loan
Termination Date or any earlier date on which the Aggregate Commitment
is reduced to zero or otherwise terminated pursuant to the terms
hereof (other than pursuant to Section 2.2(c)).
"Consent Date" is defined in Section 2.2(b).
"Consolidated Adjusted EBITDA" means, for any period,
Consolidated EBIT plus, to the extent deducted from revenues in
determining Consolidated Net Income, all amortization of intangibles
and depreciation, all calculated for the Borrower and its Consolidated
Subsidiaries on a consolidated basis in accordance with Agreement
Accounting Principles, consistently applied, adjusted with respect to
permitted Acquisitions, on a pro forma basis, using unadjusted
historical financial statements with respect to the business acquired.
"Consolidated EBIT" means, for any period, Consolidated Net
Income plus, to the extent deducted from revenues in determining
Consolidated Net Income, (i) Consolidated Interest Expense and (ii)
expense for income taxes paid or accrued, all calculated for the
Borrower and its Consolidated Subsidiaries on a consolidated basis in
accordance with Agreement Accounting Principles, consistently applied.
"Consolidated Interest Expense" means, with reference to any
period, the interest expense of the Borrower and its Consolidated
Subsidiaries for such period, adjusted by adding thereto the amount of
all Receivables Facility Financing Costs (to the extent not otherwise
included), all calculated for the Borrower and its Consolidated
Subsidiaries on a consolidated basis in accordance with Agreement
Accounting Principles, consistently applied.
"Consolidated Net Income" means, with reference to any period,
the net after-tax income (or loss) of the Borrower and its
Consolidated Subsidiaries calculated on a consolidated basis for such
period, all calculated for the Borrower and its Consolidated
Subsidiaries on a consolidated basis in accordance with Agreement
Accounting Principles, consistently applied.
"Consolidated Subsidiary" means any Subsidiary that is
consolidated on a balance sheet of the Borrower in accordance with
Agreement Accounting Principles, consistently applied.
"Consolidated Total Debt" means the sum, without duplication, of
(a) all Indebtedness of the Borrower and its Consolidated Subsidiaries
which, on the date of determination, would be required to be shown on
the Borrower's consolidated balance sheet prepared in accordance with
Agreement Accounting Principles, consistently applied, plus (b) all
Receivables Facility Attributed Indebtedness of the Borrower and its
Consolidated Subsidiaries on the date of determination regardless of
its treatment under Agreement Accounting Principles, plus (c) all Off
Balance Sheet Liabilities of the Borrower and its Consolidated
Subsidiaries on the date of determination regardless of its treatment
under Agreement Accounting Principles.
"Conversion/Continuation Notice" is defined in Section 2.10.
"Conversion Date" is defined in Section 2.2(c).
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<PAGE>
"Converted Loan Termination Date" means the date that is 364 days
after the Conversion Date (or, if such date is not a Business Day, on
the immediately preceding Business Day).
"Controlled Group" means all members of a controlled group of
corporations or other business entities and all trades or businesses
(whether or not incorporated) under common control which, together
with the Borrower or any of its Subsidiaries, are treated as a single
employer under Section 414(b), (c), (m) or (o) of the Code.
"Credit Extension" means the funding of an Advance hereunder.
"Credit Extension Date" means the Borrowing Date for an Advance.
"Default" means an event described in Article VIII.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances,
rules, judgments, orders, decrees, plans, injunctions, permits,
concessions, grants, franchises, licenses, agreements and other
governmental restrictions relating to (i) the protection of the
environment, (ii) the effect of the environment on human health, (iii)
emissions, discharges or releases of pollutants, contaminants,
hazardous substances or wastes into surface water, ground water or
land, or (iv) the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants,
contaminants, hazardous substances or wastes or the clean-up or other
remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations issued
thereunder.
"Eurodollar Advance" means an Advance which bears interest at the
applicable Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar
Advance for the relevant Interest Period, the applicable London
interbank offered rate for deposits in U.S. dollars appearing on
Reuters Screen FRBD as of 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period, and having a maturity
approximately equal to such Interest Period. If no London interbank
offered rate of such maturity then appears on Reuters Screen FRBD,
then the Eurodollar Base Rate shall be equal to the London interbank
offered rate for deposits in U.S. dollars maturing immediately before
or immediately after such maturity, whichever is higher, as determined
by the Administrative Agent from Reuters Screen FRBD. If Reuters
Screen FRBD is not available, the applicable Eurodollar Base Rate for
the relevant Interest Period shall be the rate determined by the
Administrative Agent to be the rate at which Bank One offers to place
deposits in U.S. dollars with first-class banks in the London
interbank market at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period, in the
approximate amount of Bank One's relevant portion of the Eurodollar
Advance and having a maturity approximately equal to such Interest
Period.
"Eurodollar Loan" means a Syndicated Loan which bears interest at
the applicable Eurodollar Rate.
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<PAGE>
"Eurodollar Rate" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the sum of (i) the quotient of (a) the
Eurodollar Base Rate applicable to such Interest Period, divided by
(b) one minus the Reserve Requirement (expressed as a decimal), if
any, applicable to such Interest Period, plus the Applicable Margin.
The Eurodollar Rate shall be rounded to the next higher multiple of
1/100 of 1% if the rate is not such a multiple.
"Excluded Taxes" means, in the case of each Lender or applicable
Lending Installation and the Administrative Agent, taxes imposed on
its net income, and franchise taxes imposed on it, by (i) the
jurisdiction under the laws of which such Lender or the Administrative
Agent is incorporated or organized or any political combination or
subdivision or taxing authority thereof or (ii) any jurisdiction in
which the Administrative Agent's or such Lender's principal executive
office or such Lender's applicable Lending Installation is located or
in which, other than as a result of the transaction evidenced by this
Agreement, the Administrative Agent or such Lender otherwise is, or at
any time was, engaged in business.
"Exhibit" refers to an exhibit to this Agreement, unless another
document is specifically referenced.
"Existing Credit Agreements" means (a) that certain Credit
Agreement dated as of May 23, 1996 among the Borrower (formerly known
as Thiokol Corporation), the financial institutions parties thereto as
lenders, and Bank One, NA (formerly known as The First National Bank
of Chicago), as Administrative Agent, as the same has been amended
from time to time; (b) that certain Credit Agreement dated as of
November 20, 1997 among the Borrower (formerly known as Thiokol
Corporation), the financial institutions parties thereto as lenders
and Bank One, NA (formerly The First National Bank of Chicago), as
Agent; (c) that certain Credit Agreement dated as of December 16, 1997
among Howmet Corporation, the financial institutions parties thereto
as lenders, ABN AMRO Bank N.V. and Bankers Trust Company, as
Co-Documentation Agents and Bank One, NA (formerly The First National
Bank of Chicago), as Swing Line Lender, LC Issuer and Agent, as the
same has been amended from time to time; and (d) that certain Credit
Agreement dated as of February 5, 1999 among the Borrower, the
financial institutions from time to time parties thereto as lenders
and Bank One, NA (formerly known as The First National Bank of
Chicago), as Administrative Agent.
"Facility Fee" is defined in Section 2.5.
"Federal Funds Effective Rate" means, for any day, an interest
rate per annum equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published for such
day (or, if such day is not a Business Day, for the immediately
preceding Business Day) by the Federal Reserve Bank of New York, or,
if such rate is not so published for any day which is a Business Day,
the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected
by the Administrative Agent in its sole discretion.
"Financial Contract" of a Person means (i) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other
financial instrument with similar characteristics or (ii) any
agreements, devices or arrangements providing for payments related to
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<PAGE>
fluctuations of interest rates, exchange rates or forward rates,
including, but not limited to, interest rate exchange agreements,
forward currency exchange agreements, interest rate cap or collar
protection agreements, forward rate currency, interest rate options or
other Rate Hedging Agreements.
"5-Year Credit Agreement" means that certain 5-Year Revolving
Credit Agreement of even date herewith among the Borrower, the
institutions from time to time parties thereto as lenders, Bank One,
NA, as Administrative Agent, ABN AMRO Bank N.V., as Syndication Agent
and Bank of America, N.A. and Wachovia Bank, N.A. as Co-Documentation
Agents, as the same may be amended, modified, supplemented and/or
restated and as in effect from time to time.
"Floating Rate" means, for any day, a rate per annum equal to the
Alternate Base Rate for such day, in each case changing when and as
the Alternate Base Rate changes.
"Floating Rate Advance" means an Advance which bears interest at
the Floating Rate.
"Floating Rate Loan" means a Syndicated Loan which bears interest
at the Floating Rate.
"Foreign Pension Plan" means any employee pension benefit plan
(as defined in Section 3(2) of ERISA) which (i) is maintained or
contributed to for the benefit of employees of (a) the Borrower, (b)
any Subsidiary of the Borrower incorporated under the laws of any
jurisdiction in the United States, (c) any Material Foreign Subsidiary
or (d) any other foreign Subsidiary 65% of the stock of which is
pledged pursuant to a Pledge Agreement, (ii) is not covered by ERISA
pursuant to Section 4(b)(4) thereof and (iii) under applicable local
law, is required to be funded through a trust or other funding
vehicle.
"Guaranty" of any Person means any agreement by which such Person
assumes, guarantees, endorses, continently agrees to purchase or
provide funds for the payment of, or otherwise becomes liable upon,
the obligation of any other Person, or agrees to maintain the net
worth or working capital or other financial condition of any other
Person or otherwise assure any creditor of such other Person against
loss, and shall include, without limitation, the contingent liability
or reimbursement obligation of such Person under or with respect to
any letter of credit or similar instrument (other than letters of
credit utilized for non-financial obligations (i.e., performance on
contracts, workers' compensation, to support self-insurance programs
and for the benefit of governmental entities in connection with
environmental clean-up activities)) which is issued upon the
application of such Person or upon which such Person is an account
party or for which such Person is in any way liable.
"Howmet Companies" means Howmet International Inc. and each of
its Consolidated Subsidiaries.
"Howmet Documentation Date" means the date that is sixty (60)
days following the date on which the Borrower first owns greater than
90% of the issued and outstanding capital stock of Howmet
International Inc.
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"Indenture" means the Indenture by and between the Borrower and
Harris Trust and Savings Bank, as Trustee, dated as of March 3, 1998,
as the same has been amended or supplemented prior to the effective
date hereof.
"Indebtedness" of any Person means, without duplication, (a) the
obligations of such Person (i) for borrowed money, (ii) under or with
respect to notes payable and drafts accepted which represent
extensions of credit (whether or not representing obligations for
borrowed money) to such Person, (iii) reimbursement obligations with
respect to letters of credit issued for the account of such Person
(other than letters of credit utilized for non-financial obligations
(i.e., performance on contracts, workers' compensation, to support
self-insurance programs and for the benefit of governmental entities
in connection with environmental clean-up activities)) or (iv) for the
deferred purchase price of property or services other than current
accounts payable arising in the ordinary course of business on terms
customary in the trade, (b) the obligations of others, whether or not
assumed, secured by Liens on property of such Person or payable out of
the proceeds of or production from property now or hereafter owned or
acquired by such Person, (c) the Capitalized Lease Obligations of such
Person, (d) the obligations of such Person under Guaranties by such
Person of any Indebtedness (other than obligations for borrowed money
incurred to finance the purchase of property leased to such Person
pursuant to a Capitalized Lease of such Person) of any other Person,
(e) all Receivables Facility Attributed Indebtedness of such Person on
the date of determination and (f) Off Balance Sheet Liabilities of
such Person.
"Insolvency Event" is defined in Section 10.13.
"Intercompany Indebtedness" is defined in Section 10.13.
"Interest Period" means, with respect to a Eurodollar Advance, a
period of one, two, three, six or (subject to availability) nine
months commencing on a Business Day selected by the Borrower pursuant
to this Agreement. Such Interest Period shall end on the day which
corresponds numerically to such date one, two, three, six or nine
months thereafter, provided, however, that if there is no such
numerically corresponding day in such next, second, third, sixth or
ninth succeeding month, such Interest Period shall end on the last
Business Day of such next, second, third, sixth or ninth succeeding
month. If an Interest Period would otherwise end on a day which is not
a Business Day, such Interest Period shall end on the next succeeding
Business Day, provided, however, that if said next succeeding Business
Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made
in the ordinary course of business), extension of credit (other than
accounts receivable arising in the ordinary course of business on
terms customary in the trade) or contribution of capital by such
Person; stocks, bonds, mutual funds, partnership interests, notes,
debentures or other securities owned by such Person; any deposit
accounts and certificate of deposit owned by such Person; and
structured notes, Financial Contracts, derivative financial
instruments and other similar instruments or contracts owned by such
Person.
"Joint Venture" means any Affiliate of the Borrower which is
accounted for by the Borrower on the equity method of accounting.
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"Lenders" means the lending institutions listed on the signature
pages of this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the
Agents, the office, branch, subsidiary or affiliate of such Lender or
Agents listed on the signature pages hereof or on a Schedule or
otherwise selected by such Lender or the Administrative Agent pursuant
to Section 2.18.
"Leverage Ratio" means, as of any date of calculation, the ratio
of (i) Consolidated Total Debt outstanding on such date to (ii)
Consolidated Adjusted EBITDA for the Borrower's then most-recently
ended four fiscal quarters.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or
preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without
limitation, the interest of a vendor or lessor under any conditional
sale, Capitalized Lease or other title retention agreement).
"Loan(s)" means, with respect to a Lender, such Lender's
Syndicated Loan, and collectively all Syndicated Loans, whether made
or continued as or converted to Floating Rate Loans or Eurodollar
Loans.
"Loan Documents" means this Agreement and Notes, if any, issued
pursuant to Section 2.14, the Collateral Documents and the Subsidiary
Guaranties.
"Material Adverse Effect" means a material adverse effect on (i)
the business, Property, condition (financial or otherwise), results of
operations, or prospects of the Borrower and its Subsidiaries taken as
a whole, (ii) the ability of the Borrower and its Subsidiaries taken
as a whole to perform their obligations under the Loan Documents to
which they are a party, or (iii) the validity or enforceability of any
of the Loan Documents or the rights or remedies of the Agents or the
Lenders thereunder.
"Material Domestic Subsidiary(ies)" means each Consolidated
Subsidiary of the Borrower (a) incorporated under the laws of any
jurisdiction in the United States and (b) the total assets of which
exceed, as at the end of any calendar quarter or, in the case of
consummation of a Permitted Acquisition, at the time of consummation
of the Permitted Acquisition, three percent (3.0%) of the consolidated
total assets of the Borrower and its Consolidated Subsidiaries.
"Material Foreign Subsidiary(ies)" means each Consolidated
Subsidiary of the Borrower (a) incorporated under the laws of any
foreign jurisdiction and (b) the total assets of which exceed, as at
the end of any calendar quarter or, in the case of consummation of a
Permitted Acquisition, at the time of consummation of the Permitted
Acquisition, three percent (3.0%) of the consolidated total assets of
the Borrower and its Consolidated Subsidiaries; provided, however, in
the event that one or more of such Consolidated Subsidiaries are owned
through another foreign Subsidiary, then the Administrative Agent
shall notify the Borrower whether the "Material Foreign Subsidiary"
shall be the holding company foreign Subsidiary or such holding
company's Subsidiary or Subsidiaries, it being the intention of the
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parties that the Administrative Agent and the Lenders shall be
provided with the maximum collateral protection without resulting in
the net income of any foreign Subsidiary being deemed to have been
repatriated under the provisions of the Code.
"Material Indebtedness" is defined in Section 8.5.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a Plan maintained pursuant to a
collective bargaining agreement or any other arrangement to which the
Borrower or any member of the Controlled Group is a party to which
more than one employer is obligated to make contributions.
"New Subsidiary" is defined in Section 7.13(b).
"Non-U.S. Lender" is defined in Section 4.5(iv).
"Note" means any promissory note issued at the request of a
Lender pursuant to Section 2.14 in the form of Exhibit A.
"Notice of Assignment" is defined in Section 13.3.2.
"Notice to Convert" is defined in Section 2.2(c).
"Obligations" means all Loans, advances, debts, liabilities,
obligations, covenants and duties owing by the Borrower to either the
Agents, any Lender, any affiliate of either of the Agents or any
Lender, or any indemnitee under the provisions of Section 10.6 or any
other provisions of the Loan Documents, in each case of any kind or
nature, present or future, arising under this Agreement, the
Collateral Documents or any other Loan Document, whether or not
evidenced by any note, guaranty or other instrument, whether or not
for the payment of money, whether arising by reason of an extension of
credit, loan, guaranty, indemnification, or in any other manner,
whether direct or indirect (including those acquired by assignment),
absolute or contingent, due or to become due, now existing or
hereafter arising and however acquired. The term includes, without
limitation, all interest, charges, expenses, fees, attorneys' fees and
disbursements, paralegals' fees (in each case whether or not allowed),
and any other sum chargeable to the Borrower under this Agreement or
any other Loan Document.
"Obligor Group" shall mean (a) the Borrower, (b) the Subsidiary
Guarantors, (c) each Subsidiary the stock of which has been pledged
pursuant to a Pledge Agreement and (d) each Subsidiary of the Borrower
that is a party to a Pledge Agreement, as a pledgor.
"Off-Balance Sheet Liability" of a Person means (i) any
repurchase obligation or liability of such Person with respect to
accounts or notes receivable sold by such Person, (ii) any liability
under any Sale and Leaseback Transaction which does not create a
liability on the balance sheet of such Person, (iii) any liability
under any financing lease or so-called "synthetic lease" transaction
entered into by such Person, or (iv) any obligation arising with
respect to any other transaction which is the functional equivalent of
or takes the place of borrowing but which does not constitute a
liability on the balance sheets of such Person, but excluding
Operating Leases.
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"Operating Lease" of a Person means any lease of Property (other
than a Capitalized Lease) by such Person as lessee which has an
original term (including any required renewals and any renewals
effective at the option of the lessor) of one year or more.
"Other Taxes" is defined in Section 4.5(ii).
"Outstanding Credit Exposure" means, as to any Lender at any
time, the aggregate principal amount of its Loans outstanding at such
time.
"Participants" is defined in Section 13.2.1.
"Payment Date" means the last day of each March, June, September
and December, the Commitment Termination Date and the Converted Loan
Termination Date, if applicable.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Percentage" means, with respect to each Lender, the percentage
that such Lender's Commitment constitutes of the Aggregate Commitment
or, after the earlier of the Conversion Date or the Commitment
Termination Date, the percentage that such Lender's Outstanding Credit
Exposure constitutes of the Aggregate Outstanding Credit Exposure.
"Permitted Acquisition" is defined in Section 7.13(a)(vi).
"Permitted Receivables Transfer" means (i) a sale or other
transfer by the Borrower or any of its Subsidiaries to a SPV of
Receivables and Related Security under any Receivables Purchase
Agreement, in accordance with the terms thereof and/or (ii) a sale by
a SPV to purchasers of such assets in accordance with the terms of the
Receivables Purchase Documents.
"Person" means any natural person, corporation, firm, joint
venture, partnership, limited liability company, association,
enterprise, trust or other entity or organization, or any government
or political subdivision or any agency, department or instrumentality
thereof.
"Plan" means 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 Code as to
which the Borrower or any member of the Controlled Group may have any
liability.
"Pledge Agreement" means a Pledge Agreement, containing
substantially the terms set forth in Exhibit B hereto, duly executed
and delivered by the Borrower (or the applicable Subsidiary of the
Borrower) to and in favor of the Administrative Agent and the Lenders,
as it may from time to time be amended, supplemented or otherwise
modified with respect to sixty-five percent (65%) of the outstanding
capital stock of each of the Borrower's Material Foreign Subsidiaries,
modified as deemed reasonably acceptable by the Administrative Agent
to reflect foreign law provisions, customs and practices, in each case
as amended, modified, supplemented or restated from time to time.
"Pricing Schedule" means the Schedule attached hereto identified
as such.
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"Prime Rate" means a rate per annum equal to the prime rate of
interest announced from time to time by Bank One or its parent (which
is not necessarily the lowest rate charged to any customer), changing
when and as said prime rate changes.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other
assets owned, leased or operated by such Person.
"Purchasers" is defined in Section 13.3.1.
"Quarterly Financial Statements" is defined in Section 7.1(i)(b).
"Rate Hedging Agreement" means an agreement, device or
arrangement providing for payments which are related to fluctuations
of interest rates, exchange rates or forward rates, including, but not
limited to, dollar-denominated or cross-currency interest rate
exchange agreements, forward currency exchange agreements, interest
rate cap or collar protection agreements, forward rate currency or
interest rate options, puts and warrants.
"Rate Hedging Obligations" of a Person means any and all
obligations of such Person, whether absolute or contingent and
howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and
substitutions therefor), under (i) any and all Rate Hedging
Agreements, and (ii) any and all cancellations, buy backs, reversals,
terminations or assignments of any Rate Hedging Agreement.
"Receivables and Related Security" means (i) "Receivables" and
"Related Security" as such terms are defined in the Receivables
Purchase Agreement to which Blade Receivables Corporation is a party
and (ii) any similarly defined terms as utilized in any other
Receivables Purchase Agreement entered into by the Borrower and/or one
of its Subsidiaries and a SPV.
"Receivables Facility Attributed Indebtedness" means the amount
of obligations outstanding under a receivables purchase facility on
any date of determination that would be characterized as principal if
such facility were structured as a secured lending transaction rather
than as a purchase.
"Receivables Facility Financing Costs" means such portion of the
cash fees, service charges, and other costs, as well as all
collections or other amounts retained by purchasers of receivables
pursuant to a receivables purchase facility, which are in excess of
amounts paid to the Borrower and its Consolidated Subsidiaries under
any receivables purchase facility for the purchase of receivables
pursuant to such facility and are the equivalent of the interest
component of the financing if the transaction were characterized as an
on-balance sheet transaction. For sake of clarity, it is understood
and agreed that the calculation of the Receivables Facility Financing
Costs shall be made consistent with the way in which the Receivables
Facility Financing Costs have been calculated under the Existing
Credit Agreements.
"Receivables Purchase Agreements" means (a) that certain
Receivables Purchase Agreement dated as of December 13, 1995, among
Howmet Corporation, certain of its Subsidiaries and Blade Receivables
Corporation, pursuant to which Howmet Corporation and such
Subsidiaries sell to Blade Receivables Corporation certain of their
Receivables and Related Security, as such agreement has been or may
hereafter be amended, restated or otherwise modified from time to
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time, or any replacement or substitution therefor and (b) any other
similarly structured receivables purchase agreement among the
Borrower, one or more Subsidiaries of the Borrower and one or more
SPVs, pursuant to which the Borrower and such Subsidiaries sell to
such SPVs certain of their accounts receivables and related security
(the scope and structure of such transactions to be in all material
respects like the transaction involving Blade Receivables
Corporation), as such agreement may be amended, restated or otherwise
modified from time to time, or any replacement or substitution
therefor.
"Receivables Purchase Documents" means the Receivables Purchase
Agreements and the other documents, instruments and agreements
executed in connection therewith.
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any
successor thereto or other regulation or official interpretation of
said Board of Governors relating to reserve requirements applicable to
member banks of the Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any
successor or other regulation or official interpretation of said Board
of Governors relating to the extension of credit by banks for the
purpose of purchasing or carrying margin stocks applicable to member
banks of the Federal Reserve System.
"Replacement Lender" is defined in Section 2.20 hereof.
"Reportable Event" means a reportable event as defined in Section
4043 of ERISA and the regulations issued under such section, with
respect to a Plan, excluding, however, such events as to which the
PBGC has by regulation waived the requirement of Section 4043(a) of
ERISA that it be notified within 30 days of the occurrence of such
event, provided, however, that a failure to meet the minimum funding
standard of Section 412 of the Code and of Section 302 of ERISA shall
be a Reportable Event regardless of the issuance of any such waiver of
the notice requirement in accordance with either Section 4043(a) of
ERISA or Section 412(d) of the Code.
"Reports" is defined in Section 10.6.
"Required Lenders" means Lenders in the aggregate having at least
51% of the Aggregate Commitment or, if the Aggregate Commitment has
been terminated or after the Conversion Date, Lenders in the aggregate
holding at least 51% of the Aggregate Outstanding Credit Exposure.
"Reserve Requirement" means, with respect to an Interest Period,
the maximum aggregate reserve requirement (including all basic,
supplemental, marginal and other reserves) which is imposed under
Regulation D on "Eurocurrency liabilities" (as defined in Regulation
D).
"Risk-Based Capital Guidelines" is defined in Section 4.2.
"S&P" means Standard and Poor's Ratings Services, a division of
The McGraw Hill Companies, Inc.
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"Sale and Leaseback Transaction" means any sale or other transfer
of Property by any Person with the intent to lease such Property as
lessee.
"Schedule" refers to a specific schedule to this Agreement,
unless another document is specifically referenced.
"Section" means a numbered section of this Agreement, unless
another document is specifically referenced.
"SPV" means, (a) Blade Receivables Corporation, a Nevada
corporation, and its successors and assigns and (b) any other special
purpose entity established for the purpose of purchasing receivables
in connection with a receivables securitization transaction permitted
under the terms of this Agreement.
"Subsidiary" of a Person means (i) any corporation more than 50%
of the outstanding securities having ordinary voting power of which
shall at the time be owned or controlled, directly or indirectly, by
such Person or by one or more of its Subsidiaries or by such Person
and one or more of its Subsidiaries, or (ii) any partnership, limited
liability company, association, joint venture or similar business
organization more than 50% of the ownership interests having ordinary
voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a
"Subsidiary" shall mean a Subsidiary of the Borrower.
"Subsidiary Guarantors" means (a) (i) all of the Borrower's
Material Domestic Subsidiaries as of the Closing Date and (ii) all of
the Borrower's domestic Consolidated Subsidiaries as of the Closing
Date which become Material Domestic Subsidiaries as at the end of any
calendar quarter and which have satisfied the provisions of Section
7.13(d), in each case, other than the SPVs and the Howmet Companies,
(b) all of the Howmet Companies which are Material Domestic
Subsidiaries as of the Howmet Documentation Date and which have
satisfied the provisions of Section 7.13(c) and (c) any other New
Subsidiaries (other than foreign corporations) which are Material
Domestic Subsidiaries as at the end of any calendar quarter (or if
acquired in connection with a Permitted Acquisition, at the time of
the consummation of such Permitted Acquisition) and which have
satisfied the provisions of Section 7.13(b), and in each case their
respective successors and assigns.
"Subsidiary Guaranty" means a Subsidiary Guaranty, substantially
in the form of Exhibit C hereto, duly executed by the Subsidiary
Guarantors in favor of the Administrative Agent, for the ratable
benefit of the Agents and the Lenders, as it may be amended, modified,
supplemented and/or restated (including to add new Subsidiary
Guarantors), and as in effect from time to time.
"Subsidiary Guaranty Supplement" means a supplement to the
Subsidiary Guaranty, substantially in the form of Annex I attached to
the Subsidiary Guaranty.
"Substantial Portion" means, with respect to the Property of the
Borrower and its Subsidiaries, Property which represents more than 10%
of the consolidated assets of the Borrower and its Consolidated
Subsidiaries as would be shown in the consolidated financial
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statements of the Borrower and its Consolidated Subsidiaries as at the
beginning of the twelve-month period ending with the month in which
such determination is made.
"Syndicated Loan(s)" means, with respect to a Lender, that
portion of any Advance made by such Lender pursuant to Section 2.1
hereof, as applicable.
"Syndicated Loan Termination Date" means February 7, 2001, or any
subsequent date to which the Syndicated Loan Termination Date has been
extended pursuant to the terms of Section 2.2(b).
"Taxes" means any and all present or future taxes, duties,
levies, imposts, deductions, charges or withholdings, and any and all
liabilities with respect to the foregoing, but excluding Excluded
Taxes.
"Transferee" is defined in Section 13.4.
"Type" means, with respect to any Advance, its nature as a
Floating Rate Advance or a Eurodollar Advance.
"Unfunded Liabilities" means the amount (if any) by which the
present value of all vested and unvested accrued benefits under all
Plans exceeds the fair market value of all such Plan assets allocable
to such benefits, all determined under and in accordance with
Financial Accounting Standard Board Statement 87.
"Unmatured Default" means an event which but for the lapse of
time or the giving of notice, or both, would constitute a Default.
"Utilization Fee" is defined in Section 2.6.
"Wholly-Owned Subsidiary" of a Person means (i) any Consolidated
Subsidiary all of the outstanding voting securities of which (other
than directors' qualifying shares) shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more
Wholly-Owned Subsidiaries of such Person, or (ii) any partnership,
limited liability company, association, joint venture or similar
business organization 100% of the ownership interests of which shall
at the time be so owned or controlled.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II: THE CREDITS
2.1. Commitment. From and including the date of this Agreement
and prior to the earlier of the Conversion Date and the Commitment
Termination Date, each Lender severally agrees, on the terms and
conditions set forth in this Agreement, to make Syndicated Loans to
the Borrower from time to time; provided, that upon giving effect to
each such Syndicated Loan, the aggregate outstanding principal amount
of all Syndicated Loans made by such Lender shall not exceed such
Lender's Commitment. Subject to the terms of this Agreement, the
Borrower may borrow, repay and reborrow Syndicated Loans at any time
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prior to the earlier of the Conversion Date and the Commitment
Termination Date. The Commitments to lend hereunder shall expire
automatically on the earlier of the Conversion Date and the Commitment
Termination Date.
2.2. Required Payments and Termination; Extension of Syndicated
Loan Termination Date; Conversion to Term Loans.
(a) Required Payments and Termination. This Agreement shall be
effective until the Commitment Termination Date or, if the Borrower
has elected to convert the Advances hereunder to a term loan pursuant
to Section 2.2(c), until the Converted Loan Termination Date. Any
outstanding Loans and all other unpaid Obligations shall be paid in
full by the Borrower on the Commitment Termination Date or, if the
Borrower has elected to convert the Advances hereunder to a term loan
pursuant to Section 2.2(c), on the Converted Loan Termination Date.
Notwithstanding the termination of this Agreement on the Commitment
Termination Date or the Converted Loan Termination Date, as
applicable, until all of the Obligations (other than contingent
indemnity obligations) shall have been fully paid and satisfied, all
financing arrangements among the Borrower and the Lenders shall have
been terminated, all of the rights and remedies under this Agreement
and the other Loan Documents shall survive and the Administrative
Agent shall be entitled to retain its security interest in and to all
existing and future collateral.
(b) Extension of Syndicated Loan Termination Date. The Aggregate
Commitment shall expire on the earlier of the Conversion Date and the
Commitment Termination Date. Within the period beginning 59 days and
ending 30 days before the then effective Syndicated Loan Termination
Date, the Borrower may request in writing that the Syndicated Loan
Termination Date be extended for an additional period of 364 days,
including the then effective Syndicated Loan Termination Date as one
of the days in the calculation of days elapsed. Within 20 days after
such request (such 20th day being the "Consent Date"), each Lender
may, in its sole discretion, agree to such extension to a new
Syndicated Loan Termination Date not more than 364 days following such
Consent Date by giving written notice of such agreement to the
Borrower and the Administrative Agent (and the failure to provide such
notice shall be deemed to be a decision not to extend). The Commitment
of each Lender that declines to extend with respect to the Aggregate
Commitment may, at the option of the Borrower, be replaced in
accordance with Section 13.3.1 (but only to the extent a replacement
Lender is then available), or the Aggregate Commitment shall be
reduced. All Obligations due to each Lender that declines to extend
its Commitment under this Section 2.2(b) shall be paid in full to the
Administrative Agent for the account of each such Lender on the then
effective Syndicated Loan Termination Date (without giving effect to
any such requested extension thereto). The Required Lenders and the
Borrower must agree to any extension with respect to the Syndicated
Loan Termination Date for any such extension to become effective.
(c) Conversion to Term Loan. Up until and including the
Commitment Termination Date, at the Borrower's option upon written
notice (a "Notice to Convert") to the Administrative Agent (who shall
promptly notify each of the Lenders), the Borrower may convert the
then outstanding aggregate principal amount of the Advances hereunder
to a term loan. The Notice to Convert shall expressly state the date
on which such conversion shall occur (such date being the "Conversion
Date") and shall be irrevocable once given and shall constitute a
representation and warranty by the Borrower that the conditions
contained in Section 5.2 have been satisfied as of the date of such
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Notice to Convert and as of the Conversion Date. Upon delivery of such
Notice to Convert, (i) the Borrower's option to request extensions of
the Syndicated Loan Termination Date under clause (b) above and to
borrow and reborrow Syndicated Loans hereunder, shall terminate, (ii)
the Aggregate Commitment shall be reduced to zero, and (iii) the
outstanding principal balance of all Loans hereunder shall be due and
payable on the Converted Loan Termination Date. All references in this
Agreement to Syndicated Loans shall include such Loans as converted
hereunder.
2.3. Ratable Loans. Each Advance hereunder shall consist of
Syndicated Loans made from the several Lenders ratably in proportion
to the ratio that their respective Commitments bear to the Aggregate
Commitment.
2.4. Types of Advances. The Advances may be Floating Rate
Advances or Eurodollar Advances, or a combination thereof, selected by
the Borrower in accordance with Sections 2.9 and 2.10.
2.5. Facility Fee; Reductions in Aggregate Commitment. The
Borrower agrees to pay to the Administrative Agent for the ratable
benefit of the Lenders a facility fee ("Facility Fee") at a per annum
rate equal to the Applicable Facility Fee Rate multiplied by the
Aggregate Commitment (or, from and after the earlier of the Conversion
Date or the Commitment Termination Date, the average daily Aggregate
Outstanding Credit Exposure) from the date hereof to and including the
date on which all of the Obligations (other than contingent indemnity
obligations) shall have been fully paid and satisfied and all
financing arrangements among the Borrower and the Lenders shall have
been terminated, payable on each Payment Date hereafter. Prior to the
Conversion Date, the Borrower may permanently reduce the Aggregate
Commitment in whole, or in part ratably among the Lenders in integral
multiples of $25,000,000, upon at least three Business Days' written
notice to the Administrative Agent, which notice shall specify the
amount of any such reduction, provided, however, that the amount of
the Aggregate Commitment may not be reduced below the aggregate
principal amount of the Aggregate Outstanding Credit Exposure. Without
limiting the foregoing, all accrued Facility Fees shall be payable on
the effective date of any termination of the obligations of the
Lenders to make Syndicated Loans hereunder (other than a termination
of such obligations pursuant to Section 2.2(c)).
2.6 Utilization Fee. If, at the end of any fiscal quarter, the
average daily Combined Utilized Amount during such quarter exceeded
thirty-three percent (33.0%) but was less than or equal to sixty-seven
percent (67.0%) of the average daily amount of the Combined Commitment
during such quarter, the Borrower will pay to the Administrative Agent
for the ratable benefit of the Lenders a utilization fee of 0.125% on
the average daily Combined Utilized Amount during such quarter until
all of the Obligations (other than contingent indemnity obligations)
shall have been fully paid and satisfied and all financing
arrangements hereunder among the Borrower and the Lenders shall have
been terminated. If, at the end of any fiscal quarter, the average
daily Combined Utilized Amount during such quarter was greater than
sixty-seven percent (67.0%) of the average daily amount of the
Combined Commitment during such quarter, the Borrower will pay to the
Administrative Agent for the ratable benefit of the Lenders a
utilization fee of 0.25% on the average daily Combined Utilized Amount
during such quarter. The fees owing pursuant to this Section 2.6 (the
"Utilization Fee") shall be payable on each Payment Date hereafter.
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2.7. Minimum Amount of Each Advance. Each Advance shall be in the
minimum amount of $25,000,000 (and in multiples of $5,000,000 if in
excess thereof), provided, however, that any Floating Rate Advance may
be in the amount of the Available Aggregate Commitment.
2.8. Optional Principal Payments. The Borrower may from time to
time pay, without penalty or premium, all outstanding Floating Rate
Advances, or, in a minimum aggregate amount of $25,000,000 or any
integral multiple of $5,000,000 in excess thereof, any portion of the
outstanding Floating Rate Advances upon one Business Day's prior
notice to the Administrative Agent. The Borrower may from time to time
pay, subject to the payment of any funding indemnification and
breakage cost amounts required by Section 4.4 but without penalty or
premium, any or all outstanding Eurodollar Advances upon three
Business Days' prior notice to the Administrative Agent.
2.9. Method of Selecting Types and Interest Periods for New
Advances. The Borrower shall select the Type of Advance and, in the
case of each Eurodollar Advance, the Interest Period applicable
thereto from time to time; provided, that there shall be no more than
eight (8) Interest Periods in effect with respect to all of the
Syndicated Loans at any time, unless such limit has been waived by the
Administrative Agent in its sole discretion. The Borrower shall give
the Administrative Agent irrevocable notice (a "Borrowing Notice") not
later than 11:00 a.m. (Chicago time) at least one Business Day before
the Borrowing Date of each Floating Rate Advance and three Business
Days before the Borrowing Date for each Eurodollar Advance,
specifying:
(i) the Borrowing Date, which shall be a Business Day, of such
Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each Eurodollar Advance, the Interest Period
applicable thereto.
Promptly after receipt of any Borrowing Notice, the Administrative Agent
shall provide the Lenders with notice thereof. Not later than 1:00 p.m.
(Chicago time) on each Borrowing Date, each Lender shall make available its
Syndicated Loan or Syndicated Loans in funds immediately available in
Chicago to the Administrative Agent at its address specified pursuant to
Article XIV. The Administrative Agent will make the funds so received from
the Lenders available to the Borrower at the Administrative Agent's
aforesaid address.
2.10. Conversion and Continuation of Outstanding Advances.
Floating Rate Advances shall continue as Floating Rate Advances unless
and until such Floating Rate Advances are converted into Eurodollar
Advances pursuant to this Section 2.10 or are repaid in accordance
with Section 2.8. Each Eurodollar Advance shall continue as a
Eurodollar Advance until the end of the then applicable Interest
Period therefor, at which time such Eurodollar Advance shall be
automatically converted into a Floating Rate Advance unless (x) such
Eurodollar Advance is or was repaid in accordance with Section 2.8 or
(y) the Borrower shall have given the Administrative Agent a
Conversion/Continuation Notice (as defined below) requesting that, at
the end of such Interest Period, such Eurodollar Advance continue as a
Eurodollar Advance for the same or another Interest Period. Subject to
the terms of Section 2.10, the Borrower may elect from time to time to
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convert all or any part of a Floating Rate Advance into a Eurodollar
Advance. The Borrower shall give the Administrative Agent irrevocable
notice (a "Conversion/Continuation Notice") of each conversion of any
Floating Rate Advance into a Eurodollar Advance or continuation of a
Eurodollar Advance not later than 11:00 a.m. (Chicago time) at least
three Business Days prior to the date of the requested conversion or
continuation, specifying:
(i) the requested date, which shall be a Business Day, of such
conversion or continuation,
(ii) the aggregate amount and Type of the Advance which is to be
converted or continued, and
(iii)the amount of such Advance which is to be converted into or
continued as a Eurodollar Advance and the duration of the
Interest Period applicable thereto.
Promptly after receipt of any Conversion/Continuation Notice, the
Administrative Agent shall provide the Lenders with notice thereof.
2.11. Changes in Interest Rate, Etc. Each Floating Rate Advance
shall bear interest on the outstanding principal amount thereof, for
each day from and including the date such Advance is made or is
automatically converted from a Eurodollar Advance into a Floating Rate
Advance pursuant to Section 2.10, to but excluding the date it is paid
or, for Floating Rate Advances, is converted into a Eurodollar Advance
pursuant to Section 2.10 hereof, at a rate per annum equal to the
Floating Rate for such day. Changes in the rate of interest on any
Floating Rate Advance will take effect simultaneously with each change
in the Alternate Base Rate. Each Eurodollar Advance shall bear
interest on the outstanding principal amount thereof from and
including the first day of the Interest Period applicable thereto to
(but not including) the last day of such Interest Period at the
interest rate determined by the Administrative Agent as applicable to
such Eurodollar Advance based upon the Borrower's selections under
Section 2.9 and 2.10 and otherwise in accordance with the terms
hereof. Changes in the rate of interest on any Eurodollar Advance will
take effect simultaneously with each change in the Applicable Margin.
No Interest Period may end after the Commitment Termination Date or,
if the Borrower has elected to convert the Advances pursuant to
Section 2.2(c), the Converted Loan Termination Date.
2.12. Rates Applicable After Default. Notwithstanding anything to
the contrary contained in Section 2.9 or 2.10, during the continuance
of a Default the Administrative Agent or the Required Lenders may, at
their option, by notice to the Borrower (which notice may be revoked
at the option of the Required Lenders notwithstanding any provision of
Section 9.2 requiring unanimous consent of the Lenders to changes in
interest rates), declare that no Advance may be made as, converted
into or continued as a Eurodollar Advance. During the continuance of a
Default, the Administrative Agent or the Required Lenders may, at
their option, by notice to the Borrower (which notice may be revoked
at the option of the Required Lenders notwithstanding any provision of
Section 9.2 requiring unanimous consent of the Lenders to changes in
interest rates), declare that each Advance shall bear interest at the
then highest Floating Rate or Eurodollar Rate (utilizing the highest
Applicable Margin as reflected on the Pricing Schedule) in effect from
time to time plus 2% per annum, provided that, during the continuance
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of a Default under Sections 8.2, 8.6 or 8.7, the interest rate
described above shall be applicable without any election or action on
the part of the Administrative Agent or any Lender.
2.13. Method of Payment. All payments of the Obligations
hereunder shall be made, without setoff, deduction, or counterclaim,
in immediately available funds to the Administrative Agent at the
Administrative Agent's address specified pursuant to Article XIV, or
at any other Lending Installation of the Administrative Agent
specified in writing by the Administrative Agent to the Borrower, by
noon (local time) on the date when due and shall be applied ratably by
the Administrative Agent among the Lenders. Each payment delivered to
the Administrative Agent for the account of any Lender shall be
delivered promptly by the Administrative Agent to such Lender in the
same type of funds that the Administrative Agent received at its
address specified pursuant to Article XIV or at any Lending
Installation specified in a notice received by the Administrative
Agent from such Lender. The Administrative Agent is hereby authorized
to charge the account of the Borrower maintained with Bank One for
each payment of principal, interest and fees as it becomes due
hereunder.
2.14. Noteless Agreement; Evidence of Indebtedness. (i) Each
Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender from time to time,
including the amounts of principal and interest payable and paid to
such Lender from time to time hereunder.
(ii) The Administrative Agent shall also maintain accounts in
which it will record (a) the amount of each Loan made hereunder, the
Type thereof and the Interest Period with respect thereto, (b) the
amount of any principal or interest due and payable or to become due
and payable from the Borrower to each Lender hereunder and (c) the
amount of any sum received by the Administrative Agent hereunder from
the Borrower and each Lender's share thereof.
(iii) The entries maintained in the accounts maintained pursuant
to paragraphs (i) and (ii) above shall be prima facie evidence of the
existence and amounts of the Obligations therein recorded; provided,
however, that the failure of the Administrative Agent or any Lender to
maintain such accounts or any error therein shall not in any manner
affect the obligation of the Borrower to repay the Obligations in
accordance with their terms.
(iv) Any Lender may request that its Loans be evidenced by a
promissory note (a "Note"). In such event, the Borrower shall execute
and deliver to such Lender a Note payable to the order of such Lender
in a form supplied by the Administrative Agent. Thereafter, the Loans
evidenced by such Note and interest thereon shall at all times
(including after any assignment pursuant to Section 13.3) be
represented by one or more Notes payable to the order of the payee
named therein or any assignee pursuant to Section 13.3, except to the
extent that any such Lender or assignee subsequently returns any such
Note for cancellation and requests that such Loans once again be
evidenced as described in paragraphs (i) and (ii) above.
2.15. Telephonic Notices. The Borrower hereby authorizes the
Lenders and the Administrative Agent to extend, convert or continue
Advances, effect selections of Types of Advances and to transfer funds
based on telephonic notices made by any person or persons the
Administrative Agent or any Lender in good faith believes to be acting
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on behalf of the Borrower. The Borrower agrees to deliver promptly to
the Administrative Agent a written confirmation, if such confirmation
is requested by the Administrative Agent or any Lender, of each
telephonic notice signed by an Authorized Officer. If the written
confirmation differs in any material respect from the action taken by
the Administrative Agent and the Lenders, the records of the
Administrative Agent and the Lenders shall govern absent manifest
error.
2.16. Interest Payment Dates; Interest and Fee Basis. Interest
accrued on each Floating Rate Advance shall be payable on each Payment
Date, commencing with the first such date to occur after the date
hereof and at maturity. Interest accrued on each Eurodollar Advance
shall be payable on the last day of its applicable Interest Period, on
any date on which the Eurodollar Advance is prepaid, whether by
acceleration or otherwise, and at maturity. Interest accrued on each
Eurodollar Advance having an Interest Period longer than three months
shall also be payable on the last day of each three-month interval
during such Interest Period. Interest accrued on Eurodollar Advances,
Facility Fees, Utilization Fees and Floating Rate Advances where the
basis for calculation is the Federal Funds Effective Rate shall be
calculated for actual days elapsed on the basis of a year of 360 days,
and interest accrued on Floating Rate Advances where the basis for
calculation is the Prime Rate shall be calculated for actual days
elapsed on the basis of a year or 365, or when appropriate 366, days.
Interest shall be payable for the day an Advance is made but not for
the day of any payment on the amount paid if payment is received prior
to noon (local time) at the place of payment. If any payment of
principal of or interest on an Advance or any fee shall become due on
a day which is not a Business Day, such payment shall be made on the
next succeeding Business Day and, in the case of a principal payment,
such extension of time shall be included in computing interest in
connection with such payment.
2.17. Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions. Promptly after receipt thereof, the
Administrative Agent will notify each Lender of the contents of each
Aggregate Commitment reduction notice, Borrowing Notice,
Conversion/Continuation Notice, and repayment notice received by it
hereunder. The Administrative Agent will notify each Lender of the
interest rate applicable to each Eurodollar Advance promptly upon
determination of such interest rate and will give each Lender prompt
notice of each change in the Alternate Base Rate.
2.18. Lending Installations. Each Lender may book its Loans at
any Lending Installation selected by such Lender and may change its
Lending Installation from time to time. All terms of this Agreement
shall apply to any such Lending Installation and the Loans and any
Notes issued hereunder shall be deemed held by each Lender for the
benefit of such Lending Installation. Each Lender may, by written
notice to the Administrative Agent and the Borrower in accordance with
Article XIV, designate replacement or additional Lending Installations
through which Loans will be made by it and for whose account Loan
payments are to be made.
2.19. Non-Receipt of Funds by the Administrative Agent. Unless
the Borrower or a Lender, as the case may be, notifies the
Administrative Agent prior to the date on which it is scheduled to
make payment to the Administrative Agent of (i) in the case of a
Lender, the proceeds of a Loan or (ii) in the case of the Borrower, a
payment of principal, interest or fees to the Administrative Agent for
the account of any of the Lenders, that it does not intend to make
such payment, the Administrative Agent may assume that such payment
has been made. The Administrative Agent may, but shall not be
obligated to, make the amount of such payment available to the
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intended recipient in reliance upon such assumption. If such Lender or
the Borrower, as the case may be, has not in fact made such payment to
the Administrative Agent, the recipient of such payment shall, on
demand by the Administrative Agent, repay to the Administrative Agent
the amount so made available together with interest thereon in respect
of each day during the period commencing on the date such amount was
so made available by the Administrative Agent until the date the
Administrative Agent recovers such amount at a rate per annum equal to
(x) in the case of payment by a Lender, the Federal Funds Effective
Rate for such day or (y) in the case of payment by the Borrower, the
interest rate applicable to the relevant Loan.
2.20 Replacement of Certain Lenders. In the event a Lender
("Affected Lender") shall have: (i) failed to fund its pro rata share
of any Advance requested by the Borrower which such Lender is
obligated to fund under the terms of this Agreement and which failure
has not been cured, (ii) requested compensation from the Borrower
under Sections 4.1, 4.2 or 4.5 to recover Taxes, Other Taxes or other
additional costs incurred by such Lender which are not being incurred
generally by the other Lenders, (iii) delivered a notice pursuant to
Section 4.3 claiming that such Lender is unable to extend Eurodollar
Rate Loans to the Borrower for reasons not generally applicable to the
other Lenders or (iv) has invoked Section 10.2, then, in any such
case, the Borrower or the Administrative Agent may make written demand
on such Affected Lender (with a copy to the Administrative Agent in
the case of a demand by the Borrower and a copy to the Borrower in the
case of a demand by the Administrative Agent) for the Affected Lender
to assign, and such Affected Lender shall assign pursuant to one or
more duly executed assignments and acceptances in substantially the
form of Exhibit D five (5) Business Days after the date of such
demand, to one or more financial institutions that comply with the
provisions of Section 13.3.1 which the Borrower or the Administrative
Agent, as the case may be, shall have engaged for such purpose
("Replacement Lender"), all of such Affected Lender's rights and
obligations under this Agreement and the other Loan Documents
(including, without limitation, its Commitment and all Loans owing to
it) in accordance with Section 13.3. With respect to such assignment,
the Affected Lender shall not be obligated to effect such an
assignment unless it has concurrently received, in cash, all amounts
due and owing to the Affected Lender hereunder or under any other Loan
Document, including, without limitation, the aggregate outstanding
principal amount of the Loans owed to such Lender, together with
accrued interest thereon through the date of such assignment, amounts
payable under Sections 4.1, 4.2 and 4.5 with respect to such Affected
Lender and compensation payable under Section 2.5 in the event of any
replacement of any Affected Lender under clause (ii) or clause (iii)
of this Section 2.20; provided that upon such Affected Lender's
replacement, such Affected Lender shall cease to be a party hereto but
shall continue to be entitled to the benefits of Sections 4.1, 4.2,
4.4, 4.5 and 10.6, as well as to any fees accrued for its account
hereunder and not yet paid, and shall continue to be obligated under
Section 11.8 with respect to amounts not reimbursed by the Borrower,
expenses or other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
imposed on, incurred by or asserted against the Administrative Agent
in any way relating to matters which occurred prior to such
assignment. The Administrative Agent agrees, upon the occurrence of
such events with respect to an Affected Lender and upon the written
request of the Borrower, to use its reasonable efforts to obtain
commitments from one or more financial institutions to act as a
Replacement Lender.
ARTICLE III: [RESERVED]
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ARTICLE IV: YIELD PROTECTION; TAXES
4.1. Yield Protection. If, on or after the date of this
Agreement, the adoption of any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive
(whether or not having the force of law), or any change in the
interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or
compliance by any Lender or applicable Lending Installation with any
request or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency:
(i) subjects any Lender or any applicable Lending Installation
to any Taxes, or changes the basis of taxation of payments
(other than with respect to Excluded Taxes) to any Lender in
respect of its Loans or other amounts due hereunder, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender or any
applicable Lending Installation (other than reserves and
assessments taken into account in determining the interest
rate applicable to Eurodollar Advances), or
(iii)imposes any other condition the result of which is to
increase the cost to any Lender or any applicable Lending
Installation of making, funding or maintaining its Loans, or
reduces any amount receivable by any Lender or any
applicable Lending Installation in connection with its
Loans, or requires any Lender or any applicable Lending
Installation to make any payment calculated by reference to
the amount of Loans held or interest received by it, by an
amount deemed material by such Lender,
and the result of any of the foregoing is to increase the cost to such
Lender or applicable Lending Installation of making or maintaining its
Loans or Commitment or to reduce the return received by such Lender or
applicable Lending Installation in connection with such Loans or
Commitment, then, within 15 days of demand by such Lender, the Borrower
shall pay such Lender such additional amount or amounts as will compensate
such Lender for such increased cost or reduction in amount received.
4.2. Changes in Capital Adequacy Regulations. If a Lender
determines the amount of capital required or expected to be maintained
by such Lender, any Lending Installation of such Lender or any
corporation controlling such Lender is increased as a result of a
Change, then, within 15 days of demand by such Lender, the Borrower
shall pay such Lender the amount necessary to compensate for any
shortfall in the rate of return on the portion of such increased
capital which such Lender determines is attributable to this
Agreement, its Loans or its Commitment to make Loans hereunder (after
taking into account such Lender's policies as to capital adequacy). No
Lender shall be entitled to demand payment under this Section 4.2 to
the extent that such payment relates to a period of time more than 90
days prior to the date upon which such Lender first notified the
Borrower of the occurrence of the event entitling such Lender to such
payment. "Change" means (i) any change after the date of this
Agreement in the Risk-Based Capital Guidelines or (ii) any adoption of
or change in any other law, governmental or quasi-governmental rule,
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regulation, policy, guideline, interpretation, or directive (whether
or not having the force of law) after the date of this Agreement which
affects the amount of capital required or expected to be maintained by
any Lender or any Lending Installation or any corporation controlling
any Lender. "Risk-Based Capital Guidelines" means (i) the risk-based
capital guidelines in effect in the United States on the date of this
Agreement, including transition rules, and (ii) the corresponding
capital regulations promulgated by regulatory authorities outside the
United States implementing the July 1988 report of the Basle Committee
on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital
Standards," including transition rules, and any amendments to such
regulations adopted prior to the date of this Agreement.
4.3. Availability of Types of Advances. If any Lender determines
that maintenance of its Eurodollar Loans at a suitable Lending
Installation would violate any applicable law, rule, regulation, or
directive, whether or not having the force of law, or if the Required
Lenders determine that (i) deposits of a type and maturity appropriate
to match fund Eurodollar Advances are not available or (ii) the
interest rate applicable to a Type of Advance does not adequately or
fairly reflect the cost of making or maintaining such Advance and the
Borrower, the Administrative Agent and the Lenders shall not have
entered into a written agreement providing to the Lenders compensation
satisfactory to the Lenders for such inadequate or unfairly reflected
cost, then the Administrative Agent shall suspend the availability of
the affected Type of Advance and require any affected Eurodollar
Advances to be repaid or converted to Floating Rate Advances, subject
to the payment of any funding indemnification amounts required by
Section 4.4.
4.4. Funding Indemnification. If any payment of a Eurodollar
Advance occurs on a date which is not the last day of the applicable
Interest Period, whether because of acceleration, prepayment or
otherwise, or a Eurodollar Advance is not made on the date specified
by the Borrower for any reason other than default by the Lenders, the
Borrower will indemnify each Lender for any loss or cost incurred by
it resulting therefrom, including, without limitation, any loss or
cost in liquidating or employing deposits acquired to fund or maintain
such Eurodollar Advance.
4.5. Taxes. (i) All payments by the Borrower to or for the
account of any Lender or the Administrative Agent hereunder or under
any Note shall be made free and clear of and without deduction for any
and all Taxes. If the Borrower shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder to any Lender or
the Administrative Agent, (a) the sum payable shall be increased as
necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section
4.5) such Lender or the Administrative Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (b) the Borrower shall make such deductions, (c)
the Borrower shall pay the full amount deducted to the relevant
authority in accordance with applicable law and (d) the Borrower shall
furnish to the Administrative Agent the original copy of a receipt
evidencing payment thereof within 30 days after such payment is made.
(ii) In addition, the Borrower hereby agrees to pay any present
or future stamp or documentary taxes and any other excise taxes,
charges or similar levies, in each case other than Excluded Taxes,
which arise from any payment made hereunder or under any Note or from
the execution or delivery of, or otherwise with respect to, this
Agreement or any Note ("Other Taxes").
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(iii) The Borrower hereby agrees to indemnify the Agents and each
Lender for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed on amounts payable under
this Section 4.5) paid by the Agents or such Lender and any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto. Payments due under this indemnification shall be made
within 30 days of the date the applicable Agent or such Lender makes
demand therefor pursuant to Section 4.6.
(iv) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof (each a "Non-U.S. Lender")
agrees that it will, not less than ten Business Days after the date of
this Agreement or the date it becomes a Lender hereunder deliver to
each of the Borrower and the Administrative Agent a United States
Internal Revenue Form W-8 or W-9, as the case may be, and certify that
it is entitled to an exemption from United States backup withholding
tax. Each Non-U.S. Lender further undertakes to deliver to each of the
Borrower and the Administrative Agent (x) renewals or additional
copies of such form (or any successor form) on or before the date that
such form expires or becomes obsolete, and (y) after the occurrence of
any event requiring a change in the most recent forms so delivered by
it, such additional forms or amendments thereto as may be reasonably
requested by the Borrower or the Administrative Agent. All forms or
amendments described in the preceding sentence shall certify that such
Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes,
unless a 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 Lender
from duly completing and delivering any such form or amendment with
respect to it and such Lender advises the Borrower and the
Administrative Agent that it is not capable of receiving payments
without any deduction or withholding of United States federal income
tax.
(v) For any period during which a Non-U.S. Lender has failed to
provide the Borrower with an appropriate form pursuant to clause (iv),
above (unless such failure is due to a change in treaty, law or
regulation, or any change in the interpretation or administration
thereof by any governmental authority, occurring subsequent to the
date on which a form originally was required to be provided), such
Non-U.S. Lender shall not be entitled to indemnification under this
Section 4.5 with respect to Taxes imposed by the United States;
provided that, should a Non-U.S. Lender which is otherwise exempt from
or subject to a reduced rate of withholding tax become subject to
Taxes because of its failure to deliver a form required under clause
(iv), above, the Borrower shall take such steps as such Non-U.S.
Lender shall reasonably request to assist such Non-U.S. Lender to
recover such Taxes.
(vi) Any Lender that is entitled to an exemption from or
reduction of withholding tax with respect to payments under this
Agreement or any Note pursuant to the law of any relevant jurisdiction
or any treaty shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without
withholding or at a reduced rate.
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4.6. Lender Statements; Survival of Indemnity. To the extent
reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its Eurodollar Loans to reduce any
liability of the Borrower to such Lender under Sections 4.1, 4.2 and
4.5 or to avoid the unavailability of Eurodollar Advances under
Section 4.3, so long as such designation is not, in the judgment of
such Lender, disadvantageous to such Lender. Each Lender shall deliver
a written statement of such Lender to the Borrower (with a copy to the
Administrative Agent) as to the amount due, if any, under Section 4.1,
4.2, 4.4 or 4.5. Such written statement shall set forth in reasonable
detail the calculations upon which such Lender determined such Lender
or amount and shall be final, conclusive and binding on the Borrower
in the absence of manifest error. Determination of amounts payable
under such Sections in connection with a Eurodollar Loan shall be
calculated as though each Lender funded its Eurodollar Loan through
the purchase of a deposit of the type and maturity corresponding to
the deposit used as a reference in determining the Eurodollar Rate
applicable to such Loan, whether in fact that is the case or not.
Unless otherwise provided herein, the amount specified in the written
statement of any Lender shall be payable on demand after receipt by
the Borrower of such written statement. The obligations of the
Borrower under Sections 4.1, 4.2, 4.4 and 4.5 shall survive payment of
the Obligations and termination of this Agreement.
ARTICLE V: CONDITIONS PRECEDENT
5.1. Initial Credit Extensions. The Lenders shall not be required
to make the initial Advance hereunder unless (a) the representation
and warranty contained in Section 6.5 is true and correct as of such
date and (b) the Borrower has furnished to the Administrative Agent
(with sufficient copies for the Lenders):
(i) Copies of the articles or certificate of incorporation of
each of the Borrower, each of its Material Domestic
Subsidiaries (other than the Howmet Companies) and each
Material Foreign Subsidiary (other than the Howmet
Companies), together, in each case, with all amendments, and
certificates of good standing, each certified by the
appropriate governmental officer in its jurisdiction of
incorporation.
(ii) Copies, certified by the Secretary or Assistant Secretary of
each member of the Obligor Group, of its by-laws, articles
or certificate of incorporation and of its Board of
Directors' resolutions and of resolutions or actions of any
other body authorizing the execution of the Loan Documents
to which it is a party.
(iii)An incumbency certificate, executed by the Secretary or
Assistant Secretary of each member of the Obligor Group,
which shall identify by name and title and bear the
signatures of the Authorized Officers and any other officers
of the members of the Obligor Group authorized to sign the
Loan Documents to which the Borrower or any of its
Consolidated Subsidiaries is a party, upon which certificate
the Administrative Agent and the Lenders shall be entitled
to rely until informed of any change in writing by the
Borrower.
(iv) A certificate, signed by the chief financial officer of the
Borrower, stating that on the initial Borrowing Date there
exists no Default or Unmatured Default.
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(v) A written opinion of counsel to each member of the Obligor
Group, addressed to the Administrative Agent and the Lenders
in form and substance reasonably acceptable to the
Administrative Agent.
(vi) Any Notes requested by any Lender pursuant to Section 2.14
payable to the order of each such requesting Lender.
(vii)Written money transfer instructions, in substantially the
form of Exhibit E, addressed to the Administrative Agent and
signed by an Authorized Officer, together with such other
related money transfer authorizations as the Administrative
Agent may have reasonably requested.
(viii) The Subsidiary Guaranty executed by each of the Borrower's
Material Domestic Subsidiaries other than the Howmet
Companies.
(ix) Documentation evidencing the arrangement for the termination
of the Existing Credit Agreements and repayment of all
obligations, indebtedness and liabilities outstanding
thereunder from the proceeds of the initial Loans hereunder.
(x) Pledge Agreements with respect to each of the Borrower's
Material Foreign Subsidiaries other than the Howmet
Companies, if any, together with applicable stock
certificates, stock powers or other applicable
documentation.
(xi) A written opinion of foreign counsel with respect to each
Pledge Agreement, if any, addressed to the Administrative
Agent and the Lenders, in form and substance acceptable to
the Administrative Agent.
(xii)A form U-1 signed by the Borrower together with such
information as shall permit the Administrative Agent to
complete the provisions of such form U-1.
(xiii) Such other documents as the Administrative Agent, any
Lender or its counsel may have reasonably requested.
5.2. Each Credit Extension. The Lenders shall not be required to
make any Advance unless, on the applicable Credit Extension Date, both
immediately prior to, and immediately after giving effect to, such
Credit Extension:
(i) The Administrative Agent shall have received a Borrowing
Notice in compliance with Section 2.9.
(ii) The Aggregate Outstanding Credit Exposure does not and would
not exceed the Aggregate Commitment.
(iii) There exists no Default or Unmatured Default.
(iv) The representations and warranties contained in Article VI
(other than Section 6.5) are true and correct as of such
Borrowing Date except to the extent any such representation
or warranty is stated to relate solely to an earlier date,
in which case such representation or warranty shall have
been true and correct on and as of such earlier date.
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(v) All legal matters incident to the making of such Credit
Extension shall be satisfactory to the Lenders and their
counsel.
Each Borrowing Notice with respect to each such Advance shall
constitute a representation and warranty by the Borrower that the
conditions contained in Sections 5.2(i) and (ii) have been satisfied.
Any Lender may require a duly completed compliance certificate in
substantially the form of Exhibit F as a condition to making an
Advance (with the financial covenant calculations contained therein
being as of the most recently ended fiscal quarter for which the
Borrower has been required to have filed its financial statements with
the Securities and Exchange Commission).
ARTICLE VI: REPRESENTATIONS AND WARRANTIES
In order to induce the Agents and the Lenders to enter into this
Agreement and to make the Credit Extensions to the Borrower described
herein, the Borrower represents and warrants as follows to each Lender
and the Agents as of the Closing Date, and thereafter on the date of a
Notice to Convert, on the Conversion Date and on each date as required
by Section 5.2:
6.1. Existence and Standing. Each member of the Obligor Group is
a corporation or (in the case of Consolidated Subsidiaries only) a
partnership or limited liability company duly and properly
incorporated or organized, as the case may be, validly existing and
(to the extent such concept applies to such entity) in good standing
under the laws of its jurisdiction of incorporation or organization
and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted unless the failure so
to qualify would not be reasonably expected to have a Material Adverse
Effect.
6.2. Authorization and Validity. Each of the Borrower and its
Consolidated Subsidiaries has the power and authority and legal right
to execute and deliver the Loan Documents to which it is a party and
to perform its obligations thereunder. The execution and delivery by
each of the Borrower and its Consolidated Subsidiaries of the Loan
Documents to which it is a party and the performance of each of its
obligations thereunder have been duly authorized by proper corporate
proceedings (or in the case of Consolidated Subsidiaries, partnership
or company proceedings), and the Loan Documents to which each of the
Borrower and its Consolidated Subsidiaries is a party constitute
legal, valid and binding obligations of the Borrower and its
Consolidated Subsidiaries enforceable against the Borrower and its
Consolidated Subsidiaries in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally.
6.3. No Conflict; Government Consent. Neither the execution and
delivery by the Borrower of the Loan Documents to which it is a party,
nor the consummation of the transactions therein contemplated, nor
compliance with the provisions thereof will violate (i) any law, rule,
regulation, order, writ, judgment, injunction, decree or award binding
on the Borrower or (ii) the Borrower's articles or certificate of
incorporation or by-laws or (iii) the provisions of any indenture,
loan agreement, credit agreement, mortgage or deed of trust, or any
other material contract, agreement or instrument to which the Borrower
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is a party or is subject, or by which it, or its Property, is bound,
or conflict with or constitute a default thereunder, or result in, or
require, the creation or imposition of any Lien in, of or on any
material Properties of the Borrower pursuant to the terms of any such
indenture, loan agreement, credit agreement, mortgage, deed of trust
or other material contract, agreement or instrument other than
pursuant to the Collateral Documents. Neither the execution and
delivery by the Borrower or any of its Subsidiaries of the Loan
Documents to which it is a party, nor the consummation of the
transactions therein contemplated, nor compliance with the provisions
thereof will violate in any material respect (i) any material law,
rule, regulation, order, writ, judgment, injunction, decree or award
binding on any of the Borrower's Subsidiaries or (ii) any articles or
certificate of incorporation, partnership agreement, certificate of
partnership, articles or certificate of organization, or by-laws, or
operating or other management agreement, as the case may be, of any
Subsidiary of the Borrower or (iii) the provisions of any material
indenture, loan agreement, credit agreement, mortgage or deed of
trust, or any other material contract, agreement or instrument to
which any of the Borrower's Subsidiaries is a party or is subject, or
by which such Subsidiaries, or any of their Property, is bound, or
conflict in any material respect with or constitute a default
thereunder, or result in, or require, the creation or imposition of
any Lien in, of or on any material Properties of any of the Borrower's
Subsidiaries pursuant to the terms of any such material indenture,
loan agreement, credit agreement, mortgage, deed of trust or other
material contract, agreement or instrument other than pursuant to the
Collateral Documents. No order, consent, adjudication, approval,
license, authorization, or validation of, or filing, recording or
registration with, or exemption by, or other action in respect of any
governmental or public body or authority, or any subdivision thereof,
which has not been obtained by the Borrower or any of its
Subsidiaries, is required to be obtained by the Borrower or any of its
Subsidiaries in connection with the execution and delivery of the Loan
Documents, the borrowings under this Agreement, the payment and
performance by the Borrower of the Obligations or the legality,
validity, binding effect or enforceability of any of the Loan
Documents.
6.4. Financial Statements. The September 30, 1999 unaudited
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries heretofore delivered to the Lenders were prepared in
accordance with generally accepted accounting principles in effect on
the date such statements were prepared and fairly present the
consolidated financial condition and operations of the Borrower and
its Consolidated Subsidiaries at such date and the consolidated
results of their operations for the period then ended, subject to
normal year-end audit adjustments.
6.5. Material Adverse Change. Since September 30, 1999 and up to
the date of the initial Credit Extension hereunder, there has been no
change in the business, Property, prospects, condition (financial or
otherwise) or results of operations of the Borrower or its
Subsidiaries which could reasonably be expected to have a Material
Adverse Effect.
6.6. Taxes. The Borrower and its Subsidiaries have filed all
United States federal tax returns and all other tax returns which are
required to be filed and have paid all taxes due pursuant to said
returns or pursuant to any assessment received by the Borrower or any
of its Subsidiaries, except such taxes, if any, as are being contested
in good faith and as to which adequate reserves have been provided in
accordance with Agreement Accounting Principles and as to which no
Lien exists. The United States income tax returns of the Borrower and
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its Subsidiaries have been audited by the Internal Revenue Service
through the fiscal year ended June 30, 1995. Except as provided in
Section 7.14(iii), no tax liens have been filed and no claims are
being asserted with respect to any such taxes. The charges, accruals
and reserves on the books of the Borrower and its Subsidiaries in
respect of any taxes or other governmental charges are adequate.
6.7. Litigation and Contingent Obligations. There is no
litigation, arbitration, governmental investigation, proceeding or
inquiry pending or, to the knowledge of any of their officers,
threatened against or affecting the Borrower or any of its
Subsidiaries which could reasonably be expected to have a Material
Adverse Effect or which seeks to prevent, enjoin or delay the making
of any Loans. Other than any liability incident to any litigation,
arbitration or proceeding which could not reasonably be expected to
have a Material Adverse Effect and other than as set forth on Schedule
1, the Borrower has no material contingent obligations not provided
for or disclosed in the financial statements referred to in Section
6.4.
6.8. Subsidiaries. Schedule 2 contains an accurate list of all
Subsidiaries (identifying which of those Subsidiaries are Consolidated
Subsidiaries) of the Borrower as of the date of this Agreement,
setting forth their respective jurisdictions of organization and the
percentage of their respective capital stock or other ownership
interests owned by the Borrower or other Subsidiaries together with a
calculation, in the case of foreign Subsidiaries, as of the quarter
ended immediately prior to the Closing Date of such Subsidiaries'
total assets as a percentage of the consolidated total assets of the
Borrower and its Consolidated Subsidiaries . All of the issued and
outstanding shares of capital stock or other ownership interests of
such Subsidiaries have been (to the extent such concepts are relevant
with respect to such ownership interests) duly authorized and issued
and are fully paid and non-assessable. After the formation or
acquisition of any New Subsidiary permitted under Section 7.13(b), if
requested by the Administrative Agent or any Lender, the Borrower
shall provide a supplement to Schedule 2 to this Agreement.
6.9. ERISA; Foreign Pension Plan Matters. The sum of (a) the
Unfunded Liabilities of all Plans and (b) the present value of the
aggregate unfunded liabilities to provide the accrued benefits under
all Foreign Pension Plans do not in the aggregate exceed an amount
equal to the sum of (i) five percent (5.0%) of the value (as of any
date of determination) of all Plan assets allocable to Plan benefits
guaranteed by ERISA and (ii) five percent (5.0%) of the fair market
value of the assets held in trust or other funding vehicles for
accrued benefits under all Foreign Pension Plans. Each Plan and each
Foreign Pension Plan complies in all material respects with all
applicable requirements of law and regulations, no Reportable Event
has occurred with respect to any Plan, neither the Borrower nor any
other member of the Controlled Group has withdrawn from any
Multiemployer Plan or initiated steps to do so, and no steps have been
taken to terminate any Plan, other than such non-compliance,
Reportable Events, withdrawals, and terminations which, individually
or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
6.10. Accuracy of Information. No factual information, exhibit or
report furnished by the Borrower or any of its Subsidiaries to the
Administrative Agent, the Arranger or to any Lender, including,
without limitation the January 2000 Confidential Information
Memorandum entitled "Cordant Technologies $1,000,000,000 Senior Credit
Facilities", in connection with the negotiation of, or compliance
with, the Loan Documents contained any material misstatement of fact
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or omitted to state a material fact or any fact necessary to make the
statements contained therein not misleading. The projections furnished
by the Borrower and its Subsidiaries to the Administrative Agent and
the Lenders prior to and in connection with the execution of this
Agreement were prepared in good faith and, at the time of the
preparation thereof, based on good faith estimates and assumptions
believed by management of the Borrower to be reasonable, subject to
the uncertainties inherent in projections.
6.11. Securities Activities. The Borrower and its Subsidiaries
are in compliance with Regulations T, U and X. Neither the Borrower
nor any of its Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the
purpose of purchasing or carrying "margin stock" (as defined in
Regulation U).
6.12. Material Agreements. Neither the Borrower nor any
Subsidiary is a party to any agreement or instrument or subject to any
charter or other corporate restriction which could reasonably be
expected to have a Material Adverse Effect. Neither the Borrower nor
any Subsidiary is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions
contained in any agreement to which it is a party, which default could
reasonably be expected to have a Material Adverse Effect.
6.13. Compliance With Laws. The Borrower and its Subsidiaries
have complied in all respects with all applicable statutes, rules,
regulations, orders and restrictions of any domestic or foreign
government or any instrumentality or agency thereof having
jurisdiction over the conduct of their respective businesses or the
ownership of their respective Property, except for non-compliance
therewith which individually or in the aggregate could not reasonably
be expected to have a Material Adverse Effect.
6.14. Ownership of Properties. Except as set forth on Schedule 3,
on the date of this Agreement, the Borrower and its Consolidated
Subsidiaries will have good title, free of all Liens other than those
permitted by Section 7.14, to all of the Property and assets reflected
in the Borrower's most recent consolidated financial statements
provided to the Administrative Agent as owned by the Borrower and its
Consolidated Subsidiaries.
6.15. Plan assets; prohibited transactions. The borrower is an
"operating company" within the meaning of 29 c.F.R. Section 2510.3-101 And
neither the execution of this agreement nor the making of loans hereunder
gives rise to a prohibited transaction within the meaning of section 406 of
erisa or section 4975 of the code.
6.16. Environmental Matters. In the ordinary course of its
business, the officers of the Borrower and its Subsidiaries consider
the effect of Environmental Laws on the business of the Borrower and
its Subsidiaries, in the course of which they identify and evaluate
potential risks and liabilities accruing to the Borrower and its
Subsidiaries due to Environmental Laws. On the basis of this
consideration, the Borrower has concluded that Environmental Laws
cannot reasonably be expected to have a Material Adverse Effect.
Neither the Borrower nor any Subsidiary has received any notice to the
effect that its operations are not in material compliance with any of
the requirements of applicable Environmental Laws or are the subject
of any federal or state investigation evaluating whether any remedial
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action is needed to respond to a release of any toxic or hazardous
waste or substance into the environment, which non-compliance or
remedial action could reasonably be expected to have a Material
Adverse Effect.
6.17. Investment Company Act. Neither the Borrower nor any
Subsidiary is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act
of 1940, as amended.
6.18. Public Utility Holding Company Act. Neither the Borrower
nor any Subsidiary is a "holding company" or a "subsidiary company" of
a "holding company", or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
ARTICLE VII: COVENANTS
During the term of this Agreement, unless the Required Lenders
shall otherwise consent in writing:
7.1. Financial Reporting.
(i) The Borrower will maintain, for itself and each Consolidated
Subsidiary, a system of accounting established and
administered in accordance with generally accepted
accounting principles and shall cause to be filed with the
Securities and Exchange Commission in electronic format
available to the Lenders:
(a) Within 90 days after the close of each of its
fiscal years, an unqualified audit report
certified by independent certified public
accountants of nationally recognized standing or
otherwise acceptable to the Lenders, prepared in
accordance with Agreement Accounting Principles on
a consolidated basis for itself and its
Consolidated Subsidiaries, including balance
sheets as of the end of such period, related
profit and loss and reconciliation of surplus
statements, and a statement of cash flows (the
"Annual Audited Financial Statements"); and
(b) Within 45 days after the close of each of the
first three quarters in each fiscal year, for
itself and its Consolidated Subsidiaries,
consolidated unaudited balance sheets as at the
close of each such period and consolidated profit
and loss and reconciliation of surplus statements
and a statement of cash flows for the period from
the beginning of such fiscal year to the end of
such quarter (subject in each case to normal
year-end audit adjustments) (the "Quarterly
Financial Statements").
(ii) The Borrower will furnish to the Administrative Agent
(copies of which the Administrative Agent shall forward to
the Lenders):
(a) Within 10 Business Days after filed with the
Securities and Exchange Commission, the Annual
Audited Financial Statements, accompanied by (1)
any management letter prepared by said accountants
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and (2) a certificate of said accountants that, in
the course of their examination necessary for
their certification of the foregoing, they have
obtained no knowledge of any Default or Unmatured
Default under the financial terms contained in
Section 7.10, 7.12, 7.13, 7.14, 7.17 or 7.18, or
if, in the opinion of such accountants, any such
Default or Unmatured Default shall exist, stating
the nature and status thereof.
(b) Within 10 Business Days after filed with the
Securities and Exchange Commission, the Quarterly
Financial Statements, certified by its chief
financial officer or treasurer.
(c) As soon as available, but in any event within 90
days after the beginning of each fiscal year of
the Borrower, beginning with the fiscal year
commencing January 1, 2001, a copy of the plan and
forecast (including a projected consolidated
balance sheet, income statement and funds flow
statement) of the Borrower and its Consolidated
Subsidiaries for such fiscal year.
(d) Together with the financial statements required
under Sections 7.1(ii)(a) and 7.1(ii)(b), a
compliance certificate in substantially the form
of Exhibit F signed by its chief financial officer
or treasurer showing the calculations necessary to
determine compliance with this Agreement and
stating that no Default or Unmatured Default
exists, or if any Default or Unmatured Default
exists, stating the nature and status thereof.
(e) As soon as practicable after receipt thereof by
the Borrower but in any event within 365 days
after the close of each plan year for each Plan, a
statement of the Unfunded Liabilities of such
Plan, certified as correct by an actuary enrolled
under ERISA.
(f) As soon as possible and in any event within 30
days after the Borrower knows that any Reportable
Event has occurred with respect to any Plan, or
any material unfunded liability has arisen with
respect to any Foreign Pension Plan, a statement,
signed by the chief financial officer or treasurer
of the Borrower, describing said Reportable Event
or material unfunded liability and the action
which the Borrower proposes to take with respect
thereto.
(g) As soon as possible and in any event within 30
days after receipt by the Borrower, a copy of (1)
any notice or claim to the effect that the
Borrower or any of its Subsidiaries is or may be
liable in any material amount to any Person as a
result of any material release by the Borrower,
any of its Subsidiaries, or any other Person of
any toxic or hazardous waste or substance into the
environment, and (2) any notice alleging any
material violation of any federal, state or local
environmental, health or safety law or regulation
by the Borrower or any of its Subsidiaries.
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(h) Promptly upon the furnishing thereof to the
shareholders of the Borrower, copies of all
financial statements, reports and proxy statements
so furnished.
(i) Promptly upon the filing thereof, copies of all
registration statements or other regular reports
not otherwise provided pursuant to this Section
7.1(ii) which the Borrower or any of its
Consolidated Subsidiaries files with the
Securities and Exchange Commission.
(j) Promptly after the execution thereof, copies of
all material amendments to any of the Receivables
Purchase Documents.
(k) Such other information (including non-financial
information) as the Administrative Agent or any
Lender may from time to time reasonably request.
7.2. Use of Proceeds. The Borrower will, and will cause each
Subsidiary to, use the proceeds of the Loans for working capital, capital
expenditures, Permitted Acquisitions and other general corporate purposes
(which may include refinancing certain existing indebtedness, backstopping
commercial paper, or to repay outstanding Loans in accordance with the
terms of Section 2). The Borrower shall (a) use the proceeds of Advances in
compliance with all applicable legal and regulatory requirements and any
use shall not result in a violation of any such applicable regulatory
requirements, including, without limitation, Regulation U, and the
Securities Act of 1933 and the Securities Exchange Act of 1934 and the
regulations thereunder and (b) not, nor will it permit any Subsidiary to,
use any of the proceeds of the Advances to make any Acquisition other than
a Permitted Acquisition. In connection with Advances to be used for the
purpose of purchasing or carrying any "margin stock" (as defined in
Regulation U) or to consummate any other Acquisition, such purchase or
Acquisition shall be disclosed by the Borrower promptly upon execution and
delivery of a letter of intent or comparable agreement with respect
thereto. With respect to any Loan the proceeds of which shall be used to
purchase or carry "margin stock" (as defined in Regulation U), the Borrower
shall (a) include in the Notice of Borrowing for such Borrowing (i) a
representation that "margin stock" (as defined in Regulation U) (after
consummating such purchase) constitutes less than 25% of the value of those
assets of the Borrower and its Subsidiaries which are subject to any
limitation on sale, pledge, or other restriction hereunder or (ii) if such
a representation cannot be made, such information (including, without
limitation, information regarding the current market value of the margin
stock being purchased, all debt securities convertible into margin stock
and the current market value of such margin stock, and the other assets of
the Borrower and its Subsidiaries, together with a signed Form U-1 (or any
replacement form) or other form required to be completed under the
provisions of Regulations T, U or X) as shall enable the Administrative
Agent to reasonably determine that the Lenders and the Borrower are in
compliance with Regulations T, U and X.
7.3. Notice of Default. The Borrower will, and will cause each
Subsidiary to, give prompt notice in writing to the Lenders of the
occurrence of any Default or Unmatured Default and of any other
development, financial or otherwise, which could reasonably be expected to
have a Material Adverse Effect.
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7.4. Conduct of Business. The Borrower will carry on and conduct
its business in the manner of a diversified industrial manufacturing
company and will cause each Subsidiary to conduct its business in a manner
consistent with the Borrower's objectives as such. The Borrower will, and
will cause each Subsidiary to, do all things necessary to remain duly
incorporated or organized, validly existing and (to the extent such concept
applies to such entity) in good standing as a corporation, partnership or
limited liability company in its jurisdiction of incorporation or
organization, and maintain all requisite authority to conduct its business
in each jurisdiction where, because of the nature of its activities or
properties, such authority is required and the failure to maintain such
authority would materially and adversely affect its business, assets,
financial condition, operations or prospects.
7.5. Taxes. The Borrower will, and will cause each Subsidiary to,
timely file complete and correct United States federal and applicable
foreign, state and local tax returns required by law and pay when due all
taxes, assessments and governmental charges and levies upon it or its
income, profits or Property, except those which are being contested in good
faith by appropriate proceedings and with respect to which adequate
reserves have been set aside in accordance with Agreement Accounting
Principles.
7.6. Insurance. The Borrower will, and will cause each Consolidated
Subsidiary to, maintain insurance in such amounts and covering such risks
as is consistent with sound business practice.
7.7. Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject
including, without limitation, all Environmental Laws, except for
non-compliance therewith which individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect.
7.8. Maintenance of Properties. The Borrower will, and will cause
each Subsidiary to, do all things necessary to maintain, preserve, protect
and keep its Property in good repair, working order and condition, and make
all necessary and proper repairs, renewals and replacements, except for
Property no longer used or useful in the respective businesses of the
Borrower or such Subsidiary.
7.9. Inspection. To the extent permitted by applicable law and not
in violation of any agreements of the Borrower or its Subsidiaries with any
third party regarding confidential, proprietary or secret information, the
Borrower will, and will cause each Consolidated Subsidiary to, permit the
Administrative Agent and the Lenders, by their respective representatives
and agents, to inspect any of the Property, books and financial records of
the Borrower and each Consolidated Subsidiary, to examine and make copies
of the books of accounts and other financial records of the Borrower and
each Consolidated Subsidiary, and to discuss the affairs, finances and
accounts of the Borrower and each Consolidated Subsidiary with, and to be
advised as to the same by, their respective officers at such reasonable
times and intervals as (i) the Administrative Agent may designate or (ii)
any Lender may designate if at the time of such designation by such Lender
a Default or an Unmatured Default has occurred and is continuing (or such
Lender has a reasonable basis for believing such a Default or Unmatured
Default may have occurred and is continuing).
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7.10. Subsidiary Indebtedness. The Borrower will not permit
any Consolidated Subsidiary to, create, incur or suffer to exist any
Indebtedness, except:
(i) The Subsidiary Guaranties.
(ii) Guaranties executed by any Subsidiary Guarantor with
respect to any Indebtedness of the Borrower provided such
Indebtedness is not incurred by the Borrower in violation
of this Agreement.
(iii) Indebtedness existing on the date hereof and described in
Schedule 3.
(iv) Indebtedness incurred in connection with the Receivables
Purchase Documents; provided that Receivables Facility
Attributed Indebtedness incurred in connection therewith
does not exceed in $200,000,000 in the aggregate at any
time.
(v) Intercompany Indebtedness between (i) the Borrower and
any of its Consolidated Subsidiaries or (ii) any
Consolidated Subsidiaries provided any Intercompany
Indebtedness extended by any member of the Obligor Group
to any Subsidiary not part of the Obligor Group shall be
extended on reasonable terms in the ordinary course of
business.
(vi) Other Indebtedness in addition to that referred to
elsewhere in this Section 7.10 incurred by the Borrower's
Consolidated Subsidiaries; provided that no Default or
Unmatured Default shall have occurred and be continuing
at the date of such incurrence or would result therefrom;
and provided further that the aggregate outstanding
amount of all Indebtedness incurred by the Borrower's
Consolidated Subsidiaries (other than Indebtedness
incurred pursuant to clauses (i), (ii), (iv) and (v) of
this Section 7.10) shall not at any time exceed
$225,000,000.
7.11 Merger. The Borrower will not, nor will it permit any
Consolidated Subsidiary to, merge, amalgamate, or consolidate with or into
any other Person, except that a Consolidated Subsidiary may merge,
amalgamate or consolidate into the Borrower or a Wholly-Owned Subsidiary or
with any other Person in connection with a Permitted Acquisition. The
Borrower will not permit the stock of any Material Subsidiary to be the
subject of any spin-off transaction except in connection with an asset sale
transaction permitted pursuant to the terms of Section 7.12 below.
7.12. Sale of Assets. Other than in connection with transactions
expressly permitted by Sections 7.11 (other than the last sentence
thereof), 7.13 and 7.14, the Borrower will not, nor will it permit any
Consolidated Subsidiary to, lease, sell or otherwise dispose of its
Property to any other Person, except:
(i)Sales of inventory in the ordinary course of business.
(ii) Sales, assignments, transfers, leases, conveyances or other
dispositions of other assets (other than pursuant to clause (i)
above or clauses (iii) or (v) below) if such transaction (a) is
for not less than fair market value, and (b) when combined with
all such other transactions (each such transaction being valued
at book value) (i) during the immediately preceding twelve-month
period, represents the disposition of not greater than ten
percent (10%) of the borrower's consolidated assets at the end of
the fiscal year immediately preceding that in which such
transaction is proposed to be entered into, and (ii) during the
period from the closing date to the date of such proposed
transaction, represents the disposition of not greater than
twenty-five percent (25%) of the borrower's consolidated assets
at the end of the fiscal year immediately preceding that in which
such transaction is proposed to be entered into.
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(iii)Any transfer of an interest in accounts or notes receivable on a
limited recourse basis under the Receivables Purchase Documents,
provided that such transfer qualifies as a legal sale and as a
sale under Agreement Accounting Principles and that the amount
Receivables Facility Attributed Indebtedness does not exceed
$200,000,000 at any one time outstanding.
(iv) Sale and Leaseback Transactions; provided that the aggregate
amount of Off-Balance Sheet Liabilities incurred in connection
therewith shall not at any time exceed an aggregate amount in
excess of five percent (5.0%) of consolidated assets of the
Borrower and its Consolidated Subsidiaries.
(v) Any sale, lease, or other disposition of equipment by the
Borrower to any of its Consolidated Subsidiaries or by any
Consolidated Subsidiary to the Borrower or any other Consolidated
Subsidiary.
7.13. Investments and Acquisitions; New Subsidiaries; Documentation
by Howmet Companies.
(a) Investments. The Borrower will not, nor will it permit any
Consolidated Subsidiary to, make or suffer to exist any Investments
(including without limitation, loans and advances to, and other Investments
in, Subsidiaries), or commitments therefor, or to become or remain a
partner in any partnership or joint venture, or to make any Acquisition of
any Person, except:
(i) Cash Equivalent Investments.
(ii) Existing Investments in Consolidated Subsidiaries and
other Investments in existence on the date hereof and
described in Schedule 4.
(iii) Investments in Consolidated Subsidiaries (other than
Joint Ventures).
(iv) Investments in the Joint Ventures as set forth in this
clause (iv); provided the aggregate amount of such
Investments shall not at any time exceed an aggregate
amount in excess of ten percent (10.0%) of consolidated
assets of the Borrower and its Consolidated Subsidiaries;
provided, further, for purposes of calculating the
Investments in any particular Joint Venture or group of
Joint Ventures under this clause (iv), the Investment
shall equal (1) the aggregate amount of the Investments
minus (2) the aggregate amount of all distributions
received by the Borrower and its Consolidated
Subsidiaries from such Joint Venture or group of Joint
Ventures.
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(v) Investments in the SPVs required in connection with the
Receivables Purchase Documents.
(vi) Acquisitions meeting the following requirements
(each such Acquisition constituting a "Permitted
Acquisition"):
(a) No Default or Unmatured Default shall have
occurred and be continuing or would result from such
Acquisition or the incurrence of any Indebtedness in
connection therewith;
(b) The businesses being acquired shall be
consistent with the Borrower's objective to carry on and
conduct its business in the manner of a diversified
industrial manufacturing company;
(c) The purchase is consummated pursuant to a
negotiated acquisition agreement on a non-hostile basis
pursuant to an acquisition agreement approved by the
board of directors or other applicable governing body of
the Seller prior to the commencement thereof;
(d) To the extent such Permitted Acquisition
involves a New Subsidiary, the Borrower is in compliance
with the terms set forth below and after taking into
account the Acquisition, the Borrower is in compliance
with the terms of Section 7.17 below;
(e) After giving effect to such Acquisition, the
representations and warranties set forth in the Credit
Agreement shall be true and correct in all material
respects on and as of the date of such Acquisition with
the same effect as though made on and as of such date;
and
(f) The Borrower shall have determined that
after giving effect to such Acquisition and the
incurrence of any Indebtedness under the Credit Agreement
or otherwise in connection therewith, on a pro forma
basis, as if the Acquisition and such incurrence of
Indebtedness had occurred on the first day of the
twelve-month period ending on the last day of the
Borrower's most recently completed fiscal quarter, the
Borrower would have been in compliance with all of the
covenants contained in this Agreement.
(vii) Investments resulting from Financial Contracts entered
into in the ordinary course of business and which do not
violate the terms of Section 7.16.
(b) New Subsidiaries. The Borrower will not, nor will it permit
any Consolidated Subsidiary to, create or acquire a Subsidiary (a "New
Subsidiary") other than in connection with a Permitted Acquisition or
pursuant to any transaction that is permitted by or not otherwise
prohibited by this Agreement; provided that: (1) upon the creation or
acquisition of each New Subsidiary which is a Material Domestic Subsidiary
other than a SPV, or if necessary to remain in compliance with the terms of
Section 7.17, the Borrower shall cause each such New Subsidiary to promptly
(but in any event within 30 days following the creation or acquisition
thereof) deliver to the Administrative Agent an executed counterpart of a
Guaranty Supplement to become a Subsidiary Guarantor under the Subsidiary
Guaranty in the form of Annex I to the form of Subsidiary Guaranty attached
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as Exhibit C hereto; (2) upon the creation or acquisition of each New
Subsidiary which is a Material Foreign Subsidiary, or if necessary to
remain in compliance with the terms of Section 7.17 the Borrower shall or
shall cause its applicable domestic Subsidiary promptly (but in any event
within 60 days following the creation or acquisition thereof) to execute a
Pledge Agreement with respect to 65% of the stock of such Material Foreign
Subsidiary; and (3) in either case, shall deliver appropriate certified
constituting and governing documents, corporate resolutions, opinions,
stock certificates, stock powers and other documentation in form and
substance satisfactory to the Administrative Agent in connection therewith.
(c) Howmet Companies. On or prior to the Howmet Documentation
Date, the Borrower shall: (1) cause each Howmet Company which is a Material
Domestic Subsidiary to deliver to the Administrative Agent an executed
counterpart of a Guaranty Supplement to become a Subsidiary Guarantor under
the Subsidiary Guaranty in the form of Annex I to the form of Subsidiary
Guaranty attached as Exhibit C hereto; (2) cause the applicable Howmet
Companies to execute and deliver to the Administrative Agent a Pledge
Agreement with respect to 65% of the stock of each Howmet Company which is
a Material Foreign Subsidiary; and (3) in either case, shall deliver
appropriate corporate resolutions, opinions, stock certificates, stock
powers and other documentation in form and substance satisfactory to the
Administrative Agent in connection therewith.
(d) Additional Material Domestic Subsidiaries and Material Foreign
Subsidiaries. If any Consolidated Subsidiary of the Borrower (other than a
New Subsidiary, a Howmet Company or an SPV) becomes a Material Domestic
Subsidiary or a Material Foreign Subsidiary as at the end of any calendar
quarter, (1) the Borrower shall cause any such Material Domestic Subsidiary
to promptly (but in any event within 30 days following the end of such
calendar quarter) deliver to the Administrative Agent an executed
counterpart of a Guaranty Supplement to become a Subsidiary Guarantor under
the Subsidiary Guaranty in the form of Annex I to the form of Subsidiary
Guaranty attached as Exhibit C hereto; (2) the Borrower shall or shall
cause its applicable domestic Subsidiary promptly (but in any event within
60 days following the end of such calendar quarter) to execute a Pledge
Agreement with respect to 65% of the stock of any such Material Foreign
Subsidiary; and (3) in either case, shall deliver appropriate certified
constituting and governing documents, corporate resolutions, opinions,
stock certificates, stock powers and other documentation in form and
substance satisfactory to the Administrative Agent in connection therewith.
7.14. Liens. The Borrower will not, nor will it permit any
Consolidated Subsidiary to, create, incur, assume or suffer to exist any
Lien in, of or on the Property of the Borrower or any of its Consolidated
Subsidiaries , or assign any right to receive income or permit the filing
of any financing statement under the UCC or any other similar notice of
Lien under any similar recording or notice statute, except:
(i) Liens in favor of (a) the Administrative Agent, for the
benefit of itself and the Lenders, granted pursuant to
any Collateral Document or (b) the Administrative Agent
under the 5-Year Credit Agreement for the benefit of
itself, the LC Issuers, the Swing Line Lender and the
Lenders thereunder, granted pursuant to any "Collateral
Documents" under and as defined therein.
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(ii) Liens arising under the Receivables Purchase Documents.
(iii) Inchoate Liens for taxes, assessments or governmental
charges or levies not yet due and payable or Liens for
taxes, assessments or governmental charges or levies
being contested in good faith and by appropriate
proceedings for which adequate reserves have been
established in accordance with Agreement Accounting
Principles (or the equivalent thereof in any country in
which a foreign Consolidated Subsidiary is doing
business, as applicable);
(iv) Liens in respect of property or assets of the Borrower or any of
its Consolidated Subsidiaries imposed by law, which were incurred
in the ordinary course of business and do not secure Indebtedness
for borrowed money, such as carriers', warehousemen's,
materialmen's and mechanics' liens and other similar Liens
arising in the ordinary course of business, and (x) which do not
in the aggregate materially detract from the value of the
property or assets of the Borrower or the Borrower and its
Subsidiaries taken as a whole, or materially impair the use
thereof in the operation of the business of the Borrower or the
Borrower and its Subsidiaries taken as a whole or (y) which are
being contested in good faith by appropriate proceedings, which
proceedings (or orders entered in connection with such
proceedings) have the effect of preventing the forfeiture or sale
of the property or assets subject to any such Lien;
(v) Liens in existence on the Closing Date which are listed, and the
property subject thereto described, in Schedule 3, but only to
the respective date, if any, set forth in such Schedule 3 for the
removal and termination of any such Liens, plus renewals and
extensions of such Liens to the extent set forth on Schedule 3,
provided that (x) the aggregate principal amount of the
Indebtedness, if any, secured by such Liens does not increase
from that amount outstanding at the time of any such renewal or
extension and (y) any such renewal or extension does not encumber
any additional assets or properties of the Borrower or any of its
Consolidated Subsidiaries;
(vi) Licenses, leases or subleases granted to other Persons in the
ordinary course of business not materially interfering with the
conduct of the business of the Borrower or the Borrower and its
Subsidiaries taken as a whole or materially diminishing the
aggregate value of any collateral for the Obligations;
(vii)Easements, rights-of-way, restrictions (including zoning
restrictions), encroachments, protrusions and other similar
charges or encumbrances, and minor title deficiencies, in each
case whether now or hereafter in existence, not securing
Indebtedness, not materially interfering with the conduct of the
business of the Borrower or the Borrower and its Subsidiaries
taken as a whole and not materially diminishing the aggregate
value of any collateral for the Obligations;
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(viii) Liens arising from precautionary UCC financing statement
filings regarding Operating Leases entered into by the Borrower
or any of its Consolidated Subsidiaries in the ordinary course of
business;
(ix) Liens arising out of the existence of judgments or awards not
constituting an Event of Default under Section 8.9, provided that
no cash or property is deposited or delivered to secure the
respective judgment or award (or any appeal bond in respect
thereof);
(x) Statutory and contractual landlords' liens under leases or
subleases to which the Borrower or any of its Consolidated
Subsidiaries is a party created in the ordinary course of
business for amounts not yet due or which are being contested in
good faith by appropriate proceedings properly instituted and
diligently conducted and with respect to which adequate reserves
or other appropriate provisions are being maintained in
accordance with Agreement Accounting Principles;
(xi) Any interest or title of a lessor, sublessor, licensee or
licensor under any lease or license agreement permitted by this
Agreement; provided that Liens in connection with Capitalized
Leases shall be permitted only to the extent that the
Indebtedness secured thereby together with the liabilities
secured pursuant to Liens under clause (xvii) below would not
exceed the limitation set forth in such clause (xvii);
(xii)Liens in favor of customs and revenue authorities arising as a
matter of law to secure the payment of customs duties in
connection with the importation of goods;
(xiii) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the manufacture or sale
of goods entered into by the Borrower or any of its Consolidated
Subsidiaries in the ordinary course of business in accordance
with the past practices of the Borrower and its Consolidated
Subsidiaries prior to the Closing Date;
(xiv)Deposits made to secure statutory obligations in the form of
excise taxes;
(xv) Liens upon specific items of inventory or other goods and
proceeds thereof granted in favor of any Person (but not directly
or indirectly securing any Indebtedness) to facilitate the
purchase, shipment or storage of such inventory or other goods in
the ordinary course of business;
(xvi)Liens securing Indebtedness assumed in connection with a
Permitted Acquisition and not prohibited under this Agreement
with respect to property acquired by the Borrower or any of its
Subsidiaries after the Closing Date (and not created in
contemplation of such Acquisition) pursuant to a Permitted
Acquisition; provided, that (y) the aggregate outstanding amount
of Indebtedness so secured shall not at any time exceed
$50,000,000 for all such Indebtedness, and (z) such Liens shall
extend only to the property so acquired; and
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(xvii) Liens not otherwise permitted by the foregoing clauses (i)
through (xvi) to the extent attaching to properties and assets
with an aggregate fair value not in excess of, and securing
liabilities which when aggregated with Capitalized Leases secured
pursuant to clause (xi) above do not exceed five percent (5.0%)
of the consolidated assets of the Borrower and its Subsidiaries,
in the aggregate at any time outstanding;
provided, however, notwithstanding anything else to the contrary, no
Liens on any capital stock of any Subsidiary of the Borrower shall
be permitted other than as permitted in clause (i) above.
In addition, neither the Borrower nor any of its Consolidated Subsidiaries
shall become a party to any agreement, note, indenture or other instrument,
or take any other action, which would prohibit the creation of a Lien on
any material portion of its Property in favor of the Administrative Agent
for the benefit of itself and the Lenders as collateral for the Obligations
except for the prohibitions existing in the Indenture as of the date of
this Agreement applicable to debt securities issued under the Indenture and
prohibitions no more restrictive than such existing prohibitions applicable
to debt securities to be issued under the Indenture.
7.15. Affiliates. Except as set forth on Schedule 5, the Borrower
will not, and will not permit any Consolidated Subsidiary to, enter into
any transaction (including, without limitation, the purchase or sale of any
Property or service) with, or make any payment or transfer to, any
Affiliate except (a) in the ordinary course of business and pursuant to the
reasonable requirements of the Borrower's or such Consolidated Subsidiary's
business and upon fair and reasonable terms no less favorable to the
Borrower or such Consolidated Subsidiary than the Borrower or such
Consolidated Subsidiary would obtain in a comparable arms-length
transaction, (b) Permitted Receivables Transfers and (c) Intercompany
Indebtedness incurred pursuant to Section 7.10(v).
7.16. Financial Contracts. The Borrower shall not and shall not
permit any of its Consolidated Subsidiaries to enter into any Financial
Contract, other than interest rate, foreign currency or commodity exchange,
swap, collar, cap or similar Rate Hedging Agreements entered into by the
Borrower or such Consolidated Subsidiaries pursuant to which the Borrower
or such Consolidated Subsidiary hedged its actual or anticipated interest
rate, foreign currency or commodity exposure existing or anticipated at the
time thereof.
7.17. Non-Guarantor or Pledged Subsidiaries. The Borrower will not
as of the end of any calendar quarter permit the aggregate assets of all of
the Borrower's domestic Consolidated Subsidiaries (other than the SPVs)
which are not parties to the Subsidiary Guaranty plus the aggregate assets
of all of the Borrower's foreign Consolidated Subsidiaries in connection
with which the Administrative Agent has not received a Pledge Agreement (or
Pledge Agreement with respect to its parent corporation) to exceed fifteen
percent (15%) of consolidated total assets of the Borrower and its
Consolidated Subsidiaries (other than the SPVs) as at the end of such
quarter; provided it shall not be a violation hereof if, (y) within 30 days
of the end of such calendar quarter the Borrower has delivered all guaranty
documentation necessary to bring itself back into compliance with the 15%
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limitation set forth above or (z) within 60 days of the end of such
calendar quarter the Borrower has delivered all pledge documentation
necessary to bring itself back in compliance with the 15% limitation set
forth above (such documentation, in each case, to be of the type described
in Section 7.13(b) with respect to New Subsidiaries). Notwithstanding the
foregoing, prior to the Howmet Documentation Date, the provisions of
Section 7.13(c) shall govern the timing of guaranty and pledge
documentation with respect to the Howmet Companies.
7.18. Financial Covenants.
7.18.1. Interest Coverage Ratio. The Borrower will not
permit the ratio, determined as of the end of each of its fiscal
quarters for the then most-recently ended four fiscal quarters, of
(i) Consolidated EBIT to (ii) Consolidated Interest Expense to be
less than 2.50 to 1.0.
7.18.2. Leverage Ratio. The Borrower will not permit its Leverage
Ratio, determined as of the end of each of its fiscal quarters
and calculated as set forth in the definition thereof, to be
greater than 3.00 to 1.0.
7.19. Subsidiary Covenants. Except for encumbrances or
restrictions existing under or by reason of (i) applicable law, (ii) this
Agreement or the other Loan Documents, (iii) the Receivables Purchase
Documents, (iv) customary provisions restricting subletting or assignment
of any lease governing a leasehold interest, (v) restrictions imposed by
the holder of any Lien permitted under Section 7.14 on the transfer of the
assets subject thereto and (vi) restrictions existing in the Indenture as
of the date of this Agreement applicable to debt securities issued under
the Indenture and restrictions no more restrictive than such existing
restrictions applicable to debt securities to be issued under the
Indenture, the Borrower will not, and will not permit any Consolidated
Subsidiary to, create or otherwise cause to become effective or permit to
exist any consensual encumbrance or restriction of any kind on the ability
of any Consolidated Subsidiary to pay dividends or make any other
distribution on its stock, redeem or repurchase its stock, make any other
similar payment or distribution, pay any Indebtedness or other Obligation
owed by the Borrower or any other Consolidated Subsidiary, make loans or
advances or other Investments in the Borrower or any other Consolidated
Subsidiary, or sell, transfer or otherwise convey any of its property to
the Borrower or any other Consolidated Subsidiary.
ARTICLE VIII: DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
8.1. Any representation or warranty made or deemed made by or on
behalf of the Borrower or any of its Subsidiaries to the Lenders or the
Administrative Agent under or in connection with this Agreement, any Credit
Extension, or any certificate or information delivered in connection with
this Agreement, any Credit Extension or any other Loan Document shall be
materially false on the date as of which made.
8.2. Nonpayment of principal of any Loan when due, or nonpayment
of interest upon any Loan or of any Facility Fee, Utilization Fee or other
obligations under any of the Loan Documents within five days after the same
becomes due.
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8.3. The breach by the Borrower of any of the terms or provisions
of Section 7.1 (only as to clauses (i), (ii)(a) and (ii)(b) thereof),
Section 7.2 (only as to the last sentence thereof), 7.3, 7.9, 7.10, 7.11,
7.12, 7.13, 7.14, 7.15, 7.17 or 7.18.
8.4. The breach by the Borrower (other than a breach which
constitutes a Default under another Section of this Article VIII) of any of
the terms or provisions of this Agreement which is not remedied within
thirty days after the earlier to occur of (a) the date on which written
notice from the Administrative Agent or any Lender is received by the
Borrower of such breach and (b) the date on which the senior management of
any member of the Obligor Group had knowledge of the existence of such
breach or when any member of the senior management of the Obligor Group
should have known of the existence of such breach.
8.5. Failure of the Borrower or any of its Consolidated
Subsidiaries to pay when due any Indebtedness aggregating in excess of
$20,000,000 ("Material Indebtedness"); or the default by the Borrower or
any of its Consolidated Subsidiaries in the performance (beyond the
applicable grace period with respect thereto, if any) of any term,
provision or condition contained in the 5-Year Credit Agreement or any
agreement under which any Material Indebtedness was created or is governed,
or any other event shall occur or condition exist, the effect of which
default or event is to cause, or to permit the lenders under the 5-Year
Credit Agreement or the holder or holders of such Material Indebtedness to
cause, the Indebtedness under the 5-Year Credit Agreement or such Material
Indebtedness to become due prior to its stated maturity; or the
Indebtedness under the 5-Year Credit Agreement or any Material Indebtedness
of the Borrower or any of its Consolidated Subsidiaries shall be declared
to be due and payable or required to be prepaid or repurchased (other than
by a regularly scheduled payment) prior to the stated maturity thereof; or
the Borrower or any of its Consolidated Subsidiaries shall not pay, or
admit in writing its inability to pay, its debts generally as they become
due.
8.6. The Borrower or any of its Consolidated Subsidiaries shall
(i) have an order for relief entered with respect to it under the Federal
bankruptcy laws or other applicable bankruptcy laws as now or hereafter in
effect, (ii) make an assignment for the benefit of creditors, (iii) apply
for, seek, consent to, or acquiesce in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for it or any
Substantial Portion of its Property, (iv) institute any proceeding seeking
an order for relief under the Federal bankruptcy laws or other applicable
bankruptcy laws as now or hereafter in effect or seeking to adjudicate it a
bankrupt or insolvent, or seeking dissolution, winding up, liquidation,
reorganization, arrangement, adjustment or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors or fail to file an answer or other pleading denying the
material allegations of any such proceeding filed against it, (v) take any
corporate or partnership action to authorize or effect any of the foregoing
actions set forth in this Section 8.6 or (vi) fail to contest in good faith
any appointment or proceeding described in Section 8.7.
8.7. Without the application, approval or consent of the Borrower
or any of its Consolidated Subsidiaries, a receiver, trustee, examiner,
liquidator or similar official shall be appointed for the Borrower or any
of its Consolidated Subsidiaries or any Substantial Portion of its
Property, or a proceeding described in Section 8.6(iv) shall be instituted
against the Borrower or any of its Consolidated Subsidiaries and such
appointment continues undischarged or such proceeding continues undismissed
or unstayed for a period of 60 consecutive days.
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8.8. Any court, government or governmental agency shall condemn,
seize or otherwise appropriate, or take custody or control of, all or any
portion of the Property of the Borrower and its Consolidated Subsidiaries
which, when taken together with all other Property of the Borrower and its
Consolidated Subsidiaries so condemned, seized, appropriated, or taken
custody or control of, during the twelve-month period ending with the month
in which any such action occurs, constitutes a Substantial Portion.
8.9. The Borrower or any of its Consolidated Subsidiaries shall
fail within 30 days to pay, bond or otherwise discharge any judgment or
order for the payment of money in excess of $25,000,000, which is not
stayed on appeal.
8.10. The sum of (a) the Unfunded Liabilities of all Plans and (b)
the present value of the aggregate unfunded liabilities to provide the
accrued benefits under all Foreign Pension Plans exceeds in the aggregate
an amount equal to the sum of (i) five percent (5.0%) of the value (as of
any date of determination) of all Plan assets allocable to Plan benefits
guaranteed by ERISA and (ii) five percent (5.0%) of the fair market value
of the assets held in trust or other funding vehicles for accrued benefits
under all Foreign Pension Plans, or any Reportable Event shall occur in
connection with any Plan.
8.11. The Borrower or any other member of the Controlled Group has
incurred withdrawal liability or become obligated to make contributions to
a Multiemployer Plan in an amount which, when aggregated with all other
amounts required to be paid to Multiemployer Plans by the Borrower or any
other member of the Controlled Group, could reasonably be expected to have
a Material Adverse Effect.
8.12. The Borrower or any of its Consolidated Subsidiaries shall
(i) be the subject of any proceeding or investigation pertaining to the
release by the Borrower, any of its Consolidated Subsidiaries or any other
Person of any toxic or hazardous waste or substance into the environment,
or (ii) violate any Environmental Law, which, in the case of an event
described in clause (i) or clause (ii), could reasonably be expected to
have a Material Adverse Effect.
8.13. Any Change in Control shall occur.
8.14. The occurrence of any "default", as defined in any Loan
Document (other than this Agreement) or the breach of any of the terms or
provisions of any Loan Document (other than this Agreement), which default
or breach shall continue for a period of 30 days after the earlier of the
Borrower's knowledge thereof or the Borrower received notice thereof from
the Administrative Agent or any Lender.
8.15. The Subsidiary Guaranty shall fail to remain in full force
or effect with respect to each Subsidiary Guarantor or any action shall be
taken to discontinue or to assert the invalidity or unenforceability of the
Subsidiary Guaranty, or any Subsidiary Guarantor shall fail to comply with
any of the terms or provisions of the Subsidiary Guaranty, or any
Subsidiary Guarantor shall deny that it has any further liability under the
Subsidiary Guaranty, or shall give notice to such effect.
8.16. Any of the following shall occur: (i) any Collateral
Document shall for any reason fail to create a valid and perfected first
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priority security interest in any collateral purported to be covered
thereby, except as permitted by the terms of any Collateral Document, (ii)
any Collateral Document shall fail to remain in full force or effect, (iii)
any action shall be taken to discontinue or to assert the invalidity or
unenforceability of any Collateral Document, or (iv) the Borrower or any of
its Subsidiaries shall fail to comply with any of the terms or provisions
of any Collateral Document, and, in the case of clauses (i), (ii) and (iv),
such occurrence shall continue for a period of 30 days after the earlier of
the Borrower's knowledge thereof or the Borrower received notice thereof
from the Administrative Agent or any Lender.
8.17 An "Early Amortization Event," "Servicer Default" or event
shall occur resulting in the termination of purchases and/or funding under
any Receivables Purchase Agreement, or Howmet Corporation or the Borrower
shall cease to act as "Servicer" under the Amended and Restated Pooling and
Servicing Agreement dated as of April 18, 1996 executed in connection with
the Receivables Purchase Agreement executed by Blade Receivables
Corporation, as the same may have been or may hereafter be amended,
modified, supplemented or restated or the Borrower shall cease to act as
the servicer under any pooling and servicing agreement executed in
connection with any other Receivables Purchase Agreement, as the same may
be amended, modified, supplemented or restated.
ARTICLE IX: ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
9.1. Acceleration. (a) If any Default described in Section 8.6 or
8.7 occurs with respect to the Borrower, the obligations of the Lenders to
make Loans hereunder shall automatically terminate and the Obligations
shall immediately become due and payable without any election or action on
the part of the Administrative Agent or any Lender. If any other Default
occurs, the Required Lenders (or the Administrative Agent with the consent
of the Required Lenders) may terminate or suspend the obligations of the
Lenders to make Loans hereunder, or declare the Obligations to be due and
payable, or both, whereupon the Obligations shall become immediately due
and payable, without presentment, demand, protest or notice of any kind,
all of which the Borrower hereby expressly waives.
(b) If, within 30 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans
hereunder as a result of any Default (other than any Default as described
in Section 8.6 or 8.7 with respect to the Borrower) and before any judgment
or decree for the payment of the Obligations due shall have been obtained
or entered, the Required Lenders (in their sole discretion) shall so
direct, the Administrative Agent shall, by notice to the Borrower, rescind
and annul such acceleration and/or termination.
9.2. Amendments. Subject to the provisions of this Article IX, the
Required Lenders (or the Administrative Agent with the consent in writing
of the Required Lenders) and such member(s) of the Obligor Group which are
parties thereto may enter into agreements which add or modify any
provisions to the Loan Documents or change in any manner the rights of the
Lenders or the Borrower hereunder or thereunder or waive any Default
hereunder; provided, however, that no such supplemental agreement shall,
without the consent of all of the Lenders:
(a) Reduce the principal of or rate of interest on any Loan
or any fees hereunder; or
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(b) Postpone the date fixed for any payment of principal of or
interest on any Loan or any fees hereunder (except as expressly
permitted by the terms of Section 2.2); or
(c) Extend the Commitment Termination Date, the Syndicated Loan
Termination Date, the Converted Loan Termination Date or
otherwise extend the term of the Commitment of any Lender (except
as expressly permitted by the terms of Section 2.2); or
(d) Change the definition of Required Lenders or the percentage of
the Commitments or the Outstanding Credit Exposures or of the
aggregate unpaid principal amount of the Notes, or the number of
Lenders, which shall be required for the Lenders or any of them
to take any action under this Section or any other provision of
the Loan Documents; or
(e) Permit the Borrower to assign any of its rights or obligations
under this Agreement;
(f) Other than in connection with any transactions which shall be
permitted by the terms hereof or of any other Loan Document or
which shall otherwise have been approved in writing by the
Required Lenders (or, if required by the other terms of Section
9.2, all of the Lenders), release any Subsidiary from all or any
portion of its guaranty liability under the Subsidiary Guaranty;
or
(g) Other than in connection with any transactions which shall be
permitted by the terms hereof or of any other Loan Document or
which shall otherwise have been approved in writing by the
Required Lenders (or, if required by the other terms of Section
9.2, all of the Lenders), release any of the collateral pledged
pursuant to the Pledge Agreements; or
(h) Amend or waive any of the provisions of this Section 9.2.
No amendment of any provision of this Agreement relating to the
Administrative Agent shall be effective without the written consent of the
Administrative Agent. The Administrative Agent may waive payment of the fee
required under Section 13.3.2 without obtaining the consent of any other
party to this Agreement. For all purposes under this Agreement and the
other Loan Documents, a Default shall be deemed to be continuing until
waived in accordance with the terms of this Section 9.2.
9.3. Preservation of Rights. No delay or omission of the Lenders
or the Administrative Agent to exercise any right under the Loan Documents
shall impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Loan notwithstanding the
existence of a Default or the inability of the Borrower to satisfy the
conditions precedent to such Loan shall not constitute any waiver or
acquiescence. Any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any other
right, and no waiver, amendment or other variation of the terms, conditions
or provisions of the Loan Documents whatsoever shall be valid unless in
writing signed by the Lenders required pursuant to Section 9.2, and then
only to the extent in such writing specifically set forth. All remedies
contained in the Loan Documents or by law afforded shall be cumulative and
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all shall be available to the Administrative Agent and the Lenders until
the Obligations have been paid in full.
ARTICLE X: GENERAL PROVISIONS
10.1.Survival of Representations. All representations and warranties
of the Borrower contained in this Agreement shall survive the
making of the Credit Extensions herein contemplated.
10.2.Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, no Lender shall be obligated to
extend credit to the Borrower in violation of any limitation or
prohibition provided by any applicable statute or regulation.
10.3.Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the
interpretation of any of the provisions of the Loan Documents.
10.4.Entire Agreement. The Loan Documents embody the entire agreement
and understanding among the Borrower, the Administrative Agent
and the Lenders and supersede all prior agreements and
understandings among the Borrower, the Administrative Agent and
the Lenders relating to the subject matter thereof other than the
fee letters described in Section 11.13.
10.5.Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint
and no Lender shall be the partner or agent of any other (except
to the extent to which the Administrative Agent is authorized to
act as such). The failure of any Lender to perform any of its
obligations hereunder shall not relieve any other Lender from any
of its obligations hereunder. This Agreement shall not be
construed so as to confer any right or benefit upon any Person
other than the parties to this Agreement and their respective
successors and assigns, provided, however, that the parties
hereto expressly agree that the Arrangers shall enjoy the
benefits of the provisions of Sections 10.6, 10.10 and 11.11 to
the extent specifically set forth therein and shall have the
right to enforce such provisions on its own behalf and in its own
name to the same extent as if it were a party to this Agreement.
10.6.Expenses; Indemnification. (i) The Borrower shall reimburse the
Agents and the Arrangers for any reasonable costs, internal
charges and out-of-pocket expenses (including reasonable
attorneys' fees and time charges of attorneys for either of the
Agents, which attorneys may be employees of either of the Agents)
paid or incurred by the Agents or the Arrangers in connection
with the preparation, negotiation, execution, delivery,
syndication, review, amendment, modification, and administration
of the Loan Documents. The Borrower also agrees to reimburse the
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Agents, the Arrangers and the Lenders for any costs, internal charges and
out-of-pocket expenses (including attorneys' fees and time
charges of attorneys for the Agents, the Arrangers, and the
Lenders, which attorneys may be employees of the Agents, the
Arrangers or the Lenders) paid or incurred by the Agents, the
Arrangers or any Lender in connection with the collection and
enforcement of the Loan Documents. Expenses being reimbursed by
the Borrower under this Section include, without limitation,
costs and expenses incurred in connection with the Reports
described in the following sentence. The Borrower acknowledges
that from time to time Bank One may prepare and may distribute to
the Lenders (but shall have no obligation or duty to prepare or
to distribute to the Lenders) certain audit reports (the
"Reports") pertaining to the Borrower's assets or business for
internal use by Bank One from information furnished to it by or
on behalf of the Borrower, after Bank One has exercised its
rights of inspection pursuant to this Agreement.
(ii) The Borrower hereby further agrees to indemnify each of the
Agents, each of the Arrangers and each Lender, its directors,
officers, agents, attorneys and employees against all losses,
claims, damages, penalties, judgments, liabilities and expenses
(including, without limitation, all expenses of litigation or
preparation therefor whether or not the Agents, the Arrangers or
any Lender is a party thereto) which any of them may pay or incur
arising out of or relating to this Agreement, the other Loan
Documents, the transactions contemplated hereby or the direct or
indirect application or proposed application of the proceeds of
any Loan hereunder except to the extent that they are determined
in a final judgment by a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of the
party seeking indemnification. The obligations of the Borrower
under this Section 10.6 shall survive the termination of this
Agreement.
(iii)Each indemnitee, with respect to any action against it in
respect of which indemnity may be sought under this Section,
shall give written notice of the commencement of such action to
the Borrower within a reasonable time after such indemnitee is
made a party to such action. Upon receipt of any such notice by
the Borrower, unless such indemnitee shall be advised by its
counsel that there are or may be legal defenses available to such
indemnitee that are different from, in addition to, or in
conflict with, the defenses available to the Obligor Group, the
Borrower may participate with the indemnitee in the defense of
such indemnified matter, including the employment of counsel
consented to by such indemnitee (which consent shall not be
unreasonably withheld); provided, however, nothing provided
herein shall entitle (a) the Borrower or any other member of the
Obligor Group to assume the defense of such indemnified matter or
(b) any indemnitee to effect any settlement in respect of any
indemnified matter without the Borrower's consent, such consent
not to be unreasonably withheld.
10.7. Numbers of Documents. All statements, notices, closing
documents, and requests hereunder shall be furnished to the Administrative
Agent with, if requested by the Administrative Agent, sufficient
counterparts so that the Administrative Agent may furnish one to each of
the Lenders.
10.8. Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement
Accounting Principles. If any changes in generally accepted accounting
principles are hereafter required or permitted and are adopted by the
Borrower or any of its Subsidiaries with the agreement of its independent
certified public accountants and such changes result in a change in the
method of calculation of any of the financial covenants, tests,
restrictions or standards herein or in the related definitions or terms
used therein ("Accounting Changes"), the parties hereto agree, at the
Borrower's request, to enter into negotiations, in good faith, in order to
amend such provisions in a credit neutral manner so as to reflect equitably
such changes with the desired result that the criteria for evaluating the
Borrower's and its Subsidiaries' financial condition shall be the same
after such changes as if such changes had not been made; provided, however,
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until such provisions are amended in a manner reasonably satisfactory to
the Administrative Agent and the Required Lenders, no Accounting Change
shall be given effect in such calculations and all financial statements and
reports required to be delivered hereunder shall be prepared in accordance
with Agreement Accounting Principles without taking into account such
Accounting Changes. In the event such amendment is entered into, all
references in this Agreement to Agreement Accounting Principles shall mean
generally accepted accounting principles as of the date of such amendment.
10.9. Severability of Provisions. Any provision in any Loan
Document that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable,
or invalid without affecting the remaining provisions in that jurisdiction
or the operation, enforceability, or validity of that provision in any
other jurisdiction, and to this end the provisions of all Loan Documents
are declared to be severable.
10.10. Nonliability of Lenders. The relationship between the
Borrower on the one hand and the Lenders and the Agents on the other hand
shall be solely that of borrower and lender. Neither the Agents, the
Arrangers, nor any Lender shall have any fiduciary responsibilities to the
Borrower. Neither the Agents, the Arrangers, nor any Lender undertakes any
responsibility to the Borrower to review or inform the Borrower of any
matter in connection with any phase of the Borrower's business or
operations. The Borrower agrees that neither the Agents, the Arrangers, nor
any Lender shall have liability to the Borrower (whether sounding in tort,
contract or otherwise) for losses suffered by the Borrower in connection
with, arising out of, or in any way related to, the transactions
contemplated and the relationship established by the Loan Documents, or any
act, omission or event occurring in connection therewith, unless it is
determined in a final judgment by a court of competent jurisdiction that
such losses resulted from the gross negligence or willful misconduct of the
party from which recovery is sought. Neither the Agents, the Arrangers, nor
any Lender shall have any liability with respect to, and the Borrower
hereby waives, releases and agrees not to sue for, any special, indirect or
consequential damages suffered by the Borrower in connection with, arising
out of, or in any way related to the Loan Documents or the transactions
contemplated thereby.
10.11. Confidentiality. Each Lender and each of the Agents agrees
to hold any confidential information which it may receive from the Borrower
pursuant to this Agreement in confidence, except for disclosure (i) to its
Affiliates and to other Lenders or the Agents and their respective
Affiliates, (ii) to legal counsel, accountants, and other professional
advisors to that Lender, the Agent or to a Transferee, (iii) to regulatory
officials, (iv) to any Person as requested pursuant to or as required by
law, regulation, or legal process, (v) to any Person in connection with any
legal proceeding to which that Lender or the Administrative Agent is a
party, and (vi) permitted by Section 13.4.
10.12. Nonreliance. Each Lender hereby represents that it is not
relying on or looking to any margin stock (as defined in Regulation U) for
the repayment of the Loans provided for herein.
10.13. Subordination of Intercompany Indebtedness. The Borrower
agrees that any and all claims of the Borrower against any of its
Subsidiaries that is a Subsidiary Guarantor with respect to any
"Intercompany Indebtedness" (as hereinafter defined), any endorser, obligor
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or any other guarantor of all or any part of the Obligations, or against
any of its properties shall be subordinate and subject in right of payment
to the prior payment, in full and in cash, of all Obligations; provided
that, and not in contravention of the foregoing, so long as no Default has
occurred and is continuing the Borrower may make loans to and receive
payments in the ordinary course with respect to such Intercompany
Indebtedness from each such Subsidiary Guarantor to the extent permitted by
the terms of this Agreement and the other Loan Documents. Notwithstanding
any right of the Borrower to ask, demand, sue for, take or receive any
payment from any Subsidiary Guarantor, all rights, liens and security
interests of the Borrower, whether now or hereafter arising and howsoever
existing, in any assets of any Subsidiary Guarantor shall be and are
subordinated to the rights of the holders of the Obligations and the
Administrative Agent in those assets. The Borrower shall have no right to
possession of any such asset or to foreclose upon any such asset, whether
by judicial action or otherwise, unless and until all of the Obligations
(other than contingent indemnity obligations) shall have been fully paid
and satisfied (in cash) and all financing arrangements pursuant to any Loan
Document among the Borrower and the holders of the Obligations (or any
affiliate thereof) have been terminated. If all or any part of the assets
of any Subsidiary Guarantor, or the proceeds thereof, are subject to any
distribution, division or application to the creditors of such Subsidiary
Guarantor, whether partial or complete, voluntary or involuntary, and
whether by reason of liquidation, bankruptcy, arrangement, receivership,
assignment for the benefit of creditors or any other action or proceeding,
or if the business of any such Subsidiary Guarantor is dissolved or if
substantially all of the assets of any such Subsidiary Guarantor are sold,
then, and in any such event (such events being herein referred to as an
"Insolvency Event"), any payment or distribution of any kind or character,
either in cash, securities or other property, which shall be payable or
deliverable upon or with respect to any indebtedness of any Subsidiary
Guarantor to the Borrower ("Intercompany Indebtedness") shall be paid or
delivered directly to the Administrative Agent for application on any of
the Obligations, due or to become due, until such Obligations (other than
contingent indemnity obligations) shall have first been fully paid and
satisfied (in cash). Should any payment, distribution, security or
instrument or proceeds thereof be received by the Borrower upon or with
respect to the Intercompany Indebtedness after an Insolvency Event prior to
the satisfaction of all of the Obligations (other than contingent indemnity
obligations) and the termination of all financing arrangements pursuant to
any Loan Document among the Borrower and the holders of Obligations, the
Borrower shall receive and hold the same in trust, as trustee, for the
benefit of the holders of the Obligations and shall forthwith deliver the
same to the Administrative Agent, for the benefit of such Persons, in
precisely the form received (except for the endorsement or assignment of
the Borrower where necessary), for application to any of the Obligations,
due or not due, and, until so delivered, the same shall be held in trust by
the Borrower as the property of the holders of the Obligations. If the
Borrower fails to make any such endorsement or assignment to the
Administrative Agent, the Administrative Agent or any of its officers or
employees are irrevocably authorized to make the same. The Borrower agrees
that until the Obligations (other than the contingent indemnity
obligations) have been paid in full (in cash) and satisfied and all
financing arrangements pursuant to any Loan Document among the Borrower and
the holders of the Obligations have been terminated, the Borrower will not
assign or transfer to any Person (other than the Administrative Agent) any
claim the Borrower has or may have against any Subsidiary Guarantor.
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ARTICLE XI: THE ADMINISTRATIVE AGENT
11.1. Appointment; Nature of Relationship. Bank One, NA is hereby
appointed by each of the Lenders as its contractual representative (herein
referred to as the "Administrative Agent") hereunder and under each other
Loan Document, and each of the Lenders irrevocably authorizes the
Administrative Agent to act as the contractual representative of such
Lender with the rights and duties expressly set forth herein and in the
other Loan Documents. The Administrative Agent agrees to act as such
contractual representative upon the express conditions contained in this
Article XI. Notwithstanding the use of the defined term "Administrative
Agent," it is expressly understood and agreed that the Administrative Agent
shall not have any fiduciary responsibilities to any Lender by reason of
this Agreement or any other Loan Document and that the Administrative Agent
is merely acting as the contractual representative of the Lenders with only
those duties as are expressly set forth in this Agreement and the other
Loan Documents. In its capacity as the Lenders' contractual representative,
the Administrative Agent (i) does not hereby assume any fiduciary duties to
any of the Lenders, (ii) is a "representative" of the Lenders within the
meaning of Section 9-105 of the Uniform Commercial Code and (iii) is acting
as an independent contractor, the rights and duties of which are limited to
those expressly set forth in this Agreement and the other Loan Documents.
Each of the Lenders hereby agrees to assert no claim against the
Administrative Agent on any agency theory or any other theory of liability
for breach of fiduciary duty, all of which claims each Lender hereby
waives.
11.2. Powers. The Administrative Agent shall have and may exercise
such powers under the Loan Documents as are specifically delegated to the
Administrative Agent by the terms of each thereof, together with such
powers as are reasonably incidental thereto. The Administrative Agent shall
have no implied duties to the Lenders or any obligation to the Lenders to
take any action thereunder except any action specifically provided by the
Loan Documents to be taken by the Administrative Agent.
11.3. General Immunity. Neither the Administrative Agent nor any
of its directors, officers, agents or employees shall be liable to the
Borrower or any Lender for any action taken or omitted to be taken by it or
them hereunder or under any other Loan Document or in connection herewith
or therewith except to the extent such action or inaction is determined in
a final judgment by a court of competent jurisdiction to have arisen from
the gross negligence or willful misconduct of such Person.
11.4. No Responsibility for Loans, Recitals, etc. Neither the
Administrative Agent nor any of its directors, officers, agents or
employees shall be responsible for or have any duty to ascertain, inquire
into, or verify (a) any statement, warranty or representation made in
connection with any Loan Document or any borrowing hereunder; (b) the
performance or observance of any of the covenants or agreements of any
obligor under any Loan Document, including, without limitation, any
agreement by an obligor to furnish information directly to each Lender; (c)
the satisfaction of any condition specified in Article V, except receipt of
items required to be delivered solely to the Administrative Agent; (d) the
existence or possible existence of any Default or Unmatured Default; (e)
the validity, enforceability, effectiveness, sufficiency or genuineness of
any Loan Document or any other instrument or writing furnished in
connection therewith; (f) the value, sufficiency, creation, perfection or
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priority of any Lien in any collateral security; or (g) the financial
condition of the Borrower or any guarantor of any of the Obligations or of
any of the Borrower's or any such guarantor's respective Subsidiaries. The
Administrative Agent shall have no duty to disclose to the Lenders
information that is not required to be furnished by the Borrower to the
Administrative Agent at such time, but is voluntarily furnished by the
Borrower to the Administrative Agent (either in its capacity as
Administrative Agent or in its individual capacity).
11.5. Action on Instructions of Lenders. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from
acting, hereunder and under any other Loan Document in accordance with
written instructions signed by the Required Lenders, and such instructions
and any action taken or failure to act pursuant thereto shall be binding on
all of the Lenders. The Lenders hereby acknowledge that the Administrative
Agent shall be under no duty to take any discretionary action permitted to
be taken by it pursuant to the provisions of this Agreement or any other
Loan Document unless it shall be requested in writing to do so by the
Required Lenders. The Administrative Agent shall be fully justified in
failing or refusing to take any action hereunder and under any other Loan
Document unless it shall first be indemnified to its satisfaction by the
Lenders pro rata against any and all liability, cost and expense that it
may incur by reason of taking or continuing to take any such action.
11.6. Employment of Administrative Agents and Counsel. The
Administrative Agent may execute any of its duties as Administrative Agent
hereunder and under any other Loan Document by or through employees,
agents, and attorneys-in-fact and shall not be answerable to the Lenders,
except as to money or securities received by it or its authorized agents,
for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Administrative Agent shall be
entitled to advice of counsel concerning the contractual arrangement
between the Administrative Agent and the Lenders and all matters pertaining
to the Administrative Agent's duties hereunder and under any other Loan
Document.
11.7. Reliance on Documents; Counsel. The Administrative Agent
shall be entitled to rely upon any Note, notice, consent, certificate,
affidavit, letter, telegram, statement, paper or document believed by it to
be genuine and correct and to have been signed or sent by the proper person
or persons, and, in respect to legal matters, upon the opinion of counsel
selected by the Administrative Agent, which counsel may be employees of the
Administrative Agent.
11.8. Administrative Agent's Reimbursement and Indemnification.
The Lenders agree to reimburse and indemnify the Administrative Agent
ratably in proportion to their respective Percentages (i) for any amounts
not reimbursed by the Borrower for which the Administrative Agent is
entitled to reimbursement by the Borrower under the Loan Documents, (ii)
for any other expenses incurred by the Administrative Agent on behalf of
the Lenders in connection with the preparation, execution, delivery,
administration and enforcement of the Loan Documents (including, without
limitation, for any expenses incurred by the Administrative Agent in
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connection with any dispute between the Administrative Agent and any Lender
or between two or more of the Lenders) and (iii) for any liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Administrative Agent in any
way relating to or arising out of the Loan Documents or any other document
delivered in connection therewith or the transactions contemplated thereby
(including, without limitation, for any such amounts incurred by or
asserted against the Administrative Agent in connection with any dispute
between the Administrative Agent and any Lender or between two or more of
the Lenders), or the enforcement of any of the terms of the Loan Documents
or of any such other documents, provided that no Lender shall be liable for
any of the foregoing to the extent any of the foregoing is found in a final
judgment by a court of competent jurisdiction to have resulted from the
gross negligence or willful misconduct of the Administrative Agent. The
obligations of the Lenders under this Section 11.8 shall survive payment of
the Obligations and termination of this Agreement.
11.9. Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or
Unmatured Default hereunder unless the Administrative Agent has received
written notice from a Lender or the Borrower referring to this Agreement
describing such Default or Unmatured Default and stating that such notice
is a "notice of default". In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give prompt notice
thereof to the Lenders.
11.10. Rights as a Lender. In the event the Administrative Agent
is a Lender, the Administrative Agent shall have the same rights and powers
hereunder and under any other Loan Document with respect to its Commitment
and its Loans as any Lender and may exercise the same as though it were not
the Administrative Agent, and the term "Lender" or "Lenders" shall, at any
time when the Administrative Agent is a Lender, unless the context
otherwise indicates, include the Administrative Agent in its individual
capacity. The Administrative Agent and its Affiliates may accept deposits
from, lend money to, and generally engage in any kind of trust, debt,
equity or other transaction, in addition to those contemplated by this
Agreement or any other Loan Document, with the Borrower or any of its
Subsidiaries in which the Borrower or such Subsidiary is not restricted
hereby from engaging with any other Person.
11.11. Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon the Agents, the Arrangers or
any other Lender and based on the financial statements prepared by the
Borrower and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement and the other Loan Documents. Each of the Lenders also
acknowledges that it will, independently and without reliance upon the
Agents, the Arrangers or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement
and the other Loan Documents.
11.12. Successor Administrative Agent. The Administrative Agent
may resign at any time by giving written notice thereof to the Lenders and
the Borrower, such resignation to be effective upon the appointment of a
successor Administrative Agent or, if no successor Administrative Agent has
been appointed, forty-five days after the resigning Administrative Agent
gives notice of its intention to resign. The Administrative Agent may be
removed at any time with or without cause by written notice received by the
Administrative Agent from the Required Lenders, such removal to be
effective on the date specified by the Required Lenders. Upon any such
resignation or removal, the Borrower may nominate a successor
Administrative Agent provided the Required Lenders shall have the right to
appoint, on behalf of the Borrower and the Lenders, such successor
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Administrative Agent. If the successor Administrative Agent appointed by
the Required Lenders is not the successor nominated by the Borrower, the
Borrower shall have the right to consent to such appointment, such consent
not to be unreasonably withheld or delayed; provided, no such consent of
the Borrower shall be required if a Default or Unmatured Default has
occurred and is continuing. If no successor Administrative Agent shall have
been so appointed by the Required Lenders (and consented to, if so
required, by the Borrower) within thirty days after the resigning
Administrative Agent's giving notice of its intention to resign, then the
resigning Administrative Agent may appoint, on behalf of the Borrower and
the Lenders, a successor Administrative Agent. Notwithstanding the previous
sentence, the Administrative Agent may at any time without the consent of
the Borrower or any Lender, appoint any of its Affiliates which is a
commercial bank as a successor Administrative Agent hereunder. If the
Administrative Agent has resigned or been removed and no successor
Administrative Agent has been appointed, the Lenders may perform all the
duties of the Administrative Agent hereunder and the Borrower shall make
all payments in respect of the Obligations to the applicable Lender and for
all other purposes shall deal directly with the Lenders. No successor
Administrative Agent shall be deemed to be appointed hereunder until such
successor Administrative Agent has accepted the appointment. Any such
successor Administrative Agent shall be a commercial bank having capital
and retained earnings of at least $100,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
resigning or removed Administrative Agent. Upon the effectiveness of the
resignation or removal of the Administrative Agent, the resigning or
removed Administrative Agent shall be discharged from its duties and
obligations hereunder and under the Loan Documents. After the effectiveness
of the resignation or removal of an Administrative Agent, the provisions of
this Article XI shall continue in effect for the benefit of such
Administrative Agent in respect of any actions taken or omitted to be taken
by it while it was acting as the Administrative Agent hereunder and under
the other Loan Documents. In the event that there is a successor to the
Administrative Agent by merger, or the Administrative Agent assigns its
duties and obligations to an Affiliate pursuant to this Section 11.12, then
the term "Prime Rate" as used in this Agreement shall mean the prime rate,
base rate or other analogous rate of the new Administrative Agent.
11.13. Agents' and Arrangers' Fees. The Borrower agrees to pay to
the Agents and the Arrangers the fees agreed to by the Borrower pursuant to
those certain letter agreements dated December 17, 1999, or as otherwise
agreed from time to time.
11.14. Delegation to Affiliates. The Borrower and the Lenders
agree that the Administrative Agent may delegate any of its duties under
this Agreement to any of its Affiliates. Any such Affiliate (and such
Affiliate's directors, officers, agents and employees) which performs
duties in connection with this Agreement shall be entitled to the same
benefits of the indemnification, waiver and other protective provisions to
which the Administrative Agent is entitled under Articles X and XI.
11.15. Execution of Collateral Documents. The Lenders hereby
empower and authorize the Administrative Agent to execute and deliver to
the Borrower on their behalf the Pledge Agreement(s) and all related
agreements, documents or instruments as shall be necessary or appropriate
to effect the purposes of the Pledge Agreement(s).
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11.16. Collateral and Guaranty Releases. The Lenders hereby
empower and authorize the Administrative Agent to execute and deliver to
the Borrower or the applicable Subsidiary on behalf of the Lenders any
agreements, documents or instruments as shall be necessary or appropriate
to effect any releases of any entities' liability with respect to the
Subsidiary Guaranty or release of any collateral pledged pursuant to any
Pledge Agreement in connection with any transactions which shall be
permitted by the terms hereof or of any other Loan Document or which shall
otherwise have been approved in writing by the Required Lenders (or, if
required by the terms of Section 9.2, all of the Lenders), and the
Administrative Agent shall be obligated to execute and deliver to the
Borrower such releases in connection with any such permitted transactions.
ARTICLE XII: SETOFF; RATABLE PAYMENTS
12.1. Setoff. In addition to, and without limitation of, any
rights of the Lenders under applicable law, if the Borrower becomes
insolvent, however evidenced, or any Default occurs, any and all deposits
(including all account balances, whether provisional or final and whether
or not collected or available) and any other Indebtedness at any time held
or owing by any Lender or any Affiliate of any Lender to or for the credit
or account of the Borrower may be offset and applied toward the payment of
the Obligations owing to such Lender whether or not the Obligations, or any
part hereof, shall then be due.
12.2. Ratable Payments. If any Lender, whether by setoff or
otherwise, has payment made to it upon its Obligations (other than payments
received pursuant to Section 4.1, 4.2, 4.4 or 4.5) in a greater proportion
than that received by any other Lender, such Lender agrees, promptly upon
demand, to purchase a portion of the Loans held by the other Lenders so
that after such purchase each Lender will hold its ratable proportion of
Loans. If any Lender, whether in connection with setoff or amounts which
might be subject to setoff or otherwise, receives collateral or other
protection for its Obligations or such amounts which may be subject to
setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral
ratably. In case any such payment is disturbed by legal process, or
otherwise, appropriate further adjustments shall be made.
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
13.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower
and the Lenders, the Agent, the Arrangers and their respective successors
and assigns, except that (i) the Borrower shall not have the right to
assign its rights or obligations under the Loan Documents and (ii) any
assignment by any Lender must be made in compliance with Section 13.3.
Notwithstanding clause (ii) of this Section, any Lender may at any time,
without the consent of the Borrower or the Administrative Agent, assign all
or any portion of its rights under this Agreement and any Note to a Federal
Reserve Bank; provided, however, that no such assignment to a Federal
Reserve Bank shall release the transferor Lender from its obligations
hereunder. The Administrative Agent may treat the Person which made any
Loan or which holds any Note as the owner thereof for all purposes hereof
unless and until such Person complies with Section 13.3 in the case of an
assignment thereof or, in the case of any other transfer, a written notice
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of the transfer is filed with the Administrative Agent. Any assignee or
transferee of the rights to any Loan or any Note agrees by acceptance of
such transfer or assignment to be bound by all the terms and provisions of
the Loan Documents. Any request, authority or consent of any Person, who at
the time of making such request or giving such authority or consent is the
owner of the rights to any Loan (whether or not a Note has been issued in
evidence thereof), shall be conclusive and binding on any subsequent
holder, transferee or assignee of the rights to such Loan.
13.2. Participations.
13.2.1 Permitted Participants; Effect. Any Lender may, in
the ordinary course of its business and in accordance with
applicable law, at any time sell to one or more banks or other
entities ("Participants") participating interests in any Loan
owing to such Lender, any Note held by such Lender, any Commitment
of such Lender or any other interest of such Lender under the Loan
Documents. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's
obligations under the Loan Documents shall remain unchanged, such
Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations, such Lender shall remain
the owner of its Loans and the holder of any Note issued to it in
evidence thereof for all purposes under the Loan Documents, all
amounts payable by the Borrower under this Agreement shall be
determined as if such Lender had not sold such participating
interests, and the Borrower and the Administrative Agent shall
continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under the
Loan Documents.
13.2.2. Voting Rights. Each Lender shall retain the sole
right to approve, without the consent of any Participant, any
amendment, modification or waiver of any provision of the Loan
Documents other than any amendment, modification or waiver with
respect to any Loan or Commitment in which such Participant has an
interest which forgives principal, interest or fees or reduces the
interest rate or fees payable with respect to any such Loan or
Commitment, extends the Commitment Termination Date, the
Syndicated Loan Termination Date or the Converted Loan Termination
Date (other than as expressly permitted by Section 2.2(b)),
postpones any date fixed for any regularly-scheduled payment of
principal of, or interest or fees on, any such Loan or Commitment
(other than as expressly permitted by Section 2.2(b)), releases
any guarantor of any such Loan or releases all or substantially
all of the collateral, if any, securing any such Loan.
13.2.3. Benefit of Setoff. The Borrower agrees that each
Participant shall be deemed to have the right of setoff provided
in Section 12.1 in respect of its participating interest in
amounts owing under the Loan Documents to the same extent as if
the amount of its participating interest were owing directly to it
as a Lender under the Loan Documents, provided that each Lender
shall retain the right of setoff provided in Section 12.1 with
respect to the amount of participating interests sold to each
Participant. The Lenders agree to share with each Participant, and
each Participant, by exercising the right of setoff provided in
Section 12.1, agrees to share with each Lender, any amount
received pursuant to the exercise of its right of setoff, such
amounts to be shared in accordance with Section 12.2 as if each
Participant were a Lender.
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<PAGE>
13.3. Assignments.
13.3.1. Permitted Assignments; Substitution of a Lender.
(a) Permitted Assignments. Any Lender may, in the
ordinary course of its business and in accordance with applicable
law, at any time assign to one or more banks or other entities
("Purchasers") all or any part of its rights and obligations under
the Loan Documents. Such assignment shall be substantially in the
form of Exhibit D or in such other form as may be agreed to by the
parties thereto. The consent of the Borrower and the
Administrative Agent shall be required prior to an assignment
becoming effective with respect to a Purchaser which is not a
Lender or an Affiliate thereof; provided, however, the consent of
the Borrower shall not be required if (i) a Default or Unmatured
Default has occurred and is continuing or (ii) if such assignment
is to another Lender or an Affiliate of any Lender. Such consent
shall not be unreasonably withheld or delayed. Unless the Borrower
and the Administrative Agent otherwise consent (provided, however
that if a Default has occurred and is continuing, the consent of
the Borrower shall not be required), each such assignment shall be
in an amount not less than the lesser of (i) $5,000,000 or (ii)
the remaining amount of the assigning Lender's Commitment
(calculated as at the date of such assignment) or, after the
earlier of the Conversion Date or the Commitment Termination Date,
the remaining amount of the assigning Lender's Outstanding Credit
Exposure.
(b) Substitution of a Lender. The Borrower may, at its
sole expense and effort, require any Lender to transfer and
assign, without recourse (in accordance with this Section 13.3)
all (but not less than all) of its interests, rights and
obligations under this Agreement to an assignee which shall assume
such assigned obligations (which assignee may be another Lender,
if a Lender accepts such assignment); provided, that (i) such
assignment shall not conflict with any law, rule or regulation or
order of any court or other governmental authority, (ii) the
Borrower shall have received a written consent of the
Administrative Agent in the case of an entity that is not a
Lender, which consent shall not be unreasonably withheld, (iii)
the Borrower or such assignee shall have paid to the assigning
Lender in immediately available funds the principal of and
interest accrued to the date of such payment on the Loans made by
it hereunder and all other amounts owed to it hereunder and the
fee payable to the Administrative Agent pursuant to Section 13.3.2
and (iv) nothing in the foregoing is intended or shall be
construed as obligating the Administrative Agent or any Lender to
locate such an assignee.
13.3.2. Effect; Effective Date. Upon (i) delivery to the
Administrative Agent of a notice of assignment, substantially in
the form attached as Exhibit 1 to Exhibit D (a "Notice of
Assignment"), together with any consents required by Section
13.3.1, and (ii) payment of a $3,500 fee to the Administrative
Agent for processing such assignment (including assignments to
other Lenders, but excluding assignments from a Lender to an
Affiliate of such Lender), such assignment shall become effective
on the effective date specified in such Notice of Assignment. The
Notice of Assignment shall contain a representation by the
Purchaser to the effect that none of the consideration used to
make the purchase of the Commitment and Loans under the applicable
assignment agreement are "plan assets" as defined under ERISA and
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<PAGE>
that the rights and interests of the Purchaser in and under the
Loan Documents will not be "plan assets" under ERISA. On and after
the effective date of such assignment, such Purchaser shall for
all purposes be a Lender party to this Agreement and any other
Loan Document executed by or on behalf of the Lenders and shall
have all the rights and obligations of a Lender under the Loan
Documents, to the same extent as if it were an original party
hereto, and no further consent or action by the Borrower, the
Lenders or the Administrative Agent shall be required to release
the transferor Lender with respect to the percentage of the
Aggregate Commitment and Loans assigned to such Purchaser. Upon
the consummation of any assignment to a Purchaser pursuant to this
Section 13.3.2, the transferor Lender, the Administrative Agent
and the Borrower shall, if the transferor Lender or the Purchaser
desires that its Loans be evidenced by Notes, make appropriate
arrangements so that new Notes or, as appropriate, replacement
Notes are issued to such transferor Lender and new Notes or, as
appropriate, replacement Notes, are issued to such Purchaser, in
each case in principal amounts reflecting their respective
Commitments (or, after the earlier of the Conversion Date or the
Commitment Termination Date, their respective Outstanding Credit
Exposure), as adjusted pursuant to such assignment.
13.4. Dissemination of Information. The Borrower authorizes each
Lender to disclose to any Participant or Purchaser or any other Person
acquiring an interest in the Loan Documents by operation of law (each a
"Transferee") and any prospective Transferee any and all information in
such Lender's possession concerning the creditworthiness of the Borrower
and its Subsidiaries, including without limitation any information
contained in any Reports; provided that each Transferee and prospective
Transferee agrees to be bound by Section 10.11 of this Agreement.
13.5. Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the
transferor Lender shall cause such Transferee, concurrently with the
effectiveness of such transfer, to comply with the provisions of Section
4.5(iv).
ARTICLE XIV: NOTICES
14.1. Notices. Except as otherwise permitted by Section 2.15 with
respect to borrowing notices, all notices, requests and other
communications to any party hereunder shall be in writing (including
electronic transmission, facsimile transmission or similar writing) and
shall be given to such party: (x) in the case of the Borrower and the
Administrative Agent, at its address or facsimile number set forth on the
signature pages hereof, (y) in the case of any Lender, at its address or
facsimile number set forth below its signature hereto or (z) in the case of
any party, at such other address or facsimile number as such party may
hereafter specify for the purpose by notice to the Administrative Agent and
the Borrower in accordance with the provisions of this Section 14.1. Each
such notice, request or other communication shall be effective (i) if given
by facsimile transmission, when transmitted to the facsimile number
specified in this Section and confirmation of receipt 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 (or, in the case of electronic
transmission, received) at the address specified in this Section; provided
that notices to the Administrative Agent under Article II shall not be
effective until received.
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<PAGE>
14.2. Change of Address. The Borrower, the Administrative Agent and
any Lender may each change the address for service of notice upon it by a
notice in writing to the other parties hereto.
ARTICLE XV: COUNTERPARTS
This Agreement may be executed in any number of counterparts, all
of which taken together shall constitute one agreement, and any of the
parties hereto may execute this Agreement by signing any such counterpart.
This Agreement shall be effective when it has been executed by the
Borrower, the Administrative Agent and the Lenders and each party has
notified the Administrative Agent by facsimile transmission or telephone
that it has taken such action.
ARTICLE XVI: CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER
OF JURY TRIAL
16.1. CHOICE OF LAW. THE ADMINISTRATIVE AGENT ACCEPTS THIS
AGREEMENT, ON BEHALF OF ITSELF AND THE LENDERS, AT CHICAGO, ILLINOIS BY
ACKNOWLEDGING AND AGREEING TO IT THERE. ANY DISPUTE BETWEEN THE BORROWER
AND THE AGENT OR ANY LENDER OR OTHER HOLDER OF OBLIGATIONS ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS (OTHER THAN THOSE EXPRESSLY CONTAINING A CONTRARY CHOICE OF LAW
PROVISION), AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE,
SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING 735 ILCS
105/5-1 ET SEQ. BUT OTHERWISE WITHOUT REGARD TO THE CONFLICTS OF LAWS
PROVISIONS) OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO APPLICABLE
FEDERAL LAWS.
16.2. CONSENT TO JURISDICTION.
(A) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B),
EACH OF THE PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT
OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR
OTHERWISE, SHALL BE RESOLVED EXCLUSIVELY BY STATE OR FEDERAL COURTS LOCATED
IN CHICAGO, ILLINOIS, BUT THE PARTIES HERETO ACKNOWLEDGE THAT ANY APPEALS
FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF
CHICAGO, ILLINOIS. EACH OF THE PARTIES HERETO WAIVES IN ALL DISPUTES
BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY OBJECTION THAT IT MAY HAVE TO
THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(B) OTHER JURISDICTIONS. THE BORROWER AGREES THAT THE
ADMINISTRATIVE AGENT OR ANY LENDER SHALL HAVE THE RIGHT TO PROCEED AGAINST
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THE BORROWER OR ITS PROPERTY IN A COURT IN ANY LOCATION TO ENABLE SUCH
PERSON TO (1) OBTAIN PERSONAL JURISDICTION OVER THE BORROWER OR (2) REALIZE
ON ANY COLLATERAL FOR THE OBLIGATIONS OR TO ENFORCE A JUDGMENT OR OTHER
COURT ORDER ENTERED IN FAVOR OF SUCH PERSON. THE BORROWER AGREES THAT IT
WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY
SUCH PERSON TO REALIZE ON ANY COLLATERAL FOR THE OBLIGATIONS OR TO ENFORCE
A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH PERSON. THE BORROWER
WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH
SUCH PERSON HAS COMMENCED A PROCEEDING DESCRIBED IN THIS SUBSECTION (B).
16.3. WAIVER OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT
AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
<PAGE>
IN WITNESS WHEREOF, the Borrower, the Lenders and the
Administrative Agent have executed this Agreement as of the date first
above written.
CORDANT TECHNOLOGIES INC.
By:
Title:
Notice Address:
Attention:
Telephone:
FAX:
<PAGE>
BANK ONE, NA (Main Office Chicago),
Individually as a Lender and as Administrative Agent
By:
Title:
Notice Address:
Attention:
Telephone:
FAX:
<PAGE>
ABN AMRO BANK N.V.
Individually as a Lender and as Syndication Agent
By:
Title:________________________________
By:_________________________________
Title:________________________________
Notice Address:
Attention:
Telephone:
FAX:
<PAGE>
[OTHER LENDERS]
By:
Title:________________________________
Notice Address:
Attention:
Telephone:
FAX:
<PAGE>
<TABLE>
<CAPTION>
Pricing Schedule Page 2
PRICING SCHEDULE
- ---------------------- ------------------ -------------------- -------------------- ------------------ ------------------
LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
- ---------------------- ------------------ -------------------- -------------------- ------------------ ------------------
<S> <C> <C> <C> <C> <C>
Applicable Facility 0.10% 0.125% 0.15% 0.175% 0.20%
Fee Rate
- ---------------------- ------------------ -------------------- -------------------- ------------------ ------------------
- ---------------------- ------------------ -------------------- -------------------- ------------------ ------------------
Applicable Margin 0.525% 0.75% 0.85% 0.95% 1.175%
- ---------------------- ------------------ -------------------- -------------------- ------------------ ------------------
</TABLE>
For the purposes of this Schedule, the following terms have the
following meanings, subject to the final paragraph of this Schedule:
"Level I Status" exists at any date if, on such date, the
Borrower's S&P Rating is BBB+ or better or the Borrower's Moody's Rating is
Baa1 or better.
"Level II Status" exists at any date if, on such date, (i) the
Borrower has not qualified for Level I Status and (ii) the Borrower's S&P
Rating is BBB or the Borrower's Moody's Rating is Baa2.
"Level III Status" exists at any date if, on such date, (i) the
Borrower has not qualified for Level I Status or Level II Status and (ii)
the Borrower's S&P Rating is BBB- and the Borrower's Moody's Rating is
Baa3.
"Level IV Status" exists at any date if, on such date, (i) the
Borrower has not qualified for Level I Status, Level II Status or Level III
Status and (ii) (a) the Borrower's S&P Rating is BBB- and the Borrower's
Moody's Rating is Ba1 or (b) the Borrower's S&P Rating is BB+ and the
Borrower's Moody's Rating is Baa3.
"Level V Status" exists at any date if, on such date, the Borrower
has not qualified for Level I Status, Level II Status, Level III Status or
Level IV Status.
"Moody's Rating" means, at any time, the rating issued by Moody's
and then in effect with respect to the Borrower's senior unsecured
long-term debt securities without third-party credit enhancement.
"S&P Rating" means, at any time, the rating issued by S&P, and
then in effect with respect to the Borrower's senior unsecured long-term
debt securities without third-party credit enhancement.
"Status" means Level I Status, Level II Status, Level III Status,
Level IV Status or Level V Status.
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<PAGE>
The Applicable Margin and Applicable Fee Rate shall be determined
in accordance with the foregoing table based on the Borrower's Status as
determined from its then-current Moody's and S&P Ratings. The credit rating
in effect on any date for the purposes of this Schedule is that in effect
at the close of business on such date. If at any time the Borrower has no
Moody's Rating or no S&P Rating, Level V Status shall exist. If the
Borrower is split-rated and the ratings differential is one level, the
higher rating will apply. If the Borrower is split-rated and the ratings
differential is two levels or more, the rating level one below the higher
level will apply.
