- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------------------------
SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
(AMENDMENT NO. 4)
(FINAL AMENDMENT)
---------------------------------------------
Cyprus Amax Minerals Company
(Name of Subject Company)
CAV Corporation
and
Phelps Dodge Corporation
(Bidders)
---------------------------------------------
Common Stock, no par value
(Including the associated preferred share purchase rights)
(Title of Classes of Securities)
---------------------------------------------
496902107 (Common Stock)
(CUSIP Number of Class of Securities)
---------------------------------------------
S. David Colton, Esq.
Vice President and General Counsel
Phelps Dodge Corporation
2600 North Central Avenue
Phoenix, Arizona 85004-3014
Tel. (602) 234-8100
--------------------------
Copies to:
Michael W. Blair, Esq. Stephen R. Volk, Esq.
Debevoise & Plimpton David W. Heleniak, Esq.
875 Third Avenue Shearman & Sterling
New York, New York 10022 599 Lexington Avenue
Tel. (212) 909-6000 New York, New York 10022
Tel. (212) 848-4000
CALCULATION OF FILING FEE
===============================================================
Transaction Valuation | Amount of Filing Fee
|
---------------------------------------------------------------
$1,557,511,057* | $311,502
---------------------------------------------------------------
[X] Check box if any part of the fee is offset as provided by Rule 0-11 (a) (2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid: $404,698
Form or Registration No.: 333-86061
Filing Party: Phelps Dodge Corporation
Date Filed: August 27, 1999
* For purposes of calculating the filing fee only. This calculation
assumes that 90,454,100 shares of common stock, no par value per share,
of Cyprus Amax Minerals Company will be exchanged for shares of common
stock, $6.25 par value per share, of Phelps Dodge Corporation. Pursuant to
Rules 0-11 (d) and 0-11 (a) (4) of the Securities Exchange Act of 1934, as
amended, the filing fee was based upon the average of the high and low
prices of Cyprus Amax Minerals Company common stock on August 31, 1999, as
reported on the New York Stock Exchange Composite Tape.
** The filing fee is calculated by taking 1/50 of 1% of the Transaction
Valuation, pursuant to Rule 0-11 (d) of the Exchange Act.
<PAGE>
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1. Name of Reporting Persons
Phelps Dodge Corporation
SS. or I.R.S. Identification No. of Above Person
13-1808503
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2. Check the Appropriate Box if a Member of Group
(a) [ ]
(b) [ ]
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3. SEC Use only
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4. Sources of Funds
WC, BK
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5. Check if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(e) or 2(f)
[ ]
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6. Citizenship or Place of Organization
New York
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7. Aggregate Amount Beneficially Owned by Each Reporting Person
Approximately 81,750,496 shares of Common Stock, no par value per
share
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8. Check if the Aggregate Amount in Row (7) Excludes Certain Shares
[ ]
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9. Percent of Class Represented by Amount in Row (7)
89.9% of Common Stock, no par value per share
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10. Type of Reporting Person
CO
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<PAGE>
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1. Name of Reporting Persons
CAV Corporation
S.S. or I.R.S. Identification No. of Above Person
N/A
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2. Check the Appropriate Box if a Member of Group
(a) [ ]
(b) [ ]
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3. SEC Use only
- --------------------------------------------------------------------------------
4. Sources of Funds
WC, BK
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5. Check if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(e) or 2(f)
[ ]
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6. Citizenship or Place of Organization
Delaware
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7. Aggregate Amount Beneficially Owned by Each Reporting Person
Approximately 81,750,496 shares of Common Stock, no par value per
share
- --------------------------------------------------------------------------------
8. Check if the Aggregate Amount in Row (7) Excludes Certain Shares
[ ]
- --------------------------------------------------------------------------------
9. Percent of Class Represented by Amount in Row (7)
89.9% of Common Stock, no par value per share
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10. Type of Reporting Person
CO
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<PAGE>
By this Amendment No. 4 to the Tender Offer Statement on Schedule 14D-1
(the "Schedule 14D-1"), Phelps Dodge Corporation, a New York corporation
("Phelps Dodge"), and its wholly owned subsidiary, CAV Corporation, a Delaware
corporation ("Purchaser"), hereby amend and supplement their Schedule 14D-1
filed with the Securities and Exchange Commission (the "Commission") on
September 3, 1999, as amended on September 22, 1999, September 27, 1999 and
October 1, 1999, with respect to the Purchaser's exchange offer to acquire all
outstanding shares of common stock, no par value per share, and the associated
preferred share purchase rights (each, a "Cyprus Amax Share" and collectively,
the "Cyprus Amax Shares"), of Cyprus Amax Minerals Company, a Delaware
corporation ("Cyprus Amax"), at a share price of, subject to proration, either
$20.54, net to the seller in cash, or 0.3500 shares of Phelps Dodge per Cyprus
Amax Share, upon the terms and subject to the conditions set forth in the Phelps
Dodge prospectus, dated September 2, 1999, as amended (the "Prospectus") and in
the related Letter of Election and Transmittal, which together constitute the
Offer. Pursuant to Instruction F of Schedule 14D-1, this statement is submitted
in satisfaction of the reporting obligation of the Purchaser under Section 13(d)
of the Securities Exchange Act of 1934, as amended.
Item 4 is hereby amended and supplemented as follows:
Item 4. Source and Amount of Funds or Other Consideration.
Phelps Dodge estimates that the total amount of funds required pursuant
to the Cyprus Amax exchange offer to pay the cash consideration in connection
with the exchange of all Cyprus Amax shares outstanding will be approximately
$691 million. Phelps Dodge expects to obtain these funds from cash on hand, from
its existing revolving credit facility, and from the additional credit facility
described below.
Phelps Dodge has entered into a Credit Agreement, dated as of October
18, 1999, with Citibank, N.A., as Administrative Agent and as a lender, First
Union National Bank and Morgan Guaranty Trust Company of New York, as
Syndication Agents and as lenders, Salomon Smith Barney Inc., as Arranger and
Book Manager, and other lenders that may become parties thereto. Under this
Credit Agreement, the lenders will provide Phelps Dodge with a $650 million
revolving credit facility that Phelps Dodge may use to pay cash consideration in
connection with the Cyprus Amax exchange offer and for general corporate
purposes.
The lenders' obligations to make loans under this credit facility are
subject to customary conditions, including (i) completion of the Cyprus Amax
exchange offer; (ii) absence of any material adverse change to Phelps Dodge
since December 31, 1998; and (iii) accuracy and completeness of representations
and warranties made by Phelps Dodge and information furnished by Phelps Dodge.
Loans under the credit facility will be unsecured, and will bear
interest, at Phelps Dodge's option, at either (a) Citibank's base rate, or (b)
LIBOR plus a variable margin of between 0.40% and 2.00% (plus an additional
premium of 0.25% if amounts are drawn after
<PAGE>
December 20, 1999), depending on Phelps Dodge's credit rating and the amount
Phelps Dodge has outstanding under the facility from time to time. The facility
will terminate on the earlier of January 31, 2000 or the date on which the
Phelps Dodge/Cyprus Amax merger is completed.
Item 5 is hereby amended and supplemented as follows:
Item 5. Purpose of the Tender Offer and Plans or Proposals of Bidder.
In accordance with the Agreement and Plan of Merger, dated as of
September 30, 1999, among Phelps Dodge, the Purchaser and Cyprus Amax (the
"Merger Agreement"), upon purchase by Purchaser of Cyprus Amax Shares, Phelps
Dodge is entitled to designate a certain number of directors on the Cyprus Amax
Board of Directors. As of October 16, 1999, eight members of the Board of
Directors resigned and were replaced by two designees of Phelps Dodge, Douglas
C. Yearley and J. Steven Whisler. Two of the current Cyprus Amax Board members,
Willam C. Bousquette and Milton H. Ward, will remain on the Cyprus Amax Board
until completion of the merger between Purchaser and Cyprus Amax. As of October
23, 1999, Manuel J. Iraola will be Phelps Dodge's third designee to the Cyprus
Amax Board.
Item 6 is hereby amended and supplemented as follows:
Item 6. Interest in Securities of the Subject Company.
(a) - (b) The Offer expired at 12:00 midnight, New York City time, on
October 15, 1999. According to a preliminary count by ChaseMellon Shareholder
Service, L.L.C., the exchange agent for the Offer, there were tendered and not
withdrawn approximately 81,750,496 Cyprus Amax Shares. The Cyprus Amax Shares
tendered include approximately 17,280,264 shares tendered pursuant to Notices of
Guaranteed Delivery. On October 17, 1999, the Purchaser accepted for payment
all of such Cyprus Amax Shares. A copy of the press release issued on October
18, 1999 by Phelps Dodge with respect to the foregoing is attached hereto as
Exhibit (a)(20) and incorporated by reference herein.
Item 9 is hereby amended and supplemented as follows:
Item 9. Financial Statements of Certain Bidders.
Phelps Dodge released its Third Quarter results on October 12, 1999.
This information was filed with the Commission on Current Report Form 8-K on
October 13, 1999 and is hereby incorporated by reference herein.
Item 10 is hereby amended and supplemented as follows:
<PAGE>
Item 10. Additional Information.
(f) Phelps Dodge announced on October 13, 1999 that its shareholders,
at a special meeting held that date, approved the issuance of Phelps Dodge
shares in connection with the exchange offers to acquire Cyprus Amax and Asarco
Incorporated. This information was filed with the Commission on Current Report
Form 8-K the same day and is hereby incorporated by reference herein.
Item 11 is hereby amended and supplemented by the addition of the following
exhibit thereto:
Item 11. Material to be filed as Exhibits.
Exhibit (a)(20) Press release issued by Phelps Dodge Corporation on
October 18, 1999.
(b)(2) Phelps Dodge Credit Agreement, dated as of October 18,
1999, with Citibank, N.A., as Administrative Agent
and as a lender, First Union National Bank and Morgan
Guaranty Trust Company of New York, as Syndication
Agents and as lenders, Salomon Smith Barney Inc., as
Arranger and Book Manager, and other lenders that may
become parties thereto.
<PAGE>
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Phelps Dodge Corporation
By:/s/ Ramiro G. Peru
------------------------------------
Name: Ramiro G. Peru
Title: Chief Financial Officer and
Senior Vice President
October 19, 1999
<PAGE>
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
CAV Corporation
By:/s/ Ramiro G. Peru
------------------------------------
Name: Ramiro G. Peru
Title: Vice President and Treasurer
October 19, 1999
<PAGE>
EXHIBIT INDEX
Sequentially
Exhibit Numbered
Number Description Page
- ------- ----------- ------------
(a)(20) Press release issued by Phelps Dodge Corporation
on October 18, 1999.
(b)(2) Phelps Dodge Credit Agreement, dated as of October 18, 1999, with
Citibank, N.A., as Administrative Agent and as a lender,
First Union National Bank and Morgan Guaranty Trust Company of
New York, as Syndication Agents and as lenders, Salomon Smith
Barney Inc., as Arranger and Book Manager, and other lenders that
may become parties thereto.
<PAGE>
Exhibit (a)(20)
FOR IMMEDIATE RELEASE
Contacts:
Investors Media
Phelps Dodge Phelps Dodge
Thomas M. Foster Susan M. Suver
(602) 234-8139 (602) 234-8003
Gregory W. Stevens
(602) 234-8166
Arthur Schmidt & Associates, Inc. Sard Verbinnen & Co
Martin Zausner/Alan Weinstein/Joan Harper George Sard/David Reno/Paul Caminiti
(212) 953-5555 (212) 687-8080
PHELPS DODGE ANNOUNCES EXPIRATION OF CYPRUS AMAX EXCHANGE OFFER
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PHOENIX, AZ, October 18, 1999 - Phelps Dodge Corporation (NYSE: PD)
announced today that its offer to exchange $7.61 in cash and 0.2203 Phelps Dodge
shares for each share of Cyprus Amax Minerals Company (NYSE: CYM) on a fully
prorated basis expired at 12:00 midnight, New York City time, October 15, 1999.
Phelps Dodge said that it has been informed by ChaseMellon Shareholder
Services, the exchange agent for the offer, that based on a preliminary count,
approximately 81,750,496 shares of Cyprus Amax stock have been tendered,
representing approximately 89.87% of the outstanding shares of Cyprus Amax. Of
the approximately 81,750,496 shares tendered, approximately 51,822,175 elected
cash, 29,576,966 elected stock and 351,355 made no election. The total shares
tendered include 17,280,264 shares tendered pursuant to notices of guaranteed
delivery. All shares of Cyprus Amax tendered were accepted for exchange by
Phelps Dodge according to the terms of the exchange offer.
Based on preliminary tabulations, since the cash election was
oversubscribed, all Cyprus Amax shareholders requesting stock will receive
0.3500 Phelps Dodge shares per Cyprus Amax share. Those shareholders requesting
cash will be prorated to receive approximately $13.36 in cash and approximately
0.1223 shares of Phelps Dodge common stock per Cyprus Amax share. Phelps Dodge
is in the process of determining the exact proration, which it expects to
announce later this week and commence payment.
Douglas C. Yearley, Chairman and Chief Executive Officer of Phelps Dodge,
said, "We are another step closer to completing the Cyprus Amax acquisition and
beginning to realize its compelling benefits for shareholders of both
companies."
Phelps Dodge Corporation is among the world's largest producers of copper.
The company also is one of the world's largest producers of carbon black, one of
the world's largest manufacturers of magnet wire, and has operations and
investments in mines and wire and cable manufacturing facilities around the
world. Phelps Dodge has operations in 28 countries.
<PAGE>
Exhibit (b)(2)
U.S. $650,000,000
CREDIT AGREEMENT
Dated as of October 18, 1999
among
PHELPS DODGE CORPORATION
as Borrower
and
THE LENDERS PARTY HERETO
and
CITIBANK, N.A.
as Administrative Agent
and
FIRST UNION NATIONAL BANK
and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
as Syndication Agents
and
SALOMON SMITH BARNEY INC.
as Arranger and Book Manager
WEIL, GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, New York 10153-0119
<PAGE>
TABLE OF CONTENTS
Page
Article I DEFINITIONS AND ACCOUNTING TERMS................................1
Section 1.1. Certain Defined Terms......................................1
Section 1.2. Computation of Time Periods...............................13
Section 1.3. Accounting Terms..........................................13
Section 1.4. Certain Terms.............................................13
Article II AMOUNTS AND TERMS OF THE ADVANCES..............................13
Section 2.1. The Advances..............................................13
Section 2.2. Making the Advances.......................................14
Section 2.3. Fees......................................................15
Section 2.4. Termination or Reduction of the Commitments...............16
Section 2.5. Repayment of Advances.....................................16
Section 2.6. Interest on Advances......................................16
Section 2.7. Interest Rate Determination...............................17
Section 2.8. Optional Conversion of Advances...........................18
Section 2.9. Prepayments of Advances...................................18
Section 2.10. Increased Costs...........................................19
Section 2.11. Illega1ity................................................19
Section 2.12. Payments and Computations.................................20
Section 2.13. Taxes.....................................................21
Section 2.14. Sharing of Payments, Etc. ................................23
Section 2.15. Evidence of Debt..........................................24
Section 2.16. Use of Proceeds...........................................25
Article III CONDITIONS TO EFFECTIVENESS AND LENDING........................25
Section 3.1. Conditions Precedent to Effectiveness of Section 2.1......25
Section 3.2. Conditions Precedent to Each Revolving Credit Borrowing
and Extension Date................................................27
Section 3.3. Determinations Under Section 3.1..........................27
Article IV REPRESENTATIONS AND WARRANTIES................................28
Section 4.1. Representations and Warranties of the Borrower............28
Article V COVENANTS OF THE BORROWER......................................33
i
<PAGE>
TABLE OF CONTENTS
(continued)
Page
Section 5.1. Affirmative Covenants.....................................33
Section 5.2. Financial Covenants.......................................36
Section 5.3. Negative Covenants........................................36
Article VI EVENTS OF DEFAULT..............................................39
Section 6.1. Event of Default..........................................39
Article VII THE AGENT......................................................42
Section 7.1. Authorization and Action..................................42
Section 7.2. Agent's Reliance, Etc. ...................................42
Section 7.3. Citibank and Affiliates...................................42
Section 7.4. Lender Credit Decision....................................43
Section 7.5. Indemnification...........................................43
Section 7.6. Successor Agent...........................................43
Section 7.7. Other Agents..............................................44
Article VIII MISCELLANEOUS..................................................44
Section 8.1. Amendments Etc. ..........................................44
Section 8.2. Notices, Etc. ............................................44
Section 8.3. No Waiver; Remedies.......................................45
Section 8.4. Costs and Expenses; Indemnity.............................45
Section 8.5. Right of Setoff...........................................46
Section 8.6. Binding Effect............................................47
Section 8.7. Assignments and Participations............................47
Section 8.8. Confidentiality...........................................50
Section 8.9. Governing Law.............................................50
Section 8.10. Execution in Counterparts.................................50
Section 8.11. Jurisdiction, Etc. .......................................50
Section 8.12. Waiver of Jury Trial......................................51
ii
<PAGE>
TABLE OF CONTENTS
(continued)
Schedules
- ---------
Schedule I -- Lenders and Commitments
Schedule II -- Applicable Facility Fee Rate, Applicable Margin and
Applicable Utilization Fee Rate
Schedule III -- The Borrower and Its Subsidiaries
Exhibits
- --------
Exhibit A -- Form of Revolving Credit Promissory Note
Exhibit B -- Form of Notice of Revolving Credit Borrowing
Exhibit C -- Form of Assignment and Acceptance
Exhibit D1 -- Forms of Opinion of Internal Counsel for the Borrower
Exhibit D2 -- Form of Opinion of External Counsel for the Borrower
iii
<PAGE>
CREDIT AGREEMENT, dated as of October 18, 1999, among Phelps Dodge
Corporation, a New York corporation, as borrower (the "Borrower"), the Lenders
(as defined below) and Citibank, N.A. ("Citibank") as administrative agent (the
"Agent"). It is agreed as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.1. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Advance" means an advance by a Lender to the Borrower as part of a
Revolving Credit Borrowing and refers to a Base Rate Advance or a Eurodollar
Rate Advance (each of which shall be "Type" of Advance).
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For purposes of this
definition, the term "control" (including the terms "controlling",
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 20% or more of the
Voting Stock of such Person or to direct or cause the direction of the
management and policies of such Person, whether through the ownership of
Voting Stock, by contract or otherwise.
"Agent's Account" means the account of the Agent maintained by the
Agent at Citibank at its office at 399 Park Avenue, New York, New York
10043, Account No. 36852246, Attention: Leonard Sarcona.
"Agreement" means this Credit Agreement.
"Applicable Lending Office" means, with respect to each Lender, such
Lender's Domestic Lending Office in the case of a Base Rate Advance and such
Lender's Eurodollar Lending Office in the case of a Eurodollar Rate Advance.
"Applicable Facility Fee Rate" means, at any time, the rate per annum
set forth on Schedule II hereof under the heading "Applicable Facility Fee
Rate" corresponding to the Borrower's long-term senior unsecured
non-credit-enhanced debt as rated by Moody's and/or Standard & Poor's at
such time as set forth on such Schedule II.
"Applicable Margin" means, at any time, (a) for Base Rate Advances, 0%
per annum and (b) for Eurodollar Rate Advances, as of any date, the rate per
annum set forth on Schedule II hereof under the heading "Applicable Margin"
corresponding to the Borrower's long-term senior unsecured
non-credit-enhanced debt as rated by Moody's and/or Standard & Poor's at
such time as set forth on
1
<PAGE>
such schedule, provided that for Base Rate Advances and Eurodollar Rate
Advances the Applicable Margin shall be increased by an additional 0.25% per
annum from and after December 20, 1999.
"Applicable Utilization Fee Rate" means, at any time, the rate per
annum set forth on Schedule II hereof under the heading "Applicable
Utilization Fee Rate" corresponding to the Borrower's long-term unsecured
non-credit-enhanced debt as rated by Moody's and/or Standard & Poor's at
such time as set forth on such Schedule II.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee, and accepted by the Agent and (if
its consent is required pursuant to the terms hereof) the Borrower, in
substantially the form of Exhibit C hereto.
"Attributable Debt" means, at any time, the present value, discounted
at a rate per annum equal to the weighted average of the interest rates for
any Advances outstanding under this Agreement, and if no Advances are
outstanding under this Agreement, the Base Rate at such time, compounded
quarterly, of the obligation of a lessee for rental payments (not including
amounts payable by the lessee for maintenance, property taxes and insurance)
during the remaining term of any lease (including any period for which such
lease has been extended or may, at the option of the lessor, be extended).
"Base Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the
highest of:
(a) the rate of interest announced publicly by Citibank in New
York, New York, from time to time, as Citibank's base rate;
(b) the sum (adjusted to the nearest 1/32 of 1% or, if there is no
nearest 1/32 of 1%, to the next higher 1/32 of 1%) of (i) 1/2 of 1% per
annum, plus (ii) the rate obtained by dividing (A) the latest
three-week moving average of secondary market morning offering rates in
the United States for three-month certificates of deposit of major
United States money market banks, such three-week moving average
(adjusted to the basis of a year of 360 days) being determined weekly
on each Monday (or, if such day is not a Business Day, on the next
succeeding Business Day) for the three-week period ending on the
previous Friday by Citibank on the basis of such rates reported by
certificate of deposit dealers to and published by the Federal Reserve
Bank of New York or, if such publication shall be suspended or
terminated, on the basis of quotations for such rates received by
Citibank from three New York certificate of deposit dealers of
recognized standing selected by Citibank, by (B) a percentage equal to
100% minus the average of the daily percentages specified during such
three-week period by the Board of Governors of the Federal Reserve
System (or any successor) for determining the maximum reserve
2
<PAGE>
requirement (including, but not limited to, any emergency, supplemental
or other marginal reserve requirement) for Citibank with respect to
liabilities consisting of or including (among other liabilities)
three-month U.S. dollar non-personal time deposits in the United
States, plus (iii) the average during such three-week period of the
annual assessment rates estimated by Citibank for determining the then
current annual assessment payable by Citibank to the Federal Deposit
Insurance Corporation (or any successor) for insuring U.S. dollar
deposits of Citibank in the United States; and
(c) 1/2 of one percent per annum above the Federal Funds Rate, or
for the period from December 15, 1999 to January 15, 2000, 2 percent
per annum above the Federal Funds Rate.
"Base Rate Advance" means an Advance denominated in Dollars that bears
interest as provided in Section 2.6(a)(i).
"Borrowing" means a Revolving Credit Borrowing.
"Business Day" means a day of the year on which banks are not required
or authorized by law to close in New York City and, if the applicable
Business Day relates to any Eurodollar Rate Advances, on which dealings are
carried on in the London interbank market.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants or options to purchase any of the
foregoing.
"Capitalized Lease" means any Lease of property, real, personal or
mixed, in respect of which the present value (or some other computation) of
the minimum rental commitment thereunder would, in accordance with GAAP in
effect on the date such Lease is executed, be capitalized on a balance sheet
of the lessee.
"Capitalized Lease Obligation" means, at any time, the aggregate
amounts which, in accordance with GAAP, are shown as liabilities on the
balance sheet of the lessee with respect to the minimum rental commitment
under a Capitalized Lease of the lessee.
"Commitment" means as to any Lender (a) the amount set forth opposite
such Lender's name on Schedule I hereof or (b) if such Lender has become a
Lender hereunder pursuant to an Assignment and Acceptance, the amount set
forth for such Lender in the Register maintained by the Agent pursuant to
Section 8.7(d), as such amount may be reduced pursuant to Section 2.4.
"Commonly Controlled Entity" means an entity, whether or not
incorporated, which is under common control with the Borrower within the
3
<PAGE>
meaning of Section 4001 of ERISA or is part of a group which includes the
Borrower and which is treated as a single employer under Section 414 of the
Code.
"Confidential Information" means information that the Borrower
furnishes to the Agent or any Lender, but does not include any such
information that is or becomes generally available to the public or that is
or becomes available to the Agent or such Lender from a source other than
the Borrower.
"consolidated" means the consolidation of accounts in accordance with
GAAP.
"Consolidated Tangible Net Worth" means at any date, the excess at such
date of total assets over total liabilities of the Borrower and its
consolidated Subsidiaries determined in accordance with GAAP, on a
consolidated basis, excluding, however, from the determination of total
assets (i) all intangible assets such as goodwill, trade names, trademarks,
patents, organization expenses, unamortized debt discount and expense and
other like intangibles, (ii) to the extent not already deducted from total
assets, reserves for depreciation, depletion, obsolescence and/or
amortization of properties and all other reserves or appropriations of
retained earnings which, in accordance with GAAP, should be established in
connection with the business conducted by the relevant corporation, and
(iii) any revaluation or other write-up in book value of assets subsequent
to December 31, 1998 except in accordance with GAAP.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Convert", "Conversion" and "Converted" each refers to a conversion of
Advances of one Type into Advances of the other Type pursuant to Section 2.7
or 2.8.
"Cyprus" means Cyprus Amax Minerals Company, a Delaware corporation.
"Default" means any Event of Default or any event that would constitute
an Event of Default but for the requirement that notice be given or time
elapse or both.
"Domestic Lending Office" means, with respect to any Lender, the office
of such Lender specified as its "Domestic Lending Office" opposite its name
on Schedule I hereto or in the Assignment and Acceptance pursuant to which
it became a Lender, or such other office of such Lender as such Lender may
from time to time specify to the Borrower and the Agent.
"Effective Date" has the meaning specified in Section 3.1.
4
<PAGE>
"Eligible Assignee" means (i) any Lender; (ii) an Affiliate of any
Lender; and (iii) any other bank or financial institution other than an
Affiliate of the Borrower.
"Environmental Action" means any action, suit, demand, demand letter,
claim, notice of non-compliance or violation, notice of liability or
potential liability, investigation, proceeding, consent order or consent
agreement relating in any way to any Environmental Law, Environmental Permit
or Hazardous Materials or arising from alleged injury or threat of injury to
health, safety or the environment, including, without limitation, (a) by any
governmental or regulatory authority for enforcement, cleanup, removal,
response, remedial or other actions or damages and (b) by any governmental
or regulatory authority or any third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.
"Environmental Law" means any and all applicable foreign, Federal,
state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority or
other Requirements of Law (including common law) regulating, relating to or
imposing liability or standards of conduct concerning protection of human
health or the environment.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant
to which it became a Lender (or, if no such office is specified, its
Domestic Lending Office), or such other office of such Lender as such Lender
may from time to time specify to the Borrower and the Agent.
"Eurodollar Rate" means, for any Interest Period for each Eurodollar
Rate Advance comprising part of the same Revolving Credit Borrowing, an
interest rate per annum equal to the rate per annum obtained by dividing (a)
the rate per annum (rounded upward to the nearest whole multiple of 1/32 of
1% per annum) appearing on Dow Jones Markets Telerate Page 3750 (or any
successor page) as the London interbank offered rate for deposits in U.S.
dollars at approximately 11:00 A.M. (London time) two Business Days prior to
the first day of such Interest Period for a term comparable to such Interest
Period or, if for any reason
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such rate is not available, the average (rounded upward to the nearest whole
multiple of 1/32 of 1% per annum, if such average is not such a multiple) of
the rate per annum at which deposits in U.S. dollars are offered by the
principal office of each of the Reference Banks in London, England to prime
banks in the London interbank market at 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period in an amount
substantially equal to such Reference Bank's Eurodollar Rate Advance
comprising part of such Revolving Credit Borrowing to be outstanding during
such Interest Period and for a period equal to such Interest Period by (b) a
percentage equal to 100% minus the Eurodollar Rate Reserve Percentage for
such Interest Period. If the Dow Jones Markets Page 3750 (or any successor
page) is unavailable, the Eurodollar Rate for any Interest Period for each
Eurodollar Rate Advance comprising part of the same Revolving Credit
Borrowing shall be determined by the Agent on the basis of applicable rates
furnished to and received by the Agent from the Reference Banks two Business
Days before the first day of such Interest Period, subject however to the
provisions of Section 2.7.
"Eurodollar Rate Advance" means an Advance that bears interest as
provided in Section 2.6(a)(ii).
"Eurodollar Rate Reserve Percentage" means for any Interest Period for
all Eurodollar Rate Advances comprising part of the same Borrowing means the
reserve percentage applicable two Business Days before the first day of such
Interest Period under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for determining
the maximum reserve requirement (including any emergency, supplemental or
other marginal reserve requirement) for a member bank of the Federal Reserve
System in New York City with respect to liabilities or assets consisting of
or including Eurocurrency Liabilities (or with respect to any other category
of liabilities that includes deposits by reference to which the interest
rate on Eurodollar Rate Advances is determined) having a term equal to such
Interest Period.
"Event of Default" has the meaning specified in Section 6.1.
"Exchange Offer" means the exchange offer for the outstanding common
stock of Cyprus made pursuant to the Offer to Purchase.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published 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, or, if such rate is
not so published for any day that is a Business Day, the average of the
quotations for such day on such transactions received by the Agent from
three Federal funds brokers of recognized standing selected by it.
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"Fee Letter" means the letter dated October 13, 1999 among the
Borrower, Citibank and the Arranger and Book Manager.
"GAAP" has the meaning specified in Section 1.3.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantee" of a Person means, at a particular date, the sum (without
duplication) of the following: (a) guarantees or endorsements (other than
for purposes of collection in the ordinary course of business) of, or
obligations to purchase goods or services for the purpose of supplying funds
for the purchase or payment of, indebtedness, liabilities or obligations of
others, and other contingent liabilities in respect of, or to purchase or
otherwise acquire or service, indebtedness, liabilities or obligations of
others, provided that any such obligation to purchase goods or services
shall be treated as Indebtedness only to the extent that payment thereunder
will be required (after giving effect to any provision limiting such
payments) if such property or services are not delivered to such Person, and
(b) all indebtedness in effect guaranteed by an agreement, contingent or
otherwise, to make any loan, advance, capital contribution or other
investment in the debtor for the purpose of assuring a minimum equity, asset
base, working capital or other balance sheet condition for any date, or to
provide funds for the payment of any liability, dividend or stock
liquidation payment, or otherwise to supply funds to or in any manner invest
in the debtor, but only to the extent of the liability of such Person
thereunder.
"Hazardous Materials" means (a) petroleum and petroleum products,
byproducts or breakdown products, radioactive materials, asbestos-containing
materials, polychlorinated biphenyls, ureaformaldehyde and radon gas and (b)
any other chemicals, materials, substances or wastes designated, classified
or regulated as hazardous or toxic or as a pollutant or contaminant under
any Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts and other similar agreements.
"Indebtedness" of a Person means, at a particular date, the sum
(without duplication) of the following: (a) all items of indebtedness which
in accordance with GAAP would be included in determining total liabilities
as shown on the liability side of a balance sheet of such Person as at such
date, (b) indebtedness for the repayment of borrowed money secured by any
Lien existing on a Principal Property owned subject to such Lien, whether or
not the indebtedness secured thereby shall have been assumed, (c)
Guarantees, (d) Capitalized Lease Obligations and (e) Production Payments,
provided, however, that the term "Indebtedness" shall not include
liabilities in respect of advance payments made
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under contracts for the sale of goods and/or services, or lease obligations
other than Capitalized Lease Obligations, or guarantees of any such
liabilities or lease obligations.
"Indebtedness for Money Borrowed" of a Person means, at a particular
date, the sum (without duplication) of the following (a) all Indebtedness,
whether or not represented by bonds, debentures, notes, commercial paper or
other securities, for the repayment of borrowed money, (b) all deferred
obligations for the payment of the purchase price of property or assets
purchased and secured by a purchase money mortgage, conditional sale
agreement, security agreement or any title retention agreement, (c)
Indebtedness of the character described in clauses (b) and (c) of the
definition of "Indebtedness" in Section 1.1 if such Indebtedness relates to
Indebtedness for Money Borrowed of others, (d) Capitalized Lease Obligations
and (e) Production Payments.
"Indemnified Party" has the meaning specified in Section 8.4.
"Interest Period" means, for each Eurodollar Rate Advance comprising
part of the same Revolving Credit Borrowing, the period commencing on the
date of such Eurodollar Rate Advance or the date of the Conversion of any
Base Rate Advance into such Eurodollar Rate Advance and ending on the last
day of the period selected by the Borrower pursuant to the provisions below
and, thereafter, with respect to Eurodollar Rate Advances, each subsequent
period commencing on the last day of the immediately preceding Interest
Period and ending on the last day of the period selected by the Borrower
pursuant to the provisions below. The duration of each such Interest Period
shall be seven days or one, two or three months, as the Borrower may, upon
notice received by the Agent not later than 2:00 P.M. (New York City time)
on the third Business Day prior to the first day of such interest Period,
select; provided, however, that:
(i) the Borrower may not select any Interest Period that ends
after the Termination Date;
(ii) Interest Periods commencing on the same date for Eurodollar
Rate Advances comprising part of the same Revolving Credit Borrowing
shall be of the same duration;
(iii) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such Interest
Period (other than a seven-day Interest Period) shall be extended to
occur on the next succeeding Business Day, provided, however, that, if
such extension would cause the last day of such Interest Period to
occur in the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business Day; and
(iv) whenever the first day of any Interest Period occurs on a day
of an initial calendar month for which there is no numerically
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corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months in
such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"Lender" means each financial institution or other Person listed on
Schedule I or that from time to time becomes a party hereto as a Lender by
execution of an Assignment and Acceptance and in accordance with Section
8.7.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement
and any Capitalized Lease having substantially the same economic effect as
any of the foregoing).
"Loan Documents" means, collectively, this Agreement, any Revolving
Credit Notes, the Fee Letter and each certificate, agreement, notice,
request or document executed by the Borrower and delivered to the Agent or
any Lender in connection with or pursuant to any of the foregoing.
"Material Adverse Change" means a material adverse change in the
financial condition of the Borrower and its Subsidiaries taken as a whole
from that reflected in the Borrower's consolidated balance sheet as of
December 31, 1998.
"Materials of Environmental Concern" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any applicable Environmental Law, including, without
limitation, asbestos, polychlorinated biphenyls and ureaformaldehyde
insulation.
"Merger" means the merger of Cyprus into CAV Corporation to be made
pursuant to the terms of the Merger Agreement.
"Merger Agreement" means the agreement and plan of merger between the
Borrower, CAV Corporation and Cyprus dated September 30, 1999.
"Moody's" means Moody's Investor Service, Inc.
"Mortgage" means any mortgage, pledge, lien, pledge or other security
interest.
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"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA.
"Notice of Revolving Credit Borrowing" has the meaning specified in
Section 2.2(a).
"Obligations" means the Advances, and all other advances, debts,
liabilities, obligations, covenants and duties owing by the Borrower to the
Agent, any Lender, any Affiliate of any of them or any Indemnified Party, of
every type and description, present or future, whether or not evidenced by
any note, guaranty or other instrument, arising under this Agreement or
under any other Loan Document, whether or not for the payment of money,
arising by reason of an extension of credit, loan, guaranty,
indemnification, foreign exchange transaction or Hedge Agreement or in any
other manner, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now existing or
hereafter arising and however acquired. The term "Obligations" includes all
letter of credit, cash management and other fees and all interest, charges,
expenses, fees, attorneys' fees and disbursements and other sums chargeable
to the Borrower under this Agreement or any other Loan Document.
"Offer to Purchase" means the Amended Offer to Exchange each
Outstanding Share of Common Stock (including Associated Preferred Share
Purchase Rights) of Cyprus Amax Mineral Company, dated October 1, 1999 and
filed with the Securities and Exchange Commission on such date.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association,
joint venture, limited liability company or other entity, or a government or
any political subdivision or agency thereof.
"Plan" means at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Principal Domestic Subsidiary" means CAV Corporation, Cyprus
(following the Merger) and each of the Subsidiaries designated as a
"Principal Domestic Subsidiary" on Schedule III attached hereto.
"Principal Property" means (a) any mineral property, located within the
United States of America or its territories or possessions, of the Borrower
or any Principal Domestic Subsidiary which is in production, under
development or included in estimates of reserves published by the Borrower,
(b) any concentrator, smelter, refinery, rod mill, metal fabricating plant
or similar processing or
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manufacturing facility, located within the United States of America or its
territories or possessions, of the Borrower or any Principal Domestic
Subsidiary, or (c) any Capital Stock of, or any Indebtedness for Money
borrowed owing to the Borrower or any other Principal Domestic Subsidiary
of, any Principal Domestic Subsidiary which owns any Principal Property;
provided, that Principal Property shall in any event not include any
property, facility or Principal Domestic Subsidiary determined by the Board
of Directors not to be of material importance to the operations of the
Borrower and the Principal Domestic Subsidiaries taken as a whole.
"Production Payment" means any arrangement providing for the sale,
transfer or other disposition of (a) minerals (including coal and
hydrocarbons) until the transferee thereof shall realize therefrom a
specified amount of money (however determined) or a specified amount of such
minerals (however determined) or (b) any interest in minerals (including
coal and hydrocarbons) of the character commonly referred to as a
"production payment".
"Reference Banks" means Citibank, First Union National Bank and Morgan
Guaranty Trust Company of New York.
"Register" has the meaning specified in Section 8.7(d).
"Related Documents" means the Merger Agreement and each other document
and instrument relating to the Merger and the Exchange Offer.
"Required Lenders" means at any time Lenders owed at least 50% in
interest of the then aggregate unpaid principal amount of the Advances owing
to Lenders, or, if no such principal amount is then outstanding, Lenders
having at least a majority in interest of the Commitments.
"Reportable Event" means any of the events set forth in Section 4043(c)
of ERISA, other than those events as to which the thirty day notice period
is waived under subsections .12, .13, .14, .16, .18, .19 or .20 of PBGC Reg.
ss. 2615.
"Requirement of Law" means, as to any Person, any applicable law,
treaty, rule or regulation or determination (including Environmental Law and
ERISA) of an arbitrator or a court or other Governmental Authority, in each
case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Responsible Officer" means the chief executive officer, the president
or any vice-president of the Borrower or, with respect to financial matters,
the chief financial officer, any vice-president with responsibility
primarily for accounting or financial matters, the treasurer or the
controller of the Borrower.
"Revolving Credit Borrowing" means a borrowing consisting of
simultaneous Advances of the same Type made by each of the Lenders pursuant
to Section 2.1.
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"Revolving Credit Note" means a promissory note of the Borrower payable
to the order of any Lender, delivered pursuant to a request made under
Section 2.15 in substantially the form of Exhibit A hereto, evidencing the
aggregate indebtedness of the Borrower to such Lender resulting from the
Advances made by such Lender.
"Sale and Lease-Back Transactions" means any arrangement with any
Person providing for the leasing by the Borrower or a Principal Domestic
Subsidiary of any Principal Property (except for temporary leases for a term
of not more than three years), title to which property has been or is to be
sold or transferred by the Borrower or such Principal Domestic Subsidiary to
such Person, except for arrangements with any Governmental Authority of the
United States of America or any of its territories or possessions entered
into for the purpose of financing all or any part of the purchase price or
the cost of constructing or improving the property subject to such
arrangement. "Single Employer Plan" means any Plan which is covered by Title
IV of ERISA, but which is not a Multiemployer Plan.
"Single Employee Plan" means any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Standard & Poor's" means Standard & Poor's Ratings Service, a division
of the McGraw-Hill Companies, Inc.
"Subsidiary" means, as to any Person, a corporation, partnership or
other entity of which a majority of the Voting Stock (other than stock or
such other ownership interests having such power only by reason of the
happening of a contingency) is at the time owned, or the management of which
is otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by such Person.
"Termination Date" means the earliest of (a) January 31, 2000, (b) as
soon as practicable after the date upon which the Borrower first obtains
access to cash and marketable securities of Cyprus and (c) the date of
termination in whole of the Commitments pursuant to Section 2.4 or 6.1.
"Total Capitalization" at any date, the sum of Consolidated Tangible
Net Worth at such date and Indebtedness for Money Borrowed of the Borrower
and its consolidated Subsidiaries determined in accordance with GAAP, on a
consolidated basis, at such date.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the happening of
such a contingency.
Section 1.2. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word
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"from" means "from and including" and the words "to" and "until" each mean "to
but excluding".
Section 1.3. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles as in effect from time to time ("GAAP").
Section 1.4. Certain Terms.
(a) The words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole, and not to any particular
Article, Section, subsection or clause in this Agreement.
(b) References herein to an Exhibit, Schedule, Article, Section,
subsection or clause refer to the appropriate Exhibit or Schedule to, or
Article, Section, subsection or clause in this Agreement.
(c) Each agreement defined in this Article 1 shall include all
appendices, exhibits and schedules thereto, and, unless specifically stated
otherwise, shall include amendments, restatements, supplements or other
modifications thereto, and as the same may be in effect at any and all times
such reference becomes operative, but only (if required) with the prior
written consent of the Required Lenders.
(d) The term "including" when used in any Loan Document means
"including without limitation".
(e) The terms "Lender" and "Agent" include their respective successors.
(f) Upon the appointment of any successor Agent pursuant to Section
7.6, references to Citicorp in Section 7.3 and to Citibank in the
definitions of Reference Bank and Base Rate shall be deemed to refer to the
financial institution then acting as the Agent or one of its Affiliates if
it so designates.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
Section 2.1. The Advances. Each Lender severally agrees, on the terms
and conditions hereinafter set forth, to make Advances to the Borrower from time
to time on any Business Day during the period from the Effective Date until the
Termination Date in an aggregate amount not to exceed at any time outstanding
such Lender's Commitment. Each Revolving Credit Borrowing shall be in an
aggregate amount of $10,000,000 or an integral multiple of $5,000,000 in excess
thereof and shall consist of Advances of the same Type made on the same day by
the Lenders ratably according to their respective Commitments. Within the limits
of each Lender's Commitment, the
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Borrower may borrow under this Section 2.1, prepay pursuant to Section 2.9 and
reborrow under this Section 2.1.
Section 2.2. Making the Advances.
(a) Each Revolving Credit Borrowing shall be made on notice, given not
later than (x) 2:00 P.M. (New York City time) on the third Business Day
prior to the date of the proposed Revolving Credit Borrowing in the case of
a Revolving Credit Borrowing consisting of Eurodollar Rate Advances or (y)
11:00 A.M. (New York City time) on the date of the proposed Revolving Credit
Borrowing in the case of a Revolving Credit Borrowing consisting of Base
Rate Advances, by the Borrower to the Agent, which shall give to each Lender
prompt notice thereof by telecopier or telex. Each such notice of a
Revolving Credit Borrowing (a "Notice of Revolving Credit Borrowing") shall
be by telephone, confirmed immediately in writing, or telecopier or telex in
substantially the form of Exhibit B hereto, specifying therein the requested
(i) date of such Revolving Credit Borrowing, (ii) Type of Advances
comprising such Revolving Credit Borrowing, (iii) aggregate amount of such
Revolving Credit Borrowing, and (iv) in the case of a Revolving Credit
Borrowing consisting of Eurodollar Rate Advances, initial Interest Period
for each such Advance. Each Lender shall, before 12:00 Noon (New York City
time) on the date of such Revolving Credit Borrowing make available for the
account of its Applicable Lending Office to the Agent at the Agent's
Account, in same day funds, such Lender's ratable portion of such Revolving
Credit Borrowing. Subject to fulfillment of the applicable conditions set
forth in Article III, such Revolving Credit Borrowing will be made available
to the Borrower by the Agent crediting the account of the Borrower on the
books of the Agent's office (referred to in Section 8.2), or such other
account as may be directed by the Borrower's written instruction to the
Agent, with the aggregate of the amounts made available to the Agent by the
Lenders and in like funds as received by the Agent.
(b) Anything in clause (a) above to the contrary notwithstanding, (i)
the Borrower may not select Eurodollar Rate Advances for any Revolving
Credit Borrowing if the aggregate amount of such Revolving Credit Borrowing
is less than $5,000,000 or if the obligation of the Lenders to make
Eurodollar Rate Advances shall then be suspended pursuant to Section 2.7 or
2.11 and (ii) the Eurodollar Rate Advances may not be outstanding as part of
more than six separate Revolving Credit Borrowings.
(c) Each Notice of Revolving Credit Borrowing shall be irrevocable and
binding on the Borrower. In the case of any Revolving Credit Borrowing that
the related Notice of Revolving Credit Borrowing specifies is to be
comprised of Eurodollar Rate Advances, the Borrower shall indemnify each
Lender against any loss, cost or expense actually incurred by such Lender as
a result of any failure to fulfill on or before the date specified in such
Notice of Revolving Credit Borrowing for such Revolving Credit Borrowing the
applicable conditions set forth in Article III, including any loss
(excluding loss of anticipated profits), cost
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or expense incurred by reason of the liquidation or reemployment of deposits
or other funds acquired by such Lender to fund the Advance to be made by
such Lender as part of such Revolving Credit Borrowing when such Advance, as
a result of such failure, is not made on such date.
(d) Unless the Agent shall have received notice from a Lender prior to
the date of any Revolving Credit Borrowing that such Lender will not make
available to the Agent such Lender's ratable portion of such Revolving
Credit Borrowing, the Agent may assume that such Lender has made such
portion available to the Agent on the date of such Revolving Credit
Borrowing in accordance with clause (a) of this Section 2.2 and the Agent
may, in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount. If and to the extent that such Lender
shall not have so made such ratable portion available to the Agent, such
Lender and the Borrower severally agree to repay to the Agent forthwith on
demand such corresponding amount together with interest thereon, for each
day from the date such amount is made available to the Borrower until the
date such amount is repaid to the Agent, at (i) in the case of the Borrower,
the interest rate applicable at the time to Advances comprising such
Revolving Credit Borrowing and (ii) in the case of such Lender, the Federal
Funds Rate. If such Lender shall repay to the Agent such corresponding
amount, such amount so repaid shall constitute such Lender's Advance as part
of such Revolving Credit Borrowing for purposes of this Agreement.
(e) The failure of any Lender to make the Advance to be made by it as
part of any Revolving Credit Borrowing shall not relieve any other Lender of
its obligation, if any, hereunder to make its Advance on the date of such
Revolving Credit Borrowing, but no Lender shall be responsible for the
failure of any other Lender to make the Advance to be made by such other
Lender on the date of any Revolving Credit Borrowing.
Section 2.3. Fees.
(a) Facility Fee. The Borrower agrees to pay to the Agent for the
account of each Lender a facility fee on the aggregate amount of such
Lender's Commitment from the date hereof at the Applicable Facility Fee
Rate, payable in arrears quarterly on the last day of each March, June,
September and December, commencing December 31, 1999, and on the Termination
Date.
(b) Utilization Fee. The Borrower agrees to pay to the Agent for the
account of each Lender for each date prior to the Termination Date on which
the aggregate outstanding Advances exceed 25% of the Commitments, a
utilization fee on the aggregate amount of the outstanding Advances at the
Applicable Utilization Fee Rate, payable in arrears on each date on which
interest is payable pursuant to Section 2.6.
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(c) Agent's Fees. The Borrower shall pay to the Agent for its own
account such fees as may from time to time be agreed between the Borrower
and the Agent.
Section 2.4. Termination or Reduction of the Commitments.
(a) Optional. The Borrower shall have the right, upon at least one
Business Day's notice to the Agent, to terminate in whole or reduce ratably
in part the unused portions of the respective Commitments of the Lenders,
provided that each partial reduction shall be in the aggregate amount of
$5,000,000 or an integral multiple of $1,000,000 in excess thereof.
(b) Mandatory. On the Termination Date, the Commitments of the Lenders
shall be automatically and permanently cancelled and reduced to zero.
Section 2.5. Repayment of Advances. The Borrower shall repay to the
Agent for the ratable account of the Lenders on the Termination Date the
aggregate principal amount of the Advances then outstanding.
Section 2.6. Interest on Advances.
(a) Scheduled Interest. The Borrower shall pay interest on the unpaid
principal amount of each Advance owing to each Lender from the date of such
Advance until such principal amount shall be paid in full, at the following
rates per annum:
(i) Base Rate Advances. During such periods as such Advance is a
Base Rate Advance, a rate per annum equal at all times to the sum of (x) the
Base Rate in effect from time to time plus (y) the Applicable Margin in
effect from time to time, payable in arrears quarterly on the last day of
each March, June, September and December during such periods and on the date
such Base Rate Advance shall be Converted or paid in full.
(ii) Eurodollar Rate Advances. During such periods as such Advance
is a Eurodollar Rate Advance, a rate per annum equal at all times during
each Interest Period for such Advance to the sum of (x) the Eurodollar Rate
for such Interest Period for such Advance plus (y) the Applicable Margin in
effect from time to time, payable in arrears on the last day of such
Interest Period and on the date such Eurodollar Rate Advance shall be
Converted or paid in full.
(b) Default Interest. Upon the occurrence and during the continuance of
an Event of Default under Section 6.1(a), the Borrower shall pay interest on
(i) the unpaid principal amount of each Advance owing to each Lender,
payable in arrears on the dates referred to in clause (a)(i) or (a)(ii)
above, at a rate per annum equal at all times to 2% per annum above the rate
per annum required to be paid on such Advance pursuant to clause (a)(i) or
(a)(ii) above and (ii) to the fullest extent permitted by law, the amount of
any interest, fee or other amount payable hereunder that is not paid when
due, from the date such amount shall be due until
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such amount shall be paid in full, payable in arrears on the date such
amount shall be paid in full and on demand, at a rate per annum equal at all
times to 2% per annum above the rate per annum required to be paid on Base
Rate Advances pursuant to clause (a)(i) above.
Section 2.7. Interest Rate Determination.
(a) Each Reference Bank agrees to furnish to the Agent timely
information for the purpose of determining each Eurodollar Rate. If any one
or more of the Reference Banks shall not furnish such timely information to
the Agent for the purpose of determining any such interest rate, the Agent
shall determine such interest rate on the basis of timely information
furnished by the remaining Reference Banks. The Agent shall give prompt
notice to the Borrower and the Lenders of the applicable interest rate
determined by the Agent for purposes of Section 2.6(a)(i) or (ii), and the
rate, if any, furnished by each Reference Bank for the purpose of
determining the interest rate under Section 2.6(a)(ii).
(b) If, with respect to any Eurodollar Rate Advances, the Required
Lenders notify the Agent that the Eurodollar Rate for any Interest Period
for such Advances will not adequately reflect the cost to such Required
Lenders of making, funding or maintaining their respective Eurodollar Rate
Advances for such Interest Period, the Agent shall forthwith so notify the
Borrower and the Lenders, whereupon (i) each Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period
therefor, Convert into a Base Rate Advance, and (ii) the obligation of the
Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall
be suspended until the Agent shall notify the Borrower and the Lenders that
the circumstances causing such suspension no longer exist.
(c) If the Borrower shall fail to select the duration of any Interest
Period for any Eurodollar Rate Advances in accordance with the provisions
contained in the definition of "Interest Period" in Section 1.1, the Agent
will forthwith so notify the Borrower and the Lenders and such Advances will
automatically, on the last day of the then existing Interest Period
therefor, be Converted into Base Rate Advances.
(d) On the date on which the aggregate unpaid principal amount of
Eurodollar Rate Advances comprising any Borrowing shall be reduced, by
payment or prepayment or otherwise, to less than $5,000,000, such Advances
shall automatically Convert into Base Rate Advances.
(e) Upon the occurrence and during the continuance of any Event of
Default, (i) each Eurodollar Rate Advance will automatically, on the last
day of the then existing Interest Period therefor, Convert into a Base Rate
Advance and (ii) the obligation of the Lenders to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended.
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(f) If Dow Jones Markets Telerate Page 3750 is unavailable and fewer
than two Reference Banks furnish timely information to the Agent for
determining the Eurodollar Rate for any Eurodollar Rate Advances,
(i) the Agent shall forthwith notify the Borrower and the Lenders
that the interest rate cannot be determined for such Eurodollar Rate
Advances,
(ii) with respect to Eurodollar Rate Advances, each such Advance
will automatically, on the last day of the then existing Interest Period
therefor, be prepaid by the Borrower or be automatically Converted into a
Base Rate Advance (or if such Advance is then a Base Rate Advance, will
continue as a Base Rate Advance), and
(iii) the obligation of the Lenders to make Eurodollar Rate
Advances or to Convert Advances into Eurodollar Rate Advances shall be
suspended until the Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist.
Section 2.8. Optional Conversion of Advances. The Borrower may on any
Business Day, upon notice given to the Agent not later than 11:00 A.M. (New York
City time) on the third Business Day prior to the date of the proposed
Conversion and subject to the provisions of Sections 2.7 and 2.11, Convert all
Advances of one Type comprising the same Borrowing into Advances of the other
Type; provided, however, that any Conversion of Eurodollar Rate Advances into
Base Rate Advances shall be made only on the last day of an Interest Period for
such Eurodollar Rate Advances, any Conversion of Base Rate Advances into
Eurodollar Rate Advances shall be in an amount not less than the minimum amount
specified in Section 2.2(b) and no Conversion of any Advances shall result in
more separate Revolving Credit Borrowings than permitted under Section 2.2(b).
Each such notice of a Conversion shall, within the restrictions specified above,
specify (i) the date of such Conversion, (ii) the Advances to be Converted, and
(iii) if such Conversion is into Eurodollar Rate Advances, the duration of the
initial Interest Period for each such Advance. Each notice of Conversion shall
be irrevocable and binding on the Borrower.
Section 2.9. Prepayments of Advances. The Borrower may, upon notice at
least two Business Days' prior to the date of such prepayment, in the case of
Eurodollar Rate Advances, and not later than 2:00 P.M. (New York City time) on
the date of such prepayment, in the case of Base Rate Advances, to the Agent
stating the proposed date and aggregate principal amount of the prepayment, and
if such notice is given the Borrower shall, prepay the outstanding principal
amount of the Advances comprising part of the same Revolving Credit Borrowing in
whole or ratably in part, together with accrued interest to the date of such
prepayment on the principal amount prepaid; provided, however, that (x) each
partial prepayment shall be in an aggregate principal amount of $10,000,000 or
an integral multiple of $5,000,000 in excess thereof and (y) in the event of any
such prepayment of a Eurodollar Rate Advance, the Borrower shall be obligated to
reimburse the Lenders in respect thereof pursuant to Section 8.4(c).
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Section 2.10. Increased Costs.
(a) If after the date hereof, due to either (i) the introduction of or
any change in any Requirement of Law or in the interpretation or application
thereof or (ii) the compliance with any guideline or request from any
central bank or other Governmental Authority (whether or not having the
force of law), there shall result an increase in the cost to any Lender by
an amount which such Lender deems to be material of agreeing to make or
making, funding or maintaining Eurodollar Rate Advances (excluding for
purposes of this Section 2.10 any such increased costs resulting from (i)
Taxes or Other Taxes (as to which Section 2.13 shall govern) and (ii)
changes in the basis of taxation of overall net income or overall gross
income by the United States or by the foreign jurisdiction or state under
the laws of which such Lender is organized or has its Applicable Lending
Office or any political subdivision thereof), then the Borrower shall
promptly pay to the Lender additional amounts sufficient to compensate such
Lender for such increased cost. If any Lender becomes entitled to claim any
additional amounts pursuant to this Section, it shall promptly notify the
Borrower in writing, through the Agent, of the event by reason of which it
has become so entitled; provided, that the Borrower shall not be required to
compensate a Lender for costs in respect of any period beginning before the
date which is 120 days prior to the date on which the Borrower receives
notice that such costs have been imposed, or if such costs have been imposed
retroactively, the period beginning on such earlier date on which such costs
shall have become effective (excluding however, any portion of such period
which is after the date of adoption of or change in the relevant Requirement
of Law and more than 120 days prior to the date on which the Borrower had
received notice that such costs had been imposed). A certificate as to the
amount of such increased cost, submitted to the Borrower and the Agent by
such Lender, shall be conclusive, absent manifest error.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any
Governmental Authority made subsequent to the date hereof does or shall have
the effect of reducing the rate of return on such Lender's or such
corporation's capital as a consequence of its obligations hereunder to a
level below that which such Lender or such corporation could have achieved
but for such change or compliance (taking into consideration such Lender's
or such corporation's policies with respect to capital adequacy) by an
amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Borrower (with a copy to the Administrative
Agent) of a written request therefor, the borrower shall pay to such Lender
such additional amount or amounts as will compensate such Lender or
corporation for such reduction.
Section 2.11. Illegality. Notwithstanding any other provision of this
Agreement, the adoption of, or any change in, any Requirement of Law or in the
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interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Rate Advances as contemplated by this Agreement, (a)
the commitment of such Lender hereunder to make or maintain Eurodollar Rate
Advances, continue Eurodollar Rate Advances as such and convert Base Rate
Advances to Eurodollar Rate Advances shall forthwith be canceled and (b) such
Lender's Revolving Credit Borrowings then outstanding as Eurodollar Rate
Advances, if any, shall be converted automatically to Base Rate Advances on the
respective last days of the then current Interest Periods with respect to such
Revolving Credit Borrowings or within such earlier period as required by law. If
any such conversion of a Eurodollar Rate Advance occurs on a day which is nor
the last day of the then current Interest Period with respect thereto, the
Borrower shall pay to such Lender such amounts, if any, as may be required
pursuant to Section 8.4(c).
Section 2.12. Payments and Computations.
(a) The Borrower shall make each payment hereunder not later than 2:00
P.M. (New York City time) on the day when due to the Agent at the Agent's
Account in same day funds. The Agent will promptly thereafter cause to be
distributed like funds relating to the payment of principal or interest or
facility fees ratably (other than amounts payable pursuant to Section 2.10,
2.13 or 8.4(c)) to the Lenders for the account of their respective
Applicable Lending Offices, and like funds relating to the payment of any
other amount payable to any Lender to such Lender for the account of its
Applicable Lending Office, in each case to be applied in accordance with the
terms of this Agreement. Upon its acceptance of an Assignment and Acceptance
and recording of the information contained therein in the Register pursuant
to Section 8.7(d), from and after the effective date specified in such
Assignment and Acceptance, the Agent shall make all payments hereunder and
under the Revolving Credit Notes in respect of the interest assigned thereby
to the Lender assignee thereunder, and the parties to such Assignment and
Acceptance shall make all appropriate adjustments in such payments for
periods prior to such effective date directly between themselves.
(b) The Borrower hereby authorizes each Lender, if and to the extent
payment owed to such Lender is not made when due hereunder or under the
Revolving Credit Note held by such Lender, to charge from time to time
against any or all of the Borrower's accounts with such Lender any amount so
due.
(c) All computations of interest based on the Base Rate shall be made
by the Agent on the basis of a year of 365 or 366 days, as the case maybe,
all computations of interest based on the Eurodollar Rate, or the Federal
Funds Rate and of fees shall be made by the Agent on the basis of a year of
360 days, in each case for the actual number of days (including the first
day but excluding the last day) occurring in the period for which such
interest or facility fees are payable. Each determination by the Agent of an
interest rate hereunder shall be conclusive and binding for all purposes,
absent manifest error.
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(d) Whenever any payment hereunder or under the Revolving Credit Notes
shall be stated to be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of payment of
interest or facility fee, as the case may be; provided, however, that, if
such extension would cause payment of interest on or principal of Eurodollar
Rate Advances to be made in the next following calendar month, such payment
shall be made on the next preceding Business Day.
(e) Unless the Agent shall have received notice from the Borrower prior
to the date on which any payment is due to the Lenders hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause to be distributed to each
Lender on such due date an amount equal to the amount then due such Lender.
If and to the extent the Borrower shall not have so made such payment in
full to the Agent, each Lender shall repay to the Agent forthwith on demand
such amount distributed to such Lender together with interest thereon, for
each day from the date such amount is distributed to such Lender until the
date such Lender repays such amount to the Agent, at the Federal Funds Rate.
Section 2.13. Taxes.
(a) Any and all payments by the Borrower hereunder or under the
Revolving Credit Notes shall be made, in accordance with Section 2.12, free
and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities
with respect thereto ("Taxes"), excluding, (i) Taxes imposed on the Agent or
any Lender as a result of a present or former connection between the Agent
or such Lender and the jurisdiction of the Governmental Authority imposing
such Tax or any political subdivision or taxation authority thereof or
therein (other than any such connection arising solely from the Agent or
such Lender having executed, delivered or performed its obligations or
received a payment under, or enforced, this Agreement or the Revolving
Credit Notes) and (ii) Taxes imposed by the United States on any Lender
other than as a result of a Change in Law (as defined below) relating to
such Lender (all such non-excluded Taxes in respect of payments hereunder or
under the Revolving Credit Notes being hereinafter referred to as
"Non-Excluded Taxes"). If the Borrower shall be required by law to deduct
any Taxes from or in respect of any sum payable hereunder or under any
Revolving Credit Note to any Lender or the Agent, (i) the Borrower shall
make such deductions, (ii) the Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable law and (iii) if such Taxes are Non-Excluded Taxes, the sum
payable shall be increased as may be necessary so that after making all
required deductions of Non-Excluded Taxes (including deductions of
Non-Excluded Taxes applicable to additional sums payable under this Section
2.13), such Lender or the Agent (as
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the case may be) receives an amount equal to the sum it would have received
had no such deductions been made.
(b) In addition, the Borrower shall pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made hereunder or under the Revolving
Credit Notes or from the execution, delivery or registration of, performing
under, or otherwise with respect to, this Agreement or the Revolving Credit
Notes (hereinafter referred to as "Other Taxes").
(c) If the Borrower fails to pay any Non-Excluded Taxes when due to the
relevant taxation authority or fails to remit to the Agent the required
documentary evidence set forth in clause (d) below, the Borrower shall
indemnify each Lender and the Agent for any Non-Excluded Taxes (including
any Non-Excluded Taxes imposed by any jurisdiction on amounts payable under
this Section 2.13(c)) with respect to amounts payable by such Lender or the
Agent (as the case may be) as a result of such failure and any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto. This indemnification shall be made within 30 days from the
date such Lender or the Agent (as the case may be) makes written demand
therefor.
(d) Reasonably promptly after the date of any payment of Taxes pursuant
to clause (a), the Borrower shall furnish to the Agent, at its address
referred to in Section 8.2, the original or a certified copy of a receipt
evidencing such payment. In the case of any payment hereunder or under the
Revolving Credit Notes by or on behalf of the Borrower through an account or
branch outside the United States or by or on behalf of the Borrower by a
payor that is not a United States person, if the Borrower determines that no
Taxes are payable in respect thereof, the Borrower shall furnish, or shall
cause such payor to furnish, to the Agent, at such address, an opinion of
counsel reasonably acceptable to the Agent stating that such payment is
exempt from deduction of Taxes. For purposes of this clause (d) and clause
(e), the terms "United States" and "United States person" shall have the
meanings specified in Section 7701 of the Internal Revenue Code.
(e) Each Lender organized under the laws of a jurisdiction other than
the United States of America or a State thereof, shall (i) on or prior to
the date such Lender becomes a Lender hereunder, provide each of the Agent
and the Borrower with (A) two duly completed and accurate copies of Internal
Revenue Service forms 1001 or 4224, as appropriate, or any successor or
other form prescribed by the Internal Revenue Service, certifying that such
Lender is exempt from United States withholding tax on payments pursuant to
this Agreement or the Revolving Credit Notes and (B) an Internal Revenue
Service form W-8 or W-9, or any successor form, as the case may be,
certifying that such Lender is entitled to an exemption from United Stated
backup withholding tax; (ii) provide each of the Agent and the Borrower with
two further duly completed and accurate copies of any such form or
certification on or before the date that any such form
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or certification expires or becomes obsolete and after the occurrence of an
event requiring a change in the most recent form previously provided by it
to the Borrower (unless in any such case a Change in Law (as defined below)
in the circumstances described in Section 2.13(e)(ii) above has occurred
prior to the date on which any such delivery would otherwise be required
which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrower in writing);
and (iii) obtain such extensions of time for filing as may reasonably be
requested by the Agent or the Borrower. In addition, each Lender shall, upon
the written request of the Borrower, provide the Borrower with such other
forms, certificates or documentation as may be reasonably necessary to claim
any exemption from, or reduced rate of, Taxes for which the Borrower in
liable under Section 2.13(a); provided that such action shall not cause the
imposition on such Lender of any material additional costs or legal,
regulatory or administrative burdens. If an event occurs after the date on
which any form, certificate or documentation is submitted by a Lender that
renders such item or the information set forth therein incorrect, such
Lender shall promptly notify the Agent and Borrower in writing of such
incorrectness.
(f) For any period with respect to which a Lender has failed to provide
the Borrower with the appropriate form described in Section 2.13(e) (other
than if such failure is due to a Change in Law (as defined below) or if such
form otherwise is not required under Section 2.13(e) above), such Lender
shall not be entitled to indemnification under Section 2.13(a) or (c) with
respect to Taxes deducted by the Borrower by reason of such failure;
provided, however, that the Borrower shall take such steps as such Lender
shall reasonably request to assist the Lender to recover such Taxes.
(g) Any Lender claiming any additional amounts payable pursuant to this
Section 2.13 agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of
its Eurodollar Lending Office if the making of such a change would avoid the
need for, or reduce the amount of, any such additional amounts that may
thereafter accrue and would not, in the reasonable judgment of such Lender,
be otherwise disadvantageous to such Lender.
(h) For purposes of this Section 2.13, "Change in Law" shall mean, with
respect to any Lender, a change in the Internal Revenue Code, the Treasury
Regulations thereunder or any official interpretation thereof (or any
officially proposed changes in the interpretation thereof) or an amendment
or revocation of an applicable United States income tax treaty after the
date such Lender became a Lender hereunder.
Section 2.14. Sharing of Payments, Etc. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Advances owing to it (other than
pursuant to Section 2.10, 2.13 or 8.4(c)) in excess of its ratable share of
payments on account of the Advances
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obtained by all the Lenders, such Lender shall forthwith purchase from the other
Lenders such participations in the Advances owing to them as shall be necessary
to cause such purchasing Lender to share the excess payment ratably with each of
them; provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an amount equal to
such Lender's ratable share (according to the proportion of (i) the amount of
such Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.14 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
Section 2.15. Evidence of Debt.
(a) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such
Lender resulting from each Advance owing to such Lender from time to time,
including the amounts of principal and interest payable and paid to such
Lender from time to time hereunder in respect of Advances. The Borrower
agrees that upon notice by any Lender to the Borrower (with a copy of such
notice to the Agent) to the effect that a Revolving Credit Note is required
or appropriate in order for such Lender to evidence (whether for purposes of
pledge, enforcement or otherwise) the Advances owing to, or to be made by,
such Lender, the Borrower shall promptly execute and deliver to such Lender
a Revolving Credit Note payable to the order of such Lender in a principal
amount up to the Commitment of such Lender.
(b) The Register maintained by the Agent pursuant to Section 8.7(d)
shall include a control account, and a subsidiary account for each Lender,
in which accounts (taken together) shall be recorded (i) the date and amount
of each Borrowing made hereunder, the Type of Advances comprising such
Borrowing and, if appropriate, the Interest Period applicable thereto, (ii)
the terms of each Assignment and Acceptance delivered to and accepted by it,
(iii) the amount of any principal or interest due and payable or to become
due and payable from the Borrower to each Lender hereunder and (iv) the
amount of any sum received by the Agent from the Borrower hereunder and each
Lender's share thereof.
(c) Entries made in good faith by the Agent in the Register pursuant to
clause (b) above, and by each Lender in its account or accounts pursuant to
clause (a) above, shall be prima facie evidence of the amount of principal
and interest due and payable or to become due and payable from the Borrower
to, in the case of the Register, each Lender and, in the case of such
account or accounts, such Lender, under this Agreement, absent manifest
error; provided, however, that the failure of the Agent or such Lender to
make an entry, or any finding that an entry
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is incorrect, in the Register or such account or accounts shall not limit or
otherwise affect the obligations of the Borrower under this Agreement.
Section 2.16. Use of Proceeds. The proceeds of the Advances shall be
available (and the Borrower agrees that it shall use such proceeds) solely for
(i) general corporate purposes of the Borrower and its Subsidiaries, including
commercial paper backstop and (ii) financing the Exchange Offer, the Merger and
transaction costs related thereto. Notwithstanding anything herein to the
contrary, no proceeds of the Advances shall be used to finance any portion of
the Borrower's acquisition of ASARCO Incorporated.
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
Section 3.1. Conditions Precedent to Effectiveness of Section 2.1.
Section 2.1 of this Agreement shall become effective on and as of the first date
(the "Effective Date") on which the following conditions precedent have been
satisfied:
(a) There shall have occurred no Material Adverse Change since December
31, 1998.
(b) There shall exist no action, suit, investigation, litigation or
proceeding affecting the Borrower or any of its Subsidiaries pending or
threatened before any court, governmental agency or arbitrator that could
reasonably be expected to result in a Material Adverse Change.
(c) Nothing shall have come to the attention of the Lenders during the
course of their due diligence investigation to lead them to believe that the
written information supplied to them by the Borrower (i) as to any factual
matters (excluding any such information referred to in paragraph (ii)
below), was or has become misleading, incorrect or incomplete in any
material respect or (ii) as to any financial and business projections,
budgets, pro forma data and forecasts (all of the foregoing together being
"Projections") was not prepared in good faith or the grounds on which such
Projections were prepared are no longer reasonable (it being understood by
the parties hereto that such Projections are subject to significant
uncertainties and contingencies many of which are beyond the control of the
Borrower and that no assurance can be given (without limiting any provision
of this Agreement or the Loan Documents) that any such Projections will be
realized). Without limiting the generality of the foregoing, the Lenders
shall have been given such access to the management, records, books of
account, contracts and properties of the Borrower and its Subsidiaries as
they shall have requested.
(d) All governmental and material third party consents and approvals
(including any Hart-Scott-Rodino Antitrust Improvements Act of 1976
antitrust clearance) necessary in connection with the Exchange Offer and any
other
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transactions contemplated hereby and by the Related Documents shall have
been obtained (without the imposition of any conditions that are not
acceptable to the Lenders) and shall remain in effect and all applicable
periods shall have expired without any action by any Governmental Authority
which may inhibit or adversely affect the Exchange Offer, and no law or
regulation shall be applicable in the reasonable judgment of the Lenders
that restrains, prevents or imposes materially adverse conditions upon the
transactions contemplated hereby or by the Related Documents.
(e) The Borrower shall have notified each Lender and the Agent in
writing as to the proposed Effective Date.
(f) The Borrower shall have paid all accrued fees and expenses of the
Agent and the Lenders (including the reasonable fees and expenses of a
single firm of counsel to the Agent) to the extent invoiced to the Borrower
at least one Business Day before the Effective Date.
(g) On the Effective Date, the following statements shall be true and
the Agent shall have received for the account of each Lender a certificate
signed by a duly authorized officer of the Borrower, dated the Effective
Date, stating that:
(i) The representations and warranties contained in Section 4.1
are true and correct on and as of the Effective Date, and
(ii) No event has occurred and is continuing that constitutes a
Default.
(h) The Agent shall have received on or before the Effective Date the
following, each dated such day, in form and substance satisfactory to the
Agent and (except for the Revolving Credit Notes) in sufficient copies for
each Lender:
(i) The Revolving Credit Notes to the order of the Lenders to the
extent requested by any Lender pursuant to Section 2.15.
(ii) Certified copies of the Certificate of Incorporation, the
Charter and by-laws of the Borrower and certified copies of the resolutions
of the Board of Directors of the Borrower authorizing the execution,
delivery and performance of, and borrowing under, this Agreement and the
Revolving Credit Notes, and certified copies of all documents evidencing
other necessary corporate action and governmental approvals, if any, with
respect to this Agreement and the Revolving Credit Notes.
(iii) A certificate of the Secretary or an Assistant Secretary of
the Borrower certifying the names and true signatures of the officers of the
Borrower authorized to sign this Agreement and the Revolving Credit Notes
and the other documents to be delivered hereunder.
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(iv) A copy of the Merger Agreement and each Schedule, appendix
and amendment thereto certified by the Secretary or an Assistant Secretary
of the Borrower to be true and correct copies of such documents, together
with all amendments, supplements and other modifications thereto.
(v) Favorable opinions of (a) The Senior Counsel and Assistant
Secretary to the Borrower substantially in the form of Exhibit D-1 and (b)
Debevoise & Plimpton, counsel for the Borrower, substantially in the form of
Exhibit D-2 hereto and as to such other matters as any Lender through the
Agent may reasonably request.
(vi) A favorable opinion of Weil, Gotshal & Manges LLP, counsel
for the Agent, in form and substance satisfactory to the Agent.
(i) The terms and conditions of the Exchange Offer and the Related
Documents shall be as stated in the Offer to Purchase and shall not be, or
have been, amended without the approval of the Required Lenders (such
approval not to be unreasonably withheld). All conditions precedent to the
consummation of the Exchange Offer (including the minimum tender condition)
shall have been satisfied and not waived without the consent of the Required
Lenders.
Section 3.2. Conditions Precedent to Each Revolving Credit Borrowing
and Extension Date. The obligation of each Lender to make an Advance on the
occasion of each Revolving Credit Borrowing shall be subject to the conditions
precedent that the Effective Date shall have occurred and on the date of such
Revolving Credit Borrowing the following statements shall be true (and each of
the giving of the applicable Notice of Revolving Credit Borrowing and the
acceptance by the Borrower of the proceeds of such Revolving Credit Borrowing
shall constitute a representation and warranty by the Borrower that on the date
of such Borrowing such statements are true):
(i) the representations and warranties contained in Section 4.1
(except the representation set forth in Section 4.1(b)) are correct on and
as of such date, before and after giving effect to such Revolving Credit
Borrowing, and to the application of the proceeds therefrom, as though made
on and as of such date; and
(ii) no event has occurred and is continuing, or would result from
such Revolving Credit Borrowing or from the application of the proceeds
therefrom, that constitutes a Default;
and the Agent shall have received such other approvals, opinions or documents as
any Lender through the Agent may reasonably request.
Section 3.3. Determinations Under Section 3.1. For purposes of
determining compliance with the conditions specified in Section 3.1, each Lender
shall be deemed to have consented to, approved or accepted or to be satisfied
with each document or other matter required thereunder to be consented to or
approved by or acceptable or satisfactory to the Lenders unless an officer of
the Agent responsible for the transactions
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contemplated by this Agreement shall have received notice from such Lender prior
to the date that the Borrower, by notice to the Lenders, designates as the
proposed Effective Date, specifying its objection thereto. The Agent shall
promptly notify the Lenders of the occurrence of the Effective Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) Financial Condition. The consolidated balance sheet of the Borrower
and its consolidated Subsidiaries as at December 31, 1998 and the related
consolidated statements of income and of cash flows for the fiscal year
ended on such date, reported on by PricewaterhouseCoopers LLP, copies of
which have heretofore been furnished to each Lender, are complete and
correct and present fairly the consolidated financial condition of the
Borrower and its consolidated Subsidiaries as at such dates, and the
consolidated results of their operations and their consolidated cash flows
for the fiscal years then ended. The unaudited consolidated balance sheet of
the Borrower and its consolidated Subsidiaries as at June 30, 1999 and the
related unaudited consolidated statements of income and of cash flows for
the six-month period ended on such date, certified by a Responsible Officer,
copies of which have heretofore been furnished to each Lender, are complete
and correct and present fairly the consolidated financial condition of the
Borrower and its consolidated Subsidiaries as at such date, and the
consolidated results of their operations and their consolidated cash flows
for the three-month period then ended (subject to normal year-end audit
adjustments). All such financial statements, including the related schedules
and notes thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by such
accountants or Responsible Officer, as the case may be, and as disclosed
therein).
(b) No Change. No event or circumstance since December 31, 1998 has
occurred or is existing which has resulted in, or after giving effect to the
reasonably projected outcome or effect thereof will result in, a Material
Adverse Change.
(c) Corporate Existence. The Borrower (i) is a corporation duly
organized, validly existing and in good standing under the laws of the State
of New York, (ii) has the corporate power and authority, and the legal
right, to own and operate its property, to lease the property it operates as
lessee and to conduct the business in which it is currently engaged and
(iii) is duly qualified as a foreign corporation and in good standing under
the laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification except
to the extent that the failure to be so qualified would not be reasonably
expected to result in a Material Adverse Change.
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(d) Corporate Power; Authorization; Enforceable Obligations. The
Borrower has the corporate power and authority, and the legal right, to
make, deliver and perform this Agreement, the Loan Documents and the Related
Documents and to borrow hereunder and has taken all necessary corporate
action to authorize the borrowings on the terms and conditions of this
Agreement, the Loan Documents and the Related Documents and to authorize the
execution, delivery and performance of this Agreement, the Loan Documents
and the Related Documents. No consent or authorization of, filing with,
notice to or other act by or in respect of, any Governmental Authority or
any other Person is required in connection with the borrowings hereunder or
the transactions contemplated hereby or by the Related Documents or with the
execution, delivery, performance, validity or enforceability of the Loan
Documents or the Related Documents except such as have been obtained or made
and are in full force and effect. This Agreement and each Related Document
has been, and each Loan Document will be, duly executed and delivered on
behalf of the Borrower. This Agreement constitutes, and each other Loan
Document and the Related Documents to be executed by it when executed and
delivered will constitute, a legal, valid and binding obligation of the
Borrower enforceable against the Borrower in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at
law).
(e) No Legal Bar. The execution, delivery and performance of the Loan
Documents and the Related Documents, the borrowings hereunder and the use of
the proceeds thereof will not violate the certificate of incorporation,
charter or by-laws of the Borrower or any Requirement of Law or Contractual
Obligation of the Borrower or of any of its Principal Domestic Subsidiaries
and will not result in, or require, the creation or imposition of any Lien
on any of its or their respective properties or revenues pursuant to any
provision of its certificate of incorporation, charter or by-laws or any
such Requirement of Law or Contractual Obligation.
(f) No Material Litigation. No litigation, investigation or proceeding
(including any Environmental Action) of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
overtly threatened by or against the Borrower or any of its Principal
Domestic Subsidiaries or against any of its or their respective properties
or revenues (a) (except as disclosed in the Offer to Purchase) with respect
to any of the Loan Documents, the Related Documents, the Exchange Offer or
any of the transactions contemplated hereby or thereby, or (b) which after
giving effect to the reasonably projected outcome or effect thereof, will
result in a Material Adverse Change.
(g) No Default. Neither the Borrower nor any of its Principal Domestic
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which has resulted in or, after giving effect to
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the reasonably projected outcome or effect thereof, will result in, a
Material Adverse Change. No Default has occurred and is continuing.
(h) Ownership of Property; Liens. Each of the Borrower and its
Principal Domestic Subsidiaries has good record and marketable title in fee
simple to, or a valid leasehold interest in, all its real property, and good
title to, or a valid leasehold interest in, all its other property, and none
of such property is subject to any Lien (except Liens which are permitted by
Section 5.3(a)) except to the extent that the absence of such title or
leasehold interest has not resulted in, and after giving effect to the
reasonably projected outcome or effect thereof, will not result in, a
Material Adverse Change.
(i) Compliance with Law. The Borrower and each of its Principal
Domestic Subsidiaries is in compliance with all Requirements of Law and
Contractual Obligations except to the extent that the failure to comply
therewith has not resulted in, and, after giving effect to the reasonably
projected outcome or effect thereof, will not result in, a Material Adverse
Change.
(j) Taxes. Each of the Borrower and its Principal Domestic Subsidiaries
has filed or caused to be filed all tax returns which, to the knowledge of
the Borrower, are required to be filed and has paid all taxes shown to be
due and payable on said returns or on any assessments made against it or any
of its property and all other taxes, fees or other charges imposed on it or
any of its property by any Governmental Authority (other than any the amount
or validity of which are currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity
with GAAP have been provided on the books of the Borrower or its Principal
Domestic Subsidiaries, as the case may be) and, to the knowledge of the
Borrower, no tax Lien (other than a Lien for taxes that are not yet due and
payable) has been filed, with respect to any such tax, fee or other charge
which, in any case, has resulted in, or after giving effect to the
reasonably projected outcome or effect thereof will result in, a Material
Adverse Change.
(k) Federal Regulations. The Borrower is not engaged in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
stock" within the respective meanings of each of the quoted terms under
Regulation U of the Board of Governors of the Federal Reserve System as now
and from time to time hereafter in effect and no proceeds of an Advance have
been or will be used for any purpose which violates the provisions of the
Regulations of such Board of Governors. At no time would the Obligations be
directly or "indirectly secured" by assets of the Borrower and its
consolidated Subsidiaries that are "margin stock" (pursuant to, and as such
captioned terms are defined in, Section 221.2(g) of Regulation U), provided
that in any event not more than 25% of the value of the assets of the
Borrower and its consolidated Subsidiaries subject to such arrangements
shall be represented by such margin stock. If requested by any Lender or the
Agent, the Borrower will furnish to the
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Agent and each Lender a statement to the foregoing effect in conformity with
the requirements of FR Form U-1 referred to in said Regulation U.
(l) ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) nor any other event has occurred during the five-year period prior to
the date on which this representation is made or deemed made with respect to
any Plan which has resulted in or, after giving effect to the reasonably
projected outcome or effect thereof, will result in, a Material Adverse
Change.
(m) Investment Company Act; Other Regulations. The Borrower is not an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. The
Borrower is not subject to regulation under any Federal or state statute or
regulation which limits its ability to incur indebtedness of the type being
incurred by it pursuant to this Agreement.
(n) Subsidiaries. Set forth in Schedule III is a complete and accurate
list showing all Subsidiaries (other than inactive Subsidiaries) existing as
of the date of this Agreement, designating certain Subsidiaries as Principal
Domestic Subsidiaries and showing the jurisdiction of incorporation of each
Principal Domestic Subsidiary and the percentage of the outstanding shares
of Capital Stock of such Subsidiaries owned (directly or indirectly) by the
Borrower or any Subsidiary. All of the outstanding Capital Stock of each
Principal Domestic Subsidiary has been validly issued, is fully paid and
non-assessable and is owned by the Borrower or one or more of the Principal
Domestic Subsidiaries free and clear of all Liens. Each Principal Domestic
Subsidiary is duly incorporated, validly existing and in good standing under
the laws of the jurisdiction of its incorporation.
(o) Environmental Matters. Except as disclosed in the Borrower's Annual
Report on Form 10-K for fiscal year 1998, to the best knowledge of the
Borrower, the Borrower and each Principal Domestic Subsidiary has complied
with all applicable Environmental Laws, except for failures to comply which
have not resulted in, and after giving effect to the reasonably projected
outcome or effect thereof will not result in, a Material Adverse Change.
Except as disclosed in the Borrower's Annual Report on Form 10-K for fiscal
year 1998 or on Schedule IV, to the best knowledge of the Borrower, there
are no events, conditions or circumstances involving the Borrower, any of
its Principal Domestic Subsidiaries or any Subsidiaries of such Principal
Domestic Subsidiaries with respect to management of any Hazardous Materials,
environmental pollution or contamination or employee health or safety which
have resulted in, or after giving effect to the reasonably projected outcome
or effect thereof will result in, a Material Adverse Change.
(p) Information. All written information provided by the Borrower to
the Agent, the Arranger and Book Manager or any Lender in connection with
this
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Agreement, the Loan Documents or the Related Documents and the transactions
contemplated hereby and thereby, at the date hereof or (if provided after
the date hereof) at the date it was provided (i) in the case of any factual
matter (excluding any such information referred to in paragraph (ii)), is
true and accurate in all material respects and (ii) in the case of financial
and business projections, budgets, pro forma data and forecasts (all of the
foregoing being, together, "Projections"), contained therein, were prepared
in good faith and on reasonable grounds (it being understood by the parties
hereto that such Projections are subject to significant uncertainties and
contingencies, many of which are beyond the control of the Borrower and that
no assurance can be given (without limiting any other provision of this
Agreement or the Loan Documents) that any such Projections will be
realized).
(q) Year 2000. The Borrower has (i) initiated a review and assessment
of all areas within its and each of its Subsidiaries' business and
operations (including those affected by suppliers, vendors and customers)
that could be adversely affected by computer applications used by the
Borrower or any of its Subsidiaries (or suppliers, vendors and customers)
being unable to recognize and perform properly date sensitive functions
involving certain dates prior to and any date after December 31, 1999 (the
"Year 2000 Problem"), (ii) developed a plan and timetable for addressing the
Year 2000 Problem on a timely basis and (iii) to date, implemented that plan
substantially in accordance with such timetable. Based on the foregoing, the
Borrower believes that all computer applications of the Borrower and its
Subsidiaries that are material to its or any of its Subsidiaries' business
and operations are reasonably expected on a timely basis to be able to
perform properly date-sensitive functions for all dates before, on and after
January 1, 2000 and the Borrower has no reason to believe that all computer
applications of its suppliers, vendors and customers that are material to
its or any of its Subsidiaries' business and operations are not reasonably
expected on a timely basis to be able to perform properly date-sensitive
functions for all dates before, on and after January 1, 2000, except in the
aggregate, to the extent that a failure to do so could not reasonably be
expected to result in a Material Adverse Change.
(r) The Merger. The Merger Agreement has been approved by the boards of
directors of both Cyprus and the Borrower, is in full force and effect and
none of the terms of the Exchange Offer or the Merger Agreement have been
amended or waived without the consent of the Required Lenders. Neither
Cyprus nor the Borrower is in default of any of its obligations under the
Merger Agreement. The number of shares of Cyprus accepted for payment or
exchange in the Exchange Offer is equal to no less than the minimum number
of shares, determined on a fully diluted basis, necessary to approve the
consummation of the Merger in accordance with the provisions of any
applicable Requirement of Law or provision in the Borrower's certificate of
incorporation, charter, by-laws, or any instrument or agreement which is
binding on the Borrower.
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ARTICLE V
COVENANTS OF THE BORROWER
Section 5.1. Affirmative Covenants. So long as any Advance shall remain
unpaid or any Lender shall have any Commitment hereunder, the Borrower will:
(a) Financial Statements. Furnish to each Lender:
(i) as soon as available, but in any event within 100 days after
the end of each fiscal year of the Borrower, a copy of the consolidated
balance sheet of the Borrower and its consolidated subsidiaries as at the
end of such year and the related consolidated statements of income and
retained earnings and of cash flows for such year, setting forth in each
case in comparative form the figures for the previous year, reported on
without a "going concern" or like qualification or exception, or
qualification arising out of the scope of the audit, by
PricewaterhouseCoopers LLP or other independent certified public accountants
of nationally recognized standing; and
(ii) as soon as available, but in any event not later than 55 days
after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, the unaudited consolidated balance sheet of the
Borrower and its consolidated subsidiaries as at the end of such quarter and
the related unaudited consolidated statements of income and retained
earnings and of cash flows of the Borrower and its consolidated subsidiaries
for such quarter and the portion of the fiscal year through the end of such
quarter, setting forth in each case in comparative form the figures for the
previous year, certified by a Responsible Officer as being fairly stated in
all material respects (subject to normal year-end audit adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with
GAAP applied consistently throughout the periods reflected therein and with
prior periods (except as approved by such accountants or officer, as the
case may be, and disclosed therein).
(b) Certificates; Other Information. Furnish to each Lender:
(i) concurrently with the delivery of the financial statements
referred to in Section 5.1(a)(i), a certificate of the independent certified
public accountants reporting on such financial statements stating that in
making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default (including calculations demonstrating compliance
with Section 5.2), except as specified in such certificate;
(ii) concurrently with the delivery of the financial statements
referred to in Sections 5.1(a)(i) and 5.1(a)(ii), a certificate of a
Responsible Officer stating that, to the best of such Officer's knowledge,
the Borrower during
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such period has observed or performed all of its covenants and other
agreements, and satisfied every condition, contained in this Agreement and
in the Revolving Credit Notes to be observed, performed or satisfied by it
(including calculations demonstrating compliance with Section 5.2), and that
such Officer has obtained no knowledge of any Default or Event of Default
except as specified in such certificate;
(iii) within ten days after the same are sent, copies of all
financial statements and reports which the Borrower sends to its
stockholders, and within ten days after the same are filed, copies of all
financial statements and periodic financial reports which the Borrower may
make to, or file with, the Securities and Exchange Commission or any
successor or analogous Governmental Authority; and
(iv) promptly, such additional financial and other information as
any Lender may from time to time reasonably request.
(c) Payment of Taxes and Other Obligations. Pay, discharge or otherwise
satisfy, in all material respects, and cause its Principal Domestic
Subsidiaries to pay, discharge or otherwise satisfy, in all material
respects, (i) all material taxes, assessments and governmental charges or
levies imposed on its property when due by it and (ii) at or before maturity
or otherwise in accordance with reasonable business practices, all its
material obligations of whatever nature; provided, that the Borrower or its
Principal Domestic Subsidiaries, as the case may be, may contest taxes,
assessments, charges, levies or obligations in good faith by appropriate
proceedings if it maintains reserves in conformity with GAAP with respect
thereto.
(d) Conduct of Business and Maintenance of Existence. Continue to
engage in businesses of the same general types as now conducted by it and
preserve, renew and keep in full force and effect its corporate existence
and take all reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its business
except that nothing in this clause (d) shall prevent (i) the Borrower from
discontinuing any business if, in the opinion of its board of directors,
such discontinuance is in the best interests of the Borrower and not
disadvantageous in any material respect to any Lender or the holder of any
Revolving Credit Note or (ii) the abandonment, modification or termination
of rights, privileges and franchises of the Borrower, if, in the opinion of
the Board of Directors, such abandonment, modification or termination is in
the best interests of the Borrower and not disadvantageous in any material
respect to any Lender or the holder of any Revolving Credit Note.
(e) Compliance With Laws, Etc. Use commercially reasonable efforts to
comply, and to cause each Principal Domestic Subsidiary to comply, in all
material respects with all Requirements of Law and Contractual Obligations
except to the extent that failure to so comply would not, in the reasonable
judgment of the Borrower, be expected to result in a Material Adverse
Change,
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provided, however, that neither the Borrower nor any Principal Domestic
Subsidiary shall be required to comply with any Requirements of Law or
Contractual Obligations if the applicability or validity thereof shall
currently be contested in good faith by appropriate proceedings.
(f) Maintenance of Property; Insurance. Keep all Principal Properties
in good working order and condition except that nothing in this clause (f)
shall prevent the Borrower or any of its Principal Domestic Subsidiaries
from discontinuing the operation and maintenance of any of its Principal
Properties if, in the opinion of the board of directors of the Borrower,
such discontinuance is in the best interest of the Borrower and not
disadvantageous in any material respect to any Lender or the holder of any
Revolving Credit Note; maintain, and cause each Principal Domestic
Subsidiary to maintain, with financially sound and reputable insurance
companies insurance on all its property of a character usually insured by
companies similarly situated and operating like properties in at least such
amounts and against at least such risks as are usually insured against in
the same general area by companies engaged in the same or a similar
business; and furnish to each Lender, upon written request, full information
as to the insurance carried. The Borrower and any Principal Domestic
Subsidiary may self-insure (which term shall include insurance by an
affiliated insurance company) against any of the risks required to be
insured against pursuant to this clause (f) so long as such self-insurance
is not excessive in the light of self-insurance by companies similarly
situated and operating like properties, provided, in the case of any
insurance required by law, that such risk is permitted to be self-insured
under applicable law and such self-insurance complies with applicable law.
(g) Inspection of Property; Books and Records; Discussions. Keep, and
cause each Principal Domestic Subsidiary to keep, proper books of records
and account in which full, true and correct entries in conformity with GAAP
and all Requirements of Law shall be made of all dealings and transactions
in relation to its business and activities; and permit, and cause any
Principal Domestic Subsidiary to permit, representatives of any Lender, at
such Lender's own expense, to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any
reasonable time and as often as may reasonably be desired and, after
reasonable notice to the Borrower, to discuss the business, operations,
properties and financial and other condition of the Borrower and its
Principal Domestic Subsidiaries with officers and employees of the Borrower
and its Principal Domestic Subsidiaries and with its independent certified
public accountants.
(h) Notices. Promptly give notice to the Agent and each Lender of:
(i) the occurrence of any Default;
(ii) any (A) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (B) litigation,
investigation or proceeding which may exist at any time between the Borrower
or
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any of its Subsidiaries and any Governmental Authority, unless in either
case, the Borrower has determined that such event has not resulted in, or
after giving effect to the reasonably projected outcome or effect thereof
will not result in, a Material Adverse Change; and
(iii) the following events, as soon as possible and in any event
within 30 days after the Borrower knows or has reason to know thereof: (A)
the occurrence or reasonably expected occurrence of any Reportable Event
with respect to any Plan, a failure to make any required contribution to a
Plan, the creation of any Lien in favor of the PBGC or a Plan or any
withdrawal from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (B) the institution of proceedings or the taking of
any other action by the PBGC or the Borrower or any Commonly Controlled
Entity or any Multiemployer Plan with respect to the withdrawal from, or the
terminating, Reorganization or Insolvency of, any Plan which with respect to
the events in clause (A) or (B), individually or in the aggregate, could
reasonably be expected to involve an amount of $15,000,000 or more.
Each notice pursuant to this clause (h) shall be accompanied by a statement
of a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower proposes to take with respect
thereto.
(i) Use of Proceeds. Ensure that the proceeds of the Advances are
applied solely in accordance with Section 2.16.
Section 5.2. Financial Covenants. So long as any Advance shall remain
unpaid or any Lender shall have any Commitment hereunder, the Borrower will:
(a) maintain Consolidated Tangible Net Worth of at least
$1,100,000,000; and
(b) maintain the ratio of Indebtedness for Money Borrowed of the
Borrower and its consolidated Subsidiaries (determined on a consolidated
basis in accordance with GAAP) to Total Capitalization of not greater than
0.5 to 1.
Section 5.3. Negative Covenants So long as any Advance shall remain
unpaid or any Lender shall have any Commitment hereunder:
(a) Mortgages. The Borrower will not, nor will it permit any Principal
Domestic Subsidiary to, (i) issue, assume or guarantee any Indebtedness for
Money Borrowed, if such Indebtedness for Money Borrowed is secured by a Lien
upon, or (ii) directly or indirectly secure any outstanding Indebtedness for
Money Borrowed by a Mortgage upon, any Principal Property now owned or
hereinafter acquired; provided, however, that the foregoing restriction
shall not apply to the following:
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(i) Mortgages on any Principal Property acquired, constructed or
improved by the Borrower or any Principal Domestic Subsidiary after the date
of this Agreement which are created or assumed contemporaneously with, or
within 90 days after, such acquisition, construction or improvement to
secure or provide for the payment of any part of the purchase price of such
property or the cost of such construction or improvement incurred after the
date of this Agreement, or, in addition to Mortgages contemplated by clause
(ii) below, Mortgage on any Principal Property existing at the time of
acquisition thereof, provided, that in the case of any such acquisition,
construction or improvement the Mortgages shall not apply to any property
theretofore owned by the Borrower or any Principal Domestic Subsidiary,
other than in the case of any such construction or improvement, any
theretofore unimproved real property on which the property so constructed,
or the improvement, is located;
(ii) Mortgages on any Principal Property acquired from a
corporation which is merged with or into the Borrower or a Principal
Domestic Subsidiary;
(iii) Mortgages to secure Indebtedness for Money Borrowed of a
Principal Domestic Subsidiary to the Borrower or to another Principal
Domestic Subsidiary;
(iv) any extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in part, of any Mortgage
referred in the foregoing clauses (i) to (iii), inclusive; provided,
however, that the principal amount of Indebtedness for Money Borrowed
secured thereby shall not exceed the principal amount of Indebtedness for
Money Borrowed so secured at the time of such extension, renewal or
replacement, and that such extension, renewal or replacement shall be
limited to all or part of the property which secured the mortgage so
extended, renewed or replaced (plus improvements on such property); and
(v) the issuance, assumption or guarantee of secured Indebtedness
for Money Borrowed which would otherwise be subject to the foregoing
restrictions of this Section 5.3(a) in an aggregate amount which, together
with all other such Indebtedness for Money Borrowed of the Borrower and its
Principal Domestic Subsidiaries and the Attributable Debt in respect of Sale
and Lease-Back Transactions (other than Sale and Lease-Back Transactions
permitted because the Borrower would be entitled to incur Indebtedness for
Money Borrowed secured by a mortgage on the property to be leased pursuant
to the provisions of this Section 5.3 and other than Sale and Lease-Back
Transactions the proceeds of which have been applied in accordance with the
limitations on Sale and Lease-Back Transactions set forth in Section 5.3(b)
below) does not at the time exceed 10% of Consolidated Tangible Net Worth.
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For the purposes of this Section 5.3, the following types of transactions,
among others, shall not be deemed to create Indebtedness for Money Borrowed
secured by a Mortgage:
(i) Production Payments; and
(ii) Mortgages in favor of the United States of America, any of
its territories or possessions, or any State thereof, or any department,
agency, instrumentality or political subdivision of any thereof, or any
department, agency or instrumentality of any such political subdivision, to
secure partial progress, advance or other payments pursuant to any contract
or statute or to secure any indebtedness incurred for the purpose of
financing all or any part of the purchase price or the cost of constructing
or improving the property subject to such liens.
(b) Sale and Lease - Back Transactions. The Borrower will not, nor will
it permit any Principal Domestic Subsidiary to, enter into any Sale and
Lease-Back Transaction, unless the proceeds of such sale or transfer are at
least equal to the fair value (as determined by the board of directors of
the Borrower) of such property and either (i) the Borrower or such Principal
Domestic Subsidiary would be entitled to incur Indebtedness for Borrowed
Money secured by a mortgage on the property to be leased pursuant to this
Section 5.3(b) or (ii) the Borrower shall, and in any such case the Borrower
covenants that it will, apply an amount equal to the fair value (as
determined by the board of directors of the Borrower) of the property so
leased to the retirement (other than any mandatory retirement), within 90
days of the effective date of any such Sale and Lease-Back Transaction, of
Indebtedness for Money Borrowed of the Borrower or such Principal Domestic
Subsidiary which by its terms matures at, or is extendible or renewable at
the option of the obligor to, a date more than twelve months after the date
of the creation of such Indebtedness for Money Borrowed and which ranks
prior to or on a parity with the Advances; provided, however, that the
Borrower or any Principal Domestic Subsidiary may enter into any Sale and
Lease-Back Transaction which would otherwise be subject to the foregoing
restrictions of this Section 5.3(b) if the amount of the Attributable Debt
in respect of such Sale and Lease-Back Transactions for such transaction,
together with all secured Indebtedness for Money Borrowed of the Borrower
and its Principal Domestic Subsidiaries and all other Attributable Debt in
respect of Sale and Lease-Back Transactions existing at such time (other
than Sale and Lease-Back Transactions permitted because the Borrower would
be entitled to incur Indebtedness for Money Borrowed secured by a Lien on
the property to be leased and other than Sale and Lease-Back Transactions
the proceeds of which have been applied in accordance with the clause (ii)
of this Section), does not at the time exceed 10% of Consolidated Tangible
Net Worth.
(c) Mergers, Etc. Merge or consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of the assets (whether now
owned or hereafter acquired) of the Borrower and its Subsidiaries, taken as
a whole, to, any Person,
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or permit any of its Subsidiaries to do so, except that any Subsidiary of
the Borrower may merge or consolidate with or into, or dispose of
substantially all of its assets to, one or more other Subsidiaries of the
Borrower, and except that any Subsidiary of the Borrower may merge into or
dispose of substantially all of its assets to the Borrower and one or more
other Subsidiaries and the Borrower may merge with any other Person so long
as the Borrower is the surviving corporation, provided, in each case, that
no Default shall have occurred and be continuing at the time of such
proposed transaction or would result therefrom.
(d) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in accounting policies or
reporting practices, except as required or permitted by GAAP.
ARTICLE VI
EVENTS OF DEFAULT
Section 6.1. Event of Default. If any of the following events ("Events
of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Advance when
due in accordance with the terms thereof or hereof; or the Borrower shall
fail to pay any interest on any Advance, or any other amount payable
hereunder, within five Business Days after any such interest or other amount
becomes due in accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by the Borrower
herein or which is contained in any certificate, document or financial or
other statement furnished by it at any time under or in connection with this
Agreement shall prove to have been incorrect in any material respect on or
as of the date made or deemed made; or
(c) The Borrower shall default in the observance or performance of any
obligation contained in Sections 5.2 or 5.3(a) through (c) or (unless such
default is capable of remedy and is remedied to the reasonable satisfaction
of the Required Lenders within 30 days of such default) Section 5.3(d); or
(d) The Borrower shall default in the observance or performance of any
other agreement contained in this Agreement (other than as provided in
paragraphs (a) through (c) of this Section), and such default shall continue
unremedied for a period of 30 days after notice thereof has been given to
the Borrower in accordance with this Agreement; or
(e) The Borrower or any of its Principal Domestic Subsidiaries shall
(i) default in any payment of principal of or interest of any Indebtedness
for Money Borrowed (other than the Advances), beyond the period of grace
(not to exceed 30 days), if any, provided in the instrument or agreement
under which
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such Indebtedness for Money Borrowed was created (except for any such
payments on account of Indebtedness for Money Borrowed in an aggregate
amount at any one time of up to $20,000,000); or (ii) default in the
observance or performance of any other agreement or condition relating to
any such Indebtedness for Money Borrowed (except for any such Indebtedness
in an aggregate principal amount at any one time of up to $20,000,000) or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the effect of
which default or other event or condition is to cause, or to permit the
holder or holders of such Indebtedness for Money Borrowed (or a trustee or
agent on behalf of such holder or holders) to cause, with the giving of
notice if required, such Indebtedness for Money Borrowed to become due prior
to its stated maturity; or
(f) (i) The Borrower or any of its Principal Domestic Subsidiaries
shall commence any case, proceeding or other action (A) under any existing
or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to have
an order for relief entered with respect to it, or seeking to adjudicate it
a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with
respect to it or its debts, or (B) seeking appointment of a receiver,
trustee, custodian, conservator or other similar official for it or for all
or any substantial part of its assets, or the Borrower or any of its
Principal Domestic Subsidiaries shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced against the
Borrower or any of its Principal Domestic Subsidiaries any case, proceeding
or other action of a nature referred to in clause (i) above which (A)
results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a
period of 60 days; or (iii) there shall be commenced against the Borrower or
any of its Principal Domestic Subsidiaries any case, proceeding or other
action seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets which
results in the entry of an order for any such relief which shall not have
been vacated, discharged, or stayed or bonded pending appeal within 60 days
from the entry thereof; or (iv) the Borrower or any of its Principal
Domestic Subsidiaries shall take any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the acts set forth
in clause (i), (ii), or (iii) above; or (v) the Borrower or any of its
Principal Domestic Subsidiaries shall generally not, or shall be unable to,
or shall admit in writing its inability to, pay its debts as they become
due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be
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appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of a trustee
is, in the reasonable opinion of the Required Lenders, likely to result in
the termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v)
the Borrower or any Commonly Controlled Entity shall, or in the reasonable
opinion of the Required Lenders is likely to, incur any liability in
connection with a withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other event or condition shall occur or exist
with respect to a Plan; and in each case in clauses (i) through (vi) above,
such event or condition, together with all other such events or conditions,
if any, has resulted in, or after giving effect to the reasonably projected
outcome or effect thereof will result in, a Material Adverse Change; or
(h) One or more judgments or decrees shall be entered against the
Borrower or any of its Principal Domestic Subsidiaries involving in the
aggregate a liability (not paid or fully covered by insurance) of
$30,000,000 or more, and all such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal within 60 days from the
entry thereof; or
(i) This Agreement or any of the Loan Documents shall, at any time
while any Advance shall remain unpaid or any Lender shall have any
Commitment hereunder, cease to be in full force and effect or shall be
declared to be null and void, or the validity or enforceability thereof
shall be contested by the Borrower or shall otherwise be invalid or
unenforceable, or the Borrower shall deny that it has any or further
liability or obligation under this Agreement or any of the Loan Documents;
then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the
obligation of each Lender to make Advances to be terminated, whereupon the same
shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the
Advances, all interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Advances, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrower; provided, however, that if such
event is an Event of Default specified in paragraph (f)(i) or (f)(ii) above with
respect to the Borrower (A) the obligation of each Lender to make Advances and
the Commitments shall automatically be terminated and (B) the Advances, all such
interest and all such amounts shall automatically become and be due and payable,
without presentment, demand, protest or any notice of any kind, all of which are
hereby expressly waived by the Borrower.
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ARTICLE VII
THE AGENT
Section 7.1. Authorization and Action. Each Lender hereby appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under this Agreement as are delegated to the Agent by
the terms hereof, together with such powers and discretion as are reasonably
incidental thereto. As to any matters not expressly provided for by this
Agreement (including enforcement or collection of the Revolving Credit Notes),
the Agent shall not be required to exercise any discretion or take any action,
but shall be required to act or to refrain from acting (and shall be fully
protected in so acting or refraining from acting) upon the instructions of the
Required Lenders, and such instructions shall be binding upon all Lenders and
all holders of Revolving Credit Notes; provided, however, that the Agent shall
not be required to take any action that exposes the Agent to personal liability
or that is contrary to this Agreement or applicable law. The Agent agrees to
give to each Lender prompt notice of each notice given to it by the Borrower
pursuant to the terms of this Agreement.
Section 7.2. Agent's Reliance, Etc. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this Agreement,
except for its or their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, the Agent: (i) may treat the
Lender that made any Advance as the holder of the Indebtedness resulting
therefrom until the Agent receives and accepts an Assignment and Acceptance
entered into by such Lender, as assignor, and an Eligible Assignee, as assignee,
as provided in Section 8.7; (ii) may consult with legal counsel (including
counsel for the Borrower), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (iii) makes no warranty or representation to any Lender
and shall not be responsible to any Lender for any statements, warranties or
representations (whether written or oral) made in or in connection with this
Agreement; (iv) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement on the part of the Borrower or to inspect the property (including the
books and records) of the Borrower; (v) shall not be responsible to any Lender
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; and (vi) shall incur no liability under or in respect
of this Agreement by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telecopier, telegram or telex) believed
by it to be genuine and signed or sent by the proper party or parties.
Section 7.3. Citibank and Affiliates. With respect to its Commitment,
the Advances made by it and the Revolving Credit Note issued to it, Citibank
shall have the same rights and powers under this Agreement as any other Lender
and may exercise the same as though it were not the Agent; and the term "Lender"
or "Lenders" shall, unless otherwise expressly indicated, include Citibank in
its individual capacity. Citibank and its Affiliates may accept deposits from,
lend money to, act as trustee under
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indentures of, accept investment banking engagements from and generally engage
in any kind of business with, the Borrower, any of its Subsidiaries and any
Person who may do business with or own securities of the Borrower or any such
Subsidiary, all as if Citibank were not the Agent and without any duty to
account therefor to the Lenders.
Section 7.4. Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon the Agent or any other Lender and
based on the financial statements referred to in Section 4.1 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
Section 7.5. Indemnification. The Lenders agree to indemnify the Agent
(to the extent not reimbursed by the Borrower), ratably according to the
respective principal amounts of the Advances then owed to each of them (or if no
Advances are at the time outstanding, ratably according to the respective
amounts of their 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 that may be imposed
on, incurred by, or asserted against the Agent in any way relating to or arising
out of this Agreement or any action taken or omitted by the Agent under this
Agreement (collectively, the "Indemnified Costs"), provided that no Lender shall
be liable for any portion of the Indemnified Costs resulting from the Agent's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Lender agrees to reimburse the Agent promptly upon demand for its ratable
share of any out-of-pocket expenses (including reasonable counsel fees) incurred
by the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, to the extent that the Agent
is not reimbursed for such expenses by the Borrower. In the case of any
investigation, litigation or proceeding giving rise to any Indemnified Costs,
this Section 7.5 applies whether any such investigation, litigation or
proceeding is brought by the Agent, any Lender or a third party.
Section 7.6. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrower and may be removed
at any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Agent, provided that the Borrower shall have the right to consent to
such successor Agent (which consent shall not be unreasonably withheld or
delayed). If no successor Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Agent's giving of notice of resignation or the Required Lenders removal
of the retiring Agent, then the retiring Agent may, on behalf of the Lenders,
appoint a successor Agent, which shall be a commercial bank organized under the
laws of the United States of America or of any State thereof and having a
combined capital and surplus of at least $500,000,000. Upon the acceptance of
any appointment as
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Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, discretion, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations under this Agreement. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Article VII
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement.
Section 7.7. Other Agents. Each party hereby acknowledges that (a) any
co-agent and any other Lender (except in its capacity as a Lender) designated as
an "agent" on the cover page hereof and (b) Salomon Smith Barney Inc. as
arranger and book manager, shall in each case have no liability hereunder.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Amendments Etc. No amendment or waiver of any provision of
this Agreement or the Revolving Credit Notes, nor consent to any departure by
the Borrower therefrom, shall in any event be effective unless the same shall be
in writing and signed by the Required Lenders, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by all the Lenders, do any of the following: (a)
waive any of the conditions specified in Section 3.1, (b) increase the
Commitments of the Lenders or subject the Lenders to any additional obligations,
(c) reduce the principal of, or interest on, the Advances or any fees or other
amounts payable hereunder, (d) postpone any date fixed for any payment of
principal of, or interest on, the Advances or any fees or other amounts payable
hereunder, (e) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Advances, or the number of Lenders, that shall be
required for the Lenders or any of them to take any action hereunder or (f)
amend this Section 8.1; provided further that no amendment, waiver or consent
shall, unless in writing and signed by the Agent in addition to the Lenders
required above to take such action, affect the rights or duties of the Agent
under this Agreement or any Loan Document.
Section 8.2. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telecopier, telegraphic or
telex communication) and mailed, telecopied, telegraphed, telexed or delivered,
if to the Borrower, at its address at [2600 North Central Avenue, Phoenix,
Arizona 85004-3014], Attention: Amelia G. Singleterry; if to any Lender, at its
Domestic Lending Office specified opposite its name on Schedule I hereto; if to
any other Lender, at its Domestic Lending Office specified in the Assignment and
Acceptance pursuant to which it became a Lender; and if to the Agent, at its
address at Two Penns Way, Newcastle, Delaware 19720, Attention: Bank Loan
Syndications Department; or, as to the Borrower or the Agent, at such other
address as shall be designated by such party in a written notice to the other
parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower and the Agent. All
such notices and
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communications shall, when mailed, telecopied, telegraphed or telexed, be
effective when deposited in the mails, telecopied, delivered to the telegraph
company or confirmed by telex answerback, respectively, except that notices and
communications to the Agent pursuant to Article II, III or VII shall not be
effective until received by the Agent. Delivery by telecopier of an executed
counterpart of any amendment or waiver of any provision of this Agreement or the
Revolving Credit Notes or of any Exhibit hereto to be executed and delivered
hereunder shall be effective as delivery of a manually executed counterpart
thereof.
Section 8.3. No Waiver; Remedies. No failure on the part of any Lender
or the Agent to exercise, and no delay in exercising, any right hereunder or
under any Loan Document shall operate as a waiver thereof; nor shall any single
or partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
Section 8.4. Costs and Expenses; Indemnity.
(a) The Borrower agrees to pay on demand all costs and expenses of the
Agent in connection with the preparation, execution, delivery,
administration, modification and amendment of this Agreement, the Loan
Documents and the other documents to be delivered hereunder, including (i)
all due diligence, syndication (including out-of-pocket printing,
distribution and bank meetings), transportation, computer and duplication
expenses and (ii) the reasonable fees and expenses of counsel for the Agent
with respect thereto and with respect to advising the Agent as to its rights
and responsibilities under this Agreement and the Loan Documents. The
Borrower further agrees to pay on demand all costs and expenses of the Agent
and the Lenders, if any (including reasonable counsel fees and expenses), in
connection with the enforcement (whether through negotiations, legal
proceedings or otherwise) of this Agreement, the Loan Documents and the
other documents to be delivered hereunder or thereunder, including
reasonable fees and expenses of counsel for the Agent and the Lenders in
connection with the enforcement of rights under this Section 8.4(a).
(b) The Borrower agrees to indemnify and hold harmless the Agent, the
Arranger and Book Manager and each Lender and each of their Affiliates and
their officers, directors, employees, agents and advisors (each, an
"Indemnified Party") from and against any and all claims, damages, losses,
liabilities and expenses (including reasonable fees and expenses of counsel)
incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or by reason of (including in
connection with any investigation, litigation or proceeding or preparation
of a defense in connection therewith) (i) this Agreement, the Loan
Documents, the Related Documents, any of the transactions contemplated
herein or therein or the actual or proposed use of the proceeds of the
Advances or (ii) the actual or alleged presence of Hazardous Materials on
any property of the Borrower or any of its Subsidiaries or any Environmental
Action relating in any way to the Borrower or any of its
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Subsidiaries, except to the extent such claim, damage, loss, liability or
expense is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence
or willful misconduct. In the case of an investigation, litigation or other
proceeding to which the indemnity in this Section 8.4(b) applies, such
indemnity shall be effective whether or not such investigation, litigation
or proceeding is brought by the Borrower, its directors, shareholders or
creditors or an Indemnified Party or any other Person or any Indemnified
Party is otherwise a party thereto and whether or not the transactions
contemplated hereby are consummated. The Borrower also agrees not to assert
any claim for special, indirect, consequential or punitive damages against
the Agent, any Lender, any of their Affiliates, or any of their respective
directors, officers, employees, attorneys and agents, and the Agent and each
Lender agrees not to assert any claim for special, indirect, consequential
or punitive damages against the Borrower, any of its Affiliates, or any of
their respective directors, officers, employees, attorneys and agents, on
any theory of liability arising out of or otherwise relating to the this
Agreement, any Loan Document, any of the transactions contemplated herein or
in the Related Documents or the actual or proposed use of the proceeds of
the Advances.
(c) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance, is made by the Borrower to or for the account of a Lender
other than on the last day of the Interest Period for such Advance, as a
result of a payment or Conversion pursuant to Section 2.7(d) or (e), 2.9 or
2.11, acceleration of the maturity of the Advances pursuant to Section 6.1
or for any other reason or by an Eligible Assignee to a Lender other than on
the last day of the Interest Period for such Advance upon an assignment of
rights and obligations under this Agreement pursuant to Section 8.7 as a
result of a demand by the Borrower pursuant to Section 8.7(a), the Borrower
shall, upon demand by such Lender (with a copy of such demand to the Agent),
pay to the Agent for the account of such Lender any amounts required to
compensate such Lender for any additional losses, costs or expenses that it
shall actually incur as a result of such payment or Conversion, including
any loss (excluding loss of anticipated profits), cost or expense incurred
by reason of the liquidation or reemployment of deposits or other funds
acquired by any Lender to fund or maintain such Advance.
(d) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained
in Sections 2.10 and 2.13 and this Section 8.4 shall survive the payment in
full of principal, interest and all other amounts payable hereunder and
under the Loan Documents.
Section 8.5. Right of Setoff. Upon the occurrence and during the
continuance of any Event of Default, each Lender and each of its Affiliates is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by such Lender or such Affiliate to or for the credit or the
account of the Borrower against any and all of the
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obligations of the Borrower now or hereafter existing under this Agreement and
the Loan Documents, whether or not such Lender shall have made any demand under
this Agreement or such Loan Document and although such obligations may be
unmatured. Each Lender agrees promptly to notify the Agent and the Borrower
after any such set-off and application, provided that the failure to give such
notice shall not affect the validity of such set-off and application. The rights
of each Lender and its Affiliates under this Section are in addition to other
rights and remedies (including other rights of set-off) that such Lender and its
Affiliates may have.
Section 8.6. Binding Effect. This Agreement shall become effective
(other than Section 2.1, which shall only become effective upon satisfaction of
the conditions precedent set forth in Section 3.1) when it shall have been
executed by the Borrower and the Agent and when the Agent shall have been
notified by each Lender that such Lender has executed it and thereafter shall be
binding upon and inure to the benefit of the Borrower, the Agent and each Lender
and their respective successors and assigns, except that the Borrower shall not
have the right to assign its rights hereunder or any interest herein without the
prior written consent of the Lenders.
Section 8.7. Assignments and Participations.
(a) Each Lender may and, if required by the Borrower (following a
demand by such Lender pursuant to Section 2.10 or 2.13) will, with the
consent of the Borrower and the Agent (such consents not to be unreasonably
withheld or delayed and which consents shall not be required from the Agent
or the Borrower in the case of assignment to (i) an Affiliate of such Lender
(ii) another Lender or its Affiliate or (iii) any Federal Reserve Bank
(pursuant to Section 8.7(g)) upon at least five Business Days' notice to the
Agent, assign to one or more Persons all or a portion of its rights and
obligations under this Agreement (including all or a portion of its
Commitment, the Advances owing to it and the Revolving Credit Note or Notes
held by it); provided, however, that (i) each such assignment shall be of a
constant, and not a varying, percentage of all rights and obligations under
this Agreement, (ii) except in the case of an assignment to a Person that,
immediately prior to such assignment, was a Lender or an assignment of all
of a Lender's rights and obligations under this Agreement, the amount of the
Commitment of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $10,000,000 or an
integral multiple of $1,000,000 in excess thereof, (iii) each such
assignment shall be to an Eligible Assignee, (iv) each such assignment made
as a result of a demand by the Borrower pursuant to this Section 8.7(a)
shall be arranged by the Borrower after consultation with the Agent and
shall be either an assignment of all of the rights and obligations of the
assigning Lender under this Agreement or an assignment of a portion of such
rights and obligations made concurrently with another such assignment or
other such assignments that together cover all of the rights and obligations
of the assigning Lender under this Agreement, (v) no Lender shall be
obligated to make any such assignment as a result of a demand by the
Borrower pursuant to this Section 8.7(a) if an Event of Default has occurred
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and is continuing or unless and until such Lender shall have received one or
more payments from either the Borrower or one or more Eligible Assignees in
an aggregate amount at least equal to the aggregate outstanding principal
amount of the Advances owing to such Lender, together with accrued interest
thereon to the date of payment of such principal amount and all other
amounts payable to such Lender under this Agreement, and (vi) the parties to
each such assignment shall execute and deliver to the Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance,
together with any Revolving Credit Note subject to such assignment and a
processing and recordation fee of $3,500. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in
each Assignment and Acceptance, (x) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder and (y) the Lender assignor thereunder
shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or the performance or observance by the
Borrower of any of its obligations under this Agreement or any other
instrument or document furnished pursuant hereto; (iii) such assignee
confirms that it has received a copy of this Agreement, together with copies
of the financial statements referred to in Section 4.1 and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon the Agent,
such assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement;
(v) such assignee confirms that it is an Eligible Assignee; (vi) such
assignee appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers and discretion under this Agreement
as are delegated to the Agent by the terms hereof, together with such powers
and discretion as are reasonably incidental thereto; and (vii) such assignee
agrees that it will perform in accordance with their terms all of the
48
<PAGE>
obligations that by the terms of this Agreement are required to be performed
by it as a Lender.
(c) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee representing that it is an Eligible
Assignee, together with any Revolving Credit Note or Notes subject to such
assignment, the Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit C hereto, (i) accept
such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the
Borrower.
(d) The Agent shall maintain at its address referred to in Section 8.2
a copy of each Assignment and Acceptance delivered to and accepted by it and
a register for the recordation of the names and addresses of the Lenders and
the Commitment of, and principal amount of the Advances owing to, each
Lender from time to time (the "Register"). The entries in the Register shall
be conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or
any Lender at any reasonable time and from time to time upon reasonable
prior notice.
(e) Each Lender may sell participations to one or more banks or other
entities (other than the Borrower or any of its Affiliates) in or to all or
a portion of its rights and obligations under this Agreement (including all
or a portion of its Commitment, the Advances owing to it and any Revolving
Credit Note or Notes held by it); provided, however, that (i) such Lender's
obligations under this Agreement (including its Commitment to the Borrower
hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of any such Revolving
Credit Note for all purposes of this Agreement, (iv) the Borrower, the Agent
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement and (v) no participant under any such participation shall have any
right to approve any amendment or waiver of any provision of this Agreement
or any Loan Document, or any consent to any departure by the Borrower
therefrom, except to the extent that such amendment, waiver or consent would
reduce the principal of, or interest on, the Revolving Credit Notes or any
fees or other amounts payable hereunder, in each case to the extent subject
to such participation, or postpone any date fixed for any payment of
principal of, or interest on, the Revolving Credit Notes or any fees or
other amounts payable hereunder, in each case to the extent subject to such
participation.
(f) Any Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 8.7,
disclose to the assignee or participant or proposed assignee or participant,
any information relating to the Borrower furnished to such Lender by or on
behalf of the Borrower; provided that, prior to any such disclosure, the
assignee or
49
<PAGE>
participant or proposed assignee or participant shall agree to preserve the
confidentiality of any Confidential Information relating to the Borrower
received by it from such Lender.
(g) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security interest in all or any portion
of its rights under this Agreement (including the Advances owing to it and
any Revolving Credit Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of
the Federal Reserve System.
Section 8.8. Confidentiality. Neither the Agent nor any Lender shall
disclose any Confidential Information to any other Person without the consent of
the Borrower, other than (a) to the Agent's or such Lender's Affiliates and
their officers, directors, employees, agents and advisors and, as contemplated
by Section 8.7(f), to actual or prospective assignees and participants, and then
only on a confidential basis, (b) as required by any law, rule or regulation or
judicial process and (c) as requested or required by any state, federal or
foreign authority or examiner regulating banks or banking and having
jurisdiction over such Lender.
Section 8.9. Governing Law. This Agreement and the Revolving Credit
Notes shall be governed by, and construed in accordance with, the laws of the
State of New York.
Section 8.10. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of a manually executed counterpart of
this Agreement.
Section 8.11. Jurisdiction, Etc.
(a) Each of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of
any New York State court or federal court of the United States of America
sitting in New York City, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement or the
Loan Documents, or for recognition or enforcement of any judgment, and each
of the parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and
determined in any such New York State court or, to the extent permitted by
law, in such federal court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement shall affect any right
that any party may otherwise have to bring any action or proceeding relating
to this Agreement or the Loan Documents in the courts of any jurisdiction.
50
<PAGE>
(b) Each of the parties hereto irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection
that it may now or hereafter have to the laying of venue of any suit, action
or proceeding arising out of or relating to this Agreement or the Revolving
Credit Notes in any New York State or federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law,
the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
Section 8.12. Waiver of Jury Trial. Each of the Borrower, the Agent and
the Lenders hereby irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to this Agreement or the Revolving Credit Notes or
the actions of the Agent or any Lender in the negotiation, administration,
performance or enforcement thereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
PHELPS DODGE CORPORATION,
as Borrower
By:
-----------------------------------------
Title:
CITIBANK, N.A.,
as Agent and as a Lender
By:
-----------------------------------------
Title:
FIRST UNION NATIONAL BANK,
as a Lender
By:
-----------------------------------------
Title:
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as a Lender
By:
-----------------------------------------
Title:
<PAGE>
SCHEDULE I
LENDERS AND COMMITMENTS
-----------------------
Lender Commitment
- ------ ----------
1. Citibank, N.A. $250,000,000
Domestic Lending Office:
Two Penns Way
New Castle, Delaware 19720
Attn: Ray Dunning
Fax: 212 832 9857
2. First Union National Bank $200,000,000
Domestic Lending Office:
301 S. College Street
Charlotte, NC 28288
Attn: Peter D. Steffen
Fax: 704 383 7236
3. Morgan Guaranty Trust Company of New York $200,000,000
Domestic Lending Office:
60 Wall Street
New York NY 102006
Attn: Kira Hindsley
Fax: 302 634 1852
Eurodollar Lending Office:
Nassau Bahamas Office
c/o J.P. Morgan Services Inc.
500 Stanton - Christina Road
Newark, DE 19713
Attn: Kira Hindsley
Fax: 302 634 1852
Total: $650,000,000
53
<PAGE>
SCHEDULE II
APPLICABLE FACILITY FEE RATE,
APPLICABLE MARGIN AND
APPLICABLE UTILIZATION FEE RATE
-------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Borrower's long term senior Applicable Applicable Applicable
unsecured non-credit Margin Facility Fee Rate Utilization Fee Rate
enhanced debt rating (% per annum) (% per annum) (% per annum)
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Greater than or equal to A- by
Standard & Poor's or A3 by 0.32 0.08 0.10
Moody's
- -----------------------------------------------------------------------------------------
Less than A- by Standard &
Poor's and A3 by Moody's but
greater than or equal to BBB+ by 0.40 0.10 0.125
Standard & Poor's or Baa1 by
Moody's
- -----------------------------------------------------------------------------------------
Less than BBB+ by Standard &
Poor's and Baa1 by Moody's but
greater than or equal to BBB by 0.50 0.125 0.125
Standard & Poor's or Baa2 by
Moody's
- -----------------------------------------------------------------------------------------
Less than BBB by Standard &
Poor's and Baa2 by Moody's but
greater than or equal to BBB- by 0.725 0.15 0.125
Standard & Poor's and Baa3 by
Moody's
- -----------------------------------------------------------------------------------------
Less than BBB- by Standard &
Poor's and Baa3 by Moody's but
greater than or equal to BBB- by 0.80 0.20 0.25
Standard & Poor's or Baa3 by
Moody's
- -----------------------------------------------------------------------------------------
Less than BBB- by Standard
& Poor's and Baa3 by Moody's 1.20 0.30 0.50
- -----------------------------------------------------------------------------------------
</TABLE>
54
<PAGE>
SCHEDULE III
BORROWER AND ITS SUBSIDIARIES
-----------------------------
PRINCIPAL DOMESTIC SUBSIDIARIES
Percentage of
Voting Stock
held by Borrower
and its Jurisdiction
Associated of
Name Companies Incorporation
Colombian Chemicals Company 100 Delaware
Phelps Dodge Chino, Inc. 100 Delaware
Phelps Dodge Industries, Inc. 100 Delaware
Phelps Dodge Morenci, Inc. 100 Delaware
Phelps Dodge Refining Corporation 100 New York
SUBSIDIARIES
(OTHER THAN PRINCIPAL DOMESTIC SUBSIDIARIES)
Percentage of
Voting Stock held
by Borrower and
its Associated
Name Companies
AAV Corporation 100.00%
Aisiamientos Plasticos, C.A. (PLASTICA) 100.00%
Ajo Improvement Company 100.00%
Alambres y Cables de Panama, S.A. (ALCAP) 78.08%
Alambres y Cables Venezolanos, C.A. (ALCAVE) 89.96%
ALCAP Commercial, S.A. (ALCOMER) 100.00%
Alcave Trading 100.00%
Alcoa Fios e Cabos Electricos S.A. 60.00%
Arizona Community Investment Corporation 100.00%
Ashfork Mines Limited 100.00%
Aurex International (Barbados) Ltd. 100.00%
Bisbee Queen Mining Company 65.90%
Burro Chief Copper Company 100.00%
Busa Mining Co., Inc. 100.00%
Cables Electricos Ecuatorianos, C.A. (CABLEC) 67.10%
55
<PAGE>
Percentage of
Voting Stock held
by Borrower and
its Associated
Name Companies
Cahose, S.A. (Panama) 78.08%
Canapian Mining Co., Inc. 100.00%
Capital Gestao de Negocios Ltda. 100.00%
CAV Corporation 100.00%
Chino Mines Company 66.67%
CIS Venture Kazakstan, L.L.C. 60.00%
CIS Venture Kyrgystan, L.L.C. 60.00%
Cobre Cerrillos S.A. (COCESA) 65.86%
Cobre del Mayo, S.A. de C.V. 70.00%
Cobre Mining Company 100.00%
Cocesa Ingenieria y Construccion, S.A. (COCETEL) 100.00%
Cocetel del Plata, S.A. (Argentina) 95.00%
Cocetel El Salvador 100.00%
Cocetel Ingenieria y Construccion, C.A. (Venezuela) 100.00%
Columbian Carbon Deutschland G.M.B.H. 90.00%
Columbian Carbon Europe S.R.L. 100.00%
Colurnbian Carbon International (France) S.A. 100.00%
CoIumbian Carbon Japan Ltd. 50.00%
Columbian Carbon Philippines, Inc. 88.20%
Columbian Carbon Spain, S.A. 100.00%
Columbian Chemicals Brazil, S.A. 100.00%
Columbian Chemicals Canada, Ltd. 100.00%
Columbian Chemicals Europe, GMBH 100.00%
Columbian Chemicals Korea Co., Ltd. 85.00%
Columbian Holding Company 98.00%
Columbian International Chemicals Corporation (CICC) 100.00%
Columbian International Trading Company 100.00%
Columbian Technology Company 100.00%
Columbian Tiszai Carbon Ltd. 60.00%
Columbian (U.K.) Limited (CUKL) 100.00%
Compania Contractual Minera Candelaria 80.00%
Compania Contractual Minera Ojos del Salado 100.00%
Conducen Phelps Dodge Centro America El Salvador, S.A. de C.V. 100.00%
Conductores y Aluminio, C.A. (CONAL) 100.00%
56
<PAGE>
Percentage of
Voting Stock held
by Borrower and
its Associated
Name Companies
Conductores Electricos de Centro America, S.A.(CONELCA) 72.39%
CONDUCEN, S.A. 73.42%
CONDUCOMER, S.A. (formerly INDELEC) 100.00%
Corobong Mining Co., Inc. 100.00%
Daguma Mining Co., Inc. 100.00%
Dodge & James Insurance Company, Ltd. 100.00%
Dulugan Mining Co., Inc. 100.00%
Dumulag MIning Co., Inc. 100.00%
Electroconductores de Honduras, S.A. de C.V. (ECOHSA) 60.00%
Fabrica de Conductores Electricos, S.A. (FACELEC) 100.00%
Ferragudo Mining of Portugal, L.L.C. 70.00%
Geomining L.L.C. 51.00%
Grasshopper, L.L.C. 60.00%
Habirshaw Cable and Wire Corporation 100.00%
Hudson International Conductors Japan, Ltd. 100.00%
Industria de Conductores Electricos, C.A. (ICONEL) 100.00%
Inversiones de Cobre Chile Co., S.A. 100.00%
Iponan Mining Co., Inc. 100.00%
Isulan Mining Co., Inc. 100.00%
James Douglas Insurance Company, Ltd. 100.00%
Kidapawan Mining Co., Inc. 100.00%
Kumakata Mining Co., Inc. 100.00%
Kyruso Mining Co., Inc. 100.00%
Lambunao Mining Co., Inc. 100.00%
Lumintao Mining Co., Inc. 100.00%
Macote Mining Co., Inc. 100.00%
Makilala Mining Co., Inc 100.00%
Malampay Mining Co., Inc. 100.00%
Malibato Mining Co., Inc. 100.00%
Mambalili Mining Co., Inc. 100.00%
Mambusao Mining Co., Inc. 100.00%
Metal Fabricators of Zambia Limited (ZAMEFA) 51.00%
Metallic Ventures, Inc. 100.00%
Minera Aurex (Chile) Limitada 99.00%
Mineracao Serra do Sossego S.A. 50.00%
57
<PAGE>
Percentage of
Voting Stock held
by Borrower and
its Associated
Name Companies
Minera Cobre Chile Co., S.A. 100.00%
Minera Cobre Chile Limitada 99.00%
Minera La Mesa, S.A. de C.V. 100.00%
Minera Las Clauditas, S.A. 84.00%
Minera Las Trancas, S.A. de C.V. 100.00%
Minera Papago, SA de C.V. 99.90%
Minera Phelps Dodge del Peru S.A. 100.00%
Minera Phelps Dodge Mexico, S de RL de CV 100.00%
Minuet Realty Corp. 100.00%
Norala Miring Co., Inc. 100.00%
Oclaves Limited 100.00%
Pacific Western Land Company 100.00%
Pallmbang Mining Co., Inc. 100.00%
PD Candelaria, Inc. 100.00%
PD Cobre del Mayo, Inc. 100.00%
PD Cobre, Inc. 100.00%
PD Colombia S.A. 100.00%
PDEP Inc. 100.00%
PD Explorations, Inc. 100.00%
PD Indonesia CorporatIon 100.00%
PD Las Bambas Corporation 100.00%
PD Mineral Development Company (U.K.) Ltd. 98.00%
PD Ojos del Salado, Inc. 100.00%
PD Peru, Inc. 100.00%
PD Rus, LLC 100.00%
PD Russia, Inc. 99.00%
PD-Siam Rod Company Ltd. 65.00%
Phelps Dodge Africa Cable Corporation (PDACC) 100.00%
Phelps Dodge Ajo, Inc. 100.00%
Phelps Dodge Australasia, Inc. 100.00%
Phelps Dodge Centro America Honduras, S.A. de C.V. 100.00%
Phelps Dodge Centro Amerlca, SA. Nicaragua 100.00%
Phelps Dodge Chino, Inc. 100.00%
Phelps Dodge Corporation of Canada, Limited 100.00%
Phelps Dodge Development Corporation 100.00%
58
<PAGE>
Percentage of
Voting Stock held
by Borrower and
its Associated
Name Companies
Phelps Dodge do Brasil Mineracao Ltda 99.99%
Phelps Dodge Dublin, Inc. 100.00%
Phelps Dodge Energy Services, LLC 100.00%
Phelps Dodge Enfield Corporation 100.00%
Phelps Dodge Espanola Co. 100.00%
Phelps Dodge ExploratIon Corporation 100.00%
Phelps Dodge Exploration East, Inc. 100.00%
Phelps Dodge Exploration India Private Limited 100.00%
Phelps Dodge Foundation -
Phelps Dodge Hidalgo, Inc. 100.00%
Phelps Dodge High Performance Conductors of NJ, Inc. 100.00%
Phelps Dodge High Pertarmance Conductors of SC & GA, Inc. 100.00%
Phelps Dodge Industries, Inc. (PDI) 100.00%
Phelps Dodge International Corporation 100.00%
Phelps Dodge Madagascar S.A.R.L. 99.00%
Phelps Dodge Magnet Wire (Austria) GrnbH 100.00%
Phelps Dodge Magnet Wire de Mexico, SA de CV 99.00%
Phelps Dodge Mercantile Company 100.00%
Phelps Dodge Mining (Zambia) Limited 100.00%
Phelps Dodge Mining Services, Inc. 100.00%
Phelps Dodge Molybdenum Corporation 100.00%
Phelps Dodge Morenci, Inc. 100.00%
Phelps Dodge of Africa, Ltd. 100.00%
Phelps Dodge of Botswana (Pty) Ltd. 100.00%
Phelps Dodge Oversees Capital Corporation 100.00%
Phelps Dodge Overseas Marketing Corporation 100.00%
Phelps Dodge Real Estate Services Company de Mexico SA de CV 99.00%
Phelps Dodge Refining Corporation 100.00%
Phelps Dodge Safford, Inc. 100.00%
Phelps Dodge Sales Company, Incorporated 100.00%
Phelps Dodge Thailand Limited 75.47%
Phelps Dodge Tyrone, Inc. 100.00%
Phelps Dodge Wire and Cable Holding de Mexico SA de CV 99.00%
Phelps Dodge Wire and Cable Services de Mexico, SA de CV 99.00%
59
<PAGE>
Percentage of
Voting Stock held
by Borrower and
its Associated
Name Companies
Phelps Dodge Wire & Cable Trading Company de Mexico, SA de CV 99.00%
Phelps Dodge Yanti Cable Company 60.00%
Phelps Dodge Yantai China Holdings Inc. 66.67%
Pietersburg Iron Company (Proprietary) Limited 50.00%
Pollac Mining Co., Inc. 100.00%
Proper Equipment Co. 80.00%
Proveedorade Cables y Alambres PDCA Guatemala, S.A. 100.00%
PT Kutaraja Tembaga Raya 75.00%
Representaciones de Industries Venezolanas, C.A. (REDIVENCA) 100.00%
Sabang Mining Co., Inc. 100.00%
Savanna Development Co., Ltd. 100.00%
Sevalco Limited 100.00%
Sevalco (Trustee) Ltd. 100.00%
Sofia Mineral Ltd. (Sornin) (partnership) 50.00%
Soner, Inc. 100.00%
St. Joseph Phelps Dodge Exploration Pty. Ltd. 50.00%
Tambali MIning Co., Inc. 100.00%
T.I.E. (Trading Import Export) 100.00%
Tien Shen Minerals 50.00%
The Morenci Water & Electric Company 100.00%
Tucson, Cornelia and Gila Bend Railroad Co. 100.00%
Warren Company 100.00%
Western Nuclear Australia Limited 100.00%
Western Nuclear, Inc. 100.00%
60
<PAGE>
EXHIBIT A -- FORM OF
REVOLVING CREDIT
PROMISSORY NOTE
PROMISSORY NOTE
Lender: ______________________
Principal Amount: U.S.$______ Dated: _______________, 199_
FOR VALUE RECEIVED, the undersigned, PHELPS DODGE CORPORATION, a New
York corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of the
Lender named above (the "Lender") for the account of its Applicable Lending
Office on the Termination Date (as defined in the Credit Agreement referred to
below) the Principal Amount set forth above or, if less, the aggregate principal
amount of the Advances made by the Lender to the Borrower pursuant to the Credit
Agreement dated as of October [18], 1999 among the Borrower, the Lender and
certain other lenders parties thereto, and Citibank, N.A. as Agent for the
Lender and such other lenders (as amended or modified from time to time, the
"Credit Agreement"; the terms defined therein being used herein as therein
defined) outstanding on such date.
The Borrower promises to pay interest on the unpaid principal amount of
each Advance from the date of such Advance until such principal amount is paid
in full, at such interest rates, and payable at such times, as are specified in
the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Citibank, N.A., as Agent, at 399 Park Avenue, New York, New
York 10043, in same day funds. Each Advance owing to the Lender by the Borrower
pursuant to the Credit Agreement, and all payments made on account of principal
thereof, shall be recorded by the Lender and, prior to any transfer hereof,
endorsed on the grid attached hereto which is part of this Promissory Note.
This Promissory Note is one of the Revolving Credit Notes referred to
in, and is entitled to the benefits of, the Credit Agreement. The Credit
Agreement, among other things, (i) provides for the making of Advances by the
Lender to the Borrower from time to time in an aggregate amount not to exceed at
any time outstanding the U.S. dollar amount first above mentioned, the
indebtedness of the Borrower resulting from each such Advance being evidenced by
this Promissory Note and (ii) contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events upon the terms and
conditions therein specified.
PHELPS DODGE CORPORATION
By:
-----------------------------------------
Title:
A-1
<PAGE>
ADVANCES AND PAYMENTS OF PRINCIPAL
================================================================================
Amount of
Principal Unpaid
Amount of Paid Principal Notation
Date Advance or Prepaid Balance Made By
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
A-2
<PAGE>
EXHIBIT B -- FORM OF
NOTICE OF REVOLVING
CREDIT BORROWING
Citibank, N.A., as Agent
for the Lenders party to
the Credit Agreement
referred to below
[Two Penns Way
New Castle, Delaware 19720]
[Date]
Attention: Bank Loan Syndications Department
Ladies and Gentlemen:
The undersigned, Phelps Dodge Corporation, refers to the Credit
Agreement, dated as of October [18], 1999 (as amended or modified from time to
time, the "Credit Agreement", the terms defined therein being used herein as
therein defined), among the undersigned, certain Lenders parties thereto and
Citibank, N.A., as Agent for said Lenders, and hereby gives you notice,
irrevocably, pursuant to Section 2.2 of the Credit Agreement that the
undersigned hereby requests a Revolving Credit Borrowing under the Credit
Agreement, and in that connection sets forth below the information relating to
such Revolving Credit Borrowing (the "Proposed Revolving Credit Borrowing") as
required by Section 2.2(a) of the Credit Agreement:
(i) The Business Day of the Proposed Revolving Credit Borrowing is
___________, [1999] [2000].
(ii) The Type of Advances comprising the Proposed Revolving Credit
Borrowing is [Base Rate Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed Revolving Credit
Borrowing is $______________.
[(iv) The initial Interest Period for each Eurodollar Rate Advance
made as part of the Proposed Revolving Credit Borrowing is [seven days]
[_____ month[s]].]
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the Proposed Revolving
Credit Borrowing:
(A) the representations and warranties contained in Section 4.1 of
the Credit Agreement (except the representations set forth in Section
4.1(b)) are correct, before and after giving effect to the Proposed
B-1
<PAGE>
Revolving Credit Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date; and
(B) no event has occurred and is continuing, or would result from
such Proposed Revolving Credit Borrowing or from the application of the
proceeds therefrom, that constitutes a Default.
Very truly yours,
PHELPS DODGE CORPORATION
By:
-----------------------------------------
Title:
B-2
<PAGE>
EXHIBIT C -- FORM OF
ASSIGNMENT AND
ACCEPTANCE
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of October [18],
1999 (as amended or modified from time to time, the "Credit Agreement") among
Phelps Dodge Corporation., a New York corporation (the "Borrower"), the Lenders
(as defined in the Credit Agreement) and Citibank, N.A., as agent for the
Lenders (the "Agent"). Terms defined in the Credit Agreement are used herein
with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule I hereto
agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
assignee hereby purchases and assumes from the Assignor, an interest in and to
the Assignor's rights and obligations under the Credit Agreement as of the date
hereof equal to the percentage interest specified on Schedule 1 hereto of all
outstanding rights and obligations under the Credit Agreement. After giving
effect to such sale and assignment, the Assignee's Commitment and the amount of
the Advances owing to the Assignee will be as set forth on Schedule 1 hereto.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under the
Credit Agreement or any other instrument or document furnished pursuant thereto;
and (iv) attaches the Revolving Credit Note, if any held by the Assignor.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 4.1 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iii) confirms that it is an Eligible Assignee; (iv) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement as are delegated to the
C-1
<PAGE>
Agent by the terms thereof, together with such powers and discretion as are
reasonably incidental thereto; (v) agrees that it will perform in accordance
with their terms all of the obligations that by the terms of the Credit
Agreement are required to be performed by it as a Lender; and (vi) attaches any
U.S. Internal Revenue Service forms required under Section 2.13 of the Credit
Agreement.
4. Following the execution of this Assignment and Acceptance, it will
be delivered (if required pursuant to Section 8.7 of the Credit Agreement) to
the Borrower for approval and to the Agent for acceptance and recording by the
Agent (provided that such acceptance and recording shall only be made if the
Borrower and the Agent have consented thereto to the extent required by Section
8.7 of the Credit Agreement). The effective date for this Assignment and
Acceptance (the "Effective Date") shall be the date of acceptance hereof by the
Agent, unless otherwise specified on Schedule 1 hereto.
5. Upon such acceptance and recording by the Agent, as of the Effective
Date, (i) the Assignee shall be a party to the Credit Agreement and, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement and
the Revolving Credit Notes in respect of the interest assigned hereby (including
all payments of principal, interest and facility fees with respect thereto) to
the Assignee. The Assignor and Assignee shall make all appropriate adjustments
in payments under the Credit Agreement and the Revolving Credit Notes for
periods prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule
1 to this Assignment and Acceptance to be executed by their officers thereunto
duly authorized as of the date specified thereon.
C-2
<PAGE>
Schedule 1
to
Assignment and Acceptance
Percentage interest assigned: _____%
Assignee's Commitment: $______
Aggregate outstanding principal of Advances assigned: $______
Principal amount of Revolving Credit Note payable to Assignee: $______
Principal amount of Revolving Credit Note payable to Assignor: $______
Effective Date*: ____________, [____]
[NAME OF ASSIGNOR], as Assignor
By:
-----------------------------------------
Title:
Dated: ___________, [____]
[NAME OF ASSIGNEE], as Assignee
By:
-----------------------------------------
Title:
Dated: ___________, [____]
Domestic Lending Office:
[Address]
Eurodollar Lending Office:
[Address]
_____________________
* This date should be no earlier than five Business Days after the delivery
of this Assignment and Acceptance to the Agent.
C-3
<PAGE>
Accepted [and Approved] this
_____ day of ___________, [____]
___________________, as Agent
By:
--------------------------------
Title:
[Approved this _____ day
of ___________, [____]
PHELPS DODGE CORPORATION
By: ]*
--------------------------------
Title:
____________________
* Required if the Assignee is an Eligible Assignee solely by reason of clause
(iii) of the definition of "Eligible Assignee".
C-4
<PAGE>
EXHIBIT D-1 FORM OF
OPINION OF INTERNAL
COUNSEL FOR THE BORROWER
[FINAL FORM TO BE ATTACHED AT CLOSING]
D-1
<PAGE>
EXHIBIT D-2 FORM OF
OPINION OF EXTERNAL
COUNSEL FOR THE BORROWER
[FINAL FORM TO BE ATTACHED AT CLOSING]
D-2
