<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-END> DEC-31-1994
<CASH> 43,500
<SECURITIES> 0
<RECEIVABLES> 154,800
<ALLOWANCES> 14,100
<INVENTORY> 194,200
<CURRENT-ASSETS> 413,500
<PP&E> 537,200
<DEPRECIATION> 320,300
<TOTAL-ASSETS> 804,900
<CURRENT-LIABILITIES> 229,400
<BONDS> 178,200
<COMMON> 3,000
0
0
<OTHER-SE> 199,200
<TOTAL-LIABILITY-AND-EQUITY> 804,900
<SALES> 242,600
<TOTAL-REVENUES> 242,600
<CGS> 191,400
<TOTAL-COSTS> 191,400
<OTHER-EXPENSES> 48,500
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,000
<INCOME-PRETAX> (2,300)
<INCOME-TAX> 800
<INCOME-CONTINUING> (3,100)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,100)
<EPS-PRIMARY> (.16)
<EPS-DILUTED> (.16)
</TABLE>
<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
(X) Quarterly report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended December 31, 1994.
or
( ) Transition report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934
Commission file number 1-2883
OUTBOARD MARINE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-1589715
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
100 Sea Horse Drive
Waukegan, Illinois 60085
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (708) 689-6200
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
------- -------
Number of shares of Common Stock of $0.15 par value outstanding
at January 31, 1995 were 19,700,102 shares (not including
195,214 treasury shares).
Exhibit Index Page 12.
-1-
<PAGE> 2
OUTBOARD MARINE CORPORATION
FORM 10-Q
PART I, ITEM 1
FINANCIAL INFORMATION
FINANCIAL STATEMENTS
December 31, 1994
Financial statements required by this form:
Page
----
Statement of Consolidated Earnings 3
Condensed Statement of Consolidated Financial Position 4
Statement of Consolidated Cash Flows 5
In the opinion of management, the information furnished reflects
all adjustments necessary for a fair statement of the results of
the interim periods and all such adjustments are of a normal
recurring nature. These financial statements should be read in
conjunction with the financial statements and notes thereto
included in the Company's Annual Report on Form 10-K for the year
ended September 30, 1994.
-2-
<PAGE> 3
OUTBOARD MARINE CORPORATION
STATEMENT OF CONSOLIDATED EARNINGS
(UNAUDITED)
Three Months Ended
December 31
--------------------
(In millions except amounts per share) 1994 1993
-------- -------
NET SALES $ 242.6 $ 190.8
COST OF GOODS SOLD 191.4 154.4
-------- -------
Gross earnings 51.2 36.4
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 50.1 41.8
-------- -------
Earnings (loss) from operations 1.1 (5.4)
NON-OPERATING EXPENSE (INCOME):
Interest expense 5.0 5.0
Other, net (1.6) (1.9)
-------- -------
3.4 3.1
-------- -------
Earnings (loss) before provision for
income taxes (2.3) (8.5)
PROVISION FOR INCOME TAXES 0.8 0.8
-------- -------
Net earnings (loss) $ (3.1) $ (9.3)
======== ========
NET EARNINGS (LOSS) PER SHARE OF COMMON STOCK
based on weighted average common shares and
common stock equivalents outstanding:
Primary $ (0.16) $ (0.47)
======== ========
Fully diluted $ (0.16) $ (0.47)
======== ========
DIVIDENDS PAID PER SHARE $ 0.10 $ 0.10
======== ========
AVERAGE SHARES OF COMMON STOCK AND COMMON
STOCK EQUIVALENTS OUTSTANDING (if applicable) 19.9 19.8
-3-
<PAGE> 4
OUTBOARD MARINE CORPORATION
CONDENSED STATEMENT OF CONSOLIDATED FINANCIAL POSITION
(UNAUDITED)
<TABLE>
<CAPTION>
December 31 September 30
(In millions) 1994 1993 1994
-------- -------- --------
<S> <C> <C> <C>
ASSETS
- ------
CURRENT ASSETS:
Cash and cash equivalents $ 43.5 $ 44.5 $ 80.3
Receivables 140.7 126.9 150.5
Inventories-
Finished products 75.8 72.7 58.7
Raw material, work in process
and service parts 118.4 87.6 105.0
-------- -------- --------
Total inventory 194.2 160.3 163.7
Other current assets 35.1 32.1 35.3
-------- -------- --------
Total current assets 413.5 363.8 429.8
PRODUCT TOOLING, net 49.5 39.2 48.3
INTANGIBLES 31.8 32.8 32.1
OTHER ASSETS 93.2 86.5 89.8
PLANT AND EQUIPMENT, at cost 537.2 547.5 535.6
Less-Accumulated depreciation 320.3 336.5 318.5
-------- -------- --------
216.9 211.0 217.1
-------- -------- --------
Total assets $ 804.9 $ 733.3 $ 817.1
======== ======== ========
-4-
<PAGE> 5
LIABILITIES AND SHAREHOLDERS' INVESTMENT
- ----------------------------------------
CURRENT LIABILITIES:
Notes payable $ 25.0 $ - $ -
Accounts payable 79.4 49.1 102.9
Accrued and other 125.0 155.5 130.7
-------- -------- --------
Total current liabilities 229.4 204.6 233.6
LONG-TERM DEBT 178.2 183.1 178.2
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS 102.0 105.9 102.3
OTHER NON-CURRENT LIABILITIES 93.1 88.9 94.0
SHAREHOLDERS' INVESTMENT:
Common stock and capital surplus 110.2 107.1 109.3
Retained earnings 101.1 54.4 106.3
Cumulative translation adjustments (9.1) (10.7) (6.6)
-------- -------- --------
Total shareholders' investment 202.2 150.8 209.0
-------- -------- --------
Total liabilities and
shareholders' investment $ 804.9 $ 733.3 $ 817.1
======== ======== ========
SHARES OF COMMON STOCK OUTSTANDING 20.0 19.8 20.0
</TABLE>
-5-
<PAGE> 6
OUTBOARD MARINE CORPORATION
STATEMENT OF CONSOLIDATED CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
December 31
---------------------
(In millions) 1994 1993
------- -------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (3.1) $ (9.3)
Adjustments to reconcile net loss to net cash
provided by operations:
Depreciation and amortization 10.8 10.7
Changes in current accounts excluding the effects
of noncash transactions
Decrease in accounts receivable 10.2 9.4
(Increase) in inventory (31.2) (7.2)
Decrease (increase) in other current assets 0.3 (1.2)
(Decrease) in accounts payable and accrued
liabilities (31.5) (45.8)
Other, net (1.3) (0.8)
------- -------
Net cash used for operating activities (45.8) (44.2)
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for plant and equipment, and tooling (14.0) (14.0)
Other, net (1.1) 1.4
------- -------
Net cash used for investing activities (15.1) (12.6)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in short-term debt 25.0 -
Cash dividends paid (2.0) (2.0)
Other, net 1.1 0.6
------- -------
Net cash provided by (used for)
financing activities 24.1 (1.4)
EXCHANGE RATE EFFECT ON CASH - (1.7)
------- -------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (36.8) (59.9)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 80.3 104.4
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 43.5 $ 44.5
======= =======
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Interest paid $ 3.6 $ 3.2
Income taxes paid 1.5 4.0
</TABLE>
-6-
<PAGE> 7
OUTBOARD MARINE CORPORATION
FORM 10-Q
PART I, ITEM 2
FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
December 31, 1994
RESULTS OF OPERATIONS
The company reported a net loss of $3.1 million, or 16
cents per share, for this year's first quarter compared with a net
loss of $9.3 million, or 47 cents per share, for the first quarter
of 1994. The company normally incurs a loss for the first quarter
because of the seasonality of the business.
Fueling that bottom line growth was a 27 percent sales
increase. Sales grew to $242.6 million from $190.8 million in the
first quarter last year. Every one of the operating groups
contributed to the sales increase.
U.S. sales increased 28 percent. In the U.S., all
operating groups achieved sales increases of 20 percent or better,
including a 45 percent increase in the OMC Fishing Boat Group's
sales and a 37 percent increase in the Recreational Boat Group's
sales. The Recreational Boat Group was the hardest hit of the U.S.
operating groups during the industry downturn.
Sales outside the U.S. increased 24 percent. OMC Asia
led the group with a sales increase of 53 percent. Canada and
Latin American achieved sales increases of 36 percent and 30
percent, respectively, and the company was especially pleased by an
11 percent sales increase in Europe. The European marine products
market has been depressed, and the company is very encouraged by
this solid sign of growth.
Market demand was primarily responsible for increased
sales in the past quarter as was the resolution of some outboard
manufacturing problems that constrained sales in the fourth quarter
of 1994. First quarter sales benefited from additional backorders
that were carried from the fourth quarter and filled in the first
quarter.
The company largely solved its manufacturing problems and
expects to have the backorder situation worked down to basically
normal levels in the second quarter. The company is well prepared
to meet dealer product needs in the spring selling season, and the
company believes it can meet market demand for the remainder of the
year with the operations it is currently running. The company does
not see the need at this time to reactivate manufacturing plants
mothballed during the last industry downturn.
-7-
<PAGE> 8
Operating expenses increased in the first quarter,
primarily due to increased engineering and marketing costs. The
company plans to make the investment necessary to develop the
products that will win sales for it now and in the future. In
spite of increased new product development spending in the first
quarter, gross earnings increased to $51.2 million, up from $36.4
million in the same quarter last year. Our gross margin improved
by more than two percentage points, or 11 percent.
In spite of increased marketing spending, operating
results improved by $6.5 million. This operating line improvement
is the product not just of market recovery, but also of the
restructuring work the company did over the past several years to
improve the efficiency of its operations. While selling, general
and administrative expenses increased in absolute dollars in the
first quarter, they were only 21 percent of sales. This is down
from nearly 22 percent of sales in the first quarter of 1994, and
down from 27 percent of sales in the first quarter of 1993.
The provision for income taxes of $.8 million for the
three months ended December 31, 1994 and 1993, respectively,
resulted from expected taxes payable relating to certain
international subsidiaries.
It is not appropriate to compare the results of
operations for the current quarter with those of the preceding
quarter because of the seasonal nature of the company's business.
-8-
<PAGE> 9
OUTBOARD MARINE CORPORATION
FORM 10-Q
PART I, ITEM 2
FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
December 31, 1994
FINANCIAL CONDITION
Due to the seasonal nature of the company's business, it
is more appropriate to compare the December 31, 1994 Condensed
Statement of Financial Position with December 31, 1993. The
company's ratio of current assets to current liabilities was 1.8 at
both December 31, 1994 and December 31, 1993. Current assets of
$413.5 million at December 31, 1994 increased $49.7 million as
compared to current assets of $363.8 million at December 31, 1993.
Receivables increased $13.8 million due primarily to higher sales
in the current quarter and to a miscellaneous receivable in 1994 on
a tax interest adjustment. Inventories increased $33.9 million due
primarily to higher manufacturing activity. Other current assets
increased $3.0 million due primarily to deferred income tax
benefits.
Other assets increased $6.7 million due primarily to the
adoption of SFAS 109 and increased pension assets. Product tooling
increased $10.3 million due primarily to the introduction of new
outboard motor models.
Current liabilities increased by $24.8 million to $229.4
million as of December 31, 1994 compared to $204.6 million at
December 31, 1993. Notes payable increased $25.0 million at
December 31, 1994. The $30.3 million increase in accounts payable
resulted primarily from increased manufacturing activity. The
decrease in accrued and other resulted from higher restructuring
accruals at December 31, 1993 and decreased current maturities of
long-term debt at December 31, 1994.
The company's total debt to total capitalization at
December 31, 1994 was 50.2 percent compared to 56.2 percent at
December 31, 1993. Notes payable increased $25.0 million at
December 31, 1994 while long-term debt decreased $4.9 million and
current maturities of long-term debt decreased $10.0 million from
the previous year.
In December 1994, the company amended and restated its
revolving credit agreement with its banks. This agreement provides
for borrowings of up to $200 million and expires December 31, 1997.
The company believes with the current capital structure
and the use of funds to be generated by operating activities,
existing cash and marketable securities, additional funds available
from existing worldwide credit lines, and long-term debt and equity
sources, it has sufficient resources to meet future capital
requirements.
-9-
<PAGE> 10
OUTBOARD MARINE CORPORATION
FORM 10-Q
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The company settled with the Michigan Department of Natural
Resources for past costs incurred and natural resource damages
resulting from the alleged release of hazardous substances at the
Cadillac Industrial Park. The settlement was within the amount
previously accrued by the company for this site.
Item 4. Submission of Matters to a Vote of Security Holders
At the Registrant's Annual Meeting of Shareholders held on January
19, 1995, there were 19,920,563 shares outstanding and entitled to
notice of and to vote at the meeting. The following matters were
voted on, with the results indicated:
Richard T. Lindgren, Richard J. Stegemeier and Richard F.
Teerlink were each elected a Director for a three year term
expiring at the Company's 1998 Annual Meeting of Shareholders
with votes of 17,339,202 for and 135,857 withheld, 17,340,416
for and 134,643 withheld and 17,213,355 for and 261,704
withheld, respectively. The term of office as director
continued after the Annual Meeting of Shareholders for Frank
Borman, James C. Chapman, William C. France, Urban T. Kuechle,
J. W. Marriott, Jr. and Charles D. Strang.
The appointment of Arthur Andersen LLP as the Registrant's
independent accountants was confirmed with 17,403,727 shares
voting "FOR" the confirmation, 18,510 shares voting "AGAINST"
the confirmation and 52,822 shares abstaining from voting.
-10-
<PAGE> 11
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits reference is made to the Exhibit Index on Page
12.
(b) Reports on Form 8-K. The Registrant did not file any
reports on Form 8-K for the fiscal
quarter ended December 31, 1994.
S I G N A T U R E
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
OUTBOARD MARINE CORPORATION
Signature Title Date
_______________________ ___________________________ ____________________
By /s/ James R. Maurice Vice President & Controller February 8, 1995
_______________________ ___________________________ ____________________
JAMES R. MAURICE
-11-
<PAGE> 12
OUTBOARD MARINE CORPORATION
EXHIBIT INDEX
Exhibit 4: Instruments defining the rights of security holders
including indentures:
(A) With respect to the Agreement of Outboard Marine
Corporation, reference is made to Exhibit 4(A) to
the Registrant's Annual Report on Form 10-K for the
fiscal year ended September 30, 1994, which is
incorporated herein by reference.
(B) With respect to rights of Series A, Junior
Participating Preferred Stock, reference is
made to the Registrant's report on Form 8-K filed on
October 17, 1990, which is incorporated herein by
reference.
(C) With respect to rights of holders of the
Registrant's 9-1/8% Sinking Fund Debentures due
2017, reference is made to Exhibit 4(A) in the
Registrant's Registration Statement Number 33-12759
filed on March 20, 1987, which is incorporated
herein by reference.
(D) With respect to rights of holders of Registrant's 7%
Convertible Subordinated Debentures due 2002,
reference is made to Registrant's Registration
Statement Number 33-47354 filed on April 28, 1992,
which is incorporated herein by reference.
Exhibit 10: Material contracts:
(A) With respect to the Registrant's 1987 Stock Option
and Performance Unit Plan, reference is made to
Exhibit 10(D) to the Registrant's Annual Report on
Form 10-K for the fiscal year ended September 30,
1987, which is incorporated herein by reference.
-12-
<PAGE> 13
(B) With respect to the OMC Executive Bonus Plan,
reference is made to Exhibit 10(C) to the
Registrant's Annual Report on Form 10-K for the
fiscal year ended September 30, 1990, which is
incorporated herein by reference.
(C) With respect to the OMC Executive Equity Incentive
Plan, reference is made to Exhibit 10(D) to the
Registrant's Annual Report on Form 10-K for the
fiscal year ended September 30, 1990, which is
incorporated herein by reference.
(D) With respect to the OMC 1994 Long-Term Incentive
Plan, reference is made to Exhibit C, to Outboard
Marine Corporation's Notice of Annual Meeting and
Proxy Statement prepared in connection with the
January 20, 1994 Annual Meeting of Shareholders,
which is incorporated herein by reference.
(E) With respect to Severance Agreements for all elected
officers of the Registrant (except Mr. Chapman),
reference is made to Exhibit 10(E) of the
Registrant's Annual Report on Form 10-K for the
fiscal year ended September 30, 1988, which is
incorporated herein by reference.
(F) With respect to the Severance Agreement for Mr.
Chapman, reference is made to Exhibit 10(F) of the
Registrant's Annual Report on Form 10-K for the
fiscal year ended September 30, 1988, which is
incorporated herein by reference.
(G) With respect to the Registrant's Revolving Credit
Agreement dated as of December 30, 1994, a copy
thereof is attached hereto without its schedules and
exhibits.
Exhibit 11: Statements regarding computation of per share
earnings:
A statement regarding the computation of per share
earnings is attached hereto as Exhibit 11.
Exhibit 19: Report furnished to security holders:
A copy of the Registrant's Shareholders Report for
the fiscal quarter ended December 31, 1994, is
attached hereto as Exhibit 19.
Exhibit 27: Financial data schedules:
This information is filed only in the electronic filing.
-13-
<PAGE> 14
EXHIBIT 11
OUTBOARD MARINE CORPORATION AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
(In millions except amounts per share)
Three Months Ended
December 31
-------------------------
1994 1993
-------- --------
Primary Earnings (Loss) Per Share:
Net earnings (loss) $ (3.1) $ (9.3)
======== ========
Weighted average number of shares 19.9 19.8
Common stock equivalents (stock options) * *
-------- --------
Average shares outstanding 19.9 19.8
======== ========
Primary earnings (loss) per share $ (0.16) $ (0.47)
======== ========
Fully Diluted Earnings (Loss) per Share:
Net earnings (loss) $ (3.1) $ (9.3)
Add: After-tax interest and
related expense amortiza-
tion on 7% convertible
subordinated debentures 0.8 0.8
-------- --------
Net earnings (loss) adjusted $ (2.3) $ (8.5)
======== ========
Weighted average number of shares 19.9 19.8
Common stock equivalents (stock options) 0.1 0.1
Weighted average common
shares assuming
conversion of 7% convertible
subordinated debentures 3.4 3.4
-------- --------
Average shares outstanding 23.4 23.3
======== ========
Fully diluted earnings (loss) per share $ ** $ **
======== ========
* The computation of primary earnings per share of common stock
is computed without common stock equivalents because inclusion
of common stock equivalents is antidilutive.
** The computation of fully diluted earnings per share of
common stock is antidilutive; therefore, the amount reported
for primary and fully diluted earnings per share is the same.
-14-
<PAGE> 15
EXHIBIT 19
January 19, 1995
To Our Shareholders:
I am very pleased to tell you that OMC has turned in a very strong
first quarter. In fact, in terms of bottom line results, it was the
strongest first quarter performance this company has achieved since 1988.
We reported a net loss of $3.1 million, or 16 cents per share, for
this year's first quarter compared with a net loss of $9.3 million, or 47
cents per share, for the first quarter of 1994. As you know, we normally
incur a loss for the first quarter because of the seasonality of our
business. And a $6.2 million improvement on the bottom line is obviously
very positive.
Fueling that bottom line growth was a 27 percent sales increase. Our
sales grew to $242.6 million -- up from $190.8 million in the first quarter
last year. Every one of our operating groups contributed to the sales
increase.
Our U.S. sales increased 28 percent. In the U.S., all of our
operating groups achieved sales increases of 20 percent or better. We were
very pleased by a 45 percent increase in the OMC Fishing Boat Group's sales
and also by a 37 percent increase in the Recreational Boat Group's sales.
As you know, the Recreational Boat Group was the hardest hit of our U.S.
operating groups during the industry downturn.
Outside the U.S., our sales increased 24 percent. OMC Asia led the
group with a sales increase of 53 percent. Canada and Latin America
achieved sales increases of 36 percent and 30 percent, respectively and we
were especially pleased by an 11 percent sales increase in Europe. The
European marine products market has been depressed, and we're very
encouraged by this solid sign of growth.
Market demand boosted our sales in the past quarter. But so did the
resolution of some outboard manufacturing problems that constrained our
sales in the fourth quarter of 1994. Our first quarter sales benefitted
from additional backorders that we carried from the fourth quarter and
filled in the first quarter.
-15-
<PAGE> 16
We've largely solved our manufacturing problems and we expect to have
our backorder situation worked down to basically normal levels in the
current quarter. We're well prepared to meet our dealers' product needs in
the spring selling season, and we believe we can meet market demand for the
remainder of the year with the operations we currently are running. We
don't see the need at this time to reactivate manufacturing plants we
mothballed during the last industry downturn. Our operating expenses
increased in the first quarter due primarily to increased engineering and
marketing costs. As we told you last quarter, we plan to make the investment
necessary to develop the products that will win sales for us, now and in
the future. But in spite of our increased new product development spending
in the first quarter, our gross earnings increased to $51.2 million, up
from $36.4 million in the same quarter last year. Our gross margin
improved by more than two percentage points -- or 11 percent.
In spite of our increased marketing spending, our operating results
improved by $6.5 million. This operating line improvement didn't happen by
accident. It's the product not just of market recovery, but also of the
restructuring work we did over the past several years to improve the
efficiency of our operations. While our selling, general and administrative
expenses increased in absolute dollars in the first quarter, they were only
20.65 percent of sales. That's down from nearly 22 percent of sales in the
first quarter of 1994, and down from 27 percent of sales in the first quarter
of 1993.
Clearly, we've created a more efficient company during the last
industry downturn. A company that is profiting from the upturn that's
gaining strength this year. Demonstrating its continuing confidence in our
progress, the board of directors on January 19 declared a cash dividend of
10 cents per share for the first quarter, payable February 24 to
shareholders of record February 10.
JAMES C. CHAPMAN
- ----------------
James C. Chapman
Chairman, President and
Chief Executive Officer
-16-
<PAGE> 17
OUTBOARD MARINE CORPORATION
STATEMENT OF CONSOLIDATED EARNINGS
(UNAUDITED)
Three Months Ended
December 31
--------------------
(In millions except amounts per share) 1994 1993
-------- -------
NET SALES $ 242.6 $ 190.8
COST OF GOODS SOLD 191.4 154.4
-------- -------
Gross earnings 51.2 36.4
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 50.1 41.8
-------- -------
Earnings (loss) from operations 1.1 (5.4)
NON-OPERATING EXPENSE (INCOME):
Interest expense 5.0 5.0
Other, net (1.6) (1.9)
-------- -------
3.4 3.1
-------- -------
Earnings (loss) before provision for
income taxes (2.3) (8.5)
PROVISION FOR INCOME TAXES 0.8 0.8
-------- -------
Net earnings (loss) $ (3.1) $ (9.3)
======== ========
NET EARNINGS (LOSS) PER SHARE OF COMMON STOCK
based on weighted average common shares and
common stock equivalents outstanding:
Primary $ (0.16) $ (0.47)
======== ========
Fully diluted $ (0.16) $ (0.47)
======== ========
DIVIDENDS PAID PER SHARE $ 0.10 $ 0.10
======== ========
AVERAGE SHARES OF COMMON STOCK AND COMMON
STOCK EQUIVALENTS OUTSTANDING (if applicable) 19.9 19.8
-17-
<PAGE> 18
OUTBOARD MARINE CORPORATION
CONDENSED STATEMENT OF CONSOLIDATED FINANCIAL POSITION
(UNAUDITED)
<TABLE>
<CAPTION>
December 31 September 30
(In millions) 1994 1993 1994
-------- -------- --------
<S> <C> <C> <C>
ASSETS
- ------
CURRENT ASSETS:
Cash and cash equivalents $ 43.5 $ 44.5 $ 80.3
Receivables 140.7 126.9 150.5
Inventories-
Finished products 75.8 72.7 58.7
Raw material, work in process
and service parts 118.4 87.6 105.0
-------- -------- --------
Total inventory 194.2 160.3 163.7
Other current assets 35.1 32.1 35.3
-------- -------- --------
Total current assets 413.5 363.8 429.8
PRODUCT TOOLING, net 49.5 39.2 48.3
INTANGIBLES 31.8 32.8 32.1
OTHER ASSETS 93.2 86.5 89.8
PLANT AND EQUIPMENT, at cost 537.2 547.5 535.6
Less-Accumulated depreciation 320.3 336.5 318.5
-------- -------- --------
216.9 211.0 217.1
-------- -------- --------
Total assets $ 804.9 $ 733.3 $ 817.1
======== ======== ========
-18-
<PAGE> 19
LIABILITIES AND SHAREHOLDERS' INVESTMENT
- ----------------------------------------
CURRENT LIABILITIES:
Notes payable $ 25.0 $ - $ -
Accounts payable 79.4 49.1 102.9
Accrued and other 125.0 155.5 130.7
-------- -------- --------
Total current liabilities 229.4 204.6 233.6
LONG-TERM DEBT 178.2 183.1 178.2
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS 102.0 105.9 102.3
OTHER NON-CURRENT LIABILITIES 93.1 88.9 94.0
SHAREHOLDERS' INVESTMENT:
Common stock and capital surplus 110.2 107.1 109.3
Retained earnings 101.1 54.4 106.3
Cumulative translation adjustments (9.1) (10.7) (6.6)
-------- -------- --------
Total shareholders' investment 202.2 150.8 209.0
-------- -------- --------
Total liabilities and
shareholders' investment $ 804.9 $ 733.3 $ 817.1
======== ======== ========
SHARES OF COMMON STOCK OUTSTANDING 20.0 19.8 20.0
</TABLE>
-19-
<PAGE> 20
EXHIBIT 10(G)
(CONFORMED COPY)
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
Dated as of December 30,1994
Among
OUTBOARD MARINE CORPORATION
THE BANKS NAMED ON THE SIGNATURE PAGES,
THE FIRST NATIONAL BANK OF CHICAGO ("Agent")
and
BANK OF AMERICA ILLINOIS ("Co-Agent")
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<PAGE> 21
TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
1.01. Certain Definitions . . . . . . . . . . . . . . . . . .
1.02. Financial Standards . . . . . . . . . . . . . . . . . .
ARTICLE II THE CREDIT . . . . . . . . . . . . . . . . . . . . . . . . .
2.01. Credit . . . . . . . . . . . . . . . . . . . . . . . .
2.02. Requests for Advances . . . . . . . . . . . . . . . .
2.03. Evidence of Credit Extensions . . . . . . . . . . . .
2.04. Computation of and Payment of Interest . . . . . . . .
2.05. Payment of Principal . . . . . . . . . . . . . . . .
2.06. (Intentionally Omitted) . . . . . . . . . . . . . . .
2.07. Facility Fee . . . . . . . . . . . . . . . . . . . . .
2.08. Agent's and Co-Agent's Fees . . . . . . . . . . . . .
2.09. Computations of Interest and Fees; Banking Day . . . .
2.10. Late Payment; Date of Receipt of Notices . . . . . . .
2.11. Method of Payment; Mistakes . . . . . . . . . . . . .
2.12. Optional Prepayment; Funding Losses on Any Prepayment
2.13. Reduction or Termination of Commitments . . . . . . .
2.14. Taxes . . . . . . . . . . . . . . . . . . . . . . . .
2.15. Reserves, Etc. . . . . . . . . . . . . . . . . . . . .
2.16. Illegality . . . . . . . . . . . . . . . . . . . . . .
2.17. Unavailability . . . . . . . . . . . . . . . . . . .
2.18. The Bid Facility . . . . . . . . . . . . . . . . . .
2.19. Telephone Notice, Indemnity . . . . . . . . . . . . .
2.20. Facility Letters of Credit . . . . . . . . .. . . . .
2.21. Extension of Termination Date . . . . . . . . . . . .
ARTICLE III CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . .
3.01. Conditions Precedent to Closing Date . . . . . . . . .
3.02. Conditions Precedent to Each Borrowing . . . . . . . .
3.03. Termination of Existing Agreement . . . . . . . . . .
3.04. Advances under Existing Agreement . . . . . . . . . .
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<PAGE> 22
ARTICLE IV REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . .
4.01. The Company's Existence . . . . . . . . . . . . . . . . .
4.02. Subsidiaries' Existence . . . . . . . . . . . . . . . . .
4.03. Company's Powers . . . . . . . . . . . . . . . . . . . .
4.04. Power of Company Officers . . . . . . . . . . . . . . . .
4.05. Government and Other Approvals . . . . . . . . . . . . .
4.06. Compliance With Laws . . . . . . . . . . . . . . . . . .
4.07. Enforceability of Agreement . . . . . . . . . . . . . . .
4.08. Title to Property . . . . . . . . . . . . . . . . . . . .
4.09. Litigation . . . . . . . . . . . . . . . . . . . . . . .
4.10. Events of Default . . . . . . . . . . . . . . . . . . . .
4.11. Investment Company Act of 1940 . . . . . . . . . . . . .
4.12. Regulation U . . . . . . . . . . . . . . . . . . . . . .
4.13. Financial Information . . . . . . . . . . . . . . . . . .
4.14. ERISA . . . . . . . . . . . . . . . . . . . . . . . . .
4.15. Acquisitions . . . . . . . . . . . . . . . . . . . . . .
4.16. Environmental Matters . . . . . . . . . . . . . . . . . .
ARTICLE V AFFIRMATIVE COVENANTS
5.01. Use of Proceed . . . . . . . . . . . . . . . . . . . . .
5.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . .
5.03. Financial Statements, Reports, Etc. . . . . . . . . . . .
5.04. Existence, Etc. . . . . . . . . . . . . . . . . . . . . .
5.05. Payment of Obligations. . . . . . . . . . . . . . . . . .
5.06. Compliance with Laws . . . . . . . . . . . . . . . . . .
5.07. Insurance . . . . . . . . . . . . . . . . . . . . . . . .
5.08. Adequate Books . . . . . . . . . . . . . . . . . . . . .
5.09. Interest Coverage Ratio . . . . . . . . . . . . . . . . .
5.10. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE VI NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . .
6.01. Capitalization Ratio . . . . . . . . . . . . . . . . . .
6.02. Change in Business . . . . . . . . . . . . . . . . . . .
6.03. Liens. . . . . . . . . . . . . . . . . . . . . . . . . .
6.04. Mergers, Sales of Assets, Etc. . . . . . . . . . . . . .
6.05. Acquisitions, Investments . . . . . . . . . . . . . . . .
6.06. Operating Leases . . . . . . . . . . . . . . . . . . . .
6.07. Existing Indebtedness . . . . . . . . . . . . . . . . . .
6.08. Repurchase Arrangements . . . . . . . . . . . . . . . . .
6.09. Dividends and other Restricted Payments. . . . . . . . .
ARTICLE VII EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . .
7.01. Nonpayment . . . . . . . . . . . . . . . . . . . . . . .
7.02. Representation or Warranty . . . . . . . . . . . . . . .
7.03. Specific Defaults . . . . . . . . . . . . . . . . . . . .
7.04. Other Defaults . . . . . . . . . . . . . . . . . . . . .
7.05. Judgments . . . . . . . . . . . . . . . . . . . . . . . .
7.06. Voluntary Bankruptcy . . . . . . . . . . . . . . . . . .
7.07. Involuntary Bankruptcy . . . . . . . . . . . . . . . . .
7.08. Cross Default . . . . . . . . . . . . . . . . . . . . . .
7.09. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . .
7.10. Change in Control . . . . . . . . . . . . . . . . . . . .
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<PAGE> 23
ARTICLE VIII RELATION OF BANKS . . . . . . . . . . . . . . . . . . . .
8.01. Appointment and Authorization . . . . . . . . . . . . . .
8.02. Pro Rata Sharing . . . . . . . . . . . . . . . . . . . .
8.03. Sharing of Setoff . . . . . . . . . . . . . . . . . . . .
8.04. Communication; Confidentiality . . . . . . . . . . . . .
8.05. Approvals . . . . . . . . . . . . . . . . . . . . . . . .
8.06. Exculpation . . . . . . . . . . . . . . . . . . . . . . .
8.07. Indemnification . . . . . . . . . . . . . . . . . . . . .
8.08. The Agent, the Co-Agent and Bid Agent as Banks . . . . .
8.09. Notice of Transfer . . . . . . . . . . . . . . . . . . .
8.10. Credit Decision . . . . . . . . . . . . . . . . . . . . .
8.11. Resignation of the Agent . . . . . . . . . . . . . . . .
8.12. Reliance by Agent and Co-Agent . . . . . . . . . . . . .
ARTICLE IX MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . .
9.01. Notices . . . . . . . . . . . . . . . . . . . . . . . . .
9.02. Successors and Assigns . . . . . . . . . . . . . . . . .
9.03. Banks' Obligations Several . . . . . . . . . . . . . . .
9.04. Assignments, Participations; Setoff . . . . . . . . . . .
9.05. Delays and Waivers . . . . . . . . . . . . . . . . . . .
9.06. Costs and Expenses . . . . . . . . . . . . . . . . . . .
9.07. Entire Agreement . . . . . . . . . . . . . . . . . . . .
9.08. Governing Law . . . . . . . . . . . . . . . . . . . . . .
9.09. Section Headings . . . . . . . . . . . . . . . . . . . .
9.10. Severability . . . . . . . . . . . . . . . . . . . . . .
9.11. Counterparts . . . . . . . . . . . . . . . . . . . . . .
9.12. Indemnity . . . . . . . . . . . . . . . . . . . . . . . .
9.13. Judgment Currency Indemnity . . . . . . . . . . . . . . .
9.14. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . .
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<PAGE> 24
EXHIBIT A-1 COMMITTED NOTE
EXHIBIT A-2 COMPETITIVE BID NOTE
EXHIBIT B OPINION OF COUNSEL
SCHEDULE I AGENT'S PAYMENT OFFICES
SCHEDULE 2 SIGNIFICANT SUBSIDIARIES
SCHEDULE 3 MATERIAL LIENS
SCHEDULE 4 LITIGATION
SCHEDULE 5 MATERIAL FINANCIAL OBLIGATIONS
SCHEDULE 6 FORM OF BID LOAN REQUEST
SCHEDULE 7 FORM OF BID LOAN OFFER
SCHEDULE 8 FORM OF BID LOAN ACCEPTANCE
SCHEDULE 9 FORM OF CONFIDENTIALITY AGREEMENT
SCHEDULE 10 SCHEDULE OF LETTERS OF CREDIT MONTH END:
DECEMBER 1994
SCHEDULE 11 INVESTMENTS
SCHEDULE 12 EXISTING ADVANCES
-24-
<PAGE> 25
AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
This Agreement is entered into as of December 30, 1994 among OUTBOARD
MARINE CORPORATION (the "Company"), the banks listed on the signature pages
hereof (collectively the "Banks" and individually a "Bank"), THE FIRST
NATIONAL BANK OF CHICAGO as agent for the Banks (in such capacity the
"Agent") and BANK OF AMERICA ILLINOIS as co-agent for the Banks (in such
capacity, the "Co-Agent").
Whereas, the Company, the Banks, the Agent and Bank of America National
Trust & Savings Association are parties to a Revolving Credit Agreement
dated as of August 27, 1992, as amended ("Existing Agreement"); and
Whereas, the Company desires to amend and restate the Existing Agreement
to, among other things, increase the amount, change the interest rates and
make certain other changes therein; and
So therefore, the Company, the Banks, the Agent and the Co-Agent have
agreed to amend and restate the Existing Agreement on the terms and
conditions set forth herein:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01. Certain Definitions. In addition to the terms defined elsewhere in
this Agreement, the following terms have the meanings indicated for
purposes of this Agreement:
"Absolute Rate" means the rate of interest quoted by a Bank for an Absolute
Rate Loan pursuant to Section 2.18.
"Absolute Rate Loan" means a Bid Loan for which interest is based on the
Absolute Rate.
"Acquisition" means any transaction or series of transactions by which the
Company and/or any Consolidated Subsidiary
(a) acquires any going business or all or substantially all of the assets
of any Person, whether through the purchase of assets, merger or otherwise;
(b) directly or indirectly acquires control of at least a majority (in
number of votes) of the securities of a corporation which have ordinary
voting power for the election of directors; or (c) directly or indirectly
acquires a twenty percent (20%) or more ownership interest in any
partnership or joint venture.
"Advance" means a loan hereunder by a Bank under the Revolving Credit
Facility pursuant to Section 2.01(a) and may also be used to refer to a
Refunding Advance unless the context otherwise requires.
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<PAGE> 26
"Affiliate" means, with respect to any Person, any other Person directly or
indirectly controlling (including but not limited to all directors and
officers of such Person), controlled by, or under direct or indirect common
control with such Person. A Person shall be deemed to control a
corporation if such Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of such
corporation, whether through the ownership of voting securities, by contract
or otherwise.
"Aggregate Available Commitment" means, at any date of determination, (a)
the Aggregate Commitment minus (b) the Facility Letter of Credit
Obligations then outstanding minus (c) the principal amount of all then
outstanding Advances and minus (d) the principal amount of all the
outstanding Bid Loans.
"Aggregate Commitment" means the aggregate of the Commitments of all the
Banks, as modified from time to time pursuant to the terms hereof, which
amount is $200,000,000 as of the Closing Date of this Agreement.
"Applicable Margin" means the percentage in excess of the Base Rate payable
by the Company as set forth in Section 2.04.
"Available Fund" shall mean, as of any Restricted Payment Date, an amount
equal to 50% of Consolidated Net Income of the Company and Subsidiaries for
the period (taken as one accounting period) commencing on October 1, 1994
and terminating at the end of the Company's most recently completed fiscal
quarter preceding such Restricted Payment Date, reduced by the sum of the
(i) aggregate amount of all dividends and other distributions paid by the
Company or any Subsidiary on each class of its capital stock on or after
October 1, 1994 and (ii) the aggregate amount paid by or on behalf of the
Company or any Subsidiary on or after October 1, 1994 for the redemption,
purchase, retirement or other acquisition of any shares of its capital
stock. For purposes of this definition, the amount of dividends and other
distributions paid by any Subsidiary shall not include amounts payable to
the Company or to another Subsidiary. Capital stock shall include warrants
and other rights and options to acquire shares of capital stock.
"Banking Day" means (a) for all purposes other than transactions referred
to in clause (b) below, a day on which banks are open for business in
Illinois, California and New York, and (b) with respect to all notices and
determinations in connection with, and payments of principal of and
interest on, Eurodollar Advances or LIBOR Loans and Optional Currency
Advances, any day which is a Banking Day described in clause (a) and is
also a day on which banks are open for business and quoting interest rates
for Dollar deposits or the relevant Optional Currency deposits in London,
England. "Base Rate" means the Reference Rate, CD Rate, or LIBOR, as the
case may be.
"Bid Agent" means the Agent acting in its capacity as the bid agent for the
Bid Facility or any successor thereto appointed hereunder.
"Bid Facility" means the credit facility provided in Section 2.18.
"Bid Loan" means a loan by a Bank to the Company under the Bid Facility.
"Borrowing" means any Advances hereunder made by the Banks on the same day
and having the same interest rate and Interest Period and any Bid Loans
hereunder made by any or all of the Banks on the same day and having the
same Interest Period and may also be used to refer to a Refunding Borrowing
unless the context otherwise requires.
"CD Rate" means for each Interest Period in respect of CD Rate Advances the
rate of interest determined pursuant to the following formula:
-26-
<PAGE> 27
CD Rate =
((Certificate of Deposit Rate)/(1.00 - Reserve Percentage))+ Assessment Rate
Where,
"Assessment Rate" means the arithmetic average, as determined by the Agent,
of the net annual assessment rates (rounded upwards, if necessary, to the
nearest one-hundredth of one percent (1/100%)) in effect on the first day
of such Interest Period payable by First Chicago to the Federal Deposit
Insurance Corporation, or any successor, for insuring time deposits made in
Dollars at offices of First Chicago in the United States of America during
the most recent period for which such rate has been determined prior to the
commencement of such Interest Period.
"Certificate of Deposit Rate" means for each Interest Period in respect of
CD Rate Advances the rate of interest determined by the Agent to be the
arithmetic average (rounded up to the nearest one-hundredth of one percent
(1/100%)) of the rates of interest bid by two (2) New York or Chicago
certificate of deposit dealers of recognized standing selected by First
Chicago for the purchase at face value from First Chicago of its
certificates of deposit in the secondary market, for such period and in the
amount of First Chicago's CD Rate Advance to be made, at approximately
10:00 a.m., Chicago time, on the first day of such Interest Period.
"Reserve Percentage" means for each Interest Period for CD Rate Advances
the maximum reserve percentage (expressed as a decimal) in effect at the
beginning of such Interest Period (including, but not limited to, marginal,
emergency, supplemental, special and other reserve percentages) prescribed
by the Board of Governors of the Federal Reserve System, or any successor,
for determining the reserves to be maintained by member banks of the
Federal Reserve System with deposits exceeding One Billion Dollars
($1,000,000,000) for new non-personal time deposits for a period
approximating such Interest Period and in an amount of One Hundred Thousand
Dollars ($100,000) or more.
"CD Rate Advance" means an Advance for which interest is calculated with
reference to the CD Rate.
"Capitalization" means the sum of the Tangible Net Worth and Indebtedness
for Borrowed Money of the Company and its Consolidated Subsidiaries,
calculated on a consolidated basis.
"Closing Date" means December 30, 1994.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commitment" means for each Bank the obligation of such Bank to make
Advances and to issue or purchase participations in Facility Letters of
Credit in an aggregate amount not exceeding the amount set opposite its
name on the signature pages hereof as such amount may be modified from time
to time in accordance with the terms hereof.
"Committed Note" means a promissory note in substantially the form of
Exhibit "A-1" hereto, with appropriate insertions, duly executed and
delivered to the Agent by the Company for the account of a Bank in the
amount of its Commitment, including any amendment, modification, renewal or
replacement of such promissory note.
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<PAGE> 28
"Competitive Bid Note" means a promissory note in substantially the form of
Exhibit "A-2" hereto, with appropriate insertions, duly executed and
delivered to the Agent by the Company for the account of a Bank and payable
to the order of such Bank, including any amendment, modification, renewal
or replacement of such promissory note.
"Consolidated" or "consolidated" means: (a) when used herein with
reference to financial statements, ratios, assets or liabilities, that any
calculations have been made by consolidating the assets and liabilities of
the Company and certain of its Subsidiaries indicated in the footnotes to
the Company's financial statements after eliminating all intercompany items
and making such adjustments as required by GAAP; and (b) when used herein
with reference to a Subsidiary, a Subsidiary the financial statements of
which have been presented together with those of the Company or a
newly-acquired Subsidiary, which has been designated by the Company as a
Consolidated Subsidiary pursuant to Section 5.03(f).
"Credit" means the Revolving Credit Facility described in Section 2.01, the
Bid Facility described in Section 2.18 and the Letter of Credit Facility
described in Section 2.20.
"Default" means an event which, with notice or lapse of time or both, would
become an Event of Default.
"Dividends" means any dividend payment or other distribution of assets,
properties, cash, rights, obligations or securities on account of or in
exchange for any shares of any class of capital stock of the Company,
provided that dividend payments or other distributions payable solely in
its common stock shall not be included in this definition.
"Dollars" and "$" mean United States dollars.
"EBIT" means for any period of determination in respect of the Company and
its Consolidated Subsidiaries the sum of (a) their Net Income before
deduction of taxes, (b) their Interest Expense, (c) any extraordinary
losses, and (d) amortization of goodwill and intangibles associated with
any Acquisition minus any extraordinary gains, all calculated on a
consolidated basis.
"Environmental Claim" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability for
violation of any Environmental Law or for release or injury to the
environment or threat to public health, personal injury (including
sickness, disease or death), property damage, natural resources damage, or
otherwise alleging liability for damages, punitive damages, cleanup costs,
removal costs, remedial costs, response costs, restitution, civil or
criminal penalties, injunctive relief, or other type of relief, resulting
from or based upon (a) the presence, placement, discharge, emission or
release (including intentional and unintentional, negligent and
non-negligent, sudden or non-sudden, accidental or non-accidental
placement, spill, leaks, discharges, emissions or releases) of any
Hazardous Material at, in or from property, whether or not owned by the
Company or any of its Subsidiaries, or (b) any other circumstances forming
the basis of any violation, or alleged violation, of any Environmental Law.
-28-
<PAGE> 29
"Environmental Law" means the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. 9601 et seq.) ("CERCLA"),
the Hazardous Material Transportation Act (49 U.S.C. 1801 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. 6901 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.), the Clean
Air Act (42 U.S.C. 7401 et seq.), the Toxic Substances Control Act (15
U.S.C. 2601 et seq.) and the Occupational Safety and Health Act (29
U.S.C. 651 et seq.) ("OSHA"), as such laws have been or hereafter may
be amended or supplemented, and any and all analogous future federal, or
present or future state or local, statutes and the regulations promulgated
pursuant thereto.
"Equivalent Amount" means in relation to any Optional Currency Advance, at
any date any determination thereof is made, the amount in Dollars of such
Advance calculated at the spot rate of exchange for the purchase of Dollars
with the relevant Optional Currency quoted by First Chicago at
approximately 11:00 am. (London time) two (2) Banking Days prior to the
relevant date.
"ERISA" means the Employee Retirement Income Security Act of 1974 and all
the rules and regulations promulgated pursuant thereto, as amended from
time to time.
"Eurodollars" means Dollars disbursed by a Bank from a location outside of
the United States.
"Eurodollar Advance" means an Advance denominated in Dollars for which
interest is calculated with reference to LIBOR.
"Event of Default" means any event set forth in Sections 7.01 through 7.10.
"Existing Agreement" means the Credit Agreement dated as of August 27, 1992
as amended, among the Company, the Bank parties thereto, The First National
Bank of Chicago, as Agent and Bank of America National Trust and Savings
Association, as Co-Agent.
"Existing Letters of Credit" means those Letters of Credit currently
outstanding and issued by a Bank party hereto, a list of which is attached
hereto as Schedule 10 including any extensions thereof.
"Facility Letter of Credit Obligations" means, at any date of determination
thereof, all liabilities, whether actual or contingent, of the Company in
respect of the Facility Letters of Credit, including without limitation,
the sum of (a) Reimbursement Obligations and (b) the aggregate undrawn face
amount of the outstanding Facility Letters of Credit.
"Facility Letters of Credit" means, collectively, the letters of credit
issued under the Letter of Credit Facility and including, without
limitation, the Existing Letters of Credit.
"Federal Funds Rate" means for any day the weighted average of rates on
overnight Federal funds transactions with members of the Federal Reserve
System only, arranged by Federal funds brokers as published for such day
(or, if such day is not a business day, for the next preceding business
day) by the Federal Reserve Bank of New York in statistical release H.15
(519) or any successor publication or, if such rate is not so published for
any business day, the average of the quotations at approximately 10:00 a.m.
(Chicago time) on such day on such transactions received by the Agent from
three Federal funds brokers of recognized standing selected by the Agent in
its sole discretion.
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<PAGE> 30
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
System.
"First Chicago" means The First National Bank of Chicago, in its individual
capacity, and its successors.
"fiscal year" means with respect to the Company a year commencing October 1
and ending September 30.
"Fixed Assets" of any Person means land, buildings, fixtures and personal
property used in the operation of the business carried out thereon (other
than inventory held for sale in the ordinary course of business).
"Fixed Rate" means either or both of the CD Rate or LIBOR, for a Fixed Rate
Advance.
"Fixed Rate Advance" means a Eurodollar Advance or a CD Rate Advance.
"GAAP" means generally accepted accounting principles in effect from time
to time in the United States.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof and any central bank thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Hazardous Materials" means all those substances which are regulated by, or
which may form the basis of liability under, any Environmental Law,
including all substances identified under any Environmental Law as a
pollutant, contaminant, waste, solid waste, hazardous waste, hazardous
constituent, special waste, hazardous substance, hazardous material, or
toxic substance, or petroleum or petroleum derived substance or waste.
"Indebtedness for Borrowed Money" means for any Person, without
duplication, (i) all obligations of such Person (including without
limitation all fees, costs or unpaid accrued interest) for or with respect
to borrowed money or for the deferred purchase price of property or
services (other than accounts payable in the ordinary course of business),
(ii) all obligations of such Person created or arising under any
conditional sale or other title retention agreement with respect to any
property acquired by such Person and all obligations created or arising
under such agreement even though the rights and remedies of the seller or
lender thereunder are limited to repossession or sale of such property in
the event of default, (iii) all obligations of such Person under leases
which shall have been or should be recorded as capitalized leases, (iv) all
guaranties and other obligations (contingent or otherwise) of such Person
to assure a creditor against loss (including, without limitation, letters
of responsibility or comfort letters, arrangements to purchase or
repurchase property or obligations (other than repurchase arrangements with
respect to boats, motors or boat/motor/trailer (or any combination thereof)
packages permitted in accordance with Section 6.08), pay for property,
goods or services whether or not delivered or rendered, maintain working
capital, equity capital or other financial statement condition of, or lend
or contribute to or invest in, any such Person) in respect of obligations
of any other Person, which guaranties and other obligations exceed in the
aggregate at any one time Twenty Million Dollars ($20,000,000), (v) all
endorsements of such Person (other than, in the case of instruments, for
deposit or collection in the ordinary course of business), and (vi) all
indebtedness secured by any Lien on any property owned by such Person,
whether or not such Person has assumed or become liable for the payment
thereof. In calculating the amount of Indebtedness for Borrowed Money,
there shall be no double counting of obligations of Subsidiaries which are
guaranteed by the Company.
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"Indemnified Party" has the meaning specified in Section 9.12.
"Interest Expense" means all accrued interest paid or payable by the
Company and its Consolidated Subsidiaries.
"Interest Payment Date" means the last day of each Interest Period or the
day specified in accordance with Section 2.04(c).
"Interest Period" means
(a) for Reference Rate Advances, the period requested by the Company,
commencing on the date of the relevant Borrowing and ending up to ninety
(90) days thereafter;
(b) for Absolute Rate Loans, the period requested by the Company,
commencing on the date of the relevant Borrowing and ending not less than
fourteen (14) days and up to two hundred seventy (270) days thereafter;
(c) for Eurodollar Advances, Optional Currency Advances or LIBOR Loans, the
period requested by the Company, commencing on the date of the relevant
Borrowing and ending one (1), two (2), three (3) or six (6) months
thereafter; and
(d) for CD Rate Advances, the period requested by the Company, commencing
on the date of the relevant Borrowing and ending thirty (30), sixty (60),
ninety (90) or one hundred eighty (180) days thereafter; provided, however,
that:
(i) If any Interest Period would end on a day not a Banking Day, it shall
end on the next succeeding Banking Day, except that with respect to
Eurodollar Advances, Optional Currency Advances and LIBOR Loans, if the
next succeeding Banking Day would fall in the next calendar month, the
Interest Period shall end on the Banking Day immediately preceding the last
day of such Interest Period but for such change; and
(ii) Any Interest Period which would otherwise extend beyond the
Termination Date shall end on the Termination Date.
"Investment" means (a) any loan, advance, extension of credit (other than
in the ordinary course of business to trade customers) or contribution of
capital by the Company or any Subsidiary to any Person or the purchase by
the Company or any Subsidiary of any Person's notes, stock, bonds or other
securities, (b) advances by the Company or any Subsidiary to employees of a
Person other than in the ordinary course of business for the purpose of
defraying travel, relocation or business expenses, and (c) any contribution
of capital or property or services contributed or committed to be
contributed by a Person in connection with the purchase of debt or equity
interests or other ownership interests.
"Issuance Date" means, with respect to any Facility Letter of Credit, the
date on which such Facility Letter of Credit is issued hereunder.
"Issuer" means, with respect to any Facility Letter of Credit, any Bank
which has issued a Facility Letter of Credit pursuant to the Letter of
Credit Facility, and its successors and assigns.
"Issuer's Fee" is defined in Section 2.20(g).
"Lending Branch" means, with respect to a Bank or the Agent, any office,
branch, subsidiary or affiliate of such Bank or the Agent.
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"Letter of Credit Facility" means the Letter of Credit Facility provided in
Section 2.20.
"Letter of Credit Fee" means, with respect to any Facility Letter of Credit
on the Issuance Date thereof, a fee equal to the product of (a) the
applicable percentage set forth in Section 2.20(g) times (b) the maximum
face amount of such Facility Letter of Credit.
"Letter of Credit Request" is defined in Section 2.20(c).
"LIBOR" means, for each Interest Period in respect of Eurodollar Advances,
LIBOR Loans or Optional Currency Advances, the rate of interest determined
by the Agent to be the applicable London interbank offered rate for
deposits in Dollars or the applicable Optional Currency appearing on the
Bloomberg System Money Market Function (page LR) as of 11:00 a.m. (London
time) two Banking Days prior to the first day of such Interest Period and
having a maturity equal to such Interest Period. If no London interbank
offered rate of such maturity then appears on Bloomberg Page LR, the LIBOR
shall be equal to the London interbank offered rate for deposits in Dollars
or the applicable Optional Currency having a maturity immediately before or
immediately after the maturity of such Interest Period, whichever is
higher, as determined by the Agent from Bloomberg Page LR.
"LIBOR Loan" means a Bid Loan for which interest is calculated with
reference to LIBOR.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including any agreement to provide any of the
foregoing), any conditional sale or other title retention agreement or any
lease in the nature thereof, any filing or agreement to file a financing
statement as debtor under the Uniform Commercial Code on any property
leased to any Person under a lease which is not in the nature of a
conditional sale or title retention agreement, or any subordination
arrangement in favor of another Person.
"Majority Banks" means Banks whose Commitments equal at least sixty-six and
two-thirds percent (66-2/3%) of the Aggregate Commitments, provided that at
any time after the Advances have been accelerated and the Commitments
terminated pursuant to Article VII, "Majority Banks" shall mean Banks whose
aggregate proportionate interest in the outstanding Advances, Bid Loans and
Facility Letters of Credit constitute at least sixty-six and two-thirds
percent (66-2/3%) of the outstanding Advances, Bid Loans and Facility
Letters of Credit.
"Margin" means the percentage points above or below LIBOR quoted by a Bank
for a LIBOR Loan pursuant to Section 2.18.
"Margin Stock" has the meaning ascribed to it in Regulation U of the Board
of Governors of the Federal Reserve System.
"Minimum Amount" initially means $10,000,000, such amount to be increased
by an amount equal to the aggregate amount of dividends payable during a
fiscal year on all new shares of capital stock issued by the Company after
October 1, 1994 (at the dividend rate in effect on October 1, 1994), net of
any shares retired after that date.
"Moody's" means Moody's Investors Service, Inc.
"Net Income" means the amount shown on the income statement of a Person as
its "net earnings (loss)."
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"Net Proceeds" means the cash proceeds realized from the sale or from any
sale and leaseback transaction (after deducting all applicable taxes and
the reasonable costs of such sale) of any property (excluding receivables)
owned by the Company or any Consolidated Subsidiary (other than sales of
inventory in the ordinary course of business and the sale of worn-out or
obsolete equipment no longer useful or needed in the operation of its
business) or the sale of any common or preferred stock of the Company.
"Notes" means, collectively, the Competitive Bid Notes and the Committed
Notes; and "Note" means any one of the Notes.
"Optional Currency" means Deutschemarks, Canadian dollars, Belgian francs
or Australian dollars, which are freely transferable and convertible into
Dollars and the deposits of which are traded in the London interbank market
and which are disbursed by a Bank outside the Federal Republic of Germany,
Canada, the Kingdom of Belgium or the Commonwealth of Australia,
respectively.
"Optional Currency Advance" means any Advance denominated in an Optional
Currency for which interest is calculated with reference to LIBOR.
"Original Dollar Amount" means in relation to any Optional Currency
Advance, at any time any determination thereof is made, the amount in
Dollars which would have been outstanding if such Optional Currency Advance
had first been disbursed and remained denominated in Dollars (taking into
account any partial repayments thereof) calculated at the spot rate of
exchange for the purchase of Dollars with the relevant Optional Currency
quoted by First Chicago at approximately 11:00 a.m. (London time) two (2)
Banking Days prior to the disbursement date of such Optional Currency
Advance.
"PBGC" means the Pension Benefit Guaranty Corporation created under Section
4002 (a) of ERISA or any successor thereto.
"Percentage Share" means, as to any Bank, at any time, such Bank's
percentage share of the Aggregate Commitment of all the Banks, as set forth
opposite such Bank's name under the heading "Percentage Share" on the
signature pages hereof as such percentage may be modified from time to time
in connection with any assignment of the Commitment of such Bank in
accordance with the terms hereof.
"Permitted Liens" means
(a) Liens for taxes not yet due or which are being actively contested in
good faith by appropriate proceedings and for which adequate reserves have
been established if required by GAAP;
(b) other Liens incidental to the conduct of the business of the Company
and its Consolidated Subsidiaries or the ownership of their respective
property and assets which were not incurred in connection with the
borrowing of money or the obtaining of advances or credit, and which do not
in the aggregate materially detract from the value of such property or
assets or materially impair the use thereof in the operation of the
Company's and its Subsidiaries' business;
(c) Liens on property or assets of a Subsidiary to secure obligations of
such Subsidiary to the Company or another Subsidiary;
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(d) For one hundred eighty (180) days after the closing date of any
Acquisition or any Investment, Liens existing at the time of such
Acquisition or such Investment (and not created in contemplation of such
Acquisition or such Investment) in favor of Persons other than the Banks on
the inventory and accounts receivable of the Person acquired;
(e) any Liens on the Fixed Assets of a Person existing at the time such
Person becomes a Subsidiary, or existing Liens on Fixed Assets acquired by
a Subsidiary, whether or not such Liens are assumed by the Company or a
Subsidiary, or Liens on any Fixed Assets acquired, constructed or improved
by the Company or any Subsidiary after the date hereof and created
contemporaneously with or no more than one hundred twenty (120) days after
the acquisition, construction or improvement to secure or provide for all
or a portion of the purchase price of such Fixed Assets or for such
construction or improvement if such Liens do not extend to other property
of the Company or any Subsidiary (except to unimproved real property on
which the construction or improvement is located) and the aggregate amount
of Indebtedness for Borrowed Money or other obligations secured thereby
does not exceed an aggregate amount of Ten Million Dollars ($10,000,000) at
any time;
(f) any Lien renewing or extending any Lien permitted by clause (e) above,
provided that the principal amount of the obligations secured is not
increased beyond the original principal amount of the obligations secured
by such Lien, such principal amount secured does not include any
capitalization of interest, and the Lien is not extended to other property;
(g) Liens in favor of the United States of America, resulting from
acceptance of progress or partial payments in the ordinary course of
business under government contracts or subcontracts thereunder;
(h) other Liens provided that the sum of (i) the aggregate principal amount
of Indebtedness for Borrowed Money of the Company and its Subsidiaries
secured by Liens permitted by this clause (h) plus (ii) the present value
of all rental payments (discounted at the rate of 9% per annum compounded
semi-annually) arising from a sale and leaseback transaction permitted in
Section 6.04(c) owed by the Company and its Subsidiaries does not exceed at
any time an amount equal to five percent (5%) of the Tangible Net Worth of
the Company and its Subsidiaries on a consolidated basis; and
(i) Liens incurred in connection with sales of receivables permitted by
Section 6.04 (h).
"Person" means an individual, a corporation, a partnership, an association,
a trust or any other entity or organization, including a governmental or
political subdivision or an agent or instrumentality thereof. "Plan" means
any defined benefit plan maintained or contributed to by the Company or any
Subsidiary or by any trade or business (whether or not incorporated) under
common control with the Company or any Subsidiary as defined in Section
4001(b) of ERISA and insured by the PBGC under Title IV of ERISA.
"Reference Rate" means the higher of:
(a) the rate of interest announced from time to time by First Chicago in
Chicago, Illinois, as its corporate base rate, which is a rate set by First
Chicago based upon various factors and
(b) the Federal Funds Rate plus one-half of one percent (1/2%).
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"Reference Rate Advance" means an Advance for which interest is calculated
with reference to the Reference Rate.
"Refunding Advance" means an Advance which, after application of the
proceeds thereof, results in no net increase in the outstanding principal
amount of the Advances of any Bank, and "Refunding Borrowing" means a
Borrowing having the same result.
"Reimbursement Obligations" means, at any time, the aggregate of the
obligations of the Company to the Issuers and the Banks in respect of all
unreimbursed payments or disbursements made by an Issuer and the Banks
under or in respect of the Facility Letters of Credit.
"Reportable Event" shall be as defined in ERISA.
"Restricted Payments" shall mean: (i) every dividend or other distribution
paid by the Company or any Subsidiary on or in respect of any class of the
capital stock of the Company or any Subsidiary, and (ii) every payment by
or on behalf of the Company or any Subsidiary in connection with the
redemption, purchase, retirement or other acquisition of any shares of the
capital stock of the Company or any Subsidiary; but excluding, however,
from the foregoing every dividend, distribution or other payment to the
extent payable in shares of the capital stock of the Company or any
Subsidiary. For purposes of this definition, "capital stock" shall include
warrants and other rights and options to acquire shares of capital stock.
"Restricted Payment Date" means the date a Restricted Payment is paid.
"Revolving Credit Facility" means the credit facility provided in Section
2.01(a).
"Shareholder Rights Plan" means the Company's Amended and Restated Rights
Plan dated as of June 12, 1986 as amended and restated as of September 6,
1990.
"Significant Subsidiary" means (a) the Subsidiaries of the Company listed
on Schedule 2 hereto and any additional schedules provided pursuant to this
paragraph and (b) any other Subsidiary of the Company, the assets,
revenues, or Tangible Net Worth of which during the two (2) fiscal quarters
immediately preceding any date of calculation thereof is equal to or
greater than five percent (5%) of the corresponding assets or revenues or
the Tangible Net Worth of the Company and its Consolidated Subsidiaries, on
a consolidated basis (which subsidiaries shall be listed on additional
schedules delivered by the Company to the Agent from time to time).
"Standard & Poor's" means Standard & Poor's Ratings Group, a division of
McGraw - Hill, Inc.
"Subsidiary" means any corporation in which the Company owns, directly or
indirectly, more than fifty percent (50%) of the total voting securities
thereof, irrespective of whether or not the stock of any class shall or
might have voting power by reason of any contingency, or which the Company
otherwise controls.
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"Tangible Net Worth" means, without duplication, total shareholders' equity
in the Company and its Consolidated Subsidiaries (excluding treasury stock,
sinking fund payments required to be made prior to the Termination Date of
this Agreement, and that portion of any redeemable preferred stock which
has a mandatory redemption date prior to the Termination Date of this
Agreement) less (a) all items that would be treated as intangibles under
GAAP, including, without limitation, the net book value of goodwill,
patents, trademarks, trade names, copyrights, licenses, deferred charges,
leasehold conversion costs, unamortized debt discount, franchise rights,
and non-compete agreements, but excluding foreign currency translation
adjustments required by the Statement of the Financial Accounting Standards
Board #52, (b) any Investments in the form of credit extensions to
stockholders, directors or employees of the Company or its Subsidiaries
and, plus (c) from and after the date such charge is reported in the
Company's financial statements, an amount, not to exceed $109,000,000 at
any time, equal to the amount of non-cash charges, net of any tax benefits
taken, related to retiree medical benefits.
"Termination Date" means the earliest to occur of
(a) December 31, 1997, or such later date to which the Termination Date is
extended pursuant to Section 2.21 hereof,
(b) the date on which, prior to the date set forth in (a) above, the Credit
terminates in accordance with a notice to that effect given to the Agent by
the Company pursuant to Section 2.13, and
(c) the date on which the Credit is terminated or accelerated pursuant to
Article VII.
"Value Date" means the date an Advance or Bid Loan is to be disbursed to
the Company.
1.02. Financial Standards. All financial computations required under this
Agreement shall be made, and all financial information required under this
Agreement shall be prepared, in accordance with GAAP. If generally accepted
accounting principles are modified by the Financial Accounting Standards Board
subsequent to the Closing Date and prior to the Termination Date, then for
purposes of this Section 1.02, such modified generally accepted accounting
principles shall be the generally accepted accounting principles which are
required to be consistently applied.
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ARTICLE II
THE CREDIT
2.01. Credit.
(a) The Revolving Credit Facility. From the Closing Date to but excluding
the Termination Date, each Bank, severally, will make available to the
Company Advances in Dollars and any available Optional Currency in an
amount equal to such Bank's Percentage Share of the Aggregate Available
Commitment (without regard to such Bank's outstanding Bid Loans); provided
that the Original Dollar Amount of the aggregate outstanding Optional
Currency Advances denominated in Australian dollars and Belgian francs,
respectively, may not exceed Fifty Million Dollars ($50,000,000) on any
date of disbursement of any such Optional Currency Advance; provided that
in no event may the total amount of Advances for all Banks (after
determining the Equivalent Amount of all Optional Currency Advances) plus
Bid Loans for all Banks outstanding under this Agreement plus Facility
Letter of Credit Obligations for all Banks exceed at any time the then
effective Aggregate Commitment.
If at any time the total amount of Advances for all Banks (after
determining the Equivalent Amount of all Optional Currency Advances) plus
Bid Loans for all Banks outstanding under this Agreement plus Facility
Letter of Credit Obligations for all Banks exceeds the maximum available
amount set forth above, the Company shall promptly prepay the excess
thereof plus accrued interest thereon to the Agent for the account of the
Banks.
(b) Minimum Amounts. Each Borrowing under this Section 2.01 shall be in a
minimum amount of
(i) Five Million Dollars ($5,000,000) in respect of Reference Rate Advances
and in integral multiples of One Million Dollars ($1,000,000) in excess
thereof, and
(ii) Five Million Dollars ($5,000,000) in respect of Fixed Rate Advances or
Optional Currency Advances, and in integral multiples of One Million
Dollars ($1,000,000) in excess thereof for all Advances denominated in
Dollars or the Equivalent Amount of the foregoing in an Optional Currency
or an integral multiple of One Million Australian dollars, Canadian
dollars, Belgian francs or Deutschemarks, as the case may be.
(c) Reborrowing. The Credit is a revolving credit and, prior to the
Termination Date, the Company may borrow, repay and reborrow amounts repaid
up to the then Aggregate Available Commitment of the Banks.
2.02. Requests for Advances.
(a) Advances shall be made available to the Company upon the irrevocable
request of the Company received by the Agent, specifying: (i) the date of
the Borrowing, which shall be a Banking Day; (ii) the amount of the
Borrowing; (iii) whether the Advances are to be Reference Rate Advances,
Eurodollar Advances, CD Rate Advances or Optional Currency Advances; (iv)
the Original Dollar Amount (when such quotation is available, but in any
event prior to disbursement) of any requested Optional Currency Advance;
(v) the Interest Period therefor; and (vi) the bank and the account where
the funds to be borrowed are to be made available to the Company. Such
request must be received by the Agent at its address for notices by the
time specified in Section 2.10(b) not less than
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(A) the day such Advance is to be made, with respect to Reference Rate
Advances,
(B) two (2) Banking Days, with respect to CD Rate Advances,
(C) three (3) Banking Days, with respect to Eurodollar Advances and
(D) four (4) Banking Days, with respect to Optional Currency Advances,
prior to the date of the Borrowing.
(b) Each Bank agrees that it will make the funds which it is to advance
hereunder available to the Agent at the Agent's Domestic Lending Branch not
later than 1:00 p.m., Chicago time, or at the locations specified on
Schedule 1 attached hereto with respect to Advances in an Optional Currency
not later than 11:00 a.m., local time, on the date of disbursement of
Advances, upon receipt of notice from the Agent as follows:
(i) not later than 11:00 a.m. (Chicago time) on the date of a Borrowing
with respect to Reference Rate Advances;
(ii) two (2) Banking Days prior to the date of a Borrowing with respect to
CD Rate Advances;
(iii) three (3) Banking Days prior to the date of a Borrowing with respect
to Eurodollar Advances; and
(iv) four (4) Banking Days prior to the date of a Borrowing with respect to
Optional Currency Advances.
The Agent will thereupon advance to the Company the amount so received from
the Banks unless the Agent, after notice is given to the Company, shall
determine that any condition precedent applicable to the Borrowing set
forth in Section 3.01 or 3.02 shall not be fulfilled as of the date of such
Borrowing.
(c) Each request for a Borrowing may be made by telephone (immediately
confirmed by telecopy on the same Banking Day) or by telecopy or by telex,
confirmed by letter sent not later than one (1) Banking Day thereafter.
(d) Each Borrowing under Section 2.01 shall be made on a pro rata basis
from the Banks. Subject to Section 2.16(b), all Advances that are part of
the same Borrowing shall bear the same Base Rate.
(e) (i) With respect to any Fixed Rate Advance or an Optional Currency
Advance, a notice of Borrowing shall be irrevocable and the Company shall
be obliged to accept the Advance requested. If notwithstanding the notice
of Borrowing, the Advance is not disbursed to the Company on the date
specified in such notice by reason of any of the conditions set forth in
Article III not having been satisfied, the Company shall indemnify and hold
harmless each Bank, by payment in Dollars or the currency specified in the
relevant notice of Borrowing as the Agent shall stipulate immediately upon
demand, from and against any losses, costs and expenses (including
reasonable legal expenses) which it has sustained or incurred as a
consequence of the Advance not being advanced on such date, including (but
not limited to) all losses, premiums and penalties incurred in liquidating
or reemploying deposits made by third parties or funds acquired or arranged
to effect or maintain the Advance or any part thereof. The certificate of
a Bank, signed by an authorized officer, as to the amount of any losses,
costs or expenses payable to it under this Section 2.02(e)(i) shall, in the
absence of manifest error, be conclusive and binding upon the Company.
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(ii) Subject to Sections 2.16 and 2.17, the Agent shall promptly confirm by
telecopy or telex to the Company that Eurodollars or the Optional Currency
requested by the Company is available and notify the Company of the sum in
the relevant Optional Currency which will represent the Optional Currency
Advance to be made available to the Company during the Interest Period to
which the notice of Borrowing relates.
(iii) If Eurodollars or the Optional Currency requested by the Company is
not available to any Bank, such Bank shall promptly so notify the Company
and the Agent and the Bank shall consult with the Company and the Agent as
to the currency in which the Advance is to be disbursed, provided, however,
that in the case of renewal of an Advance, the provisions of Section 2.05
shall apply.
2.03. Evidence of Credit Extensions.
(a) The total of each Bank's Advances shall be evidenced by a Committed
Note, executed by the Company, payable to the order of such Bank in the
amount of its Commitment, dated the Closing Date and providing for the
payment of principal and interest in accordance with the terms of this
Agreement. Each Bank's Bid Loans shall be evidenced by a Competitive Bid
Note, executed by the Company, payable to the order of such Bank and
providing for the payment of principal and interest on Competitive Bid
Loans in accordance with the terms of this Agreement. Each Bank shall
record Advances and Bid Loans and principal payments thereof on the grid
attached thereto or, at the option of each Bank, in its records, and the
Bank's record thereof shall be conclusive absent manifest error.
Notwithstanding the foregoing, the failure to make, or an error in making,
a notation with respect to any Advance or Bid Loan shall not limit or
otherwise affect the obligation of the Company hereunder or under any Note.
(b) Each Bank's proportionate interest in each Borrowing and each payment
by the Company to such Bank under this Agreement and the Notes shall be
made to the Agent for the account of such Bank. Each Bank may designate
any of its branches as its Eurodollar Lending Branch or Optional Currency
Lending Branch for purposes of this Agreement. By written notice to the
Agent and the Company, a Bank may change the designation of any of its
Lending Branches. All payments to the Agent shall be made at the locations
specified on Schedule 1 hereto with respect to the relevant currency.
2.04. Computation of and Payment of Interest.
(a) The outstanding principal balance of each Advance shall bear interest
to but excluding the last day of the Interest Period therefor at a rate per
annum equal to the Base Rate selected by the Company plus the Applicable
Margin set forth below for each Base Rate, which corresponds to the lower
of the most recently published final Standard & Poor's or Moody's rating
for the Company's senior long-term unsecured public debt (without credit
enhancement) in effect four (4) Banking Days before the applicable date of
Borrowing:
Reference Rate LIBOR Rate CD Rate
Equal to or Better
than BBB and Baa2 0% .30% .425%
Equal to or Better
than BBB- and Baa3 0% .40% .525%
Equal to or Better
than BB+ and Ba1
0% .70% .825%
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Equal to or Better
than BB
and Ba2 0% .90% 1.025%
Lower than BB
or Ba2 .25% 1.00% 1.125%
(b) If no senior long-term unsecured public debt rating (without credit
enhancement) for the Company from Standard & Poor's or Moody's is in effect
at the relevant time, the outstanding principal amount of each Advance
shall bear interest as set forth in the bottom row in subclause (a) above.
(c) The Company shall pay interest on the principal amount of each Advance
and Bid Loan on the Interest Payment Date relating to such Advance and Bid
Loan and, with respect to each Advance or Bid Loan having an Interest
Period in excess of three (3) months or ninety (90) days, as the case may
be, the Company shall also pay interest on the Banking Day falling three
(3) months or ninety (90) days, respectively, after the Borrowing date.
Interest on any Optional Currency Advance shall be calculated and paid in
the relevant Optional Currency.
2.05. Payment of Principal. The Company will repay Advances to the Agent
for the account of each Bank and in the currency of such Advances on the
last day of the Interest Period for such Advances; provided, however, that,
if a Borrowing is made on an Interest Payment Date for Advances being
repaid, the Company may pay to the Agent for the account of the Banks only
the amount by which the repayment of maturing Advances exceeds the amount
reborrowed, and the Agent and each Bank shall apply the amount reborrowed
to repay the maturing Advances, disbursing to the Company only any excess
proceeds.
2.06. (Intentionally Omitted).
2.07. Facility Fee. (a) For the period from the Closing Date to but
excluding the Termination Date, the Company shall pay to the Agent for the
account of the Banks a facility fee at a rate per annum equal to the
percentage set forth below of the Aggregate Commitment for the lower of the
most recently published final Standard & Poor's or Moody's rating of the
Company's senior long-term unsecured public debt (without credit
enhancement) in effect on the last day of the then ending fiscal quarter of
the Company. The facility fee shall be due quarterly in arrears, and each
payment shall be made within five (5) days following the end of each
calendar quarter, and the last payment shall be due and paid on the
Termination Date. The applicable rate shall be the rate set forth below:
Equal to or Equal to or Equal to or Equal to or
Better than Better than Better than Better than Lower than
BBB and Baa2 BBB- and Baa3 BB+ and Ba1 BB and Ba2 BB or Ba2
.20% .25% .30% .35% .50%
(b) If no senior long-term unsecured public debt rating (without credit
enhancement) for the Company from Standard & Poor's or Moody's is in effect
at the relevant time, the facility fee shall be the amount set forth in the
furthest right-hand column in sub-clause (a) above.
2.08. Agent's and Co-Agent's Fees. The Company shall pay to the Agent and
the Co-Agent agency fees, administration fees and such other fees in such
amounts and at such times as may be agreed upon by the Company and the
Agent and the Company and the Co-Agent in writing from time to time.
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2.09. Computations of Interest and Fees; Banking Day.
(a) All computations of interest and commissions under this Agreement shall
be made on the basis of
(i) a year of three hundred sixty-five (365) or three hundred sixty-six
(366), as the case may be, days and actual days elapsed with respect to
Reference Rate Advances; and
(ii) a year of three hundred sixty (360) days and actual days elapsed with
respect to Fixed Rate Advances, Optional Currency Advances, Absolute Rate
Loans and LIBOR Loans. Interest shall accrue on any principal balance
outstanding from and including the date of a Borrowing to but excluding the
date on which such principal balance is repaid.
(b) All computation of fees under this Agreement shall be made on the basis
of a year of three hundred sixty-five (365) or three hundred sixty-six
(366) days, as the case may be, and actual days elapsed.
2.10. Late Payment; Date of Receipt of Notices.
(a) If any sum of principal or, to the extent permitted by law, interest in
respect of any Borrowing is not paid when due, whether by acceleration or
otherwise, the Company will, on demand, pay interest thereon from its due
date until paid in full at a rate per annum equal to two percent (2%) in
excess of the sum of the Reference Rate and the Applicable Margin.
(b) All notices given by the Company to the Agent and received by the Agent
after
(i) 10:00 a.m., Chicago time, on a Banking Day in respect of Reference Rate
Advances,
(ii) 10:00 a.m., Chicago time, on a Banking Day, in respect of Fixed Rate
Advances or Optional Currency Advances, and
(iii) 10:00 a.m., Chicago time, on a Banking Day, in respect of LIBOR Loans
or Absolute Rate Loans,
shall be deemed received on the next Banking Day.
2.11. Method of Payment; Mistakes.
(a) Each payment of principal, interest and other sums due under this
Agreement shall be made without set-off or counterclaim in Dollars or the
relevant Optional Currency in immediately available funds (or such other
funds having similar availability as the Agent may reasonably require) on a
Banking Day not later than 12:00 noon, Chicago time. All sums received
after such time shall be deemed received on the next Banking Day. Any
payment due on a day that is not a Banking Day shall be made on the next
Banking Day, subject to the practices of the London interbank market. All
payments to the Agent shall be made at the locations specified on Schedule
1 hereto with respect to the relevant currency.
(b) Payment of all sums under this Agreement shall be made by the Company
to the Agent for the account of the Banks, and the Agent shall promptly
distribute to each Bank its share of such payments by wire transfer of
immediately available funds.
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(c) Unless the Agent shall have been notified by telephone (confirmed in
writing, by telex or telecopy), by any Bank prior to a Borrowing date, that
such Bank will not make available to the Agent such Bank's pro rata share
of such Borrowing or drawing under a Facility Letter of Credit, the Agent
may (but shall not be required to) assume that such Bank has made such
amount available to the Agent and, in reliance thereon, may make available
to the Company or the Issuer a corresponding amount. If such Bank makes
its pro rata share of a Borrowing or drawing under a Facility Letter of
Credit available to the Agent after a Borrowing date, such Bank shall pay
to the Agent on demand an amount equal to the product of (i) the daily
average Federal Funds Rate from and including the Borrowing date to but
excluding the date such Bank's pro rata share of the Borrowing or drawing
under a Facility Letter of Credit was made available to the Agent (the "Out
of Funds Period") multiplied by (ii) an amount equal to such Bank's pro
rata share of the Borrowing or drawing under a Facility Letter of Credit
multiplied by (iii) the number of days in the Out of Funds Period. A
certificate signed by an authorized officer of the Agent submitted to any
Bank with respect to any amounts owing under this subsection (c) shall be
conclusive in the absence of manifest error. If such amount is not in fact
made available to the Agent by such Bank within one (1) Banking Day after a
Borrowing date, the Agent shall be entitled to recover such amount, with
interest thereon at the rate per annum then applicable to such Borrowing or
drawing under a Facility Letter of Credit, on demand from the Company,
without prejudice to the Agent's and the Company's rights against such
defaulting Bank.
(d) Unless the Agent shall have been notified by telephone (confirmed in
writing or by telex or telecopy) by the Company, prior to any date on which
a payment is due hereunder, under the Notes or on a Facility Letter of
Credit, that the Company will not make the required payment on such date,
the Agent may (but shall not be required to) assume that the Company will
make such payment to the Agent and, in reliance upon such assumption, may
make available to each Bank the amount due to it on such date. If such
amount is not in fact paid to the Agent by the Company within one (1)
Banking Day after such payment is due, the Agent shall be entitled to
recover from each Bank the amount paid to it by the Agent, together with
interest thereon in the amount equal to the product of (i) the daily
average Federal Funds Rate from and including the payment date to but
excluding the date the payment was made available to the Agent (the "Out of
Funds Period") multiplied by (ii) an amount equal to such Bank's pro rata
share of the total amount paid by the Agent multiplied by (iii) the number
of days in the Out of Funds Period. A certificate signed by an authorized
officer of the Agent submitted to any Bank with respect to any amounts
owing under this subsection (d) shall be conclusive in the absence of
manifest error.
2.12. Optional Prepayment; Funding Losses on Any Prepayment.
(a) The Company shall not prepay all or any part of the Bid Facility. The
Company may, without premium or penalty, at any time prepay all or any part
of the Revolving Credit Facility as follows, together with accrued and
unpaid interest on the amount prepaid to but excluding the date of payment:
(i) in a minimum amount of Five Million Dollars ($5,000,000) and upon
written notice received by the Agent at least one (1) Banking Day prior to
the date of payment with respect to Reference Rate Advances;
(ii) in a minimum amount of Ten Million Dollars ($10,000,000) and upon
written notice received by the Agent at least two (2) Banking Days prior to
the date of payment with respect to CD Rate Advances; and
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(iii) in a minimum amount of Ten Million Dollars ($10,000,000) (or the
Equivalent Amount thereof in an Optional Currency) and upon written notice
received by the Agent at least three (3) Banking Days prior to the date of
payment with respect to Eurodollar Advances and Optional Currency Advances.
(b) Notwithstanding Section 2.12(a), if the Company repays or prepays Bid
Loans, Optional Currency Advances or Fixed Rate Advances on a date other
than the last day of an Interest Period, the Company shall pay, on demand
by each Bank, such amount (as determined by such Bank) as is required to
compensate such Bank for any additional losses, costs or expenses which
such Bank may reasonably incur as a result of such payment, including,
without limitation, any loss, costs or expense (including a loss of profit)
incurred by reason of the liquidation or re-employment of deposits or other
funds acquired by such Bank to fund or maintain such Bid Loan, Optional
Currency Advance or Fixed Rate Advance. A Bank's written statement to the
Company, signed by an authorized officer, of the amount owed in respect of
this subsection shall be conclusive evidence, absent manifest error, of the
amount to be paid.
2.13. Reduction or Termination of Commitments. Upon at least three (3)
Banking Days' notice to the Agent and on the last day of an Interest
Period, the Company may reduce the Commitments from time to time in whole
or in part in an aggregate amount not less than Ten Million Dollars
($10,000,000) and integral multiples of One Million Dollars ($1,000,000) in
excess thereof or may terminate the Commitments, and thereafter, if the
Commitments are reduced, the computation of any facility fees shall be
based upon such reduced Commitments; provided, however, that the
Commitments may not at any time be reduced by the Company if the reduced
Commitments would be less than the amount outstanding hereunder, under the
Notes and the aggregate Facility Letter of Credit Obligations for all Banks
on the date of reduction. Any optional reduction of a portion of the
Commitments or termination shall not be reinstated.
2.14. Taxes.
(a) All payments or reimbursements under this Agreement and any instrument
or agreement required hereunder shall be made free and clear of and without
deduction for any taxes, fees or other charges of any nature whatsoever
imposed by any taxing authorities.
(b) The Company agrees to pay on behalf of each Bank directly to the
appropriate Governmental Authority, or to reimburse each Bank for the cost
of, any or all taxes or other duties which may be imposed by any
Governmental Authority with respect to the Credit, except such taxes
(including income taxes or franchise taxes of any taxing jurisdiction) as
are imposed on or measured by each Bank's net income or receipts. Each
Bank which is organized outside the United States shall deliver to the
Company such certificates, documents, or other evidence as the Company may
reasonably require from time to time as are necessary to establish that
such Bank is not subject to withholding under Section 1441 or 1442 of the
Code, or comparable successor provisions, because payments of interest to
such Bank are effectively connected with the conduct of such Bank of a
trade or business in the United States or exempt from United States tax
under provision of an applicable tax treaty.
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(c) If the Company is legally prohibited from complying with subparagraph
(a) or (b), payments due to any such Bank under this Agreement and any
instrument or agreement required hereunder shall be increased so that,
after provisions for taxes and all taxes on such increase, the amounts
received by such Bank will be equal to the amounts required under this
Agreement and any instrument or agreement required hereunder if no taxes
were due on such payments.
(d) The Company shall confirm that all such taxes or duties have been paid
by sending official tax receipts, or notarized copies thereof, to the Agent
within thirty (30) days after the due date for each payment of any such tax
or duty.
(e) Each Bank will use its best efforts to notify the Company of any taxes
subject to this provision of which it has knowledge.
2.15. Reserves, Etc. (a) The Company shall reimburse or compensate each
Bank for all costs incurred, losses suffered (including lost profit) or
payments made by such Bank which are applied or allocated by such Bank to
its Eurodollar Advances, Optional Currency Advances, LIBOR Loans, its
Commitment hereunder or the Facility Letters of Credit (all as determined
by such Bank in good faith and in its sole and absolute discretion) by
reason of:
(i) any and all present or future reserve, deposit or similar requirements
against (or against any class of or change in or in the amount of) assets
or liabilities of such Bank; or
(ii) compliance by such Bank with any directive, requirement or request
from any regulatory authority, whether or not having the force of law.
(b) Capital Adequacy. If, after the date hereof, any Bank shall have
determined that the adoption of any applicable law, rule, regulation or
guideline regarding capital adequacy, or any change therein, or any change
in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or its
Lending Branch) with any direction, requirement, or request regarding
capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, affects or would affect the
amount of capital required or expected to be maintained by such Bank or any
corporation controlling such Bank and such Bank (taking into consideration
such Bank's policies with respect to capital adequacy and such Bank's
desired return on capital) determines that the amount of such capital is
increased as a consequence of such Bank's obligations under this Agreement,
then, upon demand by such Bank, the Company shall immediately pay to such
Bank, from time to time as specified by such Bank, additional amounts
sufficient to compensate such Bank for such increase.
(c) Payment of such sum pursuant to Section 2.15(a) or (b) shall be made by
the Company to any Bank making demand hereunder not later than ten (10)
days after any such demand is made. A certificate of any Bank, signed by
an authorized officer claiming compensation under this Section and setting
forth the additional amount or amounts to be paid to it and explaining the
manner in which such amount was determined shall be conclusive evidence of
the amount to be paid, absent manifest error. Demand for payment of any
amount pursuant to Section 2.15(a) shall be made within thirty (30) days
after the end of the Interest Period for the Advance or Bid Loan against
which such cost, loss or payment is incurred. Payment shall not be
demanded by any Bank pursuant to Section 2.15(b) for any portion of any
period prior to forty-five (45) days before the date of such demand for
which such Bank's capital is required to be increased.
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(d) At any time and from time to time if the Company shall receive a demand
or request for payment from a Bank under Section 2.15(b), the Company may
elect to terminate or replace any such Bank and thereby terminate the
rights and obligations of such Bank, under this Agreement by doing any one
of the following within forty-five (45) days of receipt of the demand or
request:
(i) the Company may, provided no Default or Event of Default then exists
and upon three Banking Days prior notice to such Bank (with a copy to the
Agent), and if such notice is given the Company shall, prepay in full all
Advances (if any) and Bid Loans then owing to such Bank together with
accrued interest thereon and all fees and other amounts payable to such
Bank by the Company hereunder (including but not limited to any increased
costs or additional amounts and any taxes, incurred by such Bank prior to
the effective date of such prepayment) and terminate the Commitment of such
Bank in full. If the Commitment of any Bank shall be so terminated, the
Company may (without the consent of, but upon notice to, the Agent and the
other Banks), request another Bank or Banks or designate another bank to
replace such Bank and to assume all or part of the terminated Commitment
pursuant to documentation which shall be reasonably satisfactory to the
Agent and under which the assuming bank shall undertake, to the extent of
the portion of the terminated Commitment assumed by it, to assume the
rights and undertake the obligations of a Bank hereunder as though the
assuming bank had initially been a party hereto.
(ii) The Company may request such Bank (with a copy to the Agent) to, and
such Bank will, if requested by the Company, unless a Default or an Event
of Default shall have occurred and shall be continuing, assign to one or
more financial institutions in accordance with Section 9.04 (excluding,
however, the 20% retention requirement in Section 9.04(a)) all Advances and
Bid Loans then owing to such Bank and all rights and obligations hereunder,
provided that (A) each such assignment shall be either an assignment of all
of the rights and obligations of the assigning Bank under this Agreement or
an assignment of a portion of such rights and obligations made concurrently
with another such assignment or assignments which together cover all of the
rights and obligations of the assigning Bank under this Agreement, and (B)
no Bank shall be obligated to make any such assignment as a result of a
demand by the Company pursuant to this Section 2.15(d) unless and until
such Bank shall have received one or more payments from either the Company
or one or more assignees in an aggregate amount at least equal to the
aggregate outstanding principal amount of the Advances and Bid Loans owing
to such Bank, together with accrued interest thereon to the date of payment
of such principal amount and all fees and other amounts payable to such
Bank under this Agreement (including but not limited to any increased costs
or additional amounts and any taxes, incurred by such Bank prior to the
effective date of such assignment and any reasonable costs, expenses and
attorneys' fees (including without limitation the reasonable allocated cost
of staff counsel) incurred in connection with making such assignment).
Without prejudice to the survival of any other agreement of the Company
hereunder, the agreements of the Company contained in Sections 2.10, 2.12,
2.14, 2.15 and 2.18 shall survive for the benefit of any Bank being
replaced under this Section 2.15(d) with respect to the time prior to such
replacement.
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2.16. Illegality.
(a) If at any time any Bank, in its sole and absolute discretion,
determines that any change in applicable law or regulation or in the
interpretation thereof makes it unlawful for such Bank to make or continue
its portion of the Advances or any Bid Loan bearing interest calculated
with reference to LIBOR, then such Bank shall promptly give notice (signed
by an authorized officer) thereof to the Company and the Agent and, upon
the giving of such notice, such Bank's obligation to make such Advances or
Bid Loans, as the case may be, shall terminate and thereafter only
Reference Rate Advances or CD Rate Advances shall be available from such
Bank. If designating a different Lending Branch with respect to such
Advances or Bid Loans, as the case may be, would obviate the need to give
such notice, any affected Bank shall so designate, so long as such
designation shall not be illegal or otherwise disadvantageous to such Bank.
(b) Upon receipt of such notice, the Company shall repay in full the then
outstanding principal amount of each affected Advance or Bid Loan bearing
interest with reference to LIBOR, together with interest thereon and any
amounts payable under Section 2.12(b) either (i) on the last day of the
then current Interest Period applicable to such Advance or Bid Loan if such
Bank may lawfully continue to maintain and fund such Advance or Bid Loan to
such day or (ii) immediately if such Bank may not lawfully continue to
maintain and fund such Advance or Bid Loan to such day. On the date of any
prepayment pursuant to clause (ii), the Company shall borrow a Reference
Rate Advance, or at the Company's option, subject to the requirements of
Section 2.02, a CD Rate Advance from such Bank in an equal principal amount
for an Interest Period having the same number of days remaining in the then
current Eurodollar Advance Interest Period, Optional Currency Advance
Interest Period or LIBOR Loan Interest Period, as the case may be.
(c) If the condition or circumstance causing the giving of notice ceases to
exist, the Agent or such Bank shall give notice thereof to the Company, and
the Company may then borrow Advances or Bid Loans bearing interest
calculated with reference to LIBOR, as the case may be, in accordance with
the terms hereof.
2.17. Unavailability. If the Agent is advised
(a) by the Majority Banks that deposits in Dollars or the relevant Optional
Currency in the amount of the Advances to be made by the Banks are not
being offered to the Majority Banks in the relevant market for the Interest
Period requested by the Company, or
(b) by Banks having Commitments equal to at least 50.1% of the Aggregate
Commitments that the CD Rate or LIBOR, as the case may be, will not
adequately and fairly reflect the cost to such Banks of maintaining or
funding their Fixed Rate Advances or Optional Currency Advances for the
requested Interest Period, the Agent shall promptly give notice thereof to
the Company and the Banks, and the obligations of the Banks to make Fixed
Rate Advances, or Optional Currency Advances, as the case may be, shall be
suspended until the Agent notifies the Company that the circumstances
giving rise to such suspension no longer exist. If the circumstances
causing such suspension shall cease, the Agent shall give prompt notice
thereof to the Company, and the Company may then borrow Fixed Rate Advances
or Optional Currency Advances, as the case may be, in accordance with the
terms of this Agreement.
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2.18. The Bid Facility.
(a) Bid Loans. From time to time, from the Closing Date to but excluding
the Termination Date, and provided that both Standard & Poor's and Moody's
ratings for the Company's senior long-term unsecured public debt (without
credit enhancement) is at least equal to BB and Ba2, respectively, each
Bank severally agrees to lend to the Company Absolute Rate Loans and LIBOR
Loans pursuant to bids which have been made by such Bank pursuant to
Section 2.18(c) and accepted by the Company pursuant to Section 2.18(d);
provided, however, that the total amount of Advances for all Banks (after
determining the Equivalent Amount of all Optional Currency Advances),
outstanding Facility Letter of Credit Obligations and Bid Loans for all
Banks outstanding under this Agreement may not exceed at any time the
Aggregate Commitment. Neither the Agent, the Co-Agent nor any Bank (other
than the Bank who has agreed to fund such Bid Loan) will be liable for the
failure of a Bank to fund a Bid Loan such Bank agrees to make to the
Company.
Each Bank may, but shall have no obligation to, make a bid in response to a
request for bids by the Company pursuant to Section 2.18(b), which may
exceed such Bank's Commitment but not the maximum amount available under
the Credit as set forth above. Subject to the requirements of Section
2.18(d), the Company shall have no obligation to accept any of the bids
made pursuant to a request for bids.
(b) Requests for Bids. The Company may request the Bid Agent to solicit
bids from the Banks for one or more Bid Loans by a telephone notice
received not later than 10:00 a.m., Chicago time, one (1) Banking Day prior
to the Value Date for Absolute Rate Loans and not later than 12:00 noon,
Chicago time, three (3) Banking Days prior to the Value Date for LIBOR
Loans in Dollars and not later than 12:00 noon, Chicago time, six (6)
Banking Days prior to the Value Date for LIBOR Loans in Optional
Currencies. Each such telephone request shall be followed promptly by a
request in writing, by telecopy or by telex in the form of Schedule 6
hereto and shall become irrevocable upon the first notice of such request
given by the Bid Agent to a Bank. The Company may not request the Bid
Agent to solicit bids within five (5) Banking Days of any other request.
Each request shall specify:
(i) the Value Date for the Bid Loans, which shall be a Banking Day and the
same day for all Bid Loans requested in such notice;
(ii) the principal amount of each Borrowing of Bid Loans under this Section
2.18(b)(ii), which shall not be less than Ten Million Dollars ($10,000,000)
and shall be in an integral multiple of One Million Dollars ($1,000,000) in
excess thereof;
(iii) whether the Bid Loans are to be Absolute Rate Loans or LIBOR Loans
(but only one interest rate option may be specified in each request); and
(iv) if the Bid Loans are to be Absolute Rate Loans, the Interest Period
for each such Loan, or if the Loans are to be LIBOR Loans, the Interest
Period for each such Bid Loan.
The Bid Agent shall promptly notify the Banks by telephone of each request
for bids received from the Company pursuant to this Section 2.18. Each
such telephone notice from the Bid Agent shall be followed promptly by
notice in writing, by telecopy or by telex in the form of Schedule 6
received from the Company.
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(c) Bids. Each Bank shall notify the Bid Agent of the Bid Loans for which
such Bank is bidding by an irrevocable notice in writing, by telecopy or by
telex in the form of Schedule 7 hereto received by the Bid Agent not later
than 9:00 a.m., Chicago time, on the Value Date for Absolute Rate Loans,
not later than 1:00 p.m., Chicago time, three (3) Banking Days prior to the
Value Date for LIBOR Loans in Dollars and not later than 1:00 p.m., Chicago
time, three (3) Banking Days prior to the Value Date for LIBOR Loans in
Optional Currencies; provided that the Bid Agent and any Bank may bid on
not more than three (3) Bid Loans in response to any one request by the
Company for bids; provided further that bids by the Bid Agent must be
submitted to the Company not later than 8:45 a.m., Chicago time, on the
Value Date for Absolute Rate Loans and not later than 12:45 p.m., Chicago
time, three (3) Banking Days prior to the Value Date for LIBOR Loans in
Dollars and Optional Currencies. Each notice shall specify:
(i) the principal amount such Bank is bidding for each Bid Loan, which
shall not be less than Five Million Dollars ($5,000,000) and shall be an
integral multiple of One Million Dollars ($1,000,000) in excess thereof;
(ii) for Absolute Rate Loans, the Absolute Rate for each such Bid Loan, and
for LIBOR Loans, the Margin for each such Bid Loan (but the interest rate
option for all Bid Loans covered by such bid must be the same as specified
in the Company's request for bids); and
(iii) for Absolute Rate Loans, the Interest Period for each such Bid Loan,
and for LIBOR Loans, the Interest Period for each such Bid Loan.
The Bid Agent shall notify the Company by telephone of the bid received
from each Bank pursuant to this Section 2.18(c) not later than 9:30 a.m.,
Chicago time, on the date such bid is received by the Bid Agent for
Absolute Rate Loans and not later than 1:30 p.m., Chicago time, on the date
such bid is received by the Bid Agent for LIBOR Loans in Dollars and
Optional Currencies.
(d) Acceptance of Bids. If the Company wishes to accept a bid or bids, the
Company shall by irrevocable telephone notice received by the Bid Agent not
later than 10:00 a.m., Chicago time, on the Value Date for Absolute Rate
Loans and not later than 2:00 p.m, Chicago time, three (3) Banking Days
prior to the Value Date for LIBOR Loans, notify the Agent and the Bid Agent
of the bid or bids it accepts, which telephone notice shall be followed
promptly by a notice in writing, by telecopy or by telex in the form of
Schedule 8 hereto. The Bid Agent shall promptly notify the Banks by
telephone of the amount of the bids accepted and of the rates at which bids
have been accepted. The acceptance of bids is subject to the following
requirements:
(i) the Company may accept one or more of the Bid Loans specified in a bid
(but not more than the aggregate amount requested by the Company), and may
accept a Bid Loan in an amount less than the amount specified in the bid
for such Bid Loan, provided that, subject to the provisions of Section
2.18(d)(iii) and (iv), each Bid Loan accepted shall be in an amount not
less than Five Million Dollars ($5,000,000) and an integral multiple of One
Million Dollars ($1,000,000) in excess thereof;
(ii) the acceptance of bids may only be made on the basis of ascending
interest rates for Bid Loans with the same Interest Period;
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(iii) if bids are made by two or more Banks for Bid Loans with the same
interest rates for the same Interest Period and for a greater aggregate
amount than the Company wishes to borrow, the Company shall allocate its
acceptance among such bids as nearly as possible (in amounts of One Million
Dollars ($1,000,000) or integral multiples thereof) in proportion to the
bids made by each Bank; and
(iv) the acceptance of bids is subject to the maximum limits for borrowing
under Sections 2.01(a) and 2.18(a) (as reduced pursuant to Section 2.13),
and if bids are made by two or more Banks for a greater aggregate amount
than permitted by such limits, the Company shall allocate its acceptance
among such bids in proportion to the bid made by each such Bank so that the
total amounts of Advances and Bid Loans do not exceed such limits.
(e) Bid Agent's Fee. The Company shall pay to the Bid Agent for the
account and sole use and benefit of the Bid Agent a fee of $200 per Bank
(excluding the Agent) per auction.
(f) Resignation of the Bid Agent. The Bid Agent may resign at any time by
giving written notice to the Agent, the Banks and the Company. Upon any
such resignation by the Bid Agent, the Majority Banks with the prior
written consent of the Company, which shall not be unreasonably withheld,
shall have the right to appoint a successor from among the Banks party
hereto. If no successor shall have accepted such appointment within
forty-five (45) days after the retiring Bid Agent's giving of notice of
resignation, the retiring Bid Agent may, on behalf of the Banks, appoint a
successor thereto with the prior written consent of the Company, which
shall not be unreasonably withheld and such successor Bid Agent shall be a
bank or trust company organized under the laws of the United States or any
state thereof having a combined capital and surplus of at least
$1,000,000,000. Upon the acceptance by such successor of its appointment
hereunder, such successor shall succeed to and become vested with all the
rights and obligations of the retiring Bid Agent, and the retiring Bid
Agent shall be discharged from its obligations under this Agreement except
with respect to any liability with respect to a breach of any obligation
hereunder prior to such resignation. The provisions of this Agreement
shall inure to the benefit of the retiring Bid Agent as to any actions
taken or omitted to be taken by it while it held such position under this
Agreement.
2.19. Telephone Notice, Indemnity. The Company shall protect the Banks,
the Bid Agent, the Agent and the Co-Agent and hold them harmless from and
not liable for any and all loss, damage, claim, or expense (including,
without limitation, reasonable attorneys' fees and the reasonable allocated
cost of staff counsel) incurred by the Banks, the Bid Agent, the Co-Agent
and the Agent in connection with or in relation to any act or any failure
to act upon telephone instructions received by any Bank, the Bid Agent, the
Co-Agent or the Agent from the Company or any persons who has identified
himself as an authorized officer of the Company, whether or not the
instructions are actually given by an authorized officer of the Company;
provided, however, that such indemnity shall not, as to the Bid Agent, the
Agent, the Co-Agent or any Bank, apply to any such losses, claims, damages,
liabilities or related expenses arising from the gross negligence or
willful misconduct of the party to be indemnified. If such written notice
conflicts with the telephonic notice, the Agent, the Co-Agent, the Banks
and the Bid Agent shall be entitled to rely on the telephonic notice.
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2.20. Facility Letters of Credit. Subject to the terms and conditions of
this Agreement, the Company may obtain Facility Letters of Credit, from
time to time during the period commencing on the date hereof and ending on
the Banking Day prior to the Termination Date. The Company may request any
Bank to issue a Facility Letter of Credit and such Bank may, but is not
required to, issue a Facility Letter of Credit. If no other Bank is
willing to issue a Facility Letter of Credit, First Chicago shall issue
such Facility Letter of Credit. Any Bank issuing a Facility Letter of
Credit shall be an Issuer. No Bank shall be responsible for issuing a
Facility Letter of Credit that First Chicago or another Bank has agreed to
issue if First Chicago or such other Bank fails to issue such Facility
Letter of Credit. Nothing herein contained shall prohibit the Company from
obtaining letters of credit outside of this Agreement.
(a) Types and Amounts. No Issuer (including First Chicago) shall:
(i) issue any Facility Letter of Credit if the aggregate maximum amount
then available for drawing under Facility Letters of Credit, after giving
effect to the Facility Letter of Credit requested hereunder, shall exceed
any limit imposed by law or regulation upon the Issuer;
(ii) issue any Facility Letter of Credit if, after giving effect thereto,
the sum of (a) the Facility Letter of Credit Obligations and (b) the
aggregate unpaid principal balance of the Advances plus the Bid Loans would
exceed the Aggregate Commitment;
(iii) issue any Facility Letter of Credit which has an expiration date (a)
later than twelve months after the Issuance Date thereof or (b) after the
Termination Date, provided that in no case shall any Facility Letter of
Credit expire after the Termination Date; or
(iv) issue any Facility Letter of Credit if the Facility Letter of Credit
Obligations, after giving effect to the Facility Letter of Credit requested
hereunder, shall exceed $40,000,000.
(b) Conditions. In addition to being subject to the satisfaction of the
conditions contained in Article III, the obligation of the Issuer to issue
any Facility Letter of Credit is subject to the satisfaction in full of the
following conditions:
(i) the Company shall have delivered to the Issuer, with a copy to the
Agent, at such times and in such manner as the Issuer may reasonably
prescribe such documents and materials as may be required pursuant to the
terms of the proposed Facility Letter of Credit and the proposed Facility
Letter of Credit shall be reasonably satisfactory to the Issuer as to form
and content; and
(ii) as of the Issuance Date, no order, judgment or decree of any court,
arbitrator or Governmental Authority shall purport by its terms to enjoin
or restrain the Issuer from issuing the proposed Facility Letter of Credit
and no law, rule or regulation applicable to the Issuer and no request or
directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over the Issuer shall prohibit or request that
the Issuer refrain from the issuance of Facility Letters of Credit
generally or the issuance of such proposed Facility Letter of Credit in
particular.
(c) Procedure for Issuance of Facility Letters of Credit.
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(i) The Company shall give the Issuer and the Agent three (3) Banking Days'
prior written notice of any requested issuance of a Facility Letter of
Credit (except that, in lieu of such written notice, the Company may give
the Issuer (x) notice of such request by tested telex or other tested
arrangement satisfactory to the Issuer or (y) telephonic notice of such
request if confirmed in writing by delivery to the Issuer (i) immediately
(A) of a telecopy of the written notice required hereunder which has been
signed by an authorized signatory of the Company or (B) of a telex
containing all information required to be contained in such written notice
and (ii) promptly (but in no event later than the requested time of
issuance) of a copy of the written notice required hereunder containing the
original signature of an authorized signatory of the Company). Each such
notice (each a "Letter of Credit Request") shall be irrevocable once the
relevant Facility Letter of Credit is issued and shall specify the stated
amount of the Facility Letter of Credit requested, the Issuance Date (which
day shall be a Banking Day) of such requested Facility Letter of Credit,
the date on which such requested Facility Letter of Credit is to expire
(which date shall be a Banking Day and shall in no event be later than the
Termination Date), the purpose for which such Facility Letter of Credit is
to be issued, and the Person for whose benefit the requested Facility
Letter of Credit is to be issued. Promptly after receipt thereof, the
Agent shall notify each Bank of the contents of each Letter of Credit
Request. At the time such Letter of Credit Request is made, the Company
shall also provide the Issuer and the Agent with a copy of the form of the
Facility Letter of Credit it is requesting be issued. Such Letter of
Credit Request, to be effective, must be received by the Issuer and the
Agent not later than 2:00 p.m. (Chicago time) on the last Banking Day on
which notice can be given under this Section 2.20(c).
(ii) Subject to the terms and conditions of this Section 2.20(c) and
provided that the applicable conditions set forth in Article III and
Section 2.20(b) have been satisfied, the Issuer shall, on the requested
Issuance Date, issue the requested Facility Letter of Credit for the
account of the Company in accordance with the Issuer's usual and customary
business practices.
(iii) An Issuer shall not amend, renew, extend, or permit an extension of
any Facility Letter of Credit unless the requirements of this Section
2.20(c) are met as if a new Facility Letter of Credit were being requested
and issued.
(iv) On and after the Closing Date, all Existing Letters of Credit shall be
deemed to be Facility Letters of Credit and subject to the terms of this
Agreement as fully and completely as if such Letters of Credit had been
issued hereunder as Facility Letters of Credit.
(d) Reimbursement Obligations.
(i) The Issuer shall promptly notify the Company and the Agent and each
Bank of any draw under a Facility Letter of Credit. The Company shall
reimburse the Agent for the account of the Issuer, in immediately available
funds, for draws under a Facility Letter of Credit no later than the
Banking Day next succeeding the date of the payment by the Issuer.
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(ii) Any Reimbursement Obligation with respect to any Facility Letter of
Credit shall bear interest from the date of the relevant draws under the
relevant Facility Letter of Credit at the interest rate for Borrowings not
paid at maturity as calculated in accordance with Section 2.10.
(iii) Any action taken or omitted to be taken by the Issuer under or in
connection with any Facility Letter of Credit, if taken or omitted in the
absence of willful misconduct or gross negligence, shall not put the Issuer
under any resulting liability to any Bank or, assuming that the Issuer has
complied with the procedures specified in Section 2.20(c) and such Bank has
not given a notice contemplated by Section 2.20(e) that continues in full
force and effect, relieve such Bank of its obligations hereunder to the
Issuer. In determining whether to pay under any Facility Letter of Credit,
the Issuer shall have no obligation relative to the Banks, the Agent or the
Company other than to confirm that any documents required to be delivered
under such Facility Letter of Credit appear to comply on their face with
the requirements of such Facility Letter of Credit.
(e) Participation; Receipt of Payments.
(i) Immediately upon issuance or extension or renewal by an Issuer of any
Facility Letter of Credit in accordance with the procedures set forth in
Section 2.20(c), and for all Existing Letters of Credit, each Bank shall be
deemed to have irrevocably and unconditionally purchased and received from
the Issuer, without recourse or warranty, an undivided interest and
participation equal to its Percentage Share in such Facility Letter of
Credit (including, without limitation, all obligations of the Company with
respect thereto) and any security therefor or guaranty pertaining thereto,
if any; provided, that a Facility Letter of Credit issued by the Issuer
shall not be deemed to be a Facility Letter of Credit for purposes of this
Section 2.20(e) if the Issuer and the Agent shall have received written
notice from any Bank on or before one Banking Day prior to the date of its
issuance of such Facility Letter of Credit that one or more of the
conditions contained in Article III is not then satisfied, and, in the
event the Issuer and the Agent receive such a notice, there shall be no
further obligation on the part of First Chicago or any Issuer to issue any
Facility Letter of Credit until such notice is withdrawn by that Bank or
such condition has been effectively waived in accordance with the
provisions of this Agreement.
(ii) In the event that an Issuer makes any payment under any Facility
Letter of Credit and the Company shall not have repaid such amount to the
Issuer pursuant to Section 2.20(d), the Issuer shall promptly notify the
Agent and each Bank of such failure, and each Bank shall promptly and
unconditionally pay to the Agent for the account of the Issuer the amount
of such Bank's Percentage Share of the unreimbursed amount of any such
payment. The failure of any Bank to make available to the Agent, in
immediately available funds, its Percentage Share of the unreimbursed
amount of any such payment shall not relieve any other Bank of its
obligation hereunder to make available to the Agent, in immediately
available funds, its Percentage Share of the unreimbursed amount of any
payment on the date such payment is to be made, but no Bank shall be
responsible for the failure of any other Bank to make available to the
Agent its Percentage Share of the unreimbursed amount of any payment on the
date such payment is to be made.
(iii) Whenever the Agent or an Issuer receives a payment on account of a
Reimbursement Obligation, including any interest thereon, it shall promptly
pay to each Bank which has funded its participating interest therein, in
immediately available funds, an amount equal to such Bank's Percentage
Share thereof.
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(iv) The obligations of a Bank to make payments to the Agent for the
account of an Issuer with respect to a Facility Letter of Credit shall be
absolute, unconditional and irrevocable, not subject to any counterclaim,
set-off, qualification or exception whatsoever and shall be made in
accordance with the terms and conditions of this Agreement under all
circumstances.
(f) Payment of Reimbursement Obligations.
(i) The Company agrees to pay to the Agent for the account of the Issuer
the amount of all Reimbursement Obligations, interest and other amounts
payable to the Issuer under or in connection with any Facility Letter of
Credit immediately when due, irrespective of any claim, set-off, defense or
other right which the Company or any Subsidiary may have at any time
against the Issuer or any other Person, under all circumstances, including
without limitation, any of the following circumstances:
(A) any lack of validity or enforceability of this Agreement or any of the
other documents, instruments or agreements executed by the Company in
connection therewith;
(B) the existence of any claim, setoff, defense or other right which the
Company or any Subsidiary may have at any time against a beneficiary named
in a Facility Letter of Credit or any transferee of any Facility Letter of
Credit (or any Person for whom any such transferee may be acting), any
Issuer, any Bank, or any other Person, whether in connection with this
Agreement, any Facility Letter of Credit, the transactions contemplated
herein or any unrelated transactions (including any underlying transactions
between the Company or any Subsidiary and the beneficiary named in any
Facility Letter of Credit);
(C) any draft, certificate or any other document presented under the
Facility Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect (provided any such draft, certificate or other
document appeared valid on its face when presented to the Issuer);
(D) the surrender or impairment of any security for the performance or
observance of any of the terms of this Agreement or any of the documents,
instruments or agreements executed by the Company in connection therewith;
or
(E) the occurrence of any Default or Event of Default.
(ii) In the event any payment by the Company received by the Agent or an
Issuer with respect to a Facility Letter of Credit and distributed to the
Banks on account of their participations is thereafter set aside, avoided
or recovered from the Agent or an Issuer in connection with any
receivership, liquidation, reorganization or bankruptcy proceeding, each
Bank which received such distribution shall, upon demand by the Agent,
contribute to the Agent or such Issuer such Bank's Percentage Share of the
amount set aside, avoided or recovered together with interest at the rate
required to be paid by the Agent or such Issuer upon the amount required to
be repaid by it.
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(g) Compensation for Facility Letters of Credit. The Company shall pay to
the Agent, for the ratable account of each Bank, a Letter of Credit Fee in
respect of the facility Letter of Credit then being issued in accordance
with the following schedule, based on the lower of the most recently
published final Standard & Poor's or Moody's rating of the Company's senior
long-term unsecured public debt (without credit enhancement) in effect on
the day such Facility Letter of Credit is issued. For Existing Letters of
Credit, the Letter of Credit Fee will commence on the Closing Date.
Promptly upon its receipt of such Letter of Credit Fee, the Agent shall
promptly pay to each Bank, in immediately available funds, an amount equal
to such Bank's Percentage Share thereof.
Letter of Credit Fee
Equal to or Better
than BBB and Baa2 .30%
Equal to or Better
than BBB- and Baa3 .40%
Equal to or Better
than BB+ and Ba1 .70%
Equal to or Better
than BB and Ba2 .90%
Lower than BB or Ba2 1.00%
Any Issuer shall have the right to receive, for its own account, (i) in
respect of each Facility Letter of Credit issued by it, a fee in the amount
of 1/4 of 1% per annum of the maximum face amount of such Facility Letter
of Credit ("Issuer's Fee"), and (ii) all of its reasonable and customary
costs of issuing and servicing the Facility Letters of Credit. The Letter
of Credit Fee and the Issuer's Fee shall begin to accrue on the Issuance
Date or, for Existing Letters of Credit, commencing on the Closing Date,
and shall be payable quarterly in arrears.
2.21. Extension of Termination Date. The Company may, from time to time,
by notice to the Agent (each such notice being an "Extension Notice") given
no later than 60 days but not sooner than 90 days prior to the first and
second anniversary of the Closing Date, extend the Termination Date to a
date one year after the then applicable Termination Date; provided,
however, that such extension shall not be effective unless all of the Banks
consent to such extension by written notice to the Agent within 30 days of
the Agent's receipt of the Extension Notice. Failure to respond shall be
deemed a rejection of the extension request. The Agent shall notify each
Bank of its receipt of an Extension Notice within two (2) Business Days
after the Agent's receipt thereof. The Company may deliver only one (1)
Extension Notice per year and not more than two (2) Extension Notices
during the term of this Agreement. In no event may the Termination Date be
extended beyond December 31, 1999. If less than 100% of the Banks consent
to the proposed extension, the Commitments of the Banks shall terminate on
the then effective Termination Date without giving effect to such proposed
extension.
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ARTICLE III
CONDITIONS PRECEDENT
3.01. Conditions Precedent to Closing Date. In addition to the
requirements set forth in Section 3.02, the obligation of each Bank to make
its first Advance or Bid Loan or the Issuer to issue any Facility Letter of
Credit, as the case may be, under the Credit is subject to the condition
precedent that on the Closing Date, the following shall have been delivered
to the Agent, in form and substance satisfactory to the Agent and its
counsel and copies in sufficient numbers for each Bank:
(a) Company's Incorporation Papers. A certificate, certified by the
Secretary or an Assistant Secretary of the Company, stating that there have
been no amendments and modifications to the articles of incorporation of
the Company since copies of such documents were delivered to the Banks in
connection with the Existing Agreement and a copy of the by-laws of the
Company, accompanied by a certificate from the Secretary or Assistant
Secretary stating that such by-laws are in full force and effect on the
Closing Date.
(b) Company's Corporate Resolution. A copy of the resolution passed by the
Board of Directors of the Company, on July 16, 1992 certified by the
Secretary or an Assistant Secretary of the Company as still being in full
force and effect on the Closing Date, authorizing the Borrowings provided
for herein and the execution, delivery and performance of this Agreement,
the Notes and any other instrument or agreement required hereunder.
(c) Company's Incumbency Certificate. A certificate, signed by the
Secretary or an Assistant Secretary of the Company and dated the Closing
Date, as to the incumbency, and containing the specimen signature or
signatures, of the Persons authorized to execute and deliver this
Agreement, the Notes, and any other instrument or agreement required
hereunder.
(d) Opinion of the Company's Counsel. A written opinion, dated
the Closing Date, of D. Jeffrey Baddeley, Vice President and General
Counsel for the Company, in the form attached hereto as Exhibit B.
(e) Agreement. A copy of this Agreement, duly executed by an authorized
officer of the Company.
(f) Notes. Committed Notes payable to the order of each Bank in the amount
of such Bank's Commitment, dated the Closing Date and duly executed by an
authorized officer of the Company.
(g) Fees. The fees described in Section 2.08 which are payable on the
Closing Date and a closing fee, payable to the Agent for the account of
each Bank on a pro rata basis, equal to .10% of the Aggregate Commitment.
(h) No Default Certificate. A certificate, signed by the controller or
chief financial officer of the Company, stating that on the Closing Date
the representations and warranties contained in the Agreement are true and
correct and that no Default or Event of Default has occurred and is
continuing.
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(i) Other Evidence Banks May Require. Such other evidence as the Majority
Banks may reasonably request to establish the consummation of the
transactions contemplated hereby, the taking of all necessary actions in
any proceedings in connection herewith and compliance with the conditions
set forth in this Agreement.
3.02. Conditions Precedent to Each Borrowing. The obligation of each Bank
to make any Advance or Bid Loan hereunder and the obligation of an Issuer
to issue any Facility Letter of Credit, including the first Advance or Bid
Loan or Facility Letter of Credit, is subject to the following conditions
precedent:
(a) On the date of any Borrowing or issuance of any Facility Letter of
Credit (other than a Refunding Borrowing), the representations and
warranties contained in Article IV (other than Section 4.09 and 4.13(a))
shall be true and correct as if made in writing on that date and by making
a request for such Borrowing or Facility Letter of Credit, the Company
shall be deemed to have made such representations and warranties as of that
date (except to the extent that any of the Schedules hereto shall have been
modified by more current information furnished to the Banks in accordance
with Section 5.02 or 5.03, in which event such representations and
warranties shall be deemed to be made on the basis of the information
contained in the modified schedules).
(b) On the date of each Refunding Borrowing or renewal or extensions of any
Facility Letter of Credit (including, without limitation, any automatic
extensions pursuant to the terms of any such Facility Letters of Credit),
the representations and warranties contained in Sections 4.01 through 4.08,
4.10 through 4.12, 4.14 and 4.16 (except as any of the Schedules hereto
shall have been modified by more current information furnished to the Banks
in accordance with Section 5.02 or 5.03, in which event such
representations and warranties deemed to be made on the basis of the
information contained in the modified schedules) herein shall also be true
and correct and the Company shall be deemed to have remade such
representations and warranties on each such date as if made in writing by
the Company on that date.
(c) The Agent or the Bid Agent shall have received from the Company the
notice of Borrowing described in Section 2.02 or the bid request described
in Section 2.18 or the Facility Letter of Credit Request described in
Section 2.20(c), as the case may be.
(d) With respect to the first Bid Loan by a Bank, an executed Competitive
Bid Note payable to the order of such Bank.
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3.03. Termination of Existing Agreement. The parties hereto agree that
the commitments under the Existing Agreement shall terminate in their
entirety and the Existing Agreement shall be amended and restated by this
Agreement simultaneously with and subject to the effectiveness of this
Agreement and that, except as set forth in Section 3.04 below with respect
to the principal of and interest on Existing Advances, the Company shall
simultaneously pay all other amounts due and outstanding thereunder to but
excluding the Closing Date.
3.04. Advances under Existing Agreement. The Company currently has
outstanding certain Advances under the Existing Agreement ("Existing
Advances"), a list of which is attached hereto as Schedule 12 with a
schedule of their respective Interest Periods and each Bank's pro rata
share of such Advance. The Interest Periods of the Existing Advances
extend beyond the Closing Date. The parties hereto agree that the Existing
Advances will remain outstanding and be deemed to be Advances under this
Agreement until they are paid in full. The parties hereto agree, that
notwithstanding anything in this Agreement to the contrary regarding pro
rata borrowing, repayments or otherwise, the Existing Advances will remain
in effect and each Bank's existing pro rata share therein will not be
modified. Until all Existing Advances are paid in full, the principal
amount of Advances hereunder (excluding Existing Advances) may not exceed
$174,308,057.90.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants that:
4.01. The Company's Existence. The Company is a corporation duly
organized and existing under the laws of the State of Delaware, with its
principal place of business in Waukegan, Illinois, and is duly qualified as
a foreign corporation and is properly licensed and in good standing in each
jurisdiction where the failure to qualify or be licensed would have a
material adverse effect on the business, properties or financial condition
of the Company and its Consolidated Subsidiaries taken as a whole.
4.02. Subsidiaries' Existence. Schedule 2(b) attached hereto contains a
list of all of the Company's Subsidiaries showing, as to each, the
jurisdiction of incorporation and as to each class of stock of such
Subsidiary, the amount issued and outstanding owned by any Person other
than the Company or a Subsidiary. All of the outstanding shares of stock
of each of the Subsidiaries shown on Schedule 2 as being owned by the
Company and its Subsidiaries have been validly issued, are fully paid and
nonassessable and, except for directors' qualifying shares, are owned by
the Company or another Subsidiary free and clear of all Liens. Each
Consolidated Subsidiary is duly organized and existing under the laws of
the jurisdiction of its incorporation, and is properly licensed and in good
standing in each jurisdiction in which the failure to qualify or be
licensed would have a material adverse effect on the business, properties
or financial condition of the Company and its Consolidated Subsidiaries
taken as a whole.
4.03. Company's Powers. The execution, delivery and performance of this
Agreement and any instrument or agreement required to be delivered by the
Company hereunder are within the Company's corporate powers, have been duly
authorized by all requisite corporate action, and are not in conflict with
the terms of any charter, by-law or other organizational papers of the
Company, or any instrument or agreement to which the Company is a party or
by which the Company is bound or affected.
4.04. Power of Company Officers. The officers of the Company executing
this Agreement, the Notes and any other certificate, instrument or
agreement required to be delivered by the Company hereunder have been duly
elected or appointed and were fully authorized to execute the same at the
time such agreement, certificate or instrument was executed.
4.05. Government and Other Approvals. No approval, consent, exemption or
other action by, or notice to or filing with, any Governmental Authority is
necessary in connection with the execution, delivery or performance by the
Company of this Agreement, the Notes or any other instrument or agreement
required hereunder.
4.06. Compliance With Laws. There is, to the best of the Company's
knowledge, no law, rule or regulation, nor is there any judgment, decree or
order of any court or Governmental Authority binding on the Company which
would be contravened by the execution, delivery or performance of this
Agreement, the Notes or any other instrument or agreement required
hereunder.
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4.07. Enforceability of Agreement. This Agreement is the legal, valid and
binding agreement of the Company, and the Notes when executed and delivered
will be the legal, valid and binding agreements of the Company, enforceable
against the Company in accordance with their respective terms, and any
other instrument or agreement required hereunder, when executed and
delivered, will be similarly legal, valid, binding and enforceable against
the Company.
4.08. Title to Property. The Company and its Subsidiaries have good and
marketable title to their respective properties and assets free and clear
of Liens except for Permitted Liens. The execution, delivery and
performance of this Agreement, the Notes or any other instrument or
agreement required to be delivered by the Company hereunder will not result
in the creation of any Lien. Schedule 3 attached hereto is a true and
correct listing of all existing material Liens on property owned by the
Company and its Subsidiaries.
4.09. Litigation. There are no suits, proceedings, claims or disputes
pending or, to the actual knowledge of the Company after due inquiry,
threatened against or affecting the Company or any Significant Subsidiary
and their respective properties, the adverse determination of which
individually or in the aggregate would in the reasonable judgment of the
Company materially adversely affect the Company's and its Consolidated
Subsidiaries' financial condition or operations taken as a whole or impair
the Company's ability to perform its obligations hereunder or under any
instrument or agreement required hereunder, except as disclosed in writing
on Schedule 4 hereto or otherwise disclosed to the Banks in accordance with
the terms hereof.
4.10. Events of Default. No Default or Event of Default has occurred and
is continuing or will result from the incurring of the obligations by the
Company under this Agreement.
4.11. Investment Company Act of 1940. The Company is not, and no
Affiliate of the Company is, and will by such acts as may be necessary
continue not to be, an investment company within the meaning of the
Investment Company Act of 1940.
4.12. Regulation U. The proceeds of the Advances, Bid Loans or Facility
Letters of Credit will not be used, directly or indirectly, to purchase or
carry any Margin Stock or to extend credit to others for the purpose of
purchasing or carrying any Margin Stock in violation of any applicable
regulation of the Board of Governors of the Federal Reserve System.
4.13. Financial Information.
(a) The financial statements dated September 30, 1994 and all other
information and data furnished by the Company to the Banks are materially
complete and correct, and such financial statements have been prepared in
accordance with GAAP and fairly present the consolidated financial
condition and results of operations of the Company and its Consolidated
Subsidiaries as of such date and for the period ended on such date.
Neither the Company nor any Consolidated Subsidiary has any contingent
obligations, liabilities for taxes or other outstanding financial
obligations which are material in the aggregate, except as disclosed in
such statements, information and data or on Schedule 4 or Schedule 5
hereto.
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(b) Since the date of the financial statements of the Company and its
Consolidated Subsidiaries most recently furnished to the Banks, there has
been no material adverse change in the financial condition of the Company
and its Consolidated Subsidiaries sufficient to impair the Company's
ability to repay the Credit in accordance with the terms hereof.
4.14. ERISA. No fact or circumstance, including but not limited to any
Reportable Event, exists in connection with any Plan of the Company or any
of its Consolidated Subsidiaries which would constitute grounds for the
termination of any such Plan by the PBGC or for the appointment by the
appropriate United States District Court of a trustee to administer any
such Plan and which would result in the termination of a Plan and the
incurrence of material liability by the Company or its Affiliates to the
Plan, the PBGC, participants, beneficiaries or a trustee under Section 4049
of ERISA. For the purposes of this representation and warranty, the
Company or such Consolidated Subsidiary, if not the Plan administrator,
shall be deemed to have knowledge of all facts attributable to the Plan
administrator designated pursuant to ERISA.
4.15. Acquisitions. The consummation of each Acquisition financed with
Borrowings hereunder is in accordance with the description thereof in any
information furnished by the Company to the Banks and (a) is within the
Company's or Subsidiary's corporate powers, whichever is applicable, (b)
has been duly authorized by all necessary corporate action, (c) requires no
action by or in respect of, or filing with, any governmental body, agency
or official (other than filings already made related to each such
Acquisition with the Securities and Exchange Commission and filings made
pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended) that has not been made or taken and which is material,
individually or in the aggregate, other than filings on Form 8-K, which the
Company is permitted to make at a later date, and (d) will not contravene,
or constitute a default under, any provision of applicable law or
regulation or of any agreement, judgment, injunction, order, decree or
other instrument binding upon the Company or any Subsidiary, except to the
extent that such failure to comply or such default would not have a
material adverse effect on the business, condition, property or prospects
of the Person acquired or of the Company, and will not result in the
creation or imposition of any Lien on any asset of the Company or any
Subsidiary, other than Permitted Liens.
4.16. Environmental Matters.
(a) Except as identified in Schedule 4, to the actual knowledge of the
Company after due inquiry, the operations of the Company and each of its
Subsidiaries comply in all respects with all Environmental Laws and all
other applicable requirements concerning the protection of the environment
and the health and safety of the public except where the failure to comply,
when aggregated with all other conditions, failures and potential
liabilities and costs under this Section 4.16, would not have a material
adverse effect on the financial condition of the Company and its
Consolidated Subsidiaries, taken as a whole.
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(b) Except as identified in Schedule 4, to the actual knowledge of the
Company after due inquiry, the Company and each of its Subsidiaries has
obtained or has applied for all environmental, health and safety permits
which they each believe are necessary or required for its operations, and
all such granted permits are in good standing, and the Company and each of
its Subsidiaries are in compliance with all terms and conditions of such
permits except where the failure to comply, when aggregated with all other
conditions, failures and potential liabilities and costs under this Section
4.16, would not have a material adverse effect on the financial condition
of the Company and its Consolidated Subsidiaries, taken as a whole.
(c) Except as identified in Schedule 4, to the actual knowledge of the
Company after due inquiry, the Company and each of its Subsidiaries and all
of their present property or operations (as well as their past property or
operations) are not subject to any material outstanding written order from
or agreement with any Governmental Authority or other Person nor subject to
any material judicial or docketed administrative proceeding, respecting (i)
any environmental, health or safety law, rule or regulation; (ii) any
action required to clean up, remove, treat or in any other way address
Hazardous Materials in the indoor or outdoor environment; or (iii) any
material Environmental Claim arising from the release or threatened release
of a Hazardous Material into the environment.
(d) Except as identified in Schedule 4, to the actual knowledge of the
Company, there are no conditions or circumstances associated with any
property of the Company or any of its Subsidiaries formerly owned and
operated by the Company or any of its Subsidiaries or any of their
predecessors or with the former operations, including off-site disposal
practices, of the Company or its Subsidiaries or their predecessors which
may give rise to an Environmental Claim which Environmental Claim would,
when aggregated with all other conditions, failures and potential
liabilities and costs under this Section 4.16, have a material adverse
effect on the financial condition of the Company and its Consolidated
Subsidiaries taken as a whole.
(e) Except as identified in Schedule 4, to the actual knowledge of the
Company after due inquiry (i) neither the Company nor any of its
Subsidiaries has any underground storage tanks (x) that are not properly
permitted or for which a permit has not been applied for under applicable
Environmental Laws or (y) that are leaking or dispose of Hazardous
Materials off-site and (ii) the Company and each of its Subsidiaries have
substantialy met all notification requirements under Title III of CERCLA
and OSHA.
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ARTICLE V
AFFIRMATIVE COVENANTS
The Company covenants and agrees that so long as the Commitments shall
remain available and until the full and final payment of all obligations
incurred hereunder and under the Notes and expiration of all Facility
Letters of Credit, it will and, with respect to Sections 5.04 through 5.08,
will cause each Consolidated Subsidiary to, unless the Majority Banks waive
compliance in writing:
5.01. Use of Proceeds. Use the proceeds of the Credit solely (a) for
working capital and trade financing, (b) to relend to its Consolidated
Subsidiaries from time to time, (c) to make non-hostile Acquisitions which
have been approved by the boards of directors or other governing bodies or,
if a vote of such governing bodies is not required, by the stockholders of
the Persons to be acquired with the proceeds of Borrowings hereunder, (d)
to purchase shares of the Company's outstanding common stock to the extent
permitted pursuant to Section 6.09 hereof, (e) for Facility Letters of
Credit used in the ordinary course of business of the Company and its
Subsidiaries, and (f) to repay Borrowings and Reimbursement Obligations;
but the Company will not, and will not permit any Subsidiary to, use such
proceeds to make any Acquisitions or any Investments other than those
permitted under subsections (a) through (h) of Section 6.05.
5.02. Notices. Promptly give written notice to the Agent of:
(a) all litigation or material Environmental Claims affecting the Company
or any Subsidiary where the amount claimed is One Million Dollars (or the
Equivalent Amount thereof in another currency or currencies) or more in
excess of insurance coverage (including any self-retention) or where the
insurance carrier has denied its responsibility as to an amount claimed of
One Million Dollars (or the Equivalent Amount thereof in another currency
or currencies) or more in excess of insurance coverage (including any
self-retention);
(b) any other litigation or proceeding affecting the Company or any of its
Subsidiaries which the Company reports to the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, within four
days after reporting the same to the Securities and Exchange Commission;
(c) any Reportable Event under Section 4043(b) (5), (6) or (9) of ERISA
with respect to any Plan, any decision to terminate or withdraw from a
Plan, any finding made with respect to a Plan under Section 4041(c) or (e)
of ERISA, the commencement of any proceeding with respect to a Plan under
Section 4042 of ERISA, or any material increase in the actuarial present
value of unfunded vested benefits under all Plans over the preceding year;
and
(d) any Default or Event of Default, specifying the nature and the period
of existence thereof and what action the Company has taken and proposes to
take with respect thereto.
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5.03. Financial Statements, Reports, Etc. Deliver to each Bank:
(a) as soon as available but not later than sixty (60) days after the close
of each of the first three quarters of its fiscal year, the Company's and
its Consolidated Subsidiaries' unaudited condensed statement of
consolidated financial position, statement of consolidated earnings as of
the close of such quarter, and statement of consolidated cash flow for such
quarter and that portion of the fiscal year ending with such quarter,
certified by the chief financial officer or the controller of the Company
as being complete and correct and fairly presenting the Company's and its
Consolidated Subsidiaries' financial condition and results of operations as
of the end of such quarter and for that portion of the fiscal year ending
with such quarter, and accompanied by a statement from the chief financial
officer, controller or treasurer of the Company stating: (i) that as of
the end of such quarter, no Default or Event of Default existed, or, if
such did exist, a description of such Default or Event of Default and what
action the Company has taken and proposes to take with respect thereto and
(ii) that as of the end of such quarter the Company and its Consolidated
Subsidiaries, taken on a consolidated basis, were in compliance with the
covenants contained in Sections 5.09, 6.01, 6.04, 6.05(e), 6.06 and 6.09
and with the requirements of clauses (d), (e), and (h) of the definition of
Permitted Liens, together with the calculations showing how such compliance
was determined or (iii) if the Company and its Consolidated Subsidiaries,
taken on a consolidated basis, were not in compliance therewith, stating
each incidence of non-compliance and the amount thereof and explaining the
reason therefor, together with the calculations showing how such
non-compliance was determined;
(b) as soon as available but not later than one hundred (100) days after
the close of each of its fiscal years, a complete copy of the Company's
audit report, which shall include at least the Company's and its
Consolidated Subsidiaries' statement of consolidated financial position,
statement of consolidated earnings, and its statement of consolidated cash
flow for such year, examined in accordance with generally accepted auditing
standards by an independent public accountant of national reputation
selected by the Company and acceptable to the Majority Banks. Such
auditor's report shall be free from exceptions, reservations or
qualifications as a result of which the auditor is unable to conclude that
the financial statements fairly present or adequately disclose the
financial condition of the Company and its Consolidated Subsidiaries and
shall not be limited because of restricted or limited access by such
accountant to any material portion of the Company's or any Subsidiary's
records and shall include or be accompanied by a statement from such
accountant that during the fiscal year no Default or Event of Default has
occurred. Such report shall be accompanied by a certificate from the chief
financial officer, controller or treasurer of the Company stating (i) that
as of the end of such fiscal year no Default or Event of Default existed,
or, if any exists, a description of such Default or Event of Default and
what action the Company has taken and proposes to take with respect thereto
and (ii) that the Company and its Consolidated Subsidiaries, taken on a
consolidated basis, are in compliance with the covenants contained in
Sections 5.09, 6.01, 6.04, 6.05(e), 6.06 and 6.09 and with the requirements
of clauses (d), (e), and (h) of the definition of Permitted Liens, together
with the calculations showing how such compliance was determined or (iii)
if the Company and its Consolidated Subsidiaries, taken on a consolidated
basis, are not in compliance therewith, stating each incidence of
non-compliance and the amount thereof and explaining the reason therefor,
together with the calculations showing how such non-compliance was
determined;
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(c) as soon as available but not later than one hundred twenty (120) days
after the close of each of its fiscal years, its unaudited consolidating
balance sheet, statement of earnings, and statement of accumulated earnings
employed in the business and capital in excess of par value of the common
stock;
(d) promptly after being filed by the Company with the Securities and
Exchange Commission, a copy of each form 8-K current report, form 10-K
annual report, form 10-Q quarterly report, annual report to shareholders,
proxy statement and registration statement;
(e) not later than one hundred (100) days after the end of each fiscal year
of the Company, an amendment to Schedule 3 hereto, describing Permitted
Liens (of the type described in Schedule 3) arising by operation of law or
created or suffered by the Company or any Subsidiary subsequent to the
Closing Date;
(f) not later than sixty (60) days after the end of each fiscal quarter of
the Company, an amendment to Schedules 1 and 2 hereto, adding or
subtracting the Subsidiaries or Significant Subsidiaries, as the case may
be, acquired or sold or which became Significant Subsidiaries during such
period;
(g) as soon as available but no later than sixty (60) days after the close
of each fiscal quarter of the Company, a complete copy of the statement of
financial position, the statement of earnings, and the statement of
consolidated cash flow of any captive finance Subsidiary of the Company,
prepared by management and certified by the chief financial officer or the
controller of the Company as being true and correct and fairly presenting
the financial condition of such Subsidiary and, to the extent any such
reports are prepared by independent auditors at fiscal year-end, a complete
copy of the report of such independent auditors, no later than one hundred
(100) days after the close of the Company's fiscal year; and
(h) such other statements or reports as the Majority Banks may reasonably
request in form and detail satisfactory to the Agent and the Majority
Banks.
5.04. Existence, Etc. Except as permitted herein, maintain and preserve
its existence and all rights, privileges and franchises now enjoyed and
necessary for the operation of its business and keep all its properties in
good working order and condition, normal wear and tear excepted, except
properties the Company or a Consolidated Subsidiary reasonably determines
to be surplus, obsolete or otherwise not necessary or useful in the conduct
of its business.
5.05. Payment of Obligations. Pay all taxes, assessments, governmental
charges and other obligations when due, except such as may be contested in
good faith or as to which a bona fide dispute may exist, and for which
adequate reserves have been provided if required by GAAP.
5.06. Compliance with Laws. At all times comply in all material respects
with all applicable laws, rules, regulations, orders and directions of any
Governmental Authority having jurisdiction over it or its business.
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5.07. Insurance. Maintain insurance with responsible insurance companies
against such risks, on such properties and in at least such amounts as is
customarily maintained by similar businesses; and deliver to the Agent at
the request of any Bank a list in reasonable detail of the insurance
policies then in effect, stating the names of the insurance companies, the
amounts and rates of insurance, the dates of the expiration thereof and the
properties and risks covered thereby.
5.08. Adequate Books. Maintain adequate books, accounts and records in
order to provide financial statements in accordance with GAAP and, if
requested by Banks holding twenty-five percent (25%) or more of the
Aggregate Commitment then available, permit employees or representatives of
the Agent and the Banks at any reasonable time and upon reasonable notice
to inspect and audit its properties, and to examine or audit its inventory,
books, accounts and records and make copies and memoranda thereof.
5.09. Interest Coverage Ratio. Maintain a ratio of (a) EBIT net of cash
interest income (excluding interest income earned on dealer financing) to
(b) Interest Expense, net of cash interest income (excluding interest
income earned on dealer financing), of not less than 2.00 to 1.00 as of the
last day of each calendar quarter, commencing with the quarter ending
December 31, 1994. For purposes of calculating such ratio, the items
required to be included in the calculation shall be measured on a
consolidated basis for the twelve-month period (or such shorter period
specified below) ending on the last day of such calendar quarter.
5.10. ERISA. Make prompt payment of contributions required to meet the
minimum funding standards set forth in ERISA except to the extent waived or
deferred by the PBGC.
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ARTICLE VI
NEGATIVE COVENANTS
The Company covenants and agrees that, so long as the Commitments shall
remain available and until full and final payment of all obligations
incurred hereunder and under the Notes and the expiration of all Facility
Letters of Credit, it will not and, with respect to Sections 6.02, 6.03,
6.04, 6.05 6.06 and 6.09, will not permit any Consolidated Subsidiary of
the Company to, unless the Majority Banks waive compliance in writing:
<PAGE>
6.01. Capitalization Ratio. Permit its ratio of (i) Indebtedness for
Borrowed Money for the Company and its Subsidiaries on a consolidated basis
to (ii) Capitalization to exceed the ratio set forth below at any time
during the calendar quarters as set forth below:
Quarter Capitalization
Ending: Ratio
December 31 of each
year during this Agreement .50 to 1.0
March 31 of each year
during this Agreement .55 to 1.0
June 30 of each year
during this Agreement .50 to 1.0
September 30 of each year
during this Agreement .45 to 1.0
6.02. Change in Business. Engage in any business activities or operations
substantially different from and unrelated to present business activities
and operations conducted by the Company or any Affiliate other than
business activities or operations in which the aggregate Investment of the
Company or such Affiliate does not constitute a material amount in relation
to the Tangible Net Worth of the Company or such Affiliate.
6.03. Liens. Create, assume or suffer to exist any Lien (including the
Lien of an attachment, judgment or execution) on any of its or its
Consolidated Subsidiaries' properties, whether now owned or hereafter
acquired, except Permitted Liens.
6.04. Mergers, Sales of Assets, Etc. Liquidate, dissolve, or enter into
any consolidation, merger, partnership, joint venture or any other
combination or sell, lease, assign, transfer or otherwise dispose of any
assets, whether now owned or hereafter acquired, in a single transaction or
in a series of transactions or enter into any sale and leaseback
transactions, other than
(a) the sale of inventory in the ordinary course of business;
(b) the sale or other disposition of property no longer needed in the
conduct of its business;
(c) the sale of Fixed Assets or any sale and leaseback transaction
involving Fixed Assets if the Net Proceeds thereof and any other non-cash
property received therefor in the aggregate during the term of this
Agreement commencing on the Closing Date do not exceed at any time an
amount equal to five percent (5%) of the Tangible Net Worth of the Company
and its Subsidiaries on a consolidated basis;
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(d) any merger in which the Company is the legal surviving corporation and
there will exist no Default or Event of Default after the consummation
thereof;
(e) the merger, consolidation or transfer of the business or assets of any
Subsidiary with or to the Company or with or to any Consolidated
Subsidiary;
(f) the merger or consolidation or transfer of the business or assets of
any non-consolidated Subsidiary with or to any other non-consolidated
Subsidiary;
(g) as permitted in Section 6.05; and
(h) sales of receivables by the Company or any Consolidated Subsidiary to
any Person (i) in such amounts that at any one time not more than One
Hundred Twenty- Five Million Dollars ($125,000,000) in the aggregate of
accounts receivable so sold remain as accounts receivable of all purchasers
of such receivables; (ii) at least seventy percent (70%) of the
consideration received for such sales of accounts receivable consists of
cash, cash equivalents and marketable securities; (iii) not more than
twenty percent (20%) of the consideration received for such sales of
accounts receivable consists of promissory notes (whether subordinated or
otherwise restricted in payment) against which the purchaser of such
accounts receivable may offset the principal amount of uncollected accounts
receivable and (iv) the amount of any reserve (whether by form of discount,
holdback, overcollateralization, direct or indirect recourse, liability to
a 3rd party in connection with any credit enhancement device, or any
acquisition of a subordinated or other interest in an entity established or
used for the purpose of buying receivables) established in connection with
such sale of receivables does not exceed 10% of the face amount of the
receivables sold.
6.05. Acquisitions, Investments. Make any Acquisitions or any Investments
or commitments therefor, or create any non-consolidated Subsidiary, or
create any sinking fund in relation thereto, other than
(a) Investments in accordance with the Company's Short-Term Investment
Policy and Guidelines, issued on July 26, 1994, a copy of which has been
provided to the Banks;
(b) Investments (other than in Subsidiaries) in existence on the date
hereof and described in Schedule 11 hereto;
(c) loans by the Company to its Consolidated Subsidiaries in the ordinary
course of their respective businesses;
(d) the making of tax-sharing payments to any Consolidated Subsidiary or by
any Consolidated Subsidiary to the Company pursuant to an agreement with a
Consolidated Subsidiary requiring such payment;
(e) Investments, Acquisitions and capital contributions (not otherwise
specified in this Section 6.05) of up to $20,000,000 during the term of
this Agreement, provided that such amount shall be increased by $10,000,000
for each fiscal year for which the Company meets or exceeds its Base Case
for Earnings Before Taxes, as presented to the Banks on November 30, 1994.
(f) Investments in the form of credit extensions to stockholders, directors
or employees of the Company or its Subsidiaries in the ordinary course of
business, provided such Investments are subtracted in calculating "Tangible
Net Worth";
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(g) as permitted by Section 6.04; and
(h) Investments in Consolidated Subsidiaries.
6.06. Operating Leases. Enter into any operating leases the terms of
which prohibit cancellation of such leases if the aggregate amount of the
minimum required payments under all such leases (whether entered into prior
to or subsequent to the Closing Date and after giving effect to any such
new lease) during the remaining life of such leases exceeds Forty Million
Dollars ($40,000,000) for the Company and its Consolidated Subsidiaries.
6.07. Existing Indebtedness. Prepay, defease, refinance or repurchase or
enter into any arrangement having substantially such effect with respect
to, any Indebtedness for Borrowed Money (other than the Advances and Bid
Loans) prior to the maturity or scheduled repayment date in effect as of
the Closing Date, except that during any fiscal year, the Company may
prepay, defease, refinance or repurchase up to an amount of $5,000,000 of
such Indebtedness for Borrowed Money. If the entire $5,000,000 is not
expended in any fiscal year, the unexpended amount may be carried over to
later fiscal years, provided that the total amount expended to prepay,
defease, refinance or repurchase Indebtedness for Borrowed Money over the
term of this Agreement may not exceed $15,000,000.
6.08. Repurchase Arrangements. Repurchase boats, motors or
boat/motor/trailer (or any combination thereof) packages sold pursuant to
repurchase arrangements with the financing institutions owning such boats,
motors or boat/motor/trailer (or any combination thereof) packages in an
aggregate amount in excess of Ten Million Dollars ($10,000,000) during any
fiscal year.
6.09. Dividends and other Restricted Payments. Pay any Restricted
Payments (other than dividends payable in its own capital stock) except
that (1) any Consolidated Subsidiary may pay dividends to the Company, (2)
the Company may pay Restricted Payments during any fiscal year, commencing
with the fiscal year ending September 30, 1995, if, after giving effect to
such Restricted Payment, the aggregate amount of Restricted Payments during
such fiscal year would not exceed the greater of (a) the Minimum Amount or
(b) the Available Fund on the date the Restricted Payment is paid,
provided, however, that no Restricted Payment may be paid if an Event of
Default exists on the date such Restricted Payment is declared, authorized,
or paid and further provided (subject to the immediately preceding
proviso), that all Restricted Payments must be made within 90 days after
such Restricted Payment is declared or authorized.
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ARTICLE VII
EVENTS OF DEFAULT
Regardless of the terms of any Notes issued hereunder or Facility Letters
of Credit, the occurrence and continuation of any of the following events,
at the option of Majority Banks, shall terminate any obligation on the part
of the Banks to make or continue the Credit and, at the option of the
Majority Banks, shall make all outstanding principal and accrued and unpaid
interest on the Credit and all fees and other sums outstanding under or in
respect of this Agreement, the Notes and the Facility Letters of Credit
immediately due and payable, without notice of default, presentment or
demand for payment, protest or notice of nonpayment or dishonor, or other
notices or demands of any kind or character, except as hereinafter
specified; provided, however, that the occurrence of any of the events set
forth in Section 7.06, 7.07 or 7.10 shall automatically terminate the
Banks' Commitments, automatically accelerate the amounts due hereunder and
under the Notes and the Facility Letters of Credit, without notice of
default, presentment or demand for payment, protest or notice of nonpayment
or dishonor, or other notices or demands of any kind or character.
With respect to all Facility Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of an
acceleration pursuant to the preceding paragraph, the Company shall at such
time deposit in a cash collateral account opened by the Agent for the
ratable benefit of the Banks and the Issuers an amount equal to the
aggregate then undrawn and unexpired amount of such Facility Letters of
Credit. Amounts held in such cash collateral account shall be applied by
the Agent to the payment of drafts drawn under such Facility Letters of
Credit, and the unused portion thereof after all such Facility Letters of
Credit shall have expired or been fully drawn upon, if any, shall be
applied to repay other obligations of the Company to the Banks under this
Agreement. After all such Facility Letters of Credit shall have expired or
been fully drawn upon, all Reimbursement Obligations shall have been
satisfied and all other obligations of the Company to the Banks under this
Agreement shall have been paid in full, the balance, if any, in such cash
collateral account shall be returned to the Company.
7.01. Nonpayment. The Company shall fail to pay when due any installment
of principal or any Reimbursement Obligation when due or, within three (3)
Banking Days of its due date, any installment of interest or any fee or
other sum due under this Agreement in accordance with the terms hereof or
of any Note or Facility Letter of Credit issued under this Agreement.
7.02. Representation or Warranty. Any written representation or warranty
herein or in any agreement, instrument or certificate executed pursuant
hereto shall prove to have been false or misleading in any material respect
when made or when deemed to have been made.
7.03. Specific Defaults. The Company shall fail to duly or promptly
perform or observe the provisions of any of Sections 5.09, 6.01, 6.03 or
6.09.
7.04. Other Defaults. The Company shall fail duly or promptly to perform
or observe any of the other covenants, agreements or conditions contained
in this Agreement and such default shall continue unremedied for a period
of thirty (30) days after written notice thereof is delivered to the
Company by the Agent.
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7.05. Judgments. One or more final judgments shall be entered against the
Company or any Subsidiary for the payment of money in the aggregate amount
of Five Million Dollars ($5,000,000) (or the Equivalent Amount thereof in
another currency or currencies) or more on claims not covered by insurance
or as to which the insurance carrier has denied its responsibility, and
such judgments shall continue unsatisfied and in effect for thirty (30)
consecutive days without a stay of execution.
7.06. Voluntary Bankruptcy. The Company or any Subsidiary shall generally
fail to pay or admit in writing its inability to pay its debts as they come
due, or shall file any petition or action for relief as to itself under any
bankruptcy, reorganization, insolvency or moratorium law, or any other
similar law or laws for the relief of, or relating to, debtors, or shall
apply for or consent to a receiver, trustee or custodian for it or a
substantial portion of its property, or shall make a general assignment for
the benefit of creditors.
7.07. Involuntary Bankruptcy. An involuntary petition shall be filed
under any bankruptcy or similar statute against the Company or any
Subsidiary, or a custodian, receiver, trustee, assignee for the benefit of
creditors (or other similar official) shall be appointed to take
possession, custody or control of the properties of the Company or any
Subsidiary, unless such petition or appointment is set aside or withdrawn
or ceases to be in effect within sixty (60) days from the date of said
filing or appointment.
7.08. Cross Default. Any breach or default shall occur (after giving
effect to any applicable cure period) under any other agreement relating to
Indebtedness for Borrowed Money in excess of $5,000,000 under which the
Company or any Significant Subsidiary may be obligated as borrower or
guarantor, if such default consists of the failure to pay any such
Indebtedness for Borrowed Money when due or if such default permits or
causes the acceleration of any such Indebtedness for Borrowed Money or the
termination of any commitment to lend.
7.09. ERISA. Any Plan of the Company or any of its Subsidiaries shall be
terminated within the meaning of Title IV of ERISA except as permitted by
Section 4044(d) of ERISA, or a trustee shall be appointed by the
appropriate United States District Court to administer any Plan of the
Company or any of its Subsidiaries, or the PBGC shall institute proceedings
to terminate any Plan of the Company or any of its Subsidiaries or to
appoint a trustee to administer any such Plan and, upon the occurrence of
any of the foregoing, the then current value of guaranteed benefits and
other benefit commitments (as such terms are defined under Title IV of
ERISA and determined in accordance with the principles of Title IV of
ERISA) for which the Company or any Subsidiary might be liable to any
Person exceed the then current value of the assets allocable to such
benefits by more than Five Million Dollars ($5,000,000).
7.10. Change in Control. (a) Any Person or Persons acting in concert
shall acquire beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of
1934) of fifteen percent (15%) or more of the outstanding shares of voting
stock of the Company and the board of directors of the Company fails to
redeem the rights issued under the Shareholder Rights Plan within the time
period prescribed therein; or (b) during any period of twelve (12)
consecutive months, commencing before or after the Closing Date,
individuals who at the beginning of such twelve-month period were directors
of the Company cease for any reason to constitute a majority of the board
of directors of the Company; or (c) any change of control shall occur as
defined under the provisions of the Company's certificate of incorporation
or by-laws, as at any time amended.
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ARTICLE VIII
RELATION OF BANKS
8.01. Appointment and Authorization. Each Bank hereby appoints each of
the Agent, the Bid Agent and the Co-Agent to act as its agent in connection
with the administration of this Agreement and for such purpose irrevocably
authorizes the Agent, the Bid Agent and the Co-Agent to take such action
and to exercise such rights, powers and discretions as are specifically
delegated to the Agent, the Bid Agent and the Co-Agent in this Agreement,
together with all rights, powers and discretions as are reasonably
incidental thereto. The Agent, the Bid Agent and the Co-Agent may perform
any of their respective functions and duties under this Agreement by or
through agents or their respective directors, officers or employees. In
performing their respective functions and duties under this Agreement, the
Agent, the Bid Agent and the Co-Agent shall not be deemed to have a
fiduciary relationship in respect of, or (except as provided herein) other
responsibility to, any Bank or to have assumed any relationship of agency
or trust with or for the Company or any Consolidated Subsidiary.
8.02. Pro Rata Sharing. All payments of principal and interest on the
Credit (including Reimbursement Obligations) are to be divided pro rata
among the Banks according to the principal amount outstanding (including
outstanding participations in Facility Letters of Credit) from each Bank,
provided that prior to the occurrence of an Event of Default, payments of
principal and interest on Bid Loans will not be divided pro rata. All
payments of fees (other than Issuer's Fees) to be shared among the Banks
are to be divided among the Banks pro rata according to each Bank's
Commitment.
8.03. Sharing of Setoff. Any Bank which shall receive payment of or on
account of all or part of its share of the Credit through the exercise of
any right of setoff, counterclaim, banker's lien, secured claim under any
bankruptcy statute or otherwise in a greater proportion than the
proportionate amount of principal, interest and fees due it under this
Agreement shall purchase immediately prior to such payment participations
in the portions of the Credit held by the other Banks so that all
recoveries of principal, interest and fees (except payments made pursuant
to Section 2.08, 2.11(d), 2.14 or 2.15) shall be shared by Banks in
accordance with their pro rata interests in the Credit as set forth in
Section 8.02. If all or any portion of such excess payment is thereafter
recovered from such Bank, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest. All
sums received by a Bank through the exercise of any right of setoff,
counterclaim, banker's lien, secured claim under any bankruptcy statute or
otherwise shall be deemed to be first applied to such Bank's portion of the
Indebtedness for Borrowed Money under this Agreement until payment thereof
in full and any balance remaining thereafter shall be deemed applied to any
other Indebtedness for Borrowed Money of the Company to such Bank. 8.04.
Communication; Confidentiality.
(a) Upon receipt by the Agent from the Company of any information relating
to the Company or its Consolidated Subsidiaries calling for an action on
the part of the Banks, or upon notice to the Agent of any Default or Event
of Default, the Agent will in turn immediately inform the other Banks by
telephone, telecopy or by telex of the nature of such communication or of
the Default or Event of Default, as the case may be, and will promptly
deliver to the Banks the information received by the Agent relating to the
Company or its Consolidated Subsidiaries.
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(b) Each Bank agrees to use its best efforts not to disclose without the
prior written consent of the Company (other than to such Bank's employees,
auditors or counsel) any confidential information with respect to the
Company or any Subsidiary or any Acquisition which is furnished pursuant to
this Agreement; provided, however, that each Bank may disclose any such
information (i) as has become generally available to the public (other than
in violation of this Agreement), (ii) as required by law or regulation or
by any regulatory authority having jurisdiction over the Bank, (iii)
pursuant to a subpoena or other legal process or, in connection with any
litigation, (iv) to any prospective purchaser or participant as described
in Section 9.04, provided such prospective purchaser or participant agrees
in writing to be bound as described in Section 9.04, and (v) as may be
necessary to enforce its rights hereunder or under its Notes and the
Facility Letters of Credit.
8.05. Approvals. Except as provided below in this Section 8.05, upon any
occasion requiring or permitting an approval, consent, waiver, election or
other action on the part of the Banks, action shall be taken by the Agent
for and on behalf or for the benefit of all Banks upon the direction of
Majority Banks, and any such action shall be binding on all Banks. Without
the prior written consent of all the Banks, no amendment, modification,
consent or waiver shall be effective which:
(a) increases the amount of the Credit or changes the Commitment of any
Bank,
(b) reduces the rate or amount of interest, principal or fees owing
hereunder or under the Notes,
(c) extends the date on which any sum is due hereunder or under the Notes,
(d) waives an Event of Default arising from a failure to pay principal of
or interest on an Advance or Bid Loan,
(e) reduces the rate or amount of interest on or the principal amounts of
or extends the time of payment of any Reimbursement Obligation, Letter of
Credit Fee or Issuer's Fee,
(f) changes the provisions of this Section 8.05,
(g) waives any condition specified in Article III,
(h) amends the definition of Majority Banks,
(i) affects the rights, duties or obligations of the Agent, unless all
Banks agree in writing thereto, or
(j) changes the percentage of Banks required to consent to or to take any
action hereunder.
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8.06. Exculpation. Neither the Agent, the Bid Agent nor the Co-Agent
shall be liable or answerable for anything whatsoever in connection with
this Agreement or any instrument or agreement required hereunder, including
responsibility in respect to the execution, construction or enforcement of
this Agreement or any such instrument or agreement, except for its willful
misconduct or gross negligence, and the Agent, the Bid Agent and the
Co-Agent shall have no duties or obligations other than as expressly
provided herein and therein. The Agent, the Bid Agent and the Co-Agent
shall be entitled to rely on any opinion of counsel (including counsel for
the Company) in relation to this Agreement and any instrument or agreement
required hereunder, and upon statements and communications received from
the Company, or from any other Person, reasonably believed by it to be
authentic, and shall not be liable for any action taken or omitted in good
faith on such reliance.
8.07. Indemnification. Each Bank agrees to indemnify the Agent, the Bid
Agent and the Co-Agent to the extent not reimbursed by the Company, ratably
according to its proportionate interest in the outstanding Advances and
Reimbursement Obligations (or, if there are no outstandings hereunder, in
the Commitments), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against the Agent, the Bid Agent or the Co-Agent in
any way relating to or arising out of this Agreement or any instrument or
agreement required hereunder or any action taken or omitted by the Agent,
the Bid Agent or the Co-Agent in such role under this Agreement or any such
instrument or agreement; provided that no Bank shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever resulting from the Agent's, the Bid Agent's or the
Co-Agent's willful misconduct or gross negligence.
8.08. The Agent, the Co-Agent and Bid Agent as Banks. The Agent, the Bid
Agent and the Co-Agent shall have the same rights and powers hereunder as
any other Bank and may exercise the same as though it were not the Agent,
the Bid Agent or the Co-Agent; and the term "Banks" shall include the
Agent, the Bid Agent and the Co-Agent in its individual capacity. The
Agent, the Bid Agent and the Co-Agent and their subsidiaries and Affiliates
may accept deposits from, lend money to, act as agent or trustee for other
lenders to, and generally engage in any kind of banking, trust or other
business with, the Company or any of its Subsidiaries or Affiliates as if
it were not the Agent, the Bid Agent or the Co-Agent.
8.09. Notice of Transfer. The Agent and the Company may deem and treat a
Bank party to this Agreement as the owner of such Bank's Notes for all
purposes hereof unless and until a written notice of the assignment or
transfer thereof executed by such Bank shall have been received by the
Agent and the Company.
8.10. Credit Decision. Each Bank represents that it has made and agrees
that it shall continue to make its own independent investigation of the
financial condition and affairs of the Company and its own appraisal of the
creditworthiness of the Company in connection with its Commitment and the
making and the continuance of the Advances, the Bid Loans and the Facility
Letters of Credit. Neither the Agent, the Bid Agent nor the Co-Agent has
any duty or responsibility, either initially or on a continuing basis, to
provide any Bank with any credit or other information (other than obtained
pursuant to this Agreement) with respect thereto, whether coming into its
possession before the date hereof or at any time thereafter, unless
furnished to the Agent, the Bid Agent or the Co-Agent by the Company for
delivery to the Banks.
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8.11. Resignation of the Agent. The Agent, the Bid Agent and the Co-Agent
may each resign at any time by giving written notice to the Banks and the
Company. Upon any such resignation, the Majority Banks with the prior
written consent of the Company, which shall not be unreasonably withheld,
shall have the right to appoint a successor from among the Banks party
hereto. If no successor shall have accepted such appointment within
forty-five (45) days after the retiring Agent's, Bid Agent's or Co-Agent's
giving of notice of resignation, the retiring Agent, Bid Agent or Co-Agent
may, on behalf of the Banks, appoint a successor thereto with the prior
written consent of the Company, which shall not be unreasonably withheld,
and such successor Agent, Bid Agent or Co-Agent shall be a bank or trust
company organized under the laws of the United States or any state thereof
having a combined capital and surplus of at least $1,000,000,000. Upon the
acceptance by such successor of its appointment hereunder, such successor
shall succeed to and become vested with all the rights and obligations of
the retiring Agent, Bid Agent or Co-Agent, and the retiring Agent, Bid
Agent or Co-Agent shall be discharged from its obligations under this
Agreement except with respect to any liability with respect to a breach of
any obligation hereunder prior to such resignation. The provisions of this
Article shall inure to the benefit of the retiring Agent, Bid Agent or
Co-Agent as to any actions taken or omitted to be taken by it while it held
such positions under this Agreement.
8.12. Reliance by Agent and Co-Agent. Agent and Co-Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
writing, resolution, notice, consent, certificate, affidavit, letter,
telegram, telecopy, telex or telephone message, statement or other document
or conversation reasonably believed by them to be genuine and correct and
to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including counsel to the Company),
independent accountants and other experts selected by Agent and Co-Agent.
Agent and Co-Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other instrument or agreement
contemplated hereunder unless they shall first receive such advice or
concurrence of the Majority Banks as they deem appropriate and, if they so
request, they shall first be indemnified to their satisfaction by the Banks
against any and all liability and expense which may be incurred by them by
reason of taking or continuing to take any such action. Agent and Co-Agent
shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other instrument or agreement
contemplated hereunder in accordance with a request or consent of the
Majority Banks (or, when expressly required hereby, all the Banks) and such
request and any action taken or failure to act pursuant thereto shall be
binding upon all Banks.
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ARTICLE IX
MISCELLANEOUS
9.01. Notices. Except as otherwise specifically set forth in Article 2,
any communications between the parties hereto or notices or requests
provided herein to be given may be given by mailing the same, postage
prepaid (which notice shall be deemed received two Banking Days after
mailing), by personal delivery, or by telex, telecopy or cable to each
party at its address set forth on the signature pages hereto (with a copy
to each address indicated for notices), or to such other address as any
party may in writing hereafter indicate.
9.02. Successors and Assigns. This Agreement shall bind and inure to the
benefit of the parties hereto and their respective permitted successors and
assigns; provided, however, that the Company shall not assign this
Agreement or any of the rights or obligations of the Company hereunder
without the prior written consent of each Bank.
9.03. Banks' Obligations Several. The obligations of each Bank under this
Agreement are several. Neither the Agent, the Bid Agent, the Co-Agent nor
any Bank shall be liable for the failure of any other Bank to perform its
obligations under this Agreement. The failure of any Bank to make all or
any part of the proceeds of any Advance or Bid Loan or participation in a
Facility Letter of Credit to be made by it available to the Agent, the Bid
Agent or the Co-Agent, as the case may be, for the benefit of the Company
or Issuer, as the case may be, pursuant to this Agreement, shall not
relieve any other Bank from the performance of its obligations under this
Agreement.
9.04. Assignments, Participations; Setoff.
(a) With the prior written consent of the Company and the Agent, which
shall not be unreasonably withheld, any Bank may at any time sell, assign
or otherwise transfer to any other Person all or any part of the
obligations of the Company to such Bank, so long as such Bank at all times
retains at least twenty percent (20%) of its original Commitment, and
thereupon such Person shall become a "Bank" for all purposes hereunder,
provided however, that no Bank shall be deemed to be in violation of this
Section because of a subsequent reduction of the Commitments by the
Company. Notwithstanding the foregoing, any Bank assigning its obligations
under Section 2.15(d) may sell 100% of its obligations and any Bank may at
any time, without the consent of the Company or the Agent, assign all or
any portion of its rights under this Agreement and its Notes to a Federal
Reserve Bank; provided that no such assignment shall release the transferor
Bank from its obligations hereunder.
(b) Any Bank may at any time grant participations to any other Person (a
"participant") in all or part of the obligations of the Company to such
Bank under this Agreement or any Note evidencing such obligations or with
respect to any Reimbursement Obligation, so long as such Bank at all times
retains at least twenty percent (20%) of its original Commitment hereunder
and any Advances hereunder, provided however, that no Bank shall be deemed
to be in violation of this Section because of a subsequent reduction in the
Commitments by the Company.
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(c) Each such transfer by a Bank shall be in accordance with federal and
state securities laws applicable to such Bank. In connection with such
transfer, each Bank, including the Agent, may furnish or disclose to a
proposed purchaser or participant any financial or other information
furnished or disclosed to the Banks by the Company provided that the
proposed purchaser or participant first executes a written agreement in the
form of Schedule 9 stating that it will not disclose any information
furnished to it with respect to the Company and its Subsidiaries except (i)
as has become generally available to the public (other than in violation of
this Agreement), (ii) as required by law or regulation or by any regulatory
authority, (iii) pursuant to a subpoena or other legal process or in
connection with any litigation, and (iv) as may be necessary to enforce the
rights of the Banks or such participant hereunder or under the Notes.
(d) In any participation described in subsection (b) above, each Bank shall
retain the right to vote in connection with all waivers, consents and
amendments and shall retain the right to take or fail to take any action
hereunder except as to waivers, consents, and amendments or action directly
affecting the extension of the maturity of any portion of the principal
amount of or the dates on which the interest is payable on such portion of
an Advance or any other amount payable under Sections 2.06 and 2.07
allocated to such participation or a reduction of any portion of the
principal amount of or the rate of interest payable on such portion of an
Advance or any other amount payable under Sections 2.06 and 2.07 allocated
to such participation.
(e) Upon any such transfer or assignment (other than a participation for a
period not in excess of one hundred eighty (180) consecutive days) by a
Bank pursuant to this Section 9.04, such Bank will, promptly after making
such transfer, advise the Agent and the Company in writing of the transfer
and the name and address of the transferee. The Company hereby
acknowledges and agrees that any such disposition will give rise to a
direct obligation of the Company to the participant. The Company hereby
authorizes each Bank and each such participant, in case of the occurrence
of an Event of Default by the Company hereunder, to proceed directly,
subject to Section 8.03, by right of setoff, banker's lien, or otherwise,
against any assets of the Company which may at the time of such Event of
Default be in the hands of such Bank or any such participant.
9.05. Delays and Waivers. No delay or omission by the Agent or the Banks
to exercise any right under this Agreement shall impair any such right,
nor shall it be construed to be a waiver thereof. No waiver of any single
breach or default under this Agreement shall be deemed a waiver of any
other breach or default. Any waiver, modification, amendment, consent or
approval relating to this Agreement, the Notes or the Facility Letters of
Credit, must be in writing to be effective and must be signed by or on
behalf of the Majority Banks or all the Banks, as the case may be, as
provided in Section 8.05. 9.06. Costs and Expenses. The Company agrees
to pay on demand to the Agent, the Bid Agent, the Co-Agent, each Bank and
each Issuer all reasonable costs and expenses incurred by the Agent, the
Co-Agent, the Bid Agent and each such Bank and Issuer including, without
limitation, reasonable attorneys' fees and the reasonable allocated costs
of staff counsel (a) in connection with the enforcement (after the
occurrence of an Event of Default) of this Agreement or any instrument or
agreement required hereunder or in connection with any proposed refinancing
or restructuring of the credit provided in this Agreement in the nature of
a "work-out" and (b) for all stamp, registration and other duties and
imposts to which this Agreement and any instrument or agreement required
hereunder may be subject. The Company shall indemnify the Agent, the
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Co-Agent, the Bid Agent, each Issuer and each Bank against any and all
liabilities and penalties resulting from any delay in paying, or failure to
pay, any such duties and imposts upon written notice from the Agent, the
Co-Agent or the Bid Agent or an Issuer or a Bank that such amounts have
been assessed. The Company shall reimburse each of the Agent, the Bid
Agent and the Co-Agent for its reasonable attorneys' fees (including the
reasonable allocated costs of staff counsel) and other expenses incurred in
connection with the negotiation, preparation and execution of this
Agreement and any amendments, consents, or waivers of, or relating to, this
Agreement.
9.07. Entire Agreement. This Agreement and any agreement, document or
instrument attached hereto or referred to herein integrate all the terms
and conditions mentioned herein or incidental hereto, and supersede all
oral negotiations and prior writings in respect to the subject matter
hereof (except a letter agreement dated November 21, 1994 between the Agent
and the Company, a letter agreement between the Co-Agent and the Company
and any subsequent agreements relating to fees to be paid to the Agent, the
Co-Agent or the Bid Agent). In the event of any conflict between the
terms, conditions and provisions of this Agreement and any such prior
agreement, document or instrument, the terms, conditions and provisions of
this Agreement shall prevail.
9.08. Governing Law. This Agreement, the Notes, the Facility Letters of
Credit and all other documents executed in connection herewith shall be
governed by and construed in accordance with the laws of the State of
Illinois.
9.09. Section Headings. Section headings and the table of contents are
for reference only, and shall not affect the interpretation or meaning of
any provision of this Agreement.
9.10. Severability. The illegality or unenforceability of any provision
of this Agreement or any instrument or agreement required hereunder shall
not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement
required hereunder.
9.11. Counterparts. This Agreement may be executed in as many
counterparts as may be deemed necessary or convenient, and by the different
parties hereto on separate counterparts (provided that the Company shall
execute each counterpart), each of which, when so executed, shall be deemed
an original, but all such counterparts shall constitute but one and the
same agreement.
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9.12. Indemnity. The Company hereby agrees to indemnify, protect and hold
harmless the Agent, the Bid Agent, the Co-Agent, any Issuer, the Banks and
their officers, directors, agents, employees, attorneys and shareholders or
their successors (each an "Indemnified Party") from and against all
reasonable costs and expenses (including, without limitation, the cost of
counsel, whether staff or otherwise and whether allocated or out-of-pocket)
and all actions, claims (whether made or threatened), suits, liabilities,
damages and losses incurred by or imposed on the Agent, the Bid Agent, the
Co-Agent, any Issuer, the Banks or any such officer, director, agent,
employee, attorney or shareholder or their successors in connection with or
as a result of the execution, delivery and performance of this Agreement,
and the transactions contemplated hereunder, or any Acquisition financed
with Borrowings hereunder, or with any other act, omission or event
relating in any manner to any of the foregoing. Notwithstanding anything
to the contrary in this Section 9.12, the Company shall not be obligated to
indemnify any such Person for any losses, claims, damages, liabilities and
expenses incurred by such Person which have resulted from gross negligence
or willful misconduct on the part of such Person. Without limiting the
generality of the foregoing, such indemnity shall extend to any and all
reasonable costs and expenses whatsoever incurred by the Banks, the Agent,
the Bid Agent, the Co-Agent or any Issuer their officers, directors,
agents, employees, attorneys and shareholders or their successors
(including, without limitation, the reasonable cost of counsel, whether
staff or otherwise and whether allocated or out-of-pocket) in connection
with investigating, preparing for or defending against or providing
evidence, producing documents or taking any action with respect to any such
action, claim (whether made or threatened and whether or not such Bank or
other Indemnified Party is a party to such action or claim), suit,
liability, damage or loss, whether or not resulting in any liability. The
obligation of the Company to indemnify each Bank, each Issuer, the Bid
Agent, the Co-Agent and the Agent under this Section for fees and
disbursements of counsel shall be limited to the fees and expenses of one
counsel in each jurisdiction representing all such Persons, except (i) to
the extent that, in the reasonable judgment of any such Person, the
existence of actual or potential conflicts of interest make representation
by the same counsel inappropriate and (ii) that any such Person that is a
party to, or compelled to participate in, any such action, suit or
proceeding shall be indemnified for the reasonable fees and disbursements
of its counsel to the extent otherwise provided in this Section 9.12. This
indemnity shall survive the execution, delivery and consummation of the
transactions contemplated by this Agreement and the documents related to
any Acquisition financed with Borrowings hereunder. The Company's
obligations under this indemnity are and shall remain absolute and
unconditional, enforceable against it whether or not any Borrowings are
ever made by the Company or any conditions of lending are ever met and
without regard to any act, omission, breach, knowledge or event by,
attributable to, or in any manner involving the Banks, the Agent, the Bid
Agent, the Co-Agent, or any Issuer. Payment by the Company in respect of a
claim made by the Agent, the Co-Agent, the Bid Agent, or any Issuer or Bank
pursuant to this Section shall be made within fifteen (15) days after
demand therefor. Nothing contained herein shall be construed to prevent or
restrict the Company from asserting, or be deemed to be a waiver of, any
rights which the Company may have against the Agent, the Bid Agent, the Co-
Agent or any Issuer or Bank, under any provision of law. If and to the
extent that the foregoing undertaking may be unenforceable for any reason,
the Company hereby agrees to make the maximum contribution to the payment
and satisfaction of each of the foregoing amounts which is permissible
under applicable law.
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9.13. Judgment Currency Indemnity.
(a) In the event of a judgment or order being rendered by a court or
tribunal of any particular jurisdiction for the payment of any amount owing
to the Agent, the Co-Agent, the Bid Agent, any Issuer or any of the Banks
pursuant to or in respect of this Agreement or any instrument or agreement
required hereunder (the "Loan Documents") and any such judgment or order
being expressed in a currency (the "Judgment Currency") other than that in
which the amount then owing pursuant to or in respect of this Agreement or
the Loan Documents is expressed to be payable (the "Contractual Currency"),
the Company shall indemnify and hold each of the Agent, the Co-Agent, the
Bid Agent, any Issuer or any of the Banks harmless against any deficiency
arising or resulting from any variation between (i) the rate of exchange
applied in converting any amount expressed in the Contractual Currency into
the Judgment Currency for the purposes of such judgment or order and (ii)
the rate of exchange of the Judgment Currency for the Contractual Currency
as at the date or dates of discharge of the said judgment or order.
(b) The foregoing indemnity shall constitute an obligation of the Company
separate and independent from its other obligations under this Agreement
and the Loan Documents, shall give rise to separate and independent causes
of action against the Company, shall apply irrespective of any indulgence
granted to the Company by the Agent, the Co-Agent, the Bid Agent, any
Issuer or any of the Banks from time to time and shall continue in full
force and effect notwithstanding any judgment or order. The certificate of
the Agent, the Co-Agent, the Bid Agent, an Issuer or a Bank as to the
amount of any such deficiency as aforesaid (which shall be deemed to
constitute a loss suffered by the Agent, the Co-Agent, the Bid Agent, an
Issuer or such Bank without any proof or evidence of any actual loss being
required) shall, save for any manifest error, be conclusive and binding on
the Company.
9.14. WAIVER OF JURY TRIAL. THE BORROWER, THE 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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their duly authorized officers as of the day and year first above written.
OUTBOARD MARINE CORPORATION
By: \s\: James R. Maurice
_________________________________
Title: Vice President and Controller
Address for Notices:
100 Sea-Horse Drive
Waukegan, Illinois 60085
Attention: Robert J. Moerchen
Telephone: (708) 689-5279
Telex: 253891
Answerback: OMCORP WAUK
Rapifax: (708) 689-6206
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THE FIRST NATIONAL BANK OF CHICAGO Commitment: $ 43,000,000
By: \s\: Deborah E. Stevens
_________________________
Title: Vice President
Address for Notices:
One First National Plaza
Chicago, Illinois 60670
Attention: Carlene Hicks
Telephone: (312)732-6294
Answerback: FNBCUI
Telex: 4330253
Rapifax: (312) 732-4840
With a copy to:
The First National Bank of Chicago
One First National Plaza
Chicago, Illinois 60670
Attention: Deborah E. Stevens
Vice President
Telephone: (312) 732-2532
Telex: 4330253
Answerback: FNBCUI
Rapifax: (312) 732-4840
BANK OF AMERICA ILLINOIS Commitment: $37,000,000
By: \s\: Mike Healy
______________________
Title: Vice President
Address for Notices:
231 S. LaSalle Street
Chicago, Illinois 60697
Attention: Lewis B. Fisher
Vice President
Telephone: (312) 828-3137
Rapifax: (312) 987-7384
ROYAL BANK OF CANADA Commitment: $35,000,000
By: \s\: Molly Drennor
_______________________________
Title: Manager, Corporate Banking
Address for Notices:
New York Branch
Royal Bank of Canada
Financial Square, 23rd Floor
New York, NY 10005-3531
Attention: Manager, Loans Administration
Telephone: (212) 428-6311
Telex: MCI62519
Answerback: RBCNY
Rapifax: (212) 428-2372
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<PAGE> 81
With a copy to:
Royal Bank of Canada
1 N. Franklin Street
Suite 700
Chicago, Illinois 60606
Attention: Karen Hull
Manager, Corporate Banking
Telephone: (312) 551-1617
Rapifax: (312) 551-0805
THE BANK OF NEW YORK Commitment: $20,000,000
By: \s\: Sara Powell-Goldman
____________________________
Title: Assistant Vice President
Address for notices:
One Wall Street - 19th Floor
New York, NY 10286
Attention: Mr. Bruce Miller
Vice President
Telephone: (212)635-8202
Rapifax: (212)635-1208/1209
NBD BANK, N.A. Commitment: $20,000,000
By: \s\: Jenny Gilpin
__________________________
Title: Second Vice President
Address for notices:
611 Woodward Avenue
Detroit, MI 48226
Attention: Ms. Jenny A. Gilpin
Midwest Banking Department
Telephone: (313)225-4247
Rapifax: (313)225-3269
ABN AMRO BANK N.V. Commitment: $15,000,000
By: \s\: John Wm. Stanger
_________________________
Title: Group Vice President
By: \s\: Bernard J. McGulgan
__________________________
Title: Group Vice President
Address for notices:
135 S. Lasalle Street, Suite 425
Chicago, Illinois 60674-9135
Attention: John William Stanger
Group Vice President
Telephone: (312) 904-2671
Rapifax: (312) 606-8425
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THE BANK OF NOVA SCOTIA Commitment: $15,000,000
By: \s\: Claude Ashby
__________________________________
Title: Senior Manager-Loan Operations
Address for Notices:
The Bank of Nova Scotia
600 Peachtree St., N.E. Suite 2700
Atlanta, GA 30308
Attention: Shannon Law
Loan Administrative Officer
With a copy to:
The Bank of Nova Scotia
181 West Madison Avenue, Suite 3700
Chicago, IL 60602
Attention: John P. Malloy
Representative
Telephone: (312) 201-4100
Telex:
Answerback:
Rapifax: (312) 201-4108
The Bank of Nova Scotia
Scotia Plaza
44 King Street West
Toronto, Ontario, Canada M5H 1H1
Attention: Assistant General Manager
FIRSTAR BANK MILWAUKEE, N.A. Commitment: $15,000,000
By: \s\: F. R. Dengel
______________________
Title: Vice President
Address for Notices:
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attention: U.S. Banking Division
F. R. Dengel, Vice President
Telephone: (414) 765-4144
Telex: TRT 191178
Answerback: FIRWIS MIL
Rapifax: (414) 765-5062
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