UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 3, 1994
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from .............. to ...........
COMMISSION FILE NUMBER 1-9498
ALLEGHENY LUDLUM CORPORATION
(Exact name of registrant as specified in its charter)
Pennsylvania 25-1364894
------------ ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1000 Six PPG Place, Pittsburgh,PA 15222-5479
- - --------------------------------- ----------
(Address of principal executive offices) (Zip Code)
412-394-2800
- - ------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes x No
--- ---
Number of shares of Common Stock outstanding as of April 29, 1994
70,849,680
1
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ALLEGHENY LUDLUM CORPORATION
SEC FORM 10-Q
FISCAL QUARTER ENDED April 3, 1994
INDEX
Page No.
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statement of Income 3
Condensed Consolidated Balance Sheets 4
Condensed Consolidated Statement of Cash Flows 6
Notes to Condensed Consolidated Financial
Statements 7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations 9
PART II. - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
2
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PART I - FINANCIAL INFORMATION
ITEM 1 -- FINANCIAL STATEMENTS
ALLEGHENY LUDLUM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(In thousands of dollars except per share amounts)
Fiscal Fiscal
Quarter Quarter
Ended Ended
April 3, 1994 April 4,1993
------------- ------------
NET SALES $313,932 $289,942
Costs and Expenses:
Cost of products sold 245,717 233,367
Research, development and technology 10,111 11,160
Commercial and administrative 12,883 11,995
Depreciation and amortization 9,474 7,372
------- -------
278,185 263,894
------- -------
INCOME FROM STEEL OPERATIONS 35,747 26,048
Other income (expense):
Interest expense -- net (1,377) (712)
(Loss) gain from
limited partnership (2,590) 5,550
Other -- net (217) (589)
------- -------
(4,184) 4,249
------- -------
Income before income taxes 31,563 30,297
Income taxes 13,445 12,025
------- -------
NET INCOME $ 18,118 $ 18,272
======= =======
Per common share:
Primary $.26 $.28
======= =======
Fully diluted $.25 $.27
======= =======
Dividends declared per common share $.12 $.11
======= =======
See notes to condensed consolidated financial statements
3
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ALLEGHENY LUDLUM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands of dollars)
April 3, January 2,
1994 1994
-------- ----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 38,334 $ 48,107
Short-term investments (Note 4) 30,490 50,466
Trade receivables--net 135,074 110,962
Inventories (Note 2) 223,283 254,764
Prepaid expenses and other current
assets 10,740 5,489
------- ------
TOTAL CURRENT ASSETS 437,921 469,788
Properties, plants and equipment--net 451,571 447,942
Cost in excess of net assets
acquired 143,291 144,132
Investment in limited partnership - 22,764
Deferred income taxes 61,541 54,220
Assets acquired from Athlone and
held for sale 29,117 29,117
Other assets 6,632 6,086
--------- ---------
TOTAL ASSETS $1,130,073 $1,174,049
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 3,182 $ 3,158
Senior secured notes assumed in
Athlone acquisition - 25,000
Accounts payable 62,997 83,752
Accrued compensation and benefits 56,045 50,864
Income taxes payable and deferred 36,267 20,634
Other accrued expenses 32,310 27,469
--------- ---------
TOTAL CURRENT LIABILITIES 190,801 210,877
Long-term debt, less current portion 137,832 138,870
Pensions 102,718 106,227
Postretirement benefit liability 264,742 285,122
Other 24,356 29,531
--------- ---------
TOTAL LIABILITIES 720,449 770,627
4
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SHAREHOLDERS' EQUITY:
Preferred stock, par value $1:
authorized--50,000,000 shares;
issued--none
Common stock, par value $ .10:
authorized--100,000,000 shares;
issued--72,878,242 shares 7,288 7,288
Additional capital 269,425 269,112
Retained earnings 162,467 152,258
Equity adjustment related to
minimum liability for pension plans (2,353) (2,353)
Common stock in treasury at cost--
2,028,562 and 1,844,381 shares (27,203) (22,883)
-------- -------
TOTAL SHAREHOLDERS' EQUITY 409,624 403,422
-------- -------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $1,130,073 $1,174,049
========= =========
See notes to condensed consolidated financial statements
5
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ALLEGHENY LUDLUM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(in thousands of dollars)
Fiscal Fiscal
Quarter Quarter
Ended Ended
April 3, 1994 April 4,1993
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 18,118 $ 18,272
Adjustment to reconcile net income
to cash flow from operating activities:
Depreciation and amortization 9,474 7,372
Limited partnership loss (gain) 2,590 (5,550)
Deferred taxes (4,610) 316
Change in operating assets
and liabilities:
Long-term retirement liabilities (4,518) 1,447
Trade receivables (24,112) (24,343)
Inventories 31,481 47,606
Trade payables (20,755) (17,882)
Net change in other current assets
and current liabilities 17,751 3,837
Other changes (4,659) (2,346)
------- -------
CASH FROM OPERATING ACTIVITIES 20,760 28,729
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of properties, plants
and equipment--net (12,262) (6,058)
Sales (purchases) of
short-term investments 19,976 (13,819)
Long-term investments - (1,813)
Increase in notes receivable (316) (391)
------- -------
CASH FROM (USED BY)
INVESTING ACTIVITIES 7,398 (22,081)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on senior secured debt
assumed in Athlone acquisition (25,000) -
Payments on long-term debt and
capital leases (1,014) (750)
Dividends paid (8,504) (7,242)
Purchases of treasury stock (5,096) -
Employee stock plans 1,683 1,072
------- -------
CASH USED BY FINANCING ACTIVITIES (37,931) (6,920)
DECREASE IN CASH AND CASH EQUIVALENTS (9,773) (272)
Balance of cash and cash equivalents at
beginning of period 48,107 51,437
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 38,334 $ 51,165
======= =======
See notes to condensed consolidated financial statements
6
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ALLEGHENY LUDLUM CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1--FINANCIAL STATEMENTS
This financial information should be read in conjunction with the
financial statements and notes thereto for the fiscal year ended
January 2, 1994. The accompanying unaudited condensed consolidated
financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial
information and with the instructions for Form 10-Q and Article 10
of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting only of normal accruals)
considered necessary for a fair presentation have been included.
Operating results for the fiscal quarter ended April 3, 1994 are
not necessarily indicative of results of operations that may be
expected for the fiscal year ending January 1, 1995.
Net income per common share was computed based on the weighted
average number of shares of common stock outstanding during the
periods: 70,938,937 shares for the fiscal quarter ended April 3,
1994 and 65,829,071 shares for the fiscal quarter ended April 4,
1993. The weighted average number of shares of common stock
outstanding and all per share amounts have been restated for the 2-
for-1 stock split effected July 1993.
The Company's fiscal year and fiscal quarters end on the Sunday
closest to the last day of the calendar month.
NOTE 2--INVENTORIES
Inventories consisted of the following:
April 3, January 2,
1994 1994
-------- ---------
(in thousands of dollars)
Raw materials $ 35,180 $ 55,647
Work-in-process and finished products 200,240 208,648
Supplies 15,893 16,609
------- -------
Total inventories at current cost 251,313 280,904
Less allowances to reduce current
cost values to LIFO basis 28,030 26,140
------- -------
$223,283 $254,764
======= =======
Substantially all of the Company's inventories are determined by
the LIFO method.
7
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NOTE 3--LITIGATION
The Company is involved in various lawsuits from time to time
arising in the ordinary course of business and otherwise. On April
8, 1994 the Company announced that the United States District Court
for the Western District of Pennsylvania had issued an order adverse
to the Company in a case filed in 1989 by Allegheny International,
Inc. which is being pursued by Sunbeam-Oster Company, Inc. The case
involves claims for reimbursement of various alleged insurance
coverage costs and recovery of a refund received by Allegheny Ludlum
with respect to a federal income tax overpayment. The order, which
granted a motion for summary judgment filed by Sunbeam-Oster, would
require Allegheny Ludlum to pay approximately $8.0 million to
Sunbeam-Oster. The award consists of the amount of the tax refund,
the insurance cost claim and interest. On April 8, 1994, the Company
filed its notice of appeal of the District Court's judgment with the
United States Court of Appeals for the Third Circuit.
The Company continues to believe that Sunbeam-Oster's claims are
without merit and will continue to defend the case vigorously. A
successful appeal of the District Court's ruling would result in a
judgment in favor of Allegheny Ludlum or the case proceeding to
trial.
NOTE 4--SHORT-TERM INVESTMENTS
The Company adopted Statement of Financial Accounting Standards No.
115, "Accounting for Certain Investments in Debt and Equity
Securities", in the 1994 first quarter. The adoption does not have
a material impact on the financial statements.
8
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Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This discussion should be read in conjunction with the
information in the Condensed Consolidated Financial Statements and
Notes to the Condensed Consolidated Financial Statements.
RESULTS OF OPERATIONS
Net sales by product line were as follows:
Fiscal Quarter Ended
------------------------------
April 3, 1994 April 4, 1993
------------- -------------
(millions)
Stainless steel $246.0 $234.3
Silicon electrical steel 42.9 42.3
Other specialty alloy 25.0 13.3
----- -----
Total net sales $313.9 $289.9
===== =====
Net sales increased 8% in the first fiscal quarter of 1994
compared to the first fiscal quarter of 1993. Shipments increased
to 145,061 tons in the 1994 period compared to 137,273 tons in the
1993 period. The first quarter of 1994 included stainless steel
plate and tool steel sales from the Washington Plant (Jessop) which
was acquired in November 1993. The inclusion of Jessop and
improved product mix toward more stainless Precision Rolled Strip
(TM) products caused the sales increase in the first quarter of 1994.
The increase was partially offset by weaker prices for and lower
shipments of stainless steel sheet products.
Stainless steel sales increased 5% in the first quarter of
1994 compared to the first quarter of 1993. The increase is a
result of the inclusion of sales from the Washington Plant (Jessop)
in the first quarter of 1994 which were partially offset by weaker
prices for and lower shipments of sheet products.
Silicon electrical steel sales increased slightly in the 1994
first quarter compared to the 1993 quarter. The increase was
primarily due to improved product mix and pricing partially offset
by lower shipments of finished export products.
Other specialty alloy sales increased 88% over the 1993 period
as a result of the inclusion of tool steel and other alloy sales
from the Washington Plant (Jessop) in the first quarter of 1994.
Imports of stainless steel sheet and strip and silicon steel
products continued to increase in the first two months of 1994.
Imports of stainless steel sheet and strip, stainless steel plate
and electrical steel products increased 50%, 63% and 19%,
respectively in the first two months of 1994 compared to the 1993
period. The increases follow increases of 62%, 26% and 40%,
respectively for the full year 1993 compared to 1992.
9
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Cost of products sold as a percentage of net sales decreased
2.2 percentage points in the first quarter of 1994 compared to the
first quarter of 1993. This decrease was primarily due to higher
sales from increased volume, a shift to higher priced, higher
margin products, and management's continued efforts to control
manufacturing support costs.
Research, development and technology costs decreased in the
1994 first quarter as compared to the higher than average spending
experienced in the first quarter of 1993. The decrease resulted
from a return to more historical levels of technical support of
manufacturing processes, lower expense for certain projects under
development, and decreased expense for incentive compensation
plans.
Commercial and administrative costs increased in the 1994
quarter over the 1993 quarter primarily due to the inclusion of
Washington Plant (Jessop) expenditures, which were partially offset
by lower expense for incentive compensation plans.
Interest expense-net increased as a result of lower interest
income due to lower cash balances available for investment after
debt repayment related to the Athlone (the parent of Jessop Steel)
acquisition in the 1994 first quarter as compared to the 1993 first
quarter.
Loss from the limited partnership investment reflects the
recording of equity valuation declines for the partnership
investment. At the end of the first quarter of 1994, the Company
voluntarily contributed an investment in the limited partnership
fund to an irrevocable trust established for the purpose of
partially funding the retiree medical benefits obligation the
Company has to its employees represented by the United Steelworkers
of America. In the future, investment returns from holdings in
this trust will be amortized over future periods in accordance with
FAS No. 106 and reflected in cost of sales. The Company also
contributed $5 million in cash to the trust.
The effective tax rate of 42.6% in the 1994 first quarter
compares to 39.7% in the first quarter of 1993. The increase is
primarily due to book amortization expense of cost in excess of
net assets acquired in the Athlone transaction, which is not
deductible for tax purposes, and a 1% increase in the statutory
Federal income tax rate which was enacted in the third quarter
of 1993.
FINANCIAL CONDITION AND LIQUIDITY
Working capital decreased to $247.1 million at the end of the
first quarter of 1994 compared to $258.9 million at the end of
1993. The current ratio increased to 2.3 from 2.2 in the same
periods. The change was primarily due to shifts in balances of
short-term investments, receivables, inventories and accounts
payable which occur in the normal course of business.
Assets held for sale include assets of Green River Steel
Company and Reynolds Fasteners, Inc., net of liabilities assumed
and reserves for losses. These businesses do not meet the
Company's strategic objectives and are held for sale.
10
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During the first three months of 1994, cash on hand coupled
with cash from operations of $20.8 million was used to pay down
$26.0 million of debt, invest $12.3 million in capital equipment,
pay dividends of $8.5 million, and purchase $5.1 million in
treasury stock. As a result of these transactions, the Company's
cash (including short-term investments) position was $68.8 million
at the end of the first quarter of 1994.
Due to the Union work stoppage discussed below, the Company
has temporarily discontinued expenditures on most of the capital
projects scheduled in 1994. All capital project expenditures will
be reviewed after the strike ends.
The Company entered into a new Credit Agreement in May 1994
with a group of banks which provides for borrowings of up to $50
million on a revolving credit basis in addition to the $100 million
available under the Company's existing credit agreement dated
December 28, 1990, as amended (the "1990 Credit Agreement"). The
Credit Agreement contains various covenants which are the same as
the covenants contained in the 1990 Credit Agreement.
The Company anticipates that internally generated funds,
current cash on hand, and borrowings from existing credit lines
will be adequate to meet foreseeable needs.
LABOR STRIKE
Following the expiration of the labor contract with the United
Steelworkers of America (USWA), the Union called a strike affecting
most of the Company's plants commencing at 12:01 a.m. on April 1,
1994, idling 3,500 of the Company's 6,000 employees. The strike is
having an adverse impact on the Company's sales and operations. It
is uncertain when the strike will end.
11
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PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(10) Credit Agreement dated as of May 11, 1994
(11) Computation of Per Share Earnings
(b) Reports on Form 8-K
The Company filed a report on Form 8-K/A-1
dated January 12, 1994, regarding the Company's
acquisition of Athlone Industries, Inc.
The Company filed a report on Form 8-K dated
April 7, 1994, regarding the strike called by
United Steelworkers of America against the
Company.
The Company filed a report on Form 8-K and on
Form 8-K/A-1 dated April 8, 1994, regarding the
litigation described in NOTE 3 of the Notes
to Condensed Consolidated Financial Statements.
12
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ALLEGHENY LUDLUM CORPORATION
By /s/ J.L. Murdy
----------------------------
J. L. Murdy
Senior Vice President - Finance
and Chief Financial Officer
(Duly Authorized Officer and
Principal Financial Officer)
May 13, 1994
13
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EXHIBIT INDEX
Exhibit
Number
_______
(10) Credit Agreement dated as of May 11, 1994
(filed without exhibits any of which will be
furnished to the Commission upon request)
(11) Computation of Per Share Earnings
14
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Exhibit 10
CREDIT AGREEMENT
by and among
ALLEGHENY LUDLUM CORPORATION
as the Borrower
THE BANKS PARTY HERETO
as the Banks
and
PNC BANK, NATIONAL ASSOCIATION
as the Agent
Dated as of May 11, 1994
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . 1
1.1 Definitions . . . . . . . . . . . . . . . . . . 1
1.2 Additional Definitions. . . . . . . . . . . . . 9
1.3 Accounting Terms. . . . . . . . . . . . . . . . 9
1.4 Other Definitional Conventions and Rules of
Construction. . . . . . . . . . . . . . . . . . 9
ARTICLE II THE LOANS. . . . . . . . . . . . . . . . . . . . . 10
2.1 Revolving Credit Commitment . . . . . . . . . . 10
2.2 Interest Payments, Interest Rates and Certain
Related Payments Pertaining to the Revolving
Credit Loans. . . . . . . . . . . . . . . . . . 13
2.3 Voluntary Prepayments . . . . . . . . . . . . . 17
2.4 Yield Protection. . . . . . . . . . . . . . . . 18
2.5 Special Provisions Relating to the Eurodollar
Rate Option and CD Rate Option. . . . . . . . . 20
2.6 Capital Adequacy. . . . . . . . . . . . . . . . 21
2.7 Loan Account. . . . . . . . . . . . . . . . . . 22
2.8 All Advances to Constitute One Loan . . . . . . 22
2.9 Method of Disbursements and Payments. . . . . . 23
2.10 Payment from Accounts Maintained by Borrower. . 23
2.11 Time, Place, Manner and Application of
Payments. . . . . . . . . . . . . . . . . . . . 23
ARTICLE III SET-OFF . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE IV REPRESENTATIONS AND WARRANTIES . . . . . . . . . . 24
4.1 Corporate Existence . . . . . . . . . . . . . . 24
4.2 Corporate Authority . . . . . . . . . . . . . . 25
4.3 Enforceability. . . . . . . . . . . . . . . . . 25
4.4 No Restrictions . . . . . . . . . . . . . . . . 25
4.5 Financial Statements. . . . . . . . . . . . . . 25
4.6 Other Representations and Warranties. . . . . . 26
4.7 Disclosure. . . . . . . . . . . . . . . . . . . 26
ARTICLE V AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . 26
5.1 Incorporation of Affirmative Covenants. . . . . 26
5.2 Continuation of Incorporated Affirmative
Covenants . . . . . . . . . . . . . . . . . . . 27
ARTICLE VI NEGATIVE COVENANTS . . . . . . . . . . . . . . . . 27
6.2 Continuation of Incorporated Negative
Covenants . . . . . . . . . . . . . . . . . . . 27
<PAGE>
ARTICLE VII CONDITIONS PRECEDENT TO ALL REVOLVING CREDIT
LOANS . . . . . . . . . . . . . . . . . . . . . . 27
7.1 All Revolving Credit Loans. . . . . . . . . . . 27
7.2 Conditions Precedent to the Initial Revolving
Credit Loan . . . . . . . . . . . . . . . . . . 28
ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES. . . . . . . . 30
8.1 Nonpayment of Bank Indebtedness . . . . . . . . 30
8.2 Insolvency. . . . . . . . . . . . . . . . . . . 30
8.3 Dissolution . . . . . . . . . . . . . . . . . . 30
8.4 Misrepresentation . . . . . . . . . . . . . . . 31
8.6 Event of Default under 1990 Credit Agreement. . 31
8.7 Consequences of an Event of Default . . . . . . 31
8.8 Rights and Remedies . . . . . . . . . . . . . . 32
ARTICLE IX AGREEMENT AMONG BANKS. . . . . . . . . . . . . . . 32
9.1 Appointment and Grant of Authority. . . . . . . 32
9.2 Non-Reliance on Agent . . . . . . . . . . . . . 32
9.3 Responsibility of Agent and Other Matters . . . 33
9.4 Action on Instructions. . . . . . . . . . . . . 34
9.5 Indemnification . . . . . . . . . . . . . . . . 34
9.6 Agent's Rights as a Bank. . . . . . . . . . . . 35
9.7 Payment to Banks. . . . . . . . . . . . . . . . 35
9.8 Pro Rata Sharing. . . . . . . . . . . . . . . . 35
9.9 Successor Agent.. . . . . . . . . . . . . . . . 35
ARTICLE X GENERAL PROVISIONS. . . . . . . . . . . . . . . . . 36
10.1 Amendments and Waivers. . . . . . . . . . . . . 36
10.2 Expenses. . . . . . . . . . . . . . . . . . . . 37
10.3 Notices . . . . . . . . . . . . . . . . . . . . 38
10.4 Tax Withholding . . . . . . . . . . . . . . . . 39
10.5 Pro Rata Actions. . . . . . . . . . . . . . . . 40
10.6 Successors and Assigns. . . . . . . . . . . . . 40
10.7 Assignments and Participations. . . . . . . . . 40
10.8 Severability. . . . . . . . . . . . . . . . . . 42
10.9 Survival. . . . . . . . . . . . . . . . . . . . 42
10.10 Governing Law . . . . . . . . . . . . . . . . . 42
10.11 Non-Business Days . . . . . . . . . . . . . . . 42
10.12 Integration . . . . . . . . . . . . . . . . . . 43
10.13 Headings. . . . . . . . . . . . . . . . . . . . 43
10.14 Counterparts. . . . . . . . . . . . . . . . . . 43
ii
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of May 11, 1994 among
ALLEGHENY LUDLUM CORPORATION, a corporation organized and
existing under the laws of the Commonwealth of Pennsylvania (the
"Borrower"), the FINANCIAL INSTITUTIONS listed on the signature
pages hereto and each other financial institution which, from
time to time, becomes a party hereto in accordance with Section
10.7a hereof (hereinafter individually or a "Bank" and
collectively the "Banks") and PNC BANK, NATIONAL ASSOCIATION, in
its capacity as the initial administrative agent hereunder for
the Banks (the "Agent").
WITNESSETH:
WHEREAS, the Borrower has requested that the Banks extend a
revolving credit facility to the Borrower in a principal amount
not to exceed $50,000,000.00 at any one time outstanding; and
WHEREAS, the Banks are willing to make such a revolving
credit facility available upon the terms and conditions contained
herein.
NOW, THEREFORE, in consideration of mutual promises
contained herein and other valuable consideration and with the
intent to be legally bound hereby, the Borrower, the Banks and
the Agent hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used herein, the following terms shall
have the meaning specified below unless the context otherwise
requires:
"1990 Credit Agreement" shall mean that certain Amended
and Restated Credit Agreement dated as of December 28, 1990 by
and among the Borrower, PNC Bank, National Association (formerly
Pittsburgh National Bank), Continental Bank N.A., Mellon Bank,
N.A., The Chase Manhattan Bank (National Association), Integra
Bank/Pittsburgh (formerly Integra National Bank/Pittsburgh and
The Union National Bank of Pittsburgh) and The First National
Bank of Boston, as the banks party thereto and PNC Bank, National
Association, as the agent thereunder, as the same has been and
may be amended, from time to time.
"Affiliate" shall mean, as to any Person, any other
Person which, directly or indirectly (through one or more
intermediaries), controls, is controlled by, or is under the
<PAGE>
common control with such Person (whether by ownership of voting
securities or other interests, by contract or otherwise).
"Agent" shall mean PNC Bank, National Association, its
successors and assigns, in its capacity as administrative agent
for the Banks under the Credit Agreement.
"Assessment Rate" shall mean, for any day during each
CD Rate Interest Period, the annual assessment rate determined by
the Agent to be in effect on such day of such CD Rate Interest
Period and payable for the then current semi-annual period by a
member of the Bank Insurance Fund classified as adequately
capitalized and within supervisory subgroup "A" (or a comparable
successor assessment risk classification) within the meaning of
12 C.F.R. Section 327.3(d) or any successor provision) to the
Federal
Deposit Insurance Corporation (or any successor thereto) for such
corporation's (or such successor's) insuring Dollar time deposits
at offices of such institution in the United States.
"Assignment and Assumption Agreement" shall mean an
Assignment and Assumption Agreement substantially in the form of
Exhibit "C" hereto with appropriate insertions executed by and
among a Purchasing Bank, a Transferor Bank and the Agent, on
behalf of the remaining Banks.
"Available Funds" shall mean funds which become
available to be borrowed under the Revolving Credit Commitment in
accordance with the provisions of Subsection 2.1c hereof.
"Bank" shall mean each financial institution listed on
the signature pages to this Credit Agreement and each other
financial institution which, from time to time, becomes a party
to this Credit Agreement in accordance with Subsection 10.7a
hereof together with its respective successors and assigns.
"Banks" shall mean, collectively, each and every Bank.
"Bank Indebtedness" shall mean all obligations of the
Borrower to the Banks and the Agent then outstanding, whether for
principal, interest, fees and any other amounts due hereunder by
reason of advances by the Agent or any of the Banks, made to, or
for the account of, the Borrower pursuant to this Credit
Agreement and all reasonable out-of-pocket expenses incurred by
the Agent or the Banks hereunder (including but not limited to
fees and expenses of counsel which are reimbursable pursuant to
Section 10.2 hereof).
"Borrower" shall mean Allegheny Ludlum Corporation, a
corporation organized and existing under the laws of the
Commonwealth of Pennsylvania, together with its successors and
permitted assigns.
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"Business Day" shall mean (i) when used in a context of
a Eurodollar Rate Loan, any day other than a (A) Saturday or
Sunday, (B) a day on which banks in either Pittsburgh,
Pennsylvania or New York, New York are authorized or required to
close and (C) a day on which dealings in foreign currencies and
exchange and eurodollar funding between banks cannot be carried
on at the location at which the Agent transacts its eurodollar
funding, and (ii) when used in any other context, any day other
than (A) a Saturday or Sunday and (B) a day on which banks in
either Pittsburgh, Pennsylvania or New York, New York are
authorized or required to close.
"Capital Adequacy Event" shall have the meaning given
it in Section 2.6 hereof.
"Capital Compensation Amount" shall have the meaning
given it in Section 2.6 hereof.
"CD Rate" shall mean the rate of interest per annum
determined by the Agent, with respect to each CD Rate Interest
Period for each CD Rate Loan, to be the sum of:
(i) the rate per annum obtained by dividing (the
resulting quotient to be rounded upward to the nearest
1/100 of 1%) (A) the average of the rates of interest
(which shall be the same for each day of such CD Rate
Interest Period) determined in good faith by the Agent
in accordance with its usual procedures (which
determination shall be conclusive, absent manifest
error) to be the average of the secondary market bid
rates quoted to the Agent at or about 11:00 a.m.
(Pittsburgh, Pennsylvania time) by two (2) dealers of
negotiable certificates of deposit on the first day of
such CD Rate Interest Period for the purchase at face
value of negotiable certificates of deposit of major
money center banks for delivery on such day in amounts
comparable to the Agent's CD Rate Portion of such CD
Rate Loan and having maturities comparable to the CD
Rate Interest Period therefor by (B) a percentage
(expressed as a decimal) equal to (I) 1.00 minus (II)
the CD Rate Reserve Percentage for such CD Rate
Interest Period; plus
(ii) the Assessment Rate for such CD Rate Interest
Period.
The "CD Rate" described above may also be expressed by
the following formula:
[The average of the secondary market
CD Rate = bid rates determined by Agent] + Assessment Rate
-------------------------------------
[ 1.00 - CD Rate Reserve Percentage ]
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The CD Rate shall be adjusted automatically with respect to each
CD Rate Loan then outstanding on the effective date of any change
in the CD Rate Reserve Percentage or the Assessment Rate.
"CD Rate Interest Period" shall mean any individual
period of thirty (30), sixty (60), ninety (90) or one hundred
eighty (180) days selected by the Borrower commencing on the
borrowing, conversion date or renewal date of a CD Rate Loan to
which such period shall apply.
"CD Rate Loan" shall mean a Revolving Credit Loan which
bears, or is to bear, interest under the CD Rate Option.
"CD Rate Option" shall mean the interest rate option
described in Subsection 2.2(b)(ii) of this Credit Agreement.
"CD Rate Portion" shall mean any Bank's individual
portion of a CD Rate Loan.
"CD Rate Reserve Percentage" shall mean, for each CD
Rate Interest Period applicable to any CD Rate Loan, the maximum
effective percentage (expressed as a decimal), as determined in
good faith by the Agent (which determination shall be conclusive,
absent manifest error), which is in effect on any day during such
CD Rate Interest Period as prescribed by the Board of Governors
of the Federal Reserve System (or any successor thereto) for
determining the maximum reserve requirements (including without
limitation supplemental, marginal or emergency reserve
requirements) for the Agent in respect of new nonpersonal time
deposits in Dollars in the United States. For each respective CD
Rate Loan and each respective CD Rate Interest Period, the CD
Rate Reserve Percentage will be determined initially as of the
first day of each such CD Rate Interest Period.
"Closing" shall mean the closing to be held in the
offices of Tucker Arensberg, P.C., on May 11, 1994 or such later
date agreed to by the Agent and the Borrower.
"Code" shall mean the Internal Revenue Code of 1986, as
the same may be amended from time to time, or any successor
legislation thereto, together with all regulations promulgated
and rulings issued thereunder.
"Commitment Fee(s)" shall mean the fee described in
items (i) and (ii) of Subsection 2.1h hereof.
"Commitment Percentage" shall mean, with respect to
each Bank, its percentage commitment of the aggregate Revolving
Credit Commitment which shall be the percentage set forth on the
signature page to the Credit Agreement signed by such Bank or in
any Assignment and Assumption Agreement executed by such Bank in
its capacity as the Purchasing Bank or the Transferor Bank, as
the case may be.
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"Consolidated Subsidiaries" shall mean those
Subsidiaries whose assets and liabilities and profits and losses
are combined with the Borrower's financial results for financial
reporting purposes.
"Conversion Fee" shall mean the fee described in item
(iii) of Subsection 2.1h hereof.
"Credit Agreement" shall mean this Credit Agreement and
all exhibits and schedules hereto together with all extensions,
renewals, amendments, substitutions and replacements hereto and
hereof.
"Dollars" or "$" shall mean the legal tender of the
United States.
"Encumbrance" shall mean any lien, encumbrance,
mortgage, charge, pledge, security interest, priority payment,
conditional sales agreement right, right under any deferred
purchase price obligation or other title retention agreement
right (including any right under a Capitalized Lease, but
excluding those agreements which allow the Borrower to defer
payment until acceptance), whether or not voluntarily given.
"Eurodollar Rate" shall mean the interest rate per
annum determined by the Agent, with respect to each Eurodollar
Rate Interest Period for each Eurodollar Rate Loan, obtained by
dividing (i) the rate per annum obtained as the average of the
rates of interest (which shall be the same for each day of such
Eurodollar Rate Interest Period) determined in good faith by the
Agent in accordance with its usual procedures (which
determination shall be conclusive, absent manifest error) to be
the average of the rates per annum at which deposits in Dollars
in immediately available funds have been offered by major money
center banks in the interbank eurodollar market where the foreign
exchange and currency operations of the Agent are conducted at
approximately 11:00 A.M., (Pittsburgh, Pennsylvania time), two
(2) Business Days prior to the first day of such Eurodollar Rate
Interest Period for delivery on the first day of such Eurodollar
Rate Interest Period in an amount comparable to the Agent's
Eurodollar Rate Portion for such Eurodollar Rate Interest Period
and for a duration comparable to such Eurodollar Rate Interest
Period by (ii) a percentage (expressed as a decimal) equal to (A)
1.00 minus (B) the Eurodollar Rate Reserve Percentage.
the average of the interbank eurodollar
market rates determined by the Agent
Eurodollar ------------------------------------------------
Rate = 1.00 - the Eurodollar Rate Reserve Percentage
The Eurodollar Rate shall be adjusted automatically with respect
to any Eurodollar Rate Portion outstanding on the effective date
of any change in the Eurodollar Rate Reserve Percentage, as of
the effective date of such change.
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"Eurodollar Rate Interest Period" shall mean any
individual period of one (1), two (2), three (3) or six (6)
months selected by the Borrower commencing on the borrowing,
conversion date or renewal date of a Eurodollar Rate Portion to
which such period shall apply.
"Eurodollar Rate Loan" shall mean a Revolving Credit
Loan which bears, or is to bear, interest under the Eurodollar
Rate Option.
"Eurodollar Rate Option" shall mean the interest rate
option described in Subsection 2.2(b)(iii) of this Credit
Agreement.
"Eurodollar Rate Portion" shall mean any Bank's
individual portion of a Eurodollar Rate Loan.
"Eurodollar Rate Reserve Percentage" shall mean, for
each Eurodollar Rate Interest Period, the maximum effective
percentage (expressed as a decimal and rounded upward to the
nearest 1/100 of 1%), as determined in good faith by the Agent
(which determination shall be conclusive, absent manifest error)
which is in effect on any day of such Eurodollar Rate Interest
Period, as prescribed by the Board of Governors of the Federal
Reserve System (or any successor thereto) for determining the
maximum reserve requirements, if any (including without
limitation supplemental, marginal or emergency reserve
requirements) with respect to "Eurocurrency Liabilities" (as
defined in Regulation D promulgated by the Board of Governors of
the Federal Reserve System or any successor thereto) of the
Agent. For each respective Eurodollar Rate Loan and each
respective Eurodollar Rate Interest Period, the Eurodollar Rate
Reserve Percentage will be determined initially as of the first
day of each such Eurodollar Rate Interest Period.
"Event of Default" shall mean the occurrence of events
or the existence of conditions described in Sections 8.1 through
8.5 inclusive.
"GAAP" shall mean generally accepted accounting princi-
ples which shall include, but not be limited to, the official
interpretations thereof as defined by the Financial Accounting
Standards Board, its predecessors and its successors.
"Governmental Person" shall mean the government of the
United States or any other country having jurisdiction over a
Bank, the government of any state or locality therein, any
political subdivision or any governmental, quasi-governmental,
judicial, public or statutory instrumentality, authority, body or
entity, or other regulatory bureau, authority or body of the
United States or any state or locality therein, including the
Federal Deposit Insurance Corporation, the Comptroller of the
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Currency or the Board of Governors of the Federal Reserve Bank,
any central bank or any comparable authority.
"Governmental Rule" shall mean any law, statute, rule,
regulation, ordinance, order, judgment, guideline or decision of
any Governmental Person.
"Guarantee" shall mean any obligation, direct or
indirect, by which a Person undertakes to guaranty, assume or
remain liable for the payment or performance of a second Person's
obligations, including but not limited to (i) endorsements of
negotiable instruments, (ii) discounts with recourse, (iii)
agreements to pay or perform upon a second Person's failure to
pay or perform, (iv) remaining liable on obligations assumed by a
second Person, (v) agreements to maintain the capital, working
capital solvency or general financial condition of a second
Person and (vi) agreements for the purchase or other acquisition
of products, materials, supplies or services, if in any case
payment therefor is to be made regardless of the non-delivery of
such products, materials or supplies or the non-furnishing of
such services.
"Indebtedness" shall mean indebtedness for borrowed
money or credit (other than trade credit incurred in the ordinary
course of business) received, whether such indebtedness or credit
is evidenced by a bond, note, debenture, capitalized lease,
conditional sales agreement, deferred purchase price obligation,
title retention device, book entry or Guarantees.
"Interest Period" shall mean a CD Rate Interest Period
or Eurodollar Rate Interest Period.
"Loan Account" shall mean the accounts upon the books
of each Bank as more fully set forth in Section 2.7 of this
Credit Agreement.
"Loan Documents" shall mean collectively this Credit
Agreement, the Revolving Credit Notes, any Request for Revolving
Credit Loan, any Assignment and Assumption Agreements and any
other documents furnished in connection herewith.
"Officer's Certificate" shall mean a statement signed
by a Senior Officer of the Borrower.
"Option" shall mean any of a Prime Rate Option, a CD
Rate Option or a Eurodollar Rate Option or all three (3) taken
collectively.
"Participant" shall mean any financial institution or
other entity which purchases a Participation in any Bank's
Revolving Credit Commitment, Revolving Credit Loans or Revolving
Credit Note.
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"Participation" shall mean the sale, pursuant to
Section 10.7c of this Credit Agreement, by any Bank to any
Participant of an undivided interest in all or any part of such
Bank's Revolving Credit Commitment, Revolving Credit Loans or
Revolving Credit Note.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation or any entity succeeding to any or all of its
functions.
"Person" shall mean any individual, corporation,
association, business trust, firm, partnership, joint venture,
unincorporated organization or other entity or enterprise or any
Governmental Person or any other legal entity.
"Portion" shall mean any Prime Rate Portion, any CD
Rate Portion or any Eurodollar Rate Portion or all three (3)
taken collectively.
"Prime Rate" shall mean the rate of interest announced
from time to time by the Agent as its prime rate, which rate may
not be the lowest interest rate then being charged commercial
borrowers by the Agent.
"Prime Rate Loan" shall mean a Revolving Credit Loan
which bears, or is to bear, interest under the Prime Rate Option.
"Prime Rate Option" shall mean the interest rate option
described in Subsection 2.2(b)(i) of this Credit Agreement.
"Prime Rate Portion" shall mean any Bank's individual
portion of a Prime Rate Loan.
"Purchasing Bank" shall mean a Bank which becomes a
party to this Credit Agreement by executing an Assignment and
Assumption Agreement.
"Register" shall have the meaning ascribed thereto in
Subsection 10.7b hereof.
"Request for Revolving Credit Loan" shall mean a
request substantially in the form of Exhibit "B" hereto executed
by a Senior Officer of the Borrower.
"Repayment Date" shall mean April 30, 1995.
"Required Banks" as of any date of determination, shall
mean (i) the holders of at least 66-2/3% of the aggregate face
principal amount of the Revolving Credit Notes outstanding as of
such date of determination, or (ii) if no principal of the
Revolving Credit Notes shall then be outstanding, the Banks whose
Revolving Credit Commitments aggregate at least 66-2/3% of the
aggregate Revolving Credit Commitments of all of the Banks.
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"Revolving Credit Commitment" shall mean the several
obligations of the Banks to make available to the Borrower the
maximum aggregate principal amount of $50,000,000, as set forth
in Section 2.1 hereof, as such commitment may be reduced from
time to time.
"Revolving Credit Loan(s)" shall mean one or more of
the disbursements made by the Banks under the Revolving Credit
Commitment, all as set forth in Section 2.1 hereof.
"Senior Officer" shall mean the Chairman of the Board,
any Vice Chairman of the Board, the Chief Executive Officer, the
President, any Executive Vice President, any Senior Vice
President, any Vice President, the Treasurer, the Controller or
the Chief Financial Officer of the Borrower.
"Subsidiary(ies)" shall mean any corporation of which
at least fifty percent (50%) of the outstanding capital stock
entitled to vote in an election of directors is owned either
directly or indirectly by the Borrower.
"Transferor Bank" shall mean the selling Bank under an
Assignment and Assumption Agreement.
"Transfer Effective Date" shall mean, for each
Assignment and Assumption Agreement, the date upon which such
Assignment and Assumption Agreement is effective.
1.2 Additional Definitions. Capitalized terms used in
Articles, Sections or Subsections of the 1990 Credit Agreement
which have been incorporated herein by reference and are not
defined in Section 1.1 above shall have the meanings herein as
ascribed thereto in Article I of the 1990 Credit Agreement and
are incorporated herein by reference for all purposes; provided,
however that to the extent, if any, to which terms are defined in
each of this Credit Agreement and the 1990 Credit Agreement, this
Credit Agreement shall control.
1.3 Accounting Terms. All accounting terms used in this
Credit Agreement and not otherwise defined herein shall have the
respective meanings given to such terms under, and shall be
construed in accordance with, GAAP.
1.4 Other Definitional Conventions and Rules of
Construction.
(i) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Credit Agreement shall,
unless otherwise expressly specified, refer to this Credit
Agreement as a whole and not to any particular provision of this
Credit Agreement, and Article, Section and Subsection and item
references are to this Credit Agreement unless otherwise
expressly specified.
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(ii) All terms defined in this Credit Agreement in the
singular shall have comparable meanings when used in the plural,
and vice-versa, and the masculine and feminine genders shall
include the neuter gender, and vice versa, unless otherwise
specified.
(iii) The word "or" as used herein shall mean and
connote nonexclusive alternatives, unless expressly stated or the
context clearly requires otherwise.
ARTICLE II
THE LOANS
2.1 Revolving Credit Commitment.
2.1a Revolving Credit Loans. The Banks severally agree,
subject to the terms and conditions hereof and relying on the
representations and warranties set forth herein, that the
Borrower shall have the right to borrow, repay and reborrow from
the date hereof to but excluding the Repayment Date an aggregate
principal amount not to exceed the Revolving Credit Commitment at
any one time outstanding.
2.1b Commitment of the Banks. Each Bank agrees, for itself
only, and subject to the terms and conditions of this Credit
Agreement, to make Revolving Credit Loans to the Borrower from
time to time not to exceed an aggregate principal amount at any
one time outstanding equal to the amount of their respective
Commitment Percentage of the Revolving Credit Commitment.
2.1c Designation of Available Funds. From the date hereof
until converted as set forth in this Subsection 2.1c, the
Revolving Credit Commitment shall be unavailable to the Borrower.
The Borrower, from time to time, may convert all or a portion of
the Revolving Credit Commitment into Available Funds by (i)
requesting that all or a portion of the Revolving Credit
Commitment be immediately converted to Available Funds and by
(ii) delivering to the Agent, for the pro rata benefit of the
Banks, a Conversion Fee equal to the percentage rate set forth in
Subsection 2.1h(iii) times the amount being then converted. Each
request by the Borrower for conversion of all or a portion of the
Revolving Credit Commitment to Available Funds shall be
irrevocable and shall be made to the Agent by telephone by a
Senior Officer of the Borrower by 12:00 Noon (Pittsburgh,
Pennsylvania time) (i) if the Borrower desires to borrow under
the Prime Rate Option or the CD Rate Option, at least one (1)
Business Day prior to the date the Borrower desires that the
Revolving Credit Commitment (or the portion thereof so
designated) convert into Available Funds or (ii) if the Borrower
desires to borrow under the Eurodollar Rate Option, at least
three (3) Business Days prior to the date the Borrower desires
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that the Revolving Credit Commitment (or the portion thereof so
designed) convert into Available Funds. Any telephone request
for such conversion shall be immediately followed by the
Borrower's written confirmation of such request, signed by a
Senior Officer. Immediately upon a request for the conversion of
all or any portion of the Revolving Credit Commitment to
Available Funds, the portion so converted shall be subject to the
Commitment Fee for Available Funds provided in Subsection
2.1h(ii). Immediately upon the Agent's receipt of any notice
referred to in this Subsection 2.1c, the Agent shall notify each
of the Banks.
2.1d Revolving Credit Notes. The obligation of the Borrower
to repay, on or before the Repayment Date, the aggregate unpaid
principal amount of all Revolving Credit Loans made by the Banks
pursuant to the Revolving Credit Commitment shall be evidenced by
the several Revolving Credit Notes each (i) substantially in the
form of Exhibit "A" hereto, (ii) drawn by the Borrower to the
order of each Bank in the maximum amount of that Bank's
Commitment Percentage of the Revolving Credit Commitment and
(iii) delivered to the Agent for redelivery to such Bank. The
principal amount actually due and owing each Bank at any one time
shall be the aggregate unpaid principal amount of all Revolving
Credit Loans made by such Bank, all as shown on such Bank's Loan
Account established pursuant to Section 2.7 hereof.
2.1e Revolving Credit Loans and Interest. Each Revolving
Credit Loan under Subsection 2.1a hereof shall be made severally
by each of the Banks in an amount equal to such Bank's Commitment
Percentage of the amount (not in excess of the Revolving Credit
Commitment) requested by the Borrower, provided that each
Revolving Credit Loan shall be in a minimum aggregate amount of
(i) $1,000,000 or an integral multiple thereof or (ii) such
lesser amount as may be equal to the then unused portion of the
Revolving Credit Commitment; provided, however, that if a
Revolving Credit Loan is to bear interest under the Eurodollar
Rate Option or the CD Rate Option, then such Revolving Credit
Loan shall be in the amounts set forth in Subsection 2.2d. The
outstanding Revolving Credit Loans shall bear interest in
accordance with the provisions of Section 2.2.
2.1f Requests for a Revolving Credit Loan. Each request for
a Revolving Credit Loan shall be made to the Agent, orally or in
writing, by a Senior Officer of the Borrower, by (i) 12:00 Noon
(Pittsburgh, Pennsylvania time) at least one (1) Business Day
prior to the proposed Revolving Credit Loan if the Revolving
Credit Loan or any part thereof is to bear interest at the Prime
Rate Option or the CD Rate Option or (ii) 12:00 Noon (Pittsburgh,
Pennsylvania time) at least three (3) Business Days prior to the
proposed Revolving Credit Loan if the Revolving Credit Loan or
any part thereof is to bear interest at the Eurodollar Rate
Option. Each written request shall be made pursuant to the
execution and delivery by a Senior Officer of the Borrower, to
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the Agent of a Request for Revolving Credit Loan substantially in
the form of Exhibit "B" hereto which shall specify the date on
which such Revolving Credit Loan is to be made, the amount
thereof and, if applicable the Interest Rate Options and the
Interest Periods selected therefor. Any oral request for any
such Revolving Credit Loan hereunder shall be followed
immediately by the Borrower's Request for Revolving Credit Loan.
Any request, whether oral or written, from the Borrower pursuant
to this Subsection 2.1f, with respect to a Revolving Credit Loan
or any part thereof which is initially to bear interest at the
Eurodollar Rate Option or the CD Rate Option, shall irrevocably
commit the Borrower to accept such Revolving Credit Loan on the
date specified in such request. The Agent shall promptly notify
the Banks of each request for a Revolving Credit Loan on the same
day on which the Agent receives a request for a Revolving Credit
Loan and each Bank shall make its Commitment Percentage of said
Revolving Credit Loan available to the Agent in immediately
available funds at the principal office of the Agent prior to
12:00 Noon (Pittsburgh, Pennsylvania time) on the date of such
Revolving Credit Loan.
2.1g Voluntary Reductions of the Revolving Credit
Commitment. To the extent that the Borrower has availability
under the Revolving Credit Commitment (whether or not Available
Funds), the Borrower may notify the Agent that the Borrower
desires to reduce permanently all or a portion of the Revolving
Credit Commitment available to it; provided, however, such
reduction shall be in the amount of $5,000,000 or an integral
multiple thereof; and further provided that if the Borrower
desires to permanently reduce the entire amount of the Revolving
Credit Commitment, the Borrower must provide written notice to
the Agent signed by an Senior Officer at least five (5) Business
Days prior to the date on which such reduction is to become
effective.
2.1h Fees.
(i) Commitment Fee on Unavailable Funds. On June 30,
1994 and continuing on the last day of each September, December,
March and June hereafter to and including the Repayment Date, the
Borrower shall pay in arrears to the Agent, for the pro rata
benefit of the Banks, a Commitment Fee calculated at a rate equal
to one-eighth of one percent (1/8%) per annum on the daily
(computed at the opening of business) amount of the Revolving
Credit Commitment which has not been converted to Available Funds
(as such amount may be permanently reduced pursuant to Subsection
2.1g from time to time) for the fiscal quarter then ended;
provided, however, that the first payment hereunder shall be only
for the actual number of days elapsed between the actual
execution of this Credit Agreement and June 30, 1994.
(ii) Commitment Fee on Available Funds. On June 30,
1994 and continuing on the last day of each September, December,
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March and June hereafter to and including the Repayment Date, the
Borrower shall pay in arrears to the Agent, for the pro rata
benefit of the Banks, a Commitment Fee calculated at a rate equal
to one-quarter of one percent (1/4%) per annum on the daily
(computed at the opening of business) unused amount of the
portion of the Revolving Credit Commitment (as such amount may be
permanently reduced pursuant to Subsection 2.1g from time to
time) converted to Available Funds and not borrowed hereunder for
the fiscal quarter then ended.
(iii) Conversion Fee. The Borrower shall pay to the
Agent, for the pro rata benefit of the Banks, a Conversion Fee
calculated at a rate equal to one-eighth of one percent (1/8%) of
the principal amount of each portion of the Revolving Credit
Commitment converted from unavailable to Available Funds in
accordance with the provisions of Subsection 2.1c hereof. Each
such Conversion Fee shall be paid by the Borrower to the Agent,
for the pro rata benefit of the Banks, simultaneously with the
Borrower's request for such conversion.
(iv) Calculation of Fees. Commitment Fees and
Conversion Fees hereunder shall be calculated on the basis of a
365 or 366 day year, as the case may be, and the actual number of
days elapsed.
2.1i Repayment. On the Repayment Date, the Borrower shall
repay in full all Bank Indebtedness then outstanding.
2.2 Interest Payments, Interest Rates and Certain Related
Payments Pertaining to the Revolving Credit Loans.
2.2a Interest. The Revolving Credit Notes shall bear
interest on the actual unpaid principal amount thereof from time
to time outstanding from the date thereof until payment in full
on the basis of one or more of the Interest Rate Options set
forth in Subsection 2.2b below and selected by the Borrower. The
Borrower shall pay accrued interest on the unpaid principal
balance of the Revolving Credit Loans in arrears:
(i) with respect to each Prime Rate Loan, at the rate
specified in the Prime Rate Option, (A) on the last day of
each June, September, December and March during the term of
the Revolving Credit Commitment, (B) at maturity, whether by
acceleration or otherwise, of the Revolving Credit Notes and
(C) thereafter on demand until all amounts evidenced by the
Revolving Credit Notes are paid in full;
(ii) with respect to each CD Rate Loan, at the rate
specified in the CD Rate Option applicable thereto, (A) on
the last day of the CD Rate Interest Period applicable
thereto; provided, however, if the CD Rate Interest Period
chosen for any CD Rate Loan exceeds ninety (90) days,
interest on that CD Rate Loan shall be due and payable at
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the end of every ninety (90) days during such CD Rate
Interest Period and on the last day of such CD Rate Interest
Period, (B) at the maturity, whether by acceleration or
otherwise, of the Revolving Credit Notes and (C) thereafter
on demand until all amounts evidenced by the Revolving
Credit Notes are paid in full; and
(iii) with respect to each Eurodollar Rate Loan, at
the rate specified in the Eurodollar Rate Option applicable
thereto, (A) on the last day of the Eurodollar Rate Interest
Period applicable thereto; provided, however, if the
Eurodollar Rate Interest Period chosen for any Eurodollar
Rate Loan exceeds three (3) months, interest on that
Eurodollar Rate Loan shall be due and payable at the end of
every three (3) months during such Eurodollar Rate Interest
Period and on the last day of such Eurodollar Rate Interest
Period, (B) at the maturity, whether by acceleration or
otherwise, of the Revolving Credit Notes and (C) thereafter
on demand until all amounts evidenced by the Revolving
Credit Notes are paid in full.
2.2b Interest Rate Options. During the term hereof, the
Borrower shall have the option of electing, from time to time,
one or more of the Interest Rate Options set forth below to be
applied to the Revolving Credit Loans.
(i) Prime Rate Option. Interest under this Option
shall accrue on the outstanding Revolving Credit Loans at a
rate per annum equal to the Prime Rate. The interest rate
in effect under this Option shall be adjusted on the
effective date of any change in the Prime Rate. Notice of
each such change shall be given to the Borrower and the
Banks by the Agent promptly after such change.
(ii) CD Rate Option. Interest under this Option shall
accrue on the outstanding Revolving Credit Loans for any CD
Rate Interest Period selected by the Borrower at a rate per
annum equal to the sum of (A) the CD Rate for such period
plus (B) 50 basis points (1/2%).
(iii) Eurodollar Rate Option. Interest under this
Option shall accrue on the outstanding Revolving Credit
Loans for any Eurodollar Rate Interest Period selected by
the Borrower at a rate per annum equal to the sum of (A) the
Eurodollar Rate for such period plus (B) 37.5 basis points
(3/8%).
2.2c Interest After Maturity. After the occurrence of an
Event of Default (which Event of Default continues after the
expiration of any cure period applicable thereto) and during the
continuation thereof, (i) all Prime Rate Loans shall bear
interest at a rate per annum which shall be one hundred (100)
basis points (1%) above the Prime Rate, (ii) all Eurodollar Rate
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Loans shall bear interest (A) until the end of the then current
Eurodollar Rate Interest Period for each such Eurodollar Rate
Loan, at a rate per annum which shall be one hundred thirty-seven
and one-half (137.5) basis points (1-3/8%) above the Eurodollar
Rate otherwise in effect during such period and (B) at the end of
the then current Eurodollar Rate Interest Period for each such
Eurodollar Rate Loan, such Eurodollar Rate Loans shall
automatically be converted to Prime Rate Loans, and thereafter
the interest rate shall be calculated in accordance with item (i)
of this Section 2.2c, and (iii) all CD Rate Loans shall bear
interest (A) until the end of the then current CD Rate Interest
Period for each such CD Rate Loan, at a rate per annum which
shall be one hundred fifty (150) basis points (1-1/2%) above the
CD Rate otherwise in effect during such period and (B) at the end
of the then current CD Rate Interest Period for each such CD Rate
Loan, such CD Rate Loan shall automatically be converted to Prime
Rate Loans and thereafter the interest rate shall be calculated
in accordance with item (i) of this Section 2.2c.
2.2d Interest Periods; Limitations on Elections. At any
time when the Borrower shall select, convert to or renew either
the Eurodollar Rate Option or the CD Rate Option to apply to all
or any portion of the outstanding Revolving Credit Loans, it
shall elect one or more Eurodollar Rate Interest Periods or CD
Rate Interest Periods, as the case may be; provided, however,
that:
(i) any Eurodollar Rate Interest Period which would
otherwise end on a day which is not a Business Day shall be
extended to the next Business Day unless such Business Day
falls in the succeeding calendar month in which case such
Eurodollar Rate Interest Period shall end on the next
preceding Business Day;
(ii) any Eurodollar Rate Interest Period which begins
on the last day of a calendar month or on a day for which
there is no numerically corresponding day in the subsequent
calendar month during which such Eurodollar Rate Interest
Period is to end shall end on the last Business Day of such
subsequent month; and
(iii) any CD Rate Interest Period which would
otherwise end on a day which is not a Business Day shall be
extended to the next succeeding Business Day.
Elections by the Borrower of the Eurodollar Rate Option or the CD
Rate Option shall, also, be subject to the following limitations:
(i) The Eurodollar Rate Loans for each Eurodollar Rate
Interest or the CD Rate Loans for each CD Rate Interest
Period shall be in an aggregate principal amount of
$5,000,000 or more; provided that each increment in excess
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of $5,000,000 shall be $1,000,000 or an integral multiple
thereof;
(ii) No Eurodollar Rate Interest Period or CD Rate
Interest Period may be elected which would end later than
the Repayment Date; and
(iii) At no time may there be more than three (3)
separate Eurodollar Rate Interest Periods and CD Rate
Interest Periods in effect.
2.2e Election, Renewal or Conversion of Interest Rate
Options. Elections or renewals of or conversions to the Prime
Rate Option shall continue in effect until converted as
hereinafter provided. Elections of, conversions to or renewals
of the Eurodollar Rate Option or CD Rate Option shall expire as
to each Eurodollar Rate Loan or CD Rate Loan at the expiration of
the applicable Eurodollar Rate Interest Period or CD Rate
Interest Period therefor. At any time with respect to any Prime
Rate Loan or at the expiration of the applicable Eurodollar Rate
Interest Period with respect to any Eurodollar Rate Loan or the
applicable CD Rate Interest Period with respect to any CD Rate
Loan, the Borrower may cause (subject to Subsection 2.2d) all or
any part of the principal amount of such portion to be converted
to, or to be renewed under, the Prime Rate Option, the Eurodollar
Rate Option or the CD Rate Option by notice to the Agent as
hereinafter provided. Such notice (i) shall be irrevocable, (ii)
shall be given not later than 12:00 Noon (Pittsburgh,
Pennsylvania time) in the case of a conversion to or renewal of,
either in whole or in part, (1) the Prime Rate Option or the CD
Rate Option, not less than one (1) Business Day prior to the
proposed effective date for such conversion or renewal or (2) the
Eurodollar Rate Option, not less than three (3) Business Days
prior to the proposed effective date for such conversion or
renewal, and (iii) shall set forth:
(A) the effective date of such conversion or renewal,
which shall be a Business Day;
(B) the new Eurodollar Rate Interest Period(s) or CD
Rate Interest Period(s), as the case may be, selected; and
(C) with respect to each such Eurodollar Rate Interest
Period or CD Rate Interest Period, the aggregate principal
amount of the corresponding Eurodollar Rate Loan or CD Rate
Loan.
At the expiration of each Eurodollar Rate Interest Period or CD
Rate Interest Period, any part (including the whole) of the
principal amount of the corresponding Eurodollar Rate Loan or CD
Rate Loan as to which no notice of conversion or renewal has been
received shall automatically be converted to the Prime Rate
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Option. The Agent shall promptly notify the Borrower and the
Banks of any such automatic conversion.
2.2f Notification of Election of an Interest Rate Option.
Other than as set forth in Subsection 2.2e above, the Borrower,
by a Senior Officer, shall notify the Agent of each election of
an Interest Rate Option, each conversion from one Interest Rate
Option to another, the amount of the Revolving Credit Loans then
outstanding to be allocated to each Interest Rate Option and,
where relevant, the Interest Periods therefor, all as provided
for in this Credit Agreement. Any such communication may be oral
or written and if oral it shall be followed immediately by
written confirmation of such Interest Rate Option election
executed by a Senior Officer.
2.2g Calculation of Interest. Interest on any Prime Rate
Loans shall be calculated on the basis of a 365 or 366 day year,
as the case may be, and the actual days elapsed. Interest on
each Eurodollar Rate Loan or CD Rate Loan shall be calculated on
the basis of a 360-day year and the actual days elapsed. The
calculation of the amount of interest due and owing to the Banks
shall be evidenced by posting the amount of interest due under
the Revolving Credit Notes to the Loan Account established by
each Bank pursuant to Section 2.7.
2.2h Lawful Interest Rates Intended. In no event whatsoever
shall the interest rates charged hereunder exceed the highest
rate permissible under any law which a court of competent
jurisdiction shall, in a final determination, deem applicable
hereto. In the event that such a court determines that any Bank
has received interest hereunder in excess of the highest
applicable rate, such Bank shall promptly refund such excess to
the Borrower, or at such Bank's option, apply such excess in
reduction of the principal balance of the Bank Indebtedness owing
to the affected Bank.
2.3 Voluntary Prepayments.
2.3a Prepayments of Prime Rate Loans. The Borrower may
prepay, at any time and from time to time, without penalty or
premium, any or all of the Prime Rate Loans.
2.3b Prepayments of Eurodollar Rate Loans and CD Rate Loans.
Except as otherwise provided in Subsection 2.1(g), the Borrower,
upon oral or written notice to the Agent by a Senior Officer
given at least one (1) Business Day prior to the proposed date
for repayment, may prepay, all or any part of a Eurodollar Rate
Loan or CD Rate Loan. If such Eurodollar Rate Loan or CD Rate
Loan is prepaid on the last day of the Eurodollar Rate Interest
Period or CD Rate Interest Period applicable thereto, such
prepayment shall be without premium or penalty. If the Borrower
prepays a Eurodollar Rate Loan or CD Rate Loan other than on the
last day of the Eurodollar Rate Interest Period or CD Rate
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Interest Period applicable thereto, the Borrower agrees to pay
such additional amounts as may be necessary to compensate each
Bank making such Eurodollar Rate Loan or CD Rate Loan for any
loss (including loss of profit on a pre-tax basis) and any direct
or indirect costs, including the costs of reemployment of funds
prepaid at rates lower than the cost to such Bank of such funds.
Such losses and costs shall be specified in writing to the
Borrower by the affected Bank. Such writing and the calculations
therein shall be prima facie evidence as to the amount of such
losses and costs due to such affected Bank from the Borrower.
Such prepayment shall include the then outstanding principal
amount of the Eurodollar Rate Loan or CD Rate Loan being prepaid
together with accrued interest, fees and other amounts then due
and payable on the amount prepaid, to the day of such prepayment.
Except as provided in this Section 2.3b, there shall be no
voluntary prepayment of any Eurodollar Rate Loan or CD Rate Loan.
2.4 Yield Protection. Notwithstanding Section 2.2 hereof:
(a) If any change subsequent to the Closing Date in
any Governmental Rule or in the interpretation or application
thereof by any Governmental Person or the compliance with any
guideline or request from any Governmental Person, shall make it
unlawful for any Bank to maintain or give effect to their
obligations as contemplated under the Revolving Credit Commit-
ment, such Bank shall notify the Borrower and the Agent. There-
after, such Bank's obligation to make available any further
Revolving Credit Loans hereunder shall forthwith be cancelled and
the Borrower, within thirty (30) days, or within such longer
period as may be allowed by law, if any, shall (i) repay to such
Bank so affected the outstanding principal amount of all
Revolving Credit Loans together with interest thereon to the date
of repayment and fees, if any, due as of the date of termination;
provided, however, that the affected Bank's obligations which are
lawful, if severable from those which are unlawful, shall
continue, and with respect to those obligations, this Credit
Agreement shall not terminate.
(b) If any Governmental Rule issued after the Closing
Date (including, without limitation, Regulation D issued by the
Board of Governors of the Federal Reserve System), or if any
change on or after the Closing Date in any Governmental Rule
(including, without limitation, Regulation D) or in the
interpretation thereof by any Governmental Person charged with
the administration thereof, shall
(i) subject any Bank to any tax, levy, impost,
charge, fee, duty, deduction or withholding or any kind
hereunder (other than any tax imposed or based upon the
income of the Banks and payable to any governmental or
taxing authority in the United States of America or any
state thereof); or
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(ii) change the basis of taxation of any Bank
with respect to payments of principal or interest or
other amounts due hereunder (other than any change
which affects, and only to the extent that it affects,
the taxation by the United States or any state thereof
of the total net income of the Banks); or
(iii) impose, modify or deem applicable any
reserve, special deposit or similar requirements
against assets held by any Bank (other than such
requirements which result solely to a change in the
credit quality of the Borrower or which are included in
the determination of the applicable rate or rates of
interest hereunder); or
(iv) impose upon any Bank any other obligation or
condition with respect to this Credit Agreement,
and the result of any of the foregoing is to increase the cost to
such Bank, reduce the income receivable by such Bank or impose
any expenses upon such Bank with respect to the Revolving Credit
Loans by an amount which such Bank reasonably deems material,
then and in any such case:
(i) the Bank so affected shall promptly notify
the Borrower and the Agent of the happening of such
event;
(ii) the Borrower shall pay to the affected Bank,
on demand, as additional interest on the Revolving
Credit Loans, such amount as will compensate such Bank
for such additional cost or reduced amount, calculated
from the date of the notification by such Bank; and
(iii) the Borrower may pay the affected Revolving
Credit Loan in full without the payment of any addi-
tional amount other than on account of such Bank's
out-of-pocket losses (including funding losses, if any,
as provided in paragraph (c) below) not otherwise
provided for in subparagraph (ii) immediately above.
A certificate as to the increased cost or reduced amount as a
result of any of the foregoing events shall be promptly submitted
by the affected Bank to the Borrower and the Agent and it shall
constitute prima facie evidence of the amount thereof.
(c) The Borrower agrees to indemnify each Bank against
any loss or expense which such Bank may sustain or incur in
liquidating or employing deposits from third parties acquired to
effect, fund or maintain such Eurodollar Rate Loans, CD Rate
Loans or any part thereof as a consequence of (i) the Borrower's
failure to make a payment on the due date thereof, (ii) the
Borrower's failure to borrow under, convert to or renew under the
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Eurodollar Rate Option or CD Rate Option on the proposed
effective date of such borrowing, conversion or renewal, or (iii)
the Borrower's payment, prepayment or conversion of any
Eurodollar Rate Loans or CD Rate Loans for any reason on a day
other than the last day of the Eurodollar Rate Interest Period or
CD Rate Interest Period applicable thereto. Any Bank's
determination of an amount payable under this paragraph (c) shall
constitute prima facie evidence of the amount thereof and shall
be payable on demand.
2.5 Special Provisions Relating to the Eurodollar Rate
Option and CD Rate Option.
2.5a CD Rate or Eurodollar Rate Unascertainable. In the
event that on any date on which a CD Rate Option or Eurodollar
Rate Option would otherwise be set, the Agent shall have
determined (which determination shall be final and conclusive)
that, by reason of circumstances affecting either (i) the
secondary market for negotiable certificates of deposit
maintained by dealers of recognized standing or (ii) the
interbank eurodollar market, adequate and reasonable means do not
exist for ascertaining the CD Rate or the Eurodollar Rate, the
Agent shall give prompt notice of such determination to the
Borrower and the Banks. Until the Agent notifies the Borrower
and the Banks that the circumstances giving rise to such
determination no longer exist, the right of the Borrower to
borrow under, convert to or renew the CD Rate Option or the
Eurodollar Rate Option, as the case may be, shall be suspended.
Any notice of borrowing under, conversion to or renewal of the CD
Rate Option or the Eurodollar Rate Option which was to become
effective during the period of such suspension shall be treated
as a request to borrow under, convert to or renew the Prime Rate
Option with respect to the principal amount therein specified.
2.5b Inability to Offer Eurodollar Rate or CD Rate. In the
event that any Bank shall determine, in its sole discretion, that
it is unable to obtain deposits in the interbank eurodollar
market (in the case of Eurodollar Rate Portions) or negotiable
certificates of deposits (in the case of CD Rate Portions) in
sufficient amounts and with maturities related to such Eurodollar
Rate Portions or CD Rate Portions which would enable such Bank to
fund such Eurodollar Rate Portions or CD Rate Portions, then such
Bank shall notify the Borrower and the Agent that the right of
the Borrower to borrow under, convert to or renew the Eurodollar
Rate Option or CD Rate Option, as the case may be, shall be
suspended with respect to such Bank. Following notification of
the suspension of the Eurodollar Rate Option or CD Rate Option
with respect to such Bank, the Borrower agrees to negotiate with
such Bank for a modified or alternative fixed rate of interest,
which will allow such Bank to realize its anticipated and
bargained-for yield. In the event that the Borrower and such
Bank cannot agree on a modified or alternative fixed rate of
interest, any notice of borrowing under, conversion to or renewal
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of the Eurodollar Rate Option or the CD Rate Option which was to
become effective during the period of suspension shall be treated
as a request to borrow under, convert to or renew the Prime Rate
Option with respect to the principal amount specified therein
attributable to such Bank.
2.5c Illegality. If any Bank shall determine in good faith
(which determination shall be final and conclusive) that
compliance with any Governmental Rule (whether or not having the
force of law) or the interpretation or application thereof by any
Governmental Person, has made it unlawful or impractical for such
Bank to make or maintain the Revolving Credit Loans under the
Eurodollar Rate Option or the CD Rate Option, such Bank shall
give notice of such determination to the Borrower and the Agent.
Notwithstanding any provision of this Credit Agreement to the
contrary, unless and until such Bank shall have given notice to
the Borrower and the Agent that the circumstances giving rise to
such determination no longer apply:
(i) with respect to any Eurodollar Rate Interest
Periods or CD Rate Interest Periods thereafter commencing,
interest on an amount equal to such Bank's Commitment
Percentage of the corresponding Eurodollar Rate Loan or CD
Rate Loan shall be computed and payable under the Prime Rate
Option; and
(ii) on such date, if any, as shall be required by
law, an amount equal to such Bank's Commitment Percentage of
any Eurodollar Rate Loan or CD Rate Loan, as the case may
be, then outstanding shall be automatically converted to the
Prime Rate Option and the Borrower shall pay to such Bank
the accrued and unpaid interest on such amounts to (but not
including) such conversion date.
The Borrower shall pay any such Bank any additional amounts
reasonably necessary to compensate such Bank for any costs
incurred by such Bank as a result of any conversion pursuant to
clause (ii) above which occurs on a day other than the last day
of the relevant Eurodollar Rate Interest Period or CD Rate
Interest Period, including, but not limited to, any interest or
fees payable by such Bank to lenders of funds obtained by them to
loan or maintain the lending of the Revolving Credit Loans so
converted. Such Bank shall furnish to the Borrower and the Agent
a certificate as to the amount necessary to compensate it for
such costs (which certificate shall constitute prima facie
evidence of the amount of such costs), and the Borrower shall pay
such amount to such Bank, as additional consideration hereunder,
within ten (10) days of the Borrower's receipt of such
certificate.
2.6 Capital Adequacy. If after the Closing Date (i) any
adoption of or any change in or in the interpretation of any
Governmental Rule, (ii) compliance with any Governmental Rule of
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any Governmental Person exercising control over banks or
financial institutions generally or any court (whether or not
having the force of law), or (iii) any change in the force or
effectiveness of the regulations set forth at 12 C.F.R. Part 3
(Appendix A), 12 C.F.R. Part 208 (Appendix A), 12 C.F.R. Part 225
(Appendix A) or 12 C.F.R. Part 325 (Appendix A) affects or would
affect the amount of capital required or expected to be
maintained by any Bank or any Person controlling such Bank (a
"Capital Adequacy Event"), and the result of such Capital
Adequacy Event is to reduce the rate of return on the capital of
such Bank or any Person controlling such Bank as a consequence
thereof to a level below that which such Bank could have achieved
but for such Capital Adequacy Event, taking into consideration
such Bank's policies with respect to capital adequacy, by an
amount which such Bank deems to be material, such Bank shall
deliver to the Borrower and the Agent a statement of the amount
necessary to compensate such Bank for the reduction in the rate
of return on its capital attributable to the commitments
hereunder (the "Capital Compensation Amount"). Each Bank shall
determine the Capital Compensation Amount in good faith, using
reasonable attribution and averaging methods. Each Bank shall,
from time to time, notify the Borrower and the Agent of the
amount so determined. Such amount shall be due and payable by
the Borrower to such Bank ten (10) days after such notice is
given. As soon as practicable after any Capital Adequacy Event,
such Bank shall submit to the Borrower and the Agent estimates of
the Capital Compensation Amounts that would be payable as a
function of such Bank's Revolving Credit Commitment hereunder.
2.7 Loan Account. Each Bank shall open and maintain on its
books a Loan Account in the name of the Borrower, with respect to
(i) Revolving Credit Loans made, repayments and prepayments of
the principal thereof, the computation and payment of interest
and (ii) the computation and payment of interest, Commitment Fees
and Conversion Fees due hereunder, and the computation of other
amounts due and sums paid to the Banks hereunder. The failure to
record any such amount shall not limit or otherwise affect the
obligations of the Borrower hereunder or under the Revolving
Credit Notes to repay all amounts owed hereunder and thereunder
together with all interest accrued thereon and all other fees and
charges provided herein. Each Loan Account shall constitute
prima facie evidence as to the amount at any time due to the
affected Bank from the Borrower.
2.8 All Advances to Constitute One Loan. Notwithstanding
the limitations set forth herein, all Revolving Credit Loans by
the Banks to the Borrower under this Credit Agreement and the
Revolving Credit Notes shall constitute one loan and all Bank
Indebtedness and obligations of the Borrower to the Banks under
this Credit Agreement and all other Loan Documents shall
constitute one general obligation of the Borrower secured by the
Collateral, if any, and by all other Encumbrances heretofore, now
or at any time hereafter granted by the Borrower to the Banks or
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to the Agent, for the benefit of the Banks. The Banks, the Agent
and the Borrower agree that all of the rights of the Banks, the
Agent and the Borrower set forth in this Credit Agreement and the
other Loan Documents shall apply to any amendment, modification
or extension of or supplement to this Credit Agreement and the
other Loan Documents.
2.9 Method of Disbursements and Payments. All Revolving
Credit Loans shall be made by the funding of a demand deposit
account of the Borrower maintained with the Agent. All payments
of principal, interest, Commitment Fees, Conversion Fees or other
costs relating to the Revolving Credit Loans, and all other
amounts due the Banks or the Agent hereunder shall be made
(except as otherwise specified pursuant to the terms of this
Credit Agreement) by the Borrower to the Agent at the Agent's
principal office by 12:00 Noon (Pittsburgh, Pennsylvania time) on
the due date therefor. All funds shall be immediately available
funds when either deposited in the account referred to above or
otherwise delivered by the Borrower to the Agent no later than
12:00 Noon (Pittsburgh, Pennsylvania time) on the date such
payment is due.
2.10 Payment from Accounts Maintained by Borrower. In the
event that any payment of principal, interest, Commitment Fee,
Conversion Fee, or any other amount due to the Banks or the Agent
under the Credit Agreement, the Revolving Credit Notes or the
other Loan Documents is not paid when due, the Agent is hereby
authorized to effect such payment by debiting any demand deposit
account of the Borrower maintained with the Agent (excluding
however any special purpose fiduciary accounts, which are
designated as such at the time of their creation, and mandated by
applicable statutes, regulations or rules) and distributing such
payment to the party to whom such amounts are due. This right of
debiting accounts of the Borrower are in addition to any right of
set-off accorded the Banks or the Agent hereunder or by operation
of law.
2.11 Time, Place, Manner and Application of Payments. All
payments to be made by the Borrower under the Revolving Credit
Notes (other than those provided for in Sections 2.4, 2.5 and 2.6
hereof), and of all fees and any other amounts due hereunder
shall be made at the principal office of the Agent. All payments
and prepayments of principal or interest on the Revolving Credit
Notes and of all fees and any other amounts due hereunder (other
than those provided for in Sections 2.4 and 2.5 hereof) shall be
applied pro rata to the obligations hereunder owed the Banks.
The Agent will promptly pay each such payment received to each
Bank or its order. All payments due a Bank by reason of Sections
2.4, 2.5 or 2.6 hereof shall be paid at the principal office of
the Bank which invoices the Borrower for such payment. All
payments to be made by the Borrower under this Credit Agreement
shall be paid in immediately available funds no later than 2:00
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P.M. (Pittsburgh, Pennsylvania time) on the date such payment is
due.
ARTICLE III
SET-OFF
To secure the repayment of the Bank Indebtedness, the
Borrower hereby confirms to each of the Banks, the Agent and any
Participant, regardless of the adequacy of any collateral, a
right of set-off for the amount of any Bank Indebtedness incurred
hereunder upon and in any instruments, securities or monies which
may at any time be delivered to, or be in the possession of, or
owed by any Bank, the Agent or any Participant in any capacity
whatever (exclusive of funds held in trust by the Borrower or by
any Bank, the Agent or Participant on behalf of employees of the
Borrower or others), including the balance of any deposit account
maintained by the Borrower with any Bank, the Agent or any
Participant, and authorizes any Bank, the Agent or such
Participant, upon the occurrence of an Event of Default, at such
Bank's, Participant's or the Agent's option, at any time and from
time to time, to apply, at the discretion of such Bank, the Agent
or any Participant, to the payment of the Bank Indebtedness, any
and all monies or deposit balances now or hereafter in the hands
of such Bank, the Agent or such Participant belonging or owed to
the Borrower. The exercise of the rights of set-off or banker's
lien by any Bank, the Agent or Participant is subject to the
provisions of Section 9.8 hereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Banks and the Agent to enter into this
Credit Agreement and to induce the Banks to make the Revolving
Credit Loans herein provided, the Borrower represents and
warrants to each of the Banks and the Agent that:
4.1 Corporate Existence. The Borrower and each of its
Subsidiaries is a corporation duly organized, validly existing
and in good standing under the laws of its respective state of
incorporation and it is duly qualified and in good standing as a
foreign corporation authorized to do business in each
jurisdiction where, because of the nature of its respective
properties or businesses, such qualification is required or, if
not so qualified or in good standing in any state, the lack of
such qualification or good standing will not materially affect
the Agent's or the Banks' ability to enforce this Credit
Agreement or the Revolving Credit Notes or will not materially
affect the Borrower's or such Subsidiary's ability to carry on
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its business or materially affect the Borrower's ability to
comply with this Credit Agreement or the Revolving Credit Notes.
4.2 Corporate Authority. The Borrower is duly authorized
to execute and deliver this Credit Agreement, the Revolving
Credit Notes and the other Loan Documents to which it is or will
become a party; all necessary corporate action to authorize the
execution and delivery of this Credit Agreement, the Revolving
Credit Notes and the other Loan Documents to which it is or will
become a party has been properly taken; and it is and will
continue to be duly authorized to borrow hereunder and to perform
all of the other terms and provisions of this Credit Agreement,
the Revolving Credit Notes and the other Loan Documents to which
it is or will become a party.
4.3 Enforceability. This Credit Agreement and the
Revolving Credit Notes have each been, and each other Loan
Document to which it will become a party will be, duly and
validly executed and delivered by the Borrower and each
constitutes or will constitute a valid and legally binding
agreement of the Borrower enforceable in accordance with its
terms.
4.4 No Restrictions. Neither the execution and delivery of
this Credit Agreement, the Revolving Credit Notes and the other
Loan Documents to which it is or will become a party, the
consummation of the transactions herein contemplated nor
compliance with the terms and provisions hereof or of the
Revolving Credit Notes, will conflict with or result in a breach
of any of the terms, conditions or provisions of the articles of
incorporation or the by-laws of the Borrower or of any law or of
any regulation, order, writ, injunction or decree of any court or
governmental agency or of any agreement, indenture or other
instrument to which the Borrower or any Subsidiary is a party or
by which it is bound or to which it is subject, or constitute a
default thereunder or result in the creation or imposition of any
Encumbrance of any nature whatsoever upon any of the property or
assets of the Borrower pursuant to the terms of any agreement,
indenture or other instrument except for Permitted Encumbrances.
4.5 Financial Statements. The Borrower has furnished to
the Banks and the Agent its consolidated balance sheets and the
related consolidated statements of income, shareholders' equity
and changes in financial position of the Borrower and its
Consolidated Subsidiaries as at and for the Borrower's fiscal
year ended January 2, 1994. All such financial statements,
including the related notes, have been prepared in accordance
with GAAP and fairly present the financial position and
consolidated financial position of the Borrower and its
Consolidated Subsidiaries as at the date thereof and the results
and consolidated results of their operations and the changes in
their financial position and in their consolidated financial
position for the periods ended on such date. There were no
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material liabilities of the Borrower or its Consolidated
Subsidiaries, contingent or otherwise, not reflected in such
financial statements. Except as has been fully disclosed in
writing to the Banks and the Agent, there has been no material
adverse change in the business, condition or operations
(financial or otherwise) of the Borrower since January 2, 1994.
4.6 Other Representations and Warranties. The Borrower
hereby makes and affirms the representations and warranties set
forth in Sections 4.4, 4.5, 4.8, 4.9 and 4.10 of the 1990 Credit
Agreement (which are incorporated herein by reference for all
purposes), all of which shall survive the execution and delivery
of this Credit Agreement and the making of the Revolving Credit
Loans.
4.7 Disclosure. Neither this Credit Agreement nor any
other document, certificate or statement furnished to the Banks
or the Agent by or on behalf of the Borrower pursuant to this
Credit Agreement contains any untrue statement of a material
fact. There is no fact known to the Borrower which materially
and adversely affects or in the future may (so far as the
Borrower now foresees) materially and adversely affect the
business, operations, affairs, condition, prospects, properties
or assets of the Borrower, taken as a whole, which has not been
set forth in this Credit Agreement or in the other documents,
certificates and statements (financial or otherwise) furnished to
the Banks or the Agent or otherwise disclosed in writing to the
Banks or the Agent by or on behalf of the Borrower prior to or on
the date hereof.
ARTICLE V
AFFIRMATIVE COVENANTS
5.1 Incorporation of Affirmative Covenants. From the date
hereof and thereafter until the expiration or termination of the
Revolving Credit Commitment and until the payment in full of all
Bank Indebtedness, the Borrower hereby agrees that, for the
benefit of the Banks and the Agent, that it will comply with each
of the affirmative covenants set forth in Article V of the 1990
Credit Agreement (which are incorporated herein by reference for
all purposes). For purposes of this Credit Agreement, any
amendment, modification, restatement, replacement, waiver or
release of any of the affirmative covenants under the 1990 Credit
Agreement which is approved or consented to by the "Required
Banks" (as defined in the 1990 Credit Agreement) or all of the
Banks party to the 1990 Credit Agreement shall, ipso facto,
modify the Borrower's obligations hereunder and shall be deemed
to be an amendment, modification, restatement, replacement,
waiver or release hereunder and shall be deemed to be
incorporated herein as if more fully set forth herein to the same
extent.
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5.2 Continuation of Incorporated Affirmative Covenants.
Notwithstanding the provisions of Section 5.1 above, if at any
time the 1990 Credit Agreement is terminated (whether pursuant to
its terms or otherwise), the affirmative covenants set forth in
Article V hereof as of the date of such termination shall remain
in full force and effect hereunder and shall survive such
termination for purposes of this Credit Agreement until the later
of the Repayment Date or the payment in full of the Bank
Indebtedness hereunder.
ARTICLE VI
NEGATIVE COVENANTS
6.1 Incorporation of Negative Covenants. From the date
hereof and thereafter until the expiration or termination of the
Revolving Credit Commitment and until the payment in full of all
Bank Indebtedness, the Borrower hereby agrees that, for the
benefit of the Banks and the Agent, that it will comply with each
of the negative covenants set forth in Article VI of the 1990
Credit Agreement (which are incorporated herein by reference for
all purposes). For purposes of this Credit Agreement, any
amendment, modification, restatement, replacement, waiver or
release of any of the negative covenants under the 1990 Credit
Agreement which is approved or consented to by the "Required
Banks" (as defined in the 1990 Credit Agreement) or all of the
Banks party to the 1990 Credit Agreement shall, ipso facto,
modify the Borrower's obligations hereunder and shall be deemed
to be an amendment, modification, restatement, replacement,
waiver or release hereunder and shall be deemed to be
incorporated herein as if more fully set forth herein to the same
extent.
6.2 Continuation of Incorporated Negative Covenants.
Notwithstanding the provisions of Section 6.1 above, if at any
time the 1990 Credit Agreement is terminated (whether pursuant to
its terms or otherwise), the negative covenants set forth in
Article VI hereof as of the date of such termination shall remain
in full force and effect hereunder and shall survive such
termination for purposes of this Credit Agreement until the later
of the Repayment Date or the payment in full of the Bank
Indebtedness hereunder.
ARTICLE VII
CONDITIONS PRECEDENT TO ALL REVOLVING CREDIT LOANS
7.1 All Revolving Credit Loans. The obligation of each
Bank to make any Revolving Credit Loans hereunder is subject to
the satisfaction of each of the following conditions precedent:
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7.1a Request for a Revolving Credit Loan. Receipt by the
Agent, of a Request for Revolving Credit Loan substantially in
the form of Exhibit "B" hereto and satisfying the requirements of
Section 2.1 hereof.
7.1b Receipt of Conversion Fee. Receipt by the Agent, for
the pro rata benefit of the Banks, of the Conversion Fee
applicable to the amount being requested by the Borrower, if such
funds are not presently Available Funds.
7.1c No Default. The Borrower shall have performed and com-
plied with all agreements and conditions herein required to be
performed or complied with by it prior to the making of a
Revolving Credit Loan and at the time of such advance or
conversion, no condition or event shall exist which constitutes
or which after the giving of notice, the lapse of time or both,
would constitute an Event of Default.
7.1d Representations Correct. The representations and
warranties of the Borrower contained in Article IV and otherwise
made in writing by or on behalf of the Borrower in connection
with the transactions contemplated thereby shall be true and
correct in all respects when made at the time of each Revolving
Credit Loan except to the extent that such representations and
warranties relate solely to an earlier date (in which case, such
representations and warranties shall have been true and correct
as of such date).
Each Request for Revolving Credit Loan and the
Revolving Credit Loan made pursuant to each such request shall be
deemed to be, as of the date thereof, a certification by the
Borrower as to the accuracy of the matters set forth in
Subsections 7.1c and 7.1d above.
7.2 Conditions Precedent to the Initial Revolving Credit
Loan. The obligation of each Bank to make the initial Revolving
Credit Loan under this Credit Agreement is subject to the
satisfaction of each of the following conditions precedent in
addition to the applicable conditions precedent set forth in
Section 7.1 above:
(i) Credit Agreement. Receipt by the Agent of
counterpart originals of this Credit Agreement, duly executed by
the Borrower and each Bank, for redelivery to the Banks.
(ii) Revolving Credit Notes. The Borrower shall have
delivered to the Agent for redelivery to each Bank duly executed
Revolving Credit Notes.
(iii) Borrower's Corporate Documents.
(A) Resolutions. The Borrower shall have
delivered to the Agent, for redelivery to each Bank, a copy, duly
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certified as of the date of the Closing by the secretary or
assistant secretary of the Borrower, of the resolutions of the
Borrower's Board of Directors authorizing the borrowings
hereunder and the execution and delivery of this Credit Agreement
and the Revolving Credit Notes, along with all other documents
evidencing necessary corporate action and all other approvals or
consents, if any, required to be obtained by the Borrower with
respect to the execution and delivery of this Credit Agreement
and the Revolving Credit Notes.
(B) By-Laws. The Borrower shall have delivered
to the Agent, for redelivery to the Banks, a copy, duly certified
as of the date of the Closing by the secretary or assistant
secretary of the Borrower, of the Borrower's by-laws and all
amendments thereto.
(C) Incumbency Certificate. The Borrower shall
have delivered to the Agent, for redelivery to each Bank, a
certificate of its secretary or assistant secretary certifying
the names of the officers of the Borrower authorized to sign this
Credit Agreement, the Revolving Credit Notes, and all other
documents or certificates to be delivered hereunder, together
with the true signatures of such officers.
(D) Articles of Incorporation. Receipt by the
Agent, for redelivery to the Banks, of a copy of the Borrower's
Articles of Incorporation and all amendments thereto, certified
by the Secretary of State of the Commonwealth of Pennsylvania.
(E) Good Standing Certificates. Receipt by the
Agent, for redelivery to the Banks, of certificates of good
standing issued by the Secretaries of State of the states of
Pennsylvania, Connecticut, Illinois, Indiana, New York and
Oklahoma; provided, however that the parties hereto agree that
the certificates of good standing for the states of Connecticut,
Illinois, Indiana, New York and Oklahoma may be delivered after
the Closing Date but must be delivered prior to the initial
Revolving Credit Loan hereunder.
(iv) Opinion of Counsel for the Borrower. The
Borrower shall have delivered to the Agent, for redelivery to the
Banks, the favorable opinion of Mary W. Snyder, Esquire,
Corporate Counsel and Assistant Secretary of the Borrower as to
the due authorization, execution, delivery and enforceability of
this Credit Agreement and the Revolving Credit Notes and such
other matters as the Agent and the Agent's special counsel may
reasonably require.
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ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Each of the events described in Sections 8.1 through
and including Section 8.5 shall constitute an Event of Default
under this Credit Agreement:
8.1 Nonpayment of Bank Indebtedness. The Borrower shall
default (i) in the payment of principal of any of the Revolving
Credit Notes when due or (ii) in the payment of interest on any
Revolving Credit Note when due or in the payment of any fee or
expense when due and such default in payment of interest or any
fee or expense shall have continued for a period of five (5)
Business Days after the scheduled payment date thereof.
8.2 Insolvency.
8.2a Involuntary Proceedings. A proceeding shall have been
instituted in a court having jurisdiction seeking a decree or
order for relief in respect of the Borrower or any Subsidiary in
an involuntary case under the Federal bankruptcy laws, or any
other similar applicable Federal or state law, now or hereafter
in effect, or for the appointment of a receiver, liquidator,
trustee, sequestrator or similar official for the Borrower or any
Subsidiary or for a substantial part of its property, or for the
winding up or liquidation of its affairs, and such shall remain
undismissed or unstayed and in effect for a period of thirty (30)
days.
8.2b Voluntary Proceedings. The Borrower or any Subsidiary
shall institute proceedings to be adjudicated a voluntary
bankrupt, or shall consent to the filing of a bankruptcy
proceeding against it, or shall file a petition or answer or
consent seeking reorganization under the Federal bankruptcy laws,
or any other similar applicable Federal or state law now or
hereinafter in effect, or shall consent to the filing of any such
petition or shall consent to the appointment of a receiver,
liquidator, trustee, sequestrator or similar official for the
Borrower or any Subsidiary or for a substantial part of its
property, or shall make an assignment for the benefit of
creditors, or shall admit in writing its inability or the ability
of any Subsidiary to pay its debts generally as they become due,
or corporate action shall be taken by the Borrower or any
Subsidiary in furtherance of any of the aforesaid purposes.
8.3 Dissolution. The Borrower shall terminate its
existence or cease to exist or any Subsidiary (other than any
Subsidiary the capital of which is less than $2,000,000 on the
date hereof) shall terminate its existence or cease to exist,
except by reason of a merger into or a consolidation with the
Borrower or a Consolidated Subsidiary.
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8.4 Misrepresentation. Any representation or warranty made
by the Borrower herein or in connection herewith is untrue in any
material respect as of the date when made, or any schedule,
statement, report, notice or writing furnished by the Borrower to
the Agent or the Banks is untrue in any material respect on the
dates as of which the facts set forth are stated or certified.
8.5 Failure to Comply with Covenants.
8.5a Failure to Comply with Article VI Covenants. The
Borrower shall default in the observance or performance of any
covenant contained in Article VI.
8.5b Failure to Comply with Other Covenants. The Borrower
shall default in the due performance or observance of any other
covenant, condition or provision set forth herein and such
default shall not be remedied for a period of thirty (30) days
after such default is known to any Senior Officer of the Borrower
or notice thereof has been given to the Borrower by the holder of
any of the Revolving Credit Notes.
8.6 Event of Default under 1990 Credit Agreement. An Event
of Default as defined in the 1990 Credit Agreement shall have
occurred. Notwithstanding the foregoing sentence, if at any time
the 1990 Credit Agreement is terminated (whether by its terms or
otherwise), the Events of Default set forth in Sections 8.2, 8.5
and 8.6 of the 1990 Credit Agreement shall be deemed to be
incorporated herein by reference as if more fully set forth
herein and shall be deemed to survive the termination of the 1990
Credit Agreement for the purposes of this Section 8.6.
8.7 Consequences of an Event of Default.
8.7a Consequence of an Event of Default Set Forth in
Sections 8.2 and 8.3. Upon the occurrence of an Event of Default
set forth in Section 8.2 or 8.3 hereof, the Revolving Credit
Commitment of the Banks under this Credit Agreement shall
automatically terminate and the Revolving Credit Loans then
outstanding shall become immediately due and payable, without
necessity of demand, presentation, protest, notice of dishonor or
notice of default. Thereafter, the Banks shall have no further
obligation to make any additional Revolving Credit Loans
hereunder or to permit or allow the election or renewal of any CD
Rate Option or any Eurodollar Rate Option and the Agent and the
Banks shall have the full panoply of rights and remedies granted
to them under this Credit Agreement and all those rights and
remedies granted by law to creditors. No exercise of one right
or remedy shall be deemed a waiver of other rights or remedies.
8.7b Consequences of Remaining Events of Default. During
the continuance of any Event of Default set forth in Section 8.1,
8.4 or 8.5 hereof (unless remedied or cured to the Required
Banks' satisfaction or waived), the Banks shall have no further
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obligation to make any additional Revolving Credit Loans here-
under or to permit or allow the election or renewal of any CD
Rate Option or any Eurodollar Rate Option; and the Agent, upon
written request of the Required Banks, shall, by written or
facsimile notice to the Borrower, declare the Revolving Credit
Commitment terminated and the Revolving Credit Loans then out-
standing and interest accrued thereon and all other liabilities
of the Borrower hereunder to the Banks and the Agent to be
forthwith due and payable. Thereupon the Revolving Credit
Commitment shall be terminated and all amounts due hereunder and
under any Revolving Credit Loans then outstanding shall be due
and payable without presentment, demand, protest or other notice
of any kind to the Borrower, all of which are hereby expressly
waived. In addition, the Agent and the Banks shall have the full
panoply of rights and remedies granted to them under this Credit
Agreement and all those rights and remedies granted by law to
creditors. No exercise of one right or remedy shall be deemed a
waiver of other rights or remedies.
8.8 Rights and Remedies. The rights and remedies of the
Agent and the Banks specified herein are for the sole and
exclusive benefit, use and protection of the Agent and the Banks,
and the Agent and the Banks shall be entitled, but shall have no
duty or obligation, to exercise or to refrain from exercising any
right or remedy reserved to the Agent or the Banks hereunder.
ARTICLE IX
AGREEMENT AMONG BANKS
9.1 Appointment and Grant of Authority. Each of the Banks
hereby appoints PNC Bank, National Association, and PNC Bank,
National Association hereby agrees to act as, the initial
administrative agent under this Credit Agreement and the other
Loan Documents. As such Agent, PNC Bank, National Association
shall have and may exercise such powers under this Credit
Agreement as are specifically delegated to the Agent, by the
terms hereof or of the other Loan Documents, together with such
other powers as are incidental thereto. Without limiting the
foregoing, the Agent, on behalf of the Banks, is authorized to
execute all of the Loan Documents (other than this Credit
Agreement) and to accept all of the Loan Documents and all other
agreements, documents or instruments reasonably required to carry
out the intent of the parties to this Credit Agreement.
9.2 Non-Reliance on Agent. Each Bank agrees that it has,
independently and without reliance on the Agent, based on such
documents and information as it has deemed appropriate, made its
own credit analysis and evaluation of the Borrower and its
operations and decision to enter into this Credit Agreement and
that it will, independently and without reliance upon the Agent,
and based on such documents and information as it shall deem
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appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Credit
Agreement. Except as otherwise provided herein, the Agent shall
have no duty to keep the Banks informed as to the performance or
observance by the Borrower of this Credit Agreement or any other
document or instrument referred to or provided for herein or to
inspect the properties or books of the Borrower. The Agent, in
the absence of gross negligence or willful misconduct, shall not
be liable to any Bank for its failure to relay or furnish to the
Bank any information. The preceding provisions of this Section
9.2 to the contrary notwithstanding, the Agent shall notify each
of the Banks as soon as practicable after it receives a notice of
an Event of Default from the Borrower.
9.3 Responsibility of Agent and Other Matters.
9.3a Ministerial Nature of Duties. As among the Banks and
themselves, the Agent shall have no duties or responsibilities
except those expressly set forth in this Credit Agreement or in
the other Loan Documents, and those duties and responsibilities
shall be subject to the limitations and qualifications set forth
in this Article IX. The duties of the Agent shall be ministerial
and administrative in nature.
9.3b Limitation of Liability. As among the Banks and
themselves, neither the Agent nor any of its directors, officers,
employees or agents shall be liable for any action taken or
omitted (whether or not such action taken or omitted is within or
without the Agent's responsibilities and duties expressly set
forth in this Credit Agreement) under or in connection with this
Credit Agreement or any other instrument or document in
connection herewith except for gross negligence or willful
misconduct. Without limiting the foregoing, neither the Agent
nor any of its directors, officers or employees shall be
responsible for, or have any duty to examine (i) the genuineness,
execution, validity, effectiveness, enforceability, value or
sufficiency of (A) this Credit Agreement or any of the other Loan
Documents or (B) any other document or instrument furnished
pursuant to or in connection with this Credit Agreement, (ii) the
collectibility of any amounts owed by the Borrower to the Banks,
(iii) the truthfulness of any recitals, statements,
representations or warranties made to the Agent or the Banks in
connection with this Credit Agreement, (iv) any failure of any
party to this Credit Agreement to receive any communication sent,
including any telegram, teletype, facsimile transmission or
telephone message or any writing, application, notice, report,
statement, certificate, resolution, request, order, consent
letter or other instrument or paper or communication entrusted to
the mails or to a delivery service, or (v) the assets,
liabilities, financial condition, results of operations or
business, or creditworthiness of the Borrower.
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9.3c Reliance. The Agent shall be entitled to act, and
shall be fully protected in acting upon, any telegram, teletype,
facsimile transmission or any writing, application, notice,
report, statement, certificate, resolution, request, order,
consent, letter or other instrument, paper or communication
believed by the Agent in good faith to be genuine and correct and
to have been signed or sent or made by a proper Person. The
Agent may consult counsel and shall be entitled to act, and shall
be fully protected in any action taken in good faith, in
accordance with advice given by counsel. The Agent may employ
agents and attorneys-in-fact and shall not be liable for the
default or misconduct of any such agents or attorneys-in-fact
selected by the Agent with reasonable care. The Agent shall not
be bound to ascertain or inquire as to the performance or obser-
vance of any of the terms, provisions or conditions of this
Credit Agreement or any of the other Loan Documents on the part
of the Borrower or any other party thereto.
9.4 Action on Instructions. The Agent shall be required to
act and shall be fully protected in so acting and shall be
entitled to refrain from acting, and shall be fully protected in
refraining from so acting, under this Credit Agreement, the other
Loan Documents or any other instrument or document executed or
delivered in connection herewith or therewith, in accordance with
written instructions from the Required Banks or, in the case of
the matters set forth in items (A) through (G) of Section 10.1,
from all of the Banks.
9.5 Indemnification. To the extent the Borrower does not
reimburse and save harmless the Agent according to the terms
hereof for and from all costs, expenses and disbursements in
connection herewith, such costs, expenses and disbursements shall
be borne by the Banks ratably in accordance with their respective
Commitment Percentages. Each Bank hereby agrees on such basis
(i) to reimburse the Agent for such Bank's pro rata share of all
such reasonable costs, expenses and disbursements on request and
(ii) to the extent of each such Bank's pro rata share, to
indemnify and save harmless the Agent against and from any and
all losses, obligations, penalties, actions, judgments and suits
and other costs, expenses and disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted
against the Agent, other than as a consequence of gross
negligence or willful misconduct on the part of the Agent,
arising out of or in connection with this Credit Agreement, the
other Loan Documents or any other agreement, instrument or
document executed or delivered in connection herewith or
therewith, or any request of the Required Banks or all of the
Banks, as the case may be, including without limitation the
reasonable costs, expenses and disbursements in connection with
defending themselves against any claim or liability, or answering
any subpoena or other process related to the exercise or
performance of any of their powers or duties under this Credit
Agreement, the other Loan Documents, or any of the other
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agreements, instruments or documents executed or delivered in
connection herewith or the taking or refraining from any action
under or in connection with any of the foregoing.
9.6 Agent's Rights as a Bank. With respect to the Commit-
ment of the Agent as a Bank hereunder, and any Revolving Credit
Loans of the Agent under this Credit Agreement, the other Loan
Documents and any other agreements, instruments and documents
delivered pursuant hereto and any other amounts due to the Agent
under this Credit Agreement, the Agent shall have the same rights
and powers, duties and obligations under this Credit Agreement,
the other Loan Documents or other agreement, instrument or
document as any Bank and may exercise such rights and powers and
shall perform such duties and fulfill such obligations as though
it were not the Agent. The Agent may accept deposits from, lend
money to, and generally engage, and continue to engage, in any
kind of business with the Borrower as if it were not the Agent.
9.7 Payment to Banks. Promptly after receipt from the
Borrower of any principal repayment of the Revolving Credit
Loans, interest due on the Revolving Credit Loans and any
Commitment Fees or Conversion Fees owing to the Banks or other
amounts due under any of the Loan Documents (except for such
amounts which are payable for the sole account of any Bank or the
Agent), the Agent shall distribute to each Bank that Bank's
Commitment Percentage of the funds so received.
9.8 Pro Rata Sharing. All interest and principal payments
on the Revolving Credit Loans and all Commitment Fees and
Conversion Fees are to be divided pro rata among the Banks in
accordance with their respective Commitment Percentages. Any
sums obtained from the Borrower by any Bank by reason of the
exercise of its rights of set-off, banker's lien or in collection
shall be shared (net of costs) pro rata among the Banks. Nothing
in this Section 9.8 shall be deemed to require the sharing among
the Banks of collections specifically relating to, or of the
proceeds of any collateral securing, any other Indebtedness of
the Borrower to any Bank.
9.9 Successor Agent.
9.9a Resignation of Agent. The Agent may resign as adminis-
trative agent hereunder by giving ninety (90) days' prior written
notice to the Banks and the Borrower. If such notice shall be
given, the Banks shall appoint a successor agent for the Banks,
during such ninety (90) day period, which successor agent shall
be reasonably satisfactory to the Borrower, to serve as agent
hereunder and under the several Loan Documents. If at the end of
such ninety (90) day period, the Banks have not appointed such a
successor, the Agent shall use reasonable commercial efforts to
procure a successor reasonably satisfactory to the Banks and the
Borrower, to serve as agent for the Banks hereunder and under the
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several Loan Documents. Any such successor agent shall succeed
to the rights, powers and duties of the Agent.
9.9b Rights of the Former Agent. Upon the appointment of
such successor agent or upon the expiration of such ninety (90)
day period (or any longer period to which the Agent has agreed),
the former Agent's rights, powers and duties as Agent shall be
terminated, without any other or further act or deed on the part
of such former Agent or any of the parties to this Credit Agree-
ment. After any retiring Agent's resignation hereunder as
administrative agent hereunder, the provisions of this Article IX
shall inure to the benefit of such retiring Agent as to any
actions taken or omitted to be taken by it while it was Agent
under this Credit Agreement.
ARTICLE X
GENERAL PROVISIONS
10.1 Amendments and Waivers.
10.1a Amendments to Credit Agreement, Revolving Credit Notes
and the Other Loan Documents. Subject to the remaining
provisions of this Section 10.1, the Agent, the Banks and the
Borrower may, from time to time, enter into amendments,
extensions, renewals, modifications, supplements and replacements
to and of this Credit Agreement, the Revolving Credit Notes or
the other Loan Documents and the Banks or the Required Banks, as
the case may be, may, from time to time, waive compliance with a
provision thereof. No amendment, renewal, modification,
extension, supplement, replacement or waiver of any provision of
the Credit Agreement, the Revolving Credit Notes or the other
Loan Documents, consent to any departure therefrom by the
Borrower shall be effective unless it is in writing and is signed
by the Required Banks (or the Agent with the written consent of
the Required Banks), and then such waiver or consent shall be
effective only for the specific instance and for the specific
purpose for which it is given; provided, however, that no
amendment, renewal, modification, waiver or consent, unless in
writing and signed by all of the Banks (or the Agent with the
written consent of all of the Banks), shall do any of the
following:
(A) increase the Revolving Credit Commitment of any
Bank or subject any Bank to any additional obligations
hereunder;
(B) except for changes permitted by Subsection 2.1g
hereof or changes made pursuant to an Assignment and
Assumption Agreement, change any Bank's Commitment
Percentage or the aggregate or individual unpaid principal
amount of the Revolving Credit Notes, or forgive the payment
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of the principal or interest payable on the Revolving Credit
Notes;
(C) waive an Event of Default in the payment of
principal and/or interest due hereunder and under any of the
Revolving Credit Notes;
(D) decrease the interest rate relating to the
Revolving Credit Loans;
(E) postpone any date fixed for any payment of
principal of, interest on the Revolving Credit Loans, the
Commitment Fee, the Conversion Fee or any other obligations
of the Borrower set forth in Article II, including but not
limited to, any change to the Repayment Date;
(F) reduce the Commitment Fee or the Conversion Fee;
or
(G) amend the definition of the term "Required Banks",
amend or waive the provisions of this Section 10.1 or change
in any manner whatsoever, the number of Banks which shall be
required to take any action under this Credit Agreement.
Any such supplemental agreement shall apply equally to the
Borrower and each of the Banks and shall be binding upon the
Borrower, the Banks, the Agent and all future holders of the
Revolving Credit Notes. In the case of any waiver, the Borrower,
the Banks and the Agent shall be restored to their former
positions and rights, and any Event of Default waived shall be
deemed to be cured and not continuing, but no such waiver shall
extend to any subsequent or other Event of Default, or impair any
right consequent thereon.
10.2 Expenses. The Borrower shall pay:
(i) All reasonable costs and expenses of the Agent
(including without limitation the reasonable fees and
disbursements of the Agent's special counsel, Tucker
Arensberg, P.C.), incurred in connection with the
preparation, negotiation, execution and delivery of this
Credit Agreement and the other Loan Documents and any and
all other documents and instruments prepared in connection
herewith, including but not limited to all amendments,
extensions, modifications, replacements, waivers, consents
and other documents and instruments prepared or entered into
from time to time, including after the Closing Date;
(ii) All reasonable costs and expenses of the Agent
and the Banks (including without limitation the reasonable
fees and disbursements of the Agent's and the Banks'
counsels) in connection with (A) the enforcement of this
Credit Agreement and the other Loan Documents arising
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pursuant to a breach by the Borrower of any of the terms,
conditions, representations, warranties or covenants of any
Loan Document to which it is a party, and (B) defending or
prosecuting any actions, suits or proceedings relating to
any of the Loan Documents.
All of such costs and expenses shall be payable by the Borrower
to the Banks or the Agent, as the case may be, upon demand or as
otherwise agreed upon by the Banks or the Agent and the Borrower,
and shall constitute Bank Indebtedness under this Credit
Agreement. The Borrower further agrees to pay, and save the
Agent and the Banks harmless from any and all liability for, any
stamp or other taxes which may be payable with respect to the
execution or delivery of this Credit Agreement or the issuance of
the Revolving Credit Notes. The Borrower's obligation to pay
such costs and expenses shall survive the termination of this
Credit Agreement and the repayment of the Bank Indebtedness.
10.3 Notices.
10.3a Notice to the Borrower. All notices required to be
delivered to the Borrower pursuant to this Credit Agreement shall
be in writing and shall be sent to the following address, by hand
delivery, recognized national overnight courier service,
telegram, facsimile transmission or other means of electronic
data communications or by the United States mail, first class,
postage prepaid:
If by U.S. Mail: If by other means:
If by United States Mail: If by other means:
Allegheny Ludlum Corporation Allegheny Ludlum Corporation
1000 Six PPG Place 1000 Six PPG Place
Pittsburgh, Pennsylvania 15222 Pittsburgh, Pennsylvania 15222
Attn: Treasurer Attn: Treasurer
Telecopier: (412) 394-2805
Telephone: (412) 394-2822
10.3b Notice to the Agent. All notices required to be
delivered to the Agent pursuant to this Credit Agreement shall be
in writing and shall be sent to the following address, by hand
delivery, recognized national overnight courier service,
telegram, facsimile transmission or other means of electronic
data communications or by the United States mail, first class,
postage prepaid:
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If by U.S. Mail: If by other means:
PNC Bank, National Association PNC Bank, National Association
Multi-Bank Loan Administration Multi-Bank Loan Administration
One PNC Plaza - 19th Floor One PNC Plaza - 19th Floor
Pittsburgh, Pennsylvania 15222 Pittsburgh, Pennsylvania 15222
Attention: James P. Mikula Attention: James P. Mikula
Managing Director Managing Director
Telephone: (412) 762-8341
Telecopier: (412) 762-7568
with a copy to:
PNC Bank, National Association PNC Bank, National Association
Pittsburgh Group Pittsburgh Group
One PNC Plaza, Second Floor One PNC Plaza, Second Floor
Pittsburgh, Pennsylvania 15222 Pittsburgh, Pennsylvania 15222
Attention: Robert H. Friend Attention: Robert H. Friend
Assistant Vice Assistant Vice
President President
Telephone: (412) 762-2328
Telecopier: (412) 762-6484
10.3c Notice to the Banks. All notices required to be
delivered to the Banks pursuant to this Credit Agreement shall be
in writing and shall be sent to the address set forth on the
signature pages of the Credit Agreement, by hand delivery,
recognized national overnight courier service, telegram,
facsimile transmission or other means of electronic data
communication or by the United States mail, first class, postage
prepaid.
10.3d Receipt of Notices. All such notices shall be
effective three (3) days after mailing, the date of electronic
transmission or when received, whichever is earlier. The
Borrower, the Banks and the Agent may each change the address for
service of notice upon it by a notice in writing to the other
parties hereto.
10.4 Tax Withholding. At least five (5) Business Days prior
to the first date on which interest or fees are payable hereunder
for the account of each Bank, each Bank that is not incorporated
under the laws of the United States of America or a state thereof
agrees that it will deliver to the Agent and the Borrower two (2)
duly completed copies of either (i) IRS Form W-9, 1001 or 4224 or
such other applicable form prescribed by the IRS, certifying in
each case that such Bank is entitled to receive payments under
this Credit Agreement or its Revolving Credit Note without
deduction or withholding of United States federal income taxes,
or is subject to such tax at a reduced rate under an applicable
tax treaty or (ii) IRS Form W-8 or such other applicable form
prescribed by the IRS or a certificate of such Bank indicating
that no such exemption or reduced rate of taxation is allowable
39
<PAGE>
with respect to such payments. Each Bank which delivers an IRS
Form W-8, W-9, 4224 or 1001 further undertakes to deliver to the
Agent and the Borrower two (2) additional copies of any such form
(or any successor form) on or before the date on which that form
expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form so delivered by it,
and such amendments thereto or extensions or renewals thereof as
may be reasonably requested by the Borrower or the Agent, either
certifying that such Bank is entitled to receive payments under
this Credit Agreement or its Revolving Credit Note without
deduction or withholding of any United States federal income
taxes or is subject to such tax at a reduced rate under an
applicable tax treaty or stating the date on which that no such
exemption or reduced rate is allowable. The Agent shall be
entitled to withhold, from each payment hereunder or under the
Revolving Credit Note payable to it, United States federal income
taxes at the full withholding rate unless each Bank referred to
in the first sentence of this Section 10.4 establishes an
exemption or at the applicable reduced rate established pursuant
to the above provisions.
10.5 Pro Rata Actions. All references to actions hereunder
of any Bank which require such action to be taken pro rata shall
require lending, payment, a commitment or voting in accordance
with such Bank's Commitment Percentage.
10.6 Successors and Assigns. This Credit Agreement shall be
binding upon the Borrower, the Agent and the Banks and their
respective successors and assigns, and shall inure to the benefit
of the Borrower, the Agent and the Banks and the successors and
assigns of the Agent and the Banks.
10.7 Assignments and Participations.
10.7a Assignments. Subject to the remaining provisions of
this Subsection 10.7a, any Bank, at any time, in the ordinary
course of its commercial banking business and in accordance with
applicable law, may sell to one or more Purchasing Banks, a
portion or all of its rights and obligations under this Credit
Agreement and the Revolving Credit Note then held by it, pursuant
to as Assignment and Assumption Agreement substantially in the
form of Exhibit "C" executed by the Transferor Bank, such
Purchasing Bank and the Agent; subject, however to the following
requirements:
(i) Each such assignment must be in a minimum amount
of $1,000,000, or, if in excess thereof, in integral
multiples of $500,000; and
(ii) During the first ninety (90) days following the
Closing Date, each assignment made shall become effective
only on a date which coincides with the expiration date of
any Eurodollar Rate Interest Period or CD Rate Interest
40
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Period then in effect, unless the Agent agrees to waive this
provision.
provided, however the restrictions set forth in item (i) above
shall not apply in the case of any assignment by any Transferor
Bank upon the occurrence and during the continuation of an Event
of Default.
Upon the execution, delivery, acceptance and recording of any
such Assignment and Assumption Agreement, from and after the
Transfer Effective Date determined pursuant to such Assignment
and Assumption Agreement, all parties hereto agree that (a) the
Purchasing Bank thereunder shall be a party hereto as a Bank and,
to the extent provided in such Assignment and Assumption
Agreement, shall have the rights and obligations of a Bank
hereunder with a Revolving Credit Commitment as set forth
therein, and (b) the Transferor Bank thereunder shall, to the
extent provided in such Assignment and Assumption Agreement, be
released from its obligations as a Bank under this Credit
Agreement. Such Assignment and Assumption Agreement shall be
deemed to amend this Credit Agreement (without further action) to
the extent, and only to the extent, necessary to reflect the
addition of such Purchasing Bank as a Bank and the resulting
adjustment of Commitment Percentages arising from the purchase by
such Purchasing Bank of all or a portion of the rights and
obligations of such Transferor Bank under this Credit Agreement
and its Revolving Credit Note. On or prior to the Transfer
Effective Date, the Borrower shall execute and deliver to the
Agent, in exchange for the surrendered Revolving Credit Note held
by the Transferor Bank, a new Revolving Credit Note to the order
of such Purchasing Bank in an amount equal to the Revolving
Credit Commitment or the Revolving Credit Loans assumed by it and
purchased by it pursuant to such Assignment and Assumption
Agreement, and a new Revolving Credit Note to the order of the
Transferor Bank in an amount equal to the Revolving Credit
Commitment or the Revolving Credit Loans retained by it
hereunder.
In addition to the assignments permitted above, any Bank may
assign and pledge all or any portion of its Revolving Credit
Loans and Revolving Credit Note to any Federal Reserve Bank as
collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any Operating
Circular issued by such Federal Reserve Bank. No such assignment
shall release the assigning Bank from its obligations and duties
hereunder.
10.7b Assignment Register. The Agent shall maintain, at its
address referred to in Subsection 10.3b, a copy of each
Assignment and Assumption Agreement delivered to it and a
register (the "Register") for the recordation of the names and
addresses of the Banks and the amount of the Revolving Credit
Loans owing to each Bank from time to time. The entries in the
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Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Agent and the Banks may treat each Person
whose name is recorded in the Register as the owner of the
Revolving Credit Loans recorded therein for all purposes of this
Credit Agreement. The Register shall be available at the office
of the Agent set forth in Subsection 10.3b for inspection by
either Borrower or any Bank at any reasonable time and from time
to time upon reasonable prior notice.
10.7c Participations. Each Bank, in the ordinary course of
its commercial banking business and in accordance with applicable
law, may sell to one or more Participants a participating
interest in any Revolving Credit Loan owing to such Bank, the
interest of such Bank in any Revolving Credit Note or the
Revolving Credit Commitment of such Bank. In the event of any
such sale by a Bank of a participating interest to a Participant,
such Bank's obligations under this Credit Agreement to the other
parties to this Credit Agreement shall remain unchanged, such
Bank shall remain solely responsible for the performance thereof,
such Bank shall remain the holder of its Revolving Credit Note
for all purposes under this Credit Agreement (including voting
rights hereunder), and the Borrower, the other Banks and the
Agent shall continue to deal solely and directly with such Bank
in connection with such Bank's rights and obligations under this
Credit Agreement or its Revolving Credit Note.
10.8 Severability. Any provision of this Credit Agreement
which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
10.9 Survival. All representations, warranties, covenants
and agreements of the Borrower contained herein or in the other
Loan Documents or made in writing in connection herewith or
therewith shall survive the issuance of the Revolving Credit
Notes and shall continue in full force and effect so long as the
Borrower may borrow hereunder and so long thereafter until
payment in full of all the Revolving Credit Notes and the Bank
Indebtedness.
10.10 Governing Law. This Credit Agreement, each Revolving
Credit Note and each other Loan Document shall be a contract made
under, governed by and construed in accordance with the laws of
the Commonwealth of Pennsylvania without reference to the
provision thereof regarding conflicts of law except where such
law is superseded by applicable Federal law.
10.11 Non-Business Days. Except as otherwise specifically
required pursuant to the terms of this Credit Agreement, whenever
any payment hereunder or under the Revolving Credit Notes is due
and payable on a day which is not a Business Day, such payment
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may be made on the next succeeding Business Day, and such
extension of time shall in each such case be included in
computing interest in connection with such payment.
10.12 Integration. This Credit Agreement constitutes the
entire agreement between the parties relating to this financing
transaction and it supersedes all prior understandings and
agreements, whether written or oral, between the parties hereto
concerning the subject matter of this Credit Agreement.
10.13 Headings. Article, Section and other headings used in
this Credit Agreement are intended for convenience only and shall
not affect the meaning or construction of this Credit Agreement.
10.14 Counterparts. This Credit Agreement and any amendment,
modification, extension or renewal hereto or hereof may be
executed in several counterparts and by each party on a separate
counterpart, each of which, when so executed and delivered, shall
be an original, but all of which together shall constitute but
one and the same instrument. In proving this Credit Agreement or
any amendment, modification, extension or renewal, it shall not
be necessary to produce or account for more than one such
counterpart signed by the other party against whom enforcement is
sought.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound hereby, have caused this Credit Agreement to be
executed by their respective officers thereunto duly authorized
as of the date first written above.
ATTEST: ALLEGHENY LUDLUM CORPORATION
s\Cynthia L. Schmidt By: s\ Robert S. Park
Cynthia L. Schmidt Robert S. Park
Asst. Secretary Treasurer
PNC BANK, NATIONAL
ASSOCIATION, in its capacity
as the Agent hereunder
By: s\ Robert H. Friend
Robert H. Friend
Assistant Vice President
44
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IN WITNESS WHEREOF, intending to be legally bound
hereby, the undersigned Bank has caused this Credit Agreement by
and among ALLEGHENY LUDLUM CORPORATION, THE BANKS PARTY HERETO
and PNC BANK, NATIONAL ASSOCIATION, as the Agent to be executed
by its duly authorized officers as of the date first above
written.
Revolving Credit Commitment: PNC BANK, NATIONAL ASSOCIATION
$31,000,000
Commitment Percentage:
62.00% By: s\ Robert H. Friend
Robert H. Friend
Assistant Vice President
Addresses for notice purposes:
If by United States Mail: If by other means:
PNC Bank, National Association PNC Bank, National Association
Multi-Bank Loan Administration Multi-Bank Loan Administration
One PNC Plaza - 18th Floor One PNC Plaza - 18th Floor
Pittsburgh, Pennsylvania 15222 Pittsburgh, Pennsylvania 15222
Attention: James P. Mikula Attention: James P. Mikula
Managing Director Managing Director
Telephone: (412) 762-8341
Telecopier: (412) 762-7658
With a copy to:
PNC Bank, National Association
Pittsburgh Group
One PNC Plaza - 2nd Floor
Pittsburgh, Pennsylvania 15222
Attention: Robert H. Friend
Assistant Vice
President
Telephone: (412) 762-2328
Telecopier: (412) 762-6484
Address for Eurodollar Rate Loan Funding if different from above:
____________________________
____________________________
____________________________
____________________________
Telephone: _______________
Telecopier: _______________
Telex: ____________________
45
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IN WITNESS WHEREOF, intending to be legally bound
hereby, the undersigned Bank has caused this Credit Agreement by
and among ALLEGHENY LUDLUM CORPORATION, THE BANKS PARTY HERETO
and PNC BANK, NATIONAL ASSOCIATION, as the Agent to be executed
by its duly authorized officers as of the date first above
written.
Revolving Credit Commitment: CONTINENTAL BANK N.A.
$13,000,000
Commitment Percentage:
26.00% By: s\ John M. Dillon
Name: John M. Dillon
Title: Vice President
Addresses for notice purposes:
If by United States Mail: If by other means:
____________________________ ______________________________
____________________________ ______________________________
____________________________ ______________________________
____________________________ ______________________________
Telephone: _________________
Telecopier: _________________
Telex: ______________________
Address for Eurodollar Rate Loan Funding if different from above:
____________________________
____________________________
____________________________
____________________________
Telephone: _______________
Telecopier: _______________
Telex: ____________________
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<PAGE>
IN WITNESS WHEREOF, intending to be legally bound
hereby, the undersigned Bank has caused this Credit Agreement by
and among ALLEGHENY LUDLUM CORPORATION, THE BANKS PARTY HERETO
and PNC BANK, NATIONAL ASSOCIATION, as the Agent to be executed
by its duly authorized officers as of the date first above
written.
Revolving Credit Commitment: THE CHASE MANHATTAN BANK
$6,000,000 (NATIONAL ASSOCIATION)
Commitment Percentage:
12.00% By: s\ Alex Rapetski
Name: Alex Rapetski
Title: Vice President
Addresses for notice purposes:
If by United States Mail: If by other means:
The Chase Manhattan Bank The Chase Manhattan Bank
National Association National Association
One Chase Manhattan Plaza One Chase Manhattan Plaza
New York, New York 10081 New York, New York 10081
Attention: Loretta Fava Attention: Loretta Fava
Telephone: (212) 552-7529
Telecopier: (212) 552-1477
Address for Eurodollar Rate Loan Funding if different from above:
____________________________
____________________________
____________________________
____________________________
Telephone: _______________
Telecopier: _______________
Telex: ____________________
47
Exhibit 11
Allegheny Ludlum Corporation
Computation of Per Share Earnings
(Dollars and Shares in Thousands
Except Per Share Amounts)
Fiscal Quarter Ended
--------------------
PRIMARY April 3, 1994 April 4, 1993
------------- --------------
Net Income $18,118 $18,272
------ ------
Weighted average number of
common shares 70,939 65,829
Per share of common stock:
Net Income $.26 $.28
FULLY DILUTED
- - -------------
Net Income $18,118 $18,272
Tax effected interest related
to 5 - 7/8% convertible
subordinated debentures 843 886
------ ------
Adjusted Net Income $18,961 $19,158
------ ------
Weighted average number of common
shares 70,939 65,829
Weighted average number of
convertible subordinated debenture
common shares on an "if converted"
basis 4,938 4,938
Weighted average number of common
shares related to employee stock
plans (1) 597 388
------ ------
76,474 35,772
Net income per share of
common stock $.25 $.27
====== ======
(1) Not used in primary calculation due to dilution being
less than 3%.
<PAGE>
