<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
-------------------------
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
-------------------------
Commission file number 1-9678
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ARCO Chemical Company
(Exact name of registrant as specified in its charter)
-------------------------
Delaware 51-0104393
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3801 West Chester Pike
Newtown Square, Pennsylvania 19073-2387
(Address of principal executive offices) (Zip Code)
-------------------------
(610) 359-2000
(Registrant's telephone number, including area code)
-------------------------
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
-------------------------
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, $1.00 par value, outstanding as of
June 30, 1997: 96,976,290.
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<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. ARCO CHEMICAL COMPANY AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
CONSOLIDATED STATEMENTS OF INCOME
(Millions of Dollars, Except Per Share Data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- --------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Sales and other operating revenues $ 956 $ 959 $ 1,985 $ 1,941
Costs and other operating expenses 795 743 1,639 1,473
----- ----- ------- -------
Gross profit 161 216 346 468
Selling, general and administrative
expenses 67 70 135 133
Research and development 20 21 41 39
----- ----- ------- -------
Operating income 74 125 170 296
Interest expense (20) (21) (42) (43)
Other (expense) income, net (1) 9 (2) 18
----- ----- ------- -------
Income before income taxes 53 113 126 271
Provision for income taxes 18 32 43 84
----- ----- ------- -------
Net income $ 35 $ 81 $ 83 $ 187
===== ===== ======= =======
Earnings per common share $ .36 $ .84 $ .86 $ 1.94
===== ===== ======= =======
Cash dividends paid per common share $ .70 $ .70 $ 1.40 $ 1.40
===== ===== ======= =======
</TABLE>
See accompanying notes.
<PAGE>
ARCO CHEMICAL COMPANY
CONSOLIDATED BALANCE SHEETS
(Millions of Dollars)
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
---- ----
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 88 $ 70
Accounts receivable 592 629
Inventories 513 536
Prepaid expenses and other current assets 37 37
------- -------
Total current assets 1,230 1,272
Investments and long-term receivables 65 71
Property, plant and equipment, net 2,553 2,622
Deferred charges and other assets (net of
accumulated amortization of $111 in 1997
and $312 in 1996) 425 429
------- -------
Total assets $ 4,273 $ 4,394
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 200 $ 150
Long-term debt due within one year 24 25
Accounts payable 296 349
Taxes payable 28 19
Other accrued liabilities 230 229
------- -------
Total current liabilities 778 772
------- -------
Long-term debt 806 844
Other liabilities and deferred credits 183 171
Deferred income taxes 377 408
Minority interest 215 185
Stockholders' equity:
Common stock 100 100
Additional paid-in capital 877 875
Retained earnings 1,010 1,062
Foreign currency translation 8 64
Treasury stock, at cost (81) (87)
------- -------
Total stockholders' equity 1,914 2,014
------- -------
Total liabilities and stockholders' equity $ 4,273 $ 4,394
======= =======
</TABLE>
See accompanying notes.
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<PAGE>
ARCO CHEMICAL COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions of Dollars)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities
Net income $ 83 $ 187
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 116 109
Changes in working capital accounts (1) (25)
Other 12 (14)
----- -----
Net cash provided by operating activities 210 257
----- -----
Cash flows from investment activities
Capital expenditures (127) (95)
Proceeds from asset sales 20 22
Proceeds from short-term investments -- 25
Other 15 8
----- -----
Net cash used in investment activities (92) (40)
----- -----
Cash flows from financing activities
Dividends paid (136) (135)
Repayment of long-term debt (172) (15)
Proceeds from issuance of long-term debt 158 --
Net proceeds from notes payable 46 --
Other 8 9
----- -----
Net cash used in financing activities (96) (141)
----- -----
Effect of exchange rate changes on cash (4) (3)
----- -----
Net increase in cash and cash equivalents 18 73
Cash and cash equivalents at beginning of year 70 235
----- -----
Cash and cash equivalents at end of period $ 88 $ 308
===== =====
</TABLE>
See accompanying notes.
- 3 -
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
NOTE A. Basis of Presentation
The foregoing financial information is unaudited and has been
prepared from the records of ARCO Chemical Company (the Company). In the opinion
of management, the financial information reflects all adjustments (consisting
only of items of a normal recurring nature) necessary for a fair statement of
financial position and results of operations in conformity with generally
accepted accounting principles. Certain amounts in 1996 have been reclassified
for comparative purposes. These interim financial statements should be read in
conjunction with the consolidated financial statements for the year ended
December 31, 1996.
NOTE B. Geographic Information
The Company is an international manufacturer of intermediate
chemicals and specialty chemical products which it principally markets to other
industrial concerns. The Company operates in one industry segment. The
geographic distribution of the Company's markets is indicated by the table
below. Total revenues are summarized geographically by destination (customer
location) and by origin (point of sale); intercompany sales between geographic
areas are excluded.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ -----------------------
1997 1996 1997 1996
---- ---- ---- ----
(Millions of Dollars)
<S> <C> <C> <C> <C>
Total revenues (by destination)
United States $ 480 $ 501 $ 1,011 $ 1,017
Europe 255 265 519 546
Other foreign 221 193 455 378
----- ----- ------- -------
Total $ 956 $ 959 $ 1,985 $ 1,941
===== ===== ======= =======
Total revenues (by origin)
United States $ 582 $ 569 $ 1,221 $ 1,130
Europe 277 311 569 648
Other foreign 97 79 195 163
----- ----- ------- -------
Total $ 956 $ 959 $ 1,985 $ 1,941
===== ===== ======= =======
Pretax earnings
United States $ 105 $ 121 $ 196 $ 263
Europe (32) 21 (30) 61
Other foreign -- (8) 2 (10)
Interest expense (20) (21) (42) (43)
----- ----- ------- -------
Total $ 53 $ 113 $ 126 $ 271
===== ===== ======= =======
</TABLE>
Pretax earnings include royalty charges made to foreign operations
for the use of Company technology.
- 4 -
<PAGE>
NOTE C. Inventories
Inventories at June 30, 1997 and December 31, 1996 comprised the
following categories:
<TABLE>
<CAPTION>
1997 1996
---- ----
(Millions of Dollars)
<S> <C> <C>
Finished goods $365 $392
Work-in-process 35 38
Raw materials 68 62
Materials and supplies 45 44
---- ----
Total $513 $536
==== ====
NOTE D. Property, Plant and Equipment, Net
Property, plant and equipment, at cost, and related accumulated
depreciation at June 30, 1997 and December 31, 1996 were as follows:
<CAPTION>
1997 1996
---- ----
(Millions of Dollars)
<S> <C> <C>
Property, plant and equipment $4,107 $4,152
Less: accumulated depreciation 1,554 1,530
------ ------
Total $2,553 $2,622
====== ======
</TABLE>
NOTE E. Contingencies
The Company and its subsidiaries are involved in a number of
lawsuits, all of which have arisen in the ordinary course of the Company's
business. The Company is unable to predict the outcome of these matters, but
does not believe, based upon currently available facts, that the ultimate
resolution of such matters will have a material adverse effect on the
consolidated financial statements of the Company.
The Company is subject to other loss contingencies pursuant to
federal, state, local, and foreign environmental laws and regulations. These
contingencies include possible obligations to remove or mitigate the effects on
the environment of the past disposal or release of certain chemical substances
at various sites (remediation costs). The Company continues to evaluate the
amount of these remediation costs and periodically adjusts its reserve for
remediation costs and its estimate of additional environmental loss
contingencies based on progress made in determining the magnitude, method and
timing of the remedial actions that may be required by government authorities
and an evaluation of the Company's potential liability in relation to the
liability and financial resources of any other potentially responsible parties.
At June 30, 1997, the Company's environmental reserve totaled
$48 million, which reflected the Company's latest assessment of potential future
remediation costs associated with existing sites. A significant portion of the
reserve is related to the Beaver Valley plant site, located in Monaca,
Pennsylvania. The reserve
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<PAGE>
gives recognition to a work plan, between the Company and the Pennsylvania
Department of Environmental Protection (PADEP), for testing, risk assessment,
remedial process design and remediation of conditions at the Beaver Valley
plant. The reserve also reflects an agreement between the Company and another
responsible party whereby that party has agreed to pay for approximately 50
percent of the costs associated with the Beaver Valley plant work plan. The
Company sold the Beaver Valley plant assets to NOVA Chemicals Inc. (NOVA) on
September 30, 1996, but currently retains ownership of the land at the Beaver
Valley plant site, substantial portions of which are being leased to NOVA. The
Company has retained responsibility for certain remediation of the land at the
Beaver Valley plant site under the work plan and for certain additional
remediation that may be required by PADEP pursuant to the Pennsylvania Land
Recycling and Environmental Remediation Standards Act.
The remainder of the reserve is related to four other plant sites
and one federal Superfund site for amounts ranging from $2 million to $14
million per site. The Company is involved in administrative proceedings or
lawsuits relating to eight other Superfund sites. However, the Company
estimates, based on currently available information, that potential loss
contingencies associated with these sites, individually and in the aggregate,
are not significant. Substantially all amounts reserved are expected to be paid
out over the next five to ten years.
The Company relies upon remedial investigation/feasibility studies
(RI/FS) at each site as a basis for estimating remediation costs at the site.
The Company has completed RI/FS or preliminary assessments at most of its sites.
However, selection of the remediation method and the cleanup standard to be
applied are, in most cases, subject to approval by the appropriate government
authority. Accordingly, the Company may have possible loss contingencies in
excess of the amounts reserved to the extent the scope of remediation required,
the final remediation method selected and the cleanup standard applied vary from
the assumptions used in estimating the reserve. The Company estimates that the
upper range of these possible loss contingencies should not exceed the amount
accrued by more than $65 million.
The extent of loss related to environmental matters ultimately
depends upon a number of factors, including technological developments, changes
in environmental laws, the number and ability to pay of other parties involved
at a particular site and the Company's potential involvement in additional
environmental assessments and cleanups. Based upon currently known facts,
management believes that any remediation costs the Company may incur in excess
of the amounts reserved or disclosed above would not have a material adverse
impact on the Company's consolidated financial statements.
The Company and the other principal responsible party (PRP) at the
Beaver Valley site have reached an agreement with the U.S. government whereby
the government will pay 28.5 percent of the costs incurred by the Company and
the other PRP for remediation of substantial portions of the Beaver Valley site.
The Company and the Atlantic Richfield Company (ARCO) are parties to
an agreement whereby the Company has indemnified ARCO against certain claims or
liabilities that ARCO may incur relating to ARCO's former ownership and
operation of the oxygenates and polystyrenics businesses of the Company,
including liabilities under laws relating to the protection of the environment
and the workplace and liabilities arising out of certain litigation. ARCO has
indemnified the Company with respect to claims or liabilities and other matters
of litigation not related to the assets or businesses reflected in the
consolidated financial statements. ARCO has also indemnified the Company for
certain federal, foreign, state, and local taxes that might be assessed upon
audit of the operations of the Company included in its consolidated financial
statements for periods prior to the July 1, 1987 formation of the Company.
- 6 -
<PAGE>
NOTE F. Earnings Per Common Share
Earnings per common share for the three- and six-month periods ended
June 30, 1997 are computed based on 96.9 million weighted average shares
outstanding. Earnings per common share for the three- and six-month periods
ended June 30, 1996 are computed based on 96.6 million weighted average shares
outstanding. The effect of stock options issued under the 1987 Executive Long-
Term Incentive Plan and the 1990 Long-Term Incentive Plan on the computation of
primary and fully diluted earnings per common share was not material.
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings Per
Share," establishing standards for computing and presenting earnings per share
(EPS). SFAS No. 128 is effective for financial statements issued for periods
ending after December 15, 1997 and requires restatement of all prior-period EPS
data presented. Earlier application is not permitted. The implementation of SFAS
No. 128 is not expected to have a material effect on the reported EPS of the
Company.
NOTE G. Supplemental Cash Flow Information
Following is supplemental cash flow information for the six months
ended June 30, 1997 and 1996:
<TABLE>
<CAPTION>
1997 1996
---- ----
(Millions of Dollars)
<S> <C> <C>
Changes in working capital-increase (decrease) in cash:
Accounts receivable $ (1) $ 24
Inventories 14 (40)
Prepaid expense and other current assets (9) (30)
Accounts payable (24) 61
Taxes payable 10 (20)
Other accrued liabilities 9 (20)
------- -------
Changes in working capital accounts $ (1) $ (25)
======= =======
Short-term investments:
Gross proceeds from maturities $ - 139
Gross purchases - (114)
------- -------
Net proceeds $ - $ 25
======= =======
Notes payable:
Gross proceeds from issuances $ 962 $ -
Gross repayments (916) -
------- -------
Net proceeds $ 46 $ -
======= =======
The above changes exclude the effects of foreign exchange rate changes.
Cash paid during the period for:
Interest (net of amount capitalized) $ 42 $ 47
======= ======
Income taxes $ 26 $ 97
======= ======
</TABLE>
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<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
The Company manufactures and markets intermediate chemicals and
specialty products, operating in a single industry segment. It conducts business
primarily in the Americas, Europe, and the Asia Pacific region.
Each of the Company's two principal manufacturing processes yields
its key product, propylene oxide (PO), and one of two co-products, styrene
monomer (SM) or tertiary butyl alcohol (TBA). The Company also manufactures
numerous derivatives of PO and TBA. Among these are polyols, a key derivative of
PO, and methyl tertiary butyl ether (MTBE), a principal derivative of TBA. The
Company also manufactures and markets toluene diisocyanate (TDI). TDI and
polyols are combined in the manufacture of polyurethanes. MTBE is used in
oxygenated fuels and as an octane additive.
During the second quarter 1997, the Company initiated a
restructuring program designed to reduce annual fixed and controllable costs,
currently about $750 million, by about $150 million. The program seeks to
simplify the organization and streamline processes in plant operations,
commercial activities, corporate staff functions, and research and development.
The restructuring efforts are expected to continue through the end of 1998, with
the cost reductions substantially in place by 1999. A key element of the program
is the reduction of 800 to 1,100 employee and contractor positions on a current
base of 5,300 positions. The Company expects to take a special charge to
earnings in the second half of 1997 to account for the costs of the
restructuring program.
Results of Operations
Product Volumes
Sales and other operating revenues include the sales and processing
volumes of the Company's core products and co-products for the periods indicated
below. Core products include PO, PO derivatives, and TDI.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
1997 1996 1997 1996
---- ---- ---- ----
(Millions)
<S> <C> <C> <C> <C>
Core products (pounds) 974 834 1,976 1,729
Co-products:
SM and derivatives (pounds) 627 691 1,335 1,350
TBA and derivatives (gallons) 260 257 520 532
</TABLE>
The reported SM volumes include quantities processed for PO/SM II equity
partners (SM equity volumes) under long-term processing arrangements. The SM
equity volumes averaged approximately 200 million pounds per
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<PAGE>
quarter in both 1997 and 1996. The 1996 data include SM derivatives sales
volumes for periods prior to the September 30, 1996 sale of the plastics
business.
Second Quarter 1997 versus Second Quarter 1996
Net Income
Net income for the second quarter 1997 was $35 million compared with
$81 million in the second quarter 1996. The $46 million decline was primarily
due to lower margins for most products and increased costs as a result of
scheduled maintenance turnarounds, partly offset by the benefit from higher PO
and derivatives volumes.
Revenues
Revenues of $956 million in the second quarter 1997 were comparable
to revenues of $959 million in the second quarter 1996, as lower average sales
prices offset the benefit of higher sales volumes. The lower average 1997 sales
prices were primarily due to lower prices for PO derivatives, TDI, and MTBE,
partly offset by higher prices for PO. Factors contributing to the lower 1997
prices included stronger price competition in PO derivatives and TDI markets,
the expiration of most of the Company's long-term MTBE contracts, and the effect
of a stronger U.S. dollar.
Volumes for core products increased 17 percent in the second quarter
1997 versus the prior year period. The increase reflected higher volumes for PO
derivatives and, to a lesser extent, TDI. PO derivatives volumes benefited from
improved demand and temporary supply shortages for certain products. TDI volumes
were higher due to the Olin acquisition and the increased availability of TDI
from a plant in France. The French plant was under repair and operated at
restricted rates in the 1996 period. The loss of SM derivatives volumes through
the sale of the plastics business was essentially offset by increased SM volumes
processed for the buyer of the plastics business. Other SM volumes declined due
to the timing of export shipments.
Gross Profit
Gross profit of $161 million in the second quarter 1997 decreased
$55 million from $216 million in the 1996 second quarter, reflecting lower
margins for most products and higher maintenance costs. Gross profit was 16.8
percent of sales in the second quarter 1997 compared to 22.5 percent in the 1996
period. The decline in gross profit margins is due to the combined effect of
lower sales prices and higher costs for most feedstocks in the second quarter
1997 versus the 1996 period. Turnaround costs of $23 million in the 1997 period
were $16 million higher, reflecting an increase in the number of scheduled plant
maintenance turnarounds versus the prior year period. The Company estimates that
plant turnaround costs will total $23 million in the second half of 1997.
Other
Other expense of $1 million in 1997 compared to income of $9 million
in 1996. The $10 million decrease is primarily due to a benefit from an
insurance settlement included in the second quarter 1996 and lower interest
income as a result of lower levels of cash and cash equivalents in the 1997
period.
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<PAGE>
The Company expects its 1997 effective tax rate to be 34.0 percent
compared to a 28.3 percent effective tax rate used in the second quarter 1996
and a final 1996 effective tax rate of 28.5 percent. The final 1996 rate
reflected utilization of capital loss carryforwards and the utilization of
foreign tax credits pursuant to the tax sharing agreement with ARCO.
Six Months Ended June 30, 1997 versus 1996
Net Income
Net income for the six months ended June 30, 1997 was $83 million
compared with $187 million for the comparable 1996 period. The $104 million
decline was primarily due to lower margins for PO derivatives, TDI, and MTBE,
which were only partly offset by the benefit from higher core product volumes.
Maintenance costs were also higher due to an increase in the number of scheduled
plant turnarounds in 1997.
Revenues
Revenues of $1,985 million in the first six months of 1997 increased
two percent compared to revenues of $1,941 million in the first six months of
1996, as higher net volumes were substantially offset by lower average sales
prices. Volumes for core products increased 14 percent in the first six months
of 1997 versus the prior year period. The increase reflected higher TDI volumes
due to the Olin acquisition and the increased availability of TDI from the plant
in France. Core product sales also reflected higher volumes for PO derivatives,
which benefited from improved demand and temporary supply shortages for certain
products. SM volumes declined slightly; the loss of SM derivatives volumes
through the sale of the plastics business were essentially replaced by increased
SM volumes processed for the buyer of the plastics business. TBA and derivative
volumes decreased two percent, mainly due to a weak MTBE market in the first
quarter 1997.
Average sales prices were generally lower in the 1997 period versus
1996. Contributing to the weakness in 1997 prices were stronger competition in
PO derivatives and TDI markets, expiration of most of the Company's long-term
MTBE contracts, industry concerns over SM capacity additions in Asia, and the
effect of a stronger U.S. dollar.
Gross Profit
Gross profit of $346 million in the first six months of 1997
decreased $122 million from $468 million in the 1996 period, reflecting lower
margins for most products and increased plant turnaround maintenance costs.
Gross profit was 17.4 percent of sales in the 1997 period compared to 24.1
percent in the 1996 period. The decline in gross profit margins is due to the
combined effect of lower sales prices and higher feedstock costs in the 1997
period versus the 1996 period.
Other
Other expense of $2 million in the 1997 period compared to income of
$18 million in the 1996 period. The $20 million decrease reflects the benefit of
an insurance settlement included in the 1996 period, lower interest income as a
result of lower levels of cash and cash equivalents in the 1997 period, and
higher foreign exchange losses in 1997 due to the stronger U.S. dollar.
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<PAGE>
The Company expects its 1997 effective tax rate to be 34.0 percent
compared to a 31.0 percent effective tax rate used in the first six months of
1996 and a final 1996 effective tax rate of 28.5 percent. The final 1996 rate
reflected utilization of capital loss carryforwards and the utilization of
foreign tax credits pursuant to the tax sharing agreement with ARCO.
Financial Condition
Liquidity and Capital Resources
As of June 30, 1997, the company had $88 million in cash and cash
equivalents compared with $70 million at December 31, 1996. The Consolidated
Statement of Cash Flows for the six months ended June 30, 1997 shows that net
cash flows provided by operating activities were $210 million, whereas net cash
flows used by investment and financing activities were $92 million and $96
million, respectively.
Investment activities for the first six months 1997 included capital
expenditures of $127 million. The Company's 1997 budget for plant and equipment
is $453 million and is part of a five-year, $2.6 billion program primarily
devoted to capacity expansion and growth. Minority interest includes equity
contributions designated for specific capital projects. At June 30, 1997, the
unexpended amounts were classified as deferred charges and other assets in the
balance sheet.
During July 1997, the Company negotiated a new revolving credit
facility comprised of a $200 million credit agreement and a $300 million credit
agreement, for a total commitment of $500 million. The $200 million credit
agreement is renewable annually; the $300 million credit agreement has a term of
five years. This facility replaces the previous $300 million revolving credit
agreement. The new facility has a restrictive financial covenant that requires
the Company to maintain a minimum consolidated net worth, as defined in the
agreements, of $1.5 billion. The Company has no outstanding borrowing against
the facility, which is used to back up the Company's commercial paper borrowing.
During the second quarter 1997, the Company filed a shelf
registration statement on Form S-3 with the Securities and Exchange Commission
for up to $350 million of debt securities. During the first quarter 1997, the
Company executed an agreement to refinance two Dutch bank loans, having a
combined principal balance of 300 million Dutch guilders ($158 million) and due
in 1997, with one loan due in 2002.
The Company paid dividends totaling $136 million during the first
six months 1997, including a dividend of $.70 per share, totaling $68 million,
during the quarter ended June 30, 1997. On July 17, 1997, the Board of Directors
declared a dividend of $.70 per share on the Company's common stock, payable
September 5, 1997.
During the first quarter 1997, the Company revised its hedging
strategy with respect to capital commitments related to construction of the new
PO/SM plant in Rotterdam, the Netherlands. To take advantage of the strong U.S.
dollar, the Company effectively terminated forward contracts in the notional
amount of $127 million, and entered into purchased option contracts for
approximately the same notional amount. Gains on the purchased options will be
deferred and offset against the plant's construction costs. There were no
deferred hedging gains as of June 30, 1997.
It is expected that future cash requirements for capital
expenditures, dividends and debt repayments will be met by cash generated from
operating activities and additional borrowing.
- 11 -
<PAGE>
Statement of Financial Accounting Standards Not Yet Adopted
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings Per
Share," establishing standards for computing and presenting earnings per share
(EPS). SFAS No. 128 is effective for financial statements issued for periods
ending after December 15, 1997 and requires restatement of all prior-period EPS
data presented. Earlier application is not permitted. The implementation of SFAS
No. 128 is not expected to have a material effect on the reported EPS of the
Company.
- 12 -
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Reference is made to the disclosures on page 10 of the Company's
1996 Annual Report on Form 10-K and on page 12 of the Company's first quarter
1997 Form 10-Q Report regarding other litigation.
The Company responded in writing to the Commission's Statement of
Objections on June 11, 1997 and requested an oral hearing to present its
arguments. That hearing has been scheduled for August 6-8, 1997. The Company
believes that the provisions in question are consistent with European law and
are valid and enforceable and has so argued to the Commission.
Item 4. Submission of Matters to a Vote of Security Holders
The Company's annual meeting of stockholders was held on May 8,
1997. The stockholders elected all the Company's nominees for director, approved
and ratified an amendment to the ARCO Chemical Company 1990 Long-Term Incentive
Plan, and approved the appointment of Coopers & Lybrand L.L.P. as the Company's
independent auditors for 1997. The votes were as follows:
<TABLE>
<CAPTION>
<C> <S> <C> <C>
1. Election of Directors:
For Withheld
--- --------
Walter F. Beran 94,754,531 293,022
Mike R. Bowlin 94,757,520 290,033
Anthony G. Fernandes 94,757,826 289,727
Alan R. Hirsig 94,757,644 289,909
Marie L. Knowles 94,757,879 289,674
James A. Middleton 94,756,898 290,655
Stephen R. Mut 94,757,970 289,583
Frank Savage 94,755,754 291,799
Marvin O. Schlanger 94,758,620 288,933
Robert H. Stewart, III 94,754,525 293,028
Walter J. Tusinski 94,758,858 288,695
2. Approval and ratification of amendment to the ARCO Chemical Company 1990
Long-Term Incentive Plan:
For 93,881,204
Against 1,054,753
Abstain 111,596
3. Approval of the Appointment of Coopers & Lybrand L.L.P.:
For 94,827,904
Against 170,850
Abstain 48,799
</TABLE>
- 13 -
<PAGE>
Item 5. Other Information
CAUTIONARY STATEMENT FOR PURPOSES OF THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995
The Private Securities Litigation Reform of 1995 (the "Act")
provides a safe harbor for forward-looking statements to encourage companies to
provide prospective information about their companies without fear of litigation
so long as those statements are identified as forward-looking and are
accompanied by meaningful, cautionary statements identifying important factors
that could cause actual results to differ materially from those projected in the
statement. The Company is hereby filing cautionary statements to take advantage
of the safe harbor provisions of the Act.
From time to time the Company's management may wish to make forward-
looking statements to inform more fully existing and potential security holders
regarding various matters, including without limitation, projections regarding
future income, sales volumes, production and capital spending, as well as
predictions as to the timing and success of specific strategic initiatives, such
as downstream integration, capacity additions, acquisitions, cost reduction
programs, efficiency improvements, and new product and new market development.
Forward-looking statements are generally accompanied by words such as estimate,
project, predict, or expect that convey the uncertainty of future events or
outcomes. The Company believes that the following are important factors that
could cause the Company's actual results to differ materially from projections,
forecasts, or estimates made by, or on behalf of, the Company.
- Changes in the competitive environment, including the emergence of new
competitors; the rate of capacity additions by competitors; the
intensification of price competition in the Company's markets; and the
introduction of new or substitute products by competitors.
- General economic conditions and specific chemical industry cycles,
including the dependence of certain Company products on cyclical demand
in the housing and automotive markets.
- Changes in the cost and availability of feedstocks, reflecting changes
in the supply/demand balance in petrochemical feedstock, natural gas,
and crude oil markets; and changes in the cost and availability of
utilities, such as steam and electricity.
- The level of worldwide demand growth for the Company's products,
including the effect on demand of changes in the political, regulatory
and economic climates of developing countries in Latin America, Eastern
Europe and the Asia Pacific region.
- Changes in or additions to federal, state, local, and foreign
government legislation and regulations that may affect the demand for
or the value of the Company's products, the cost of producing them, or
the general levels of construction, maintenance, and operating costs.
- Technological innovations by competitors.
- Hazards related to chemical operations. The Company's operations can be
affected by disruptions at its facilities as well as at those of its
suppliers or customers.
- The Company's ability to implement its cost reduction program as well
as the cost, timing and degree of success of such efforts.
- The Company's ability to complete construction projects on schedule.
- 14 -
<PAGE>
The factors identified in this statement are believed to be
important factors, but not necessarily all of the important factors, that could
cause actual results to differ materially from those expressed in any forward-
looking statement made by or on behalf of the Company. Unpredictable or unknown
factors not discussed herein could also have material adverse effects on
forward-looking statements.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
10.1 Term Loan Agreement, dated as of March 12, 1997, among ARCO
Chemie Nederland, Ltd. (Rotterdam Branch), as Borrower, the
Company, as Guarantor, Chase Investment Bank Limited, as
Arranger, Chase Manhattan International Limited, as Agent, and
the Banks listed therein.
10.2 Credit Agreement A, dated as of July 23, 1997, among the
Company, the Banks named therein and The First National Bank of
Chicago, as Agent.
10.3 Credit Agreement B, dated as of July 23, 1997, among the
Company, the Banks named therein and The First National Bank of
Chicago, as Agent.
10.4 Amendment No. 7, dated as of July 29, 1997, to the ARCO Chemical
Company 1990 Long-Term Incentive Plan.
27 Financial Data Schedule for the six months ended June 30, 1997.
(b) Reports on Form 8-K:
The Company filed a Current Report on Form 8-K, dated June 27, 1997,
which contained a press release, dated June 24, 1997, announcing the Company's
cost reduction program.
The Company filed a Current Report on Form 8-K, dated July 21, 1997,
which announced the adoption of a restricted stock program for the compensation
of directors serving on the Company's Board of Directors, who are neither
directors, officers or employees of Atlantic Richfield Company nor officers or
employees of the Company.
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<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ARCO CHEMICAL COMPANY
(Registrant)
/s/ Van Billet
-----------------------------
(Signature)
Van Billet
Vice President
and Controller
(Duly Authorized Officer and
Chief Accounting Officer)
Dated: July 31, 1997
- 16 -
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
10.1 Term Loan Agreement, dated as of March 12, 1997,
among ARCO Chemie Nederland, Ltd. (Rotterdam
Branch), as Borrower, the Company, as Guarantor, Chase
Investment Bank Limited, as Arranger, Chase Manhattan
International Limited, as Agent, and the Banks listed
therein.
10.2 Credit Agreement A, dated as of July 23, 1997, among the
Company, the Banks named therein and The First National
Bank of Chicago, as Agent.
10.3 Credit Agreement B, dated as of July 23, 1997, among the
Company, the Banks named therein and The First National
Bank of Chicago, as Agent.
10.4 Amendment No. 7, dated as of July 29, 1997, to the ARCO
Chemical Company 1990 Long-Term Incentive Plan.
27 Financial Data Schedule for the six months ended
June 30, 1997.
<PAGE>
CONFORMED COPY
NLG300,000,000
TERM LOAN AGREEMENT
between
ARCO CHEMIE NEDERLAND, LTD.
(ROTTERDAM BRANCH)
as Borrower
ARCO CHEMICAL COMPANY
as Guarantor
CHASE INVESTMENT BANK LIMITED
as Arranger
CHASE MANHATTAN INTERNATIONAL LIMITED
as Agent
and
OTHERS
Clifford Chance
London
Exhibit 10.1
<PAGE>
THE SCHEDULES
<TABLE>
<S> <C> <C>
The First Schedule : The Banks
The Second Schedule : Form of Transfer Certificate
The Third Schedule : Condition Precedent Documents
The Fourth Schedule : Notice of Drawdown
The Fifth Schedule : Opinion of the Guarantor's Counsel
</TABLE>
<PAGE>
CONTENTS
<TABLE>
<CAPTION>
Clause Page No.
PART 1
DEFINITIONS AND INTERPRETATION
<S> <C> <C>
1. Definitions and Interpretation ................................... 1
PART 2
THE FACILITY
2. The Facility ..................................................... 10
3. Availability of the Facility ..................................... 10
PART 3
INTEREST
4. Interest Periods ................................................. 12
5. Payment and Calculation of Interest .............................. 12
6. Alternative Interest Rates ....................................... 12
PART 4
REPAYMENT, CANCELLATION AND PREPAYMENT
7. Repayment ........................................................ 15
8. Cancellation and Prepayment ...................................... 15
PART 5
RISK ALLOCATION
9. Taxes ............................................................ 16
10. Tax Receipts ..................................................... 18
11. Changes in Circumstances ......................................... 18
PART 6
REPRESENTATIONS, COVENANTS AND EVENTS OF DEFAULT
12. Representations .................................................. 20
13. Information ...................................................... 23
14. Financial Condition .............................................. 27
15. Covenants ........................................................ 27
16. Events of Default ................................................ 31
</TABLE>
<PAGE>
PART 7
GUARANTEE
<TABLE>
<S> <C> <C>
17. Guarantee and Indemnity .......................................... 35
PART 8
DEFAULT INTEREST AND INDEMNITY
18. Default Interest and Indemnity ................................... 38
PART 9
PAYMENTS
19. Currency of Account and Payment .................................. 40
20. Payments ......................................................... 40
21. Set-Off .......................................................... 41
22. Sharing .......................................................... 41
PART 10
FEES, COSTS AND EXPENSES
23. Fees ............................................................. 43
24. Costs and Expenses ............................................... 43
PART 11
AGENCY PROVISIONS
25. The Agent, the Arranger and the Banks ............................ 45
PART 12
ASSIGNMENTS AND TRANSFERS
26. Assignments and Transfers ........................................ 50
PART 13
MISCELLANEOUS
27. Calculations and Evidence of Debt ................................ 52
28. Remedies and Waivers, Partial Invalidity ......................... 52
29. Notices .......................................................... 53
30. Amendments ....................................................... 53
PART 14
LAW AND JURISDICTION
31. Law and Jurisdiction ............................................. 55
</TABLE>
<PAGE>
THIS AGREEMENT is made on 12th March 1997
BETWEEN
(1) ARCO CHEMIE NEDERLAND, LTD. (ROTTERDAM BRANCH) (the "Borrower");
(2) ARCO CHEMICAL COMPANY (the "Guarantor");
(3) CHASE INVESTMENT BANK LIMITED (the "Arranger");
(4) CHASE MANHATTAN INTERNATIONAL LIMITED (the "Agent"); and
(5) THE BANKS (as defined below).
It is agreed as follows.
PART 1
DEFINITIONS AND INTERPRETATION
1. Definitions and Interpretation
1.1 Definitions In this Agreement the following terms have the meanings given
to them in this Clause 1.1.
"Advance" means, save as otherwise provided herein, an advance (as from time to
time reduced by repayment) made or to be made by the Banks hereunder.
"Affiliate" means (a) any person which controls, directly or indirectly, the
Guarantor or (b) any person (other than a member of the Group) which is
controlled by or is under common control with a person which controls, directly
or indirectly, the Guarantor.
"Atlantic" means Atlantic Richfield Company, or its Successor.
"Available Commitment" means, in relation to a Bank at any time and save as
otherwise provided herein, the amount set opposite its name in the First
Schedule (The Banks) less the aggregate amount which it has advanced hereunder
at such time.
"Available Facility" means, at any time, the aggregate amount of the Available
Commitments at such time.
"Bank" means:
(a) any financial institution named in the First Schedule (The Banks)
(other than one which has ceased to be a party hereto in accordance
with the terms hereof); or
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(b) any financial institution which has become a party hereto in
accordance with the provisions of Clause 26.4 (Assignments by Banks)
or Clause 26.5 (Transfers by Banks).
"Basle Paper" means the paper entitled "International Convergence of Capital
Measurement and Capital Standards" dated July 1988 and prepared by the Basle
Committee on Banking Regulations and Supervision, as amended in November 1991.
"Benefit Arrangement" means at any time an employee pension benefit plan within
the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan
and which is maintained or otherwise contributed to by any member of the ERISA
Group.
"Capital Adequacy Requirement" means a request or requirement relating to the
maintenance of capital, including one which makes any change to, or is based on
any alteration in, the interpretation of the Basle Paper or which increases the
amounts of capital required thereunder, other than a request or requirement made
by way of implementation of the Basle Paper in the manner in which it is being
implemented at the date hereof.
"Code" means the United States Internal Revenue Code of 1986.
"Cross-Indemnification Agreement" means the cross-indemnification agreement
dated 1 June 1987, as amended, made between Atlantic and the Guarantor.
"Environmental Law" means, with respect to any person, all laws, regulations,
treaties and conventions concerning the pollution or protection of human health
or the environment or the conditions of the workplace or the generation,
transportation, storage, treatment or disposal of any Materials of Environmental
Concern.
"Environmental License" means any permit, approval, ruling, exemption, consent,
license or other authorization required by any Environmental Law.
"Equivalent Amount" means the amount of any currency converted from the relevant
amount of dollars at the Agent's spot buying rate (based on the market rates
then prevailing) for the exchange of dollars and such currency at or about 11.00
a.m. on the third business day prior to the date on which the relevant amount in
such currency is to be paid or calculated under this Agreement.
"ERISA" means the United States Employee Retirement Income Security Act of 1974.
"ERISA Group" means the Guarantor and all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Guarantor, are treated as a single
employer under Section 414 of the Code.
"Event of Default" means any circumstances described as such in Clause 16
(Events of Default).
"Existing Facilities" means the facilities made available to the Borrower
pursuant to:
(a) the NLG150,000,000 Facility Agreement dated 3 March 1990 and
made between ABN AMRO Bank, N.V. and the Borrower; and
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<PAGE>
(b) the NLG150,000,000 Facility Agreement dated 15 November 1990
and made between ABN AMRO Bank, N.V. and the Borrower.
"Facility" means the term loan facility granted to the Borrower in this
Agreement.
"Facility Office" means, in relation to the Agent or any Bank, the office
identified with its signature below (or, in the case of a Transferee, at the end
of the Transfer Certificate to which it is a party as Transferee) or such other
office as it may from time to time select.
"Guarantee" means the guarantee granted by the Guarantor in this Agreement.
"Group" means the Guarantor and its subsidiaries from time to time.
"Indebtedness for Borrowed Money" means, in relation to any person at any date,
without duplication:
(a) all obligations of such person for borrowed money;
(b) all obligations of such person evidenced by debentures,
bonds, notes or other similar instruments;
(c) all obligations of such person to pay the deferred
purchase price of property or services, except trade
accounts payable arising in the ordinary course of
business;
(d) all obligations of such person as lessee under capital
leases;
(e) all Indebtedness for Borrowed Money of others secured by
an encumbrance on any asset of such person, whether or
not such Indebtedness for Borrowed Money is assumed by
such person; and
(f) all Indebtedness for Borrowed Money of others guaranteed
by such person
Provided that in no event shall Indebtedness for Borrowed Money be deemed to
include any "take-or-pay" obligations incurred by the Guarantor in the ordinary
course of business.
"Information Memorandum" means the document dated February 1997 concerning the
Obligors which, at their request and on their behalf, was prepared in relation
to this transaction and distributed by the Arranger to selected banks.
"Instructing Group" means:
(a) before any Advances have been made hereunder, a Bank or group
of Banks whose Available Commitments amount in aggregate to
more than 66 per cent. of the Available Facility; and
(b) thereafter, a Bank or group of Banks to whom in aggregate more
than 66 per cent. of the Loan is (or, immediately prior to its
repayment, was then) owed.
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<PAGE>
"Interest Period" means, save as otherwise provided herein, any of those periods
mentioned in Clause 4.1 (Interest Periods).
"LIBOR" means, in relation to any amount owed by an Obligor hereunder on which
interest for a given period is to accrue, the rate per annum determined by the
Agent to be equal to the arithmetic mean (rounded upwards, if not already such a
multiple, to the nearest whole multiple of one-sixteenth of one per cent.) of
the rates (as notified to the Agent) at which each of the Reference Banks was
offering to prime banks in the London Interbank Market deposits in Guilders for
such period at or about 11.00 a.m. (London time) on the Quotation Date for such
period.
"Loan" means the aggregate principal amount for the time being outstanding
hereunder.
"Margin" means 0.175 per cent. per annum.
"Materials of Environmental Concern" includes, but is not limited to, any and
all hydrocarbons, gases, pollutants, contaminants, toxic substances and any
radioactive omissions likely to cause harm to man or any living organism or to
damage the environment or public health or welfare.
"Material Subsidiary" means, at any time, a subsidiary of the Guarantor whose
assets have an aggregate book value which exceeds 10 per cent. of the
consolidated book value of the assets of the Group and/or whose aggregate
revenues exceed 10 per cent. of the consolidated revenues of the Group
determined by reference to the latest audited consolidated financial statements
of the Guarantor (adjusted in such manner as the Agent may require to take
account of any matters occurring after the date of preparation of the financial
statements in question).
"Multiemployer Plan" means at any time an employee pension benefit plan within
the meaning of Section 4001(a)(3) of ERISA to which any member of the ERISA
Group is then making or accruing an obligation to make contributions or has
within the preceding five plan years made contributions, including for these
purposes any person which ceased to be a member of the ERISA Group during such
five year period. "Notice of Drawdown" means a notice substantially in the form
set out in the Fourth Schedule (Notice of Drawdown).
"Obligors" means the Borrower and the Guarantor.
"Original Financial Statements" means:
(a) in relation to ARCO Chemie Nederland, Ltd., its unaudited financial
statements for its financial year ended 31 December 1995; and
(b) in relation to the Guarantor, its audited consolidated financial
statements for its financial year ended 31 December 1995.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.
"Permitted Encumbrance" means any encumbrance:
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<PAGE>
(a) on any asset of a corporation existing at the time it becomes a
subsidiary of the Guarantor or at the time it is merged or
consolidated into a member of the Group and not created in
contemplation of such event;
(b) subsisting over an asset at the time it is acquired or created to
secure either (i) payment of the consideration therefor or (ii)
Indebtedness for Borrowed Money incurred prior to, at the time of or
within 24 months after the acquisition thereof for the purpose of
financing all or part of the consideration therefor;
(c) created over an asset to secure (i) all or part of the cost of
construction or improvements thereon or (ii) Indebtedness for
Borrowed Money incurred to provide funds for the construction or
improvements thereon in a principal amount not exceeding the cost of
such construction or improvement;
(d) which secures Indebtedness for Borrowed Money owing from any member
of the Group to any other member of the Group;
(e) in favour of the United States of America or any state thereof, or
any department, agency, instrumentality or political subdivision
thereof to secure (i) any payment due pursuant to any agreement, law
or regulation or (ii) Indebtedness for Borrowed Money incurred for
the purpose of financing all or part of the consideration for or cost
of constructing or improving the asset subject to such encumbrance
including, without limitation, encumbrances to secure Indebtedness
for Borrowed Money in respect of any pollution control, industrial
revenue bond or other similar type of financing;
(f) required by any agreement, law or regulation to enable the Guarantor
or any member of the Group to perform any agreement made by it with
or at the request of the United States of America or any state
thereof, or any department, agency, instrumentality or political
subdivision thereof;
(g) created in favour of a supplier or other similar trade creditor in
the ordinary course of business securing Indebtedness for Borrowed
Money which is not overdue or being contested in good faith by
appropriate proceedings and in connection with which adequate
reserves are being maintained;
(h) which secures the obligations of any member of the Group owing
pursuant to a deferred payment agreement in an aggregate amount not
exceeding $10,000,000 (or its Equivalent Amount);
(i) of a judgment or attachment in respect of any Indebtedness for
Borrowed Money so long as (1) the Guarantor in good faith by
appropriate action, promptly initiated and diligently conducted,
shall contest or cause to be contested the validity, amount, extent
or application thereof and (2) such action shall operate to prevent
the sale or foreclosure (or the posting of notices preparatory to any
sale or foreclosure) of any part of an asset to satisfy such
encumbrance prior to a final determination of such action;
-5-
<PAGE>
(j) which secures taxes not delinquent or being contested in good faith
by appropriate proceedings and for which reserves adequate under
generally accepted accounting principles in the State of Delaware are
being maintained; and
(k) which is an extension, renewal or replacement of an encumbrance
referred to in sub-paragraphs (a) to (h) above or of the Indebtedness
for Borrowed Money secured thereby Provided that the principal amount
of Indebtedness for Borrowed Money secured thereby does not exceed
the principal amount of Indebtedness for Borrowed Money so secured at
the time of such extension, renewal or replacement and that such
extension, renewal or replacement shall be limited to all or part of
substantially the same property which secured the encumbrance
extended renewed or replaced (including improvements on such
property).
"Plan" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code and either:
(a) is maintained or contributed to by a member of the ERISA Group for
employees of a member of the ERISA Group; or
(b) has at any time within the preceding five years been maintained or
contributed to by any person which was at such time a member of the
ERISA Group for employees of any person which was at such time a
member of the ERISA Group.
"Potential Event of Default" means any event which may become (with the passage
of time, the giving of notice, the making of any determination hereunder or any
combination thereof) an Event of Default.
"Quotation Date" means, in relation to any period for which an interest rate is
to be determined hereunder, the day on which quotations would ordinarily be
given by prime banks in the London Interbank Market for deposits in Guilders for
delivery on the first day of that period Provided that, if, for any such
period, quotations would ordinarily be given on more than one date, the
Quotation Date for that period shall be the last of those dates.
"Reference Banks" means the principal London offices of ABN AMRO Bank N.V., ING
Bank N.V. and The Chase Manhattan Bank or such other bank or banks as may from
time to time be agreed between the Borrower and the Agent acting on the
instructions of an Instructing Group.
"Repayment Date" means the day which is 60 months after the date hereof.
"Sale and Lease-Back Transaction" means an arrangement with any person (other
than a member of the Group) providing for the leasing to any member of the Group
for a period of more than three years of any property which has been sold or
transferred by such member of the Group to such person, to which amounts have
been advanced or are to be advanced by such person on the security of the leased
property.
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<PAGE>
"Successor" in relation to a party means an assignee or successor in title of
such party or any person who, under the laws of its jurisdiction of
incorporation or domicile, has assumed the rights and obligations of such party
hereunder or to which under such laws the same has been transferred.
"Tax-Sharing Agreement" means the amended and restated tax-sharing agreement
dated 1 January 1995 made between Atlantic and the Guarantor.
"Termination Date" means the earlier of the day which is one month after the
date hereof and the first business day on which the Available Commitment of each
of the Banks is zero.
"Transfer Certificate" means a certificate substantially in the form set out in
the Second Schedule (Form of Transfer Certificate) signed by a Bank and a
Transferee whereby:
(a) such Bank seeks to procure the transfer to such Transferee of all or
a part of such Bank's rights, benefits and obligations hereunder as
contemplated in Clause 26.3 (Assignments and Transfers by Banks); and
(b) such Transferee undertakes to perform the obligations it will assume
as a result of delivery of such certificate to the Agent as is
contemplated in Clause 26.5 (Transfers by Banks).
"Transfer Date" means, in relation to any Transfer Certificate, the date for the
making of the transfer as specified in the schedule to such Transfer
Certificate.
"Transferee" means a bank or other financial institution to which a Bank seeks
to transfer all or part of such Bank's rights, benefits and obligations
hereunder.
"Unfunded Liabilities" means, with respect to any Plan at any time, the amount
(if any) by which the present value of all benefits under such Plan exceeds the
fair market value of all Plan assets allocable to such benefits (excluding any
accrued but unpaid contributions), all determined as of the then most recent
valuation date for such Plan, but only to the extent that such excess represents
a potential liability of a member of the ERISA Group to the PBGC or any other
person under Title IV of ERISA.
"Value" means, with respect to a Sale and Lease-Back Transaction, as of any
particular time the amount equal to the greater of (a) the net proceeds of the
sale or transfer of the property leased pursuant to such Sale and Lease-Back
Transaction or (b) the fair value in the opinion of the board of directors of
the relevant member of the Group of such property at the time of entering into
such Sale and Lease-Back Transaction, in each case divided first by the number
of full years of the term of the lease and then multiplied by the number of full
years of such term remaining at the time of determination, without regard to any
renewal or extension options contained in the lease.
1.2 Interpretation Any reference in this Agreement to:
the "Agent" or any "Bank" shall be construed so as to include its and any
subsequent Successors, Transferees and assigns in accordance with their
respective interests;
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<PAGE>
a "business day" shall be construed as a reference to a day (other than a
Saturday or Sunday) on which banks generally are open for business in Amsterdam,
London and New York City;
an "encumbrance" shall be construed as a reference to (a) a mortgage, charge,
pledge, lien or other encumbrance securing any obligation of any person, (b) any
arrangement under which money or claims to, or the benefit of, a bank or other
account may be applied, set-off or made subject to a combination of accounts so
as to effect payment of sums owed or payable to any person or (c) any other type
of preferential arrangement (including title transfer and retention
arrangements) having a similar effect;
a "holding company" of a company or corporation shall be construed as a
reference to any company or corporation of which the first-mentioned company or
corporation is a subsidiary;
"indebtedness" shall be construed so as to include any obligation (whether
incurred as principal or as surety) for the payment or repayment of money,
whether present or future, actual or contingent;
a "month" is a reference to a period starting on one day in a calendar month and
ending on the numerically corresponding day in the next succeeding calendar
month save that, where any such period would otherwise end on a day which is not
a business day, it shall end on the next succeeding business day, unless that
day falls in the calendar month succeeding that in which it would otherwise have
ended, in which case it shall end on the immediately preceding business day
Provided that, if a period starts on the last business day in a calendar month
or if there is no numerically corresponding day in the month in which that
period ends, that period shall end on the last business day in that later month
(and references to "months" shall be construed accordingly);
a "person" shall be construed as a reference to any person, firm, company,
corporation, government, state or agency of a state or any association or
partnership (whether or not having separate legal personality) of two or more of
the foregoing;
"repay" (or any derivative form thereof) shall, subject to any contrary
indication, be construed to include "prepay" (or, as the case may be, the
corresponding derivative form thereof);
a "subsidiary" of a company or corporation shall be construed as a reference to
any company or corporation:
(a) which is controlled, directly or indirectly, by the first-mentioned
company or corporation;
(b) more than half the issued share capital of which is beneficially owned,
directly or indirectly, by the first-mentioned company or corporation;
or
(c) which is a subsidiary of another subsidiary of the first-mentioned
company or corporation
and, for these purposes, a company or corporation shall be treated as being
controlled by another if that other company or corporation is able to direct its
affairs and/or to control the composition of its board of directors or
equivalent body;
-8-
<PAGE>
"tax" shall be construed so as to include any tax, levy, impost, duty or other
charge of a similar nature (including any penalty or interest payable in
connection with any failure to pay or any delay in paying any of the same);
"VAT" shall be construed as a reference to value added tax including any similar
tax which may be imposed in place thereof from time to time;
a "wholly-owned subsidiary" of a company or corporation shall be construed as a
reference to any company or corporation which has no other members except that
other company or corporation and that other company's or corporation's wholly-
owned subsidiaries or persons acting on behalf of that other company or
corporation or its wholly-owned subsidiaries; and
the "winding-up", "dissolution" or "administration" of a company or corporation
shall be construed so as to include any equivalent or analogous proceedings
under the law of the jurisdiction in which such company or corporation is
incorporated or any jurisdiction in which such company or corporation carries on
business including the seeking of liquidation, winding-up, reorganisation,
dissolution, administration, arrangement, adjustment, protection or relief of
debtors.
1.3 Currency Symbols "$" and "dollars" denote lawful currency of the United
States of America and "NLG" or "Guilders" denote lawful currency of The
Netherlands.
1.4 Agreements and Statutes Save where the contrary is indicated, any
reference in this Agreement to:
(a) this Agreement or any other agreement or document shall be construed
as a reference to this Agreement or, as the case may be, such other
agreement or document as the same may have been, or may from time to
time be, amended, varied, novated or supplemented; and
(b) a statute shall be construed as a reference to such statute as the
same may have been, or may from time to time be, amended or re-
enacted.
1.5 Headings Clause, Part and Schedule headings are for ease of reference
only.
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<PAGE>
PART 2
THE FACILITY
2. The Facility
2.1 Grant of the Facility The Banks grant to the Borrower, upon the terms and
subject to the conditions hereof, a term loan facility in an aggregate amount of
NLG300,000,000.
2.2 Purpose and Application The Facility is intended to refinance the Existing
Facilities and, accordingly, the Borrower shall apply all amounts raised by it
hereunder in or towards satisfaction of such purpose and neither the Agent, the
Arranger and the Banks nor any of them shall be obliged to concern themselves
with such application.
2.3 Condition Precedent Documents Save as the Banks may otherwise agree, the
Borrower may not deliver any Notice of Drawdown hereunder unless the Agent has
confirmed to the Borrower and the Banks that it has received all of the
documents listed in the Third Schedule (Condition Precedent Documents) and that
each is, in form and substance, satisfactory to the Agent.
2.4 Banks' Rights and Obligations Several The obligations of each Bank
hereunder are several and the failure by a Bank to perform its obligations
hereunder shall not affect the obligations of the Borrower, the Guarantor or any
Bank towards any other party hereto nor shall any other party be liable for the
failure by such Bank to perform its obligations hereunder. The rights of each
Bank hereunder are several and each Bank may, save as otherwise provided herein,
separately enforce those rights.
3. Availability of the Facility
3.1 Drawdown Conditions An Advance will be made by the Banks to the Borrower
if:
(a) prior to 10.00 a.m. (London time) on the third business day before the
proposed date for the making of such Advance, the Agent has received
from the Borrower a Notice of Drawdown therefor, receipt of which shall
oblige the Borrower to borrow the amount therein requested on the date
therein stated upon the terms and subject to the conditions contained
herein;
(b) the proposed date for the making of such Advance is a business day
which is or precedes the Termination Date;
(c) the proposed date for the making of such Advance is not less than five
business days after the date upon which the previous Advance (if any)
was made hereunder;
(d) the proposed amount of such Advance is (i) an amount or integral
multiple of NLG10,000,000 which is less than the amount of the
Available Facility or (ii) equal to the amount of the Available
Facility;
(e) the interest rate applicable to such Advance during its first Interest
Period would not fall to be determined pursuant to Clause 6.1 (Market
Disruption); and
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(f) no Event of Default or Potential Event of Default has occurred and the
representations set out in Clause 12 (Representations) are true on and
as of the proposed date for the making of such Advance.
3.2 Notice to Banks The Agent shall notify each Bank of the receipt of a
Notice of Drawdown, the details specified in such Notice of Drawdown and the
amount of such Bank's participation in the proposed Advance.
3.3 Each Bank's Participation Each Bank will participate through its Facility
Office in each Advance made pursuant to Clause 3.1 (Drawdown Conditions) in the
proportion borne by its Available Commitment to the Available Facility
immediately prior to the making of that Advance.
3.4 Reduction of Available Commitment If a Bank's Available Commitment is
reduced in accordance with the terms hereof after the Agent has received the
Notice of Drawdown for an Advance, then the amount of that Advance shall be
reduced accordingly.
3.5 Expiry of Termination Date Each Bank's Available Commitment shall
immediately be reduced to zero on the Termination Date.
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PART 3
INTEREST
4. Interest Periods
4.1 Interest Periods The period for which an Advance is outstanding shall be
divided into successive periods each of which (other than the first) shall start
on the last day of the preceding such period.
4.2 Duration The duration of each Interest Period shall, save as otherwise
provided herein, be one, three, six or twelve months, in each case as the
Borrower may by not less than five business days' prior notice to the Agent
select Provided that:
(a) if the Borrower fails to give such notice of its selection in relation
to an Interest Period, the duration of that Interest Period shall,
subject to paragraphs (b) and (c) below, be six months;
(b) any Interest Period which begins during or at the same time as any
other Interest Period shall end at the same time as that other Interest
Period; and
(c) any Interest Period which would otherwise end during the month
preceding, or extend beyond, the Repayment Date shall be of such
duration that it shall end on the Repayment Date.
4.3 Consolidation of Advances If two or more Interest Periods end at the same
time, then, on the last day of those Interest Periods, the Advances to which
they relate shall be consolidated into and treated as a single Advance.
5. Payment and Calculation of Interest
5.1 Payment of Interest On the last day of each Interest Period (and, in the
case of any Interest Period of more than six months duration, on the last day of
each successive period of six months during such Interest Period) the Borrower
shall pay accrued interest on the Advance to which such Interest Period relates.
5.2 Calculation of Interest The rate of interest applicable to an Advance from
time to time during an Interest Period relating thereto shall be the rate per
annum which is the sum of the Margin and LIBOR on the Quotation Date therefor.
5.3 Notice to Banks The Agent shall notify each Bank of the interest payable
prior to the last day of each Interest Period.
6. Alternative Interest Rates
6.1 Market Disruption If:
(a) the Agent determines that at or about 11.00 a.m. (London time) on the
Quotation Date for an Interest Period in respect of an Advance none or
only one of the Reference Banks
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was offering to prime banks in the London Interbank Market deposits in
Guilders for the proposed duration of such Interest Period; or
(b) before the close of business in London on the Quotation Date for an
Interest Period in respect of an Advance, the Agent has been notified
by a Bank or each of a group of Banks to whom in aggregate thirty-five
per cent. or more of such Advance is (or, in the case of an undrawn
Advance, if such Advance were then made, would be) owed that the rate
at which such deposits were being so offered does not accurately
reflect the cost to it of obtaining such deposits,
then, notwithstanding the provisions of Clause 4 (Interest Periods) and Clause 5
(Payment and Calculation of Interest):
(i) if paragraph (a) above applies, the duration of that Interest
Period shall be one month or, if less, such that it shall end
on the Repayment Date; and
(ii) if either paragraph (a) or (b) above applies, the rate of
interest applicable to such Advance from time to time during
such Interest Period shall be the rate per annum which is the
sum of the Margin and the rate per annum determined by the
Agent to be the arithmetic mean (rounded upwards, if not
already such a multiple, to the nearest whole multiple of
one-sixteenth of one per cent.) of the rates notified by each
Bank to the Agent before the last day of such Interest Period
to be those which express as a percentage rate per annum the
cost to each Bank of funding from whatever sources it may
select its portion of such Advance during such Interest
Period.
6.2 Substitute Basis or Repayment If (i) either of those events mentioned at
paragraphs (a) and (b) in Clause 6.1 (Market Disruption) occurs in relation to
an Advance and an Interest Period during which such Advance is (or was) to be
outstanding in Guilders or (ii) by reason of circumstances affecting the London
Interbank Market during any period of three consecutive business days none or
only one of the Reference Banks offers deposits in Guilders to prime banks in
the London Interbank Market, then:
(a) the Agent shall notify the Borrower and the Banks of such event;
(b) if the Agent so requires, within five days of such notification the
Agent and the Borrower shall enter into negotiations with a view to
agreeing a substitute basis (1) for determining the rates of interest
from time to time applicable to the Advances and/or (2) upon which the
Advances may be maintained (whether in Guilders or some other currency)
thereafter and any such substitute basis that is agreed shall take
effect in accordance with its terms and be binding on each party hereto
Provided that the Agent may not agree any such substitute basis without
the prior consent of each Bank; and
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(c) if the Agent has required the Borrower to enter into such negotiations,
the Agent may declare (any such declaration to be binding on the
Borrower) that each Advance shall become due and payable on the last
day of its then current Interest Period unless by then a substitute
basis has been agreed in relation thereto.
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PART 4
REPAYMENT, CANCELLATION AND PREPAYMENT
7. Repayment
The Borrower shall repay the Loan in full on the Repayment Date.
8. Cancellation and Prepayment
8.1 Cancellation The Borrower may, by giving to the Agent not less than
fifteen business days' prior notice to that effect, cancel the whole or any part
(being an amount or integral multiple of NLG20,000,000) of the Available
Facility; any such cancellation shall reduce the Available Commitments of the
Banks rateably.
8.2 Prepayment The Borrower may, if it has given to the Agent not less than
fifteen business days' prior notice to that effect, prepay the whole of any
Advance or any part of any Advance (being an amount or integral multiple of
NLG20,000,000) on the last day of any Interest Period relating to that Advance
which ends after the Termination Date; any such prepayment shall reduce rateably
the remaining obligations of the Borrower under Clause 7 (Repayment).
8.3 Notice of Cancellation or Prepayment Any notice of cancellation or
prepayment given by the Borrower pursuant to Clause 8.1 (Cancellation) or Clause
8.2 (Prepayment) shall be irrevocable, shall specify the date upon which such
cancellation or prepayment is to be made and the amount of such cancellation or
prepayment and, in the case of a notice of prepayment, shall oblige the Borrower
to make such prepayment on such date.
8.4 Repayment of a Bank's Share of the Loan If any Bank claims indemnification
from the Borrower under Clause 9.2 (Tax Indemnity) or Clause 11.1 (Increased
Costs) or if any Obligor is required to make an additional payment under Clause
9.1 (Tax Gross-Up) and within thirty days thereafter the Agent receives from the
Borrower at least ten business days' prior notice (which shall be irrevocable)
of the Borrower's intention to repay such Bank's share of the Loan, the Borrower
shall on the last day of each of the then current Interest Periods repay such
Bank's portion of the Advance to which such Interest Period relates; any
repayment so made after the Termination Date shall reduce rateably the remaining
obligations of the Borrower under Clause 7 (Repayment).
8.5 No Further Advances A Bank for whose account a repayment is to be made
under Clause 8.4 (Repayment of a Bank's Share of the Loan) shall not be obliged
to participate in the making of Advances on or after the date upon which the
Agent receives the Borrower's notice of its intention to repay such Bank's share
of the Loan, on which date such Bank's Available Commitment shall be reduced to
zero.
8.6 No Other Repayments and No Reborrowing The Borrower shall not repay all or
any part of the Loan except at the times and in the manner expressly provided
for in this Agreement and shall not be entitled to reborrow any amount repaid or
cancelled.
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PART 5
RISK ALLOCATION
9. Taxes
9.1 Tax Gross-up All payments to be made by either of the Obligors to any Bank
or the Agent on its behalf hereunder shall be made free and clear of and without
deduction for or on account of tax unless such Obligor is required to make such
a payment subject to the deduction or withholding of tax, in which case the sum
payable by such Obligor in respect of which such deduction or withholding is
required to be made shall be increased to the extent necessary to ensure that,
after the making of the required deduction or withholding, such Bank or the
Agent on its behalf receives and retains (free from any liability in respect of
any such deduction or withholding) a net sum equal to the sum which it would
have received and so retained had no such deduction or withholding been made or
required to be made.
9.2 Tax Indemnity Without prejudice to the provisions of Clause 9.1 (Tax
Gross-up), if any Bank or the Agent on its behalf is required to make any
payment on account of tax (not being a tax imposed on and calculated by
reference to the net income) on or calculated by reference to the amount of such
Bank's share of the Advances or on or in relation to any sum received or
receivable hereunder by such Bank or the Agent on its behalf (including any sum
received or receivable under this Clause 9) or any liability in respect of any
such payment is asserted, imposed, levied or assessed against such Bank or the
Agent on its behalf, the Borrower shall, upon demand of the Agent, promptly
indemnify such Bank or the Agent, as the case may be, against such payment or
liability, together with any interest, penalties, costs and expenses payable or
incurred in connection therewith.
9.3 Claims by Banks A Bank intending to make a claim pursuant to Clause 9.2
(Tax Indemnity) shall notify the Agent of the event by reason of which it is
entitled to do so within 90 days of the date on which such Bank's Facility
Office ought reasonably to have become aware of such Bank's entitlement to make
such a claim, whereupon the Agent shall notify the Borrower thereof. In the
event that such Bank or the Agent fails to so notify the Borrower within the
period provided in the preceding sentence, the Borrower shall not be obliged to
indemnify such Bank for all or part of any payment or liability under Clause 9.2
(Tax Indemnity) to the extent that such amount is imposed with respect to
payments made prior to the date which is 90 days prior to the date on which such
Bank or the Agent gives notice to the Borrower of the event by reason of which
it is entitled to be so indemnified. Nothing herein contained shall require
such Bank to disclose any confidential information relating to the organisation
of its affairs.
9.4 Tax Credit In the event that an additional payment is made under Clause
9.1 (Tax Gross-up), Clause 9.2 (Tax Indemnity) or Clause 11.1 (Increased Costs)
and the person for whose benefit such payment is made, in its reasonable bona
fide opinion, determines that it has received or been granted (and has derived
full use and benefit from) a credit against, relief or remission for, or
repayment of, any tax paid or payable by it in respect of or calculated with
reference to the deduction or withholding giving rise to such additional payment
or, in the case of an additional payment made pursuant to Clause 11.1 (Increased
Costs), with reference to the liability, expense or loss to which the payment
giving rise to the additional payment relates, such person shall, to the extent
that it can do so without prejudice to the retention of the amount of such
credit, relief, remission or repayment, pay to the relevant Obligor such amount
as such person shall, in its reasonable opinion (exercised in good faith) have
concluded to be attributable to such
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deduction or withholding or, as the case may be, such liability, expense or
loss. Any such payment shall be conclusive evidence of the amount due to the
relevant Obligor hereunder and shall be accepted by such Obligor in full and
final settlement of its rights of reimbursement hereunder in respect of such
deduction or withholding or, as the case may be, in respect of the additional
payment related to any liability, expense or loss. Nothing herein contained
shall interfere with the right of the Agent or any Bank to arrange its tax
affairs in whatever manner it thinks fit or oblige the Agent or any Bank to
disclose any information relating to its tax affairs or any computation made in
respect thereof and, in particular, neither the Agent nor any Bank shall be
under any obligation to claim credit, relief, remission or repayment from or
against its corporate profits or similar tax liability in respect of the amount
of such deduction or withholding or, as the case may be, in respect of the
additional payment related to any liability, expense or loss in priority to any
other claims, reliefs, credits or deductions available to it.
9.5 United States Withholding Tax The Agent and each Bank agrees that:
(a) on or prior to the date of this Agreement (or in the case of a Bank
which becomes a party hereto pursuant to a transfer or assignment, on
or prior to the date on which the relevant transfer or assignment
becomes effective), it shall deliver to the Borrower and (in the case
of each Bank) the Agent two duly completed and executed originals of
United States Internal Revenue Service Form 1001 or Form 4224 and Form
W-8 or Form W-9, as the case may be, (or successor forms) or other
manner of certification to establish that such Bank or the Agent is
exempt from withholding or deduction of any United States federal
income taxes and shall deliver, extensions or renewals thereof, upon
the request of the Borrower, on or before the date that any such form
expires or becomes obsolete and after the occurrence of any event
requiring a change in the most recent form previously delivered by it,
unless in any such case an event (including, without limitation, any
change in treaty, law or regulation) has occurred prior to the date on
which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent such Bank or the Agent
from duly completing and delivering any such form with respect to it
and such Bank or the Agent so advises the Borrower and (in the case of
any Bank) the Agent; and
(b) by its execution of this Agreement, it certifies that it is entitled to
receive payments from the Obligors under this Agreement without
deduction or withholding of any United States federal income taxes; and
(c) the Borrower is relying upon the forms and certification delivered by
the Agent and each Bank pursuant to sub-paragraphs (a) and (b) above in
providing the representation contained in Clause 12.4 (No Deduction or
Withholding) insofar as such representation relates to the deduction or
withholding of United States federal income taxes; and
(d) the Obligors shall not be required to make any additional payment to
any Bank or the Agent on its behalf pursuant to Clause 9.1 (Tax Gross-
up) or Clause 9.2 (Tax Indemnity) if such Bank or the Agent, as the
case may be, fails to complete or deliver any form required to be
completed or delivered by it pursuant to sub-paragraph (a) above or if
such form or the certification in sub-paragraph (b) above is not true
in all material respects and such additional payment would not have
been payable if such
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Bank or the Agent, as the case may be, had completed and delivered such
form and such form and certification had been true in all material
respects.
10. Tax Receipts
10.1 Notification of Requirement to Deduct Tax If, at any time, either of the
Obligors is required by law to make any deduction or withholding from any sum
payable by it hereunder (or if thereafter there is any change in the rates at
which or the manner in which such deductions or withholdings are calculated),
such Obligor shall promptly notify the Agent.
10.2 Evidence of Payment of Tax If either of the Obligors makes any payment
hereunder in respect of which it is required to make any deduction or
withholding, it shall pay the full amount required to be deducted or withheld to
the relevant taxation or other authority within the time allowed for such
payment under applicable law and shall request such authority for an original
receipt (or a certified copy thereof) issued by such authority evidencing the
payment to such authority of all amounts so required to be deducted or withheld
in respect of that Bank's share of such payment which upon receipt by such
Obligor shall be promptly delivered to the Agent for each Bank.
11. Changes in Circumstances
11.1 Increased Costs If, by reason of (i) any change in law or in its
interpretation or administration (other than the adoption of a new tax or change
in an existing tax, which would be subject to the indemnification provisions
under Clause 9.2 (Tax Indemnity)) and/or (ii) compliance with any Capital
Adequacy Requirement or any other request from or requirement of any central
bank or other fiscal, monetary or other authority:
(a) a Bank or any holding company of such Bank is unable to obtain the rate
of return on its capital pursuant to or in respect of this Agreement
which it would have been able to obtain but for such reason;
(b) a Bank or any holding company of such Bank incurs a cost as a result of
such Bank's entering into or assuming or maintaining a commitment or
performing its obligations (including its obligation to participate in
the making of Advances) under this Agreement; or
(c) there is any increase in the cost to a Bank or any holding company of
such Bank of funding or maintaining all or any of the loans comprised
in a class of loans formed by or including such Bank's share of the
Advances,
then the Borrower shall, from time to time on demand of the Agent, promptly pay
to the Agent for the account of that Bank amounts sufficient to hold harmless
and indemnify that Bank or such Bank's holding company from and against, as the
case may be, (1) such reduction in the rate of return of capital, (2) such cost
and (3) such increased cost (or such proportion of such increased cost as is, in
the opinion of that Bank, attributable to its participating in the funding or
maintaining of Advances).
11.2 Increased Costs Claims A Bank intending to make a claim pursuant to Clause
11.1 (Increased Costs) shall notify the Agent of the event by reason of which it
is entitled to do so (supported by any relevant calculations), whereupon the
Agent shall notify the Borrower thereof Provided that nothing herein shall
require such Bank to disclose any confidential information relating to the
organisation of its affairs.
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11.3 Illegality If, at any time, it is unlawful for a Bank to make, fund or
allow to remain outstanding all or part of its share of the Advances, then that
Bank shall, promptly after becoming aware of the same, deliver to the Borrower
through the Agent a notice to that effect and:
(a) such Bank shall not thereafter be obliged to participate in the making
of any Advances and the amount of its Available Commitment shall be
immediately reduced to zero; and
(b) if the Agent on behalf of such Bank so requires, the Borrower shall on
such date as the Agent shall have specified (which in any event shall
be a date no later than legally permitted) repay such Bank's share of
any outstanding Advances together with accrued interest thereon and all
other amounts owing to such Bank hereunder.
11.4 Mitigation If, in respect of any Bank, circumstances arise which would or
would upon the giving of notice result in:
(a) an increase in the amount of any payment to be made to it for its
account pursuant to Clause 9.1 (Tax Gross-Up); or
(b) a claim for indemnification from the Borrower pursuant to Clause 9.2
(Tax Indemnity) or Clause 11.1 (Increased Costs),
then such Bank shall, after consultation with the Agent and the Borrower and to
the extent that it can do so lawfully and without prejudice to its own position,
consider what steps it might reasonably take (including a change in its Facility
Office or the transfer of its rights, benefits and obligations hereunder to
another financial institution acceptable to the Borrower and willing to
participate in the Facility) with a view to mitigating the effect of such
circumstances on the Borrower.
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PART 6
REPRESENTATIONS, COVENANTS AND EVENTS OF DEFAULT
12. Representations
Each of the Obligors (in respect of itself) makes the representations and
warranties set out in Clause 12.1 to Clause 12.22 and acknowledges that the
Agent, the Arranger and the Banks have entered into this Agreement in reliance
on those representations and warranties.
12.1 Existence It is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware and is qualified to do
business in each jurisdiction where the ownership of its properties or the
conduct of its business requires such qualification (or is subject to no
material liability or disability by reason of failure to be so qualified in any
such jurisdiction).
12.2 Powers It has all corporate power and authority, governmental permits,
licences, consents, authorisations, orders and other approvals as are necessary
to carry on its business substantially as presently conducted except for such of
the foregoing the absence of which would not, in the aggregate, subject it to
any material liability or disability.
12.3 Due Authorisation The execution, delivery and performance of its
obligations under this Agreement are within its corporate power and authority
and have been duly authorised by all necessary corporate proceedings.
12.4 No Deduction or Withholding Under the laws of either its jurisdiction of
incorporation or The Netherlands in force at the date hereof, it will not be
required to make any deduction or withholding from any payment it may make
hereunder.
12.5 Claims Pari Passu Under the laws of either its jurisdiction of
incorporation or The Netherlands in force at the date hereof, the claims of the
Agent, the Arranger and the Banks against it under this Agreement will rank at
least pari passu with the claims of all its other unsecured and unsubordinated
creditors save those whose claims are preferred solely by any bankruptcy,
insolvency, liquidation or other similar laws of general application.
12.6 Consents, Filing or Stamp Taxes Under the laws of either its jurisdiction
of incorporation or The Netherlands in force at the date hereof, no consent,
authorisation, notarial attestation, order or approval of (or filing or
registration with) any court, governmental commission, board or other authority
is required to ensure the legality, validity, enforceability or admissibility in
evidence of this Agreement and it is not necessary that any stamp, registration
or similar tax be paid on or in relation to this Agreement.
12.7 Binding Obligations Assuming the due execution by the Agent and the Banks
of this Agreement, this Agreement constitutes its legal, valid and binding
obligation (subject, as to enforcement of remedies, to applicable bankruptcy,
re-organisation, insolvency, moratorium or other laws affecting creditors'
rights generally from time to time in effect and to general principles of
equity).
12.8 No Proceedings or Winding-up No member of the Group has taken any
corporate action nor have any other steps been taken or legal proceedings been
started or (to its knowledge) threatened against any member of the Group for
its winding-up, dissolution, administration or re-organisation or for the
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appointment of a receiver, administrator, administrative receiver, trustee or
similar officer of it or of any or all of its assets or revenues.
12.9 No Defaults No Event of Default or Potential Event of Default has
occurred and is continuing.
12.10 No Material Proceedings Except as disclosed in writing to the Banks
prior to the date hereof, there is no action or administrative proceeding
pending or, to the knowledge of the Borrower or the Guarantor, as the case may
be, threatened against it or any member of the Group before any court or by any
agency which is likely to have a material adverse effect upon its ability to
perform its obligations under this Agreement or which in any manner affects the
validity of this Agreement.
12.11 Original Financial Statements The Original Financial Statements of ARCO
Chemie Nederland, Ltd. and the Guarantor were prepared in accordance with
accounting principles generally accepted in the United States of America and
consistently applied and give (in conjunction with the notes thereto) a true and
fair view of the financial condition of ARCO Chemie Nederland, Ltd. or, as the
case may be, the Guarantor at the date as of which they were prepared and the
results of the operations of ARCO Chemie Nederland, Ltd. or the Guarantor, as
the case may be, during the financial year then ended.
12.12 Quarterly Statements The unaudited financial information of the
Guarantor in its quarterly report on Form 10-Q for the quarter ended 30
September 1996, as filed (with exhibits) with the Securities and Exchange
Commission, were prepared in accordance with accounting principles generally
accepted in the United States of America and consistently applied and give (in
conjunction with the notes thereto) a true and fair view of the financial
condition of the Group at the date as of which they were prepared and the
results of the Group's operations during the quarter then ended.
12.13 No Material Adverse Change Except as disclosed in writing to the Banks
prior to the date hereof, there has been no material adverse change since 30
September 1996 and prior to the date hereof in the business operations, affairs,
assets, condition (financial or otherwise) or the results of operations of the
Guarantor and each member of the Group considered as a whole.
12.14 Full Disclosure The information contained in the Information Memorandum
and all other written information supplied by any member of the Group in
connection herewith is accurate in all material respects and is not misleading
in any material respect and neither the Borrower nor the Guarantor is aware of
any material and adverse fact or circumstances which have arisen, or any events
which have occurred, that have not been disclosed to the Agent, the Arranger or
the Banks and which might, if disclosed, adversely affect the decision of a
person considering whether or not to provide finance to the Borrower or to
provide such finance against the security of a guarantee issued by the
Guarantor; any opinions, predictions or intentions expressed in the Information
Memorandum on the part of the Group are honestly held or made and are not
misleading in any material respect; all assumptions upon which any of the
projections or forecasts in the Information Memorandum are based are reasonable
and all proper enquiries have been made to ascertain and to verify the
foregoing.
12.15 Encumbrances Save as permitted by Clause 15.5 (Negative Pledge) no
encumbrance exists over all or any of the present or future revenues or assets
of any member of the Group.
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12.16 Execution of this Agreement Its execution of this Agreement and its
exercise of its rights and performance of its obligations hereunder do
not and will not:
(a) conflict with any agreement, mortgage, bond or other instrument or
treaty to which it is a party or which is binding upon it or any of
its assets;
(b) conflict with its constitutive documents and rules and regulations;
(c) conflict with any applicable law, regulation or official or judicial
order; or
(d) cause the creation of any encumbrance on any of its properties
pursuant to the provisions of any indenture, agreement or other
instrument to which it is a party or by which it is bound.
12.17 Ownership of the Borrower The Borrower is a wholly-owned subsidiary of
the Guarantor.
12.18 Cross-Indemnification Agreement and Tax-Sharing Agreement
(a) The Cross-Indemnification Agreement and the Tax-Sharing Agreement, in
the respective forms, with amendments, are in full force and effect
in accordance with their respective terms except for:
(i) any amendments, modifications or waivers of the Tax-Sharing
Agreement which do not materially alter the rights and
obligations of the Guarantor thereunder which as a whole place
the Guarantor in the same (or more favourable) relative
financial position with respect to Atlantic which the
Guarantor would have been in if the Guarantor were not
consolidated with Atlantic for the purposes of filing federal,
state or local or other income tax returns;
(ii) any amendments to the Cross-Indemnification Agreement for the
purpose of placing the Guarantor and Atlantic in the same
financial positions with respect to each other which they
would have been in if the Guarantor and Atlantic were not
members of the same ERISA Group, including the allocation of,
and indemnification with respect to, assets and funded and
unfunded liabilities among the Guarantor, Atlantic, Affiliates
and other members of the Group and their respective Plans in
such manner as is fair and equitable to the Guarantor and any
member of the Group;
(iii) any amendments, modifications and waivers of the Cross-
Indemnification Agreement or the Tax-Sharing Agreement which
do not, in the aggregate, materially reduce the rights of the
Guarantor thereunder against Atlantic or materially increase
the obligations of the Guarantor thereunder to Atlantic; and
(iv) any other amendments, modifications or waivers of such
instruments to which an Instructing Group has consented
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and true and complete copies of all such amendments,
modifications and waivers have been delivered to the Agent.
(b) No amount that may be due under the Cross-Indemnification Agreement
or the Tax-Sharing Agreement from Atlantic to the Guarantor or to
Atlantic from the Guarantor is delinquent, except such amount as the
Guarantor or Atlantic may be contesting in good faith.
12.19 Subsidiaries Each subsidiary of the Guarantor is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate powers and all governmental
licences, authorisations, consents and approvals required to carry on its
business as now conducted except for licences, authorisations, consents or
approvals the absence of which would not materially and adversely affect the
business of the Group taken as a whole.
12.20 Investment Company The Guarantor is not an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
12.21 ERISA Each member of the ERISA Group has fulfilled its obligations under
the minimum funding standards of ERISA and the Code with respect to each Plan
and is in compliance in all material respects with the presently applicable
provisions of ERISA and the Code with respect to each Plan, and has not:-
(a) sought a waiver of the minimum funding standard under Section
412 of the Code in respect of any Plan;
(b) failed to make any contribution or payment to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement, or made
any amendment to any Plan or Benefit Arrangement, which has resulted
or could result in the imposition of an encumbrance or the posting of
a bond or other security under ERISA or the Code; or
(c) incurred any liability under Title IV of ERISA other than a
liability to the PBGC for premiums under Section 4007 of ERISA.
12.22 Securities Exchange Act Except as disclosed in writing to the Banks
prior to the date hereof, the description of environmental matters affecting the
Group contained in each of the reports delivered to the Agent pursuant to Clause
13.4 (SEC Reports) complied in all material respects as of the date of such
report with the requirements of the Securities Exchange Act of 1934 and the
rules and regulations thereunder.
13. Information
13.1 Annual Statements Each of ARCO Chemie Nederland, Ltd. and the Guarantor
shall as soon as the same become available, but in any event within 120 days
after the end of each of its financial years, deliver to the Agent in sufficient
copies for the Banks its financial statements (or, in the case of the Guarantor,
the consolidated financial statements of the Group) for such financial year
setting forth in each case in comparative form the figures for the previous
financial year Provided that the delivery requirement
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in respect of the Guarantor shall be deemed to have been satisfied upon delivery
by the Guarantor to the Agent within 120 days after the end of its financial
year of its annual report on Form 10-K for such financial year, as filed (with
exhibits) with the Securities and Exchange Commission.
13.2 Quarterly Statements The Guarantor shall as soon as the same become
available, but in any event within 60 days after the end of each of the first
three quarters of each of its financial years, deliver to the Agent in
sufficient copies for the Banks the consolidated financial statements of the
Group for such quarter setting forth in comparative form the figures for the
previous financial year Provided that the delivery requirement shall be deemed
to have been satisfied upon delivery by the Guarantor to the Agent within 60
days after the end of such quarter of its quarterly report on Form 10-Q for such
quarter, as filed (with exhibits) with the Securities and Exchange Commission.
13.3 Shareholder Information The Guarantor shall, as soon as the same become
available, deliver to the Agent all notices, reports and proxy materials sent to
the shareholders of the Guarantor.
13.4 SEC Reports The Guarantor shall, as soon as the same become available,
deliver to the Agent all regular and periodic reports filed by the Guarantor
with the Securities and Exchange Commission (or any governmental agency
succeeding to the functions of such Commission).
13.5 ERISA The Guarantor shall deliver to the Agent, if and when any member of
the ERISA Group:
(a) gives or is required to give notice to the PBGC of any "reportable
event" (as defined in Section 4043 of ERISA) with respect to any Plan
which might constitute grounds for a termination of such Plan under
Title IV of ERISA, or knows that the plan administrator of any Plan
has given or is required to give notice of any such reportable event,
a copy of the notice of such reportable event given or required to be
given to the PBGC;
(b) receives notice of complete or partial withdrawal liability under
Title IV of ERISA or notice that any Multiemployer Plan is in
reorganisation, is insolvent or has been terminated, a copy of such
notice;
(c) receives notice from the PBGC under Title IV of ERISA of an intent to
terminate, impose liability (other than for premiums under Section
4007 of ERISA) in respect of, or appoint a trustee to administer any
Plan, a copy of such notice;
(d) applies for a waiver of the minimum funding standard under Section
412 of the Code, a copy of such application;
(e) gives notice of intent to terminate any Plan under Section 4041(c) of
ERISA, a copy of such notice and other information filed with the
PBGC;
(f) gives notice of withdrawal from any Plan pursuant to Section 4063 of
ERISA, a copy of such notice; and
(g) fails to make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes
any amendment to any Plan or Benefit Arrangement
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which has resulted or could result in the imposition of an encumbrance
or the posting of a bond or other security, a certificate of the chief
financial officer of the Guarantor setting forth details as to such
occurrence and action, if any, which the Guarantor or applicable member
of the ERISA Group is required or proposes to take.
13.6 Other Information Each of the Obligors shall from time to time on the
request of the Agent, furnish the Agent with such information about the business
operations, affairs, assets and condition (financial or otherwise) of the Group
or any member thereof as the Agent or a Bank through the Agent may reasonably
require.
13.7 Requirements as to Financial Statements
(a) the Guarantor shall ensure that each set of financial statements
delivered by it pursuant to Clause 13.1 (Annual Statements) has been
audited by a nationally recognised firm of independent certified public
accountants licensed to practise in the United States of America;
(b) the Guarantor shall ensure that each set of financial statements
delivered by it pursuant to Clause 13.2 (Quarterly Statements) is
certified by the treasurer or other financial officer of the Guarantor
as to fairness of presentation, generally accepted accounting
principles and consistency; and
(c) ARCO Chemie Nederland, Ltd. shall ensure that each set of financial
statements delivered by it pursuant to Clause 13.1 (Annual Statements)
is certified by its treasurer or other financial officer as to fairness
of presentation, generally accepted accounting principles and
consistency.
13.8 Compliance Certificates
(a) Each set of financial statements delivered by the Guarantor pursuant to
this Clause 13.1 (Annual Statements) and Clause 13.2 (Quarterly
Statements) shall be accompanied by a certificate of the treasurer of
other financial officer of the Guarantor:
(i) setting forth in reasonable detail the calculations required to
establish whether the Guarantor was in compliance with Clause 14
(Financial Condition) on the date of such financial statements;
and
(ii) stating whether there exists on the date of such certificate any
Event of Default or Potential Event of Default, and if so,
specifying the nature and period of existence thereof and the
action the Guarantor is taking and proposes to take in respect
thereto; and
(b) each set of financial statements delivered by the Borrower pursuant to
this Clause 13 shall be accompanied by a certificate of the treasurer
or other financial officer of the Borrower stating whether there exists
on the date of such certificate any Event of Default or Potential
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Event of Default, and if so, specifying the nature and period of
existence thereof and the action the Borrower is taking and proposes to
take in respect thereto.
13.9 Accounting Policies Each of the Obligors shall ensure that each set of
financial statements delivered to the Agent pursuant to:
(a) Clause 13.1 (Annual Statements) is prepared using accounting policies,
practices, procedures and reference period consistent with those applied in
the preparation of the Original Financial Statements unless, in relation to
any such set of financial statements, ARCO Chemie Nederland, Ltd. or the
Guarantor, as the case may be, notifies the Agent that there have been one
or more changes in any such accounting policies, practices, procedures or
reference period and the auditors for the time being of the Guarantor or
the treasurer or other financial officer of ARCO Chemie Nederland, Ltd., as
the case may be, provide:
(i) a description of the changes and the adjustments which would be
required to be made to those financial statements in order to cause
them to use the accounting policies, practices, procedures and
reference period upon which the Original Financial Statements were
prepared; and
(ii) sufficient information, in such detail and format as may be reasonably
required by the Agent, to enable the Banks to make an accurate
comparison between the financial position indicated by those financial
statements and the Original Financial Statements;
Provided that the notification requirement in respect of the Guarantor shall be
deemed to be satisfied upon delivery by the Guarantor to the Agent of any
reports filed disclosing such changes and provided to the Agent under Clause
13.4 (SEC Reports); and
(b) Clause 13.2 (Quarterly Statements) is prepared using accounting policies,
practices, procedures and reference period consistent with those applied in
the preparation of the financial statements for the quarter ended 30
September 1996 unless, in relation to any such set of financial statements,
the Guarantor notifies the Agent that there have been one or more changes
in any such accounting policies, practices, procedures or reference period
and the treasurer or other financial officer of the Guarantor provides:
(i) a description of the changes and the adjustments which would be
required to be made to those financial statements in order to cause
them to use the accounting policies, practices, procedures and
reference period upon which the financial statements for the quarter
ended 30 September 1996 were prepared; and
(ii) sufficient information, in such detail and format as may be reasonably
required by the Agent, to enable the Banks to make an accurate
comparison between the financial position indicated by those financial
statements and the financial statements for the quarter ended 30
September 1996,
and any reference in this Agreement to those financial statements shall be
construed as a reference to those financial statements as adjusted to reflect
the basis upon which the Original Financial Statements or the financial
statements for the quarter ended 30 September 1996, as the case may be, were
prepared.
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14. Financial Condition
14.1 Financial Condition of the Group At any date, the consolidated financial
condition of the Group, determined as of such date, shall be such that
Consolidated Net Worth is not less than $1,500,000,000 (or its Equivalent
Amount).
14.2 Definitions of Financial Terms In Clause 14.1 (Financial Condition of the
Group):
"Consolidated Net Worth" means, at any date, the aggregate consolidated
shareholders' equity of the Guarantor and each member of the Group less their
aggregate consolidated Write-ups, all determined as of such date.
"Write-ups" means the amount (to the extent reflected in determining
shareholders' equity) of all write-ups (other than write-ups resulting from
foreign currency translations and write-ups of assets of a going concern
business made within 12 months after the acquisition of such business)
subsequent to 31 December 1995 in the book value of any asset owned by the
Guarantor or a member of the Group.
14.3 Accounting Terms All accounting expressions which are not otherwise
defined herein shall be construed in accordance with generally accepted
accounting principles in the United States of America.
15. Covenants
15.1 Maintenance of Legal Validity Each of the Obligors shall obtain, comply
with the terms of and do all that is necessary to maintain in full force and
effect all authorisations, approvals, licences and consents required in or by
the laws and regulations of its jurisdiction of incorporation to enable it
lawfully to enter into and perform its obligations under this Agreement and to
ensure the legality, validity, enforceability or admissibility in evidence in
its jurisdiction of incorporation of this Agreement.
15.2 Untrue Representations After the delivery of any Notice of Drawdown and
before the making of the Advance requested therein, each of the Obligors shall
notify the Agent of the occurrence of any event which results in or may
reasonably be expected to result in any of the representations contained in
Clause 12 (Representations) being untrue in any material respect at or before
the time of the making of such Advance.
15.3 Notification of Events of Default Each of the Obligors shall promptly
inform the Agent of the occurrence of any Event of Default or Potential Event of
Default and, upon receipt of a written request to that effect from the Agent,
confirm to the Agent that, save as previously notified to the Agent or as
notified in such confirmation, no Event of Default or Potential Event of Default
has occurred.
15.4 Claims Pari Passu Each of the Obligors shall ensure that at all times the
claims of the Agent, the Arranger and the Banks against it under this Agreement
rank at least pari passu with the claims of all its other unsecured and
unsubordinated creditors save those whose claims are preferred by any
bankruptcy, insolvency, liquidation or other similar laws of general
application.
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15.5 Negative Pledge The Guarantor shall ensure that no member of the Group
shall create or permit to subsist any encumbrance other than a Permitted
Encumbrance over all or any of its present or future revenues or assets without
effectively providing that the Loan (together with, if the Guarantor so
determines, any other Indebtedness for Borrowed Money then existing and any
other Indebtedness for Borrowed Money thereafter created ranking equally with
the Loan) shall be secured equally and rateably with (or prior to) such
Indebtedness for Borrowed Money so long as such Indebtedness for Borrowed Money
shall be so secured Provided that the Guarantor, the Borrower and any one or
more subsidiaries may issue, assume or guarantee Indebtedness for Borrowed Money
secured by encumbrances which would otherwise be subject to the foregoing
restrictions or grant any such encumbrance to secure any such Indebtedness for
Borrowed Money in an aggregate principal amount which, together with the
aggregate outstanding principal amount of all Indebtedness for Borrowed Money of
the Guarantor and each member of the Group which would otherwise be subject to
the foregoing restrictions (not including Indebtedness for Borrowed Money
permitted to be secured under a Permitted Encumbrance), and the aggregate Value
of the Sale and Lease-Back Transactions in existence at such time (not including
Sale and Lease-Back Transactions as to which the Guarantor has complied with
Clause 15.9(b)) does not at any time exceed 15 per cent. of the consolidated
total assets of the Guarantor and each member of the Group determined by
reference to the latest audited consolidated financial statements of the
Guarantor (adjusted in such manner as the Agent may require to take account of
any matters occurring after the date of preparation of the financial statements
in question).
15.6 Disposals The Guarantor shall ensure that (disregarding sales of stock in
trade in the ordinary course of business) no member of the Group shall sell,
lease, transfer or otherwise dispose of all or any substantial part of its
assets by one or more transactions or series of transactions (whether related or
not), other than any sale, lease, transfer or disposal:
(a) which is a Sale and Lease-Back Transaction permitted under Clause 15.9
(Sale and Lease-Back);
(b) made on an arm's length basis or for full market value to a wholly-
owned subsidiary of the Guarantor which is (i) a non-operating
subsidiary and (ii) does not at any time (including at the time of or
after any sale, lease, transfer or disposal under this sub-paragraph
(b)) have any indebtedness owing to a person other than the Guarantor,
the Borrower or a wholly-owned subsidiary which meets the criteria in
(i) and (ii) under this sub-paragraph (b); or
(c) made by any member of the Group to the Guarantor, the Borrower or a
wholly-owned subsidiary of the Guarantor
and for the purpose of this Clause 15.6, "substantial part of its assets" means
assets (including any member of the Group and valued at the higher of book or
fair market value) (y) representing in aggregate more than 25 per cent. of the
consolidated assets of the Group or (z) responsible in aggregate for more than
25 per cent. of the consolidated net revenues or of the consolidated net income
of the Group, in each case determined by reference to the latest audited
consolidated financial statements of the Guarantor (adjusted in such manner as
the Agent may require to take account of any matters occurring after the date of
preparation of the financial statements in question)
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15.7 Environmental Matters Each of the Obligors shall, and shall procure that
each member of the Group shall:
(a) comply with (i) the terms and conditions of all Environmental Licences
applicable to it (and obtain and renew the same) and (ii) all other
applicable Environmental Laws; and
(b) promptly upon receipt of the same, notify the Agent of any claim,
notice or communication served on it in respect of any alleged breach
of any Environmental Law which might, if substantiated, have a material
adverse effect on the ability of such Obligor to perform its
obligations under this Agreement; and
(c) indemnify the Agent, the Arranger and each Bank and their respective
officers, employees, agents and delegates (an "Indemnified Party")
against any loss, liability, cost or expense suffered or incurred by
them which:
(i) arises by virtue of any actual or alleged breach of any
Environmental Law;
(ii) would not have arisen if this Agreement had not been entered
into; and
(iii) was not caused by the gross negligence or wilful default of
the Indemnified Party.
15.8 Merger The Guarantor shall ensure that no member of the Group which
constitutes a substantial part of its assets shall enter into any merger or
consolidation Provided that:
(a) the Guarantor or the Borrower may enter into a merger if it is the
corporation surviving the merger and immediately after giving effect to
the merger, no Event of Default has occurred and is continuing;
(b) the Guarantor may merge or consolidate with or into Atlantic if
Atlantic expressly assumes the obligations of the Guarantor hereunder
by an instrument satisfactory in form and substance to the Agent and
the Banks; and
(c) any member of the Group may enter into a merger if it merges with the
Guarantor, the Borrower or a wholly-owned subsidiary of the Guarantor
and for the purpose of this Clause 15.8, "substantial part of its assets" means
assets (including any member of the Group and valued at the higher of book or
fair market value) (y) representing in aggregate more than 25 per cent. of the
consolidated assets of the Group or (z) responsible in aggregate for more than
25 per cent. of the consolidated net revenues or of the consolidated net income
of the Group, in each case determined by reference to the latest audited
consolidated financial statements of the Guarantor (adjusted in such manner as
the Agent may require to take account of any matters occurring after the date of
preparation of the financial statements in question).
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15.9 Sale and Lease-Back The Guarantor shall ensure that no member of the Group
shall enter into a Sale and Lease-Back Transaction unless:
(a) such member of the Group would be entitled pursuant to Clause 15.5
(Negative Pledge) to incur Indebtedness for Borrowed Money in a
principal amount equal to or exceeding the Value of such Sale and
Lease-Back Transaction secured by an encumbrance on the property to
be leased without equally and ratably securing the Loan; or
(b) the Guarantor (and in any such case the Guarantor covenants to) within
four months after the effective date of such Sale and Lease-Back
Transaction (whether made by the Guarantor or any other member of the
Group), repays Indebtedness for Borrowed Money of the Borrower ranking
at least pari passu with the Loan in an amount equal to the Value of
such Sale and Lease-Back Transaction less the principal amount of such
Indebtedness for Borrowed Money repaid within such four month period,
excluding repayments of such Indebtedness for Borrowed Money as a
result of conversions or pursuant to mandatory sinking fund or
repayment provisions or (other than in the case of commercial paper) by
payment at maturity.
15.10 Transactions with Affiliates The Guarantor shall ensure that no member
of the Group shall, directly or indirectly, pay any funds to or for the account
of, make any investment in (whether by acquisition of shares or indebtedness, by
loan, advance, transfer of property, guarantee or other agreement to pay,
purchase or service, directly or indirectly, any Indebtedness for Borrowed
Money, or otherwise), sell, lease, transfer or otherwise dispose of any assets,
tangible or intangible, to, or participate in or effect any transaction in
connection with any joint enterprise or other joint arrangement with, any
Affiliate Provided that the foregoing shall not prohibit:
(a) the Guarantor declaring or making a dividend or other distribution
Provided that no Event of Default or Potential Event of Default occurs
and is continuing upon the declaring or making of such dividend or
distribution;
(b) any member of the Group entering into any sale, lease or purchase with
any Affiliate and, in connection therewith, extending credit or making
payments;
(c) any member of the Group making payments for services rendered by any
Affiliate;
(d) any member of the Group participating in, or effecting any transaction
in connection with, any joint enterprise or other joint arrangement
with any Affiliate if such sales, purchases or leases are made or such
services are rendered or such member of the Group participates in the
ordinary course of its business and in the aggregate during each
financial year of the Guarantor, the terms and conditions of all such
sales, purchases, leases, rendered services and participations are not
materially less favourable to the similar transactions with persons who
are not Affiliates;
(e) any member of the Group making payments with respect to any
Indebtedness for Borrowed Money of such member of the Group to any
Affiliate if the terms of such Indebtedness for Borrowed Money are
substantially as favourable as the terms which could have been obtained
at the time of the creation of such Indebtedness for Borrowed Money
from a lender who was not an Affiliate.
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16. Events of Default
Each of Clause 16.1 to Clause 16.17 describes circumstances which constitute an
Event of Default for the purposes of this Agreement. Clause 16.18 and Clause
16.19 deal with the rights of the Agent and the Banks after the occurrence of an
Event of Default.
16.1 Failure to Pay Either of the Obligors fails to pay, in the currency and in
the manner specified herein, (a) any principal in respect of the Loan on the due
date for payment or (b) any interest in respect of the Loan or any other sum due
hereunder within five business days of the relevant due date for payment.
16.2 Misrepresentation Any representation or statement made by either of the
Obligors in this Agreement or in any notice or other document, certificate or
statement delivered by it pursuant hereto or in connection herewith is or proves
to have been incorrect or misleading in any material respect when made.
16.3 Specific Covenants Either of the Obligors fails duly to perform or comply
with any of the obligations expressed to be assumed by it in Clause 15.1
(Maintenance of Legal Validity), Clause 15.5 (Negative Pledge), Clause 15.6
(Disposals), Clause 15.8 (Mergers) or Clause 15.9 (Sale and Lease-Back).
16.4 Other Obligations Either of the Obligors fails duly to perform or comply
with any other obligation expressed to be assumed by it in this Agreement and
such failure is not remedied within thirty days after the Agent has given notice
thereof to such Obligor.
16.5 Financial Condition At any time any of the requirements of Clause 14.1
(Financial Condition of the Group) is not satisfied.
16.6 Cross Default Any Indebtedness for Borrowed Money of the Guarantor, the
Borrower or any Material Subsidiary is not paid when due or within any
applicable grace period, any Indebtedness for Borrowed Money of the Guarantor,
the Borrower or any Material Subsidiary is declared to be or otherwise becomes
due and payable prior to its specified maturity or any creditor or creditors of
the Guarantor, the Borrower or any Material Subsidiary become entitled to
declare any Indebtedness for Borrowed Money of the Guarantor, the Borrower or
any Material Subsidiary due and payable prior to its specified maturity
Provided that the aggregate amount of all such Indebtedness for Borrowed Money,
excluding any Indebtedness for Borrowed Money owed to:
(a) any department, agency, instrumentality or political subdivision of the
United States of America or any state thereof in respect of any
pollution control, industrial revenue bond or other similar type of
financing where such obligation is being contested in good faith by
appropriate proceedings; or
(b) any member of the Group by any other member of the Group,
equals or exceeds $30,000,000 (or its Equivalent Amount).
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16.7 Voluntary Bankruptcy The Guarantor, the Borrower, any Material Subsidiary
or any two or more members of the Group which, if combined, would constitute a
Material Subsidiary, commences a voluntary case or other proceeding seeking
liquidation, reorganisation or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, or
consents to any such relief or to the appointment of or taking possession by any
such official in an involuntary case or other proceeding commenced against it,
or makes a general assignment for the benefit of creditors, or fails generally
to pay its debts as they become due, or takes any corporate action to authorise
any of the foregoing.
16.8 Involuntary Bankruptcy An involuntary case or other proceeding is
commenced against the Guarantor, the Borrower, any Material Subsidiary or any
two or more members of the Group which, if combined, would constitute a Material
Subsidiary, seeking liquidation, reorganisation or other relief with respect to
it or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding remains undismissed
and unstayed for a period of 60 days; or an order for relief is entered against
the Guarantor, the Borrower, any Material Subsidiary or any two or more members
of the Group which, if combined, would constitute a Material Subsidiary, under
the bankruptcy laws as now or hereafter in effect.
16.9 Execution or Distress Any execution or distress in respect of an amount
in excess of $20,000,000 (or its Equivalent Amount) is levied against, or an
encumbrancer takes possession of, the whole or any part of, the property,
undertaking or assets of any member of the Group.
16.10 Analogous Events Any event occurs which under the laws of any
jurisdiction has a similar or analogous effect to any of those events mentioned
in Clause 16.7 (Insolvency and Rescheduling), Clause 16.8 (Winding-up) or Clause
16.9 (Execution or Distress).
16.11 Ownership of the Borrower The Guarantor ceases to own more than sixty-
six and two-thirds per cent. of the issued share capital of the Borrower.
16.12 The Group's Business Either of the Obligors or any Material Subsidiary
ceases to carry on the business it carries on at the date hereof or enters into
any unrelated business.
16.13 Repudiation Either of the Obligors repudiates this Agreement or does or
causes to be done any act or thing evidencing an intention to repudiate this
Agreement.
16.14 Illegality At any time it is or becomes unlawful for either of the
Obligors to perform or comply with any or all of its obligations hereunder or
any of the obligations of either of the Obligors hereunder are not or cease to
be legal, valid and binding.
16.15 Performance of Obligations Any circumstances arise which give reasonable
grounds in the opinion of an Instructing Group for belief that either of the
Obligors may not (or may be unable to) perform or comply with its material
obligations hereunder.
16.16 Judgment A final, non-appealable judgment or order enforceable by the
courts of the United States, England or any other European Union country for the
payment of money in excess of $50,000,000 (or its Equivalent Amount) is
rendered against any member of the Group and remains unsatisfied after a period
of thirty days.
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16.17 Termination of Plan
(a) Any member of the ERISA Group fails to pay when due an aggregate amount
in excess of $20,000,000 (or its Equivalent Amount) which it becomes
liable to pay under Title IV of ERISA;
(b) notice of intent to terminate a Plan or Plans having aggregate Unfunded
Liabilities in excess of $50,000,000 (or its Equivalent Amount)
(collectively a "Material Plan") is filed under Title IV of ERISA by
any member of the ERISA Group, any plan administrator or any
combination of the foregoing;
(c) the PBGC institutes proceedings under Title IV of ERISA to terminate,
to impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or to cause a trustee to be appointed to
administer any Material Plan;
(d) a condition exists by reason of which the PBGC would be entitled to
obtain a decree adjudicating that any Material Plan must be terminated;
(e) there occurs a complete or partial withdrawal from, or a default,
within the meaning of Section 4219(c)(5) of ERISA, with respect to, one
or more Multiemployer Plans which could cause one or more members of
the ERISA Group to incur a current payment obligation in excess of
$20,000,000 (or its Equivalent Amount).
16.18 Acceleration and Cancellation Upon the occurrence of an Event of Default
or at any time thereafter (unless such Event of Default has been remedied or
waived), the Agent may (and, if so instructed by an Instructing Group, shall) by
written notice to the Borrower:
(a) declare the Advances to be immediately due and payable (whereupon the
same shall become so payable together with accrued interest thereon and
any other sums then owed by the Borrower hereunder) or declare the
Advances to be due and payable on demand of the Agent; and/or
(b) declare that any undrawn portion of the Facility shall be cancelled,
whereupon the same shall be cancelled and the Available Commitment of
each Bank shall be reduced to zero.
16.19 Advances Due on Demand If, pursuant to Clause 16.18 (Acceleration and
Cancellation), the Agent declares the Advances to be due and payable on demand
of the Agent, then, and at any time thereafter, the Agent may (and, if so
instructed by an Instructing Group, shall) by written notice to the Borrower:
(a) require repayment of the Advances on such date as it may specify in
such notice (whereupon the same shall become due and payable on such
date together with accrued interest thereon and any other sums then
owed by the Borrower hereunder) or withdraw its declaration with effect
from such date as it may specify in such notice; and/or
(b) select as the duration of any Interest Period which begins whilst such
declaration remains in effect a period of six months or less.
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PART 7
GUARANTEE
17. Guarantee and Indemnity
17.1 Guarantee The Guarantor irrevocably and unconditionally guarantees to the
Agent, the Arranger and the Banks the due and punctual observance and
performance of all the terms, conditions and covenants on the part of the
Borrower contained in this Agreement and agrees to pay to the Agent from time to
time on demand any and every sum or sums of money which the Borrower is at any
time liable to pay to the Agent, the Arranger and the Banks or any of them under
or pursuant to this Agreement and which has become due and payable but has not
been paid at the time such demand is made.
17.2 Indemnity The Guarantor irrevocably and unconditionally agrees as a
primary obligation to indemnify the Agent, the Arranger and the Banks from time
to time on demand by the Agent from and against any loss incurred by the Agent,
the Arranger and the Banks or any of them as a result of any of the obligations
of the Borrower under or pursuant to this Agreement being or becoming void,
voidable, unenforceable or ineffective as against the Borrower for any reason
whatsoever, whether or not known to the Agent, the Arranger and the Banks or any
of them or any other person, the amount of such loss being the amount which the
person or persons suffering it would otherwise have been entitled to recover
from the Borrower.
17.3 Additional Security The obligations of the Guarantor herein contained
shall be in addition to and independent of every other security which the Agent,
the Arranger and the Banks or any of them may at any time hold in respect of any
of the Borrower's obligations hereunder.
17.4 Continuing Obligations The obligations of the Guarantor herein contained
shall constitute and be continuing obligations notwithstanding any settlement of
account or other matter or thing whatsoever and shall not be considered
satisfied by any intermediate payment or satisfaction of all or any of the
obligations of the Borrower under this Agreement and shall continue in full
force and effect until final payment in full of all amounts owing by the
Borrower hereunder and total satisfaction of all the Borrower's actual and
contingent obligations hereunder.
17.5 Obligations not Discharged Neither the obligations of the Guarantor herein
contained nor the rights, powers and remedies conferred in respect of the
Guarantor upon the Agent, the Arranger and the Banks or any of them by this
Agreement or by law shall be discharged, impaired or otherwise affected by:
(a) the winding-up, dissolution, administration or re-organisation of the
Borrower or any other person or any change in its status, function,
control or ownership;
(b) any of the obligations of the Borrower or any other person hereunder or
under any other security taken in respect of any of its obligations
hereunder being or becoming illegal, invalid, unenforceable or
ineffective in any respect;
(c) time or other indulgence being granted or agreed to be granted to the
Borrower in respect of its obligations hereunder or under any such
other security;
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(d) any amendment to, or any variation, waiver or release of, any
obligation of the Borrower hereunder or under any such other security;
(e) any failure to take, or fully to take, any security contemplated hereby
or otherwise agreed to be taken in respect of the Borrower's
obligations hereunder;
(f) any failure to realise or fully to realise the value of, or any
release, discharge, exchange or substitution of, any security taken in
respect of the Borrower's obligations hereunder; or
(g) any other act, event or omission which, but for this Clause 17.5, might
operate to discharge, impair or otherwise affect any of the obligations
of the Guarantor herein contained or any of the rights, powers or
remedies conferred upon the Agent, the Arranger and the Banks or any of
them by this Agreement or by law.
17.6 Settlement Conditional Any settlement or discharge between the Guarantor
and the Agent, the Arranger and the Banks or any of them shall be conditional
upon no security or payment to the Agent, the Arranger and the Banks or any of
them by the Borrower or the Guarantor or any other person on behalf of the
Borrower or, as the case may be, the Guarantor being avoided or reduced by
virtue of any provisions or enactments relating to bankruptcy, insolvency,
liquidation or similar laws of general application for the time being in force
and, if any such security or payment is so avoided or reduced, the Agent, the
Arranger and the Banks shall each be entitled to recover the value or amount of
such security or payment from the Guarantor subsequently as if such settlement
or discharge had not occurred.
17.7 Exercise of Rights Neither the Agent, the Arranger and the Banks nor any
of them shall be obliged before exercising any of the rights, powers or remedies
conferred upon them in respect of the Guarantor by this Agreement or by law:
(a) to make any demand of the Borrower;
(b) to take any action or obtain judgment in any court against the
Borrower;
(c) to make or file any claim or proof in a winding-up or dissolution of
the Borrower; or
(d) to enforce or seek to enforce any other security taken in respect of
any of the obligations of the Borrower hereunder.
17.8 Deferral of Guarantor's Rights The Guarantor agrees that, so long as any
amounts are or may be owed by the Borrower hereunder or the Borrower is under
any actual or contingent obligations hereunder, the Guarantor shall not exercise
any rights which the Guarantor may at any time have by reason of performance by
it of its obligations hereunder:
(a) to be indemnified by the Borrower; and/or
(b) to claim any contribution from any other guarantor of the Borrower's
obligations hereunder; and/or
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(c) to take the benefit (in whole or in part and whether by way of
subrogation or otherwise) of any rights of the Agent, the Arranger
and the Banks hereunder or of any other security taken pursuant to,
or in connection with, this Agreement by all or any of the Agent,
the Arranger and the Banks.
17.9 Suspense Accounts All moneys received, recovered or realised by a Bank by
virtue of Clause 17.1 (Guarantee) or Clause 17.2 (Indemnity) may, in that Bank's
discretion, be credited to a suspense or impersonal account and may be held in
such account for so long as such Bank thinks fit pending the application from
time to time (as such Bank may think fit) of such moneys in or towards the
payment and discharge of any amounts owing by either of the Obligors to such
Bank hereunder and any interest accruing on such moneys shall be applied by such
Bank in or towards the payment and discharge of any amounts owing by either of
the Obligors to such Bank hereunder.
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PART 8
DEFAULT INTEREST AND INDEMNITY
18. Default Interest and Indemnity
18.1 Default Interest Periods If any sum due and payable by either of the
Obligors hereunder is not paid on the due date therefor in accordance with the
provisions of Clause 20 (Payments) or if any sum due and payable by either of
the Obligors under any judgment of any court in connection herewith is not paid
on the date of such judgment, the period beginning on such due date or, as the
case may be, the date of such judgment and ending on the date upon which the
obligation of such Obligor to pay such sum (the balance thereof for the time
being unpaid being herein referred to as an "unpaid sum") is discharged shall be
divided into successive periods, each of which (other than the first) shall
start on the last day of the preceding such period and the duration of each of
which shall (except as otherwise provided in this Clause 18) be selected by the
Agent.
18.2 Default Interest During each such period relating thereto as is mentioned
in Clause 18.1 (Default Interest Periods) an unpaid sum shall bear interest at
the rate per annum which is the sum from time to time of one per cent., the
Margin and LIBOR on the Quotation Date therefor Provided that:
(a) if, for any such period, LIBOR cannot be determined, the rate of
interest applicable to each Bank's portion of such unpaid sum shall
be the rate per annum which is the sum of one per cent., the Margin
and the rate per annum notified to the Agent by such Bank as soon as
practicable after the beginning of such period as being that which
expresses as a percentage rate per annum the cost to such Bank of
funding from whatever sources it may select its portion of such
unpaid sum during such period; and
(b) if such unpaid sum is all or part of an Advance which became due and
payable on a day other than the last day of an Interest Period
relating thereto, the first such period applicable thereto shall be
of a duration equal to the unexpired portion of that Interest Period
and the rate of interest applicable thereto from time to time during
such period shall be that which exceeds by one per cent. the rate
which would have been applicable to it had it not so fallen due.
18.3 Payment of Default Interest Any interest which shall have accrued under
Clause 18.2 (Default Interest) in respect of an unpaid sum shall be due and
payable and shall be paid by the Obligor owing such unpaid sum at the end of the
period by reference to which it is calculated or on such other dates as the
Agent may specify by written notice to such Obligor.
18.4 Broken Periods If any Bank or the Agent on its behalf receives or
recovers all or any part of such Bank's share of an Advance otherwise than on
the last day of an Interest Period relating to that Advance, the Borrower shall
pay to the Agent on demand for account of such Bank an amount equal to the
amount (if any) by which (a) the additional interest which would have been
payable on the amount so received or recovered had it been received or recovered
on the last day of that Interest Period exceeds (b) the amount of interest which
in the opinion of the Agent would have been payable to the Agent on the last day
of that Interest Period in respect of a Guilder deposit equal to the amount so
received or recovered placed by it with a prime bank in London for a period
starting on the third business day following the date of such receipt or
recovery and ending on the last day of that Interest Period Provided that such
Bank shall deliver to the Borrower, within sixty days of such receipt or
recovery, a certificate as to the amounts due pursuant to sub-paragraphs (a) and
(b) above and setting forth in reasonable detail the basis for such amount and
such certificate shall be conclusive in the absence of manifest error.
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18.5 Borrower's Indemnity The Borrower undertakes to indemnify:
(a) each of the Agent, the Arranger and the Banks against any cost,
claim, loss, expense (including legal fees) or liability together
with any VAT thereon, which any of them may sustain or incur
(otherwise than by reason of its own gross negligence or wilful
misconduct) as a consequence of the occurrence of any Event of
Default or any default by the Borrower in the performance of any of
the obligations expressed to be assumed by it in this Agreement; and
(b) each Bank against any loss it may suffer or incur (otherwise than by
reason of its own gross negligence or wilful misconduct) as a result
of its funding or making arrangements to fund its portion of an
Advance requested by the Borrower hereunder but not made by reason
of the operation of any one or more of the provisions hereof.
18.6 Unpaid Sums as Advances Any unpaid sum shall (for the purposes of this
Clause 18 and Clause 11.1 (Increased Costs)) be treated as an advance and
accordingly in this Clause 18 and Clause 11.1 (Increased Costs)) the term
"Advance" includes any unpaid sum and the term "Interest Period", in relation to
an unpaid sum, includes each such period relating thereto as is mentioned in
Clause 18.1 (Default Interest Periods).
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PART 9
PAYMENTS
19. Currency of Account and Payment
19.1 Currency of Account The Guilder is the currency of account and payment
for each and every sum at any time due from either of the Obligors hereunder
Provided that:
(a) each payment in respect of costs and expenses shall be made in the
currency in which the same were incurred; and
(b) each payment pursuant to Clause 9.2 (Tax Indemnity) or Clause 11.1
(Increased Costs) shall be made in the currency specified by the
party claiming thereunder.
19.2 Currency Indemnity If any sum due from either of the Obligors under this
Agreement or any order or judgment given or made in relation hereto has to be
converted from the currency (the "first currency") in which the same is payable
hereunder or under such order or judgment into another currency (the "second
currency") for the purpose of (a) making or filing a claim or proof against such
Obligor, (b) obtaining an order or judgment in any court or other tribunal or
(c) enforcing any order or judgment given or made in relation hereto, the
Borrower shall indemnify and hold harmless each of the persons to whom such sum
is due from and against any loss suffered or incurred as a result of any
discrepancy between (i) the rate of exchange used for such purpose to convert
the sum in question from the first currency into the second currency and (ii)
the rate or rates of exchange at which such person may in the ordinary course of
business purchase the first currency with the second currency upon receipt of a
sum paid to it in satisfaction, in whole or in part, of any such order,
judgment, claim or proof.
20. Payments
20.1 Payments to the Agent On each date on which this Agreement requires an
amount denominated in Guilders to be paid by either of the Obligors or any of
the Banks hereunder, such Obligor or, as the case may be, such Bank shall make
the same available to the Agent by payment in Guilders and in immediately
available, freely transferable, cleared funds to such account with such bank as
the Agent shall have specified for this purpose.
20.2 Alternative Payment Arrangements If, at any time, it shall become
impracticable (by reason of any action of any governmental authority or any
change in law, exchange control regulations or any similar event) for either or
both of the Obligors to make any payments hereunder in the manner specified in
Clause 20.1 (Payments to the Agent), then such Obligor may agree with each or
any of the Banks alternative arrangements for the payment direct to such Bank of
amounts due to such Bank hereunder Provided that, in the absence of any such
agreement with any Bank, such Obligor shall be obliged to make all payments due
to such Bank in the manner specified herein. Upon reaching such agreement such
Obligor and such Bank shall immediately notify the Agent thereof and shall
thereafter promptly notify the Agent of all payments made direct to such Bank.
20.3 Payments by the Agent Save as otherwise provided herein, each payment
received by the Agent for the account of another person pursuant to Clause 20.1
(Payments to the Agent) shall be made available by the Agent to such other
person (in the case of a Bank, for the account of its Facility Office) for value
the same day
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by transfer to such account of such person with such bank in the principal
financial centre of the country of the currency of such payment as such person
shall have previously notified to the Agent.
20.4 No Set-off All payments required to be made by either of the Obligors
hereunder shall be calculated without reference to any set-off or counterclaim
and shall be made free and clear of and without any deduction for or on account
of any set-off or counterclaim.
20.5 Clawback Where a sum is to be paid hereunder to the Agent for account of
another person, the Agent shall not be obliged to make the same available to
that other person until it has been able to establish to its satisfaction that
it has actually received such sum, but if it does so and it proves to be the
case that it had not actually received such sum, then the person to whom such
sum was so made available shall on request refund the same to the Agent together
with an amount sufficient to indemnify the Agent against any cost or loss it may
have suffered or incurred by reason of its having paid out such sum prior to its
having received such sum.
21. Set-Off
21.1 Contractual Set-off Each of the Obligors authorises each Bank to apply
any credit balance to which such Obligor is entitled on any account of such
Obligor with that Bank in satisfaction of any sum due and payable from such
Obligor to such Bank hereunder but unpaid; for this purpose, each Bank is
authorised to purchase with the moneys standing to the credit of any such
account such other currencies as may be necessary to effect such application.
21.2 Set-off not Mandatory No Bank shall be obliged to exercise any right
given to it by Clause 21.1 (Contractual Set-off).
22. Sharing
22.1 Redistribution of Payments Subject to Clause 22.3 (Recoveries Through
Legal Proceedings), if at any time, the proportion which any Bank (a "Recovering
Bank") has received or recovered (whether by payment, the exercise of a right of
set-off or combination of accounts or otherwise) in respect of its portion of
any payment (a "relevant payment") to be made under this Agreement by either of
the Obligors for account of such Recovering Bank and one or more other Banks is
greater (the portion of such receipt or recovery giving rise to such excess
proportion being herein called an "excess amount") than the proportion thereof
so received or recovered by the Bank or Banks so receiving or recovering the
smallest proportion thereof, then:
(a) such Recovering Bank shall inform the Agent of such receipt or
recovery and pay to the Agent an amount equal to such excess amount;
(b) there shall thereupon fall due from such Obligor to such Recovering
Bank an amount equal to the amount paid out by such Recovering Bank
pursuant to paragraph (a) above, the amount so due being, for the
purposes hereof, treated as if it were an unpaid part of such
Recovering Bank's portion of such relevant payment; and
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(c) the Agent shall treat the amount received by it from such Recovering
Bank pursuant to paragraph (a) above as if such amount had been
received by it from such Obligor in respect of such relevant payment
and shall pay the same to the persons entitled thereto (including
such Recovering Bank) pro rata to their respective entitlements
thereto.
22.2 Repayable Recoveries If any sum (a "relevant sum") received or recovered
by a Recovering Bank in respect of any amount owing to it by either of the
Obligors becomes repayable and is repaid by such Recovering Bank, then:
(a) each Bank which has received a share of such relevant sum by reason
of the implementation of Clause 22.1 (Redistribution of Payments)
shall, upon request of the Agent, pay to the Agent for account of
such Recovering Bank an amount equal to its share of such relevant
sum; and
(b) there shall thereupon fall due from such Obligor to each such Bank
an amount equal to the amount paid out by it pursuant to paragraph
(a) above, the amount so due being, for the purposes hereof, treated
as if it were the sum payable to such Bank against which such Bank's
share of such relevant sum was applied.
22.3 Recoveries Through Legal Proceedings If any Bank shall commence any
action or proceeding in any court to enforce its rights hereunder after
consultation with the other Banks and, as a result thereof or in connection
therewith, shall receive any excess amount (as defined in Clause 22.1
(Redistribution of Payments)), then such Bank shall not be required to share any
portion of such excess amount with any Bank which has the legal right to, but
does not, join in such action or proceeding or commence and diligently prosecute
a separate action or proceeding to enforce its rights in another court.
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PART 10
FEES, COSTS AND EXPENSES
23. Fees
23.1 Arrangement Fee The Borrower shall pay to the Arranger the fees specified
in the letter of even date herewith from the Arranger to the Borrower at the
times, and in the dollar amounts (or the Equivalent Amount), specified in such
letter to be distributed amongst the Arranger and the Banks as agreed between
the Arranger and the Banks.
23.2 Agency Fee The Borrower shall pay to the Agent for its own account the
agency fees specified in the letter of even date herewith from the Agent to the
Borrower at the times, and in the dollar amounts (or the Equivalent Amount),
specified in such letter.
24. Costs and Expenses
24.1 Transaction Expenses The Borrower shall, from time to time on demand of
the Agent, reimburse each of the Agent and the Arranger for all reasonable costs
and expenses (including legal fees) together with any VAT thereon incurred by it
in connection with the negotiation, preparation and execution of this Agreement
and the completion of the transactions herein contemplated.
24.2 Preservation and Enforcement of Rights The Borrower shall, from time to
time on demand of the Agent, reimburse the Agent, the Arranger and the Banks for
all reasonable costs and expenses (including legal fees) together with any VAT
thereon incurred in or in connection with the preservation and/or enforcement of
any of the rights of the Agent, the Arranger and the Banks under this Agreement.
24.3 Stamp Taxes The Borrower shall pay all stamp, registration and other
taxes to which this Agreement or any judgment given in connection herewith is or
at any time may be subject and shall, from time to time on demand of the Agent,
indemnify the Agent, the Arranger and the Banks against any liabilities, costs,
claims and expenses resulting from any failure to pay or any delay in paying any
such tax.
24.4 Agent's Costs The Borrower shall, from time to time on demand of the
Agent (and without prejudice to the provisions of Clause 24.2 (Preservation and
Enforcement of Rights) and Clause 30.2 (Amendment Costs) compensate the Agent at
such daily and/or hourly rates as the Agent shall from time to time reasonably
determine for the time and expenditure, all reasonable costs and expenses
(including telephone, fax, copying, travel and personnel costs) incurred by the
Agent in connection with its taking such action as it may deem appropriate or in
complying with any instructions from an Instructing Group or any request by the
Obligors or either of them in connection with the occurrence of any event which
is an Event of Default or a Potential Event of Default.
24.5 Banks' Liabilities for Costs If the Borrower fails to perform any of its
obligations under this Clause 24, each Bank shall, in the proportion borne by
its share of the Loan (or, if no Advances have been made, its Available
Commitment) to the amount of the Loan (or, if no Advances have been made, the
Available Facility) for the time being (or, if the Loan has been repaid in full,
immediately prior to the final repayment thereof), indemnify each of the Agent
and the Arranger against any loss incurred by any of them as a result of such
failure and the Borrower shall forthwith reimburse each Bank for any payment
made by it pursuant to this Clause 24.5.
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PART 11
AGENCY PROVISIONS
25. The Agent, the Arranger and the Banks
25.1 Appointment of the Agent The Arranger and each Bank hereby appoints the
Agent to act as its agent in connection herewith and authorises the Agent to
exercise such rights, powers, authorities and discretions as are specifically
delegated to the Agent by the terms hereof together with all such rights,
powers, authorities and discretions as are reasonably incidental thereto. The
Agent is not a trustee and owes no fiduciary obligations to any other party to
this Agreement.
25.2 Agent's Discretions The Agent may:
(a) assume, unless it has, in its capacity as agent for the Banks,
received notice to the contrary from any other party hereto (or, in
the case of a payment default, actual knowledge to the contrary),
that (i) any representation made by either of the Obligors in
connection herewith is true, (ii) no Event of Default or Potential
Event of Default has occurred, (iii) neither of the Obligors is in
breach of or default under its obligations hereunder and (iv) any
right, power, authority or discretion vested herein upon an
Instructing Group, the Banks or any other person or group of persons
has not been exercised;
(b) assume that the Facility Office of each Bank is that identified with
its signature below (or, in the case of a Transferee, at the end of
the Transfer Certificate to which it is a party as Transferee) until
it has received from such Bank a notice designating some other
office of such Bank to replace its Facility Office and act upon any
such notice until the same is superseded by a further such notice;
(c) engage and pay for the advice or services of any lawyers,
accountants, surveyors or other experts whose advice or services may
to it seem necessary, expedient or desirable and rely upon any
advice so obtained;
(d) rely as to any matters of fact which might reasonably be expected to
be within the knowledge of either of the Obligors upon a certificate
signed by or on behalf of such Obligor;
(e) rely upon any communication or document believed by it to be
genuine;
(f) refrain from exercising any right, power or discretion vested in it
as agent hereunder unless and until instructed by an Instructing
Group as to whether or not such right, power or discretion is to be
exercised and, if it is to be exercised, as to the manner in which
it should be exercised; and
(g) refrain from acting in accordance with any instructions of an
Instructing Group to begin any legal action or proceeding arising
out of or in connection with this Agreement until it shall have
received such security as it may require (whether by way of payment
in advance or otherwise) for all costs, claims, losses, expenses
(including legal fees) and liabilities together
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with any VAT thereon which it will or may expend or incur in
complying with such instructions.
25.3 Agent's Obligations The Agent shall:
(a) promptly inform each Bank of the contents of any notice or document
received by it in its capacity as Agent from either of the Obligors
hereunder;
(b) promptly notify each Bank of the occurrence of any Event of Default
or any default by either of the Obligors in the due performance of
or compliance with its obligations under this Agreement of which the
Agent has notice from any other party hereto (or, in the case of a
payment default, actual knowledge);
(c) save as otherwise provided herein, act as agent hereunder in
accordance with any instructions given to it by an Instructing
Group, which instructions shall be binding on the Arranger and the
Banks; and
(d) if so instructed by an Instructing Group, refrain from exercising
any right, power or discretion vested in it as agent hereunder.
25.4 Excluded Obligations Notwithstanding anything to the contrary expressed
or implied herein, neither the Agent nor the Arranger shall:
(a) be bound to enquire as to (i) whether or not any representation made
by either of the Obligors in connection herewith is true, (ii) the
occurrence or otherwise of any Event of Default or Potential Event
of Default, (iii) the performance by either of the Obligors of its
obligations hereunder or (iv) any breach of or default by either of
the Obligors of or under its obligations hereunder;
(b) be bound to account to any Bank for any sum or the profit element of
any sum received by it for its own account;
(c) be bound to disclose to any other person any information relating to
any member of the Group or anyone else if such disclosure would or
might in its opinion constitute a breach of any law or regulation or
be otherwise actionable at the suit of any person; or
(d) be under any obligations other than those for which express
provision is made herein.
25.5 Delegation The Agent may delegate, transfer or assign to any subsidiary
of The Chase Manhattan Corporation or its Successor from time to time all or any
of the rights, powers, authorities and discretions vested in it hereunder and
the performance of its duties in accordance herewith, and such delegation,
transfer or assignment may be made upon such terms and subject to such
conditions (including the power to sub-delegate) and subject to such regulations
as the Agent may think fit (and the term "Agent" as used in this Agreement shall
include any such delegate, transferee or assignee).
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25.6 Indemnification Each Bank shall, from time to time on demand by the
Agent, indemnify the Agent, in the proportion its share of the Loan (or, if no
Advances have been made, its Available Commitment) bears to the amount of the
Loan (or, if no Advances have been made, the Available Facility) at the time of
such demand (or, if the Loan has then been repaid in full, immediately prior to
the final repayment thereof), against any and all costs, claims, losses,
expenses (including legal fees) and liabilities together with any VAT thereon
which the Agent may incur, otherwise than by reason of (a) its own gross
negligence or wilful misconduct, in acting in its capacity as agent hereunder or
(b) the failure of the Borrower to pay to the Agent the agency fees referred to
in Clause 23.2 (Agency Fee).
25.7 Exclusion of Liabilities Neither the Agent nor the Arranger accepts any
responsibility for the accuracy and/or completeness of the Information
Memorandum or any other information supplied by either of the Obligors in
connection herewith or for the legality, validity, effectiveness, adequacy or
enforceability of this Agreement and neither the Agent nor the Arranger shall be
under any liability as a result of taking or omitting to take any action in
relation to this Agreement, save in the case of gross negligence or wilful
misconduct.
25.8 No Actions Each of the Banks agrees that it will not assert or seek to
assert against any director, officer or employee of the Agent or the Arranger
any claim it might have against any of them but which it could not bring
successfully against the Agent or the Arranger.
25.9 Business with the Group and others The Agent (whether acting through its
agency division or otherwise) and the Arranger may accept deposits from, lend
money to and generally engage in any kind of banking or other business with any
member of the Group whether or not it may or does lead to a conflict with the
interests of any Bank and the Agent or the Arranger may undertake business with
or for others even though it may or does lead to a conflict with the interests
of any Bank.
25.10 Resignation The Agent may resign its appointment hereunder at any time
without assigning any reason therefor by giving not less than thirty days' prior
written notice to that effect to each of the other parties hereto Provided that
no such resignation shall be effective until either:
(a) the Agent appoints as its Successor any subsidiary or holding
company, or any subsidiary of any holding company, of the Agent; or
(b) a Successor for the Agent is appointed in accordance with the
succeeding provisions of this Clause 25.
25.11 Successor Agent If the Agent gives notice of its resignation pursuant to
Clause 25.10 (Resignation), then any reputable and experienced bank or other
financial institution may be appointed as a Successor to the Agent by an
Instructing Group with the consent of the Borrower (such consent not to be
unreasonably withheld) during the period of such notice but, if no such
Successor is so appointed within 30 days after the expiry of such notice, the
Agent may appoint such a Successor itself with the consent of the Borrower (such
consent not to be unreasonably withheld).
25.12 Rights and Obligations If a Successor to the Agent is appointed under
the provisions of Clause 25.11 (Successor Agent), then (a) the retiring Agent
shall be discharged from any further obligation hereunder but shall remain
entitled to the benefit of the provisions of this Clause 25 and (b) its
Successor and each of the other parties hereto shall have the same rights and
obligations amongst themselves as they would have had if such Successor had been
a party hereto.
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25.13 Own Responsibility It is understood and agreed by each Bank that it has
itself been, and will continue to be, solely responsible for making its own
independent appraisal of and investigations into the financial condition,
creditworthiness, condition, affairs, status and nature of each member of the
Group and, accordingly, each Bank warrants to the Agent and the Arranger that it
has not relied on and will not hereafter rely on the Agent and the Arranger or
any of them:
(a) to check or enquire on its behalf into the adequacy, accuracy or
completeness of any information provided by either of the Obligors
in connection with this Agreement or the transactions herein
contemplated (whether or not such information has been or is
hereafter circulated to such Bank by the Agent and the Arranger or
any of them); or
(b) to assess or keep under review on its behalf the financial
condition, creditworthiness, condition, affairs, status or nature of
any member of the Group.
25.14 Agency Division Separate In acting as agent for the Arranger and the
Banks, the agency division of the Agent shall be treated as if it were a legal
entity separate from all its other divisions and departments ("elsewhere").
Accordingly, any information or documents received elsewhere is not, by reason
of such receipt, to be treated as having been received by the agency division,
and all business undertaken elsewhere is not to be treated as having been
undertaken by the agency division. The agency division of the Arranger shall be
treated in this same manner as a legal entity separate from all its other
divisions and departments.
25.15 Confidential Information Notwithstanding anything to the contrary
expressed or implied herein and without prejudice to the provisions of Clause
25.14 (Agency Division Separate), the Agent shall not be bound to disclose to
any Bank or other person any information which is supplied by any member of the
Group to the Agent in its capacity as agent hereunder for the Banks and which is
identified by such member of the Group at the time it is so supplied as being
confidential information Provided that the consent of the relevant member of
the Group to such disclosure shall not be required in relation to any
information which in the opinion of the Agent relates to an Event of Default or
Potential Event of Default or in respect of which the Banks have given a
confidentiality undertaking in a form satisfactory to the Agent and the relevant
member of the Group.
25.16 Tax Confirmation Each Bank confirms in favour of the Agent (on the date
hereof, or, in the case of a Bank which becomes a party hereto pursuant to a
transfer or assignment, on the date on which the relevant transfer or assignment
becomes effective) that either:-
(a) it is not resident for tax purposes in the United Kingdom and is
beneficially entitled to its share of the Loan and the interest
thereon; or
(b) it is a bank as defined for the purposes of Section 349 of the
Income and Corporation Taxes Act 1988 and is beneficially entitled
to its share of the Loan and the interest thereon,
and each Bank in favour of the Agent agrees to notify the Agent if there is any
change in its position from that set out above.
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<PAGE>
PART 12
ASSIGNMENTS AND TRANSFERS
26. Assignments and Transfers
26.1 Binding Agreement This Agreement shall be binding upon and enure to the
benefit of each party hereto and its or any subsequent Successors, Transferees
and assigns.
26.2 Assignments and Transfers by the Obligors Each of the Obligors shall only
be entitled to assign or transfer all or any of its rights, benefits and
obligations hereunder with the prior written consent of the Agent and all the
Banks.
26.3 Assignments and Transfers by Banks Any Bank may, at any time, assign or
transfer all or any of its rights and benefits hereunder or transfer in
accordance with Clause 26.5 (Transfers by Banks) all or any of its rights,
benefits and obligations hereunder to:
(i) any affiliate of such Bank (for the purposes of this Clause
"affiliate" means (a) any person which controls directly or
indirectly the Bank or (b) any person which is controlled by or is
under common control with a person which controls, directly or
indirectly, the Bank); or
(ii) with the prior consent of the Borrower (such consent not to be
unreasonably withheld), any other person.
26.4 Assignments by Banks If any Bank assigns all or any of its rights and
benefits hereunder in accordance with Clause 26.3 (Assignments and Transfers by
Banks), then, unless and until the assignee has agreed with the Agent, the
Arranger and the other Banks that it shall be under the same obligations towards
each of them as it would have been under if it had been an original party hereto
as a Bank (whereupon such assignee shall become a party hereto as a "Bank"), the
Agent, the Arranger and the other Banks shall not be obliged to recognise such
assignee as having the rights against each of them which it would have had if it
had been such a party hereto.
26.5 Transfers by Banks If any Bank wishes to transfer all or any of its
rights, benefits and/or obligations hereunder as contemplated in Clause 26.3
(Assignments and Transfers by Banks), then such transfer may be effected by the
delivery to the Agent of a duly completed and duly executed Transfer Certificate
in which event, on the later of the Transfer Date specified in such Transfer
Certificate and the fifth business day after (or such earlier business day
endorsed by the Agent on such Transfer Certificate falling on or after) the date
of delivery of such Transfer Certificate to the Agent:
(a) to the extent that in such Transfer Certificate the Bank party
thereto seeks to transfer its rights, benefits and obligations
hereunder, each of the Obligors and such Bank shall be released from
further obligations towards one another hereunder and their
respective rights against one another shall be cancelled (such
rights and obligations being referred to in this Clause 26.5 as
"discharged rights and obligations");
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<PAGE>
(b) each of the Obligors and the Transferee party thereto shall assume
obligations towards one another and/or acquire rights against one
another which differ from such discharged rights and obligations
only insofar as such Obligor and such Transferee have assumed and/or
acquired the same in place of such Obligor and such Bank;
(c) the Agent, the Arranger, such Transferee and the other Banks shall
acquire the same rights and benefits and assume the same obligations
between themselves as they would have acquired and assumed had such
Transferee been an original party hereto as a Bank with the rights,
benefits and/or obligations acquired or assumed by it as a result of
such transfer; and
(d) such Transferee shall become a party hereto as a "Bank".
26.6 Changes in Circumstances No assignee or Transferee of a Bank's rights may
receive any greater payment under Clause 9 (Taxes) or Clause 11 (Changes in
Circumstances) than such Bank would have been entitled to receive with respect
to the rights assigned or transferred unless such transfer is (a) made with the
prior written consent of the Borrower or (b) made to either (i) a Bank already
party to this Agreement at the time of such assignment or transfer or (ii) an
affiliate of the transferor Bank.
26.7 Transfer Fees On the date upon which a transfer takes effect pursuant to
Clause 26.5 (Transfers by Banks) the Transferee in respect of such transfer
shall pay to the Agent for its own account a transfer fee of $1000 (or its
Equivalent Amount).
26.8 Disclosure of Information Any Bank may disclose to any actual or
potential assignee or Transferee or to any person who may otherwise enter into
contractual relations with such Bank in relation to this Agreement such
information about the Obligors and the Group as such Bank shall consider
appropriate.
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<PAGE>
PART 13
MISCELLANEOUS
27. Calculations and Evidence of Debt
27.1 Basis of Accrual Interest shall accrue from day to day and shall be
calculated on the basis of a year of 360 days (or, in any case where market
practice differs, in accordance with market practice) and the actual number of
days elapsed.
27.2 Quotations If on any occasion a Reference Bank or Bank fails to supply
the Agent with a quotation required of it under the foregoing provisions of this
Agreement, the rate for which such quotation was required shall be determined
from those quotations which are supplied to the Agent.
27.3 Evidence of Debt Each Bank shall maintain in accordance with its usual
practice accounts evidencing the amounts from time to time lent by and owing to
it hereunder.
27.4 Control Accounts The Agent shall maintain on its books a control account
or accounts in which shall be recorded (a) the amount of any Advance made or
arising hereunder and each Bank's share therein, (b) the amount of all
principal, interest and other sums due or to become due from either of the
Obligors to any of the Banks hereunder and each Bank's share therein and (c) the
amount of any sum received or recovered by the Agent hereunder and each Bank's
share therein.
27.5 Prima Facie Evidence In any legal action or proceeding arising out of or
in connection with this Agreement, the entries made in the accounts maintained
pursuant to Clause 27.3 (Evidence of Debt) and Clause 27.4 (Control Accounts)
shall be prima facie evidence of the existence and amounts of the specified
obligations of the Obligors.
27.6 Certificates of Banks A certificate of a Bank (and any relevant
calculations provided pursuant to Clause 11.2 (Increased Costs Claims)) as to
(a) the amount by which a sum payable to it hereunder is to be increased under
Clause 9.1 (Tax Gross-up) or (b) the amount for the time being required to
indemnify it against any such cost, payment or liability as is mentioned in
Clause 9.2 (Tax Indemnity) or Clause 11.1 (Increased Costs) shall, in the
absence of manifest error, be prima facie evidence of the existence and amounts
of the specified obligations of the Obligors.
27.7 Agent's Certificates A certificate of the Agent as to the amount at any
time due from the Borrower hereunder or the amount which, but for any of the
obligations of the Borrower hereunder being or becoming void, voidable,
unenforceable or ineffective, at any time would have been due from the Borrower
hereunder shall, in the absence of manifest error, be conclusive for the
purposes of Part 7 (Guarantee).
28. Remedies and Waivers, Partial Invalidity
28.1 Remedies and Waivers No failure to exercise, nor any delay in exercising,
on the part of the Agent, the Arranger and the Banks or any of them, any right
or remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right or remedy prevent any further or other exercise
thereof or the exercise of any other right or remedy. The rights and remedies
herein provided are cumulative and not exclusive of any rights or remedies
provided by law.
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<PAGE>
28.2 Partial Invalidity If, at any time, any provision hereof is or becomes
illegal, invalid or unenforceable in any respect under the law of any
jurisdiction, neither the legality, validity or enforceability of the remaining
provisions hereof nor the legality, validity or enforceability of such provision
under the law of any other jurisdiction shall in any way be affected or impaired
thereby.
29. Notices
29.1 Communications in Writing Each communication to be made hereunder shall
be made in writing and, unless otherwise stated may be made by tested telex,
telefax or letter Provided that an Obligor shall indemnify each of the Agent,
the Arranger and the Banks against any cost, claim, loss, expense (including
legal fees) or liability together with any VAT thereon which any of them may
sustain or incur as a consequence of any telefax communication originating from
such Obligor not being actually received by or delivered to the intended
recipient thereof or any telefax communication purporting to originate from such
Obligor being made or delivered fraudulently.
29.2 Delivery Any communication or document to be made or delivered by one
person to another pursuant to this Agreement shall (unless that other person has
by fifteen days' written notice to the Agent specified another address) be made
or delivered to that other person at the address identified with its name below
(in the case of an Obligor, the Agent or a Bank) (or, in the case of a
Transferee, at the end of the Transfer Certificate to which it is a party as
Transferee) and (without prejudice to the provisions of Clause 28.1
(Communications in Writing) shall be deemed to have been made or delivered when
despatched and answerback received (in the case of any communication made by
telex) or when despatched and an appropriate acknowledgement of message transfer
received by the sender (in the case of any communication made by telefax) or
when left at that address, or as the case may be, ten days after being deposited
in the post postage prepaid in an envelope addressed to it at that address (in
the case of any communication made by letter) Provided that any communication
or document to be made or delivered to the Agent shall be effective only when
received by the Agent and then only if the same is expressly marked for the
attention of the department or officer identified with the Agent's signature
below (or such other department or officer as the Agent shall from time to time
specify for this purpose).
29.3 English Language Each communication and document made or delivered by one
party to another pursuant to this Agreement shall be in the English language or
accompanied by a translation thereof into English certified (by an officer of
the person making or delivering the same) as being a true and accurate
translation thereof.
30. Amendments
30.1 Amendment Procedures The Agent, if it has the prior written consent of an
Instructing Group, and the Obligors may from time to time agree in writing to
amend this Agreement or to waive, prospectively or retrospectively, any of the
requirements of this Agreement and any amendments or waivers so agreed shall be
binding on all the Banks, the Arranger and the Obligors Provided that:
(a) no such waiver or amendment shall subject any party hereto to any
new or additional obligations without the consent of such party;
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<PAGE>
(b) without the prior written consent of all the Banks, no such amendment
or waiver shall:
(i) amend or waive any provision of Clause 22 (Sharing) or this
Clause 30;
(ii) reduce the proportion of any amount received or recovered
(whether by way of set-off, combination of accounts or
otherwise) in respect of any amount due from the Borrower
hereunder to which any Bank is entitled;
(iii) change the principal amount of or currency of any Advance,
or defer the Repayment Date;
(iv) change the Margin, change the amount or currency or defer the
date for any payment of interest, fees or any other amount
payable hereunder to all or any of the Agent, the Arranger and
the Banks;
(v) defer the Termination Date;
(vi) amend the definition of Instructing Group;
(vii) amend any provision of the Guarantee; or
(viii) amend any provision which contemplates the need for the
consent or approval of all the Banks;
(c) notwithstanding any other provisions hereof, the Agent shall not be
obliged to agree to any such amendment or waiver if the same would:
(i) amend or waive any provision of this Clause 30, Clause 24
(Costs and Expenses) or Part 11 (Agency Provisions); or
(ii) otherwise amend or waive any of the Agent's rights hereunder
or subject the Agent or the Arranger to any additional
obligations hereunder; and
(d) if a single currency is introduced into all or part of the European
Union in circumstances where the Guilder (in existence at the date
hereof) is superseded by such single currency then the Agent (acting on
the instructions of an Instructing Group) may make such amendments as
may be necessary to ensure applicable conventions for loans in such
single currency are followed.
30.2 Amendment Costs If either of the Obligors requests any amendment or waiver
in accordance with Clause 30.1 (Amendment Procedures) then the Borrower shall,
on demand of the Agent, reimburse the Agent and the Arranger for all reasonable
costs and expenses (including legal fees) together with any VAT thereon incurred
by the Agent and the Arranger in the negotiation, preparation and execution of
any written instrument contemplated by Clause 30.1 (Amendment Procedures). <PAGE>
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PART 14
LAW AND JURISDICTION
31. Law and Jurisdiction
31.1 English Law This Agreement, and all matters arising out of or in
connection with it, shall be governed by English law.
31.2 English Courts Each of the parties hereto irrevocably agrees for the
benefit of each of the Agent, the Arranger and the Banks that the courts of
England shall have jurisdiction to hear and determine any suit, action or
proceedings, and to settle any disputes, which may arise out of or in connection
with this Agreement (respectively "Proceedings" and "Disputes") and, for such
purposes, irrevocably submits to the jurisdiction of such courts.
31.3 Appropriate Forum Each of the Obligors irrevocably waives any objection
which it might now or hereafter have to the courts referred to in Clause 31.2
(English Courts) being nominated as the forum to hear and determine any
Proceedings and to settle any Disputes and agrees not to claim that any such
court is not a convenient or appropriate forum.
31.4 Service of Process Each of the Obligors agrees that the process by which
any Proceedings are begun may be served on it by being delivered to ARCO
Chemical Europe, Inc. at ARCO Chemical House, Bridge Avenue, Maidenhead,
Berkshire SL6 1YP, England; Attention: Assistant General Counsel - Europe or
other its registered office for the time being. If the person mentioned in this
Clause 31.4 resigns or otherwise revokes its appointment in respect of either or
both Obligors, such Obligor or Obligors shall immediately appoint a further
person in England to accept service of process on its behalf in England and,
failing such appointment within 15 days, the Agent shall be entitled to appoint
such a person by notice to such Obligor or Obligors Provided that such
resignation or revocation shall for the purpose of this Agreement be deemed to
be ineffective until such further person is appointed in accordance with this
Clause 31.4. Nothing contained herein shall affect the right to serve process
in any other manner permitted by law.
31.5 Non-exclusive Submissions The submission to the jurisdiction of the courts
referred to in Clause 31.2 (English Courts) shall not (and shall not be
construed so as to) limit the right of the Agent, the Arranger and the Banks or
any of them (but shall limit the right of each Obligor) to take Proceedings
against either of the Obligors in any other court of competent jurisdiction nor
shall the taking of Proceedings in any one or more jurisdictions preclude the
taking of Proceedings in any other jurisdiction (whether concurrently or not) if
and to the extent permitted by applicable law.
31.6 Consent to Enforcement Each of the Obligors hereby consents generally in
respect of any Proceedings to the giving of any relief or the issue of any
process in connection with such Proceedings including the making, enforcement or
execution against any property whatsoever (irrespective of its use or intended
use) of any order or judgment which may be made or given in such Proceedings.
31.7 Waiver of Immunity To the extent that either of the Obligors may in any
jurisdiction claim for itself or its assets immunity from suit, execution,
attachment (whether in aid of execution, before judgment or otherwise) or other
legal process and to the extent that in any such jurisdiction there may be
attributed to itself or its assets such immunity (whether or not claimed), such
Obligor hereby irrevocably agrees not to claim and
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<PAGE>
hereby irrevocably waives such immunity to the full extent permitted by the laws
of such jurisdiction and, in particular, to the intent that in any proceedings
taken in New York the foregoing waiver of immunity shall have effect under and
be construed in accordance with the United States Foreign Sovereign Immunities
Act of 1976.
AS WITNESS the hands of the duly authorised representatives of the parties
hereto the day and year first before written.
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<PAGE>
THE FIRST SCHEDULE
The Banks
<TABLE>
<CAPTION>
Bank Commitment (NLG)
<S> <C>
The Chase Manhattan Bank 30,000,000
Bayerische Landesbank International S.A. 24,375,000
Credit Lyonnais, Amsterdam Branch 24,375,000
Deutsche Bank de Bary N.V. Rotterdam Branch 24,375,000
Generale Bank Nederland N.V. 24,375,000
ING Bank N.V. 24,375,000
RBC Finance B.V. 24,375,000
Sakura Bank (Luxembourg) S.A. 24,375,000
Societe Generale 24,375,000
ABN AMRO Bank N.V. 15,000,000
Banque et Caisse d'Epargne de l'Etat, Luxembourg 15,000,000
Caixa Geral de Depositos, S.A., Paris Branch 15,000,000
Citibank, N.A. 15,000,000
The First National Bank of Chicago 15,000,000
----------------
300,000,000
================
</TABLE>
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<PAGE>
THE SECOND SCHEDULE
Form of Transfer Certificate
To: [ ]
TRANSFER CERTIFICATE
relating to the agreement (as from time to time amended, varied, novated or
supplemented, the "Facility Agreement") dated 12 March 1997 whereby a
NLG300,000,000 term loan facility was made available to ARCO Chemie Nederland,
Ltd as borrower under the guarantee of ARCO Chemical Company as guarantor by a
group of banks on whose behalf Chase Manhattan International Limited acted as
agent in connection therewith.
1. Terms defined in the Facility Agreement shall, subject to any contrary
indication, have the same meanings herein. The terms Bank, Transferee, Bank's
Participation and Amount Transferred are defined in the schedule hereto.
2. The Bank confirms that the Bank's Participation is an accurate summary of
its participation in the Facility Agreement and requests the Transferee to
accept and procure the transfer to the Transferee of a percentage of the Bank's
Participation (equal to the percentage that the Amount Transferred is of the
aggregate of the component amounts (as set out in the schedule hereto) of the
Bank's Participation) by counter-signing and delivering this Transfer
Certificate to the Agent at its address for the service of notices specified in
the Facility Agreement.
3. The Transferee hereby requests the Agent to accept this Transfer
Certificate as being delivered to the Agent pursuant to and for the purposes of
Clause 26.5 (Transfers by Banks) of the Facility Agreement so as to take effect
in accordance with the terms thereof on the Transfer Date or on such later date
as may be determined in accordance with the terms thereof.
4. The Transferee confirms that it has received a copy of the Facility
Agreement together with such other information as it has required in connection
with this transaction and that it has not relied and will not hereafter rely on
the Bank to check or enquire on its behalf into the legality, validity,
effectiveness, adequacy, accuracy or completeness of any such information and
further agrees that it has not relied and will not rely on the Bank to assess or
keep under review on its behalf the financial condition, creditworthiness,
condition, affairs, status or nature of the Borrower or the Guarantor.
5. The Transferee hereby undertakes with the Bank and each of the other
parties to the Facility Agreement that it will perform in accordance with their
terms all those obligations which by the terms of the Facility Agreement will be
assumed by it after delivery of this Transfer Certificate to the Agent and
satisfaction of the conditions (if any) subject to which this Transfer
Certificate is expressed to take effect.
6. The Bank makes no representation or warranty and assumes no responsibility
with respect to the legality, validity, effectiveness, adequacy or
enforceability of the Facility Agreement or any document relating thereto and
assumes no responsibility for the financial condition of the Borrower or the
Guarantor or for the performance and observance by the Borrower or the Guarantor
of any of its obligations under the Facility Agreement or any document relating
thereto and any and all such conditions and warranties, whether express or
implied by law or otherwise, are hereby excluded.
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<PAGE>
7. The Bank hereby gives notice that nothing herein or in the Facility
Agreement (or any document relating thereto) shall oblige the Bank to (a) accept
a re-transfer from the Transferee of the whole or any part of its rights,
benefits and/or obligations under the Facility Agreement transferred pursuant
hereto or (b) support any losses directly or indirectly sustained or incurred by
the Transferee for any reason whatsoever including the non-performance by the
Borrower, the Guarantor or any other party to the Facility Agreement (or any
document relating thereto) of its obligations under any such document. The
Transferee hereby acknowledges the absence of any such obligation as is referred
to in (a) or (b) above.
8. This Transfer Certificate and the rights, benefits and obligations of the
parties hereunder shall be governed by and construed in accordance with English
law.
THE SCHEDULE
1. Bank:
2. Transferee:
3. Transfer Date:
4. Bank's Participation:
Bank's Available Commitment* Bank's Portion of the Loan
5. Amount Transferred: Advances
[Transferor Bank] [Transferee Bank]
By: By:
Date: Date:
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<PAGE>
Administrative Details of Transferee
Address:
Contact Name:
Account for Payments:
Telex:
Telefax:
Telephone:
SWIFT:
________________________________________________________________________________
* Details of the Bank's Available Commitment should not be completed after the
Termination Date
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<PAGE>
THE THIRD SCHEDULE
Condition Precedent Documents
1. In relation to each of the Obligors:
(a) a copy, certified a true copy by a duly authorised officer of such
Obligor, of the constitutional documents of such Obligor;
(b) a copy, certified a true copy by a duly authorised officer of such
Obligor, of a Board Resolution of such Obligor approving the execution,
delivery and performance of this Agreement and the terms and conditions
hereof and authorising a named person or persons to sign this Agreement
and any documents to be delivered by such Obligor pursuant hereto; and
(c) a certificate of a duly authorised officer of such Obligor setting out
the names and signatures of the persons authorised to sign, on behalf
of such Obligor, this Agreement and any documents to be delivered by
such Obligor pursuant hereto.
2. A certificate of the Chairman of the works' council of the Borrower or of a
duly authorised officer of the Borrower confirming either that the approval of
the works' council has been obtained for the Borrower to enter into this
Agreement or that no such approval is required.
3. A copy, certified a true copy by or on behalf of the Borrower, of each such
law, decree, consent, licence, approval, registration or declaration as is, in
the opinion of counsel to the Banks, necessary to render this Agreement legal,
valid, binding and enforceable, to make this Agreement admissible in evidence in
each Obligor's jurisdiction of incorporation and to enable each of the Obligors
to perform its obligations hereunder.
4. A legal opinion of the Banks' Dutch Counsel, in substantially the form
distributed to the Banks' prior to the signing of this Agreement.
5. A legal opinion of the Banks' Delaware Counsel, in substantially the form
distributed to the Banks' prior to the signing of this Agreement.
6. A legal opinion of the Guarantor's Counsel, in substantially the form set
out in the Fifth Schedule (Opinion of the Guarantor's Counsel).
7. A legal opinion of Clifford Chance, solicitors to the Agent, satisfactory
in form and substance to the Agent.
8. A copy, certified a true copy by a duly authorised officer of the Borrower,
of the Original Financial Statements of the Borrower.
9. A copy, certified a true copy by a duly authorised officer of the
Guarantor, of the Original Financial Statements of the Guarantor.
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<PAGE>
10. Evidence that ARCO Chemical Europe, Inc. has agreed to act as the agent of
the Obligors for the service of process in England.
11. Evidence in a form satisfactory to the Agent, that, subject to the
repayment and satisfaction of all amounts outstanding under the facility
agreements relating thereto, the Existing Facilities have been cancelled.
12. A copy, certified a true copy by a duly authorised officer of the
Guarantor, of each of the Cross-Indemnification Agreement and the Tax-Sharing
Agreement as originally executed and all amendments, modifications and waivers
thereto.
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THE FOURTH SCHEDULE
Notice of Drawdown
From: ARCO Chemie Nederland, Ltd
To: Chase Manhattan International Limited
Dated:
Dear Sirs,
1. We refer to the agreement (as from time to time amended, varied, novated or
supplemented, the "Facility Agreement") dated [ ] 1997 and made between
ARCO Chemie Nederland, Ltd as Borrower, ARCO Chemical Company as Guarantor,
Chase Investment Bank Limited as Arranger, Chase Manhattan International Limited
as Agent and the financial institutions named therein as banks. Terms defined
in the Facility Agreement shall have the same meaning in this notice.
2. We hereby give you notice that, pursuant to the Facility Agreement and on
[date of proposed Advance], we wish to borrow an Advance in the amount of NLG[
] Dutch Guilders upon the terms and subject to the conditions contained therein.
[3. We would like this Advance to have a first Interest Period of [ ] months'
duration.]*
4. We confirm that, at the date hereof, the representations set out in Clause
12 (Representations) of the Facility Agreement are true and no Event of Default
or Potential Event of Default has occurred.
5. The proceeds of this drawdown should be credited to [insert account
details].
Yours faithfully
..................
for and on behalf of
ARCO Chemie Nederland, Ltd
________________________________________________________________________________
* Insert only if there are no outstanding Advances
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THE FIFTH SCHEDULE
Opinion of the Guarantor's Counsel
March , 1997
To: Chase Manhattan International Limited as Agent on its own behalf and for
and on behalf of the Arranger and the Banks referred to in the Facility
Agreement (described below)
Re: NLG300,000,000 Term Loan Facility
Ladies and Gentlemen:
We have acted as counsel to ARCO Chemical Company, a Delaware corporation (the
"Guarantor") and ARCO Chemie Nederland, Ltd., a Delaware corporation (the
"Borrower") in connection with that certain NLG300,000,000 Term Loan Facility,
dated March __, 1997 (the "Facility Agreement") among the Borrower, the Company
as Guarantor, Chase Investment Bank Limited as Arranger, Chase Manhattan
International Limited as Agent, and the financial institutions defined therein
as Banks. Except as otherwise provided herein, terms defined in the Facility
Agreement are used herein as defined therein. This opinion letter is being
delivered pursuant to Clause 2.3 of the Facility Agreement.
In rendering the opinions expressed below, we have examined the Facility
Agreement, the Certificate of Incorporation and Bylaws of each of the Guarantor
and the Borrower and such records of each of the Guarantor and the Borrower and
such other documents as we have deemed necessary as a basis for such opinions.
In our examination, we have assumed the genuineness of all signatures (other
than those of the Guarantor and the Borrower), the authenticity of all documents
submitted to us as originals and the conformity with authentic original
documents of all documents submitted to us as copies. As to matters of fact, we
have relied upon statements of governmental officials and upon representations
made in or pursuant to the Facility Agreement and certificates of appropriate
representatives of the Guarantor and the Borrower.
Based upon and subject to the foregoing and subject also to the comments and
qualifications set forth below, and having considered such questions of law as
we have deemed necessary as a basis for the opinions expressed below, we are of
the opinion that:
1. Each of the Guarantor and the Borrower is a corporation validly existing
and in good standing under the laws of the State of Delaware.
2. Each of the Guarantor and the Borrower has all necessary corporate power
and authority to execute and deliver the Facility Agreement and to perform
its respective obligations thereunder, and all necessary corporate action
on the part of each of the Guarantor and the Borrower has been taken to
authorize such execution, delivery and performance.
-61-
<PAGE>
3. The Facility Agreement has been duly authorised executed and delivered by
each of the Guarantor and the Borrower and constitutes the legal, valid and
binding obligation of each of the Guarantor and the Borrower, enforceable
against such parties in accordance with its terms, except as may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally and except as
the enforceability of the Facility Agreement is subject to the application
of general principles of equity (regardless of whether considered in a
proceeding in equity or at law), including, without limitation (a) the
availability of specific performance, injunctive relief or any other
equitable remedy and (b) concepts of materiality, reasonableness, good
faith and fair dealing.
4. No approval, consent, order, authorization, permit, license, exemption of,
or registration, declaration or filing with, any federal, state or local
governmental, regulatory or public agency, authority or court is required
in connection with the execution, delivery and performance by each of the
Guarantor and the Borrower of its respective obligations under the Facility
Agreement.
5. Except as may be limited by the Uniform Foreign Money Judgment Recognition
Act as in effect in the Commonwealth of Pennsylvania, a judgment for the
recovery of money due and owing under the Facility Agreement in the English
courts would be enforceable in the courts of the Commonwealth of
Pennsylvania in the same manner as a judgment obtained in a court of
appropriate jurisdiction in the United States of America.
The foregoing opinions are subject to the following comments and qualifications:
(A) The enforceability of provisions of the Facility Agreement requiring the
Borrower or the Guarantor to indemnify any other party may be limited by
(i) laws rendering unenforceable indemnification contrary to Federal or
state securities laws and the public policy underlying such laws and (ii)
laws limiting the enforceability of provisions exculpating or exempting a
party, or requiring indemnification of a party for, liability for its own
action or inaction, to the extent the action or inaction involves gross
negligence, recklessness, wilful misconduct or unlawful conduct.
(B) The enforceability of provisions in the Facility Agreement to the effect
that terms may not be waived or modified except in writing may be limited
under certain circumstances.
(C) We express no opinion as to (i) the effect of the laws of any jurisdiction
in which any Bank is located that limit the interest, fees or other charges
such Bank may impose, (ii) clause 31 of the Facility Agreement.
(D) We assume that the Facility Agreement is the legal, valid and binding
obligation of each party thereto other than the Guarantor and the Borrower.
We are licensed to practice law in the Commonwealth of Pennsylvania and have not
in connection with this opinion made an investigation of the laws of any other
jurisdiction except the federal laws of the United States and the General
Corporation Law of the State of Delaware and nothing in this opinion should be
or shall be construed otherwise. This opinion is limited solely to the laws of
the Commonwealth of Pennsylvania, the General Corporation Law of the State of
Delaware and the federal laws of the United States and rules, regulations and
orders thereunder which are presently in effect.
-62-
<PAGE>
This opinion is given as of the date hereof, is given for the benefit of the
Arranger and the Banks and the benefit of your counsel, and may not be relied
upon by any other person or entity.
Very truly yours,
-63-
<PAGE>
The Borrower
ARCO CHEMIE NEDERLAND, LTD.
(ROTTERDAM BRANCH)
By: WALTER J. TUSINSKI RONALD R. REMICK
Address: Theemsweg 14
3197 KM Botlek
Rotterdam
The Netherlands
Attention: Financial Controls Manager
Telefax: +31181 294999
With a copy to:
Address: ARCO Chemical Company
3801 West Chester Pike
Newtown Square
Pennsylvania 19073
United States of America
Attention: Manager of Corporate Finance
Telefax: +1 610 359 7222
-64-
<PAGE>
The Guarantor
ARCO CHEMICAL COMPANY
By: WALTER J. TUSINSKI
Address: 3801 West Chester Pike
Newtown Square
Pennsylvania 19073
United States of America
Attention: Manager of Corporate Finance
Telefax: +1 610 359 7222
The Arranger
CHASE INVESTMENT BANK LIMITED
By: EDWARD BROWN
Address: 125 London Wall
London EC2Y 5AJ
United Kingdom
Attention: Edward Brown
Telephone: +44 171 777 4836
Telefax: +44 171 777 3841
-65-
<PAGE>
The Agent
CHASE MANHATTAN INTERNATIONAL LIMITED
By: DONALD BURRI
Address: Trinity Tower
9 Thomas More Street
London E1 9YT
United Kingdom
Attention: Steve Clarke
Telephone: +44 171 777 2353
Telefax: +44 171 777 2360
Telex: 94060177 CMIL G
The Banks
The Lead Managers
BAYERISCHE LANDESBANK INTERNATIONAL S.A.
By: KATHRYN JEPSON
(Attorney-in-fact)
Address: 3 rue Jean Monnet
L-2180 Luxembourg
Attention: Mr P Lang
Telephone: + 352 42434 3325
Telefax: + 352 42434 3399
Telex: 1229 bayer lu
-66-
<PAGE>
THE CHASE MANHATTAN BANK
By: KATHRYN JEPSON
Address 125 London Wall
London EC2Y 5AS
United Kingdom
For notices:
Address: Chaseside
Bournemouth
Dorset BH7 7DB
United Kingdom
Attention: Nick Gittins/Tina Holes
European Loan Services
Telephone: + 44 1202 34 3923/2020
Telefax: + 44 1202 34 3730
Telex: 8954681 CMB G
CREDIT LYONNAIS, AMSTERDAM BRANCH
By: KATHRYN JEPSON
(Attorney-in-fact)
Address: "Atrium", 5th Floor
Strawinskylaan 3093
1077 ZX Amsterdam
The Netherlands
Attention: Audouin de Forestier
Telephone: + 31 20 504 7070
Telefax: + 31 20 504 7077
-67-
<PAGE>
DEUTSCHE BANK . DE BARY N.V., ROTTERDAM BRANCH
By: KATHRYN JEPSON
(Attorney-in-fact)
Address: Westplein 12
P.O. Box 1711
3000 BS Rotterdam
The Netherlands
Attention: Mr E R Bergkotte
Telephone: + 31 10 436 6400
Telefax: + 31 10 436 8017
Telex: 22608
GENERALE BANK NEDERLAND N.V.
By: KATHRYN JEPSON
(Attorney-in-fact)
Address: Blaak 555
PO Box 339
3000 AH Rotterdam
The Netherlands
For credit matters:
Attention: Mr Bart M.H. van Iersel (RB 22 A)
Telephone: + 31 10 2703265
Telefax: + 31 10 2703881
For administration matters:
Attention: Mrs H Willemen-van-Gelder (RB 02 C)
Mr L M van der Moer (RB 02 C)
Telephone: + 31 10 270 1241/1242
Telefax: + 31 10 270 3897
-68-
<PAGE>
ING BANK N.V.
By: KATHRYN JEPSON
(Attorney-in-fact)
Address: 49 St. Stephen's Green
Dublin 2
Ireland
For credit matters:
Attention: Samantha de Foubert
Account Manager
Telephone: + 353 1 662 1911
Telefax: + 353 1 662 1916
For administrative matters:
Attention: Alan Maher
Assistant Manager, Administration
Telephone: + 353 1 662 1911
Telefax: + 353 1 662 1916
RBC FINANCE B.V.
By: KATHRYN JEPSON
(Attorney-in-fact)
Address: Keizersgracht 604
1017EP Amsterdam
The Netherlands
Attention: C J Pickett/Ms I Awondatu
Telephone: + 31 20 5 233 213
Telefax: + 31 20 6 262 196
Telex: 15595 rbc nl
-69-
<PAGE>
SAKURA BANK (LUXEMBOURG) S.A.
By: KATHRYN JEPSON
(Attorney-in-fact)
Address: 33, boulevard du Prince Henri
L-2010 Luxembourg
Attention: Business Promotion Department
Telephone: + 352 46 24 36 / 22 54 55
Telefax: + 352 46 24 39 / 47 57 81
Telex: 60792 (MTKBK)
2466 (MITKBK)
SOCIETE GENERALE
By: KATHRYN JEPSON
(Attorney-in-fact)
Address: Tour Societe Generale
ENTR/FIN/ING
92972 Paris La Defense Cedex
France
For credit matters:
Attention: Christine Broutin
Telephone: + 33 1 42 13 80 96
Telefax: + 33 1 42 14 60 93
For administrative matters:
Attention: Laurence Gaertner
Telephone: + 33 1 42 13 77 71
Telefax: + 33 1 42 13 69 67
Telex: SG MAR 615 890
-70-
<PAGE>
The Managers
ABN AMRO BANK N.V.
By: KATHRYN JEPSON
(Attorney-in-fact)
Address: Coolsingel 119
3012 AG Rotterdam
The Netherlands
Attention: Mr J G Smit
Telephone: + 31 10 402 5725
Telefax: + 31 10 402 5580
Telex: 12377 (arbitration)
BANQUE ET CAISSE D'EPARGNE L'ETAT, LUXEMBOURG
By: KATHRYN JEPSON
(Attorney-in-fact)
Address: 1+2 Place de Metz
L-1930 Luxembourg
For credit matters:
Attention: Mr Jean-Pierre Thein
Telephone: + 352 4015 4337
Telefax: + 352 4015 4284
Telex: 3417 EPPDA LU
For administrative matters:
Attention: Mrs Marguerite Braun/Mrs Christiane Hahn/Mrs Pina Girardi
Telephone: + 352 4015 4364/4366/4349
Telefax: + 352 4015 4284
Telex: + 3417 EPPDA LU
-71-
<PAGE>
CAIXA GERAL DE DEP SITOS S.A., PARIS BRANCH
By: KATHRYN JEPSON
(Attorney-in-fact)
Address: 83 avenue Marceau
75116 Paris
France
For credit matters:
Attention: Ms Isabelle Khegt
Telephone: + 331 4069 5449
Telefax: + 331 4070 0309
Telex: 640569 F
For administrative matters:
Attention: Ms Sandra Bagulho
Telephone: + 331 4069 5447
Telefax: + 331 4070 0309
Telex: 640569 F
CITIBANK, N.A.
By: MOIRA McMANUS
Address: "Europlaza"
Hoogoorddreef 54B
1101 BE Amsterdam z.o.
The Netherlands
Attention: Sigrid Jorissen
Telephone: + 31 20 65 14 205
Telefax: + 31 20 65 14 292
Telex: 12261
-72-
<PAGE>
THE FIRST NATIONAL BANK OF CHICAGO
By: DAVID ROBERTS
Address: First Chicago House
90 Long Acre
London WC2E 9RB
United Kingdom
Attention: Dot O'Flaherty
Credit Operations
Telephone: + 44 171 438 4150
Telefax: + 44 171 438 4148
Telex: 887716
-73-
<PAGE>
============================================================================
CREDIT AGREEMENT A
DATED AS OF JULY 23, 1997
AMONG
ARCO CHEMICAL COMPANY,
THE FIRST NATIONAL BANK OF CHICAGO,
AS AGENT
AND
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
ARRANGED BY
FIRST CHICAGO CAPITAL MARKETS, INC.
============================================================================
EXHIBIT 10.2
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
SECTION PAGE
<S> <C>
ARTICLE I
DEFINITIONS............................... 1
SECTION 1.01. Definitions................................................. 1
SECTION 1.02. Accounting Terms and Determinations......................... 12
ARTICLE II
THE CREDITS.............................. 13
SECTION 2.01. Commitments to Lend......................................... 13
SECTION 2.02. Notice of Syndicated Borrowings............................. 14
SECTION 2.03. Money Market Borrowings..................................... 14
SECTION 2.04. Notice to Banks; Funding of Loans........................... 19
SECTION 2.05. Notes....................................................... 19
SECTION 2.06. Maturity of Loans........................................... 20
SECTION 2.07. Interest Rates.............................................. 20
SECTION 2.08. Fees........................................................ 22
SECTION 2.09. Optional Termination or Reduction of Commitments............ 22
SECTION 2.10. Mandatory Termination of Commitments........................ 23
SECTION 2.11. Optional Prepayments........................................ 23
SECTION 2.12. General Provisions as to Payments........................... 23
SECTION 2.13. Funding Losses.............................................. 24
SECTION 2.14. Computation of Interest and Fees............................ 25
SECTION 2.15. Judgment Currency........................................... 25
SECTION 2.16. Taxes....................................................... 26
SECTION 2.17. Maximum Interest Rate....................................... 28
SECTION 2.18. Extension of the Termination Date........................... 28
ARTICLE III
CONDITIONS TO BORROWINGS........................ 29
SECTION 3.01. Initial Borrowing by the Borrower........................... 29
SECTION 3.02. Each Borrowing.............................................. 30
ARTICLE IV
REPRESENTATIONS AND WARRANTIES..................... 31
SECTION 4.01. Representations and Warranties of the Borrower.............. 31
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
SECTION PAGE
<S> <C>
ARTICLE V
COVENANTS................................. 34
SECTION 5.01. Certain Information to be Furnished by the Borrower.......... 34
SECTION 5.02. Limitation on Liens.......................................... 36
SECTION 5.03. Limitation on Sale and Lease-Back............................ 37
SECTION 5.04. Consolidation, Merger, Disposition of Assets................. 38
SECTION 5.05. Minimum Consolidated Net Worth............................... 39
SECTION 5.06. Transactions with Affiliates................................. 39
SECTION 5.07. Use of Proceeds.............................................. 39
ARTICLE V
IDEFAULTS................................. 40
SECTION 6.01. ............................................................. 40
SECTION 6.02. Notice of Default............................................ 42
ARTICLE VII
THE AGENT................................. 42
SECTION 7.01. Appointment and Authorization................................ 42
SECTION 7.02. Agent and Affiliates......................................... 42
SECTION 7.03. Action by Agent.............................................. 42
SECTION 7.04. Employment and Reliance on Agents and Counsel................ 42
SECTION 7.05. Liability of Agent........................................... 42
SECTION 7.06. Reimbursement and Indemnification............................ 43
SECTION 7.07. Credit Decision.............................................. 43
SECTION 7.08. Successor Agent.............................................. 43
SECTION 7.09. Co-Agents.................................................... 44
ARTICLE VIII
CHANGE IN CIRCUMSTANCES......................... 44
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair..... 44
SECTION 8.02. Illegality................................................... 46
SECTION 8.03. Increased Cost and Reduced Return............................ 46
SECTION 8.04. Substitute Loans............................................. 48
SECTION 8.05. Certain Reserve Compensation................................. 48
SECTION 8.06. Substitution of Bank......................................... 49
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
SECTION PAGE
<S> <C>
ARTICLE IX
MISCELLANEOUS..........................................49
SECTION 9.01. Notices..................................................................49
SECTION 9.02. No Waiver................................................................50
SECTION 9.03. Governing Law............................................................50
SECTION 9.04. Expenses and Indemnification.............................................50
SECTION 9.05. Amendments, Etc..........................................................50
SECTION 9.06. Counterparts; Effectiveness; Termination of Existing Credit Agreement....51
SECTION 9.07. Successors and Assigns...................................................51
SECTION 9.08. Survival.................................................................52
SECTION 9.09. Acknowledgement..........................................................52
SECTION 9.10. Headings.................................................................53
SECTION 9.11. Sharing of Setoffs.......................................................53
SECTION 9.12. Collateral...............................................................53
SECTION 9.13. Consent to Jurisdiction..................................................53
SECTION 9.14. Waiver of Jury Trial.....................................................54
</TABLE>
iii
<PAGE>
SCHEDULE I -- Euro-Currency Payment Offices of the Agent
EXHIBIT A -- Note
EXHIBIT B -- Money Market Quote Request
EXHIBIT C -- Invitation for Money Market Quotes
EXHIBIT D -- Money Market Quote
EXHIBIT E -- Form of Certificate of Incumbency
EXHIBIT F -- Form of Opinion of Counsel for the Borrower
EXHIBIT G -- Assignment and Assumption Agreement
EXHIBIT H -- Notice of Effectiveness
EXHIBIT I -- Form of Opinion of Special Counsel for the Agent
<PAGE>
This CREDIT AGREEMENT A (this "Agreement") is entered into as of July 23,
1997 among ARCO CHEMICAL COMPANY, a Delaware corporation (the "Borrower"), the
several financial institutions from time to time party to this Agreement
(individually each a "Bank;" collectively the "Banks") and THE FIRST NATIONAL
BANK OF CHICAGO, as Agent (the "Agent").
WHEREAS, the Borrower desires to borrow from the Banks from time to time
under this Agreement amounts not exceeding in the aggregate $200,000,000
outstanding at any one time for its general corporate purposes, and the Banks
are prepared to make loans upon the terms hereof.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. In addition to terms defined elsewhere in this
-----------
Agreement, as used in this Agreement, the following terms shall have the
following meanings (all terms defined in this Agreement in the singular to have
the same meanings when used in the plural and vice versa):
"Absolute Rate Auction" shall mean a solicitation of Money Market Quotes
setting forth Money Market Rates pursuant to Section 2.03.
"Administrative Questionnaire" shall mean, with respect to any Bank, an
administrative questionnaire in the form prepared by the Agent and submitted to
the Agent (with a copy to the Borrower) duly completed by such Bank.
"Affiliate" shall mean (i) any Person that directly, or indirectly through
one or more intermediaries, controls the Borrower (a "Controlling Person") or
(ii) any Person (other than the Borrower or a Subsidiary) which is controlled by
or is under common control with a Controlling Person. As used herein, the term
"control" means possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through
the ownership of voting securities, by contract or otherwise.
"Agent" shall mean The First National Bank of Chicago in its capacity as
agent for the Banks hereunder, and its successors in such capacity.
"Agreed Currency" shall mean Dollars, Deutsche Marks, Dutch guilders,
French francs, Japanese yen and pounds sterling and any other currency which is
freely transferable and convertible into Dollars, in which deposits are
customarily offered to banks in the London interbank market, which the Borrower
requests the Agent to include as an Agreed Currency hereunder and which is
acceptable to each Bank; provided that the Agent shall promptly notify each Bank
--------
of each such request and each Bank shall be deemed to have agreed to each such
request if its objection thereto
<PAGE>
has not been received by the Agent within five Domestic Business Days from the
date of such notification by the Agent to such Bank.
"Applicable Lending Office" shall mean as to any Bank (i) in the case of
its Base Rate Loans, its Domestic Lending Office, (ii) in the case of its Euro-
Currency Loans, its Euro-Currency Lending Office and (iii) in the case of its
Money Market Loans, its Money Market Lending Office.
"Approximate Equivalent Amount" of any currency with respect to any amount
of Dollars at any date shall mean the Equivalent Amount of such currency with
respect to such amount of Dollars at such date (i) if such currency is an Agreed
Currency listed below, rounded up to the nearest amount of such Agreed Currency
set forth below opposite such amount of Dollars:
<TABLE>
<CAPTION>
Amount of Amount of Amount of Amount of Amount of
Amount of Deutsche Dutch French Japanese Pounds
Dollars Marks Guilders Francs Yen Sterling
- --------- --------- --------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C>
up to 1,000,000 1,000 1,000 1,000 100,000 1,000
1,000,000 to 9,999,999 10,000 10,000 10,000 1,000,000 10,000
10,000,000 to 99,999,999 100,000 100,000 100,000 10,000,000 100,000
100,000,000 and upwards 1,000,000 1,000,000 1,000,000 100,000,000 1,000,000
</TABLE>
and (ii) if such currency is not an Agreed Currency listed above, rounded up to
the nearest amount of such currency as determined by the Agent from time to
time.
"Arranger" shall mean First Chicago Capital Markets, Inc.
"Assignee" shall have the meaning set forth in Section 9.07(c).
"Authorized Officer" and "Authorized Representative" of the Borrower shall
mean an officer or other representative of the Borrower designated in the latest
Certificate of Incumbency of the Borrower. The Agent and the Banks shall be
conclusively entitled to rely on the latest such Certificate of Incumbency
delivered to the Agent.
"Bank" shall mean each bank which is listed on the signature pages hereof
as having a Commitment and which has executed and delivered this Agreement, and
its successors and assigns.
"Bank Credit Documents" shall mean, collectively, this Agreement, the
Notes, the Other Agreement and the "Notes" under and as defined in the Other
Agreement.
"Base Rate" shall mean, for any day, a rate per annum equal to the higher
of (i) the Corporate Base Rate for such day or (ii) the sum of 1/2 of 1% plus
the Federal Funds Rate for such day.
"Base Rate Loan" shall mean a Loan to be made by a Bank pursuant to Section
2.01 as a Base Rate Loan in accordance with the applicable Notice of Borrowing
or pursuant to Article VIII or
2
<PAGE>
Section 2.04(d).
"Benefit Arrangement" shall mean at any time an employee pension benefit
plan within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"Borrowed Funds" shall mean Debt for borrowed money.
"Borrower" shall mean ARCO Chemical Company, a Delaware corporation, and
its permitted successors.
"Borrowing" shall mean the aggregation of Loans of the same type and
currency of one or more Banks to be made to the Borrower pursuant to Article II
on a single date and for a single Interest Period. Borrowings are classified
for purposes of this Agreement either by reference to the pricing of Loans
comprising such Borrowing (e.g., a "Euro-Currency Borrowing" is a Borrowing
comprised of Euro-Currency Loans) or by reference to the provisions of Article
II under which participation therein is determined (e.g., a "Syndicated
Borrowing" is a Borrowing under Section 2.01 in which all Banks participate in
proportion to their Commitments and a "Money Market Borrowing" is a Borrowing
under Section 2.03 in which the Bank participants are determined by the Agent in
accordance therewith).
"Certificate of Incumbency" shall mean a Certificate of Incumbency
described in Section 3.01(ii) and any successor or replacement Certificate of
Incumbency delivered hereunder.
"Code" shall mean the Internal Revenue Code of 1986, as amended, or any
successor statute.
"Commitment" shall mean, as to each Bank, the Dollar Amount set forth
opposite its name on the signature pages hereof under the heading "Commitment"
(as such amount may be reduced from time to time as provided in Section 2.09).
"Consolidated Net Worth" shall mean at any date the consolidated
stockholders' equity of the Borrower and its Consolidated Subsidiaries less
their consolidated write-ups, all determined as of such date. For purposes of
this definition, "write-ups" shall mean the amount (to the extent reflected in
determining such consolidated stockholders' equity) of all write-ups (other than
write-ups resulting from foreign currency translations and write-ups of assets
of a going concern business made within 12 months after the acquisition of such
business) subsequent to December 31, 1995 in the book value of any asset owned
by the Borrower or a Consolidated Subsidiary.
"Consolidated Subsidiary" shall mean, on any date, any Subsidiary or other
entity the accounts of which would be consolidated with those of the Borrower in
its consolidated financial statements as of such date.
"Corporate Base Rate" shall mean a rate per annum equal to the corporate
base rate of interest
3
<PAGE>
announced by The First National Bank of Chicago from time to time, changing when
and as said corporate base rate changes.
"Cross-Indemnification Agreement" shall mean the Cross-Indemnification
Agreement dated as of June 1, 1987, as amended, between the Parent and the
Borrower.
"Debt" of any Person shall mean at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations of such Person as lessee under capital leases,
(v) all Debt of others secured by a Lien on any asset of such Person, whether or
not such Debt is assumed by such Person, and (vi) all Debt of others guaranteed
by such Person; provided that in no event shall "Debt" be deemed to include any
--------
"take-or-pay" obligations incurred by the Borrower in connection with its
purchases of petrochemical feedstocks or other such petrochemical products in
the ordinary course of business.
"Default" shall mean any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Designated Currency" shall mean (i) each Agreed Currency, (ii) any other
currency which is freely transferable and convertible into Dollars, in which
deposits are customarily offered to banks in the London interbank market and
which the Borrower designates as a Designated Currency hereunder upon five
Domestic Business Days' notice in writing to the Banks through the Agent and
(iii) any other currency which is freely transferable and convertible into
Dollars, in which deposits are not customarily offered to banks in the London
interbank market and which the Borrower designates as a Designated Currency
hereunder by notice in writing to the Banks through the Agent; provided that any
--------
notice given pursuant to this clause (iii) shall also propose an appropriate
amendment to this Agreement to provide for the basis for determining the rate to
which Money Market Margins are to be added or subtracted in the relevant Money
Market Quotes and to amend any other relevant provisions hereof as necessary and
that any such notice and proposed amendment shall be effective for all purposes
hereunder on the 20th Domestic Business Day after the date of such notification
by the Agent to each Bank if no Bank has objected thereto to the Agent before
such 20th Domestic Business Day.
"Dollar Amount" of any currency at any date shall mean (i) the amount of
such currency if such currency is Dollars or (ii) the equivalent amount of
Dollars if such currency is any currency other than Dollars, calculated on the
basis of the arithmetical mean of the buy and sell spot rates of exchange of the
Agent for such currency on the London market at the opening of business in
London on the relevant FX Date.
"Dollars" and "$" shall mean lawful money of the United States of America.
4
<PAGE>
"Domestic Business Day" shall mean any day except a Saturday, Sunday or
other day on which commercial banks in New York City or Chicago, Illinois are
authorized or required by law to close.
"Domestic Lending Office" shall mean, as to each Bank, its office, branch
or affiliate specified as its "Domestic Lending Office" below its name on the
signature pages hereof or such other office, branch or affiliate as such Bank
may from time to time specify to the Agent and the Borrower as its Domestic
Lending Office.
"Equivalent Amount" of any currency with respect to any amount of Dollars
at any date shall mean the equivalent in such currency of such amount of
Dollars, calculated on the basis of the arithmetical mean of the buy and sell
spot rates of exchange of the Agent for such other currency at the opening of
business in London on the relevant FX Date.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Group" shall mean the Borrower and all members of a controlled group
of corporations and all trades or business (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414 of the Code.
"Euro-Currency Business Day" shall mean any Domestic Business Day on which
commercial banks are open for international business (including dealings in
Dollar deposits) in London and, where funds are to be paid or made available in
a currency other than Dollars, on which commercial banks are open for domestic
and international business (including dealings in deposits in such currency) in
both London and the place where such funds are to be paid or made available.
"Euro-Currency Lending Office" shall mean, as to each Bank, (i) for loans
denominated in each of Dollars, Deutsche Marks, Dutch guilders, French francs,
Japanese yen and pounds sterling, its office, branch or affiliate specified as
its "Euro-Currency Lending Office" for such currency below its name on the
signature pages hereof (or, if no such office is specified, its Domestic Lending
Office for Base Rate Loans) or such other office, branch or affiliate of such
Bank as it may from time to time specify to the Agent and the Borrower as its
Euro-Currency Lending Office and (ii) for loans denominated in each other Agreed
Currency permitted hereunder from time to time, such office branch or affiliate
of such Bank as it may from time to time specify to the Agent and the Borrower
as its Euro-Currency Lending Office for such other currency (or, if no such
office is specified, its Domestic Lending Office for Base Rate Loans).
"Euro-Currency Loan" shall mean a Loan to be made by a Bank pursuant to
Section 2.01 as a Euro-Currency Loan in accordance with the applicable Notice of
Borrowing.
"Euro-Currency Payment Office" of the Agent shall mean, (i) for each of
Dollars, Deutsche Marks, Dutch guilders, French francs, Japanese yen and pounds
sterling, the office, branch or affiliate of the Agent specified as the "Euro-
Currency Payment Office" for such currency in Schedule
5
<PAGE>
I hereto or such other office, branch, affiliate or correspondent bank of the
Agent as it may from time to time specify to the Borrower and each Bank as its
Euro-Currency Payment Office and, (ii) for each other Designated Currency, such
office, branch, affiliate or correspondent bank of the Agent as it may from time
to time specify to the Borrower and each Bank as its Euro-Currency Payment
Office for such Designated Currency.
"Euro-Currency Reserve Percentage" shall mean with respect to any Bank for
any day that percentage (expressed as a decimal) which is in effect on such day,
as prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the reserve requirement imposed on such Bank in
respect of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Currency Loans and Money Market LIBOR Loans is determined or any category
of extensions of credit or other assets which includes loans by a non-United
States office of such Bank to United States residents).
"Event of Default" shall have the meaning assigned to that term in Section
6.01.
"Existing Credit Agreement" shall mean the $300 million Credit Agreement
dated as of November 19, 1993 (as amended by Amendment No. 1 dated as of October
14, 1994, and Amendment No. 2 dated as of April 3, 1996), among the Borrower,
the banks listed on the signature pages thereof and The First National Bank of
Chicago, as agent.
"Facility Fee Percentage" shall mean 0.05% per annum.
"Federal Funds Rate" shall mean for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day; provided that (i) if such day is not a Domestic
--------
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on the
next succeeding Domestic Business Day and (ii) if no such rate is so published
on such next succeeding Domestic Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to The First National Bank of Chicago on
such day on such transactions as determined by the Agent.
"Fixed Rate Loans" shall mean Euro-Currency Loans or Money Market Loans
(excluding Money Market LIBOR Loans bearing interest at the Base Rate pursuant
to Section 8.01(a)) or any combination of the foregoing.
"FX Date" shall mean the date on which the Agent's spot rate of exchange
shall be determined for purposes of calculating the Dollar Amount and Equivalent
Amount of any currency at any time. With respect to any calculation of Dollar
Amount or Equivalent Amount as of:
(i) any borrowing date for any type of Borrowing, the relevant FX
Date shall be the
6
<PAGE>
latest date by which a Notice of Borrowing is required to be delivered with
respect to such Borrowing (unless the Borrowing is a Base Rate Borrowing
pursuant to Section 2.04(d), 8.01(a), 8.02 or 8.04(b), in which case the
relevant FX Date shall be four Euro-Currency Business Days before the
borrowing date);
(ii) the Termination Date, the relevant FX Date shall be four Euro-
Currency Business Days before the Termination Date;
(iii) any date of prepayment of any Loan which is not also a
borrowing date, the relevant FX Date shall be the date of such prepayment;
(iv) each day as of which the Commitment may be reduced or terminated
pursuant to Section 2.09, the relevant FX Date shall be four Euro-Currency
Business Days before such day; and
(v) each day on which any vote or other action by the Required Banks
or Banks holding a specified proportion of the principal amount of the
Notes is to be taken or to be effective and each other day not specified
above on which the Dollar Amount or Equivalent Amount is to be determined
(including, without limitation, pursuant to Section 6.01(e) and 6.01(i)),
the relevant FX Date shall be such day.
"GAAP" means generally accepted accounting principles set forth from time
to time in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.
"Guarantee" by any Person shall mean any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in any
other manner the obligee of such Debt or other obligation of the payment thereof
or to protect such obligee against loss in respect thereof (in whole or in
part); provided that the term "Guarantee" shall not include endorsements for
--------
collection or deposit in the ordinary course of business. The term "guarantee"
used as a verb shall have a corresponding meaning.
"Interest Period" shall mean: (1) with respect to each Euro-Currency
Borrowing, the period commencing on the date of such Borrowing and ending 1, 2,
3 or 6 months thereafter (or 9 or 12 months thereafter if all Reference Banks
agree to such period), as the Borrower may elect in the
7
<PAGE>
applicable Notice of Borrowing; provided that:
--------
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Currency Business Day shall be extended to the next succeeding
Euro-Currency Business Day unless such Euro-Currency Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Euro-Currency Business Day;
(b) any Interest Period which begins on the last Euro-Currency
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Euro-Currency Business Day of a
calendar month; and
(c) the Borrower may not elect any Interest Period which would end
subsequent to the Termination Date;
(2) with respect to each Base Rate Borrowing, the period commencing on the
date of such Borrowing and ending 30 days thereafter; provided that:
--------
(a) any Interest Period (other than an Interest Period determined
pursuant to clause (b) below) which would otherwise end on a day which is
not a Euro-Currency Business Day shall be extended to the next succeeding
Euro-Currency Business Day; and
(b) any Interest Period which begins before the Termination Date and
would otherwise end after the Termination Date shall end on the Termination
Date;
(3) with respect to each Money Market LIBOR Borrowing, the period
commencing on the date of such Borrowing and ending such whole number of months
thereafter as the Borrower may elect in accordance with Section 2.03; provided
--------
that:
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Currency Business Day shall be extended to the next succeeding
Euro-Currency Business Day unless such Euro-Currency Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Euro-Currency Business Day;
(b) any Interest Period which begins on the last Euro-Currency
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Euro-Currency Business Day of a
calendar month; and
(c) the Borrower may not elect any Interest Period which would end
subsequent to the Termination Date;
8
<PAGE>
(4) with respect to each Money Market Rate Borrowing, the period
commencing on the date of such Borrowing and ending on such day (not earlier
than the 7th day) thereafter, as the Borrower may elect in accordance with
Section 2.03; provided that:
--------
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Currency Business Day shall be extended to the next succeeding
Euro-Currency Business Day; and
(b) the Borrower may not elect any Interest Period which would end
subsequent to the Termination Date.
"Internally-Funded Subsidiary" shall mean any Wholly-Owned Consolidated
Subsidiary (a) all of the shares of capital stock or other ownership interests
of which (except directors' qualifying shares) are owned by the Borrower or
another Internally-Funded Subsidiary, (b) which is a non-operating Subsidiary,
and (c) that does not at any time (including, without limitation, at the time
of, or at any time subsequent to, any transfer of the Borrower's assets to such
Subsidiary pursuant to clause (B) of the third proviso to Section 5.04) have any
Debt owing to any Person other than the Borrower or another Internally-Funded
Subsidiary.
"LIBOR Auction" shall mean a solicitation of Money Market Quotes setting
forth Money Market Margins based on the London Interbank Offered Rate pursuant
to Section 2.03.
"Lien" shall mean, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, the Borrower or any Subsidiary shall be
deemed to own subject to a Lien any asset which it has acquired or holds subject
to the interest of a vender or lessor under any conditional sale agreement,
capital lease or other title retention agreement relating to such asset.
"Loan" shall mean a Base Rate Loan or a Euro-Currency Loan or a Money
Market Loan and "Loans" means Base Rate Loans or Euro-Currency Loans or Money
Market Loans or any combination of the foregoing.
"London Interbank Offered Rate" shall have the meaning set forth in Section
2.07(b).
"Material Subsidiary" shall mean, as of any date of determination, a
Subsidiary which meets the definition of a "significant subsidiary" contained as
of the date of this Agreement in Regulation S-X of the Securities and Exchange
Commission.
"Money Market Lending Office" shall mean, as to each Bank, (i) for Money
Market Loans denominated in Dollars, its Domestic Lending Office for Base Rate
Loans or such other office, branch or affiliate of such Bank as it may from time
to time specify as its Money Market Lending Office by notice to the Borrower and
the Agent and (ii) for Money Market Loans denominated in each other Designated
Currency, such office, branch or affiliate of such Bank as it may from time
9
<PAGE>
to time specify as its Money Market Lending Office for such other Designated
Currency by notice to the Borrower and the Agent (or, if no such office if
specified, its Domestic Lending Office for Base Rate Loans); provided that any
--------
Bank may from time to time by notice to the Borrower and the Agent designate
separate Money Market Lending Offices for each of its Money Market LIBOR Loans
denominated in each Designated Currency and its Money Market Rate Loans in which
case all references herein to the Money Market Lending Office of such Bank shall
be deemed to refer to one or all of such offices, as the context may require.
"Money Market LIBOR Loan" shall mean a Loan to be made by a Bank pursuant
to a LIBOR Auction (including such a Loan bearing interest at the Base Rate
pursuant to Section 8.01(a)).
"Money Market Loan" shall mean a Money Market LIBOR Loan or a Money Market
Rate Loan.
"Money Market Margin" shall have the meaning set forth in Section 2.03(d).
"Money Market Quote" shall mean an offer by a Bank to make a Money Market
Loan in accordance with Section 2.03.
"Money Market Rate" shall have the meaning set forth in Section 2.03(d).
"Money Market Rate Loan" shall mean a Loan to be made by a Bank pursuant to
an Absolute Rate Auction.
"Multiemployer Plan" shall mean at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which any member of
the ERISA Group is then making or accruing an obligation to make contributions
or has within the preceding five plan years made contributions, including for
these purposes any Person which ceased to be a member of the ERISA Group during
such five year period.
"New York Interbank Offered Rate" applicable to any Interest Period for any
Euro-Currency Loan or Money Market LIBOR Loan shall mean the average (rounded
upward, if necessary, to the next higher 1/16 of 1%) of the respective rates per
annum at which deposits in the currency in which such Euro-Currency Loan is
denominated are offered to each of the Reference Banks in the New York interbank
market at approximately 11:00 a.m., New York City time, two Euro-Currency
Business Days before the first day of such Interest Period in an amount
approximately equal to the principal amount of the Euro-Currency Loan of such
Reference Bank to which such Interest Period is to apply and for a period of
time comparable to such Interest Period.
"Notes" means promissory notes of the Borrower, substantially in the form
of Exhibit A hereto, evidencing the obligation of the Borrower to repay the
Loans, and "Note" means any one of such promissory notes issued hereunder.
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<PAGE>
"Notice of Borrowing" shall mean a Notice of Syndicated Borrowing (as
defined in Section 2.02) or a Notice of Money Market Borrowing (as defined in
Section 2.03(f)) and the "date of a Notice of Borrowing" shall mean the date the
Notice of Borrowing is given to the Agent pursuant to Section 2.02 or 2.03(f),
as the case may be.
"Other Agreement" means Credit Agreement B dated as of July 23, 1997, as it
may be amended, extended, supplemented or otherwise modified, among the
Borrower, the banks listed on the signature pages thereof and The First National
Bank of Chicago, as agent for said banks.
"Parent" shall mean Atlantic Richfield Company, a Delaware corporation, and
its successors.
"Participant" shall have the meaning set forth in Section 9.07(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" shall mean an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
"Plan" shall mean at any time an employee pension benefit plan (other than
a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code and either (i) is
maintained, or contributed to, by a member of the ERISA Group for employees of a
member of the ERISA Group or (ii) has at any time within the preceding five
years been maintained, or contributed to, by any Person which was at such time a
member of the ERISA Group for employees of any Person which was at such time a
member of the ERISA Group.
"Quarterly Date" shall mean the last day of each March, June, September and
December, commencing September 30, 1997; provided that, if any such date is not
--------
a Euro-Currency Business Day, the relevant Quarterly Date shall be the next
succeeding Euro-Currency Business Day.
"Reference Banks" shall mean the principal London offices of Bank of
America National Trust and Savings Association, The Chase Manhattan Bank and The
First National Bank of Chicago, and each such other bank as may be appointed
pursuant to Section 9.07(f), and "Reference Bank" shall mean any one of such
Reference Banks.
"Refunding Borrowing" shall mean a Borrowing which, after application of
the proceeds thereof to repay one or more other Borrowings in whole or in part,
results in no net increase in the aggregate principal amount of Loans
outstanding hereunder.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time (including any successor
provision thereto or any other United
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<PAGE>
States law or regulation imposing reserves on deposits or loans).
"Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time (including any successor
provision thereto).
"Required Banks" shall mean at any time Banks having at least 66-2/3% of
the aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding Notes the Dollar Amount of the aggregate principal amount of
which evidence at least 66-2/3% of the Dollar Amount of the outstanding
aggregate principal amount of the Notes.
"Subsidiary" shall mean any corporation or other entity of which securities
or other ownership interests having ordinary voting power to elect a majority of
the board of directors or other Persons performing similar functions (whether or
not any other class of securities has or might have voting power by reason of
the happening of a contingency) are at the time owned or controlled directly or
indirectly by the Borrower.
"Syndicated Loan" shall mean a Base Rate Loan or a Euro-Currency Loan made
by a Bank pursuant to Section 2.01.
"Syndicated Margin" shall mean, with respect to Base Rate Loans, 0%, and
with respect to Euro-Currency Loans, 0.15%.
"Taxes" shall mean any present or future taxes, duties, withholdings or
other charges levied or imposed by any government or any political subdivision
or taxing authority thereof, excluding any of the foregoing imposed on or
calculated by reference to the net income of any Bank.
"Tax Sharing Agreement" shall mean the Amended and Restated Tax Sharing
Agreement dated as of January 1, 1995, as amended, between the Parent and the
Borrower.
"Termination Date" shall mean July 22, 1998, or such later date to which
the Termination Date may be extended pursuant to Section 2.18 (or, if such day
is not a Euro-Currency Business Day, the next preceding Euro-Currency Business
Day).
"Unfunded Liabilities" shall mean, with respect to any Plan at any time,
the amount (if any) by which (i) the present value of all benefits under such
Plan exceeds (ii) the fair market value of all Plan assets allocable to such
benefits (excluding any accrued but unpaid contributions), all determined as of
the then most recent valuation date for such Plan, but only to the extent that
such excess represents a potential liability of a member of the ERISA Group to
the PBGC or any other Person under Title IV of ERISA.
"Wholly-Owned Consolidated Subsidiary" shall mean any Consolidated
Subsidiary all of the shares of capital stock or other ownership interests of
which (except directors' qualifying shares) are at the time directly or
indirectly owned by the Borrower.
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<PAGE>
SECTION 1.02. Accounting Terms and Determinations. Unless otherwise
-----------------------------------
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with GAAP as
in effect from time to time, applied on a basis consistent (except for changes
concurred in by the Borrower's independent public accountants) with the most
recent audited consolidated financial statements of the Borrower and its
Consolidated Subsidiaries delivered to the Banks; provided that if the Borrower
--------
notifies the Agent that the Borrower wishes to amend Section 5.05 to eliminate
or to take into account the effect of any change in GAAP on the operation of
such covenant (or if the Agent notifies the Borrower that the Required Banks
wish to amend Section 5.05 for such purpose), then the Borrower's compliance
with such covenant shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such covenant is amended in a manner satisfactory to
the Borrower and the Required Banks.
SECTION 1.03. Introduction of Euro. For the avoidance of doubt, the
--------------------
parties hereto affirm and agree that neither the fixation of the conversion rate
of any Designated Currency of a country that is a member of the European Union
against the Euro as a single currency, in accordance with the Treaty
Establishing the European Economic Community, as amended by the Treaty on the
European Union (the Maastricht Treaty), nor the conversion of any Loans or other
obligations under this Agreement from a Designated Currency of a country that is
a member of the European Union into Euros, shall require the early termination
of this Agreement or the prepayment of any amount due under this Agreement or
create any liability of one party to another party for any direct or
consequential loss arising from any of such events. As of the date that any
such Designated Currency is no longer the lawful currency of its respective
country, all payment obligations under this Agreement that would otherwise be in
such Designated Currency shall thereafter by satisfied in Euros.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend. From the date hereof to but not
-------------------
including the Termination Date, each Bank severally agrees, on the terms and
conditions set forth in this Agreement, to lend to the Borrower pursuant to this
Section 2.01 from time to time amounts such that, upon giving effect to each
such Borrowing: (i) the then aggregate outstanding principal Dollar Amount of
all Syndicated Loans made by such Bank to the Borrower shall not exceed the
amount of such Bank's Commitment then in effect and (ii) the then aggregate
outstanding principal Dollar Amount of all Syndicated Loans and all Money Market
Loans made by the Banks to the Borrower shall not exceed the aggregate amount of
the Commitments then in effect. Each Borrowing under this Section 2.01 shall be
in an aggregate principal amount of $10,000,000 (or the Approximate Equivalent
Amount thereof) or a larger multiple of $1,000,000 (or the Approximate
Equivalent Amount thereof) (except that any such Borrowing may be in the
aggregate amount of the unused
13
<PAGE>
Commitments or the Equivalent Amount thereof) and shall be made from the several
Banks ratably in proportion to their respective Commitments. Within the
foregoing limits, the Borrower may borrow under this Section 2.01, repay, or to
the extent permitted by Section 2.11, prepay Loans and reborrow under this
Section 2.01 at any time prior to the Termination Date. Subject to the
preceding provisions of this Section 2.01, each Bank severally agrees to make
Euro-Currency Loans in the Agreed Currencies.
SECTION 2.02. Notice of Syndicated Borrowings. The Borrower shall give
-------------------------------
the Agent notice (a "Notice of Syndicated Borrowing") not later than 10:00 a.m.,
Chicago time, on (x) the Domestic Business Day next preceding each Base Rate
Borrowing, (y) in the case of a Euro-Currency Borrowing to be made in Dollars,
the third Euro-Currency Business Day before each such Euro-Currency Borrowing
(or the fourth Euro-Currency Business Day before any such Euro-Currency
Borrowing for which a 9 or 12 month Interest Period is requested) and (z) in the
case of a Euro-Currency Borrowing to be made in an Agreed Currency other than
Dollars, the fourth Euro-Currency Business Day before each such Euro-Currency
Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Domestic Business
Day in the case of a Base Rate Borrowing or a Euro-Currency Business Day in
the case of a Euro-Currency Borrowing;
(ii) the aggregate amount of such Borrowing; provided that upon
--------
giving effect to such Borrowing, the then aggregate outstanding principal
Dollar Amount of all Syndicated Loans and all Money Market Loans shall not
exceed the aggregate amount of the Commitments then in effect;
(iii) whether the Loans comprising such Borrowing are to be Base Rate
Loans or Euro-Currency Loans and, if Euro-Currency Loans, the currency
thereof in accordance with the last sentence of Section 2.01; and
(iv) in the case of a Euro-Currency Borrowing, the duration of the
Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period and provided that deposits in the currency of
such Borrowing are being offered for such Interest Period to the Reference
Banks in the London interbank market.
Notwithstanding the preceding provisions of this Section 2.02, if, by 10:00
a.m., Chicago time, on the Domestic Business Day next preceding the last day of
the Interest Period applicable to any outstanding Syndicated Loan, the Borrower
shall not have either (i) given a Notice of Syndicated Borrowing to refinance
such Syndicated Loan, (ii) requested offers for Money Market Loans pursuant to
Section 2.03(b) to refinance such Syndicated Loan or (iii) given notice of the
Borrower's election to prepay such Syndicated Loan pursuant to Section 2.11 or
to repay such Syndicated Loan pursuant to Section 2.12, then the Borrower shall
be deemed to have given Notice of Syndicated Borrowing for a Refunding Borrowing
comprised of a Base Rate Loan in Dollars to be made on the last day of such
Interest Period in a principal amount equal to the outstanding principal Dollar
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Amount of such Syndicated Loan, the making of such Refunding Borrowing to be
subject to each of the conditions precedent set forth in clauses (ii), (iii) and
(iv) of Section 3.02.
SECTION 2.03. Money Market Borrowings. (a) In addition to Syndicated
-----------------------
Borrowings pursuant to Section 2.01, the Borrower may, as set forth in this
Section, request the Banks at any time prior to the Termination Date (but not
during any period when the Borrower's senior unsecured long-term public debt is
rated either below Baa3 by Moody's Investor Service, Inc. (or its successor) or
below BBB- by Standard & Poor's Corporation (or its successor)) to make offers
to make Money Market Loans to the Borrower. The Banks may, but shall have no
obligation to, make such offers and the Borrower may, but shall have no
obligation to, accept any such offers in the manner set forth in this Section.
(b) When the Borrower wishes to request offers to make Money Market Loans
under this Section, it shall transmit to the Agent by telex or facsimile
transmission a Money Market Quote Request substantially in the form of Exhibit B
hereto so as to be received no later than (x) 3:00 p.m., London time, on the
fifth Euro-Currency Business Day prior to the date of Borrowing proposed
therein, in the case of a LIBOR Auction in a Designated Currency other than
Dollars, (y) 10:00 a.m., Chicago time, on the fifth Euro-Currency Business Day
prior to the date of Borrowing proposed therein, in the case of a LIBOR Auction
in Dollars or (z) 9:00 a.m., Chicago time, on the Domestic Business Day next
preceding the date of Borrowing proposed therein, in the case of an Absolute
Rate Auction (or, in any such case, such other time and date as the Borrower and
the Agent shall have mutually agreed and shall have notified the Banks of not
later than the date of the Money Market Quote Request for the first LIBOR
Auction or Absolute Rate Auction for which such change is to be effective),
specifying:
(i) the proposed date of Borrowing, which shall be a Euro-Currency
Business Day in the case of a LIBOR Auction or a Domestic Business Day in
the case of an Absolute Rate Auction;
(ii) the proposed currency of such Borrowing, which shall be a
Designated Currency in the case of a LIBOR Auction or Dollars in the case
of an Absolute Rate Auction;
(iii) the aggregate amount of such Borrowing, which shall be at least
$10,000,000 (or the Approximate Equivalent Amount thereof) or a larger
multiple of $1,000,000 (or the Approximate Equivalent Amount thereof);
provided that upon giving effect to such Borrowing, the then aggregate
--------
outstanding principal Dollar Amount of all Syndicated Loans and all Money
Market Loans shall not exceed the aggregate amount of the Commitments then
in effect;
(iv) the duration of the Interest Period applicable thereto, subject
to the provisions of the definition of Interest Period; and
(v) whether the Money Market Quotes requested are to set forth a
Money Market
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Margin or a Money Market Rate.
The Borrower may request offers to make Money Market Loans for more than one
Interest Period but not more than one currency in a single Money Market Quote
Request. No Money Market Quote Request shall be given within five Euro-Currency
Business Days (or such other number of days as the Borrower and the Agent may
agree) of any other Money Market Quote Request (under and as defined in either
this Agreement or the Other Agreement).
(c) Promptly upon receipt of a Money Market Quote Request, the Agent shall
send to the Banks by telex or facsimile transmission an Invitation for Money
Market Quotes substantially in the form of Exhibit C hereto, which shall
constitute an invitation by the Borrower to each Bank to submit Money Market
Quotes offering to make the Money Market Loans to which such Money Market Quote
Request relates in accordance with this Section.
(d)(i) Each Bank may submit a Money Market Quote containing an offer or
offers to make Money Market Loans in response to any Invitation for Money Market
Quotes. Each Money Market Quote must comply with the requirements of this
subsection and must be submitted to the Agent by telex or facsimile transmission
at its offices specified in or pursuant to Section 9.01 not later than (x) 3:00
p.m., London time, on the fourth Euro-Currency Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction in a Designated
Currency other than Dollars, (y) 1:00 p.m., Chicago time, on the fourth
Euro-Currency Business Day prior to the proposed date of Borrowing, in the case
of a LIBOR Auction in Dollars, or (z) 9:00 a.m., Chicago time, on the proposed
date of Borrowing, in the case of an Absolute Rate Auction (or, in any such
case, such other time and date as the Borrower and the Agent shall have mutually
agreed and shall have notified the Banks of not later than the date of the Money
Market Quote Request for the first LIBOR Auction or Absolute Rate Auction for
which such change is to be effective); provided that Money Market Quotes
--------
submitted by the Agent (or any Affiliate of the Agent) in the capacity of a Bank
may be submitted, and may only be submitted, if the Agent or such affiliate
notifies the Borrower of the terms of the offer or offers contained therein not
later than (A) 2:00 p.m., London time, on the fourth Euro-Currency Business Day
prior to the proposed date of Borrowing, in the case of a LIBOR Auction in a
Designated Currency other than Dollars, (B) noon, Chicago time, on the fourth
Euro-Currency Business Day prior to the proposed date of Borrowing, in the case
of a LIBOR Auction in Dollars, or (C) 8:45 a.m., Chicago time, on the proposed
date of Borrowing, in the case of an Absolute Rate Auction. Subject to Articles
III and VI, any Money Market Quote so made shall be irrevocable except with the
written consent of the Agent given on the instructions of the Borrower.
(ii) Each Money Market Quote shall be in substantially the form of
Exhibit D hereto and shall in any case specify:
(A) the proposed date of Borrowing and, in the case of a LIBOR
Auction, the proposed currency of such Borrowing;
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<PAGE>
(B) the principal amount of each Money Market Loan for which each
such offer is being made, (w) the Dollar Amount of which principal amount
may be greater or less than the Commitment of the quoting Bank, (x) which
principal amount must be $1,000,000 (or the Approximate Equivalent Amount
thereof) or a larger multiple of $1,000,000 (or the Approximate Equivalent
Amount thereof), (y) which principal amount may not exceed in the aggregate
with the other Money Market Loans included in such offer the principal
amount of Money Market Loans for which offers were requested and (z) which
principal amount may be subject to an aggregate limitation as to the
maximum principal amount of Money Market Loans for which offers being made
by such quoting Bank may be accepted;
(C) the duration of the Interest Period applicable to each Money
Market Loan for which each such offer is being made, subject to the
provisions of the definition of Interest Period;
(D) in the case of a LIBOR Auction, the margin above or below the
applicable London Interbank Offered Rate (the "Money Market Margin")
offered for each such Money Market Loan, expressed as a percentage (rounded
to the nearest 1/10,000th of 1%) to be added to or subtracted from such
base rate;
(E) in the case of an Absolute Rate Auction, the rate of interest
per annum (rounded to the nearest 1/10,000th of 1%) (the "Money Market
Rate") offered for each such Money Market Loan; and
(F) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the quoting
Bank with respect to each Interest Period specified in the related Invitation
for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded that:
(A) is not substantially in the form of Exhibit D hereto or does not
specify all of the information required by subsection (d)(ii) of this
Section;
(B) contains qualifying, conditional or similar language;
(C) proposes terms other than or in addition to those set forth in
the applicable Invitation for Money Market Quotes; or
(D) arrives after the time set forth in subsection (d)(i) of this
Section.
(e) The Agent shall promptly notify the Borrower of the terms (i) of any
Money Market Quote submitted by a Bank that is in accordance with subsection (d)
of this Section and (ii) of any subsequent Money Market Quote that amends,
modifies or is otherwise inconsistent with a previous
17
<PAGE>
Money Market Quote submitted by such Bank with respect to the same Money Market
Quote Request; provided that any such subsequent Money Market Quote shall be
--------
disregarded by the Agent unless such subsequent Money Market Quote is submitted
solely to correct a manifest error in such former Money Market Quote. The
Agent's notice to the Borrower shall specify (x) the aggregate principal amount
and currency of Money Market Loans for which offers have been received for each
Interest Period specified in the related Money Market Quote Request, (y) the
respective principal amounts and Money Market Margins or Money Market Rates, as
the case may be, so offered and (z) if applicable, limitations on the aggregate
principal amount of Money Market Loans for which offers in any single Money
Market Quote may be accepted.
(f) Not later than (x) 5:00 p.m., London time, on the fourth Euro-Currency
business Day prior to the proposed date of Borrowing, in the case of a LIBOR
Auction in a Designated Currency other than Dollars, (y) 10:00 a.m., Chicago
time, on the third Euro-Currency Business Day prior to the proposed date of
Borrowing, in the case of a LIBOR Auction in Dollars, or (z) 10:00 a.m., Chicago
time, on the proposed date of Borrowing, in the case of an Absolute Rate Auction
(or, in any such case, such other time and date as the Borrower and the Agent
shall have mutually agreed upon and shall have notified the Banks of not later
than the date of the Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be effective), the Borrower
shall notify the Agent of its acceptance or non-acceptance of the offers so
notified to it pursuant to subsection (e) of this Section. In the case of
acceptance, such notice (a "Notice of Money Market Borrowing") shall specify the
aggregate principal amount of offers for each Interest Period that are accepted.
The Borrower may accept any Money Market Quote in whole or in part; provided
--------
that:
(i) the aggregate principal amount of each Money Market Borrowing
may not exceed the applicable amount set forth in the related Money Market
Quote Request;
(ii) the principal amount of each Money Market Borrowing must be at
least $10,000,000 (or the Approximate Equivalent Amount thereof) or a
larger multiple of $1,000,000 (or the Approximate Equivalent Amount
thereof); provided that upon giving effect to such Borrowing, the then
--------
aggregate outstanding principal Dollar Amount of all Syndicated Loans and
all Money Market Loans shall not exceed the aggregate amount of the
Commitments then in effect;
(iii) acceptance of offers for each Interest Period may only be made
on the basis of ascending Money Market Margins or Money Market Rates, as
the case may be; and
(iv) the Borrower may not accept any offer that is described in
subsection (d)(iii) of this Section or that otherwise fails to comply with
the requirements of this Agreement.
(g) If offers are made by two or more Banks with the same Money Market
Margins or Money Market Rates, as the case may be, for a greater aggregate
principal amount of Money Market Loans than can be accepted for the related
Interest Period (after giving effect to the acceptance of all lower
18
<PAGE>
Money Market Margins or Money Market Rates, as the case may be, properly offered
for such Interest Period), the principal amount of Money Market Loans which can
be accepted shall be allocated by the Agent among such Banks as nearly as
possible (in such multiples, not greater than $1,000,000 (or the Approximate
Equivalent Amount thereof), as the Agent may deem appropriate) in proportion to
the aggregate principal amount of such offers. Determinations by the Agent of
the amounts of Money Market Loans by each Bank shall be conclusive in the
absence of manifest error.
SECTION 2.04. Notice to Banks; Funding of Loans. (a) Upon receipt of a
---------------------------------
Notice of Borrowing, the Agent shall promptly notify each Bank of the contents
thereof and of such Bank's ratable share (if any) of such Borrowing and such
Notice of Borrowing shall not thereafter be revocable by the Borrower except
pursuant to subsection (d) of this Section or Section 8.01(a).
(b) On the date of each Borrowing, each Bank participating therein shall
(except as provided in subsection (c) of this Section) make available its
ratable share of such Borrowing, (i) if such Borrowing is denominated in
Dollars, not later than 12:00 noon, Chicago time, in Federal or other funds
immediately available to the Agent, in Chicago, Illinois at its address
specified in or pursuant to Section 10.01 and, (ii) if such Borrowing is
denominated in another currency, not later than 12:00 noon, local time in the
city of the Agent's Euro-Currency Payment Office for such currency, in such
funds as may then be customary for the settlement of international transactions
in such currency in the city of and at the address of the Agent's Euro-Currency
Payment Office for such currency. Unless the Agent determines that any
applicable condition specified in Article III has not been satisfied, the Agent
will make the funds so received from the Banks available to the Borrower at the
Agent's aforesaid address.
(c) If any Bank makes a new Loan hereunder on the date on which the
Borrower is to repay all or any part of an outstanding Loan from such Bank,
which outstanding Loan is denominated in the currency of such new Loan, such
Bank shall apply the proceeds of its new Loan to make such repayment and only an
amount equal to the difference (if any) between the amount being borrowed and
the principal amount being repaid shall be made available by such Bank to the
Agent as provided in subsection (b) of this Section or remitted by the Borrower
to the Agent as provided in Section 2.12, as the case may be.
(d) Notwithstanding the satisfaction of all conditions referred to in
Section 2.01, 2.02 or 2.03(b) with respect to any Borrowing in any currency
other than Dollars, if there shall occur on or prior to the date of such
Borrowing any change in national or international financial, political or
economic conditions or currency exchange rates or exchange controls which would
in the opinion of the Agent or the Required Banks make it impracticable for the
Euro-Currency Loans or Money Market LIBOR Loans comprising such Borrowing to be
denominated in the currency specified by the Borrower, then the Agent shall
forthwith give notice thereof to the Borrower and the Banks, and such Loans
shall not be denominated in such currency but shall be made on the date of such
Borrowing in Dollars, in an aggregate principal amount equal to the Dollar
Amount of the aggregate principal amount specified in the related Notice of
Borrowing, as Base Rate Loans, unless the Borrower notifies the Agent at least
one Domestic Business Day before such date that (i) it elects
19
<PAGE>
not to borrow on such date or (ii) it elects to borrow on such date in a
different Agreed Currency or Designated Currency, as the case may be, in which
the denomination of such Loans would in the opinion of the Agent and the
Required Banks be practicable and in an aggregate principal amount equal to the
Dollar Amount of the aggregate principal amount specified in the related Notice
of Borrowing.
SECTION 2.05. Notes. (a) The Loans of each Bank to the Borrower shall be
-----
evidenced by a single Note of the Borrower payable to the order of such Bank for
the account of its Applicable Lending Office in an amount equal to the aggregate
unpaid principal amount of such Bank's Loans to the Borrower.
(b) Each Bank may, by notice to the Borrower and the Agent (to be given
not later than two Domestic Business Days prior to the first Borrowing) request
that its Loans of a particular type be evidenced by a separate Note in an amount
equal to the aggregate unpaid principal amount of such Loans. Each such Note
shall be in substantially the form of Exhibit A hereto with appropriate
modifications to reflect the fact that it evidences solely Loans of the relevant
type. Each reference in this Agreement to a "Note" or the "Notes" of such Bank
shall be deemed to refer to and include any or all of such Notes, as the context
may require.
(c) Upon receipt of each Bank's Note(s) pursuant to Section 3.01(vi), the
Agent shall mail such Note(s) to such Bank. Each Bank shall record, and prior
to any transfer of its Note(s) shall endorse on the schedules forming a part
thereof appropriate notations to evidence, the date, currency, amount and
maturity of each Loan made by it to the Borrower and the date and amount of each
payment of principal made by the Borrower with respect thereto; provided that
--------
the failure of any Bank to make any such recordation or endorsement shall not
affect the obligations of the Borrower hereunder or under the Notes. Each Bank
is hereby irrevocably authorized by the Borrower so to endorse the Notes and to
attach to and make a part of any such Note a continuation of any such schedule
as and when required.
SECTION 2.06. Maturity of Loans. Each Loan included in any Borrowing
-----------------
shall mature, and the principal amount thereof shall be due and payable, on the
last day of the Interest Period applicable to such Borrowing.
SECTION 2.07. Interest Rates. (a) Each Base Rate Loan shall bear interest
--------------
on the outstanding principal amount thereof, for each day from the date such
Loan is made until it becomes due at a rate per annum equal to the Base Rate for
such day. Such interest shall be payable for each Interest Period on the last
day thereof. Any overdue principal of and, to the extent permitted by law,
overdue interest on any Base Rate Loan shall bear interest, payable on demand,
for each day until paid at a rate per annum equal to the sum of 1% plus the rate
otherwise applicable to Base Rate Loans for such day.
(b) Each Euro-Currency Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a rate
per annum equal to the sum of the applicable
20
<PAGE>
Syndicated Margin plus the applicable London Interbank Offered Rate. Such
interest shall be payable for each Interest Period on the last day thereof and,
if such Interest Period is longer than three months, at intervals of three
months after the first day thereof.
The "London Interbank Offered Rate" applicable to any Interest Period for
any Euro-Currency Loan or Money Market LIBOR Loan shall mean the average
(rounded upward, if necessary, to the next higher 1/16 of 1%) of the respective
rates per annum at which deposits in the currency in which such Euro-Currency
Loan or Money Market LIBOR Loan is denominated are offered to each of the
Reference Banks in the London interbank market at approximately 11:00 a.m.,
London time, two Euro-Currency Business Days before the first day of such
Interest Period, in an amount approximately equal to (i) the principal amount of
the Euro-Currency Loan or Money Market LIBOR Loan of such Reference Bank to
which such Interest Period is to apply or (ii) if such Reference Bank is not
submitting a Money Market Quote for such Money Market LIBOR Loan, $10,000,000
(or the Approximate Equivalent Amount thereof), and for a period of time
comparable to such Interest Period; provided that (i) for Euro-Currency Loans
--------
denominated in pounds sterling the respective rates per annum at which deposits
in pounds sterling are offered to each of the Reference Banks shall be the rate
for euro-sterling deposits not domestic sterling deposits and (ii) for Money
Market LIBOR Loans denominated in pounds sterling the respective rates per annum
at which deposits in pounds sterling are offered to each of the Reference Banks
shall be the rates for euro-sterling or domestic sterling deposits as specified
by the Borrower in the relevant Money Market Quote Request.
(c) Any overdue principal of and, to the extent permitted by law, overdue
interest on any Euro-Currency Loan shall bear interest, payable on demand, for
each day from and including the date payment thereof was due to but excluding
the date of actual payment, at a rate per annum equal to the sum of 1% plus the
applicable Syndicated Margin plus the average (rounded upward, if necessary, to
the next higher 1/16 of 1%) of the respective rates per annum at which one day
(or, if such amount due remains unpaid more than three Euro-Currency Business
Days, then for such other period of time not longer than three months as the
Agent may elect) deposits in the relevant currency in an amount approximately
equal to such overdue payment due to each of the Reference Banks are offered to
such Reference Bank in the London interbank market for the applicable period
determined as provided above (or, if the circumstances described in clause (a)
or (b) of Section 8.01 shall exist, at a rate per annum equal to the sum of (i)
if such Euro-Currency Loan is denominated in Dollars, 1% plus the rate
applicable to Base Rate Loans for such day and (ii) if such Euro-Currency Loan
is denominated in any other currency, 1% plus the cost to such Bank of funding
or maintaining such Euro-Currency Loan). The certificate of such Bank as to the
cost of funding or maintaining such Euro-Currency Loan shall be conclusive
absent manifest error.
(d) Subject to Section 8.01(a)(1), each Money Market LIBOR Loan shall bear
interest on the outstanding principal amount thereof, for the Interest Period
applicable thereto, at a rate per annum equal to the sum of the London Interbank
Offered Rate for such Interest Period (determined in accordance with subsection
(c) of this Section as if each Reference Bank were to participate in the related
Money Market Borrowing ratably in proportion to its Commitment) plus (or minus)
the
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<PAGE>
Money Market Margin quoted by the Bank making such Loan in accordance with
Section 2.03. Each Money Market Rate Loan shall bear interest on the
outstanding principal amount thereof, for the Interest Period applicable
thereto, at a rate per annum equal to the Money Market Rate quoted by the Bank
making such Loan in accordance with Section 2.03. Such interest shall be
payable for each Interest Period on the last day thereof. Any overdue principal
of and, to the extent permitted by law, overdue interest on any Money Market
Loan shall bear interest, payable on demand, for each day until paid at a rate
per annum equal to the sum of (i) if such Money Market Loan is denominated in
Dollars, 1% plus the rate applicable to Base Rate Loans for such day and (ii) if
such Money Market Loan is denominated in any other currency, 1% plus the cost to
such Bank of funding or maintaining such Money Market Loan. The certificate of
such Bank certifying the cost of funding or maintaining such Money Market Loan
shall be conclusive absent manifest error.
(e) The Agent shall determine each interest rate applicable to the Loans
hereunder. The Agent shall give prompt notice to the Borrower and the
participating Banks by telex or facsimile transmission of each rate of interest
so determined, and its determination thereof shall be conclusive in the absence
of manifest error.
(f) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Agent as contemplated by this Section. If any Reference Bank
does not furnish a timely quotation, the Agent shall determine the relevant
interest rate on the basis of the quotation or quotations furnished by the
remaining Reference Bank or Banks or, if none of such quotations is available on
a timely basis, the provisions of Section 8.01 shall apply.
SECTION 2.08. Fees. (a) The Borrower shall pay to the Agent for the
----
account of the Banks ratably in proportion to their Commitments a facility fee
at a rate per annum equal to the Facility Fee Percentage on the daily average
amount of the Commitments (without regard to the outstanding principal amount of
the Loans). Such facility fee shall accrue from and including July 23, 1997 to
but excluding the Termination Date.
(b) The Borrower shall pay to each of the Agent and the Arranger for its
own account fees in the amounts and at the time previously agreed upon between
the Borrower, the Agent and the Arranger.
(c) Accrued fees under subsection (a) of this Section shall be payable
quarterly in arrears on the fifth Domestic Business Day after each Quarterly
Date for the quarter ending on such Quarterly Date or, if earlier, the fifth
Domestic Business Day after the date of termination of the Commitments in their
entirety.
SECTION 2.09. Optional Termination or Reduction of Commitments.
------------------------------------------------
(a) The Borrower may, upon at least two Domestic Business Days'
irrevocable notice to the Agent, terminate at any time, or reduce from time to
time by an aggregate amount of $10,000,000 or a larger multiple of $1,000,000
the aggregate amount of the Commitments in excess of the Dollar
22
<PAGE>
Amount of the aggregate outstanding principal amount of the Loans.
(b) In the absence of a Default that has occurred and is continuing and in
the event that (i) any Bank claims indemnification pursuant Section 2.16(a) or
Section 2.16(b), (ii) the Borrower is required to make an additional payment to
any Bank pursuant to Section 2.16(a), or (iii) any Bank makes a claim for
increased costs relating to taxes under Section 8.03, the Borrower shall have
the right to repay all of such Bank's outstanding Loans and to terminate such
Bank's Commitment hereunder upon ten days prior written notice to the Agent and
such Bank. On the day on which any Bank's Commitment is terminated pursuant to
this Section 2.09(b), the Borrower shall pay all principal, accrued interest,
fees and other amounts owing to such Bank hereunder (including, without
limitation, any amounts owing under Sections 2.08, 2.13, 2.16, and 8.03).
SECTION 2.10. Mandatory Termination of Commitments. The Commitments shall
------------------------------------
terminate on the Termination Date, and any Loans outstanding on the Termination
Date shall be due and payable on the Termination Date (together with accrued
interest thereon).
SECTION 2.11. Optional Prepayments. (a) The Borrower may prepay any Base
--------------------
Rate Borrowing (or any Money Market Borrowing bearing interest at the Base Rate
pursuant to Section 8.01(a)) upon at least one Domestic Business Day's notice to
the Agent or, subject to Section 2.13, prepay any Euro-Currency Borrowing upon
at least two Euro-Currency Business Days' notice to the Agent, in any such case
in whole at any time, or from time to time in part in amounts aggregating
$10,000,000 (or the Approximate Equivalent Amount thereof) or any larger
multiple of $1,000,000 (or the Approximate Equivalent Amount thereof), by paying
the principal amount to be prepaid together with accrued interest thereon to the
date of prepayment. Each such optional prepayment shall be applied to prepay
ratably the Loans of the several Banks included in such Borrowing. The Borrower
may not prepay all or any portion of the principal amount of any Money Market
Loan (other than a Money Market LIBOR Loan bearing interest at the Base Rate
pursuant to Section 8.01(a)) prior to the maturity thereof.
(b) Upon receipt of a notice of prepayment pursuant to this Section, the
Agent shall promptly notify each Bank of the contents thereof and of such Bank's
ratable share (if any) of such prepayment and such notice shall not thereafter
be revocable by the Borrower.
SECTION 2.12. General Provisions as to Payments. (a) All payments to be
---------------------------------
made by the Borrower hereunder or under the Notes in Dollars shall be made not
later than 12:00 noon, Chicago time, on the date when due, in Federal or other
funds immediately available in Chicago, Illinois, to the Agent at its address
referred to in Section 9.01. The Agent will promptly distribute to each Bank
its ratable share of each such payment received by the Agent for the account of
the Banks.
(b) Each Borrowing shall be repaid or prepaid in the currency in which it
was made in the amount borrowed and interest payable thereon shall be paid in
such currency. All payments to be made by the Borrower hereunder or under the
Notes in any currency other than Dollars shall be made in such currency on the
date due in such funds as may then be customary for the settlement of
23
<PAGE>
international transactions in such currency for the account of the Agent, at its
Euro-Currency Payment Office for such currency. The Agent will promptly cause
such payments to be distributed to each Bank in like funds and currency.
Notwithstanding the foregoing provisions of this Section, if, after the making
of any Loan in any currency other than Dollars, currency control or exchange
regulations are imposed in the country which issues such currency with the
result that different types of such currency (the "New Currency") are introduced
and the type of currency in which the Borrowing was made (the "Original
Currency") no longer exists or the Borrower is not able to make payment to the
Agent for the account of the Banks in such Original Currency, then all payments
to be made by the Borrower hereunder or under the Notes in such currency shall
be made in such amount and such type of the New Currency as shall be equivalent
to the amount of such payment otherwise due hereunder or under the Notes in the
Original Currency, it being the intention of the parties hereto that the
Borrower takes all risks of the imposition of any such currency control or
exchange regulations. In addition, notwithstanding the foregoing provisions of
this Section, if, after the making of any Borrowing in any currency other than
Dollars, the Borrower is not able to make payment to the Agent for the account
of the Banks in the type of currency in which such Borrowing was made, then such
Borrowing shall instead be repaid when due in Dollars in a principal amount
equal to the Dollar Amount (as of the date of repayment) of such Borrowing.
(c) Whenever any payment of principal of, or interest on, the Base Rate
Loans or of additional compensation shall be due on a day which is not a
Domestic Business Day, the date for payment thereof shall be extended to the
next succeeding Domestic Business Day. Whenever any payment of principal of, or
interest on, the Euro-Currency Loans shall be due on a day which is not a Euro-
Currency Business Day, the date for payment thereof shall be extended to the
next succeeding Euro-Currency Business Day unless such Euro-Currency Business
Day occurs in another calendar month, in which case the date for payment thereof
shall be the next preceding Euro-Currency Business Day. Whenever any payment of
principal of, or interest on, the Money Market Loans shall be due on a day which
is not a Euro-Currency Business Day, the date for payment thereof shall be
extended to the next succeeding Euro-Currency Business Day. If the date for any
payment of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time.
(d) Unless the Agent shall have been notified by a Bank or the Borrower
(the "Payor") prior to the date on which such Bank is to make payment to the
Agent of the proceeds of a Loan to be made by it hereunder or the Borrower is to
make a payment to the Agent for the account of one or more of the Banks, as the
case may be (each of such payments being herein called a "Required Payment"),
which notice shall be effective upon receipt, that the Payor does not intend to
make the Required Payment to the Agent, the Agent may assume that the Required
Payment has been made and may (but shall not be required to), in reliance upon
such assumption, make the amount thereof available to the intended recipient on
such date and, if the Payor has not in fact made the Required Payment to the
Agent, the recipient of such payment shall, on demand, refund to the Agent the
amount made available to it together with interest thereon in respect of the
period commencing on the date such amount was so made available by the Agent
until the date the Agent recovers such amount at a rate equal to the Federal
Funds Rate for such period, if the recipient is a Bank, and, if
24
<PAGE>
the recipient is the Borrower, the rate which the Borrower would have been
obligated to pay hereunder for the Loans that are the subject of, or are
equivalent to, such payment for such period.
SECTION 2.13. Funding Losses. The Borrower shall pay to the Agent for the
--------------
account of each Bank, upon the request of such Bank through the Agent, such
amount or amounts as shall compensate such Bank for any reasonable loss, cost or
expense incurred by such Bank (or, subject to Section 9.07(b), by an existing or
prospective Participant in the related Loan) as a result of:
(a) any payment or prepayment of a Fixed Rate Loan (pursuant to
Section 2.11 or Article VI or VIII or otherwise) held by such Bank on a
date other than the last day of the Interest Period applicable thereto, or
the end of an applicable period fixed pursuant to Section 2.07(c) or
(b) any failure by the Borrower to borrow a Fixed Rate Loan
(including a failure to borrow due to the occurrence of any event described
in Section 2.04(d)) held or to be held by such Bank on the date for such
Borrowing specified in the relevant Notice of Borrowing under Section 2.02
or 2.03(f), such compensation to be payable in the currency specified in
the certificate referred to below and to include, without limitation, an
amount equal to the excess, if any, of (i) the amount of interest which
would have accrued on the amount so paid or prepaid, or not borrowed, for
the period from the date of such payment or prepayment or failure to borrow
to the last day of such Interest Period (or, in the case of a failure to
borrow, the Interest Period for such Fixed Rate Loan which would have
commenced on the date of such failure to borrow) in each case at the
applicable rate of interest for such Fixed Rate Loan provided for herein
(excluding, however, the Syndicated Margin or any positive Money Market
Margin, as the case may be, included therein) over (ii) the amount of
interest (as reasonably determined by such Bank) which would have accrued
to such Bank on such amount by placing such amount on deposit for a
comparable period with leading banks in the London interbank market or in
the New York or Chicago certificate of deposit market; provided that such
--------
Bank shall have delivered to the Borrower, within 60 days after the date of
such payment or prepayment or failure to borrow, a certificate as to the
amount and currency of such loss or expense, which certificate shall set
forth in reasonable detail the basis for such loss or expense and shall be
conclusive in the absence of manifest error.
SECTION 2.14. Computation of Interest and Fees. Interest based on the
--------------------------------
Base Rate and interest on Borrowings denominated in pounds sterling shall be
computed on the basis of a year of 365 days (or 366 days in a leap year) and
paid for the actual number of days elapsed (including the first day but
excluding the last day). All other interest and fees shall be computed on the
basis of a year of 360 days and paid for the actual number of days elapsed
(including the first day but excluding the last day).
SECTION 2.15. Judgment Currency. If for the purposes of obtaining
-----------------
judgment in any court it is necessary to convert a sum due from the Borrower
hereunder or under any of the Notes in the currency expressed to be payable
herein or under the Notes (the "specified currency") into another
25
<PAGE>
currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Agent could purchase the specified
currency with such other currency at the Agent's main Chicago office on the
Euro-Currency Business Day preceding that on which final, non-appealable
judgment is given. The obligations of the Borrower in respect of any sum due to
any Bank or the Agent hereunder or under any Note shall, notwithstanding any
judgment in a currency other than the specified currency, be discharged only to
the extent that on the Euro-Currency Business Day following receipt by such Bank
or the Agent (as the case may be) of any sum adjudged to be so due in such other
currency such Bank or the Agent (as the case may be) may in accordance with
normal, reasonable banking procedures purchase the specified currency with such
other currency. If the amount of the specified currency so purchased is less
than the sum originally due to such Bank or the Agent, as the case may be, in
the specified currency, the Borrower agrees, to the fullest extent that it may
effectively do so, as a separate obligation and notwithstanding any such
judgment, to indemnify such Bank or the Agent, as the case may be, against such
loss, and if the amount of the specified currency so purchased exceeds (a) the
sum originally due to any Bank or the Agent, as the case may be, in the
specified currency and (b) any amounts shared with other Banks as a result of
allocations of such excess as a disproportionate payment to such Bank under
Section 9.11, such Bank or the Agent, as the case may be, agrees to remit such
excess to the Borrower.
SECTION 2.16. Taxes. (a) All payments made by the Borrower in respect of
-----
principal of and interest on its Borrowings and of all other amounts payable by
it under this Agreement are payable without deduction for or on account of any
Taxes. If the Borrower shall be required by law to deduct or withhold any Taxes
from any such amount payable by it hereunder or under any of the Notes to or for
the account of any Bank, (i) such amount shall be increased as may be necessary
so that, after making such deductions or withholdings (including any deductions
or withholdings applicable to additional amounts payable pursuant to this
Section), such Bank receives an amount equal to the amount it would have
received had no such deductions or withholdings been made and (ii) the Borrower
shall make such deductions and withholdings and pay the amount thereof to the
relevant government, political subdivision or taxing authority at or prior to
the time required to be paid under applicable law (and shall promptly furnish to
the Agent, for the benefit of the Banks, official receipts evidencing such
payment). In addition, the Borrower will pay any present or future stamp or
documentary taxes or similar taxes or levies imposed by any government of any
jurisdiction outside the United States of America or any political subdivision
or taxing authority thereof from any payment by it hereunder or under any of the
Notes or from the execution, delivery or registration of, or otherwise with
respect to, this Agreement or any of the Notes (herein called "Other Taxes").
The Borrower will indemnify each Bank and the Agent for, and hold each Bank and
the Agent harmless against, the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section) paid or payable by such Bank or the Agent
and any liability of such Bank or the Agent relating thereto (including, without
limitation, penalties, interest and expenses). Notwithstanding anything set
forth above in this clause (a), the Borrower shall have no obligation to
increase the amount payable to any Bank as a result of any deduction or
withholding, or to indemnify any Bank for or hold any Bank harmless against any
Taxes or Other Taxes, to the extent that such deduction or withholding would not
have
26
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been required, or such Taxes or Other Taxes would not have been paid or payable,
if such Bank's representation and warranty in clause (f) below had been accurate
or such Bank had complied with its obligations under clause (g) below.
(b) If the cost to any Bank of making or maintaining any Loan to the
Borrower is increased, or the amount of any sum received or receivable by any
Bank (or its Applicable Lending Office) is reduced, by an amount deemed by such
Bank to be material, which increase or reduction would not have occurred but for
the fact that the Borrower conducts business in a jurisdiction outside the
United States of America, the Borrower shall indemnify such Bank for such
increased cost or reduction within 15 days after demand by such Bank (with a
copy to the Agent). A certificate of such Bank claiming indemnification under
this Section, setting forth the additional amount or amounts to be paid to it
hereunder and setting forth in reasonable detail a reasonable basis therefor,
shall be conclusive in the absence of manifest error. In determining such
amount, such Bank may use any reasonable averaging and attribution methods.
(c) Each Bank will promptly notify the Borrower and the Agent of any event
of which it has knowledge that will entitle such Bank to any payment or
indemnification under clause (a) or (b) of this subsection and will designate a
different Domestic Lending Office, Money Market Lending Office or Euro-Currency
Lending Office, as the case may be, if such designation will avoid the need for,
or reduce the amount of, such payment or indemnification and will not, in the
sole opinion of such Bank, be otherwise materially disadvantageous to such Bank.
(d) If, and to the extent that, any Bank shall obtain a credit, relief or
remission for, or repayment of, any Taxes or Other Taxes indemnified or paid by
the Borrower pursuant to this Section or for any taxes for which Borrower has
made payments under Section 8.03, such Bank agrees to promptly notify the
Borrower thereof and thereupon enter into negotiations in good faith with the
Borrower to determine the basis on which an equitable reimbursement of such
taxes can be made to the Borrower.
(e) All tax receipts required to be delivered under this Section shall be
originals, duplicate originals or duly certified or authenticated copies within
the meaning of Treasury Regulation Section 1.905-2(a)(2).
(f) Each Bank represents and warrants to the Borrower and the Agent that,
as of the date of this Agreement (or, in the case of an Assignee, the date it
becomes a party hereto), it is entitled to receive payments hereunder without
any deduction or withholding for or on account of any Taxes imposed by the
United States of America or any political subdivision or taxing authority
thereof.
(g) Each Bank which is a Non-U.S. Person (and, if at any time the Agent
hereunder is a Non-U.S. Person, such Agent) agrees that it will, to the extent
it is able to do so under applicable law and treaties,
(i) within 30 days of the date of this Agreement (or, in the case of
a Bank which
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<PAGE>
becomes a party hereto pursuant to a transfer or assignment, on or prior to
the date on which the relevant transfer or assignment becomes effective)
deliver to the Borrower (and, in the case of a Bank, to the Agent) such
forms (including two duly executed originals of United States Internal
Revenue Form 1001 or 4224 or any successor to the applicable form),
properly and accurately completed, as are necessary to claim complete or
partial (as the case may be) exemption from withholding of United States
federal taxes; and
(ii) deliver extensions or renewals of such forms on or before the
date that any such form expires or becomes obsolete, and after the
occurrence of any event requiring a change in the most recent form
previously delivered by it, unless in any such case an event (including,
without limitation, any change in treaty, law or regulation) has occurred
prior to the date on which any such delivery would otherwise be required
which renders all such forms inapplicable or which would prevent such Agent
or Bank from duly completing and delivering any such form with respect to
it and such Agent or Bank so advises the Borrower (and, in the case of a
Bank, the Agent).
For purposes of the foregoing, a Non-U.S. Person means a Person that is not (i)
a citizen or resident of the United States, (ii) a corporation or partnership
created or organized under the laws of the United States or any state thereof or
(iii) an estate or trust the income of which is subject to United States federal
income taxation regardless of its source;
SECTION 2.17. Maximum Interest Rate. (a) Nothing contained in this
---------------------
Agreement or the Notes shall require the Borrower to pay interest at a rate
exceeding the maximum rate permitted by applicable law.
(b) If the amount of interest payable for the account of any Bank on any
interest payment date in respect of the immediately preceding interest
computation period, computed pursuant to Section 2.07, would exceed the maximum
amount permitted by applicable law to be charged by such Bank, the amount of
interest payable for its account on such interest payment date shall be
automatically reduced to such maximum permissible amount.
(c) If the amount of interest payable for the account of any Bank in
respect of any interest computation period is reduced pursuant to clause (b) of
this Section and the amount of interest payable for its account in respect of
any subsequent interest computation period, computed pursuant to Section 2.07,
would be less than the maximum amount permitted by applicable law to be charged
by such Bank, then the amount of interest payable for its account in respect of
such subsequent interest computation period shall be automatically increased to
such maximum permissible amount; provided that at no time shall the aggregate
--------
amount by which interest paid for the account of any Bank has been increased
pursuant to this clause (c) exceed the aggregate amount by which interest paid
for its account has theretofore been reduced pursuant to clause (b) of this
Section.
SECTION 2.18. Extension of the Termination Date. (a) The Borrower may,
---------------------------------
from time to time, by written notice to the Agent (each such notice being an
"Extension Notice") given not later
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than 30 days but not sooner than 60 days prior to the then scheduled Termination
Date, request an extension of the Termination Date to the Euro-Currency Business
Day falling not more than 364 days after the then-scheduled Termination Date.
The Agent shall notify each Bank in writing of its receipt of an Extension
Notice within three Domestic Business Days after the Agent's receipt thereof.
Each Bank may, by a revocable written notice (a "Consent Notice") to the
Borrower and the Agent given within 30 days following the Agent's receipt of
such Extension Notice (the "Consent Deadline Date"), consent to such extension
of the Termination Date, which consent may be given or withheld by each Bank in
its absolute and sole discretion; it being understood that any Bank that fails
to respond in writing to the Borrower and the Agent by the Consent Deadline Date
shall be deemed not to have consented to such request.
(b) Any Bank which does not consent (or is deemed not to have consented)
to an extension of the Termination Date (a "Non-Consenting Bank") shall be
obliged during the 30 days following the Consent Deadline Date, at the request
of the Borrower and subject to the Non-Consenting Bank receiving payment in full
of all amounts owing to it under this Agreement, the Other Agreement and its
"Notes" (as defined in both this Agreement and the Other Agreement), to assign,
in accordance with the provisions of Section 9.07(c) of this Agreement and the
Other Agreement, all of its rights and obligations under this Agreement, the
Other Agreement and its "Notes" (as defined in both this Agreement and the Other
Agreement) to a Bank or other bank or financial institution nominated by the
Borrower, consented to by the Agent (such consent not to be unreasonably
withheld) and willing to participate in the Other Agreement and this Agreement
(through, in the case of this Agreement, the extended Termination Date) in the
place of such Non-Consenting Bank.
(c) If all Banks consent to the extension of the scheduled Termination
Date prior to the Consent Deadline Date pursuant to clause (a) above or all
Non-Consenting Banks are replaced as parties to this Agreement prior to the
scheduled Termination Date pursuant to clause (b) above, then the Termination
Date shall be extended to the date requested by the Borrower in its Extension
Notice (effective on the previously scheduled Termination Date). In the absence
of such consents or such replacement(s), the Termination Date shall occur as
scheduled.
ARTICLE III
CONDITIONS TO BORROWINGS
SECTION 3.01. Initial Borrowing by the Borrower. The obligation of each
---------------------------------
Bank to make any Loan to be made by it as a part of the initial Borrowing by the
Borrower hereunder is subject to the condition precedent that the Agent shall
have received the following documents:
(i) certified copies of the Certificate of Incorporation and By-Laws
of the Borrower and the resolutions of the Board of Directors of the
Borrower adopted in respect of the transactions contemplated hereby and
such other documents as the Agent or the Required Banks may reasonably
request relating to the existence of the Borrower, the corporate
29
<PAGE>
authority for and the validity of this Agreement and the Notes, and any
other matters relevant hereto, all in form and substance satisfactory to
the Agent;
(ii) a Certificate of Incumbency executed by the Secretary or an
Assistant Secretary of the Borrower in substantially the form of Exhibit E
hereto setting forth the name, title and specimen signature of each
Authorized Officer or Authorized Representative of the Borrower (1) who has
signed this Agreement on behalf of the Borrower, (2) who will sign the
Notes on behalf of the Borrower or (3) who will, until replaced by another
officer or representative duly authorized for that purpose, act as the
representative of the Borrower for the purposes of signing documents and
giving notices and other communications by the Borrower in connection with
this Agreement and the transactions contemplated hereby;
(iii) an opinion of the General Counsel or, in his absence, the
Associate General Counsel-Corporate, of the Borrower, dated on or prior to
the date of such initial Borrowing, with respect to the Borrower in
substantially the form of Exhibit F hereto and covering such additional
matters relating to the transactions contemplated hereby as the Required
Banks may reasonably request;
(iv) certified copies of the Cross-Indemnification Agreement and the
Tax Sharing Agreement as originally executed and all amendments,
modifications and waivers thereto;
(v) a certificate signed by the President or any Vice President of
the Borrower to the effect set forth in clauses (iii) and (iv) of Section
3.02;
(vi) for the account of each Bank, a duly executed Note, dated on or
before the date of such initial Borrowing, complying with the provisions of
Section 2.05; and
(vii) an opinion of Mayer, Brown and Platt, special counsel to the
Agent, substantially in the form of Exhibit I hereto.
The certificate referred to in subclause (v) shall be dated no more than three
Euro-Currency Business Days before the date of such initial Borrowing.
SECTION 3.02. Each Borrowing. The obligation of each Bank to make each
--------------
Loan to be made by it as part of a Borrowing hereunder to the Borrower is
subject to the further conditions precedent that:
(i) the Agent shall have received a Notice of Borrowing as required
by Section 2.02 or 2.03, as the case may be;
(ii) the fact that, immediately after such Borrowing, the Dollar
Amount of the aggregate outstanding principal amount of the Loans will not
exceed the aggregate amount of the Commitments;
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(iii) the fact that, immediately after such Borrowing, no Default
shall have occurred and be continuing; and
(iv) the fact that the representations and warranties of the Borrower
contained in this Agreement shall be true on and as of the date of such
Borrowing as if made on and as of such date (except, in the case of a
Refunding Borrowing, the representations and warranties set forth in
clauses (d) and (e) of Section 4.01 as to any material adverse change or
litigation, respectively, which has theretofore been disclosed in writing
by the Borrower to the Banks).
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the facts specified in clauses
(ii), (iii) and (iv) of this Section.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The
----------------------------------------------
Borrower represents and warrants to the Banks as follows:
(a)(1) The Borrower (i) is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware and
(ii) either is qualified to do business and in good standing in each
jurisdiction where the ownership of its properties or the conduct of its
business requires such qualification or is subject to no material liability
or disability by reason of the failure to be so qualified in any such
jurisdiction.
(2) The Borrower has all corporate power and authority, governmental
permits, licenses, consents, authorizations, orders and approvals and other
authorizations as are necessary to carry on its business substantially as
presently conducted except for such of the foregoing the absence of which
would not, in the aggregate, subject the Borrower to any material liability
or disability.
(3) The execution, delivery and performance of the Bank Credit
Documents, and borrowings thereunder by the Borrower, are within its
corporate power and authority and have been duly authorized by all
necessary corporate proceedings.
(4) Neither such authorization nor the execution, delivery and
performance by the Borrower of the Bank Credit Documents, nor any borrowing
thereunder by the Borrower when made, will conflict with, result in a
breach of or constitute a default under any of the terms, conditions or
provisions of any law or any regulation, order, writ, injunction or decree
of any court or governmental authority or of the Certificate of
Incorporation or By-Laws of the Borrower or result in the violation or
contravention of, or the acceleration of any obligation under, or cause the
creation of any Lien on any of the properties of the Borrower
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pursuant to the provisions of, any indenture, agreement or other instrument
to which it is a party or by which it is bound.
(5) Assuming their due execution by the Banks and the Agent, each of
this Agreement and the Other Agreement constitutes a legal, valid and
binding agreement of the Borrower, and the Notes (both as defined hereunder
and under the Other Agreement), when duly executed on behalf of the
Borrower and delivered in accordance with this Agreement and the Other
Agreement, will constitute legal, valid and binding obligations of the
Borrower (subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditors'
rights generally from time to time in effect and to general principles of
equity).
(b) The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of December 31, 1996 and the related
consolidated statements of income and changes in financial position for the
12 months ended that date, certified by Coopers & Lybrand, copies of all of
which have been delivered to the Banks, fairly present the consolidated
financial position of the Borrower and its Consolidated Subsidiaries as of
such date and the consolidated results of their operations and changes in
financial position for such fiscal year, in conformity with GAAP
consistently applied.
(c) The unaudited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of March 31, 1997 and the related unaudited
consolidated statements of income and changes in financial position for the
fiscal quarter then ended, a copy of which has been delivered to each of
the Banks, fairly present, in conformity with GAAP applied on a basis
consistent with the financial statements referred to in paragraph (b) of
this Section, the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and changes in financial position for such fiscal quarter
(subject to normal year-end adjustments).
(d) Except as disclosed in writing to the Banks prior to July 23,
1997, there has been no material adverse change since December 31, 1996 and
prior to July 23, 1997, in the business, operations, affairs, assets,
condition (financial or otherwise) or results of operations of the Borrower
and its Consolidated Subsidiaries, considered as a whole.
(e) Except as disclosed in writing to the Banks prior to July 23,
1997, there is no action, suit or proceeding pending or, to the knowledge
of the Borrower, threatened against or affecting the Borrower or any of its
Subsidiaries in any court or before or by any arbitrator, governmental
department, agency or instrumentality (i) which is likely to have a
material adverse effect upon the Borrower's ability to pay and perform its
obligations under the Bank Credit Documents in accordance with their
respective terms or (ii) which in any manner draws into question the
validity of any of the Bank Credit Documents.
(f) No Default has occurred and is continuing.
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<PAGE>
(g) No consent, authorization, order or approval of (or filing or
registration with) any governmental commission, board or other regulatory
authority (other than routine reporting requirements) is required for the
execution, delivery and performance by the Borrower of any of the Bank
Credit Documents or for borrowings thereunder by the Borrower.
(h) Each member of the ERISA Group has fulfilled its obligations under
the minimum funding standards of ERISA and the Code with respect to each
Plan and is in compliance in all material respects with the presently
applicable provisions of ERISA and the Code with respect to each Plan. No
member of the ERISA Group has (i) sought a waiver of the minimum funding
standard under Section 412 of the Code in respect of any Plan, (ii) failed
to make any contribution or payment to any Plan or Multiemployer Plan or in
respect of any Benefit Arrangement, or made any amendment to any Plan or
Benefit Arrangement, which has resulted or could result in the imposition
of a Lien or the posting of a bond or other security under ERISA or the
Code or (iii) incurred any liability under Title IV of ERISA other than a
liability to the PBGC for premiums under Section 4007 of ERISA.
(i) The Cross-Indemnification Agreement and the Tax Sharing Agreement,
in the respective forms, with amendments, certified to the Banks pursuant
to Section 3.01(iv), are in full force and effect in accordance with their
respective terms except for (1) any amendments, modifications or waivers of
the Tax Sharing Agreement which do not materially alter the rights and
obligations of the Borrower thereunder which as a whole place the Borrower
in the same (or more favorable) relative financial position with respect to
the Parent which the Borrower would have been in if the Borrower were not
consolidated with the Parent for purposes of filing federal, state or local
or other income tax returns, (2) any amendments to the Cross-
Indemnification Agreement for the purpose of placing the Borrower and the
Parent in the same financial positions with respect to each other which
they would have been in if the Borrower and the Parent were not members of
the same ERISA Group, including the allocation of, and indemnification with
respect to, assets and funded and unfunded liabilities among the Borrower,
the Parent, Affiliates, Subsidiaries and their respective Plans in such
manner as is fair and equitable to the Borrower and its Subsidiaries, (3)
any amendments, modifications or waivers of the Cross-Indemnification
Agreement or the Tax Sharing Agreement which do not, in the aggregate,
materially reduce the rights of the Borrower thereunder against the Parent
or materially increase the obligations of the Borrower thereunder to the
Parent and (4) any other amendments, modifications or waivers of such
instruments to which the Required Banks have consented. True and complete
copies of all such amendments, modifications and waivers have been
delivered to the Agent for each of the Banks. No amount that may be due
under the Cross-Indemnification Agreement or the Tax Sharing Agreement from
the Parent to the Borrower or to the Parent from the Borrower is
delinquent, except such amount as the Borrower or the Parent may be
contesting in good faith.
(j) Each corporate Subsidiary is a corporation duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate
33
<PAGE>
powers and all governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted except for
licenses, authorizations, consents or approvals the absence of which will
not materially and adversely affect the business of the Borrower and its
Consolidated Subsidiaries taken as a whole.
(k) The Borrower is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
(l) There are no Liens on any asset of the Borrower or any Subsidiary
on July 23, 1997 which would have been prohibited if Section 5.02 of this
Agreement had been in effect on the date the Borrower or such Subsidiary,
as the case may be, acquired such asset.
(m) Except as disclosed in writing to the Banks, the description of
environmental matters affecting the Borrower and its Subsidiaries contained
in each of the Borrower's reports delivered to the Banks pursuant to clause
(ii) of Section 5.01(c) complied in all material respects as of the date of
such report with the requirements of the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment hereunder
or any amount payable under any Note remains unpaid:
SECTION 5.01. Certain Information to be Furnished by the Borrower. The
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Borrower will deliver to each Bank:
(a) as soon as available and in any event within 120 days after the
end of each of its fiscal years, the consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as of the end of such fiscal
year and the related consolidated statements of income and cash flows for
such year, setting forth in each case in comparative form the figures for
the previous fiscal year, prepared in accordance with GAAP consistently
applied and so certified by a nationally recognized firm of independent
certified public accountants, provided, that the delivery requirement
--------
described in this paragraph (a) for any fiscal year shall be deemed to have
been satisfied upon delivery by the Borrower to the Banks within 120 days
after the end of such fiscal year of its Annual Report on Form 10-K for
such fiscal year, as filed (with exhibits) with the Securities and Exchange
Commission;
(b) as soon as available and in any event within 60 days after the end
of each of the first three quarters of each of its fiscal years, the
consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of the end of such fiscal quarter, the related consolidated
34
<PAGE>
statement of income for such fiscal quarter and for the portion of the
fiscal year ended with such quarter and the related consolidated statement
of cash flows for the portion of the fiscal year ended with such quarter,
setting forth in each case in comparative form the figures for the
corresponding quarter and the corresponding portion of the Borrower's
previous fiscal year, all certified (subject to normal year-end
adjustments) as to fairness of presentation, GAAP and consistency by the
chief financial officer or the chief accounting officer of the Borrower,
provided, that the delivery requirement described in this paragraph (b) for
--------
any fiscal quarter shall be deemed to have been satisfied upon delivery by
the Borrower to the Banks within 60 days after the end of such fiscal
quarter of its Quarterly Report on Form 10-Q for such fiscal quarter, as
filed (with exhibits) with the Securities and Exchange Commission;
(c) promptly after the same are available, copies of all (i) financial
statements, notices, reports and proxy materials sent to shareholders of
the Borrower and (ii) regular and periodic reports filed by the Borrower
with the Securities and Exchange Commission (or any governmental agency
succeeding to the functions of such Commission);
(d) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the
Borrower signed by the Treasurer or other financial officer of the Borrower
(i) setting forth in reasonable detail the calculations required to
establish whether the Borrower was in compliance with the requirements of
Section 5.05 on the date of such financial statements and (ii) stating
whether there exists on the date of such certificate any Default, and, if
any such Default then exists, specifying the nature and period of existence
thereof and the action the Borrower is taking and proposes to take with
respect thereto;
(e) forthwith, if at any time any officer of the Borrower shall obtain
knowledge of any Default, a certificate of the Treasurer or other financial
officer specifying the nature and period of existence thereof and the
action the Borrower is taking and proposes to take with respect thereto;
(f) if and when any member of the ERISA Group (i) gives or is required
to give notice to the PBGC of any "reportable event" (as defined in Section
4043 of ERISA) with respect to any Plan which might constitute grounds for
a termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any
such reportable event, a copy of the notice of such reportable event given
or required to be given to the PBGC; (ii) receives notice of complete or
partial withdrawal liability under Title IV of ERISA or notice that any
Multiemployer Plan is in reorganization, is insolvent or has been
terminated, a copy of such notice; (iii) receives notice from the PBGC
under Title IV of ERISA of an intent to terminate, impose liability (other
than for premiums under Section 4007 of ERISA) in respect of, or appoint a
trustee to administer any Plan, a copy of such notice; (iv) applies for a
waiver of the minimum funding standard under Section 412 of the Code, a
copy of such application; (v) gives notice of intent to terminate
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<PAGE>
any Plan under Section 4041(c) of ERISA, a copy of such notice and other
information filed with the PBGC; (vi) gives notice of withdrawal from any
Plan pursuant to Section 4063 of ERISA, a copy of such notice; or (vii)
fails to make any payment or contribution to any Plan or Multiemployer Plan
or in respect of any Benefit Arrangement or makes any amendment to any Plan
or Benefit Arrangement which has resulted or could result in the imposition
of a Lien or the posting of a bond or other security, a certificate of the
chief financial officer or the chief accounting officer of the Borrower
setting forth details as to such occurrence and action, if any, which the
Borrower or applicable member of the ERISA Group is required or proposes to
take; and
(g) from time to time such further information regarding compliance
with this Agreement or the business, operations, affairs, assets, condition
(financial or otherwise) or results of operations of the Borrower and its
Consolidated Subsidiaries as the Agent, at the request of any Bank, may
reasonably request.
SECTION 5.02. Limitation on Liens. Neither the Borrower nor any
-------------------
Subsidiary will issue, assume or guarantee any Debt secured by any Lien upon any
asset of the Borrower or any Subsidiary or grant any Lien on any such asset to
secure any such Debt without effectively providing that all of the Notes
(together with, if the Borrower so determines, any other Debt then existing and
any other Debt thereafter created ranking equally with the Notes) shall be
secured equally and ratably with (or prior to) such Debt so long as such Debt
shall be so secured. To the extent the following Liens would otherwise be
prohibited by the foregoing provisions, the foregoing provisions shall not apply
to:
(a) Liens on any asset of a corporation existing at the time it
becomes a Subsidiary of the Borrower or at the time it is merged into or
consolidated with the Borrower or a Subsidiary and not created in
contemplation of such event;
(b) Liens on property existing at the time of acquisition thereof or
incurred to secure payment of all or part of the purchase price thereof or
to secure Debt incurred prior to, at the time of or within 24 months after
acquisition thereof for the purpose of financing all or part of the
purchase price thereof;
(c) Liens on any property to secure all or part of the cost of
construction or improvements thereon or Debt incurred to provide funds for
any such purpose in a principal amount not exceeding the cost of such
construction or improvements;
(d) Liens which secure only Debt owing by a Subsidiary to the Borrower
or another Subsidiary;
(e) Liens in favor of the United States of America or any state
thereof or any department, agency, instrumentality or political subdivision
of any such jurisdiction to secure partial, progress, advance or other
payments pursuant to any contract or statute or to secure
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any Debt payable to the foregoing incurred for the purpose of financing all
or any part of the purchase price or cost of constructing or improving the
property subject to such Lien, including, without limitation, Liens to
secure Debt in respect of any pollution control, industrial revenue bond or
other similar type of financing;
(f) Liens required by any contract or statute in order to permit the
Borrower or a Subsidiary to perform any contract or subcontract made by it
with or at the request of the United States of America, any state or any
department, agency or instrumentality or political subdivision of either;
(g) mechanics', suppliers', materialmen's and similar Liens arising in
the ordinary course of business securing Debt which is not overdue or is
being contested by the Borrower in good faith by appropriate action,
promptly initiated and diligently conducted and in connection with which
adequate reserves are being maintained;
(h) Liens securing obligations of the Borrower or any Subsidiary to
pay the deferred purchase price of services not exceeding in the aggregate
$10,000,000;
(i) the Lien of any judgment or attachment in respect of any Debt, so
long as (1) the Borrower in good faith by appropriate action, promptly
initiated and diligently conducted, shall contest or cause to be contested
the validity, amount, extent or application thereof and (2) such action
shall operate to prevent the sale or foreclosure (or the posting of notices
preparatory to any sale or foreclosure) of any part of any asset to satisfy
such Lien prior to a final determination of such action;
(j) Liens for taxes not delinquent or being contested in good faith
based on the advice of counsel that such contest is meritorious and by
appropriate proceedings and for which reserves adequate under GAAP are
being maintained; and
(k) any extension, renewal or replacement (or successive extensions,
renewals or replacements), in whole or in part, of any Lien referred to in
the foregoing clauses (a) to (h) inclusive or of any Debt secured thereby,
provided that the principal amount of Debt secured thereby shall not exceed
--------
the principal amount of Debt so secured at the time of such extension,
renewal or replacement, and that such extension, renewal or replacement
Lien shall be limited to all or part of substantially the same property
which secured the Lien extended, renewed or replaced (plus improvements on
such property);
provided that the Borrower and any one or more Subsidiaries may issue, assume or
- --------
guarantee Debt secured by Liens which would otherwise be subject to the
foregoing restrictions or grant any such Lien to secure any such Debt in an
aggregate principal amount which, together with the aggregate outstanding
principal amount of all Debt of the Borrower and the Subsidiaries which would
otherwise be subject to the foregoing restrictions (not including Debt permitted
to be secured under clauses (a) to (g) inclusive above) and the aggregate Value
of the Sale and Lease-Back Transactions
37
<PAGE>
(as such terms are defined in Section 5.03 hereof) in existence at such time
(not including Sale and Lease-Back Transactions as to which the Borrower has
complied with Section 5.03(b) hereof) does not at any one time exceed 15% of the
consolidated total assets of the Borrower and its Consolidated Subsidiaries.
SECTION 5.03. Limitation on Sale and Lease-Back. Neither the Borrower nor
---------------------------------
any Subsidiary will enter into any arrangement with any Person (other than the
Borrower or a Subsidiary), or to which any such Person is a party, providing for
the leasing to the Borrower or a Subsidiary for a period of more than three
years of any property which
has been or is to be sold or transferred by the Borrower or such Subsidiary to
such Person or to any Person (other than the Borrower or a Subsidiary), to which
funds have been or are to be advanced by such Person on the security of the
leased property (in this Section and in Section 5.02 hereof called a "Sale and
Lease-Back Transaction") unless either:
(a) the Borrower or such Subsidiary would be entitled, pursuant to the
provisions of Section 5.02 hereof, to incur Debt in a principal amount
equal to or exceeding the Value of such Sale and Lease-Back Transaction,
secured by a Lien on the property to be leased, without equally and ratably
securing the Notes; or
(b) the Borrower (and in any such case the Borrower covenants and
agrees that it will do so) during or immediately after the expiration of
four months after the effective date of such Sale and Lease-Back
Transaction (whether made by the Borrower or a Subsidiary) applies to the
voluntary retirement of Debt of the Borrower ranking at least pari passu
with the Notes an amount equal to the Value of such Sale and Lease-Back
Transaction, less the principal amount of such Debt of the Borrower
voluntarily retired by the Borrower within such four-month period,
excluding retirements of such Debt as a result of conversions or pursuant
to mandatory sinking fund or repayment provisions or (other than in the
case of commercial paper) by payment at maturity.
For purposes of Section 5.02 hereof and this Section, the term "Value" shall
mean, with respect to a Sale and Lease-Back Transaction, as of any particular
time, the amount equal to the greater of (i) the net proceeds of the sale or
transfer of the property leased pursuant to such Sale and Lease-Back Transaction
or (ii) the fair value in the opinion of the Board of Directors of the Borrower
of such property at the time of entering into such Sale and Lease-Back
Transaction, in either case divided first by the number of full years of the
term of the lease and then multiplied by the number of full years of such term
remaining at the time of determination, without regard to any renewal or
extension options contained in the lease.
SECTION 5.04. Consolidation, Merger, Disposition of Assets. The Borrower
--------------------------------------------
will not (i) consolidate or merge with or into any other Person or (ii) sell,
lease or otherwise transfer all or any substantial part of its assets (whether
in a single transaction or in a series of related transactions) to any other
Person; provided that the Borrower may merge with another Person if (A) the
--------
Borrower is the corporation surviving such merger and (B) immediately after
giving effect to such merger, no
38
<PAGE>
Default shall have occurred and be continuing; and provided further that the
-------- -------
Borrower may consolidate or merge with or into the Parent if (A) the Parent
theretofore expressly assumes the obligations of the Borrower hereunder and
under the Notes by an instrument satisfactory in form and substance to the
Required Banks and (B) immediately after giving effect to such consolidation or
merger and such assumption, no Default shall have occurred and be continuing;
and provided further that the Borrower may (A) sell its inventory in the
-------- -------
ordinary course of business and (B) sell, lease or otherwise transfer such of
its assets (including all or any portion of the stock of any Subsidiary) on an
arms-length basis to an Internally-Funded Subsidiary. The Borrower will not
permit any Subsidiary which constitutes a substantial part of its assets to
consolidate or merge with or into, or transfer all or substantially all of its
assets (whether in a single transaction or in a series of related transactions)
to, any Person other than the Borrower or a Wholly-Owned Consolidated
Subsidiary. For purposes of this Section, "substantial part of its assets" means
assets (including Subsidiaries or other Persons and valued at the higher of book
or fair market value) (y) representing more than 25% of the consolidated assets
of the Borrower and its Subsidiaries as reflected in the then most recent
consolidated annual financial statements of the Borrower and its Subsidiaries
delivered pursuant to Section 5.01(a) or (z) responsible for more than 25% of
the consolidated net revenues or of the consolidated net income of the Borrower
and its Subsidiaries as reflected in the financial statements referred to in the
preceding clause (y). Notwithstanding the foregoing, the Banks will not
unreasonably withhold their consent to any sale, lease or other transfer of
assets by the Borrower or any of its Subsidiaries.
SECTION 5.05. Minimum Consolidated Net Worth. Consolidated Net Worth will
------------------------------
at no time be less than $1,500,000,000.
SECTION 5.06. Transactions with Affiliates. The Borrower will not, and
----------------------------
will not permit any Subsidiary to, directly or indirectly, pay any funds to or
for the account of, make any investment (whether by acquisition of stock or
indebtedness, by loan, advance, transfer of property, Guarantee or other
agreement to pay, purchase or service, directly or indirectly, any Debt, or
otherwise) in, lease, sell, transfer or otherwise dispose of any assets,
tangible or intangible, to, or participate in, or effect any transaction in
connection with any joint enterprise or other joint arrangement with, any
Affiliate; provided, however, that the foregoing provisions of this Section
-------- -------
shall not prohibit (a) the Borrower from declaring or paying any lawful dividend
to, or repurchasing its common stock from, any Affiliate so long as, after
giving effect thereto, no Default shall have occurred and be continuing, (b) the
Borrower or any Subsidiary (1) from making sales to or purchases from or leasing
from any Affiliate and, in connection therewith, extending credit or making
payments, or (2) from making payments for services rendered by any Affiliate or
(3) from participating in, or effecting any transaction in connection with, any
joint enterprise or other joint arrangement with any Affiliate if such sales,
purchases or leases are made or such services are rendered or the Borrower or
such Subsidiary participates in the ordinary course of business of the Borrower
or such Subsidiary, as the case may be, and, in the aggregate during each fiscal
year of the Borrower, the terms and conditions of all such sales, purchases,
leases, rendered services and participations are not materially less favorable
to the similar transactions with Persons who are not Affiliates and (c) the
Borrower or any Subsidiary from making payments of principal, interest and
premium on any Debt of the Borrower
39
<PAGE>
or such Subsidiary held by an Affiliate if the terms of such Debt are
substantially as favorable to the Borrower or such Subsidiary as the terms which
could have been obtained at the time of the creation of such Debt from a lender
which was not an Affiliate.
SECTION 5.07. Use of Proceeds. The proceeds of the Loans made under this
---------------
Agreement will be used for general corporate purposes. None of such proceeds
will be used, directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of purchasing or carrying any "margin stock" within the
meaning of Regulation U.
ARTICLE VI
DEFAULTS
SECTION 6.01. Defaults. If one or more of the following events (herein
--------
called "Events of Default") shall occur and be continuing:
(a) Non-Payment: the Borrower shall default in the payment when due
-----------
of any principal of any Loan or shall default in the payment within five
days of the due date thereof of any interest on any Loan or any other
amount payable hereunder;
(b) Certain Covenant Violations: the Borrower shall fail to perform
---------------------------
or observe any covenant or agreement to be performed or observed by it
contained in Sections 5.02 to 5.05, inclusive, or Section 5.07;
(c) Certain Other Covenants: the Borrower shall fail to perform or
-----------------------
observe any covenant or agreement to be performed by it contained in this
Agreement (other than those covered by clause (a) or (b) above) for 30 days
(less, in the case of any failure to observe or perform Section 5.01(e),
the number of days elapsed from the date an officer of the Borrower
obtained knowledge of any Default to the date the Borrower delivered notice
thereof to the Banks) after written notice of such failure is given to the
Borrower by the Agent at the request of any Bank;
(d) Misrepresentation: the Borrower shall have made or be deemed to
-----------------
have made pursuant to this Agreement any representation or warranty in or
pursuant to this Agreement, or in any certificate, financial statement or
other document delivered pursuant hereto, which shall prove to have been
incorrect in any material respect when made or deemed made;
(e) Default With Respect to Other Borrowed Funds: the Borrower or any
--------------------------------------------
Subsidiary shall fail to repay any Borrowed Funds (other than the Loans)
payable or guaranteed by it, or any interest or premium thereon, when due
(whether by scheduled maturity, required prepayment, acceleration, demand
or otherwise) and such failure shall continue after the
40
<PAGE>
applicable grace period, if any, specified in the agreement or instrument
relating to such Borrowed Funds or guarantee thereof, or any event or
condition shall occur which results in the acceleration of the maturity of
any Borrowed Funds (or guarantee thereof) of the Borrower or any
Subsidiary; provided that (i) the aggregate amount of such Borrowed Funds
--------
payable or guaranteed, including any interest or premium thereon, shall
exceed $50,000,000 (or the Equivalent Amount thereof) and (ii) there shall
be excluded for purposes of the foregoing any such Borrowed Funds (A) owed
to any department, agency, instrumentality or political subdivision of the
United States of America or any state thereof in respect of any pollution
control, industrial revenue bond or other similar type of financing, so
long as the obligation of the Borrower or any Subsidiary to pay or
guarantee such Borrowed Funds is being contested in good faith or (B) owed
to the Borrower by any Subsidiary or owed by the Borrower to any
Subsidiary;
(f) Voluntary Bankruptcy: the Borrower, any Material Subsidiary or
--------------------
any two or more Subsidiaries which, if combined, would constitute a
Material Subsidiary, shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself
or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary
case or other proceeding commenced against it, or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay its
debts as they become due, or shall take any corporate action to authorize
any of the foregoing;
(g) Involuntary Bankruptcy: an involuntary case or other proceeding
----------------------
shall be commenced against the Borrower, any Material Subsidiary or any two
or more Subsidiaries which, if combined, would constitute a Material
Subsidiary, seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or
any substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of 60 days;
or an order for relief shall be entered against the Borrower, any Material
Subsidiary or any two or more Subsidiaries which, if combined, would
constitute a Material Subsidiary, under the federal bankruptcy laws as now
or hereafter in effect;
(h) Termination of Plan: any member of the ERISA Group shall fail to
-------------------
pay when due an amount or amounts aggregating in excess of $20,000,000
which it shall have become liable to pay under Title IV of ERISA; or notice
of intent to terminate a Plan or Plans having aggregate Unfunded
Liabilities in excess of $50,000,000 (collectively, a "Material Plan")
shall be filed under Title IV of ERISA by any member of the ERISA Group,
any plan administrator or any combination of the foregoing; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate, to impose
liability (other than for premiums under
41
<PAGE>
Section 4007 of ERISA) in respect of, or to cause a trustee to be appointed
to administer any Material Plan; or a condition shall exist by reason of
which the PBGC would be entitled to obtain a decree adjudicating that any
Material Plan must be terminated; or there shall occur a complete or
partial withdrawal from, or a default, within the meaning of Section
4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans which
could cause one or more members of the ERISA Group to incur a current
payment obligation in excess of $20,000,000; or
(i) Judgment Default: a final, non-appealable judgment or order
----------------
enforceable by the courts of the United States or the United Kingdom or any
other European Community country for the payment of money in excess of
$50,000,000 (or the Equivalent Amount thereof) shall be rendered against
the Borrower or any Subsidiary and such judgment or order shall continue
unsatisfied for a period of 30 days;
then, and in every such event, the Agent shall (i) if requested by Banks having
at least 66-2/3% in aggregate amount of the Commitments, by notice to the
Borrower terminate the Commitments, and they shall thereupon terminate, and/or
(ii) if requested by Banks holding Notes evidencing at least 66-2/3% in
aggregate principal amount of the Loans, by notice to the Borrower declare the
full unpaid principal of and accrued interest on the Loans and the Notes and all
other amounts payable hereunder to be immediately due and payable, whereupon the
Commitments shall terminate and the Loans and the Notes and such other amounts
shall be immediately due and payable, without further notice, presentment,
demand, protest or other formality of any kind, all of which are hereby
expressly waived by the Borrower; provided that in the case of the occurrence of
--------
an event referred to in clause (f) or (g) above, the Commitments shall
automatically terminate and the full unpaid principal of and accrued interest on
the Loans and Notes and all other amounts payable hereunder shall automatically
become immediately due and payable, without notice, presentment, demand, protest
or other formality of any kind, all of which are hereby expressly waived by the
Borrower.
SECTION 6.02. Notice of Default. The Agent shall give notice to the
-----------------
Borrower under Section 6.01(c) promptly upon being requested to do so by any
Bank and shall thereupon notify all the Banks thereof.
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization. Each Bank irrevocably
-----------------------------
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement and the Notes as are delegated to
the Agent by the terms hereof or thereof, together with all such powers as are
reasonably incidental thereto. The Agent shall not have a fiduciary
relationship in respect of any Bank by reason of this Agreement.
42
<PAGE>
SECTION 7.02. Agent and Affiliates. The First National Bank of Chicago
--------------------
shall have the same rights and powers under this Agreement and its Notes as any
other Bank and may exercise or refrain from exercising the same as though it
were not the Agent, and The First National Bank of Chicago and its Affiliates
may accept deposits from, lend money to, and generally engage in any kind of
business with the Borrower or any Subsidiary or any Affiliate as if it were not
the Agent hereunder.
SECTION 7.03. Action by Agent. The obligations of the Agent hereunder are
---------------
only those expressly set forth herein. Without limiting the generality of the
foregoing, the Agent shall not be required to take any action with respect to
any Default, except as expressly provided in Article VI.
SECTION 7.04. Employment and Reliance on Agents and Counsel. The Agent
---------------------------------------------
may execute any of its duties as Agent hereunder by or through employees,
agents, and attorneys-in-fact and shall not be answerable to the Banks, except
as to money or securities received by it or its authorized agents, for the
default or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care. In addition, the Agent may consult with legal counsel
(who may be employees of the Agent or counsel for the Borrower), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken by it in good faith in accordance with
the advice of such counsel, accountants or experts.
SECTION 7.05. Liability of Agent. Neither the Agent, the Arranger, nor
------------------
any of their respective directors, officers, agents or employees shall be liable
for any action taken or not taken by it in connection herewith (i) with the
consent or at the request of the Required Banks or (ii) in the absence of its
own gross negligence or willful misconduct. Neither the Agent, the Arranger,
nor any of their respective directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into or verify (i) any
statement, warranty or representation made in connection with this Agreement or
any Borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of the Borrower; (iii) the satisfaction of any condition
specified in Article III, except receipt of items required to be delivered to
the Agent; or (iv) the validity, effectiveness or genuineness of this Agreement,
the Notes or any other instrument or writing furnished in connection herewith.
Neither the Agent nor the Arranger shall incur any liability by acting in
reliance upon any Note, notice, consent, certificate, statement, or other
writing (which may be a bank wire, telex, facsimile transmission or similar
writing) believed by it in good faith to be genuine or to be signed by the
proper party or parties.
SECTION 7.06. Reimbursement and Indemnification. The Banks agree to
---------------------------------
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (i) for any amounts not reimbursed by the Borrower for which the
Agent (for clarity, in its capacity as Agent, not as a Bank) is entitled to
reimbursement by the Borrower under this Agreement, (ii) for any other expenses
incurred by the Agent on behalf of the Banks, in connection with the
administration and enforcement of this Agreement and the Notes and (iii) for any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Agent in any way relating to or
arising out
43
<PAGE>
of this Agreement, the Notes or any other document delivered in connection
herewith or the transactions contemplated hereby, or the enforcement of any of
the terms hereof or of any such other documents, provided that no Bank shall be
liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Agent.
SECTION 7.07. Credit Decision. Each Bank acknowledges that it has,
---------------
independently and without reliance upon the Agent, the Arranger or any other
Bank, and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the Agent,
the Arranger or any other Bank, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking any action under this Agreement.
SECTION 7.08. Successor Agent. The Agent may resign at any time by giving
---------------
written notice thereto to the Banks and the Borrower. Upon any such
resignation, the Required Banks shall have the right to appoint a successor
Agent who has been approved by the Borrower (such approval not to be
unreasonably withheld or delayed). If no successor Agent shall have been so
appointed by the Required Banks, and shall have accepted such appointment,
within 30 days after the retiring Agent's giving notice of resignation, then the
retiring Agent may, on behalf of the Banks, appoint a successor Agent. The
successor Agent shall be (i) a commercial bank organized under the laws of the
United States of America or of any state thereof and having a combined capital
and surplus of at least $100,000,000 and (ii) a Bank, unless the Borrower
consents to the successor Agent not being a Bank, which consent may not be
unreasonably withheld or delayed. Upon the acceptance by a successor Agent of
its appointment as Agent hereunder, it shall thereupon succeed to and become
vested with all the rights and duties of the retiring Agent and the retiring
Agent shall be discharged from its duties and obligations hereunder. Each
successor Agent shall notify promptly the Borrower of its appointment as Agent
hereunder. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent.
SECTION 7.09. Co-Agents. None of the Banks identified on the signature
---------
pages of this Agreement as a "Co-Agent" shall have any right, power, obligation,
liability, responsibility or duty under this Agreement other than those
applicable to all Banks as such. Without limiting the foregoing, none of the
Banks so identified as a "Co-Agent" shall have or be deemed to have any
fiduciary relationship with any Bank. Each Bank acknowledges that it has not
relied, and will not rely, on any of the Banks identified as Co-Agents in
deciding to enter into this Agreement or in taking or not taking action
hereunder.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
44
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SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair.
--------------------------------------------------------
(a) If on or prior to the first day of any Interest Period for any Fixed Rate
Borrowing (other than a Money Market Rate Loan):
(1) the Agent is advised by the Reference Banks that deposits in the
applicable currency (in the applicable amounts) are not being offered to
the Reference Banks in the relevant market for such Interest Period, or
(2) the Required Banks advise the Agent that the London Interbank
Offered Rate as determined by the Agent will not adequately and fairly
reflect the cost to such Banks of funding their Euro-Currency Loans or
Money Market LIBOR Loans, as the case may be, for such Interest Period,
the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies the Borrower that the circumstances giving
rise to such notice no longer exist: (A) the New York Interbank Offered Rate
shall replace the London Interbank Offered Rate for purposes of interest rate
determinations hereunder for Euro-Currency Borrowings and Money Market LIBOR
Borrowings for such Interest Period (and all references herein to the London
interbank market and the London Interbank Offered Rate for such purposes shall,
unless the context otherwise requires, be deemed to be references to the New
York interbank market and the New York Interbank Offered Rate, respectively), as
the case may be, and (B) unless the Borrower notifies the Agent at least one
Domestic Business Day before the date of any Fixed Rate Borrowing for which a
Notice of Borrowing has previously been given that it elects not to borrow on
such date or that it elects to borrow in another currency such that clause (1)
or (2) above is not applicable thereto,
(i) if such Fixed Rate Borrowing is a Euro-Currency Borrowing, the
interest rate for such Euro-Currency Borrowing shall be determined on the
basis of the New York Interbank Offered Rate if all of the procedures set
forth herein for a Euro-Currency Borrowing on such basis (including the
required notice to the Banks) can be complied with at such time or, if
clause (1) or (2) of this subsection is applicable to the New York
Interbank Offered Rate at such time, such Euro-Currency Borrowing shall
instead be made as a Base Rate Borrowing; provided that, if such Euro-
--------
Currency Borrowing was to be denominated in a currency other than Dollars,
the principal amount of the Base Rate Borrowing shall be the Dollar Amount
of the principal amount of such Euro-Currency Borrowing, and
(ii) if such Fixed Rate Borrowing is a Money Market LIBOR Borrowing,
the interest rate for such Money Market LIBOR Borrowing shall be determined
on the basis of the New York Interbank Offered Rate if all of the
procedures set forth herein for a Money Market LIBOR Borrowing on such
basis (including the required notice to the Banks) can be complied with at
such time or, if clause (1) or (2) of this subsection is applicable to the
New York Interbank Offered Rate at such time, the Money Market LIBOR Loans
comprising such Borrowing shall be made in Dollars in a principal amount
equal to the Dollar Amount of the principal amount of such Money Market
LIBOR Borrowing and shall bear interest for each
45
<PAGE>
day from and including the first day to but excluding the last day of the
Interest Period applicable thereto at the Base Rate for such day.
(b) If clause (1) or (2) of subsection (a) of this Section becomes
applicable when the New York Interbank Offered Rate has replaced the London
Interbank Offered Rate hereunder, then the Agent shall give notice to the
Borrower of such condition and the Borrower and the Agent (in consultation with
the Banks) shall promptly enter into negotiations in good faith with a view to
agreeing upon an alternative basis (a "Substitute Basis") acceptable to the
Borrower and the Banks for determining the interest rate which shall be
applicable to the affected Euro-Currency Borrowings or Money Market LIBOR
Borrowings, which rate shall reflect the cost to the Banks of maintaining such
Euro-Currency Borrowings plus the applicable Syndicated Margin or maintaining
such Money Market LIBOR Loans plus any applicable Money Market Margin, as the
case may be. If, prior to the expiration of 20 days from the date of such
notice by the Agent, the Borrower and the Banks shall agree upon a Substitute
Basis, interest on such Euro-Currency Borrowings or Money Market LIBOR
Borrowings for the affected Interest Periods commencing during the period
beginning two Euro-Currency Business Days after the date of such notice and
ending on the date three Euro-Currency Business Days after the Agent notifies
the Borrower and the Banks that the condition specified in clause (1) or (2) of
subsection (a) of this Section has ceased to be in effect shall be determined on
such Substitute Basis. If no such agreement has been reached by the expiration
of such 20-day period, the Agent shall so notify the Banks and each Bank shall,
within ten days after the date of such notice, notify the Borrower (through the
Agent) of the rate (or the basis of determining the rate) at which it is
prepared to maintain such Euro-Currency Borrowings or Money Market LIBOR
Borrowings held by it hereunder for the affected Interest Periods (which rate
shall reflect the cost to such Bank of maintaining such Borrowings plus the
applicable Syndicated Margin or plus any applicable positive Money Market
Margin, as the case may be) and such rate (or basis) shall be applicable to such
Euro-Currency Borrowings or Money Market LIBOR Borrowings, as the case may be,
held by it for the affected Interest Periods applicable thereto referred to in
the preceding sentence. The Agent shall determine the total amount of interest
payable by the Borrower on each date for the payment of interest hereunder
determined in accordance with this subsection (b) (to the extent it has received
the necessary information from the Banks) and notify the Borrower of such total
amount (provided that no Bank's right to receive any interest payable to it
hereunder shall be impaired by its failure to provide such information to the
Agent). The Borrower shall have the right at any time to suspend the obligation
of each Bank notifying a rate (or basis) pursuant to the second preceding
sentence of this subsection to make Euro-Currency Loans.
SECTION 8.02. Illegality. If, after July 23, 1997, the adoption of any
----------
applicable law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or its Applicable Lending Office) with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency shall make it unlawful or
impossible for any Bank (or its Applicable Lending Office) to make, maintain or
fund its Euro-Currency Loans and such Bank shall so notify the Agent, the Agent
shall forthwith give notice thereof to the other Banks and the Borrower,
whereupon until
46
<PAGE>
such Bank notifies the Borrower and the Agent that the circumstances giving rise
to such suspension no longer exist, the obligation of such Bank to make Euro-
Currency Loans shall be suspended. Before giving any notice to the Agent
pursuant to this Section, such Bank shall designate a different Applicable
Lending Office if such designation will avoid the need for giving such notice
and will not, in the judgment of such Bank, be otherwise materially
disadvantageous to such Bank. If such Bank shall determine that it may not
lawfully continue to maintain and fund any of its outstanding Euro-Currency
Loans to maturity and shall so specify in such notice, the Borrower shall
immediately prepay in full the then outstanding principal amount of each such
affected Euro-Currency Loan, together with accrued interest thereon.
Concurrently with prepaying each such affected Euro-Currency Loan, the Borrower
shall borrow a Base Rate Loan (or, subject to Section 2.03 and the willingness
of such Bank in its own discretion to submit a Money Market Quote, a Money
Market Rate Loan) from such Bank in a principal amount equal to the Dollar
Amount of the principal amount of such affected Euro-Currency Loan for an
Interest Period coincident with the remaining term of the Interest Period
applicable to such affected Euro-Currency Loan, and such Bank shall make such a
Base Rate Loan.
SECTION 8.03. Increased Cost and Reduced Return. (a) If on or after (x)
---------------------------------
July 23, 1997, in the case of any Syndicated Loan or any obligation to make
Syndicated Loans or (y) the date of the related Money Market Quote, in the case
of any Money Market Loan, the adoption of any applicable law, rule or
regulation, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or its Applicable Lending Office) with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency:
(i) shall subject any Bank (or its Applicable Lending Office) to any
tax, duty or other charge with respect to its Fixed Rate Loans, its Notes
or its obligation to make Euro-Currency Loans, or shall change the basis of
taxation of payments to any Bank (or its Applicable Lending Office) of the
principal of or interest on its Fixed Rate Loans or any other amounts due
under this Agreement in respect of its Fixed Rate Loans or its obligation
to make Euro-Currency Loans (except for changes in the rate of tax on the
overall net income of such Bank or its Applicable Lending Office imposed by
the jurisdiction in which such Bank's principal executive office or
Applicable Lending Office is located) or
(ii) shall impose, modify or deem applicable any reserve, special
deposit, deposit insurance assessment or similar requirement (including,
without limitation, any such requirement imposed by the Board of Governors
of the Federal Reserve System, but excluding with respect to any Euro-
Currency Loan or Money Market LIBOR Loan any such requirement included in
an applicable Euro-Currency Reserve Percentage) against assets of, deposits
with or for the account of, or credit extended by, any Bank (or its
Applicable Lending Office) or shall impose on any Bank (or its Applicable
Lending Office) or on the London interbank market any other condition
affecting its Fixed Rate Loans, its Notes or its obligation to make Euro-
Currency Loans,
47
<PAGE>
and the result of any of the foregoing is to increase the cost to such Bank (or
its Applicable Lending Office) of making or maintaining any Fixed Rate Loan, or
to reduce the amount of any sum received or receivable by such Bank (or its
Applicable Lending Office) under this Agreement or under its Notes with respect
thereto, by an amount deemed by such Bank to be material, then, within 15 days
after demand by such Bank (with a copy to the Agent), the Borrower shall pay to
such Bank (without duplication of amounts otherwise payable hereunder) such
additional amount or amounts as will compensate such Bank for such increased
cost or reduction with respect to such affected Fixed Rate Loan or such affected
sum.
(b) If any Bank shall have reasonably determined that, after July 23, 1997,
the adoption of any applicable law, rule or regulation regarding capital
adequacy or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or its Applicable Lending Office) with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or has had the effect of
reducing the rate of return on the capital of such Bank (or its parent) as a
consequence of its obligations hereunder to a level below that which such Bank
(or its parent) could have achieved but for such adoption, change or compliance
(taking into consideration such Bank's policies with respect to capital
adequacy) by an amount deemed by such Bank to be material, then from time to
time, within 15 days after demand by such Bank (with a copy to the Agent), the
Borrower shall pay to such Bank (without duplication of amounts otherwise
payable hereunder) such additional amount or amounts as will compensate such
Bank (or its parent) for such reduction.
(c) Each Bank will promptly notify the Borrower and the Agent of any event
of which it has knowledge, occurring after July 23, 1997, which will entitle
such Bank to compensation pursuant to this Section and will designate a
different Applicable Lending Office if such designation will avoid the need for,
or reduce the amount of, such compensation and will not, in the judgment of such
Bank, be otherwise materially disadvantageous to such Bank. A certificate of
any Bank claiming compensation under this Section, setting forth the additional
amount or amounts to be paid to it hereunder and setting forth in reasonable
detail a reasonable basis therefor, shall be conclusive in the absence of
manifest error. In determining such amount, such Bank may use any reasonable
averaging and attribution methods.
(d) Notwithstanding any other provision of this Agreement, the Borrower
shall have no obligation to make any payment under this Section 8.03 to the
extent that such payment would not have been required (i) if such Bank's
representation and warranty in Section 2.16(f) had been accurate, or (ii) if
such Bank had complied with its obligations under Section 2.16(g).
SECTION 8.04. Substitute Loans. If (i) the obligation of any Bank to make
----------------
Euro-Currency Loans has been suspended pursuant to Section 8.01(b) or 8.02 or
(ii) any Bank has demanded compensation under Section 8.03(a) and the Borrower
shall, by at least five Euro-Currency Business Days' prior notice to such Bank
through the Agent, have elected that the provisions of this Section shall apply
to such Bank, then, unless and until such Bank notifies the Borrower that the
circumstances giving rise to such suspension or demand for compensation no
longer apply:
48
<PAGE>
(a) all Loans denominated in Dollars which would otherwise be made by
such Bank as Euro-Currency Loans shall be made instead as Base Rate Loans,
(b) all Loans denominated in a currency other than Dollars which would
otherwise be made by such Bank as Euro-Currency Loans shall be made instead
as Base Rate Loans in Dollars in a principal amount equal to the Dollar
Amount of the principal amount of such Euro-Currency Loans, and
(c) after each of its Euro-Currency Loans has been repaid, all
payments of principal which would otherwise be applied to repay such Fixed
Rate Loans shall instead be applied to repay its Loans made pursuant to
Section 8.02 or clauses (a) or (b) above.
SECTION 8.05. Certain Reserve Compensation. Each Bank may require the
----------------------------
Borrower to pay, contemporaneously with each payment of interest on the Euro-
Currency Borrowings of the Borrower, additional interest on the related Euro-
Currency Loan of such Bank at a rate per annum equal to the excess of (i)(A) the
applicable London Interbank Offered Rate divided by (B) one minus the Euro-
Currency Reserve Percentage over (ii) the rate specified in clause (i)(A). In
addition, each Bank may require the Borrower to pay, contemporaneously with each
payment of interest on the Euro-Currency Borrowings of the Borrower which are
denominated in pounds sterling, additional interest on the related Euro-Currency
Loan of such Bank at the percentage calculated from time to time by such Bank to
be the percentage required to fully compensate such Bank for all reserve costs,
liabilities, expenses and assessments which have been incurred by such Bank (or
its Applicable Lending Office) in complying with any and all requirements of any
relevant United Kingdom banking authority or authorities applicable to such Bank
(or its Applicable Lending Office) regarding the making, funding or maintaining
of such Euro-Currency Loan (including, without limitation, any and all liquid
asset maintenance requirements of the Bank of England). A certificate of any
Bank claiming compensation under the preceding sentence, setting forth the
additional interest to be paid to it thereunder and setting forth in reasonable
detail a reasonable basis therefor, shall be conclusive in the absence of
manifest error, and in determining the amount of such interest, such Bank may
use any reasonable averaging and attribution methods.
Any Bank wishing to require payment of such additional interest (x) shall
so notify the Borrower and the Agent, in which case such additional interest on
the Euro-Currency Loans of such Bank shall be payable in the currency of such
Loan to such Bank at the place indicated in such notice with respect to each
Interest Period commencing at least five Euro-Currency Business Days after the
giving of such notice and (y) shall notify the Borrower at least five Euro-
Currency Business Days prior to each date on which interest is payable on such
Euro-Currency Loans of the amount (and currency thereof) then due it under this
Section.
SECTION 8.06. Substitution of Bank. If (i) the obligation of any Bank to
--------------------
make Euro-Currency Loans has been suspended pursuant to either Section 8.01(b)
or Section 8.02 of either this Agreement or the Other Agreement or (ii) any Bank
has demanded compensation under any of Sections 2.16, 8.03 or 8.05 of either
this Agreement or the Other Agreement, the Borrower shall have the right, with
the assistance of the Agent, to seek a mutually satisfactory substitute bank or
banks (which may be one or more of the Banks) to purchase and assume all of the
rights and obligations of such Bank under this Agreement, the Other Agreement
and such Bank's "Notes" (as defined in both this Agreement and the Other
Agreement), all in accordance with the provisions of Section
49
<PAGE>
9.07(c) of this Agreement and Section 9.07(c) of the Other Agreement and subject
to such Bank receiving payment in full of all amounts owing to it under this
Agreement, the Other Agreement, and its "Notes" (as defined in both this
Agreement and the Other Agreement).
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices and other communications provided for
-------
herein shall be in writing (including bank wire, telex, facsimile transmission,
telegraph or similar writing) and shall be given to the intended recipient: (x)
in the case of the Borrower or the Agent, at its address or telex or telecopy
number set forth on the signature pages hereof, (y) in the case of any Bank, at
its address or telex or telecopy number set forth in its Administrative
Questionnaire or (z) in the case of any party, at such other address or telex or
telecopy number as shall be designated by such party in a notice to the Borrower
and the Agent. All notices and other communications shall be effective (i) if
given by telex or facsimile transmission, when transmitted to the telex or
telecopy number specified in this Section (and, in the case of telex, when the
appropriate answerback is received), (ii) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid, or (iii) if given by any other means, when delivered at
the address specified in this Section; provided that notices to the Agent under
--------
Article II or VIII hereof shall not be effective until received.
SECTION 9.02. No Waiver. No failure on the part of the Agent or any Bank
---------
to exercise and no delay in exercising, and no course of dealing with respect
to, any right, power or privilege under this Agreement or any Note shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
power or privilege under this Agreement or any Note preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The remedies provided herein are cumulative and not exclusive of any remedies
provided by law.
SECTION 9.03. GOVERNING LAW. THIS AGREEMENT, THE NOTES AND THE REQUESTS,
-------------
INVITATIONS AND OFFERS PROVIDED FOR IN SECTION 2.03 SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS.
SECTION 9.04. Expenses and Indemnification. The Borrower agrees to pay,
----------------------------
or reimburse each of the Agent and the Arranger for paying, all reasonable costs
and out-of-pocket expenses incurred or paid by each of the Agent and the
Arranger in connection with the preparation, negotiation, execution, delivery
and syndication of this Agreement and the Notes and the making of the Borrowings
hereunder (including the reasonable fees, time charges and expenses of in-house
or outside counsel to the Agent and the Arranger). The Borrower agrees to pay,
or reimburse the Agent and the Banks for paying, all reasonable fees, time
charges and expenses of in-house counsel to the Agent and such outside counsel,
if any, as shall have been retained by the Agent or the Required Banks on behalf
of the Banks, in connection with the amendment, modification, consent or waiver
of any of the terms of this Agreement or any of the Notes. The Borrower agrees
to pay, or reimburse the Agent and the Banks for paying, all reasonable costs,
internal charges and out-of-pocket expenses (including the reasonable fees, time
charges and expenses of in-house or outside counsel to the Agent or any Bank)
paid or incurred by the Agent or any Bank in connection with the enforcement of
this
50
<PAGE>
Agreement or any Note and any collection, bankruptcy, insolvency and other
enforcement proceedings resulting therefrom.
The Borrower hereby agrees to indemnify the Agent, the Arranger and each
Bank (and their respective directors, officers and employees) from and hold
each of them harmless against any and all losses, claims, damages, penalties,
judgments, liabilities and expenses (including, without limitation, all expenses
of litigation or preparation therefor whether or not the Agent, the Arranger or
any Bank is a party thereto) which any of them may pay or incur arising out of
or relating to this Agreement, the Notes, the transactions contemplated hereby
or the direct or indirect application or proposed application of the proceeds of
any Borrowing, except to the extent any of the foregoing arises from the gross
negligence or willful misconduct of the Person seeking indemnification. If and
to the extent that the foregoing indemnification is unenforceable for any
reason, the Borrower agrees to make the maximum contribution to the payment and
satisfaction of each of such losses, liabilities, claims, damages or expenses
which is permissible under applicable law. The obligations of the Borrower
under this Section 9.04 shall survive the termination of this Agreement.
SECTION 9.05. Amendments, Etc. Any provision of this Agreement or the
---------------
Notes may be amended or waived if, but only if, such amendment or waiver is in
writing and is signed by the Borrower and the Required Banks (and, if the rights
or duties of the Agent are affected thereby, by the Agent); provided that the
--------
Agent may, with the consent of the Borrower (which shall not be unreasonably
withheld), specify by notice to the Banks modifications in the procedures set
forth in Section 2.03; and provided further that no such amendment, waiver or
-------- -------
modification shall, unless signed by all the Banks, (i) increase or extend the
Commitment of any Bank or subject any Bank to any additional obligation (except
for increases to the Commitment of any Bank pursuant to Section 8.06 to which
such Bank has agreed in writing), (ii) reduce the principal of or rate of
interest on any Loan or any fees or other amounts payable hereunder or change
the currency of payment thereof, (iii) postpone the date fixed for any payment
of principal of or interest on any Loan or any fees hereunder, (iv) change the
definition of "Required Banks", amend this Section 9.05, or otherwise change the
percentage of the Commitments or of the aggregate unpaid principal amount of the
Notes, or the number of Banks, which shall be required for the Banks or any of
them to take any action under this Section or any other provision of this
Agreement, or (v) change Section 9.11 or any provision providing for the equal
or ratable treatment of the Banks.
SECTION 9.06. Counterparts; Effectiveness; Termination of Existing Credit
-----------------------------------------------------------
Agreement. This Agreement may be executed in any number of counterparts, all of
- ---------
which taken together shall constitute one and the same instrument, and any of
the parties hereto may execute this Agreement by signing any such counterpart.
This Agreement shall become effective when (a) the Agent shall have received
counterparts hereof signed by the Borrower, each Bank listed on the signature
pages hereof and the Agent, and (b) all of the Borrower's obligations under the
Existing Credit Agreement shall have been satisfied (except for any obligations
under Article VIII, Section 2.16 and Section 9.04 therein). Each Bank that is a
party to the Existing Credit Agreement acknowledges and agrees that,
notwithstanding anything to the contrary therein, upon the effectiveness of this
Agreement, the commitments of the banks under the Existing Credit Agreement to
make loans thereunder shall be automatically terminated and any notice
requirements in respect of such termination or in respect of any prepayment of
loans thereunder shall be waived. The Agent shall notify the Borrower and the
Banks of the effectiveness of this Agreement by delivery of a notice in the form
of Exhibit H hereto.
51
<PAGE>
SECTION 9.07. Successors and Assigns. (a) The provisions of this
----------------------
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that the Borrower may not
assign or otherwise transfer any of its rights under this Agreement without the
prior written consent of all Banks and the Agent.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment or
any or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Agent, such Bank shall remain responsible for the performance
of its obligations hereunder, and the Borrower and the Agent shall continue to
deal solely and directly with such Bank in connection with such Bank's rights
and obligations under this Agreement. Any agreement pursuant to which any Bank
may grant such a participating interest shall provide that such Bank shall
retain the sole right and responsibility to enforce the obligations of the
Borrower hereunder including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this Agreement; provided
--------
that such participation agreement may provide that such Bank will not agree to
any modification, amendment or waiver of this Agreement described in clause (ii)
or (iii) of Section 9.05 without the consent of the Participant. The Borrower
agrees that each Participant shall, to the extent provided in its participation
agreement, be entitled to the benefits of Sections 2.13, 2.15, 2.16, 9.04 and
Article VIII to the extent of its participating interest and with such benefits
to be determined as if the related Bank had not granted such participation. An
assignment or other transfer which is not permitted by subsection (c) or (d)
below shall be given effect for purposes of this Agreement only to the extent of
a participating interest granted in accordance with this subsection (b).
(c) With (and subject to) the written consent of the Borrower and the Agent
(such consents not to be unreasonably withheld and, in the case of an assignment
to an Affiliate, not to be required), any Bank may at any time assign to one or
more banks or other institutions (each an "Assignee") all, or a proportionate
part of all, of its rights and obligations under this Agreement and the Notes,
and such Assignee shall assume such rights and obligations, pursuant to an
Assignment and Assumption Agreement in substantially the form of Exhibit G
hereto executed by such Assignee and such transferor Bank; provided, that
simultaneously with each such assignment, the transferor Bank shall assign to
the same Assignee the same proportionate share of all of its rights and
obligations, if any, under the Other Agreement in accordance with the provisions
of Section 9.07(c) of the Other Agreement. Upon execution and delivery of such
instrument and payment by such Assignee to such transferor Bank of an amount
equal to the purchase price agreed between such transferor Bank and such
Assignee, such Assignee shall be a Bank party to this Agreement and shall have
all the rights and obligations of a Bank with a Commitment as set forth in such
instrument of assumption, and the transferor Bank shall be released from its
obligations hereunder to a corresponding extent, and no further consent or
action by any party shall be required. Upon the consummation of any assignment
pursuant to this subsection (c), the transferor Bank, the Agent and the Borrower
shall make appropriate arrangements so that, if required, new Notes are issued
to the Assignee. In connection with any such assignment under this Agreement,
the transferor Bank shall pay to the Agent an administrative fee for processing
such assignment equal to $1,500.
52
<PAGE>
(d) Any Bank may at any time assign all or any portion of its rights under
this Agreement and its Notes to a Federal Reserve Bank (without any requirement
to obtain the consent of the Borrower or the Agent thereto). No such assignment
shall release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's rights shall
be entitled to receive any greater payment under Section 8.03 or 8.05 than such
Bank would have been entitled to receive with respect to the rights transferred,
unless such transfer is (i) made with the Borrower's prior written consent or
(ii) made to either (y) a Bank already party to this Agreement at the time of
such assignment or (z) an affiliate of the transferor Bank.
(f) If any Reference Bank assigns all of its rights and obligations under
this Agreement and its Notes to an unaffiliated institution, the Agent shall, in
consultation with the Borrower and with the consent of the Required Banks,
appoint another Bank to act as a Reference Bank hereunder.
SECTION 9.08. Survival. The obligations of the Borrower under Article
--------
VIII and Sections 2.16 and 9.04 shall survive the repayment of the Loans and the
termination of the Commitments.
SECTION 9.09. Acknowledgement. The Borrower acknowledges that the Banks
---------------
have entered into this Agreement in reliance on the Borrower's assurance that it
does not intend to use the proceeds of any Borrowings hereunder in a manner
which would violate any applicable law or governmental rule or regulation.
SECTION 9.10. Headings. The Table of Contents and Article and Section
--------
headings used herein shall not affect the interpretation of any provision of
this Agreement.
SECTION 9.11. Sharing of Setoffs. Each Bank agrees that, if it shall, by
------------------
exercising any right of setoff or counterclaim or otherwise, receive payment of
a proportion of the aggregate amount of principal and interest due with respect
to any Note held by it which is greater than the proportion received by any
other Bank in respect of the aggregate amount of principal and interest due with
respect to any Note held by such other Bank (other than disproportionate
payments to any Bank provided for by this Agreement), the Bank receiving such
proportionately greater payment shall purchase such participations in the Notes
held by the other Banks, and such other adjustments shall be made, as may be
required so that all such payments of principal and interest with respect to the
Notes held by the Banks shall be shared by the Banks pro rata; provided that
--------
nothing in this Section shall impair the right of any Bank to exercise any right
of setoff or counterclaim it may have and to apply the amount recovered thereby
to the payment of indebtedness of the Borrower other than its indebtedness under
the Notes. If under any applicable bankruptcy, insolvency or other similar law,
any Bank receives a secured claim in lieu of a setoff to which this Section
applies, such Bank shall, to the extent practicable, exercise its rights in
respect of such secured claim in a manner consistent with the rights of the
Banks entitled under this Section to share in the benefits of any recovery on
such secured claim. The Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any holder of a participation in a
Note, whether or not acquired pursuant to the foregoing arrangements, may
exercise rights of setoff or counterclaim and other rights with respect to such
participation as fully as if such holder of a participation were a direct
creditor of the Borrower in the amount of such participation.
53
<PAGE>
SECTION 9.12. Collateral. Each of the Banks represents to the Agent and
----------
each of the other Banks that it in good faith is not relying upon any "margin
stock" (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 9.13. Consent to Jurisdiction. (a) The Borrower irrevocably
-----------------------
submits to the jurisdiction of any federal or Illinois state court sitting in
Chicago, Illinois over any suit, action or proceeding arising out of or relating
to this Agreement or any Note. The Borrower irrevocably waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding brought in such court
and any claim that any suit, action or proceeding brought in such court has been
brought in an inconvenient forum. The Borrower agrees that a final judgment in
any such suit, action or proceeding brought in such a court shall be conclusive
and binding upon the Borrower and may be enforced in any federal or Illinois
state court sitting in Chicago, Illinois (or any other courts to the
jurisdiction of which the Borrower is or may be subject) by a suit upon such
judgment, provided that service of process is effected upon the Borrower in one
of the manners specified in subsection (b) of this Section or as otherwise
permitted by law.
(b) Service of Process. The Borrower hereby consents to process being
------------------
served in any suit, action or proceeding referred to in the first sentence of
subsection (a) of this Section in any federal or Illinois state court sitting in
Chicago, Illinois by mailing a copy thereof by registered or certified air mail,
postage prepaid, return receipt requested, to the Borrower at its address
specified in Section 9.01 or to any other address of which the Borrower shall
have given written notice to the Agent. The Borrower irrevocably waives, to the
fullest extent permitted by law, all claim of error by reason of any such
service in any such suit, action or proceeding brought by the Agent or any Bank.
The Borrower agrees that such service shall be deemed in every respect effective
service of process upon the Borrower in any such suit, action or proceeding and
shall, to the fullest extent permitted by law, be taken and held to be valid and
personal service upon and personal delivery to the Borrower.
(c) No Limitation on Service or Suit. Nothing in this Article shall
--------------------------------
affect the right of the Agent or any Bank to serve process in any other manner
permitted by law or limit the right of the Agent or any Bank to bring
proceedings against the Borrower in the courts of the jurisdiction of the Bank's
Applicable Lending Office or the courts of any jurisdiction or jurisdictions in
which the Borrower has any assets.
SECTION 9.14. Waiver of Jury Trial. THE AGENT, THE BANKS AND THE BORROWER
--------------------
HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER BANK CREDIT DOCUMENT,
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN), OR ACTIONS OF THE AGENT, THE BANKS, OR THE BORROWER.
54
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
THE BORROWER
ARCO CHEMICAL COMPANY
By /s/ R. Remick
-----------------------------------------
Ronald R. Remick
Vice President and Treasurer
Address for Notices:
3801 West Chester Pike
Newtown Square, Pennsylvania 19073
Attn: Assistant Treasurer
Telex No.: 99-0756
(answerback ARCO CHEM NS1)
Telephone No.: 610-359-3362
Telecopier No.: 610-359-3322
S-1
<PAGE>
THE AGENT
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ George R. Schanz
-----------------------------------------
Title GEORGE R. SCHANZ
--------------------------------------
Vice President
Address for Notices:
The First National Bank of Chicago
One First National Plaza
Chicago, Illinois 60670
Attention: William P. Laird
Mail Suite 0634
Telex No.: 4330253 (answerback FNBCUI)
Telephone No.: 312-732-5635
Telecopier No.: 312-732-4840
cc: W. Walter Green, III
Mail Suite 0363
Telex No.: 4330253 (answerback FNBCUI)
Telephone No.: 312-732-7235
Telecopier No.: 312-732-3055
THE BANKS
Commitment
- ----------
$22,000,000.00 THE FIRST NATIONAL BANK OF CHICAGO,
as a Bank
By /s/ George R. Schanz
-----------------------------------------
Title GEORGE R. SCHANZ
--------------------------------------
Vice President
S-2
<PAGE>
Commitment
- ----------
$20,000,000.00 BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as a Co-Agent and a Bank
By [SIGNATURE APPEARS HERE]
-----------------------------------------
Title Vice President
--------------------------------------
S-3
<PAGE>
Commitment
- ----------
$20,000,000.00 THE CHASE MANHATTAN BANK,
as a Co-Agent and a Bank
By /s/ R. T. Sacks
-----------------------------------------
Title ROBERT T. SACKS
--------------------------------------
MANAGING DIRECTOR
S-4
<PAGE>
Commitment
- ----------
$20,000,000.00 DEUTSCHE BANK AG, NEW YORK AND/OR
CAYMAN ISLANDS BRANCHES,
as a Co-Agent and a Bank
By /s/ Jean Hannigan /s/ R. Hoffmann
-----------------------------------------
Title Jean M. Hannigan Ralf Hoffmann
--------------------------------------
Vice President Vice President
S-5
<PAGE>
Commitment
- ----------
$14,000,000.00 BANK OF TOKYO-MITSUBISHI TRUST COMPANY,
as a Bank
By /s/ M.R. Marron
-----------------------------------------
Title M. R. MARRON
--------------------------------------
Vice President
S-6
<PAGE>
Commitment
- ----------
$14,000,000.00 CREDIT LYONNAIS NEW YORK BRANCH, as a Bank
By /s/ PASCAL POUPELLE
-----------------------------------------
Title Executive Vice President
--------------------------------------
S-7
<PAGE>
Commitment
- ----------
$14,000,000.00 CORESTATES BANK, N.A. as a Bank
By [SIGNATURE APPEARS HERE]
-----------------------------------------
Title Vice President
--------------------------------------
S-8
<PAGE>
Commitment
- ----------
$14,000,000.00 MARINE MIDLAND BANK, as a Bank
By /s/ William M. Holland
-----------------------------------------
Title William M. Holland
--------------------------------------
Vice President
S-9
<PAGE>
Commitment
- ----------
$14,000,000.00 WACHOVIA BANK, N.A.,
as a Bank
By /s/ A. T. Ogburn
------------------------------------
ADAM T. OGBURN
------------------------------------
Title VICE PRESIDENT
------------------------------------
S-10
<PAGE>
Commitment
- ----------
$6,000,000.00 THE BANK OF NEW YORK, as a Bank
By /s/ I. K. Stewart
-----------------------------------------
Title IAN K. STEWART
--------------------------------------
SENIOR VICE PRESIDENT
S-11
<PAGE>
Commitment
- ----------
$6,000,000.00 THE BANK OF NOVA SCOTIA, as a Bank
By /s/ J. A. Edwards
------------------------------------
J. ALAN EDWARDS
------------------------------------
Title AUTHORIZED SIGNATORY
------------------------------------
S-12
<PAGE>
Commitment
- ----------
$6,000,000.00 CITIBANK, N.A., as a Bank
By /s/ R. Beldam
---------------------------------------
RUFUS BELDAM
---------------------------------------
Title Managing Director
399 Park/4th Fl./Zn.4
(212) 559-1605
---------------------------------------
S-13
<PAGE>
Commitment
- ----------
$6,000,000.00 THE DAI-ICHI KANGYO BANK, LTD., LOS
ANGELES AGENCY, as a Bank
By /s/ Mr. Morishita
-----------------------------------------
Title MASATSUGU MORISHITA
--------------------------------------
SR. VICE PRESIDENT &
JOINT GENERAL MANAGER
S-14
<PAGE>
Commitment
- ----------
$6,000,000.00 FIRST UNION NATIONAL BANK, as a Bank
By [SIGNATURE APPEARS HERE]
-----------------------------------------
Title Senior Vice President
--------------------------------------
S-15
<PAGE>
Commitment
- ----------
$6,000,000.00 FUJI BANK, LTD., as a Bank
By [SIGNATURE APPEARS HERE]
-----------------------------------------
Title Senior Vice President
--------------------------------------
S-16
<PAGE>
Commitment
- ----------
$6,000,000.00 MELLON BANK, N.A., as a Bank
By /s/ John K. Walsh
------------------------------------
JOHN K WALSH
------------------------------------
Title VICE PRESIDENT
------------------------------------
S-17
<PAGE>
Commitment
- ----------
$6,000,000.00 THE SAKURA BANK, LTD., as a Bank
By /s/ Y. Kikuchi
-----------------------------------------
Title YASUMASA KIKUCHI
Senior Vice President
S-18
<PAGE>
SCHEDULE I
Euro-Currency Payment Offices of the Agent
Currency Euro-Currency Payment Office
- -------- ----------------------------
Dollars The First National Bank of Chicago
Chicago Office
Account No.: 7521-7653
Ref.: ARCO Chemical
Deutsche Marks To: Swiss Bank Corp.
Frankfurt, Germany
For: The First National Bank of Chicago
Chicago Office
Account No.: 103350.50.00
Ref.: ARCO Chemical
Dutch Guilders To: Rabobank Nederland, N.V.
Utrecht, Netherlands
For: The First National Bank of Chicago
Chicago Office
Account No.: 3908.02.042
Ref.: ARCO Chemical
French Francs To: Credit Commercial De France
Paris, France
For: The First National Bank of Chicago
Chicago Office
Account No.: 020350699000
Ref.: ARCO Chemical
Japanese Yen To: Bank of Tokyo
<PAGE>
Tokyo, Japan
For: The First National Bank of Chicago
Chicago Office
Account No.: 6530422606
Ref.: ARCO Chemical
Pounds Sterling To: Midland Bank, PLC
London, England
For: The First National Bank of Chicago
Chicago Office
Account No.: 00472803
Ref.: ARCO Chemical
<PAGE>
EXHIBIT A
---------
NOTE
Chicago, Illinois
July 23, 1997
For value received, ARCO CHEMICAL COMPANY, a Delaware corporation (the
"Borrower"), promises to pay to the order of (the "Bank"),
for the account of its Applicable Lending Office, the unpaid principal amount of
each Loan made by the Bank to the Borrower pursuant to the Credit Agreement
referred to below on the last day of the Interest Period relating to such Loan.
The Borrower promises to pay interest on the unpaid principal amount of each
such Loan on the dates and at the rate or rates provided for in the Credit
Agreement. All such payments of principal and interest shall be made (i) if in
Dollars, in lawful money of the United States in Federal or other immediately
available funds at the main office of The First National Bank of Chicago, as
Agent, in Chicago Illinois or (ii) if in any other currency, in such funds as
may then be customary for the settlement of international transactions in such
other currency at the place specified for payment thereof pursuant to the Credit
Agreement.
All Loans made by the Bank, the respective maturities thereof and all
repayments of the principal thereof shall be recorded by the Bank and, prior to
any transfer hereof, endorsed by the Bank on the schedule attached hereto, or on
a continuation of such schedule attached to and made a part hereof; provided
--------
that the failure of the Bank to make any such recordation or endorsement shall
not affect the obligations of the Borrower hereunder or under the Credit
Agreement.
This note is one of the Notes referred to in Credit Agreement A dated as of
July 23, 1997 among ARCO Chemical Company, the banks listed on the signature
pages thereof and The First National Bank of Chicago, as Agent (as the same may
be amended from time to time, the "Credit Agreement"). Terms defined in the
Credit Agreement are used herein with the same meanings. Reference is made to
the Credit Agreement for provisions for the prepayment hereof and the
acceleration of the maturity hereof.
ARCO CHEMICAL COMPANY
By:____________________________
Title:__________________
<PAGE>
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
Currency and Amount of
Type of Amount of Principal Maturity Notation
Date Loan Loan Repaid Date Made by
- ---- ------- -------- ------ ------- -------
Page 2
<PAGE>
EXHIBIT B
---------
FORM OF MONEY MARKET
QUOTE REQUEST
[Date]
TO: The First National Bank of Chicago (the "Agent")
One First National Plaza
Chicago, Illinois 60670
From: Arco Chemical Company
Re: Credit Agreement A dated as of July 23, 1997 (the "Credit Agreement")
among ARCO Chemical Company, the Banks listed on the signature pages
thereof and the Agent
We hereby give notice pursuant to Section 2.03 of the Credit Agreement
that we request Money Market Quotes for the following proposed Money Market
Borrowing(s):
Date of Borrowing:__________________
Currency* Principal Amount** Interest Period***
-------- ---------------- ---------------
Such Money Market Quotes should offer a Money Market [Margin] [Rate].
[The applicable base rate is the London Interbank Offered Rate.]
Capitalized terms used herein have the meanings assigned to them in the
Credit Agreement.
ARCO CHEMICAL COMPANY
By:__________________
Title:_______________
____________
* If pounds sterling, indicate whether euro-sterling or domestic sterling.
** Amount must be $10,000,000 (or the Approximate Equivalent Amount thereof)
or a larger multiple of $1,000,000 (or the Approximate Equivalent Amount
thereof).
*** Not less than one month (LIBOR Auction) or not less than 7 days (Absolute
Rate Auction), subject to the provisions of the definition of Interest
Period.
<PAGE>
EXHIBIT C
---------
FORM OF INVITATION FOR
MONEY MARKET QUOTES
[Date]
To: [Name of Bank]
[address of Bank]
Re: Invitation for Money Market Quotes
to Arco Chemical Company (the "Borrower")
Pursuant to Section 2.03 of Credit Agreement A dated as of July 23, 1997
(the "Credit Agreement") among ARCO Chemical Company, the Banks listed on the
signature pages thereof and the undersigned, as Agent, we are pleased on behalf
of the Borrower to invite you to submit Money Market Quotes to the Borrower for
the following proposed Money Market Borrowing(s):
Date of Borrowing:________________________
Currency* Principal Amount Business Period
-------- ---------------- ---------------
Such Money Market Quotes should offer a Money Market [Margin] [Rate].
[The applicable base rate is the London Interbank Offered Rate.]
Please respond to this invitation by no later than [3:00 p.m.] [1:00 p.m.]
[9:00 a.m.] [(London time)] [(Chicago time)] on [date].
Capitalized terms used herein have the meanings assigned to them in the
Credit Agreement.
THE FIRST NATIONAL BANK OF
CHICAGO, as Agent
By:___________________________
Authorized Officer
_________
* If pounds sterling, indicate whether euro-sterling or domestic sterling.
<PAGE>
EXHIBIT D
---------
FORM OF MONEY MARKET QUOTE
To: The First National Bank
of Chicago, as Agent
One First National Plaza
Chicago, Illinois 60670
Attention: Funding Services -- Loan Sale Group
Re: Money Market Quote to Arco Chemical Company (the "Borrower")
In response to your invitation on behalf of the Borrower dated
___________, ____, we hereby make the following Money Market Quote on the
following terms:
1. Quoting Bank:
2. Person to contact at Quoting Bank:
3. Date of Borrowing: *
4. We hereby offer to make Money Market Loan(s) in the following principal
amounts for the following Interest Periods and at the following rates:
Principal Interest Money Market
Currency** Amount*** Period**** [Margin+][Rate++]
-------- ------- ------- -------------------
[provided that the aggregate principal amount of Money Market Loans for which
the above offers may be accepted shall not exceed $___________]***
__________
* As specified in the related Invitation.
** ***[If pounds sterling, indicate whether euro-sterling or domestic
sterling.]***
*** Principal amount bid for each Interest Period may not exceed principal
amount requested. Specify aggregate limitation if the sum of the individual
offers exceeds the amount the Bank is will-ing to lend. Bids must be made
for $1,000,000 (or the Approximate Equivalent Amount thereof) or a larger
multiple thereof.
**** Not less than 7 days, as specified in the related Invitation for Money
Market Quotes.
+ Margin over or under the London Interbank Offered Rate determined for the
applicable Interest Period. Specify percentage (rounded to the nearest
1/10,000 of 1%) and specify whether "PLUS" or "MINUS".
++ Specify rate of interest per annum (rounded to the nearest 1/10,000th of
1%).
We understand and agree that the offer(s) set forth above, subject to the
satisfaction of the applicable conditions set forth in Credit Agreement A dated
as of July 23, 1997 (the "Credit
<PAGE>
Agreement") among ARCO Chemical Company, the Banks listed on the signature pages
thereof and yourselves, as Agent, irrevocably obligates us to make the Money
Market Loan(s) for which any offer(s) are accepted, in whole or in part.
Capitalized terms used herein have the meanings assigned to them in the Credit
Agreement.
Very truly yours,
[NAME OF BANK]
Dated:_____________________ By:_________________________
Authorized Officer
Page 2
<PAGE>
EXHIBIT E
---------
CERTIFICATE OF
INCUMBENCY
I, , [Secretary/Assistant Secretary] of ARCO CHEMICAL COMPANY,
a Delaware corporation (the "Borrower"), hereby certify as follows:
(1) Each of the following named individuals is an Authorized Officer (as
that term is defined in Credit Agreement A, dated as of July 23, 1997 among ARCO
Chemical Company, the Banks named therein and The First National Bank of
Chicago, as Agent (the "Credit Agreement")) of the Borrower and each has been
duly elected to and is now holding the office indicated, and the signature
appearing opposite each name is the genuine signature of such Authorized
Officer:
Title Name Signature
----- ---- ---------
__________________ ___________________ _____________________
__________________ ___________________ _____________________
__________________ ___________________ _____________________
(2) Each of the following named individuals has been duly designated
as an "Authorized Representative" (as that term is defined in the Credit
Agreement) of the Borrower, and the signature appearing opposite each name is
the genuine signature of such Authorized Representative:
Title Name Signature
----- ---- ---------
__________________ ___________________ _____________________
__________________ ___________________ _____________________
__________________ ___________________ _____________________
__________________ ___________________ _____________________
__________________ ___________________ _____________________
__________________ ___________________ _____________________
<PAGE>
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the
Borrower this day of 19 .
____________________
Secretary/Assistant Secretary
[SEAL]
I, [name], [Treasurer/Assistant Secretary/Secretary] of ARCO Chemical
Company, do hereby certify that is, and at all times since
, 19 has been, the duly elected or appointed, qualified and acting
[Secretary/Assistant Secretary] of the Borrower and that the signature set forth
above is [his][her] genuine signature.
IN WITNESS WHEREOF, I have hereunto set my hand this day of , 19.
____________________
Treasurer/Assistant Secretary
Page 2
<PAGE>
EXHIBIT F
---------
OPINION OF
COUNSEL FOR THE BORROWER
[Dated as provided in
Section 3.01 of the
Credit Agreement]
To the Banks and the Agent
Referred to Below
c/o The First National Bank
of Chicago, as Agent
One First National Plaza
Chicago, Illinois 60670
Ladies and Gentlemen:
I am [General Counsel] [Associate General Counsel-Corporate] of ARCO
Chemical Company (the "Borrower") and as such have acted as counsel, or
supervised attorneys who have acted as counsel, for the Borrower in connection
with Credit Agreement A, dated as of July 23, 1997 (the "Credit Agreement"),
among ARCO Chemical Company, the banks listed on the signature pages thereof,
and The First National Bank of Chicago, as Agent. Capitalized terms used but not
otherwise defined herein have the meanings assigned to such terms in the Credit
Agreement.
I have examined originals or copies, certified or otherwise identified to
my satisfaction, of such documents, corporate records, certificates of public
officials and other instruments and have conducted such other investigations of
fact and law as I have deemed necessary or advisable for purposes of this
opinion.
Upon the basis of the foregoing, I am of the opinion that:
1. (a) The Borrower (i) is a corporation duly incorporated, validly
existing and in good standing under the laws of Delaware and (ii) either is
qualified to do business and in good standing in each jurisdiction where the
ownership of its properties or the conduct of its business requires such
qualification or is subject to no material liability or disability by reason of
the failure to be so qualified in any such jurisdiction.
(b) The Borrower has all corporate powers and authority, governmental
permits, licenses, consents, authorizations, orders and approvals and other
authorizations as are necessary to carry on its business substantially as
presently conducted except for such of the foregoing the absence of which would
not, in the aggregate, subject the Borrower to any material liability or
disability.
<PAGE>
(c) The execution, delivery and performance by the Borrower of the Credit
Agreement and the Notes, and Borrowings under the Credit Agreement by the
Borrower, are within the corporate power and authority of the Borrower and have
been duly authorized by all necessary corporate proceedings by the Borrower.
(d) Neither such authorization nor the execution, delivery and performance
by the Borrower of the Credit Agreement or of the Notes, nor any Borrowing by
the Borrower when made, will conflict with, result in a breach of or constitute
a default under any of the terms, conditions or provisions of any law or any
regulation, order, writ, injunction or decree of any court or governmental
authority or of the Certificate of Incorporation or By-Laws of the Borrower or
result in the violation or contravention of, or the acceleration of any
obligation under, or cause the creation of any Lien on any of the properties of
the Borrower pursuant to the provisions of, any indenture, agreement or other
instrument to which it is a party or by which it is bound.
(e) Assuming its due execution by the Banks and the Agent, the Credit
Agreement constitutes a legal, valid and binding agreement of the Borrower and
the Notes, when duly executed on behalf of the Borrower and delivered in
accordance with the Credit Agreement, will constitute legal, valid and binding
obligations of the Borrower enforceable in accordance with their respective
terms (subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditors' rights
generally from time to time in effect and to general principles of equity).
2. Except as previously disclosed in writing to the Banks prior to July
23, 1997, there is no action, suit or proceeding pending or, to my knowledge,
threatened against or affecting the Borrower or any of its subsidiaries in any
court or before or by any arbitrator, governmental department, agency or
instrumentality (i) which is likely to have a material adverse effect upon the
Borrower's ability to pay and perform its obligations under the Bank Credit
Documents in accordance with their respective terms or (ii) which in any manner
draws into question the validity of any of the Bank Credit Documents. In this
regard, the Borrower has brought to your attention the Borrower's annual report
on Form 10-K for the year ended December 31, 1996, and the Borrower's quarterly
report on Form 10-Q for the three months ended March 31, 1997.
3. No consent, authorization, order or approval of (or filing or
registration with) any governmental commission, board or other regulatory
authority (other than routine reporting requirements) is required for the
execution, delivery and performance by the Borrower of the Credit Agreement or
the Notes or for Borrowings under the Credit Agreement.
4. The Borrower is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
5. The Cross-Indemnification Agreement, as amended to the date hereof, and
the Tax Sharing Agreement are in full force and effect in accordance with their
respective terms.
Page 2
<PAGE>
6. Each of the Borrower's Subsidiaries that is a corporation is duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all corporate powers and all governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted except for licenses, authorizations, consents or
approvals the absence of which will not materially and adversely affect the
business of the Borrower and its Consolidated Subsidiaries taken as a whole.
I am counsel admitted to practice in the Commonwealth of Pennsylvania. In
giving the foregoing opinion, I express no opinion as to the effect (if any) of
any laws of any jurisdiction other than the general corporate laws of the State
of Delaware and the laws of the Commonwealth of Pennsylvania. I have assumed
for the purposes of this opinion that the applicable laws of the State of
Illinois are the same as the laws of the Commonwealth of Pennsylvania.
Very truly yours,
Page 3
<PAGE>
EXHIBIT G
---------
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of __________, 19__ among [ASSIGNOR] (the "Assignor"),
[ASSIGNEE] (the "Assignee"), ARCO CHEMICAL COMPANY (the "Company") and THE FIRST
NATIONAL BANK OF CHICAGO, as Agent (the "Agent").
WITNESSETH
WHEREAS, this Assignment and Assumption Agreement (the "Agreement") relates
to Credit Agreement A dated as of July 23, 1997 among the Company, the Assignor
and the other Banks party thereto, as Banks, and the Agent (the "Credit
Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor has a
Commitment to make Loans in an aggregate principal amount at any time
outstanding not to exceed $_______________;
WHEREAS, Syndicated Loans made by the Assignor under the Credit Agreement
in the aggregate principal amount of $__________ are outstanding at the date
hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all of the rights
of the Assignor under the Credit Agreement in respect of a portion of its
Commitment thereunder in an amount equal to $___________ (the "Assigned
Amount"), together with a corresponding portion of its outstanding Syndicated
Loans, and the Assignee proposes to accept assignment of such rights and assume
the corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined
-----------
herein shall have the respective meanings set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to the
----------
Assignee all of the rights of the Assignor under the Credit Agreement to the
extent of the Assigned Amount, and the Assignee hereby accepts such assignment
from the Assignor and assumes all of the obligations of the Assignor under the
Credit Agreement to the extent of the Assigned Amount, including the purchase
from the Assignor of the corresponding portion of the principal amount of the
Syndicated Loans made by the Assignor outstanding at the date hereof. Upon the
execution and delivery hereof by the Assignor, the Assignee, the Company and the
Agent and the payment of the amounts specified in Section 3 required to be paid
on the date hereof (i) the Assignee shall,
<PAGE>
as of the date hereof, succeed to the rights and be obligated to perform the
obligations of a Bank under the Credit Agreement with a Commitment in an amount
equal to the Assigned Amount, and (ii) the Commitment of the Assignor shall, as
of the date hereof, be reduced by a like amount and the Assignor released from
its obligations under the Credit Agreement to the extent such obligations have
been assumed by the Assignee. The assignment provided for herein shall be
without recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and sale
--------
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the
date hereof in Federal funds an amount equal to $__________*. It is understood
that facility fees with respect to the Assigned Amount accrued to the date
hereof are for the account of the Assignor and such fees accruing from and
including the date hereof are for the account of the Assignee. Each of the
Assignor and the Assignee hereby agrees that if it receives any amount under the
Credit Agreement which is for the account of the other party hereto, it shall
receive the same for the account of such other party to the extent of such other
party's interest therein and shall promptly pay the same to such other party.
SECTION 4. Consent of the Company and the Agent. This Agreement is
------------------------------------
conditioned upon the consent of the Company and the Agent pursuant to Section
9.07(c) of the Credit Agreement. The execution of this Agreement by the Company
and the Agent is evidence of this consent. Pursuant to Section 9.07(c) the
Company agrees to execute and deliver a Note payable to the order of the
Assignee to evidence the assignment and assumption provided for herein.**
____________
* Amount should combine principal together with accrued interest and breakage
compensation, if any, to be paid by the Assignee, net of any portion of any
upfront fee to be paid by the Assignor to the Assignee. It may be
preferable in an appropriate case to specify these amounts generically or
by formula rather than as a fixed sum.
** Delete this Section 4 if no consent is required pursuant to Section 9.07(c)
of the Credit Agreement.
Page 2
<PAGE>
SECTION 5. Non-Reliance on Assignor. The Assignor makes no representation
------------------------
or warranty in connection with, and shall have no responsibility with respect
to, the solvency, financial condition, or statements of the Borrower, or the
validity and enforceability of the obligations of the Borrower in respect of the
Credit Agreement or any Note. The Assignee acknowledges that it has,
independently and without reliance on the Assignor, and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and will continue to be responsible for
making its own independent appraisal of the business, affairs and financial
condition of the Borrower. Neither the Assignor nor any of its officers,
directors, employees, agents or attorneys shall be liable for any mistake, error
of judgment, or action taken or omitted to be taken in connection with any
Loans, Note, Commitment or other interest under the Credit Agreement.
SECTION 6. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of Illinois.
SECTION 7. Counterparts. This Agreement may be signed in any number of
------------
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date first above
written.
[ASSIGNOR]
By:___________________
Title:________________
[ASSIGNEE]
By:___________________
Title:________________
Page 3
<PAGE>
ARCO CHEMICAL COMPANY
By:____________________
Title:_________________
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By:____________________
Title:_________________
Page 4
<PAGE>
EXHIBIT H
---------
NOTICE OF EFFECTIVENESS
July 23, 1997
ARCO Chemical Company
3801 West Chester Pike
Newtown Square, Pennsylvania 19073
Attention: Treasurer
Dear Ladies/Gentlemen:
We hereby notify you that Credit Agreement A dated as of July 23, 1997 among
ARCO Chemical Company, the banks listed on the signature pages thereof and The
First National Bank of Chicago, as Agent, has become effective as of the date
hereof in accordance with Section 9.06 thereof.
Very truly yours,
THE FIRST NATIONAL BANK OF
CHICAGO, as Agent
By:___________________________
Title:________________________
<PAGE>
EXHIBIT I
---------
OPINION OF SPECIAL COUNSEL FOR THE AGENT
[Dated as provided in
Section 3.01 of the
Credit Agreement]
The First National Bank of Chicago, as
Agent, and the other financial institutions
which are parties to each of the Credit
Agreements referred to below
Re: ARCO Chemical Company
---------------------
Ladies and Gentlemen:
We have acted as special counsel to The First National Bank of Chicago, as
Agent (in such capacity, the "Agent"), in connection with Credit Agreement A and
Credit Agreement B (collectively, the "Credit Agreements"), each dated as of
July 23, 1997, among ARCO Chemical Company (the "Borrower"), various financial
institutions, and the Agent. Capitalized terms used herein and not otherwise
defined shall have the meanings attributed to them in each of the Credit
Agreements.
In connection herewith, we have examined counterparts of each Credit
Agreement executed by the Borrower, each of the Banks and the Agent; and each
Note issued by the Borrower on the date hereof pursuant to the Credit Agreements
(the "Notes"). In connection with such examination, we have assumed the
genuineness of all signatures, the authority of the persons signing such
documents and the authenticity of such documents. We also have assumed, without
any independent investigation, that (a) each Credit Agreement and each Note has
been duly authorized, executed and delivered by each of the parties thereto and
(b) each Credit Agreement is the legal, valid and binding obligation of each
party thereto other than the Borrower, enforceable against each such party in
accordance with its terms.
Based upon the foregoing, and subject to the qualifications set forth below,
we are of the opinion that, under the laws of the State of Illinois:
(1) Each Credit Agreement is the legal, valid and binding obligation of
the Borrower, enforceable against the Borrower in accordance with its
terms.
(2) The Notes are the legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with their
terms.
<PAGE>
________, 1997
Page 2
Our opinions are subject to the following qualifications:
(a) Our opinions are subject to the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or similar law
affecting creditors' rights generally and to the effect of general principles of
equity (regardless of whether considered in a proceeding in equity or at law),
including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing.
(b) We express no opinion as to indemnification or contribution obligations
which contravene public policy.
(c) We express no opinion as to any provision of either Credit Agreement
purporting to convey rights to Persons other than parties to such Credit
Agreement.
(d) We express no opinion as to any waiver of (i) the right to a jury trial,
(ii) any objection to venue or (iii) any right to bring legal proceedings in any
court having jurisdiction.
(e) Our opinions are limited to the laws of the State of Illinois, and we
express no opinion as to the laws of any other jurisdiction.
This opinion letter is solely for the benefit of the addressees hereof (and
their respective successors and assigns) in connection with the transactions
contemplated by the Credit Agreements, and this opinion letter may not be relied
upon by any other Person or for any other purpose.
Very truly yours,
MAYER, BROWN & PLATT
RCB:DTJ
Page 2
<PAGE>
================================================================================
CREDIT AGREEMENT B
DATED AS OF JULY 23, 1997
AMONG
ARCO CHEMICAL COMPANY,
THE FIRST NATIONAL BANK OF CHICAGO,
AS AGENT
AND
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
ARRANGED BY
FIRST CHICAGO CAPITAL MARKETS, INC.
================================================================================
EXHIBIT 10.3
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
<S> <C>
ARTICLE I
DEFINITIONS .................................1
SECTION 1.01. Definitions ....................................................1
SECTION 1.02. Accounting Terms and Determinations............................14
ARTICLE II
THE CREDITS..................................15
SECTION 2.01. Commitments to Lend............................................15
SECTION 2.02. Notice of Syndicated Borrowings................................15
SECTION 2.03. Money Market Borrowings........................................16
SECTION 2.04. Notice to Banks; Funding of Loans..............................20
SECTION 2.05. Notes..........................................................21
SECTION 2.06. Maturity of Loans..............................................22
SECTION 2.07. Interest Rates.................................................22
SECTION 2.08. Fees...........................................................24
SECTION 2.09. Optional Termination or Reduction of Commitments...............24
SECTION 2.10. Mandatory Termination of Commitments...........................24
SECTION 2.11. Optional Prepayments...........................................24
SECTION 2.12. General Provisions as to Payments..............................25
SECTION 2.13. Funding Losses.................................................26
SECTION 2.14. Computation of Interest and Fees...............................27
SECTION 2.15. Judgment Currency..............................................27
SECTION 2.16. Taxes..........................................................28
SECTION 2.17. Maximum Interest Rate..........................................30
ARTICLE III
CONDITIONS TO BORROWINGS ...........................30
SECTION 3.01. Initial Borrowing by the Borrower..............................30
SECTION 3.02. Each Borrowing.................................................31
ARTICLE IV
REPRESENTATIONS AND WARRANTIES........................32
SECTION 4.01. Representations and Warranties of the Borrower.................32
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
SECTION PAGE
<S> <C>
ARTICLE V
COVENANTS.................................35
SECTION 5.01. Certain Information to be Furnished by the Borrower...........35
SECTION 5.02. Limitation on Liens...........................................37
SECTION 5.03. Limitation on Sale and Lease-Back.............................39
SECTION 5.04. Consolidation, Merger, Disposition of Assets..................39
SECTION 5.05. Minimum Consolidated Net Worth................................40
SECTION 5.06. Transactions with Affiliates..................................40
SECTION 5.07. Use of Proceeds...............................................41
ARTICLE VI
DEFAULTS..................................41
SECTION 6.01. Defaults......................................................41
SECTION 6.02. Notice of Default.............................................43
ARTICLE VII
THE AGENT.................................43
SECTION 7.01. Appointment and Authorization.................................43
SECTION 7.02. Agent and Affiliates..........................................44
SECTION 7.03. Action by Agent...............................................44
SECTION 7.04. Employment and Reliance on Agents and Counsel.................44
SECTION 7.05. Liability of Agent............................................44
SECTION 7.06. Reimbursement and Indemnification.............................44
SECTION 7.07. Credit Decision...............................................45
SECTION 7.08. Successor Agent...............................................45
SECTION 7.09. Co-Agents.....................................................45
ARTICLE VIII
CHANGE IN CIRCUMSTANCES..........................46
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair......46
SECTION 8.02. Illegality....................................................48
SECTION 8.03. Increased Cost and Reduced Return.............................48
SECTION 8.04. Substitute Loans..............................................50
SECTION 8.05. Certain Reserve Compensation..................................50
SECTION 8.06. Substitution of Bank..........................................51
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
SECTION PAGE
<S> <C>
ARTICLE IX
MISCELLANEOUS..........................................51
SECTION 9.01. Notices..................................................................51
SECTION 9.02. No Waiver................................................................51
SECTION 9.03. Governing Law............................................................51
SECTION 9.04. Expenses and Indemnification.............................................51
SECTION 9.05. Amendments, Etc..........................................................52
SECTION 9.06. Counterparts; Effectiveness; Termination of Existing Credit Agreement....52
SECTION 9.07. Successors and Assigns...................................................53
SECTION 9.08. Survival.................................................................54
SECTION 9.09. Acknowledgement..........................................................54
SECTION 9.10. Headings.................................................................54
SECTION 9.11. Sharing of Setoffs.......................................................54
SECTION 9.12. Collateral...............................................................55
SECTION 9.13. Consent to Jurisdiction..................................................55
SECTION 9.14. Waiver of Jury Trial.....................................................56
</TABLE>
iii
<PAGE>
SCHEDULE I -- Euro-Currency Payment Offices of the Agent
EXHIBIT A -- Note
EXHIBIT B -- Money Market Quote Request
EXHIBIT C -- Invitation for Money Market Quotes
EXHIBIT D -- Money Market Quote
EXHIBIT E -- Form of Certificate of Incumbency
EXHIBIT F -- Form of Opinion of Counsel for the Borrower
EXHIBIT G -- Assignment and Assumption Agreement
EXHIBIT H -- Notice of Effectiveness
EXHIBIT I -- Form of Opinion of Special Counsel for the Agent
<PAGE>
This CREDIT AGREEMENT B (this "Agreement") is entered into as of July 23,
1997 among ARCO CHEMICAL COMPANY, a Delaware corporation (the "Borrower"), the
several financial institutions from time to time party to this Agreement
(individually each a "Bank;" collectively the "Banks") and THE FIRST NATIONAL
BANK OF CHICAGO, as Agent (the "Agent").
WHEREAS, the Borrower desires to borrow from the Banks from time to time
under this Agreement amounts not exceeding in the aggregate $300,000,000
outstanding at any one time for its general corporate purposes, and the Banks
are prepared to make loans upon the terms hereof.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. In addition to terms defined elsewhere in this
-----------
Agreement, as used in this Agreement, the following terms shall have the
following meanings (all terms defined in this Agreement in the singular to have
the same meanings when used in the plural and vice versa):
"Absolute Rate Auction" shall mean a solicitation of Money Market Quotes
setting forth Money Market Rates pursuant to Section 2.03.
"Administrative Questionnaire" shall mean, with respect to any Bank, an
administrative questionnaire in the form prepared by the Agent and submitted to
the Agent (with a copy to the Borrower) duly completed by such Bank.
"Affiliate" shall mean (i) any Person that directly, or indirectly through
one or more intermediaries, controls the Borrower (a "Controlling Person") or
(ii) any Person (other than the Borrower or a Subsidiary) which is controlled by
or is under common control with a Controlling Person. As used herein, the term
"control" means possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through
the ownership of voting securities, by contract or otherwise.
"Agent" shall mean The First National Bank of Chicago in its capacity as
agent for the Banks hereunder, and its successors in such capacity.
"Agreed Currency" shall mean Dollars, Deutsche Marks, Dutch guilders,
French francs, Japanese yen and pounds sterling and any other currency which is
freely transferable and convertible into Dollars, in which deposits are
customarily offered to banks in the London interbank market,
<PAGE>
which the Borrower requests the Agent to include as an Agreed Currency hereunder
and which is acceptable to each Bank; provided that the Agent shall promptly
--------
notify each Bank of each such request and each Bank shall be deemed to have
agreed to each such request if its objection thereto has not been received by
the Agent within five Domestic Business Days from the date of such notification
by the Agent to such Bank.
"Applicable Lending Office" shall mean as to any Bank (i) in the case of
its Base Rate Loans, its Domestic Lending Office, (ii) in the case of its Euro-
Currency Loans, its Euro-Currency Lending Office and (iii) in the case of its
Money Market Loans, its Money Market Lending Office.
"Approximate Equivalent Amount" of any currency with respect to any amount
of Dollars at any date shall mean the Equivalent Amount of such currency with
respect to such amount of Dollars at such date (i) if such currency is an Agreed
Currency listed below, rounded up to the nearest amount of such Agreed Currency
set forth below opposite such amount of Dollars:
<TABLE>
<CAPTION>
Amount of Amount of Amount of Amount of Amount of
Amount of Deutsche Dutch French Japanese Pounds
Dollars Marks Guilders Francs Yen Sterling
- -------------- ------ -------- ------- ------ --------
<S> <C> <C> <C> <C> <C>
up to 1,000,000 1,000 1,000 1,000 100,000 1,000
1,000,000 to 9,999,999 10,000 10,000 10,000 1,000,000 10,000
10,000,000 to 99,999,999 1000,000 100,000 100,000 10,000,000 100,000
100,000,000 and upwards, 1,000,000 1,000,000 1,000,000 100,000,000 1,000,000
</TABLE>
and (ii) if such currency is not an Agreed Currency listed above, rounded up to
the nearest amount of such currency as determined by the Agent from time to
time.
"Arranger" shall mean First Chicago Capital Markets, Inc.
"Assignee" shall have the meaning set forth in Section 9.07(c).
"Authorized Officer" and "Authorized Representative" of the Borrower shall
mean an officer or other representative of the Borrower designated in the latest
Certificate of Incumbency of the Borrower. The Agent and the Banks shall be
conclusively entitled to rely on the latest such Certificate of Incumbency
delivered to the Agent.
"Bank" shall mean each bank which is listed on the signature pages hereof
as having a Commitment and which has executed and delivered this Agreement, and
its successors and assigns.
"Bank Credit Documents" shall mean, collectively, this Agreement, the
Notes, the Other Agreement and the "Notes" under and as defined in the Other
Agreement.
"Base Rate" shall mean, for any day, a rate per annum equal to the higher
of (i) the Corporate Base Rate for such day or (ii) the sum of 1/2 of 1% plus
the Federal Funds Rate for such day.
2
<PAGE>
"Base Rate Loan" shall mean a Loan to be made by a Bank pursuant to Section
2.01 as a Base Rate Loan in accordance with the applicable Notice of Borrowing
or pursuant to Article VIII or Section 2.04(d).
"Benefit Arrangement" shall mean at any time an employee pension benefit
plan within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"Borrowed Funds" shall mean Debt for borrowed money.
"Borrower" shall mean ARCO Chemical Company, a Delaware corporation, and
its permitted successors.
"Borrowing" shall mean the aggregation of Loans of the same type and
currency of one or more Banks to be made to the Borrower pursuant to Article II
on a single date and for a single Interest Period. Borrowings are classified
for purposes of this Agreement either by reference to the pricing of Loans
comprising such Borrowing (e.g., a "Euro-Currency Borrowing" is a Borrowing
comprised of Euro-Currency Loans) or by reference to the provisions of Article
II under which participation therein is determined (e.g., a "Syndicated
Borrowing" is a Borrowing under Section 2.01 in which all Banks participate in
proportion to their Commitments and a "Money Market Borrowing" is a Borrowing
under Section 2.03 in which the Bank participants are determined by the Agent in
accordance therewith).
"Certificate of Incumbency" shall mean a Certificate of Incumbency
described in Section 3.01(ii) and any successor or replacement Certificate of
Incumbency delivered hereunder.
"Code" shall mean the Internal Revenue Code of 1986, as amended, or any
successor statute.
"Commitment" shall mean, as to each Bank, the Dollar Amount set forth
opposite its name on the signature pages hereof under the heading "Commitment"
(as such amount may be reduced from time to time as provided in Section 2.09).
"Consolidated Net Worth" shall mean at any date the consolidated
stockholders' equity of the Borrower and its Consolidated Subsidiaries less
their consolidated write-ups, all determined as of such date. For purposes of
this definition, "write-ups" shall mean the amount (to the extent reflected in
determining such consolidated stockholders' equity) of all write-ups (other than
write-ups resulting from foreign currency translations and write-ups of assets
of a going concern business made within 12 months after the acquisition of such
business) subsequent to December 31, 1995 in the book value of any asset owned
by the Borrower or a Consolidated Subsidiary.
"Consolidated Subsidiary" shall mean, on any date, any Subsidiary or other
entity the accounts of which would be consolidated with those of the Borrower in
its consolidated financial statements as of such date.
3
<PAGE>
"Corporate Base Rate" shall mean a rate per annum equal to the corporate
base rate of interest announced by The First National Bank of Chicago from time
to time, changing when and as said corporate base rate changes.
"Cross-Indemnification Agreement" shall mean the Cross-Indemnification
Agreement dated as of June 1, 1987, as amended, between the Parent and the
Borrower.
"Debt" of any Person shall mean at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations of such Person as lessee under capital leases,
(v) all Debt of others secured by a Lien on any asset of such Person, whether or
not such Debt is assumed by such Person, and (vi) all Debt of others guaranteed
by such Person; provided that in no event shall "Debt" be deemed to include any
--------
"take-or-pay" obligations incurred by the Borrower in connection with its
purchases of petrochemical feedstocks or other such petrochemical products in
the ordinary course of business.
"Default" shall mean any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Designated Currency" shall mean (i) each Agreed Currency, (ii) any other
currency which is freely transferable and convertible into Dollars, in which
deposits are customarily offered to banks in the London interbank market and
which the Borrower designates as a Designated Currency hereunder upon five
Domestic Business Days' notice in writing to the Banks through the Agent and
(iii) any other currency which is freely transferable and convertible into
Dollars, in which deposits are not customarily offered to banks in the London
interbank market and which the Borrower designates as a Designated Currency
hereunder by notice in writing to the Banks through the Agent; provided that any
--------
notice given pursuant to this clause (iii) shall also propose an appropriate
amendment to this Agreement to provide for the basis for determining the rate to
which Money Market Margins are to be added or subtracted in the relevant Money
Market Quotes and to amend any other relevant provisions hereof as necessary and
that any such notice and proposed amendment shall be effective for all purposes
hereunder on the 20th Domestic Business Day after the date of such notification
by the Agent to each Bank if no Bank has objected thereto to the Agent before
such 20th Domestic Business Day.
"Dollar Amount" of any currency at any date shall mean (i) the amount of
such currency if such currency is Dollars or (ii) the equivalent amount of
Dollars if such currency is any currency other than Dollars, calculated on the
basis of the arithmetical mean of the buy and sell spot rates of exchange of the
Agent for such currency on the London market at the opening of business in
London on the relevant FX Date.
"Dollars" and "$" shall mean lawful money of the United States of America.
4
<PAGE>
"Domestic Business Day" shall mean any day except a Saturday, Sunday or
other day on which commercial banks in New York City or Chicago, Illinois are
authorized or required by law to close.
"Domestic Lending Office" shall mean, as to each Bank, its office, branch
or affiliate specified as its "Domestic Lending Office" below its name on the
signature pages hereof or such other office, branch or affiliate as such Bank
may from time to time specify to the Agent and the Borrower as its Domestic
Lending Office.
"Equivalent Amount" of any currency with respect to any amount of Dollars
at any date shall mean the equivalent in such currency of such amount of
Dollars, calculated on the basis of the arithmetical mean of the buy and sell
spot rates of exchange of the Agent for such other currency at the opening of
business in London on the relevant FX Date.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Group" shall mean the Borrower and all members of a controlled group
of corporations and all trades or business (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414 of the Code.
"Euro-Currency Business Day" shall mean any Domestic Business Day on which
commercial banks are open for international business (including dealings in
Dollar deposits) in London and, where funds are to be paid or made available in
a currency other than Dollars, on which commercial banks are open for domestic
and international business (including dealings in deposits in such currency) in
both London and the place where such funds are to be paid or made available.
"Euro-Currency Lending Office" shall mean, as to each Bank, (i) for loans
denominated in each of Dollars, Deutsche Marks, Dutch guilders, French francs,
Japanese yen and pounds sterling, its office, branch or affiliate specified as
its "Euro-Currency Lending Office" for such currency below its name on the
signature pages hereof (or, if no such office is specified, its Domestic Lending
Office for Base Rate Loans) or such other office, branch or affiliate of such
Bank as it may from time to time specify to the Agent and the Borrower as its
Euro-Currency Lending Office and (ii) for loans denominated in each other Agreed
Currency permitted hereunder from time to time, such office branch or affiliate
of such Bank as it may from time to time specify to the Agent and the Borrower
as its Euro-Currency Lending Office for such other currency (or, if no such
office is specified, its Domestic Lending Office for Base Rate Loans).
"Euro-Currency Loan" shall mean a Loan to be made by a Bank pursuant to
Section 2.01 as a Euro-Currency Loan in accordance with the applicable Notice of
Borrowing.
"Euro-Currency Payment Office" of the Agent shall mean, (i) for each of
Dollars, Deutsche Marks, Dutch guilders, French francs, Japanese yen and pounds
sterling, the office, branch or affiliate of the Agent specified as the "Euro-
Currency Payment Office" for such currency in Schedule
5
<PAGE>
I hereto or such other office, branch, affiliate or correspondent bank of the
Agent as it may from time to time specify to the Borrower and each Bank as its
Euro-Currency Payment Office and, (ii) for each other Designated Currency, such
office, branch, affiliate or correspondent bank of the Agent as it may from time
to time specify to the Borrower and each Bank as its Euro-Currency Payment
Office for such Designated Currency.
"Euro-Currency Reserve Percentage" shall mean with respect to any Bank for
any day that percentage (expressed as a decimal) which is in effect on such day,
as prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the reserve requirement imposed on such Bank in
respect of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Currency Loans and Money Market LIBOR Loans is determined or any category
of extensions of credit or other assets which includes loans by a non-United
States office of such Bank to United States residents).
"Event of Default" shall have the meaning assigned to that term in Section
6.01.
"Existing Credit Agreement" shall mean the $300 million Credit Agreement
dated as of November 19, 1993 (as amended by Amendment No. 1 dated as of October
14, 1994, and Amendment No. 2 dated as of April 3, 1996), among the Borrower,
the banks listed on the signature pages thereof and The First National Bank of
Chicago, as agent.
"Facility Fee Percentage" shall mean, with respect to each payment of the
facility fee pursuant to Section 2.08(a), the percentage rate per annum set
forth below opposite the ratings on the Borrower's senior unsecured long-term
public debt issued by both Moody's Investor Service, Inc. (or its successor) and
Standard & Poor's Corporation (or its successor) in effect on the applicable
date of determination:
<TABLE>
<CAPTION>
Facility Fee
S & P Rating Moody's Rating Percentage
------------ -------------- -----------
<S> <C> <C>
A+ or higher A1 or higher .060%
A or A- A2 or A3 .070%
BBB+ Baa1 .090%
BBB Baa2 .125%
BBB- Baa3 .150%
Below BBB- Below Baa3 .200%
</TABLE>
For each facility fee payment pursuant to Section 2.08(a), the applicable
Facility Fee Percentage shall be determined as of the Quarterly Date, or
date of termination of the Commitments in their entirety, as the case may
be, which is five Domestic Business Days preceding the date such payment is
due pursuant to Section 2.08(a). In the event of a split rating, the
Borrower shall be entitled to the benefit of the higher rating, unless
either rating is below BBB- or Baa3 (in which case the lower rating shall
control). In the event that a
6
<PAGE>
rating is available from only one rating agency, such rating shall control.
In the event that a rating is not available from either rating agency, the
applicable Facility Fee Percentage shall be .20%.
"Federal Funds Rate" shall mean for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day; provided that (i) if such day is not a Domestic
--------
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on the
next succeeding Domestic Business Day and (ii) if no such rate is so published
on such next succeeding Domestic Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to The First National Bank of Chicago on
such day on such transactions as determined by the Agent.
"Fixed Rate Loans" shall mean Euro-Currency Loans or Money Market Loans
(excluding Money Market LIBOR Loans bearing interest at the Base Rate pursuant
to Section 8.01(a)) or any combination of the foregoing.
"FX Date" shall mean the date on which the Agent's spot rate of exchange
shall be determined for purposes of calculating the Dollar Amount and Equivalent
Amount of any currency at any time. With respect to any calculation of Dollar
Amount or Equivalent Amount as of:
(i) any borrowing date for any type of Borrowing, the relevant FX
Date shall be the latest date by which a Notice of Borrowing is required to
be delivered with respect to such Borrowing (unless the Borrowing is a Base
Rate Borrowing pursuant to Section 2.04(d), 8.01(a), 8.02 or 8.04(b), in
which case the relevant FX Date shall be four Euro-Currency Business Days
before the borrowing date);
(ii) the Termination Date, the relevant FX Date shall be four Euro-
Currency Business Days before the Termination Date;
(iii) any date of prepayment of any Loan which is not also a
borrowing date, the relevant FX Date shall be the date of such prepayment;
(iv) each day as of which the Commitment may be reduced or terminated
pursuant to Section 2.09, the relevant FX Date shall be four Euro-Currency
Business Days before such day; and
(v) each day on which any vote or other action by the Required Banks
or Banks holding a specified proportion of the principal amount of the
Notes is to be taken or to be effective and each other day not specified
above on which the Dollar Amount or Equivalent
7
<PAGE>
Amount is to be determined (including, without limitation, pursuant to
Section 6.01(e) and 6.01(i)), the relevant FX Date shall be such day.
"GAAP" means generally accepted accounting principles set forth from time
to time in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.
"Guarantee" by any Person shall mean any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in any
other manner the obligee of such Debt or other obligation of the payment thereof
or to protect such obligee against loss in respect thereof (in whole or in
part); provided that the term "Guarantee" shall not include endorsements for
--------
collection or deposit in the ordinary course of business. The term "guarantee"
used as a verb shall have a corresponding meaning.
"Interest Period" shall mean: (1) with respect to each Euro-Currency
Borrowing, the period commencing on the date of such Borrowing and ending 1, 2,
3 or 6 months thereafter (or 9 or 12 months thereafter if all Reference Banks
agree to such period), as the Borrower may elect in the applicable Notice of
Borrowing; provided that:
--------
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Currency Business Day shall be extended to the next succeeding
Euro-Currency Business Day unless such Euro-Currency Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Euro-Currency Business Day;
(b) any Interest Period which begins on the last Euro-Currency
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Euro-Currency Business Day of a
calendar month; and
(c) the Borrower may not elect any Interest Period which would end
subsequent to the Termination Date;
(2) with respect to each Base Rate Borrowing, the period commencing on the
date of such Borrowing and ending 30 days thereafter; provided that:
--------
8
<PAGE>
(a) any Interest Period (other than an Interest Period determined
pursuant to clause (b) below) which would otherwise end on a day which is
not a Euro-Currency Business Day shall be extended to the next succeeding
Euro-Currency Business Day; and
(b) any Interest Period which begins before the Termination Date and
would otherwise end after the Termination Date shall end on the Termination
Date;
(3) with respect to each Money Market LIBOR Borrowing, the period
commencing on the date of such Borrowing and ending such whole number of months
thereafter as the Borrower may elect in accordance with Section 2.03; provided
--------
that:
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Currency Business Day shall be extended to the next succeeding
Euro-Currency Business Day unless such Euro-Currency Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Euro-Currency Business Day;
(b) any Interest Period which begins on the last Euro-Currency
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Euro-Currency Business Day of a
calendar month; and
(c) the Borrower may not elect any Interest Period which would end
subsequent to the Termination Date;
(4) with respect to each Money Market Rate Borrowing, the period
commencing on the date of such Borrowing and ending on such day (not earlier
than the 7th day) thereafter, as the Borrower may elect in accordance with
Section 2.03; provided that:
--------
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Currency Business Day shall be extended to the next succeeding
Euro-Currency Business Day; and
(b) the Borrower may not elect any Interest Period which would end
subsequent to the Termination Date.
"Internally-Funded Subsidiary" shall mean any Wholly-Owned Consolidated
Subsidiary (a) all of the shares of capital stock or other ownership interests
of which (except directors' qualifying shares) are owned by the Borrower or
another Internally-Funded Subsidiary, (b) which is a non-operating Subsidiary,
and (c) that does not at any time (including, without limitation, at the time
of, or at any time subsequent to, any transfer of the Borrower's assets to such
Subsidiary pursuant to clause (B) of the third proviso to Section 5.04) have any
Debt owing to any Person other than the Borrower or another Internally-Funded
Subsidiary.
9
<PAGE>
"LIBOR Auction" shall mean a solicitation of Money Market Quotes setting
forth Money Market Margins based on the London Interbank Offered Rate pursuant
to Section 2.03.
"Lien" shall mean, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, the Borrower or any Subsidiary shall be
deemed to own subject to a Lien any asset which it has acquired or holds subject
to the interest of a vender or lessor under any conditional sale agreement,
capital lease or other title retention agreement relating to such asset.
"Loan" shall mean a Base Rate Loan or a Euro-Currency Loan or a Money
Market Loan and "Loans" means Base Rate Loans or Euro-Currency Loans or Money
Market Loans or any combination of the foregoing.
"London Interbank Offered Rate" shall have the meaning set forth in Section
2.07(b).
"Material Subsidiary" shall mean, as of any date of determination, a
Subsidiary which meets the definition of a "significant subsidiary" contained as
of the date of this Agreement in Regulation S-X of the Securities and Exchange
Commission.
"Money Market Lending Office" shall mean, as to each Bank, (i) for Money
Market Loans denominated in Dollars, its Domestic Lending Office for Base Rate
Loans or such other office, branch or affiliate of such Bank as it may from time
to time specify as its Money Market Lending Office by notice to the Borrower and
the Agent and (ii) for Money Market Loans denominated in each other Designated
Currency, such office, branch or affiliate of such Bank as it may from time to
time specify as its Money Market Lending Office for such other Designated
Currency by notice to the Borrower and the Agent (or, if no such office if
specified, its Domestic Lending Office for Base Rate Loans); provided that any
--------
Bank may from time to time by notice to the Borrower and the Agent designate
separate Money Market Lending Offices for each of its Money Market LIBOR Loans
denominated in each Designated Currency and its Money Market Rate Loans in which
case all references herein to the Money Market Lending Office of such Bank shall
be deemed to refer to one or all of such offices, as the context may require.
"Money Market LIBOR Loan" shall mean a Loan to be made by a Bank pursuant
to a LIBOR Auction (including such a Loan bearing interest at the Base Rate
pursuant to Section 8.01(a)).
"Money Market Loan" shall mean a Money Market LIBOR Loan or a Money Market
Rate Loan.
"Money Market Margin" shall have the meaning set forth in Section 2.03(d).
"Money Market Quote" shall mean an offer by a Bank to make a Money Market
Loan in accordance with Section 2.03.
10
<PAGE>
"Money Market Rate" shall have the meaning set forth in Section 2.03(d).
"Money Market Rate Loan" shall mean a Loan to be made by a Bank pursuant to
an Absolute Rate Auction.
"Multiemployer Plan" shall mean at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which any member of
the ERISA Group is then making or accruing an obligation to make contributions
or has within the preceding five plan years made contributions, including for
these purposes any Person which ceased to be a member of the ERISA Group during
such five year period.
"New York Interbank Offered Rate" applicable to any Interest Period for any
Euro-Currency Loan or Money Market LIBOR Loan shall mean the average (rounded
upward, if necessary, to the next higher 1/16 of 1%) of the respective rates per
annum at which deposits in the currency in which such Euro-Currency Loan is
denominated are offered to each of the Reference Banks in the New York interbank
market at approximately 11:00 a.m., New York City time, two Euro-Currency
Business Days before the first day of such Interest Period in an amount
approximately equal to the principal amount of the Euro-Currency Loan of such
Reference Bank to which such Interest Period is to apply and for a period of
time comparable to such Interest Period.
"Notes" means promissory notes of the Borrower, substantially in the form
of Exhibit A hereto, evidencing the obligation of the Borrower to repay the
Loans, and "Note" means any one of such promissory notes issued hereunder.
"Notice of Borrowing" shall mean a Notice of Syndicated Borrowing (as
defined in Section 2.02) or a Notice of Money Market Borrowing (as defined in
Section 2.03(f)) and the "date of a Notice of Borrowing" shall mean the date the
Notice of Borrowing is given to the Agent pursuant to Section 2.02 or 2.03(f),
as the case may be.
"Other Agreement" means Credit Agreement A dated as of July 23, 1997, as it
may be amended, extended, supplemented or otherwise modified, among the
Borrower, the banks listed on the signature pages thereof and The First National
Bank of Chicago, as agent for said banks.
"Parent" shall mean Atlantic Richfield Company, a Delaware corporation, and
its successors.
"Participant" shall have the meaning set forth in Section 9.07(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" shall mean an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
11
<PAGE>
"Plan" shall mean at any time an employee pension benefit plan (other than
a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code and either (i) is
maintained, or contributed to, by a member of the ERISA Group for employees of a
member of the ERISA Group or (ii) has at any time within the preceding five
years been maintained, or contributed to, by any Person which was at such time a
member of the ERISA Group for employees of any Person which was at such time a
member of the ERISA Group.
"Quarterly Date" shall mean the last day of each March, June, September and
December, commencing September 30, 1997; provided that, if any such date is not
--------
a Euro-Currency Business Day, the relevant Quarterly Date shall be the next
succeeding Euro-Currency Business Day.
"Reference Banks" shall mean the principal London offices of Bank of
America National Trust and Savings Association, The Chase Manhattan Bank and The
First National Bank of Chicago, and each such other bank as may be appointed
pursuant to Section 9.07(f), and "Reference Bank" shall mean any one of such
Reference Banks.
"Refunding Borrowing" shall mean a Borrowing which, after application of
the proceeds thereof to repay one or more other Borrowings in whole or in part,
results in no net increase in the aggregate principal amount of Loans
outstanding hereunder.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time (including any successor
provision thereto or any other United States law or regulation imposing reserves
on deposits or loans).
"Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time (including any successor
provision thereto).
"Required Banks" shall mean at any time Banks having at least 66-2/3% of
the aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding Notes the Dollar Amount of the aggregate principal amount of
which evidence at least 66-2/3% of the Dollar Amount of the outstanding
aggregate principal amount of the Notes.
"Subsidiary" shall mean any corporation or other entity of which securities
or other ownership interests having ordinary voting power to elect a majority of
the board of directors or other Persons performing similar functions (whether or
not any other class of securities has or might have voting power by reason of
the happening of a contingency) are at the time owned or controlled directly or
indirectly by the Borrower.
"Syndicated Loan" shall mean a Base Rate Loan or a Euro-Currency Loan made
by a Bank pursuant to Section 2.01.
12
<PAGE>
"Syndicated Margin" shall mean, with respect to a Syndicated Loan
outstanding on the applicable date of determination, the applicable Syndicated
Margin set forth below (i) beneath the interest rate option applicable to such
Syndicated Loan and (ii) opposite the ratings on the Borrower's senior unsecured
long-term public debt issued by both Moody's Investor Service, Inc. (or its
successor) and Standard & Poor's Corporation (or its successor) in effect on
such date of determination:
<TABLE>
<CAPTION>
S & P Rating Moody's Rating Euro-Currency Base Rate
------------ -------------- ------------- ----------
<S> <C> <C> <C>
A+ or higher A1 or higher .115% .000%
A or A- A2 or A3 .130% .000%
BBB+ Baa1 .185% .000%
BBB Baa2 .225% .000%
BBB- Baa3 .300% .000%
Below BBB- Below Baa3 .450% .000%
</TABLE>
The rate of interest applicable to any outstanding Syndicated Loan shall change
simultaneously with, and to the extent that, the applicable Syndicated Margin
changes (as a result of a rating change). In the event of a split rating, the
Borrower shall be entitled to the benefit of the higher rating, unless either
rating is below BBB- or Baa3 (in which case the lower rating shall control). In
the event that a rating is available from only one rating agency, such rating
shall control. In the event that a rating is not available from either rating
agency, the applicable Syndicated Margin shall be that which would be applicable
in the case of a rating below BBB- or Baa3.
"Taxes" shall mean any present or future taxes, duties, withholdings or
other charges levied or imposed by any government or any political subdivision
or taxing authority thereof, excluding any of the foregoing imposed on or
calculated by reference to the net income of any Bank.
"Tax Sharing Agreement" shall mean the Amended and Restated Tax Sharing
Agreement dated as of January 1, 1995, as amended, between the Parent and the
Borrower.
"Termination Date" shall mean July 23, 2002 or, if such day is not a Euro-
Currency Business Day, the next preceding Euro-Currency Business Day.
"Unfunded Liabilities" shall mean, with respect to any Plan at any time,
the amount (if any) by which (i) the present value of all benefits under such
Plan exceeds (ii) the fair market value of all Plan assets allocable to such
benefits (excluding any accrued but unpaid contributions), all determined as of
the then most recent valuation date for such Plan, but only to the extent that
such excess represents a potential liability of a member of the ERISA Group to
the PBGC or any other Person under Title IV of ERISA.
13
<PAGE>
"Wholly-Owned Consolidated Subsidiary" shall mean any Consolidated
Subsidiary all of the shares of capital stock or other ownership interests of
which (except directors' qualifying shares) are at the time directly or
indirectly owned by the Borrower.
SECTION 1.02. Accounting Terms and Determinations. Unless otherwise
-----------------------------------
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with GAAP as
in effect from time to time, applied on a basis consistent (except for changes
concurred in by the Borrower's independent public accountants) with the most
recent audited consolidated financial statements of the Borrower and its
Consolidated Subsidiaries delivered to the Banks; provided that if the Borrower
--------
notifies the Agent that the Borrower wishes to amend Section 5.05 to eliminate
or to take into account the effect of any change in GAAP on the operation of
such covenant (or if the Agent notifies the Borrower that the Required Banks
wish to amend Section 5.05 for such purpose), then the Borrower's compliance
with such covenant shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such covenant is amended in a manner satisfactory to
the Borrower and the Required Banks.
SECTION 1.03. Introduction of Euro. For the avoidance of doubt, the
--------------------
parties hereto affirm and agree that neither the fixation of the conversion rate
of any Designated Currency of a country that is a member of the European Union
against the Euro as a single currency, in accordance with the Treaty
Establishing the European Economic Community, as amended by the Treaty on the
European Union (the Maastricht Treaty), nor the conversion of any Loans or other
obligations under this Agreement from a Designated Currency of a country that is
a member of the European Union into Euros, shall require the early termination
of this Agreement or the prepayment of any amount due under this Agreement or
create any liability of one party to another party for any direct or
consequential loss arising from any of such events. As of the date that any
such Designated Currency is no longer the lawful currency of its respective
country, all payment obligations under this Agreement that would otherwise be in
such Designated Currency shall thereafter by satisfied in Euros.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend. From the date hereof to but not
-------------------
including the Termination Date, each Bank severally agrees, on the terms and
conditions set forth in this Agreement, to lend to the Borrower pursuant to this
Section 2.01 from time to time amounts such that, upon giving effect to each
such Borrowing: (i) the then aggregate outstanding principal Dollar Amount of
all Syndicated Loans made by such Bank to the Borrower shall not exceed the
amount of such Bank's Commitment then in effect and (ii) the then aggregate
outstanding principal Dollar Amount of all Syndicated Loans and all Money Market
Loans made by the Banks to the Borrower
14
<PAGE>
shall not exceed the aggregate amount of the Commitments then in effect. Each
Borrowing under this Section 2.01 shall be in an aggregate principal amount of
$10,000,000 (or the Approximate Equivalent Amount thereof) or a larger multiple
of $1,000,000 (or the Approximate Equivalent Amount thereof) (except that any
such Borrowing may be in the aggregate amount of the unused Commitments or the
Equivalent Amount thereof) and shall be made from the several Banks ratably in
proportion to their respective Commitments. Within the foregoing limits, the
Borrower may borrow under this Section 2.01, repay, or to the extent permitted
by Section 2.11, prepay Loans and reborrow under this Section 2.01 at any time
prior to the Termination Date. Subject to the preceding provisions of this
Section 2.01, each Bank severally agrees to make Euro-Currency Loans in the
Agreed Currencies.
SECTION 2.02. Notice of Syndicated Borrowings. The Borrower shall give
-------------------------------
the Agent notice (a "Notice of Syndicated Borrowing") not later than 10:00 a.m.,
Chicago time, on (x) the Domestic Business Day next preceding each Base Rate
Borrowing, (y) in the case of a Euro-Currency Borrowing to be made in Dollars,
the third Euro-Currency Business Day before each such Euro-Currency Borrowing
(or the fourth Euro-Currency Business Day before any such Euro-Currency
Borrowing for which a 9 or 12 month Interest Period is requested) and (z) in the
case of a Euro-Currency Borrowing to be made in an Agreed Currency other than
Dollars, the fourth Euro-Currency Business Day before each such Euro-Currency
Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Domestic Business
Day in the case of a Base Rate Borrowing or a Euro-Currency Business Day in
the case of a Euro-Currency Borrowing;
(ii) the aggregate amount of such Borrowing; provided that upon
--------
giving effect to such Borrowing, the then aggregate outstanding principal
Dollar Amount of all Syndicated Loans and all Money Market Loans shall not
exceed the aggregate amount of the Commitments then in effect;
(iii) whether the Loans comprising such Borrowing are to be Base Rate
Loans or Euro-Currency Loans and, if Euro-Currency Loans, the currency
thereof in accordance with the last sentence of Section 2.01; and
(iv) in the case of a Euro-Currency Borrowing, the duration of the
Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period and provided that deposits in the currency of
such Borrowing are being offered for such Interest Period to the Reference
Banks in the London interbank market.
Notwithstanding the preceding provisions of this Section 2.02, if, by 10:00
a.m., Chicago time, on the Domestic Business Day next preceding the last day of
the Interest Period applicable to any outstanding Syndicated Loan, the Borrower
shall not have either (i) given a Notice of Syndicated Borrowing to refinance
such Syndicated Loan, (ii) requested offers for Money Market Loans pursuant to
Section 2.03(b) to refinance such Syndicated Loan or (iii) given notice of the
Borrower's
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<PAGE>
election to prepay such Syndicated Loan pursuant to Section 2.11 or to repay
such Syndicated Loan pursuant to Section 2.12, then the Borrower shall be deemed
to have given Notice of Syndicated Borrowing for a Refunding Borrowing comprised
of a Base Rate Loan in Dollars to be made on the last day of such Interest
Period in a principal amount equal to the outstanding principal Dollar Amount of
such Syndicated Loan, the making of such Refunding Borrowing to be subject to
each of the conditions precedent set forth in clauses (ii), (iii) and (iv) of
Section 3.02.
SECTION 2.03. Money Market Borrowings. (a) In addition to Syndicated
-----------------------
Borrowings pursuant to Section 2.01, the Borrower may, as set forth in this
Section, request the Banks at any time prior to the Termination Date (but not
during any period when the Borrower's senior unsecured long-term public debt is
rated either below Baa3 by Moody's Investor Service, Inc. (or its successor) or
below BBB- by Standard & Poor's Corporation (or its successor)) to make offers
to make Money Market Loans to the Borrower. The Banks may, but shall have no
obligation to, make such offers and the Borrower may, but shall have no
obligation to, accept any such offers in the manner set forth in this Section.
(b) When the Borrower wishes to request offers to make Money Market Loans
under this Section, it shall transmit to the Agent by telex or facsimile
transmission a Money Market Quote Request substantially in the form of Exhibit B
hereto so as to be received no later than (x) 3:00 p.m., London time, on the
fifth Euro-Currency Business Day prior to the date of Borrowing proposed
therein, in the case of a LIBOR Auction in a Designated Currency other than
Dollars, (y) 10:00 a.m., Chicago time, on the fifth Euro-Currency Business Day
prior to the date of Borrowing proposed therein, in the case of a LIBOR Auction
in Dollars or (z) 9:00 a.m., Chicago time, on the Domestic Business Day next
preceding the date of Borrowing proposed therein, in the case of an Absolute
Rate Auction (or, in any such case, such other time and date as the Borrower and
the Agent shall have mutually agreed and shall have notified the Banks of not
later than the date of the Money Market Quote Request for the first LIBOR
Auction or Absolute Rate Auction for which such change is to be effective),
specifying:
(i) the proposed date of Borrowing, which shall be a Euro-Currency
Business Day in the case of a LIBOR Auction or a Domestic Business Day in
the case of an Absolute Rate Auction;
(ii) the proposed currency of such Borrowing, which shall be a
Designated Currency in the case of a LIBOR Auction or Dollars in the case
of an Absolute Rate Auction;
(iii) the aggregate amount of such Borrowing, which shall be at least
$10,000,000 (or the Approximate Equivalent Amount thereof) or a larger
multiple of $1,000,000 (or the Approximate Equivalent Amount thereof);
provided that upon giving effect to such Borrowing, the then aggregate
--------
outstanding principal Dollar Amount of all Syndicated Loans and all Money
Market Loans shall not exceed the aggregate amount of the Commitments then
in effect;
16
<PAGE>
(iv) the duration of the Interest Period applicable thereto, subject
to the provisions of the definition of Interest Period; and
(v) whether the Money Market Quotes requested are to set forth a
Money Market Margin or a Money Market Rate.
The Borrower may request offers to make Money Market Loans for more than one
Interest Period but not more than one currency in a single Money Market Quote
Request. No Money Market Quote Request shall be given within five Euro-Currency
Business Days (or such other number of days as the Borrower and the Agent may
agree) of any other Money Market Quote Request (under and as defined in either
this Agreement or the Other Agreement).
(c) Promptly upon receipt of a Money Market Quote Request, the Agent shall
send to the Banks by telex or facsimile transmission an Invitation for Money
Market Quotes substantially in the form of Exhibit C hereto, which shall
constitute an invitation by the Borrower to each Bank to submit Money Market
Quotes offering to make the Money Market Loans to which such Money Market Quote
Request relates in accordance with this Section.
(d)(i) Each Bank may submit a Money Market Quote containing an offer or
offers to make Money Market Loans in response to any Invitation for Money Market
Quotes. Each Money Market Quote must comply with the requirements of this
subsection and must be submitted to the Agent by telex or facsimile transmission
at its offices specified in or pursuant to Section 9.01 not later than (x) 3:00
p.m., London time, on the fourth Euro-Currency Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction in a Designated
Currency other than Dollars, (y) 1:00 p.m., Chicago time, on the fourth Euro-
Currency Business Day prior to the proposed date of Borrowing, in the case of a
LIBOR Auction in Dollars, or (z) 9:00 a.m., Chicago time, on the proposed date
of Borrowing, in the case of an Absolute Rate Auction (or, in any such case,
such other time and date as the Borrower and the Agent shall have mutually
agreed and shall have notified the Banks of not later than the date of the Money
Market Quote Request for the first LIBOR Auction or Absolute Rate Auction for
which such change is to be effective); provided that Money Market Quotes
--------
submitted by the Agent (or any Affiliate of the Agent) in the capacity of a Bank
may be submitted, and may only be submitted, if the Agent or such affiliate
notifies the Borrower of the terms of the offer or offers contained therein not
later than (A) 2:00 p.m., London time, on the fourth Euro-Currency Business Day
prior to the proposed date of Borrowing, in the case of a LIBOR Auction in a
Designated Currency other than Dollars, (B) noon, Chicago time, on the fourth
Euro-Currency Business Day prior to the proposed date of Borrowing, in the case
of a LIBOR Auction in Dollars, or (C) 8:45 a.m., Chicago time, on the proposed
date of Borrowing, in the case of an Absolute Rate Auction. Subject to Articles
III and VI, any Money Market Quote so made shall be irrevocable except with the
written consent of the Agent given on the instructions of the Borrower.
(ii) Each Money Market Quote shall be in substantially the form of Exhibit
D hereto and shall in any case specify:
17
<PAGE>
(A) the proposed date of Borrowing and, in the case of a LIBOR
Auction, the proposed currency of such Borrowing;
(B) the principal amount of each Money Market Loan for which each
such offer is being made, (w) the Dollar Amount of which principal amount
may be greater or less than the Commitment of the quoting Bank, (x) which
principal amount must be $1,000,000 (or the Approximate Equivalent Amount
thereof) or a larger multiple of $1,000,000 (or the Approximate Equivalent
Amount thereof), (y) which principal amount may not exceed in the aggregate
with the other Money Market Loans included in such offer the principal
amount of Money Market Loans for which offers were requested and (z) which
principal amount may be subject to an aggregate limitation as to the
maximum principal amount of Money Market Loans for which offers being made
by such quoting Bank may be accepted;
(C) the duration of the Interest Period applicable to each Money
Market Loan for which each such offer is being made, subject to the
provisions of the definition of Interest Period;
(D) in the case of a LIBOR Auction, the margin above or below the
applicable London Interbank Offered Rate (the "Money Market Margin")
offered for each such Money Market Loan, expressed as a percentage (rounded
to the nearest 1/10,000th of 1%) to be added to or subtracted from such
base rate;
(E) in the case of an Absolute Rate Auction, the rate of interest per
annum (rounded to the nearest 1/10,000th of 1%) (the "Money Market Rate")
offered for each such Money Market Loan; and
(F) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the quoting
Bank with respect to each Interest Period specified in the related Invitation
for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded that:
(A) is not substantially in the form of Exhibit D hereto or does not
specify all of the information required by subsection (d)(ii) of this
Section;
(B) contains qualifying, conditional or similar language;
(C) proposes terms other than or in addition to those set forth in
the applicable Invitation for Money Market Quotes; or
(D) arrives after the time set forth in subsection (d)(i) of this
Section.
18
<PAGE>
(e) The Agent shall promptly notify the Borrower of the terms (i) of any
Money Market Quote submitted by a Bank that is in accordance with subsection (d)
of this Section and (ii) of any subsequent Money Market Quote that amends,
modifies or is otherwise inconsistent with a previous Money Market Quote
submitted by such Bank with respect to the same Money Market Quote Request;
provided that any such subsequent Money Market Quote shall be disregarded by the
- --------
Agent unless such subsequent Money Market Quote is submitted solely to correct a
manifest error in such former Money Market Quote. The Agent's notice to the
Borrower shall specify (x) the aggregate principal amount and currency of Money
Market Loans for which offers have been received for each Interest Period
specified in the related Money Market Quote Request, (y) the respective
principal amounts and Money Market Margins or Money Market Rates, as the case
may be, so offered and (z) if applicable, limitations on the aggregate principal
amount of Money Market Loans for which offers in any single Money Market Quote
may be accepted.
(f) Not later than (x) 5:00 p.m., London time, on the fourth Euro-Currency
business Day prior to the proposed date of Borrowing, in the case of a LIBOR
Auction in a Designated Currency other than Dollars, (y) 10:00 a.m., Chicago
time, on the third Euro-Currency Business Day prior to the proposed date of
Borrowing, in the case of a LIBOR Auction in Dollars, or (z) 10:00 a.m., Chicago
time, on the proposed date of Borrowing, in the case of an Absolute Rate Auction
(or, in any such case, such other time and date as the Borrower and the Agent
shall have mutually agreed upon and shall have notified the Banks of not later
than the date of the Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be effective), the Borrower
shall notify the Agent of its acceptance or non-acceptance of the offers so
notified to it pursuant to subsection (e) of this Section. In the case of
acceptance, such notice (a "Notice of Money Market Borrowing") shall specify the
aggregate principal amount of offers for each Interest Period that are accepted.
The Borrower may accept any Money Market Quote in whole or in part; provided
--------
that:
(i) the aggregate principal amount of each Money Market Borrowing
may not exceed the applicable amount set forth in the related Money Market
Quote Request;
(ii) the principal amount of each Money Market Borrowing must be at
least $10,000,000 (or the Approximate Equivalent Amount thereof) or a
larger multiple of $1,000,000 (or the Approximate Equivalent Amount
thereof); provided that upon giving effect to such Borrowing, the then
--------
aggregate outstanding principal Dollar Amount of all Syndicated Loans and
all Money Market Loans shall not exceed the aggregate amount of the
Commitments then in effect;
(iii) acceptance of offers for each Interest Period may only be made
on the basis of ascending Money Market Margins or Money Market Rates, as
the case may be; and
(iv) the Borrower may not accept any offer that is described in
subsection (d)(iii) of this Section or that otherwise fails to comply with
the requirements of this Agreement.
19
<PAGE>
(g) If offers are made by two or more Banks with the same Money Market
Margins or Money Market Rates, as the case may be, for a greater aggregate
principal amount of Money Market Loans than can be accepted for the related
Interest Period (after giving effect to the acceptance of all lower Money Market
Margins or Money Market Rates, as the case may be, properly offered for such
Interest Period), the principal amount of Money Market Loans which can be
accepted shall be allocated by the Agent among such Banks as nearly as possible
(in such multiples, not greater than $1,000,000 (or the Approximate Equivalent
Amount thereof), as the Agent may deem appropriate) in proportion to the
aggregate principal amount of such offers. Determinations by the Agent of the
amounts of Money Market Loans by each Bank shall be conclusive in the absence of
manifest error.
SECTION 2.04. Notice to Banks; Funding of Loans. (a) Upon receipt of a
---------------------------------
Notice of Borrowing, the Agent shall promptly notify each Bank of the contents
thereof and of such Bank's ratable share (if any) of such Borrowing and such
Notice of Borrowing shall not thereafter be revocable by the Borrower except
pursuant to subsection (d) of this Section or Section 8.01(a).
(b) On the date of each Borrowing, each Bank participating therein shall
(except as provided in subsection (c) of this Section) make available its
ratable share of such Borrowing, (i) if such Borrowing is denominated in
Dollars, not later than 12:00 noon, Chicago time, in Federal or other funds
immediately available to the Agent, in Chicago, Illinois at its address
specified in or pursuant to Section 10.01 and, (ii) if such Borrowing is
denominated in another currency, not later than 12:00 noon, local time in the
city of the Agent's Euro-Currency Payment Office for such currency, in such
funds as may then be customary for the settlement of international transactions
in such currency in the city of and at the address of the Agent's Euro-Currency
Payment Office for such currency. Unless the Agent determines that any
applicable condition specified in Article III has not been satisfied, the Agent
will make the funds so received from the Banks available to the Borrower at the
Agent's aforesaid address.
(c) If any Bank makes a new Loan hereunder on the date on which the
Borrower is to repay all or any part of an outstanding Loan from such Bank,
which outstanding Loan is denominated in the currency of such new Loan, such
Bank shall apply the proceeds of its new Loan to make such repayment and only an
amount equal to the difference (if any) between the amount being borrowed and
the principal amount being repaid shall be made available by such Bank to the
Agent as provided in subsection (b) of this Section or remitted by the Borrower
to the Agent as provided in Section 2.12, as the case may be.
(d) Notwithstanding the satisfaction of all conditions referred to in
Section 2.01, 2.02 or 2.03(b) with respect to any Borrowing in any currency
other than Dollars, if there shall occur on or prior to the date of such
Borrowing any change in national or international financial, political or
economic conditions or currency exchange rates or exchange controls which would
in the opinion of the Agent or the Required Banks make it impracticable for the
Euro-Currency Loans or Money Market LIBOR Loans comprising such Borrowing to be
denominated in the currency specified by the Borrower, then the Agent shall
forthwith give notice thereof to the Borrower and the Banks, and such Loans
shall not be denominated in such currency but shall be made on the date of such
20
<PAGE>
Borrowing in Dollars, in an aggregate principal amount equal to the Dollar
Amount of the aggregate principal amount specified in the related Notice of
Borrowing, as Base Rate Loans, unless the Borrower notifies the Agent at least
one Domestic Business Day before such date that (i) it elects not to borrow on
such date or (ii) it elects to borrow on such date in a different Agreed
Currency or Designated Currency, as the case may be, in which the denomination
of such Loans would in the opinion of the Agent and the Required Banks be
practicable and in an aggregate principal amount equal to the Dollar Amount of
the aggregate principal amount specified in the related Notice of Borrowing.
SECTION 2.05. Notes. (a) The Loans of each Bank to the Borrower shall be
-----
evidenced by a single Note of the Borrower payable to the order of such Bank for
the account of its Applicable Lending Office in an amount equal to the aggregate
unpaid principal amount of such Bank's Loans to the Borrower.
(b) Each Bank may, by notice to the Borrower and the Agent (to be given
not later than two Domestic Business Days prior to the first Borrowing) request
that its Loans of a particular type be evidenced by a separate Note in an amount
equal to the aggregate unpaid principal amount of such Loans. Each such Note
shall be in substantially the form of Exhibit A hereto with appropriate
modifications to reflect the fact that it evidences solely Loans of the relevant
type. Each reference in this Agreement to a "Note" or the "Notes" of such Bank
shall be deemed to refer to and include any or all of such Notes, as the context
may require.
(c) Upon receipt of each Bank's Note(s) pursuant to Section 3.01(vi), the
Agent shall mail such Note(s) to such Bank. Each Bank shall record, and prior
to any transfer of its Note(s) shall endorse on the schedules forming a part
thereof appropriate notations to evidence, the date, currency, amount and
maturity of each Loan made by it to the Borrower and the date and amount of each
payment of principal made by the Borrower with respect thereto; provided that
--------
the failure of any Bank to make any such recordation or endorsement shall not
affect the obligations of the Borrower hereunder or under the Notes. Each Bank
is hereby irrevocably authorized by the Borrower so to endorse the Notes and to
attach to and make a part of any such Note a continuation of any such schedule
as and when required.
SECTION 2.06. Maturity of Loans. Each Loan included in any Borrowing
-----------------
shall mature, and the principal amount thereof shall be due and payable, on the
last day of the Interest Period applicable to such Borrowing.
SECTION 2.07. Interest Rates. (a) Each Base Rate Loan shall bear interest
--------------
on the outstanding principal amount thereof, for each day from the date such
Loan is made until it becomes due at a rate per annum equal to the Base Rate for
such day. Such interest shall be payable for each Interest Period on the last
day thereof. Any overdue principal of and, to the extent permitted by law,
overdue interest on any Base Rate Loan shall bear interest, payable on demand,
for each day until paid at a rate per annum equal to the sum of 1% plus the rate
otherwise applicable to Base Rate Loans for such day.
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(b) Each Euro-Currency Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a rate
per annum equal to the sum of the applicable Syndicated Margin plus the
applicable London Interbank Offered Rate. Such interest shall be payable for
each Interest Period on the last day thereof and, if such Interest Period is
longer than three months, at intervals of three months after the first day
thereof.
The "London Interbank Offered Rate" applicable to any Interest Period for
any Euro-Currency Loan or Money Market LIBOR Loan shall mean the average
(rounded upward, if necessary, to the next higher 1/16 of 1%) of the respective
rates per annum at which deposits in the currency in which such Euro-Currency
Loan or Money Market LIBOR Loan is denominated are offered to each of the
Reference Banks in the London interbank market at approximately 11:00 a.m.,
London time, two Euro-Currency Business Days before the first day of such
Interest Period, in an amount approximately equal to (i) the principal amount of
the Euro-Currency Loan or Money Market LIBOR Loan of such Reference Bank to
which such Interest Period is to apply or (ii) if such Reference Bank is not
submitting a Money Market Quote for such Money Market LIBOR Loan, $10,000,000
(or the Approximate Equivalent Amount thereof), and for a period of time
comparable to such Interest Period; provided that (i) for Euro-Currency Loans
--------
denominated in pounds sterling the respective rates per annum at which deposits
in pounds sterling are offered to each of the Reference Banks shall be the rate
for euro-sterling deposits not domestic sterling deposits and (ii) for Money
Market LIBOR Loans denominated in pounds sterling the respective rates per annum
at which deposits in pounds sterling are offered to each of the Reference Banks
shall be the rates for euro-sterling or domestic sterling deposits as specified
by the Borrower in the relevant Money Market Quote Request.
(c) Any overdue principal of and, to the extent permitted by law, overdue
interest on any Euro-Currency Loan shall bear interest, payable on demand, for
each day from and including the date payment thereof was due to but excluding
the date of actual payment, at a rate per annum equal to the sum of 1% plus the
applicable Syndicated Margin plus the average (rounded upward, if necessary, to
the next higher 1/16 of 1%) of the respective rates per annum at which one day
(or, if such amount due remains unpaid more than three Euro-Currency Business
Days, then for such other period of time not longer than three months as the
Agent may elect) deposits in the relevant currency in an amount approximately
equal to such overdue payment due to each of the Reference Banks are offered to
such Reference Bank in the London interbank market for the applicable period
determined as provided above (or, if the circumstances described in clause (a)
or (b) of Section 8.01 shall exist, at a rate per annum equal to the sum of (i)
if such Euro-Currency Loan is denominated in Dollars, 1% plus the rate
applicable to Base Rate Loans for such day and (ii) if such Euro-Currency Loan
is denominated in any other currency, 1% plus the cost to such Bank of funding
or maintaining such Euro-Currency Loan). The certificate of such Bank as to the
cost of funding or maintaining such Euro-Currency Loan shall be conclusive
absent manifest error.
(d) Subject to Section 8.01(a)(1), each Money Market LIBOR Loan shall bear
interest on the outstanding principal amount thereof, for the Interest Period
applicable thereto, at a rate per annum
22
<PAGE>
equal to the sum of the London Interbank Offered Rate for such Interest Period
(determined in accordance with subsection (c) of this Section as if each
Reference Bank were to participate in the related Money Market Borrowing ratably
in proportion to its Commitment) plus (or minus) the Money Market Margin quoted
by the Bank making such Loan in accordance with Section 2.03. Each Money Market
Rate Loan shall bear interest on the outstanding principal amount thereof, for
the Interest Period applicable thereto, at a rate per annum equal to the Money
Market Rate quoted by the Bank making such Loan in accordance with Section 2.03.
Such interest shall be payable for each Interest Period on the last day thereof.
Any overdue principal of and, to the extent permitted by law, overdue interest
on any Money Market Loan shall bear interest, payable on demand, for each day
until paid at a rate per annum equal to the sum of (i) if such Money Market Loan
is denominated in Dollars, 1% plus the rate applicable to Base Rate Loans for
such day and (ii) if such Money Market Loan is denominated in any other
currency, 1% plus the cost to such Bank of funding or maintaining such Money
Market Loan. The certificate of such Bank certifying the cost of funding or
maintaining such Money Market Loan shall be conclusive absent manifest error.
(e) The Agent shall determine each interest rate applicable to the Loans
hereunder. The Agent shall give prompt notice to the Borrower and the
participating Banks by telex or facsimile transmission of each rate of interest
so determined, and its determination thereof shall be conclusive in the absence
of manifest error.
(f) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Agent as contemplated by this Section. If any Reference Bank
does not furnish a timely quotation, the Agent shall determine the relevant
interest rate on the basis of the quotation or quotations furnished by the
remaining Reference Bank or Banks or, if none of such quotations is available on
a timely basis, the provisions of Section 8.01 shall apply.
SECTION 2.08. Fees. (a) The Borrower shall pay to the Agent for the
----
account of the Banks ratably in proportion to their Commitments a facility fee
at a rate per annum equal to the applicable Facility Fee Percentage on the daily
average amount of the Commitments (without regard to the outstanding principal
amount of the Loans). Such facility fee shall accrue from and including July
23, 1997 to but excluding the Termination Date.
(b) The Borrower shall pay to each of the Agent and the Arranger for its
own account fees in the amounts and at the time previously agreed upon between
the Borrower, the Agent and the Arranger.
(c) Accrued fees under subsection (a) of this Section shall be payable
quarterly in arrears on the fifth Domestic Business Day after each Quarterly
Date for the quarter ending on such Quarterly Date or, if earlier, the fifth
Domestic Business Day after the date of termination of the Commitments in their
entirety.
SECTION 2.09. Optional Termination or Reduction of Commitments.
------------------------------------------------
23
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(a) The Borrower may, upon at least two Domestic Business Days' irrevocable
notice to the Agent, terminate at any time, or reduce from time to time by an
aggregate amount of $10,000,000 or a larger multiple of $1,000,000 the aggregate
amount of the Commitments in excess of the Dollar Amount of the aggregate
outstanding principal amount of the Loans.
(b) In the absence of a Default that has occurred and is continuing and in
the event that (i) any Bank claims indemnification pursuant Section 2.16(a) or
Section 2.16(b), (ii) the Borrower is required to make an additional payment to
any Bank pursuant to Section 2.16(a), or (iii) any Bank makes a claim for
increased costs relating to taxes under Section 8.03, the Borrower shall have
the right to repay all of such Bank's outstanding Loans and to terminate such
Bank's Commitment hereunder upon ten days prior written notice to the Agent and
such Bank. On the day on which any Bank's Commitment is terminated pursuant to
this Section 2.09(b), the Borrower shall pay all principal, accrued interest,
fees and other amounts owing to such Bank hereunder (including, without
limitation, any amounts owing under Sections 2.08, 2.13, 2.16, and 8.03).
SECTION 2.10. Mandatory Termination of Commitments. The Commitments shall
------------------------------------
terminate on the Termination Date, and any Loans outstanding on the Termination
Date shall be due and payable on the Termination Date (together with accrued
interest thereon).
SECTION 2.11. Optional Prepayments. (a) The Borrower may prepay any Base
--------------------
Rate Borrowing (or any Money Market Borrowing bearing interest at the Base Rate
pursuant to Section 8.01(a)) upon at least one Domestic Business Day's notice to
the Agent or, subject to Section 2.13, prepay any Euro-Currency Borrowing upon
at least two Euro-Currency Business Days' notice to the Agent, in any such case
in whole at any time, or from time to time in part in amounts aggregating
$10,000,000 (or the Approximate Equivalent Amount thereof) or any larger
multiple of $1,000,000 (or the Approximate Equivalent Amount thereof), by paying
the principal amount to be prepaid together with accrued interest thereon to the
date of prepayment. Each such optional prepayment shall be applied to prepay
ratably the Loans of the several Banks included in such Borrowing. The Borrower
may not prepay all or any portion of the principal amount of any Money Market
Loan (other than a Money Market LIBOR Loan bearing interest at the Base Rate
pursuant to Section 8.01(a)) prior to the maturity thereof.
(b) Upon receipt of a notice of prepayment pursuant to this Section, the
Agent shall promptly notify each Bank of the contents thereof and of such Bank's
ratable share (if any) of such prepayment and such notice shall not thereafter
be revocable by the Borrower.
SECTION 2.12. General Provisions as to Payments. (a) All payments to be
---------------------------------
made by the Borrower hereunder or under the Notes in Dollars shall be made not
later than 12:00 noon, Chicago time, on the date when due, in Federal or other
funds immediately available in Chicago, Illinois, to the Agent at its address
referred to in Section 9.01. The Agent will promptly distribute to each Bank
its ratable share of each such payment received by the Agent for the account of
the Banks.
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<PAGE>
(b) Each Borrowing shall be repaid or prepaid in the currency in which it
was made in the amount borrowed and interest payable thereon shall be paid in
such currency. All payments to be made by the Borrower hereunder or under the
Notes in any currency other than Dollars shall be made in such currency on the
date due in such funds as may then be customary for the settlement of
international transactions in such currency for the account of the Agent, at its
Euro-Currency Payment Office for such currency. The Agent will promptly cause
such payments to be distributed to each Bank in like funds and currency.
Notwithstanding the foregoing provisions of this Section, if, after the making
of any Loan in any currency other than Dollars, currency control or exchange
regulations are imposed in the country which issues such currency with the
result that different types of such currency (the "New Currency") are introduced
and the type of currency in which the Borrowing was made (the "Original
Currency") no longer exists or the Borrower is not able to make payment to the
Agent for the account of the Banks in such Original Currency, then all payments
to be made by the Borrower hereunder or under the Notes in such currency shall
be made in such amount and such type of the New Currency as shall be equivalent
to the amount of such payment otherwise due hereunder or under the Notes in the
Original Currency, it being the intention of the parties hereto that the
Borrower takes all risks of the imposition of any such currency control or
exchange regulations. In addition, notwithstanding the foregoing provisions of
this Section, if, after the making of any Borrowing in any currency other than
Dollars, the Borrower is not able to make payment to the Agent for the account
of the Banks in the type of currency in which such Borrowing was made, then such
Borrowing shall instead be repaid when due in Dollars in a principal amount
equal to the Dollar Amount (as of the date of repayment) of such Borrowing.
(c) Whenever any payment of principal of, or interest on, the Base Rate
Loans or of additional compensation shall be due on a day which is not a
Domestic Business Day, the date for payment thereof shall be extended to the
next succeeding Domestic Business Day. Whenever any payment of principal of, or
interest on, the Euro-Currency Loans shall be due on a day which is not a Euro-
Currency Business Day, the date for payment thereof shall be extended to the
next succeeding Euro-Currency Business Day unless such Euro-Currency Business
Day occurs in another calendar month, in which case the date for payment thereof
shall be the next preceding Euro-Currency Business Day. Whenever any payment of
principal of, or interest on, the Money Market Loans shall be due on a day which
is not a Euro-Currency Business Day, the date for payment thereof shall be
extended to the next succeeding Euro-Currency Business Day. If the date for any
payment of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time.
(d) Unless the Agent shall have been notified by a Bank or the Borrower
(the "Payor") prior to the date on which such Bank is to make payment to the
Agent of the proceeds of a Loan to be made by it hereunder or the Borrower is to
make a payment to the Agent for the account of one or more of the Banks, as the
case may be (each of such payments being herein called a "Required Payment"),
which notice shall be effective upon receipt, that the Payor does not intend to
make the Required Payment to the Agent, the Agent may assume that the Required
Payment has been made and may (but shall not be required to), in reliance upon
such assumption, make the amount thereof available to the intended recipient on
such date and, if the Payor has not in fact made the Required
25
<PAGE>
Payment to the Agent, the recipient of such payment shall, on demand, refund to
the Agent the amount made available to it together with interest thereon in
respect of the period commencing on the date such amount was so made available
by the Agent until the date the Agent recovers such amount at a rate equal to
the Federal Funds Rate for such period, if the recipient is a Bank, and, if the
recipient is the Borrower, the rate which the Borrower would have been obligated
to pay hereunder for the Loans that are the subject of, or are equivalent to,
such payment for such period.
SECTION 2.13. Funding Losses. The Borrower shall pay to the Agent for the
--------------
account of each Bank, upon the request of such Bank through the Agent, such
amount or amounts as shall compensate such Bank for any reasonable loss, cost or
expense incurred by such Bank (or, subject to Section 9.07(b), by an existing or
prospective Participant in the related Loan) as a result of:
(a) any payment or prepayment of a Fixed Rate Loan (pursuant to
Section 2.11 or Article VI or VIII or otherwise) held by such Bank on a
date other than the last day of the Interest Period applicable thereto, or
the end of an applicable period fixed pursuant to Section 2.07(c) or
(b) any failure by the Borrower to borrow a Fixed Rate Loan
(including a failure to borrow due to the occurrence of any event described
in Section 2.04(d)) held or to be held by such Bank on the date for such
Borrowing specified in the relevant Notice of Borrowing under Section 2.02
or 2.03(f), such compensation to be payable in the currency specified in
the certificate referred to below and to include, without limitation, an
amount equal to the excess, if any, of (i) the amount of interest which
would have accrued on the amount so paid or prepaid, or not borrowed, for
the period from the date of such payment or prepayment or failure to borrow
to the last day of such Interest Period (or, in the case of a failure to
borrow, the Interest Period for such Fixed Rate Loan which would have
commenced on the date of such failure to borrow) in each case at the
applicable rate of interest for such Fixed Rate Loan provided for herein
(excluding, however, the Syndicated Margin or any positive Money Market
Margin, as the case may be, included therein) over (ii) the amount of
interest (as reasonably determined by such Bank) which would have accrued
to such Bank on such amount by placing such amount on deposit for a
comparable period with leading banks in the London interbank market or in
the New York or Chicago certificate of deposit market; provided that such
--------
Bank shall have delivered to the Borrower, within 60 days after the date of
such payment or prepayment or failure to borrow, a certificate as to the
amount and currency of such loss or expense, which certificate shall set
forth in reasonable detail the basis for such loss or expense and shall be
conclusive in the absence of manifest error.
SECTION 2.14. Computation of Interest and Fees. Interest based on the
--------------------------------
Base Rate and interest on Borrowings denominated in pounds sterling shall be
computed on the basis of a year of 365 days (or 366 days in a leap year) and
paid for the actual number of days elapsed (including the first day but
excluding the last day). All other interest and fees shall be computed on the
basis of a year of 360 days and paid for the actual number of days elapsed
(including the first day but excluding the last day).
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<PAGE>
SECTION 2.15. Judgment Currency. If for the purposes of obtaining
-----------------
judgment in any court it is necessary to convert a sum due from the Borrower
hereunder or under any of the Notes in the currency expressed to be payable
herein or under the Notes (the "specified currency") into another currency, the
parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which in accordance with normal
banking procedures the Agent could purchase the specified currency with such
other currency at the Agent's main Chicago office on the Euro-Currency Business
Day preceding that on which final, non-appealable judgment is given. The
obligations of the Borrower in respect of any sum due to any Bank or the Agent
hereunder or under any Note shall, notwithstanding any judgment in a currency
other than the specified currency, be discharged only to the extent that on the
Euro-Currency Business Day following receipt by such Bank or the Agent (as the
case may be) of any sum adjudged to be so due in such other currency such Bank
or the Agent (as the case may be) may in accordance with normal, reasonable
banking procedures purchase the specified currency with such other currency. If
the amount of the specified currency so purchased is less than the sum
originally due to such Bank or the Agent, as the case may be, in the specified
currency, the Borrower agrees, to the fullest extent that it may effectively do
so, as a separate obligation and notwithstanding any such judgment, to indemnify
such Bank or the Agent, as the case may be, against such loss, and if the amount
of the specified currency so purchased exceeds (a) the sum originally due to any
Bank or the Agent, as the case may be, in the specified currency and (b) any
amounts shared with other Banks as a result of allocations of such excess as a
disproportionate payment to such Bank under Section 9.11, such Bank or the
Agent, as the case may be, agrees to remit such excess to the Borrower.
SECTION 2.16. Taxes. (a) All payments made by the Borrower in respect of
-----
principal of and interest on its Borrowings and of all other amounts payable by
it under this Agreement are payable without deduction for or on account of any
Taxes. If the Borrower shall be required by law to deduct or withhold any Taxes
from any such amount payable by it hereunder or under any of the Notes to or for
the account of any Bank, (i) such amount shall be increased as may be necessary
so that, after making such deductions or withholdings (including any deductions
or withholdings applicable to additional amounts payable pursuant to this
Section), such Bank receives an amount equal to the amount it would have
received had no such deductions or withholdings been made and (ii) the Borrower
shall make such deductions and withholdings and pay the amount thereof to the
relevant government, political subdivision or taxing authority at or prior to
the time required to be paid under applicable law (and shall promptly furnish to
the Agent, for the benefit of the Banks, official receipts evidencing such
payment). In addition, the Borrower will pay any present or future stamp or
documentary taxes or similar taxes or levies imposed by any government of any
jurisdiction outside the United States of America or any political subdivision
or taxing authority thereof from any payment by it hereunder or under any of the
Notes or from the execution, delivery or registration of, or otherwise with
respect to, this Agreement or any of the Notes (herein called "Other Taxes").
The Borrower will indemnify each Bank and the Agent for, and hold each Bank and
the Agent harmless against, the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section) paid or payable by such Bank or the Agent
and any liability of such Bank or the Agent relating thereto (including,
27
<PAGE>
without limitation, penalties, interest and expenses). Notwithstanding anything
set forth above in this clause (a), the Borrower shall have no obligation to
increase the amount payable to any Bank as a result of any deduction or
withholding, or to indemnify any Bank for or hold any Bank harmless against any
Taxes or Other Taxes, to the extent that such deduction or withholding would not
have been required, or such Taxes or Other Taxes would not have been paid or
payable, if such Bank's representation and warranty in clause (f) below had been
accurate or such Bank had complied with its obligations under clause (g) below.
(b) If the cost to any Bank of making or maintaining any Loan to the
Borrower is increased, or the amount of any sum received or receivable by any
Bank (or its Applicable Lending Office) is reduced, by an amount deemed by such
Bank to be material, which increase or reduction would not have occurred but for
the fact that the Borrower conducts business in a jurisdiction outside the
United States of America, the Borrower shall indemnify such Bank for such
increased cost or reduction within 15 days after demand by such Bank (with a
copy to the Agent). A certificate of such Bank claiming indemnification under
this Section, setting forth the additional amount or amounts to be paid to it
hereunder and setting forth in reasonable detail a reasonable basis therefor,
shall be conclusive in the absence of manifest error. In determining such
amount, such Bank may use any reasonable averaging and attribution methods.
(c) Each Bank will promptly notify the Borrower and the Agent of any event
of which it has knowledge that will entitle such Bank to any payment or
indemnification under clause (a) or (b) of this subsection and will designate a
different Domestic Lending Office, Money Market Lending Office or Euro-Currency
Lending Office, as the case may be, if such designation will avoid the need for,
or reduce the amount of, such payment or indemnification and will not, in the
sole opinion of such Bank, be otherwise materially disadvantageous to such Bank.
(d) If, and to the extent that, any Bank shall obtain a credit, relief or
remission for, or repayment of, any Taxes or Other Taxes indemnified or paid by
the Borrower pursuant to this Section or for any taxes for which Borrower has
made payments under Section 8.03, such Bank agrees to promptly notify the
Borrower thereof and thereupon enter into negotiations in good faith with the
Borrower to determine the basis on which an equitable reimbursement of such
taxes can be made to the Borrower.
(e) All tax receipts required to be delivered under this Section shall be
originals, duplicate originals or duly certified or authenticated copies within
the meaning of Treasury Regulation Section 1.905-2(a)(2).
(f) Each Bank represents and warrants to the Borrower and the Agent that,
as of the date of this Agreement (or, in the case of an Assignee, the date it
becomes a party hereto), it is entitled to receive payments hereunder without
any deduction or withholding for or on account of any Taxes imposed by the
United States of America or any political subdivision or taxing authority
thereof.
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(g) Each Bank which is a Non-U.S. Person (and, if at any time the Agent
hereunder is a Non-U.S. Person, such Agent) agrees that it will, to the extent
it is able to do so under applicable law and treaties,
(i) within 30 days of the date of this Agreement (or, in the case of
a Bank which becomes a party hereto pursuant to a transfer or assignment,
on or prior to the date on which the relevant transfer or assignment
becomes effective) deliver to the Borrower (and, in the case of a Bank, to
the Agent) such forms (including two duly executed originals of United
States Internal Revenue Form 1001 or 4224 or any successor to the
applicable form), properly and accurately completed, as are necessary to
claim complete or partial (as the case may be) exemption from withholding
of United States federal taxes; and
(ii) deliver extensions or renewals of such forms on or before the
date that any such form expires or becomes obsolete, and after the
occurrence of any event requiring a change in the most recent form
previously delivered by it, unless in any such case an event (including,
without limitation, any change in treaty, law or regulation) has occurred
prior to the date on which any such delivery would otherwise be required
which renders all such forms inapplicable or which would prevent such Agent
or Bank from duly completing and delivering any such form with respect to
it and such Agent or Bank so advises the Borrower (and, in the case of a
Bank, the Agent).
For purposes of the foregoing, a Non-U.S. Person means a Person that is not (i)
a citizen or resident of the United States, (ii) a corporation or partnership
created or organized under the laws of the United States or any state thereof or
(iii) an estate or trust the income of which is subject to United States federal
income taxation regardless of its source;
SECTION 2.17. Maximum Interest Rate. (a) Nothing contained in this
---------------------
Agreement or the Notes shall require the Borrower to pay interest at a rate
exceeding the maximum rate permitted by applicable law.
(b) If the amount of interest payable for the account of any Bank on any
interest payment date in respect of the immediately preceding interest
computation period, computed pursuant to Section 2.07, would exceed the maximum
amount permitted by applicable law to be charged by such Bank, the amount of
interest payable for its account on such interest payment date shall be
automatically reduced to such maximum permissible amount.
(c) If the amount of interest payable for the account of any Bank in
respect of any interest computation period is reduced pursuant to clause (b) of
this Section and the amount of interest payable for its account in respect of
any subsequent interest computation period, computed pursuant to Section 2.07,
would be less than the maximum amount permitted by applicable law to be charged
by such Bank, then the amount of interest payable for its account in respect of
such subsequent interest computation period shall be automatically increased to
such maximum permissible amount; provided that at no time shall the aggregate
--------
amount by which interest paid for the account of any
29
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Bank has been increased pursuant to this clause (c) exceed the aggregate amount
by which interest paid for its account has theretofore been reduced pursuant to
clause (b) of this Section.
ARTICLE III
CONDITIONS TO BORROWINGS
SECTION 3.01. Initial Borrowing by the Borrower. The obligation of each
---------------------------------
Bank to make any Loan to be made by it as a part of the initial Borrowing by the
Borrower hereunder is subject to the condition precedent that the Agent shall
have received the following documents:
(i) certified copies of the Certificate of Incorporation and By-Laws
of the Borrower and the resolutions of the Board of Directors of the
Borrower adopted in respect of the transactions contemplated hereby and
such other documents as the Agent or the Required Banks may reasonably
request relating to the existence of the Borrower, the corporate authority
for and the validity of this Agreement and the Notes, and any other matters
relevant hereto, all in form and substance satisfactory to the Agent;
(ii) a Certificate of Incumbency executed by the Secretary or an
Assistant Secretary of the Borrower in substantially the form of Exhibit E
hereto setting forth the name, title and specimen signature of each
Authorized Officer or Authorized Representative of the Borrower (1) who has
signed this Agreement on behalf of the Borrower, (2) who will sign the
Notes on behalf of the Borrower or (3) who will, until replaced by another
officer or representative duly authorized for that purpose, act as the
representative of the Borrower for the purposes of signing documents and
giving notices and other communications by the Borrower in connection with
this Agreement and the transactions contemplated hereby;
(iii) an opinion of the General Counsel or, in his absence, the
Associate General Counsel-Corporate, of the Borrower, dated on or prior to
the date of such initial Borrowing, with respect to the Borrower in
substantially the form of Exhibit F hereto and covering such additional
matters relating to the transactions contemplated hereby as the Required
Banks may reasonably request;
(iv) certified copies of the Cross-Indemnification Agreement and the
Tax Sharing Agreement as originally executed and all amendments,
modifications and waivers thereto;
(v) a certificate signed by the President or any Vice President of
the Borrower to the effect set forth in clauses (iii) and (iv) of Section
3.02;
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(vi) for the account of each Bank, a duly executed Note, dated on or
before the date of such initial Borrowing, complying with the provisions of
Section 2.05; and
(vii) an opinion of Mayer, Brown and Platt, special counsel to the
Agent, substantially in the form of Exhibit I hereto.
The certificate referred to in subclause (v) shall be dated no more than three
Euro-Currency Business Days before the date of such initial Borrowing.
SECTION 3.02. Each Borrowing. The obligation of each Bank to make each
--------------
Loan to be made by it as part of a Borrowing hereunder to the Borrower is
subject to the further conditions precedent that:
(i) the Agent shall have received a Notice of Borrowing as required
by Section 2.02 or 2.03, as the case may be;
(ii) the fact that, immediately after such Borrowing, the Dollar
Amount of the aggregate outstanding principal amount of the Loans will not
exceed the aggregate amount of the Commitments;
(iii) the fact that, immediately after such Borrowing, no Default
shall have occurred and be continuing; and
(iv) the fact that the representations and warranties of the Borrower
contained in this Agreement shall be true on and as of the date of such
Borrowing as if made on and as of such date (except, in the case of a
Refunding Borrowing, the representations and warranties set forth in
clauses (d) and (e) of Section 4.01 as to any material adverse change or
litigation, respectively, which has theretofore been disclosed in writing
by the Borrower to the Banks).
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the facts specified in clauses
(ii), (iii) and (iv) of this Section.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The
----------------------------------------------
Borrower represents and warrants to the Banks as follows:
(a)(1) The Borrower (i) is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware and
(ii) either is qualified to do business and in good standing in each
jurisdiction where the ownership of its properties or the conduct of its
business requires such qualification or is subject to no material liability
or disability by reason of the failure to be so qualified in any such
jurisdiction.
(2) The Borrower has all corporate power and authority, governmental
permits, licenses, consents, authorizations, orders and approvals and other
authorizations as are necessary to carry on its business substantially as
presently conducted except for such of the foregoing the absence of which
would not, in the aggregate, subject the Borrower to any material liability
or disability.
(3) The execution, delivery and performance of the Bank Credit
Documents, and borrowings thereunder by the Borrower, are within its
corporate power and authority and have been duly authorized by all
necessary corporate proceedings.
(4) Neither such authorization nor the execution, delivery and
performance by the Borrower of the Bank Credit Documents, nor any borrowing
thereunder by the Borrower when made, will conflict with, result in a
breach of or constitute a default under any of the terms, conditions or
provisions of any law or any regulation, order, writ, injunction or decree
of any court or governmental authority or of the Certificate of
Incorporation or By-Laws of the Borrower or result in the violation or
contravention of, or the acceleration of any obligation under, or cause the
creation of any Lien on any of the properties of the Borrower pursuant to
the provisions of, any indenture, agreement or other instrument to which it
is a party or by which it is bound.
(5) Assuming their due execution by the Banks and the Agent, each of
this Agreement and the Other Agreement constitutes a legal, valid and
binding agreement of the Borrower, and the Notes (both as defined hereunder
and under the Other Agreement), when duly executed on behalf of the
Borrower and delivered in accordance with this Agreement and the Other
Agreement, will constitute legal, valid and binding obligations of the
Borrower (subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditors'
rights generally from time to time in effect and to general principles of
equity).
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<PAGE>
(b) The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of December 31, 1996 and the related
consolidated statements of income and changes in financial position for the
12 months ended that date, certified by Coopers & Lybrand, copies of all of
which have been delivered to the Banks, fairly present the consolidated
financial position of the Borrower and its Consolidated Subsidiaries as of
such date and the consolidated results of their operations and changes in
financial position for such fiscal year, in conformity with GAAP
consistently applied.
(c) The unaudited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of March 31, 1997 and the related unaudited
consolidated statements of income and changes in financial position for the
fiscal quarter then ended, a copy of which has been delivered to each of
the Banks, fairly present, in conformity with GAAP applied on a basis
consistent with the financial statements referred to in paragraph (b) of
this Section, the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and changes in financial position for such fiscal quarter
(subject to normal year-end adjustments).
(d) Except as disclosed in writing to the Banks prior to July 23,
1997, there has been no material adverse change since December 31, 1996 and
prior to July 23, 1997, in the business, operations, affairs, assets,
condition (financial or otherwise) or results of operations of the Borrower
and its Consolidated Subsidiaries, considered as a whole.
(e) Except as disclosed in writing to the Banks prior to July 23,
1997, there is no action, suit or proceeding pending or, to the knowledge
of the Borrower, threatened against or affecting the Borrower or any of its
Subsidiaries in any court or before or by any arbitrator, governmental
department, agency or instrumentality (i) which is likely to have a
material adverse effect upon the Borrower's ability to pay and perform its
obligations under the Bank Credit Documents in accordance with their
respective terms or (ii) which in any manner draws into question the
validity of any of the Bank Credit Documents.
(f) No Default has occurred and is continuing.
(g) No consent, authorization, order or approval of (or filing or
registration with) any governmental commission, board or other regulatory
authority (other than routine reporting requirements) is required for the
execution, delivery and performance by the Borrower of any of the Bank
Credit Documents or for borrowings thereunder by the Borrower.
(h) Each member of the ERISA Group has fulfilled its obligations under
the minimum funding standards of ERISA and the Code with respect to each
Plan and is in compliance in all material respects with the presently
applicable provisions of ERISA and the Code with respect to each Plan. No
member of the ERISA Group has (i) sought a waiver of the minimum funding
standard under Section 412 of the Code in respect of any Plan, (ii) failed
to make any contribution or payment to any Plan or Multiemployer Plan or in
respect
33
<PAGE>
of any Benefit Arrangement, or made any amendment to any Plan or Benefit
Arrangement, which has resulted or could result in the imposition of a Lien
or the posting of a bond or other security under ERISA or the Code or (iii)
incurred any liability under Title IV of ERISA other than a liability to
the PBGC for premiums under Section 4007 of ERISA.
(i) The Cross-Indemnification Agreement and the Tax Sharing Agreement,
in the respective forms, with amendments, certified to the Banks pursuant
to Section 3.01(iv), are in full force and effect in accordance with their
respective terms except for (1) any amendments, modifications or waivers of
the Tax Sharing Agreement which do not materially alter the rights and
obligations of the Borrower thereunder which as a whole place the Borrower
in the same (or more favorable) relative financial position with respect to
the Parent which the Borrower would have been in if the Borrower were not
consolidated with the Parent for purposes of filing federal, state or local
or other income tax returns, (2) any amendments to the Cross-
Indemnification Agreement for the purpose of placing the Borrower and the
Parent in the same financial positions with respect to each other which
they would have been in if the Borrower and the Parent were not members of
the same ERISA Group, including the allocation of, and indemnification with
respect to, assets and funded and unfunded liabilities among the Borrower,
the Parent, Affiliates, Subsidiaries and their respective Plans in such
manner as is fair and equitable to the Borrower and its Subsidiaries, (3)
any amendments, modifications or waivers of the Cross-Indemnification
Agreement or the Tax Sharing Agreement which do not, in the aggregate,
materially reduce the rights of the Borrower thereunder against the Parent
or materially increase the obligations of the Borrower thereunder to the
Parent and (4) any other amendments, modifications or waivers of such
instruments to which the Required Banks have consented. True and complete
copies of all such amendments, modifications and waivers have been
delivered to the Agent for each of the Banks. No amount that may be due
under the Cross-Indemnification Agreement or the Tax Sharing Agreement from
the Parent to the Borrower or to the Parent from the Borrower is
delinquent, except such amount as the Borrower or the Parent may be
contesting in good faith.
(j) Each corporate Subsidiary is a corporation duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business as
now conducted except for licenses, authorizations, consents or approvals
the absence of which will not materially and adversely affect the business
of the Borrower and its Consolidated Subsidiaries taken as a whole.
(k) The Borrower is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
(l) There are no Liens on any asset of the Borrower or any Subsidiary
on July 23, 1997 which would have been prohibited if Section 5.02 of this
Agreement had been in effect on the date the Borrower or such Subsidiary,
as the case may be, acquired such asset.
34
<PAGE>
(m) Except as disclosed in writing to the Banks, the description of
environmental matters affecting the Borrower and its Subsidiaries contained
in each of the Borrower's reports delivered to the Banks pursuant to clause
(ii) of Section 5.01(c) complied in all material respects as of the date of
such report with the requirements of the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment hereunder
or any amount payable under any Note remains unpaid:
SECTION 5.01. Certain Information to be Furnished by the Borrower. The
---------------------------------------------------
Borrower will deliver to each Bank:
(a) as soon as available and in any event within 120 days after the
end of each of its fiscal years, the consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as of the end of such fiscal
year and the related consolidated statements of income and cash flows for
such year, setting forth in each case in comparative form the figures for
the previous fiscal year, prepared in accordance with GAAP consistently
applied and so certified by a nationally recognized firm of independent
certified public accountants, provided, that the delivery requirement
--------
described in this paragraph (a) for any fiscal year shall be deemed to have
been satisfied upon delivery by the Borrower to the Banks within 120 days
after the end of such fiscal year of its Annual Report on Form 10-K for
such fiscal year, as filed (with exhibits) with the Securities and Exchange
Commission;
(b) as soon as available and in any event within 60 days after the end
of each of the first three quarters of each of its fiscal years, the
consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of the end of such fiscal quarter, the related consolidated
statement of income for such fiscal quarter and for the portion of the
fiscal year ended with such quarter and the related consolidated statement
of cash flows for the portion of the fiscal year ended with such quarter,
setting forth in each case in comparative form the figures for the
corresponding quarter and the corresponding portion of the Borrower's
previous fiscal year, all certified (subject to normal year-end
adjustments) as to fairness of presentation, GAAP and consistency by the
chief financial officer or the chief accounting officer of the Borrower,
provided, that the delivery requirement described in this paragraph (b) for
--------
any fiscal quarter shall be deemed to have been satisfied upon delivery by
the Borrower to the Banks within 60 days after the end of such fiscal
quarter of its Quarterly Report on Form 10-Q for such fiscal quarter, as
filed (with exhibits) with the Securities and Exchange Commission;
35
<PAGE>
(c) promptly after the same are available, copies of all (i) financial
statements, notices, reports and proxy materials sent to shareholders of
the Borrower and (ii) regular and periodic reports filed by the Borrower
with the Securities and Exchange Commission (or any governmental agency
succeeding to the functions of such Commission);
(d) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the
Borrower signed by the Treasurer or other financial officer of the Borrower
(i) setting forth in reasonable detail the calculations required to
establish whether the Borrower was in compliance with the requirements of
Section 5.05 on the date of such financial statements and (ii) stating
whether there exists on the date of such certificate any Default, and, if
any such Default then exists, specifying the nature and period of existence
thereof and the action the Borrower is taking and proposes to take with
respect thereto;
(e) forthwith, if at any time any officer of the Borrower shall obtain
knowledge of any Default, a certificate of the Treasurer or other financial
officer specifying the nature and period of existence thereof and the
action the Borrower is taking and proposes to take with respect thereto;
(f) if and when any member of the ERISA Group (i) gives or is required
to give notice to the PBGC of any "reportable event" (as defined in Section
4043 of ERISA) with respect to any Plan which might constitute grounds for
a termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any
such reportable event, a copy of the notice of such reportable event given
or required to be given to the PBGC; (ii) receives notice of complete or
partial withdrawal liability under Title IV of ERISA or notice that any
Multiemployer Plan is in reorganization, is insolvent or has been
terminated, a copy of such notice; (iii) receives notice from the PBGC
under Title IV of ERISA of an intent to terminate, impose liability (other
than for premiums under Section 4007 of ERISA) in respect of, or appoint a
trustee to administer any Plan, a copy of such notice; (iv) applies for a
waiver of the minimum funding standard under Section 412 of the Code, a
copy of such application; (v) gives notice of intent to terminate any Plan
under Section 4041(c) of ERISA, a copy of such notice and other information
filed with the PBGC; (vi) gives notice of withdrawal from any Plan pursuant
to Section 4063 of ERISA, a copy of such notice; or (vii) fails to make any
payment or contribution to any Plan or Multiemployer Plan or in respect of
any Benefit Arrangement or makes any amendment to any Plan or Benefit
Arrangement which has resulted or could result in the imposition of a Lien
or the posting of a bond or other security, a certificate of the chief
financial officer or the chief accounting officer of the Borrower setting
forth details as to such occurrence and action, if any, which the Borrower
or applicable member of the ERISA Group is required or proposes to take;
and
(g) from time to time such further information regarding compliance
with this Agreement or the business, operations, affairs, assets, condition
(financial or otherwise) or
36
<PAGE>
results of operations of the Borrower and its Consolidated Subsidiaries as
the Agent, at the request of any Bank, may reasonably request.
SECTION 5.02. Limitation on Liens. Neither the Borrower nor any
-------------------
Subsidiary will issue, assume or guarantee any Debt secured by any Lien upon any
asset of the Borrower or any Subsidiary or grant any Lien on any such asset to
secure any such Debt without effectively providing that all of the Notes
(together with, if the Borrower so determines, any other Debt then existing and
any other Debt thereafter created ranking equally with the Notes) shall be
secured equally and ratably with (or prior to) such Debt so long as such Debt
shall be so secured. To the extent the following Liens would otherwise be
prohibited by the foregoing provisions, the foregoing provisions shall not apply
to:
(a) Liens on any asset of a corporation existing at the time it
becomes a Subsidiary of the Borrower or at the time it is merged into or
consolidated with the Borrower or a Subsidiary and not created in
contemplation of such event;
(b) Liens on property existing at the time of acquisition thereof or
incurred to secure payment of all or part of the purchase price thereof or
to secure Debt incurred prior to, at the time of or within 24 months after
acquisition thereof for the purpose of financing all or part of the
purchase price thereof;
(c) Liens on any property to secure all or part of the cost of
construction or improvements thereon or Debt incurred to provide funds for
any such purpose in a principal amount not exceeding the cost of such
construction or improvements;
(d) Liens which secure only Debt owing by a Subsidiary to the Borrower
or another Subsidiary;
(e) Liens in favor of the United States of America or any state
thereof or any department, agency, instrumentality or political subdivision
of any such jurisdiction to secure partial, progress, advance or other
payments pursuant to any contract or statute or to secure any Debt payable
to the foregoing incurred for the purpose of financing all or any part of
the purchase price or cost of constructing or improving the property
subject to such Lien, including, without limitation, Liens to secure Debt
in respect of any pollution control, industrial revenue bond or other
similar type of financing;
(f) Liens required by any contract or statute in order to permit the
Borrower or a Subsidiary to perform any contract or subcontract made by it
with or at the request of the United States of America, any state or any
department, agency or instrumentality or political subdivision of either;
(g) mechanics', suppliers', materialmen's and similar Liens arising in
the ordinary course of business securing Debt which is not overdue or is
being contested by the Borrower
37
<PAGE>
in good faith by appropriate action, promptly initiated and diligently
conducted and in connection with which adequate reserves are being
maintained;
(h) Liens securing obligations of the Borrower or any Subsidiary to
pay the deferred purchase price of services not exceeding in the aggregate
$10,000,000;
(i) the Lien of any judgment or attachment in respect of any Debt, so
long as (1) the Borrower in good faith by appropriate action, promptly
initiated and diligently conducted, shall contest or cause to be contested
the validity, amount, extent or application thereof and (2) such action
shall operate to prevent the sale or foreclosure (or the posting of notices
preparatory to any sale or foreclosure) of any part of any asset to satisfy
such Lien prior to a final determination of such action;
(j) Liens for taxes not delinquent or being contested in good faith
based on the advice of counsel that such contest is meritorious and by
appropriate proceedings and for which reserves adequate under GAAP are
being maintained; and
(k) any extension, renewal or replacement (or successive extensions,
renewals or replacements), in whole or in part, of any Lien referred to in
the foregoing clauses (a) to (h) inclusive or of any Debt secured thereby,
provided that the principal amount of Debt secured thereby shall not exceed
--------
the principal amount of Debt so secured at the time of such extension,
renewal or replacement, and that such extension, renewal or replacement
Lien shall be limited to all or part of substantially the same property
which secured the Lien extended, renewed or replaced (plus improvements on
such property);
provided that the Borrower and any one or more Subsidiaries may issue, assume or
- --------
guarantee Debt secured by Liens which would otherwise be subject to the
foregoing restrictions or grant any such Lien to secure any such Debt in an
aggregate principal amount which, together with the aggregate outstanding
principal amount of all Debt of the Borrower and the Subsidiaries which would
otherwise be subject to the foregoing restrictions (not including Debt permitted
to be secured under clauses (a) to (g) inclusive above) and the aggregate Value
of the Sale and Lease-Back Transactions (as such terms are defined in Section
5.03 hereof) in existence at such time (not including Sale and Lease-Back
Transactions as to which the Borrower has complied with Section 5.03(b) hereof)
does not at any one time exceed 15% of the consolidated total assets of the
Borrower and its Consolidated Subsidiaries.
SECTION 5.03. Limitation on Sale and Lease-Back. Neither the Borrower nor
---------------------------------
any Subsidiary will enter into any arrangement with any Person (other than the
Borrower or a Subsidiary), or to which any such Person is a party, providing for
the leasing to the Borrower or a Subsidiary for a period of more than three
years of any property which
has been or is to be sold or transferred by the Borrower or such Subsidiary to
such Person or to any Person (other than the Borrower or a Subsidiary), to which
funds have been or are to be advanced
38
<PAGE>
by such Person on the security of the leased property (in this Section and in
Section 5.02 hereof called a "Sale and Lease-Back Transaction") unless either:
(a) the Borrower or such Subsidiary would be entitled, pursuant to the
provisions of Section 5.02 hereof, to incur Debt in a principal amount
equal to or exceeding the Value of such Sale and Lease-Back Transaction,
secured by a Lien on the property to be leased, without equally and ratably
securing the Notes; or
(b) the Borrower (and in any such case the Borrower covenants and
agrees that it will do so) during or immediately after the expiration of
four months after the effective date of such Sale and Lease-Back
Transaction (whether made by the Borrower or a Subsidiary) applies to the
voluntary retirement of Debt of the Borrower ranking at least pari passu
with the Notes an amount equal to the Value of such Sale and Lease-Back
Transaction, less the principal amount of such Debt of the Borrower
voluntarily retired by the Borrower within such four-month period,
excluding retirements of such Debt as a result of conversions or pursuant
to mandatory sinking fund or repayment provisions or (other than in the
case of commercial paper) by payment at maturity.
For purposes of Section 5.02 hereof and this Section, the term "Value" shall
mean, with respect to a Sale and Lease-Back Transaction, as of any particular
time, the amount equal to the greater of (i) the net proceeds of the sale or
transfer of the property leased pursuant to such Sale and Lease-Back Transaction
or (ii) the fair value in the opinion of the Board of Directors of the Borrower
of such property at the time of entering into such Sale and Lease-Back
Transaction, in either case divided first by the number of full years of the
term of the lease and then multiplied by the number of full years of such term
remaining at the time of determination, without regard to any renewal or
extension options contained in the lease.
SECTION 5.04. Consolidation, Merger, Disposition of Assets. The Borrower
--------------------------------------------
will not (i) consolidate or merge with or into any other Person or (ii) sell,
lease or otherwise transfer all or any substantial part of its assets (whether
in a single transaction or in a series of related transactions) to any other
Person; provided that the Borrower may merge with another Person if (A) the
--------
Borrower is the corporation surviving such merger and (B) immediately after
giving effect to such merger, no Default shall have occurred and be continuing;
and provided further that the Borrower may consolidate or merge with or into the
-------- -------
Parent if (A) the Parent theretofore expressly assumes the obligations of the
Borrower hereunder and under the Notes by an instrument satisfactory in form and
substance to the Required Banks and (B) immediately after giving effect to such
consolidation or merger and such assumption, no Default shall have occurred and
be continuing; and provided further that the Borrower may (A) sell its inventory
-------- -------
in the ordinary course of business and (B) sell, lease or otherwise transfer
such of its assets (including all or any portion of the stock of any Subsidiary)
on an arms-length basis to an Internally-Funded Subsidiary. The Borrower will
not permit any Subsidiary which constitutes a substantial part of its assets to
consolidate or merge with or into, or transfer all or substantially all of its
assets (whether in a single transaction or in a series of related transactions)
to, any Person other than the Borrower or a Wholly-Owned Consolidated
Subsidiary.
39
<PAGE>
For purposes of this Section, "substantial part of its assets" means assets
(including Subsidiaries or other Persons and valued at the higher of book or
fair market value) (y) representing more than 25% of the consolidated assets of
the Borrower and its Subsidiaries as reflected in the then most recent
consolidated annual financial statements of the Borrower and its Subsidiaries
delivered pursuant to Section 5.01(a) or (z) responsible for more than 25% of
the consolidated net revenues or of the consolidated net income of the Borrower
and its Subsidiaries as reflected in the financial statements referred to in the
preceding clause (y). Notwithstanding the foregoing, the Banks will not
unreasonably withhold their consent to any sale, lease or other transfer of
assets by the Borrower or any of its Subsidiaries.
SECTION 5.05. Minimum Consolidated Net Worth. Consolidated Net Worth will
------------------------------
at no time be less than $1,500,000,000.
SECTION 5.06. Transactions with Affiliates. The Borrower will not, and
----------------------------
will not permit any Subsidiary to, directly or indirectly, pay any funds to or
for the account of, make any investment (whether by acquisition of stock or
indebtedness, by loan, advance, transfer of property, Guarantee or other
agreement to pay, purchase or service, directly or indirectly, any Debt, or
otherwise) in, lease, sell, transfer or otherwise dispose of any assets,
tangible or intangible, to, or participate in, or effect any transaction in
connection with any joint enterprise or other joint arrangement with, any
Affiliate; provided, however, that the foregoing provisions of this Section
-------- -------
shall not prohibit (a) the Borrower from declaring or paying any lawful dividend
to, or repurchasing its common stock from, any Affiliate so long as, after
giving effect thereto, no Default shall have occurred and be continuing, (b) the
Borrower or any Subsidiary (1) from making sales to or purchases from or leasing
from any Affiliate and, in connection therewith, extending credit or making
payments, or (2) from making payments for services rendered by any Affiliate or
(3) from participating in, or effecting any transaction in connection with, any
joint enterprise or other joint arrangement with any Affiliate if such sales,
purchases or leases are made or such services are rendered or the Borrower or
such Subsidiary participates in the ordinary course of business of the Borrower
or such Subsidiary, as the case may be, and, in the aggregate during each fiscal
year of the Borrower, the terms and conditions of all such sales, purchases,
leases, rendered services and participations are not materially less favorable
to the similar transactions with Persons who are not Affiliates and (c) the
Borrower or any Subsidiary from making payments of principal, interest and
premium on any Debt of the Borrower or such Subsidiary held by an Affiliate if
the terms of such Debt are substantially as favorable to the Borrower or such
Subsidiary as the terms which could have been obtained at the time of the
creation of such Debt from a lender which was not an Affiliate.
SECTION 5.07. Use of Proceeds. The proceeds of the Loans made under this
---------------
Agreement will be used for general corporate purposes. None of such proceeds
will be used, directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of purchasing or carrying any "margin stock" within the
meaning of Regulation U.
ARTICLE VI
40
<PAGE>
DEFAULTS
SECTION 6.01. Defaults. If one or more of the following events (herein
--------
called "Events of Default") shall occur and be continuing:
(a) Non-Payment: the Borrower shall default in the payment when due
-----------
of any principal of any Loan or shall default in the payment within five
days of the due date thereof of any interest on any Loan or any other
amount payable hereunder;
(b) Certain Covenant Violations: the Borrower shall fail to perform
---------------------------
or observe any covenant or agreement to be performed or observed by it
contained in Sections 5.02 to 5.05, inclusive, or Section 5.07;
(c) Certain Other Covenants: the Borrower shall fail to perform or
-----------------------
observe any covenant or agreement to be performed by it contained in this
Agreement (other than those covered by clause (a) or (b) above) for 30 days
(less, in the case of any failure to observe or perform Section 5.01(e),
the number of days elapsed from the date an officer of the Borrower
obtained knowledge of any Default to the date the Borrower delivered notice
thereof to the Banks) after written notice of such failure is given to the
Borrower by the Agent at the request of any Bank;
(d) Misrepresentation: the Borrower shall have made or be deemed to
-----------------
have made pursuant to this Agreement any representation or warranty in or
pursuant to this Agreement, or in any certificate, financial statement or
other document delivered pursuant hereto, which shall prove to have been
incorrect in any material respect when made or deemed made;
(e) Default With Respect to Other Borrowed Funds: the Borrower or any
--------------------------------------------
Subsidiary shall fail to repay any Borrowed Funds (other than the Loans)
payable or guaranteed by it, or any interest or premium thereon, when due
(whether by scheduled maturity, required prepayment, acceleration, demand
or otherwise) and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such
Borrowed Funds or guarantee thereof, or any event or condition shall occur
which results in the acceleration of the maturity of any Borrowed Funds (or
guarantee thereof) of the Borrower or any Subsidiary; provided that (i) the
--------
aggregate amount of such Borrowed Funds payable or guaranteed, including
any interest or premium thereon, shall exceed $50,000,000 (or the
Equivalent Amount thereof) and (ii) there shall be excluded for purposes of
the foregoing any such Borrowed Funds (A) owed to any department, agency,
instrumentality or political subdivision of the United States of America or
any state thereof in respect of any pollution control, industrial revenue
bond or other similar type of financing, so long as the obligation of the
Borrower or any Subsidiary to pay or guarantee such Borrowed Funds is being
contested in good faith or (B) owed to the Borrower by any Subsidiary or
owed by the Borrower to any Subsidiary;
41
<PAGE>
(f) Voluntary Bankruptcy: the Borrower, any Material Subsidiary or
--------------------
any two or more Subsidiaries which, if combined, would constitute a
Material Subsidiary, shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself
or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary
case or other proceeding commenced against it, or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay its
debts as they become due, or shall take any corporate action to authorize
any of the foregoing;
(g) Involuntary Bankruptcy: an involuntary case or other proceeding
----------------------
shall be commenced against the Borrower, any Material Subsidiary or any two
or more Subsidiaries which, if combined, would constitute a Material
Subsidiary, seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or
any substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of 60 days;
or an order for relief shall be entered against the Borrower, any Material
Subsidiary or any two or more Subsidiaries which, if combined, would
constitute a Material Subsidiary, under the federal bankruptcy laws as now
or hereafter in effect;
(h) Termination of Plan: any member of the ERISA Group shall fail to
-------------------
pay when due an amount or amounts aggregating in excess of $20,000,000
which it shall have become liable to pay under Title IV of ERISA; or notice
of intent to terminate a Plan or Plans having aggregate Unfunded
Liabilities in excess of $50,000,000 (collectively, a "Material Plan")
shall be filed under Title IV of ERISA by any member of the ERISA Group,
any plan administrator or any combination of the foregoing; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate, to impose
liability (other than for premiums under Section 4007 of ERISA) in respect
of, or to cause a trustee to be appointed to administer any Material Plan;
or a condition shall exist by reason of which the PBGC would be entitled to
obtain a decree adjudicating that any Material Plan must be terminated; or
there shall occur a complete or partial withdrawal from, or a default,
within the meaning of Section 4219(c)(5) of ERISA, with respect to, one or
more Multiemployer Plans which could cause one or more members of the ERISA
Group to incur a current payment obligation in excess of $20,000,000; or
(i) Judgment Default: a final, non-appealable judgment or order
----------------
enforceable by the courts of the United States or the United Kingdom or any
other European Community country for the payment of money in excess of
$50,000,000 (or the Equivalent Amount thereof) shall be rendered against
the Borrower or any Subsidiary and such judgment or order shall continue
unsatisfied for a period of 30 days;
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then, and in every such event, the Agent shall (i) if requested by Banks having
at least 66-2/3% in aggregate amount of the Commitments, by notice to the
Borrower terminate the Commitments, and they shall thereupon terminate, and/or
(ii) if requested by Banks holding Notes evidencing at least 66-2/3% in
aggregate principal amount of the Loans, by notice to the Borrower declare the
full unpaid principal of and accrued interest on the Loans and the Notes and all
other amounts payable hereunder to be immediately due and payable, whereupon the
Commitments shall terminate and the Loans and the Notes and such other amounts
shall be immediately due and payable, without further notice, presentment,
demand, protest or other formality of any kind, all of which are hereby
expressly waived by the Borrower; provided that in the case of the occurrence of
--------
an event referred to in clause (f) or (g) above, the Commitments shall
automatically terminate and the full unpaid principal of and accrued interest on
the Loans and Notes and all other amounts payable hereunder shall automatically
become immediately due and payable, without notice, presentment, demand, protest
or other formality of any kind, all of which are hereby expressly waived by the
Borrower.
SECTION 6.02. Notice of Default. The Agent shall give notice to the
-----------------
Borrower under Section 6.01(c) promptly upon being requested to do so by any
Bank and shall thereupon notify all the Banks thereof.
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization. Each Bank irrevocably
-----------------------------
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement and the Notes as are delegated to
the Agent by the terms hereof or thereof, together with all such powers as are
reasonably incidental thereto. The Agent shall not have a fiduciary
relationship in respect of any Bank by reason of this Agreement.
SECTION 7.02. Agent and Affiliates. The First National Bank of Chicago
--------------------
shall have the same rights and powers under this Agreement and its Notes as any
other Bank and may exercise or refrain from exercising the same as though it
were not the Agent, and The First National Bank of Chicago and its Affiliates
may accept deposits from, lend money to, and generally engage in any kind of
business with the Borrower or any Subsidiary or any Affiliate as if it were not
the Agent hereunder.
SECTION 7.03. Action by Agent. The obligations of the Agent hereunder are
---------------
only those expressly set forth herein. Without limiting the generality of the
foregoing, the Agent shall not be required to take any action with respect to
any Default, except as expressly provided in Article VI.
SECTION 7.04. Employment and Reliance on Agents and Counsel. The Agent
---------------------------------------------
may execute any of its duties as Agent hereunder by or through employees,
agents, and attorneys-in-fact and shall not be answerable to the Banks, except
as to money or securities received by it or its authorized
43
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agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. In addition, the Agent may consult with
legal counsel (who may be employees of the Agent or counsel for the Borrower),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.
SECTION 7.05. Liability of Agent. Neither the Agent, the Arranger, nor
------------------
any of their respective directors, officers, agents or employees shall be liable
for any action taken or not taken by it in connection herewith (i) with the
consent or at the request of the Required Banks or (ii) in the absence of its
own gross negligence or willful misconduct. Neither the Agent, the Arranger,
nor any of their respective directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into or verify (i) any
statement, warranty or representation made in connection with this Agreement or
any Borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of the Borrower; (iii) the satisfaction of any condition
specified in Article III, except receipt of items required to be delivered to
the Agent; or (iv) the validity, effectiveness or genuineness of this Agreement,
the Notes or any other instrument or writing furnished in connection herewith.
Neither the Agent nor the Arranger shall incur any liability by acting in
reliance upon any Note, notice, consent, certificate, statement, or other
writing (which may be a bank wire, telex, facsimile transmission or similar
writing) believed by it in good faith to be genuine or to be signed by the
proper party or parties.
SECTION 7.06. Reimbursement and Indemnification. The Banks agree to
---------------------------------
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (i) for any amounts not reimbursed by the Borrower for which the
Agent (for clarity, in its capacity as Agent, not as a Bank) is entitled to
reimbursement by the Borrower under this Agreement, (ii) for any other expenses
incurred by the Agent on behalf of the Banks, in connection with the
administration and enforcement of this Agreement and the Notes and (iii) for any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Agent in any way relating to or
arising out of this Agreement, the Notes or any other document delivered in
connection herewith or the transactions contemplated hereby, or the enforcement
of any of the terms hereof or of any such other documents, provided that no Bank
shall be liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Agent.
SECTION 7.07. Credit Decision. Each Bank acknowledges that it has,
---------------
independently and without reliance upon the Agent, the Arranger or any other
Bank, and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the Agent,
the Arranger or any other Bank, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking any action under this Agreement.
44
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SECTION 7.08. Successor Agent. The Agent may resign at any time by giving
---------------
written notice thereto to the Banks and the Borrower. Upon any such
resignation, the Required Banks shall have the right to appoint a successor
Agent who has been approved by the Borrower (such approval not to be
unreasonably withheld or delayed). If no successor Agent shall have been so
appointed by the Required Banks, and shall have accepted such appointment,
within 30 days after the retiring Agent's giving notice of resignation, then the
retiring Agent may, on behalf of the Banks, appoint a successor Agent. The
successor Agent shall be (i) a commercial bank organized under the laws of the
United States of America or of any state thereof and having a combined capital
and surplus of at least $100,000,000 and (ii) a Bank, unless the Borrower
consents to the successor Agent not being a Bank, which consent may not be
unreasonably withheld or delayed. Upon the acceptance by a successor Agent of
its appointment as Agent hereunder, it shall thereupon succeed to and become
vested with all the rights and duties of the retiring Agent and the retiring
Agent shall be discharged from its duties and obligations hereunder. Each
successor Agent shall notify promptly the Borrower of its appointment as Agent
hereunder. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent.
SECTION 7.09. Co-Agents. None of the Banks identified on the signature
---------
pages of this Agreement as a "Co-Agent" shall have any right, power, obligation,
liability, responsibility or duty under this Agreement other than those
applicable to all Banks as such. Without limiting the foregoing, none of the
Banks so identified as a "Co-Agent" shall have or be deemed to have any
fiduciary relationship with any Bank. Each Bank acknowledges that it has not
relied, and will not rely, on any of the Banks identified as Co-Agents in
deciding to enter into this Agreement or in taking or not taking action
hereunder.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair.
--------------------------------------------------------
(a) If on or prior to the first day of any Interest Period for any Fixed Rate
Borrowing (other than a Money Market Rate Loan):
(1) the Agent is advised by the Reference Banks that deposits in the
applicable currency (in the applicable amounts) are not being offered to
the Reference Banks in the relevant market for such Interest Period, or
(2) the Required Banks advise the Agent that the London Interbank
Offered Rate as determined by the Agent will not adequately and fairly
reflect the cost to such Banks of funding their Euro-Currency Loans or
Money Market LIBOR Loans, as the case may be, for such Interest Period,
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the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies the Borrower that the circumstances giving
rise to such notice no longer exist: (A) the New York Interbank Offered Rate
shall replace the London Interbank Offered Rate for purposes of interest rate
determinations hereunder for Euro-Currency Borrowings and Money Market LIBOR
Borrowings for such Interest Period (and all references herein to the London
interbank market and the London Interbank Offered Rate for such purposes shall,
unless the context otherwise requires, be deemed to be references to the New
York interbank market and the New York Interbank Offered Rate, respectively), as
the case may be, and (B) unless the Borrower notifies the Agent at least one
Domestic Business Day before the date of any Fixed Rate Borrowing for which a
Notice of Borrowing has previously been given that it elects not to borrow on
such date or that it elects to borrow in another currency such that clause (1)
or (2) above is not applicable thereto,
(i) if such Fixed Rate Borrowing is a Euro-Currency Borrowing, the
interest rate for such Euro-Currency Borrowing shall be determined on the
basis of the New York Interbank Offered Rate if all of the procedures set
forth herein for a Euro-Currency Borrowing on such basis (including the
required notice to the Banks) can be complied with at such time or, if
clause (1) or (2) of this subsection is applicable to the New York
Interbank Offered Rate at such time, such Euro-Currency Borrowing shall
instead be made as a Base Rate Borrowing; provided that, if such Euro-
--------
Currency Borrowing was to be denominated in a currency other than Dollars,
the principal amount of the Base Rate Borrowing shall be the Dollar Amount
of the principal amount of such Euro-Currency Borrowing, and
(ii) if such Fixed Rate Borrowing is a Money Market LIBOR Borrowing,
the interest rate for such Money Market LIBOR Borrowing shall be determined
on the basis of the New York Interbank Offered Rate if all of the
procedures set forth herein for a Money Market LIBOR Borrowing on such
basis (including the required notice to the Banks) can be complied with at
such time or, if clause (1) or (2) of this subsection is applicable to the
New York Interbank Offered Rate at such time, the Money Market LIBOR Loans
comprising such Borrowing shall be made in Dollars in a principal amount
equal to the Dollar Amount of the principal amount of such Money Market
LIBOR Borrowing and shall bear interest for each day from and including the
first day to but excluding the last day of the Interest Period applicable
thereto at the Base Rate for such day.
(b) If clause (1) or (2) of subsection (a) of this Section becomes
applicable when the New York Interbank Offered Rate has replaced the London
Interbank Offered Rate hereunder, then the Agent shall give notice to the
Borrower of such condition and the Borrower and the Agent (in consultation with
the Banks) shall promptly enter into negotiations in good faith with a view to
agreeing upon an alternative basis (a "Substitute Basis") acceptable to the
Borrower and the Banks for determining the interest rate which shall be
applicable to the affected Euro-Currency Borrowings or Money Market LIBOR
Borrowings, which rate shall reflect the cost to the Banks of maintaining such
Euro-Currency Borrowings plus the applicable Syndicated Margin or maintaining
such Money Market LIBOR Loans plus any applicable Money Market Margin, as the
case may be. If, prior to the expiration of 20 days from the date of such
notice by the Agent, the Borrower and the Banks shall
46
<PAGE>
agree upon a Substitute Basis, interest on such Euro-Currency Borrowings or
Money Market LIBOR Borrowings for the affected Interest Periods commencing
during the period beginning two Euro-Currency Business Days after the date of
such notice and ending on the date three Euro-Currency Business Days after the
Agent notifies the Borrower and the Banks that the condition specified in clause
(1) or (2) of subsection (a) of this Section has ceased to be in effect shall be
determined on such Substitute Basis. If no such agreement has been reached by
the expiration of such 20-day period, the Agent shall so notify the Banks and
each Bank shall, within ten days after the date of such notice, notify the
Borrower (through the Agent) of the rate (or the basis of determining the rate)
at which it is prepared to maintain such Euro-Currency Borrowings or Money
Market LIBOR Borrowings held by it hereunder for the affected Interest Periods
(which rate shall reflect the cost to such Bank of maintaining such Borrowings
plus the applicable Syndicated Margin or plus any applicable positive Money
Market Margin, as the case may be) and such rate (or basis) shall be applicable
to such Euro-Currency Borrowings or Money Market LIBOR Borrowings, as the case
may be, held by it for the affected Interest Periods applicable thereto referred
to in the preceding sentence. The Agent shall determine the total amount of
interest payable by the Borrower on each date for the payment of interest
hereunder determined in accordance with this subsection (b) (to the extent it
has received the necessary information from the Banks) and notify the Borrower
of such total amount (provided that no Bank's right to receive any interest
payable to it hereunder shall be impaired by its failure to provide such
information to the Agent). The Borrower shall have the right at any time to
suspend the obligation of each Bank notifying a rate (or basis) pursuant to the
second preceding sentence of this subsection to make Euro-Currency Loans.
SECTION 8.02. Illegality. If, after July 23, 1997, the adoption of any
----------
applicable law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or its Applicable Lending Office) with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency shall make it unlawful or
impossible for any Bank (or its Applicable Lending Office) to make, maintain or
fund its Euro-Currency Loans and such Bank shall so notify the Agent, the Agent
shall forthwith give notice thereof to the other Banks and the Borrower,
whereupon until such Bank notifies the Borrower and the Agent that the
circumstances giving rise to such suspension no longer exist, the obligation of
such Bank to make Euro-Currency Loans shall be suspended. Before giving any
notice to the Agent pursuant to this Section, such Bank shall designate a
different Applicable Lending Office if such designation will avoid the need for
giving such notice and will not, in the judgment of such Bank, be otherwise
materially disadvantageous to such Bank. If such Bank shall determine that it
may not lawfully continue to maintain and fund any of its outstanding Euro-
Currency Loans to maturity and shall so specify in such notice, the Borrower
shall immediately prepay in full the then outstanding principal amount of each
such affected Euro-Currency Loan, together with accrued interest thereon.
Concurrently with prepaying each such affected Euro-Currency Loan, the Borrower
shall borrow a Base Rate Loan (or, subject to Section 2.03 and the willingness
of such Bank in its own discretion to submit a Money Market Quote, a Money
Market Rate Loan) from such Bank in a principal amount equal to the Dollar
Amount of the principal amount of such affected Euro-Currency Loan for an
Interest Period coincident with the
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remaining term of the Interest Period applicable to such affected Euro-Currency
Loan, and such Bank shall make such a Base Rate Loan.
SECTION 8.03. Increased Cost and Reduced Return. (a) If on or after (x)
---------------------------------
July 23, 1997, in the case of any Syndicated Loan or any obligation to make
Syndicated Loans or (y) the date of the related Money Market Quote, in the case
of any Money Market Loan, the adoption of any applicable law, rule or
regulation, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or its Applicable Lending Office) with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency:
(i) shall subject any Bank (or its Applicable Lending Office) to any
tax, duty or other charge with respect to its Fixed Rate Loans, its Notes
or its obligation to make Euro-Currency Loans, or shall change the basis of
taxation of payments to any Bank (or its Applicable Lending Office) of the
principal of or interest on its Fixed Rate Loans or any other amounts due
under this Agreement in respect of its Fixed Rate Loans or its obligation
to make Euro-Currency Loans (except for changes in the rate of tax on the
overall net income of such Bank or its Applicable Lending Office imposed by
the jurisdiction in which such Bank's principal executive office or
Applicable Lending Office is located) or
(ii) shall impose, modify or deem applicable any reserve, special
deposit, deposit insurance assessment or similar requirement (including,
without limitation, any such requirement imposed by the Board of Governors
of the Federal Reserve System, but excluding with respect to any Euro-
Currency Loan or Money Market LIBOR Loan any such requirement included in
an applicable Euro-Currency Reserve Percentage) against assets of, deposits
with or for the account of, or credit extended by, any Bank (or its
Applicable Lending Office) or shall impose on any Bank (or its Applicable
Lending Office) or on the London interbank market any other condition
affecting its Fixed Rate Loans, its Notes or its obligation to make Euro-
Currency Loans,
and the result of any of the foregoing is to increase the cost to such Bank (or
its Applicable Lending Office) of making or maintaining any Fixed Rate Loan, or
to reduce the amount of any sum received or receivable by such Bank (or its
Applicable Lending Office) under this Agreement or under its Notes with respect
thereto, by an amount deemed by such Bank to be material, then, within 15 days
after demand by such Bank (with a copy to the Agent), the Borrower shall pay to
such Bank (without duplication of amounts otherwise payable hereunder) such
additional amount or amounts as will compensate such Bank for such increased
cost or reduction with respect to such affected Fixed Rate Loan or such affected
sum.
(b) If any Bank shall have reasonably determined that, after July 23, 1997,
the adoption of any applicable law, rule or regulation regarding capital
adequacy or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or its Applicable Lending Office) with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency,
48
<PAGE>
has or has had the effect of reducing the rate of return on the capital of such
Bank (or its parent) as a consequence of its obligations hereunder to a level
below that which such Bank (or its parent) could have achieved but for such
adoption, change or compliance (taking into consideration such Bank's policies
with respect to capital adequacy) by an amount deemed by such Bank to be
material, then from time to time, within 15 days after demand by such Bank (with
a copy to the Agent), the Borrower shall pay to such Bank (without duplication
of amounts otherwise payable hereunder) such additional amount or amounts as
will compensate such Bank (or its parent) for such reduction.
(c) Each Bank will promptly notify the Borrower and the Agent of any event
of which it has knowledge, occurring after July 23, 1997, which will entitle
such Bank to compensation pursuant to this Section and will designate a
different Applicable Lending Office if such designation will avoid the need for,
or reduce the amount of, such compensation and will not, in the judgment of such
Bank, be otherwise materially disadvantageous to such Bank. A certificate of
any Bank claiming compensation under this Section, setting forth the additional
amount or amounts to be paid to it hereunder and setting forth in reasonable
detail a reasonable basis therefor, shall be conclusive in the absence of
manifest error. In determining such amount, such Bank may use any reasonable
averaging and attribution methods.
(d) Notwithstanding any other provision of this Agreement, the Borrower
shall have no obligation to make any payment under this Section 8.03 to the
extent that such payment would not have been required (i) if such Bank's
representation and warranty in Section 2.16(f) had been accurate, or (ii) if
such Bank had complied with its obligations under Section 2.16(g).
SECTION 8.04. Substitute Loans. If (i) the obligation of any Bank to make
----------------
Euro-Currency Loans has been suspended pursuant to Section 8.01(b) or 8.02 or
(ii) any Bank has demanded compensation under Section 8.03(a) and the Borrower
shall, by at least five Euro-Currency Business Days' prior notice to such Bank
through the Agent, have elected that the provisions of this Section shall apply
to such Bank, then, unless and until such Bank notifies the Borrower that the
circumstances giving rise to such suspension or demand for compensation no
longer apply:
(a) all Loans denominated in Dollars which would otherwise be made by
such Bank as Euro-Currency Loans shall be made instead as Base Rate Loans,
(b) all Loans denominated in a currency other than Dollars which would
otherwise be made by such Bank as Euro-Currency Loans shall be made instead
as Base Rate Loans in Dollars in a principal amount equal to the Dollar
Amount of the principal amount of such Euro-Currency Loans, and
(c) after each of its Euro-Currency Loans has been repaid, all
payments of principal which would otherwise be applied to repay such Fixed
Rate Loans shall instead be applied to repay its Loans made pursuant to
Section 8.02 or clauses (a) or (b) above.
SECTION 8.05. Certain Reserve Compensation. Each Bank may require the
----------------------------
Borrower to pay, contemporaneously with each payment of interest on the Euro-
Currency Borrowings of the Borrower, additional interest on the related Euro-
Currency Loan of such Bank at a rate per annum equal to the excess of (i)(A) the
applicable London Interbank Offered Rate divided by (B) one minus the Euro-
Currency Reserve Percentage over (ii) the rate specified in clause (i)(A). In
addition, each
49
<PAGE>
Bank may require the Borrower to pay, contemporaneously with each payment of
interest on the Euro-Currency Borrowings of the Borrower which are denominated
in pounds sterling, additional interest on the related Euro-Currency Loan of
such Bank at the percentage calculated from time to time by such Bank to be the
percentage required to fully compensate such Bank for all reserve costs,
liabilities, expenses and assessments which have been incurred by such Bank (or
its Applicable Lending Office) in complying with any and all requirements of any
relevant United Kingdom banking authority or authorities applicable to such Bank
(or its Applicable Lending Office) regarding the making, funding or maintaining
of such Euro-Currency Loan (including, without limitation, any and all liquid
asset maintenance requirements of the Bank of England). A certificate of any
Bank claiming compensation under the preceding sentence, setting forth the
additional interest to be paid to it thereunder and setting forth in reasonable
detail a reasonable basis therefor, shall be conclusive in the absence of
manifest error, and in determining the amount of such interest, such Bank may
use any reasonable averaging and attribution methods.
Any Bank wishing to require payment of such additional interest (x) shall
so notify the Borrower and the Agent, in which case such additional interest on
the Euro-Currency Loans of such Bank shall be payable in the currency of such
Loan to such Bank at the place indicated in such notice with respect to each
Interest Period commencing at least five Euro-Currency Business Days after the
giving of such notice and (y) shall notify the Borrower at least five Euro-
Currency Business Days prior to each date on which interest is payable on such
Euro-Currency Loans of the amount (and currency thereof) then due it under this
Section.
SECTION 8.06. Substitution of Bank. If (i) the obligation of any Bank to
--------------------
make Euro-Currency Loans has been suspended pursuant to either Section 8.01(b)
or Section 8.02 of either this Agreement or the Other Agreement or (ii) any Bank
has demanded compensation under any of Sections 2.16, 8.03 or 8.05 of either
this Agreement or the Other Agreement, the Borrower shall have the right, with
the assistance of the Agent, to seek a mutually satisfactory substitute bank or
banks (which may be one or more of the Banks) to purchase and assume all of the
rights and obligations of such Bank under this Agreement, the Other Agreement
and such Bank's "Notes" (as defined in both this Agreement and the Other
Agreement), all in accordance with the provisions of Section 9.07(c) of this
Agreement and Section 9.07(c) of the Other Agreement and subject to such Bank
receiving payment in full of all amounts owing to it under this Agreement, the
Other Agreement, and its "Notes" (as defined in both this Agreement and the
Other Agreement).
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices and other communications provided for
-------
herein shall be in writing (including bank wire, telex, facsimile transmission,
telegraph or similar writing) and shall be given to the intended recipient: (x)
in the case of the Borrower or the Agent, at its address or telex or telecopy
number set forth on the signature pages hereof, (y) in the case of any Bank, at
its address or telex or telecopy number set forth in its Administrative
Questionnaire or (z) in the case of any party, at such other address or telex or
telecopy number as shall be designated by such party in a notice to the Borrower
and the Agent. All notices and other communications shall be effective (i) if
given by telex or facsimile transmission, when transmitted to the telex or
telecopy number
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specified in this Section (and, in the case of telex, when the appropriate
answerback is received), (ii) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid, or (iii) if given by any other means, when delivered at
the address specified in this Section; provided that notices to the Agent under
--------
Article II or VIII hereof shall not be effective until received.
SECTION 9.02. No Waiver. No failure on the part of the Agent or any Bank
---------
to exercise and no delay in exercising, and no course of dealing with respect
to, any right, power or privilege under this Agreement or any Note shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
power or privilege under this Agreement or any Note preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The remedies provided herein are cumulative and not exclusive of any remedies
provided by law.
SECTION 9.03. GOVERNING LAW. THIS AGREEMENT, THE NOTES AND THE REQUESTS,
-------------
INVITATIONS AND OFFERS PROVIDED FOR IN SECTION 2.03 SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS.
SECTION 9.04. Expenses and Indemnification. The Borrower agrees to pay,
----------------------------
or reimburse each of the Agent and the Arranger for paying, all reasonable costs
and out-of-pocket expenses incurred or paid by each of the Agent and the
Arranger in connection with the preparation, negotiation, execution, delivery
and syndication of this Agreement and the Notes and the making of the Borrowings
hereunder (including the reasonable fees, time charges and expenses of in-house
or outside counsel to the Agent and the Arranger). The Borrower agrees to pay,
or reimburse the Agent and the Banks for paying, all reasonable fees, time
charges and expenses of in-house counsel to the Agent and such outside counsel,
if any, as shall have been retained by the Agent or the Required Banks on behalf
of the Banks, in connection with the amendment, modification, consent or waiver
of any of the terms of this Agreement or any of the Notes. The Borrower agrees
to pay, or reimburse the Agent and the Banks for paying, all reasonable costs,
internal charges and out-of-pocket expenses (including the reasonable fees, time
charges and expenses of in-house or outside counsel to the Agent or any Bank)
paid or incurred by the Agent or any Bank in connection with the enforcement of
this Agreement or any Note and any collection, bankruptcy, insolvency and other
enforcement proceedings resulting therefrom.
The Borrower hereby agrees to indemnify the Agent, the Arranger and each
Bank (and their respective directors, officers and employees) from and hold
each of them harmless against any and all losses, claims, damages, penalties,
judgments, liabilities and expenses (including, without limitation, all expenses
of litigation or preparation therefor whether or not the Agent, the Arranger or
any Bank is a party thereto) which any of them may pay or incur arising out of
or relating to this Agreement, the Notes, the transactions contemplated hereby
or the direct or indirect application or proposed application of the proceeds of
any Borrowing, except to the extent any of the foregoing arises from the gross
negligence or willful misconduct of the Person seeking indemnification. If and
to the extent that the foregoing indemnification is unenforceable for any
reason, the Borrower agrees to make the maximum contribution to the payment and
satisfaction of each of such losses, liabilities, claims, damages or expenses
which is permissible under applicable law. The obligations of the Borrower
under this Section 9.04 shall survive the termination of this Agreement.
51
<PAGE>
SECTION 9.05. Amendments, Etc. Any provision of this Agreement or the
---------------
Notes may be amended or waived if, but only if, such amendment or waiver is in
writing and is signed by the Borrower and the Required Banks (and, if the rights
or duties of the Agent are affected thereby, by the Agent); provided that the
--------
Agent may, with the consent of the Borrower (which shall not be unreasonably
withheld), specify by notice to the Banks modifications in the procedures set
forth in Section 2.03; and provided further that no such amendment, waiver or
-------- -------
modification shall, unless signed by all the Banks, (i) increase or extend the
Commitment of any Bank or subject any Bank to any additional obligation (except
for increases to the Commitment of any Bank pursuant to Section 8.06 to which
such Bank has agreed in writing), (ii) reduce the principal of or rate of
interest on any Loan or any fees or other amounts payable hereunder or change
the currency of payment thereof, (iii) postpone the date fixed for any payment
of principal of or interest on any Loan or any fees hereunder, (iv) change the
definition of "Required Banks", amend this Section 9.05, or otherwise change the
percentage of the Commitments or of the aggregate unpaid principal amount of the
Notes, or the number of Banks, which shall be required for the Banks or any of
them to take any action under this Section or any other provision of this
Agreement, or (v) change Section 9.11 or any provision providing for the equal
or ratable treatment of the Banks.
SECTION 9.06. Counterparts; Effectiveness; Termination of Existing Credit
-----------------------------------------------------------
Agreement. This Agreement may be executed in any number of counterparts, all of
- ---------
which taken together shall constitute one and the same instrument, and any of
the parties hereto may execute this Agreement by signing any such counterpart.
This Agreement shall become effective when (a) the Agent shall have received
counterparts hereof signed by the Borrower, each Bank listed on the signature
pages hereof and the Agent, and (b) all of the Borrower's obligations under the
Existing Credit Agreement shall have been satisfied (except for any obligations
under Article VIII, Section 2.16 and Section 9.04 therein). Each Bank that is a
party to the Existing Credit Agreement acknowledges and agrees that,
notwithstanding anything to the contrary therein, upon the effectiveness of this
Agreement, the commitments of the banks under the Existing Credit Agreement to
make loans thereunder shall be automatically terminated and any notice
requirements in respect of such termination or in respect of any prepayment of
loans thereunder shall be waived. The Agent shall notify the Borrower and the
Banks of the effectiveness of this Agreement by delivery of a notice in the form
of Exhibit H hereto.
SECTION 9.07. Successors and Assigns. (a) The provisions of this
----------------------
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that the Borrower may not
assign or otherwise transfer any of its rights under this Agreement without the
prior written consent of all Banks and the Agent.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment or
any or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Agent, such Bank shall remain responsible for the performance
of its obligations hereunder, and the Borrower and the Agent shall continue to
deal solely and directly with such Bank in connection with such Bank's rights
and obligations under this Agreement. Any agreement pursuant to which any Bank
may grant such a participating interest shall provide that such Bank shall
retain the sole right and responsibility to enforce the obligations of the
Borrower hereunder including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this Agreement; provided
--------
that such participation agreement may provide that such Bank will not agree to
any modification, amendment or waiver of this Agreement described in clause (ii)
52
<PAGE>
or (iii) of Section 9.05 without the consent of the Participant. The Borrower
agrees that each Participant shall, to the extent provided in its participation
agreement, be entitled to the benefits of Sections 2.13, 2.15, 2.16, 9.04 and
Article VIII to the extent of its participating interest and with such benefits
to be determined as if the related Bank had not granted such participation. An
assignment or other transfer which is not permitted by subsection (c) or (d)
below shall be given effect for purposes of this Agreement only to the extent of
a participating interest granted in accordance with this subsection (b).
(c) With (and subject to) the written consent of the Borrower and the Agent
(such consents not to be unreasonably withheld and, in the case of an assignment
to an Affiliate, not to be required), any Bank may at any time assign to one or
more banks or other institutions (each an "Assignee") all, or a proportionate
part of all, of its rights and obligations under this Agreement and the Notes,
and such Assignee shall assume such rights and obligations, pursuant to an
Assignment and Assumption Agreement in substantially the form of Exhibit G
hereto executed by such Assignee and such transferor Bank; provided, that
simultaneously with each such assignment, the transferor Bank shall assign to
the same Assignee the same proportionate share of all of its rights and
obligations, if any, under the Other Agreement in accordance with the provisions
of Section 9.07(c) of the Other Agreement. Upon execution and delivery of such
instrument and payment by such Assignee to such transferor Bank of an amount
equal to the purchase price agreed between such transferor Bank and such
Assignee, such Assignee shall be a Bank party to this Agreement and shall have
all the rights and obligations of a Bank with a Commitment as set forth in such
instrument of assumption, and the transferor Bank shall be released from its
obligations hereunder to a corresponding extent, and no further consent or
action by any party shall be required. Upon the consummation of any assignment
pursuant to this subsection (c), the transferor Bank, the Agent and the Borrower
shall make appropriate arrangements so that, if required, new Notes are issued
to the Assignee. In connection with any such assignment under this Agreement,
the transferor Bank shall pay to the Agent an administrative fee for processing
such assignment equal to $1,500.
(d) Any Bank may at any time assign all or any portion of its rights under
this Agreement and its Notes to a Federal Reserve Bank (without any requirement
to obtain the consent of the Borrower or the Agent thereto). No such assignment
shall release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's rights shall
be entitled to receive any greater payment under Section 8.03 or 8.05 than such
Bank would have been entitled to receive with respect to the rights transferred,
unless such transfer is (i) made with the Borrower's prior written consent or
(ii) made to either (y) a Bank already party to this Agreement at the time of
such assignment or (z) an affiliate of the transferor Bank.
(f) If any Reference Bank assigns all of its rights and obligations under
this Agreement and its Notes to an unaffiliated institution, the Agent shall, in
consultation with the Borrower and with the consent of the Required Banks,
appoint another Bank to act as a Reference Bank hereunder.
SECTION 9.08. Survival. The obligations of the Borrower under Article
--------
VIII and Sections 2.16 and 9.04 shall survive the repayment of the Loans and the
termination of the Commitments.
53
<PAGE>
SECTION 9.09. Acknowledgement. The Borrower acknowledges that the Banks
---------------
have entered into this Agreement in reliance on the Borrower's assurance that it
does not intend to use the proceeds of any Borrowings hereunder in a manner
which would violate any applicable law or governmental rule or regulation.
SECTION 9.10. Headings. The Table of Contents and Article and Section
--------
headings used herein shall not affect the interpretation of any provision of
this Agreement.
SECTION 9.11. Sharing of Setoffs. Each Bank agrees that, if it shall, by
------------------
exercising any right of setoff or counterclaim or otherwise, receive payment of
a proportion of the aggregate amount of principal and interest due with respect
to any Note held by it which is greater than the proportion received by any
other Bank in respect of the aggregate amount of principal and interest due with
respect to any Note held by such other Bank (other than disproportionate
payments to any Bank provided for by this Agreement), the Bank receiving such
proportionately greater payment shall purchase such participations in the Notes
held by the other Banks, and such other adjustments shall be made, as may be
required so that all such payments of principal and interest with respect to the
Notes held by the Banks shall be shared by the Banks pro rata; provided that
--------
nothing in this Section shall impair the right of any Bank to exercise any right
of setoff or counterclaim it may have and to apply the amount recovered thereby
to the payment of indebtedness of the Borrower other than its indebtedness under
the Notes. If under any applicable bankruptcy, insolvency or other similar law,
any Bank receives a secured claim in lieu of a setoff to which this Section
applies, such Bank shall, to the extent practicable, exercise its rights in
respect of such secured claim in a manner consistent with the rights of the
Banks entitled under this Section to share in the benefits of any recovery on
such secured claim. The Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any holder of a participation in a
Note, whether or not acquired pursuant to the foregoing arrangements, may
exercise rights of setoff or counterclaim and other rights with respect to such
participation as fully as if such holder of a participation were a direct
creditor of the Borrower in the amount of such participation.
SECTION 9.12. Collateral. Each of the Banks represents to the Agent and
----------
each of the other Banks that it in good faith is not relying upon any "margin
stock" (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 9.13. Consent to Jurisdiction. (a) The Borrower irrevocably
-----------------------
submits to the jurisdiction of any federal or Illinois state court sitting in
Chicago, Illinois over any suit, action or proceeding arising out of or relating
to this Agreement or any Note. The Borrower irrevocably waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding brought in such court
and any claim that any suit, action or proceeding brought in such court has been
brought in an inconvenient forum. The Borrower agrees that a final judgment in
any such suit, action or proceeding brought in such a court shall be conclusive
and binding upon the Borrower and may be enforced in any federal or Illinois
state court sitting in Chicago, Illinois (or any other courts to the
jurisdiction of which the Borrower is or may be subject) by a suit upon such
judgment, provided that service of process is effected upon the Borrower in one
of the manners specified in subsection (b) of this Section or as otherwise
permitted by law.
54
<PAGE>
(b) Service of Process. The Borrower hereby consents to process being
------------------
served in any suit, action or proceeding referred to in the first sentence of
subsection (a) of this Section in any federal or Illinois state court sitting in
Chicago, Illinois by mailing a copy thereof by registered or certified air mail,
postage prepaid, return receipt requested, to the Borrower at its address
specified in Section 9.01 or to any other address of which the Borrower shall
have given written notice to the Agent. The Borrower irrevocably waives, to the
fullest extent permitted by law, all claim of error by reason of any such
service in any such suit, action or proceeding brought by the Agent or any Bank.
The Borrower agrees that such service shall be deemed in every respect effective
service of process upon the Borrower in any such suit, action or proceeding and
shall, to the fullest extent permitted by law, be taken and held to be valid and
personal service upon and personal delivery to the Borrower.
(c) No Limitation on Service or Suit. Nothing in this Article shall affect
--------------------------------
the right of the Agent or any Bank to serve process in any other manner
permitted by law or limit the right of the Agent or any Bank to bring
proceedings against the Borrower in the courts of the jurisdiction of the Bank's
Applicable Lending Office or the courts of any jurisdiction or jurisdictions in
which the Borrower has any assets.
SECTION 9.14. Waiver of Jury Trial. THE AGENT, THE BANKS AND THE BORROWER
--------------------
HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER BANK CREDIT DOCUMENT,
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN), OR ACTIONS OF THE AGENT, THE BANKS, OR THE BORROWER.
55
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
THE BORROWER
ARCO CHEMICAL COMPANY
By /s/ R.Remick
------------------------------------
Ronald R. Remick
Vice President and Treasurer
Address for Notices:
3801 West Chester Pike
Newtown Square, Pennsylvania 19073
Attn: Assistant Treasurer
Telex No.: 99-0756
(answerback ARCO CHEM NS1)
Telephone No.: 610-359-3362
Telecopier No.: 610-359-3322
S-1
<PAGE>
THE AGENT
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ George R.Schanz
----------------------------------
GEORGE R. SCHANZ
----------------------------------
Title VICE PRESIDENT
----------------------------------
Address for Notices:
The First National Bank of Chicago
One First National Plaza
Chicago, Illinois 60670
Attention: William P. Laird
Mail Suite 0634
Telex No.: 4330253 (answerback FNBCUI)
Telephone No.: 312-732-5635
Telecopier No.: 312-732-4840
cc: W. Walter Green, III
Mail Suite 0363
Telex No.: 4330253 (answerback FNBCUI)
Telephone No.: 312-732-7235
Telecopier No.: 312-732-3055
THE BANKS
Commitment
- ----------
$33,000,000.00 THE FIRST NATIONAL BANK OF CHICAGO,
as a Bank
By /s/ George R. Schanz
------------------------------------
GEORGE R. SCHANZ
---------------------------------
Title VICE PRESIDENT
---------------------------------
S-2
<PAGE>
Commitment
- ----------
$30,000,000.00 BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as a Co-Agent and a Bank
By [SIGNATURE APPEARS HERE]
-----------------------------------
Title Vice President
--------------------------------
S-3
<PAGE>
Commitment
- ----------
$30,000,000.00 THE CHASE MANHATTAN BANK,
as a Co-Agent and a Bank
By /s/ Robert T. Sacks
-----------------------------------
ROBERT T. SACKS
-----------------------------------
Title MANAGING DIRECTOR
-----------------------------------
S-4
<PAGE>
Commitment
- ----------
$30,000,000.00 DEUTSCHE BANK AG, NEW YORK AND/OR
CAYMAN ISLANDS BRANCHES,
as a Co-Agent and a Bank
By /s/ Jean M.Hannigan Ralf Hoffmann
------------------------------------
JEAN M. HANNIGAN RALF HOFFMANN
--------------------------------
Title VICE PRESIDENT VICE PRESIDENT
---------------------------------
S-5
<PAGE>
Commitment
- ----------
$21,000,000.00 BANK OF TOKYO-MITSUBISHI TRUST COMPANY,
as a Bank
By /s/ M.R. Marron
----------------------------------
M.R. MARRON
-------------------------------
Title VICE PRESIDENT
-------------------------------
S-6
<PAGE>
Commitment
- ----------
$21,000,000.00 CREDIT LYONNAIS NEW YORK BRANCH, as a Bank
By /s/ Pascal Poupelle
----------------------------------
PASCAL POUPELLE
-------------------------------
Title EXECUTIVE VICE PRESIDENT
-------------------------------
S-7
<PAGE>
Commitment
- ----------
$21,000,000.00 CORESTATES BANK, N.A. as a Bank
By [SIGNATURE APPEARS HERE]
----------------------------------
Title VICE PRESIDENT
-------------------------------
S-8
<PAGE>
Commitment
- ----------
$21,000,000.00 MARINE MIDLAND BANK, as a Bank
By /s/ William M. Holland
---------------------------------
WILLIAM M. HOLLAND
---------------------------------
Title VICE PRESIDENT
--------------------------------
S-9
<PAGE>
Commitment
- ----------
$21,000,000.00 WACHOVIA BANK, N.A.,
as a Bank
By /s/ Adam T. Ogburn
----------------------------------
ADAM T. OGBURN
----------------------------------
Title VICE PRESIDENT
-------------------------------
S-10
<PAGE>
Commitment
- ----------
$9,000,000.00 THE BANK OF NEW YORK, as a Bank
By /s/ John W. Hall
------------------------------
JOHN W. HALL
------------------------------
Title VICE PRESIDENT
------------------------------
S-11
<PAGE>
Commitment
- ----------
$9,000,000.00 THE BANK OF NOVA SCOTIA, as a Bank
By /s/ J. Alan Edwards
--------------------------------
J. ALAN EDWARDS
--------------------------------
Title AUTHORIZED SIGNATORY
--------------------------------
S-12
<PAGE>
Commitment
- ----------
$9,000,000.00 CITIBANK, N.A., as a Bank
By /s/ Rufus Beldam
----------------------------------
RUFUS BELDAM
----------------------------------
Title MANAGING DIRECTOR
399 Park/4th FL./Zn.4
(212) 559-1605
----------------------------------
S-13
<PAGE>
Commitment
- ----------
$9,000,000.00 THE DAI-ICHI KANGYO BANK, LTD., LOS
ANGELES AGENCY, as a Bank
By /s/ Masatsugu Morishita
---------------------------------
MASATSUGU MORISHITA
---------------------------------
Title SR. VICE PRESIDENT
JOINT GENERAL MANAGER
---------------------------------
S-14
<PAGE>
Commitment
- ----------
$9,000,000.00 FIRST UNION NATIONAL BANK, as a Bank
By [SIGNATURE APPEARS HERE]
----------------------------------
Title Senior Vice President
-------------------------------
S-15
<PAGE>
Commitment
- ----------
$9,000,000.00 FUJI BANK, LTD., as a Bank
By [SIGNATURE APPEARS HERE]
----------------------------------
Title SeniorVice President
-------------------------------
S-16
<PAGE>
Commitment
- ----------
$9,000,000.00 MELLON BANK, N.A., as a Bank
By /s/ John K. Walsh
----------------------------------
JOHN K. WALSH
-------------------------------
Title Vice President
-------------------------------
S-17
<PAGE>
Commitment
- ----------
$9,000,000.00 THE SAKURA BANK, LTD., as a Bank
By /s/ Yasumasa Kikuchi
----------------------------------
YASUMASA KIKUCHI
----------------------------------
Title Senior Vice President
----------------------------------
S-18
<PAGE>
SCHEDULE I
Euro-Currency Payment Offices of the Agent
Currency Euro-Currency Payment Office
- -------- ----------------------------
Dollars The First National Bank of Chicago
Chicago Office
Account No.: 7521-7653
Ref.: ARCO Chemical
Deutsche Marks To: Swiss Bank Corp.
Frankfurt, Germany
For: The First National Bank of Chicago
Chicago Office
Account No.: 103350.50.00
Ref.: ARCO Chemical
Dutch Guilders To: Rabobank Nederland, N.V.
Utrecht, Netherlands
For: The First National Bank of Chicago
Chicago Office
Account No.: 3908.02.042
Ref.: ARCO Chemical
French Francs To: Credit Commercial De France
Paris, France
For: The First National Bank of Chicago
Chicago Office
Account No.: 020350699000
Ref.: ARCO Chemical
Japanese Yen To: Bank of Tokyo
<PAGE>
Tokyo, Japan
For: The First National Bank of Chicago
Chicago Office
Account No.: 6530422606
Ref.: ARCO Chemical
Pounds Sterling To: Midland Bank, PLC
London, England
For: The First National Bank of Chicago
Chicago Office
Account No.: 00472803
Ref.: ARCO Chemical
<PAGE>
EXHIBIT A
---------
NOTE
Chicago, Illinois
July 23, 1997
For value received, ARCO CHEMICAL COMPANY, a Delaware corporation (the
"Borrower"), promises to pay to the order of (the "Bank"),
for the account of its Applicable Lending Office, the unpaid principal amount of
each Loan made by the Bank to the Borrower pursuant to the Credit Agreement
referred to below on the last day of the Interest Period relating to such Loan.
The Borrower promises to pay interest on the unpaid principal amount of each
such Loan on the dates and at the rate or rates provided for in the Credit
Agreement. All such payments of principal and interest shall be made (i) if in
Dollars, in lawful money of the United States in Federal or other immediately
available funds at the main office of The First National Bank of Chicago, as
Agent, in Chicago Illinois or (ii) if in any other currency, in such funds as
may then be customary for the settlement of international transactions in such
other currency at the place specified for payment thereof pursuant to the Credit
Agreement.
All Loans made by the Bank, the respective maturities thereof and all
repayments of the principal thereof shall be recorded by the Bank and, prior to
any transfer hereof, endorsed by the Bank on the schedule attached hereto, or on
a continuation of such schedule attached to and made a part hereof; provided
--------
that the failure of the Bank to make any such recordation or endorsement shall
not affect the obligations of the Borrower hereunder or under the Credit
Agreement.
This note is one of the Notes referred to in Credit Agreement B dated as of
July 23, 1997 among ARCO Chemical Company, the banks listed on the signature
pages thereof and The First National Bank of Chicago, as Agent (as the same may
be amended from time to time, the "Credit Agreement"). Terms defined in the
Credit Agreement are used herein with the same meanings. Reference is made to
the Credit Agreement for provisions for the prepayment hereof and the
acceleration of the maturity hereof.
ARCO CHEMICAL COMPANY
By:_______________________
Title:______________
<PAGE>
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
Currency and Amount of
Type of Amount of Principal Maturity Notation
Date Loan Loan Repaid Date Made by
- ---- ------- ------------ ---------- -------- --------
Page 2
<PAGE>
EXHIBIT B
---------
FORM OF MONEY MARKET
QUOTE REQUEST
[Date]
TO: The First National Bank of Chicago (the "Agent")
One First National Plaza
Chicago, Illinois 60670
From: Arco Chemical Company
Re: Credit Agreement B dated as of July 23, 1997 (the "Credit Agreement")
among ARCO Chemical Company, the Banks listed on the signature pages
thereof and the Agent
We hereby give notice pursuant to Section 2.03 of the Credit Agreement
that we request Money Market Quotes for the following proposed Money Market
Borrowing(s):
Date of Borrowing:________________________________
Currency* Principal Amount** Interest Period***
-------- ---------------- ---------------
Such Money Market Quotes should offer a Money Market [Margin] [Rate].
[The applicable base rate is the London Interbank Offered Rate.]
Capitalized terms used herein have the meanings assigned to them in the
Credit Agreement.
ARCO CHEMICAL COMPANY
By:__________________________
Title:_____________________
_______________
* If pounds sterling, indicate whether euro-sterling or domestic sterling.
** Amount must be $10,000,000 (or the Approximate Equivalent Amount thereof)
or a larger multiple of $1,000,000 (or the Approximate Equivalent Amount
thereof).
*** Not less than one month (LIBOR Auction) or not less than 7 days (Absolute
Rate Auction), subject to the provisions of the definition of Interest
Period.
<PAGE>
EXHIBIT C
---------
FORM OF INVITATION FOR
MONEY MARKET QUOTES
[Date]
To: [Name of Bank]
[address of Bank]
Re: Invitation for Money Market Quotes
to Arco Chemical Company (the "Borrower")
Pursuant to Section 2.03 of Credit Agreement B dated as of July 23, 1997
(the "Credit Agreement") among ARCO Chemical Company, the Banks listed on the
signature pages thereof and the undersigned, as Agent, we are pleased on behalf
of the Borrower to invite you to submit Money Market Quotes to the Borrower for
the following proposed Money Market Borrowing(s):
Date of Borrowing:________________________
Currency* Principal Amount Business Period
-------- ---------------- ---------------
Such Money Market Quotes should offer a Money Market [Margin] [Rate].
[The applicable base rate is the London Interbank Offered Rate.]
Please respond to this invitation by no later than [3:00 p.m.] [1:00 p.m.]
[9:00 a.m.] [(London time)] [(Chicago time)] on [date].
Capitalized terms used herein have the meanings assigned to them in the
Credit Agreement.
THE FIRST NATIONAL BANK OF CHICAGO, as Agent
By:__________________________________
Authorized Officer
- ---------------
* If pounds sterling, indicate whether euro-sterling or domestic sterling.
<PAGE>
EXHIBIT D
---------
FORM OF MONEY MARKET QUOTE
To: The First National Bank
of Chicago, as Agent
One First National Plaza
Chicago, Illinois 60670
Attention: Funding Services -- Loan Sale Group
Re: Money Market Quote to Arco Chemical Company (the "Borrower")
In response to your invitation on behalf of the Borrower dated
___________, ____, we hereby make the following Money Market Quote on the
following terms:
1. Quoting Bank:
2. Person to contact at Quoting Bank:
3. Date of Borrowing: *
4. We hereby offer to make Money Market Loan(s) in the following principal
amounts for the following Interest Periods and at the following rates:
Principal Interest Money Market
Currency** Amount*** Period**** [Margin+][Rate++]
-------- ------- ------- -------------------
[provided that the aggregate principal amount of Money Market Loans for which
the above offers may be accepted shall not exceed $___________]***
___________
* As specified in the related Invitation.
** ***[If pounds sterling, indicate whether euro-sterling or domestic
sterling.]***
*** Principal amount bid for each Interest Period may not exceed principal
amount requested. Specify aggregate limitation if the sum of the
individual offers exceeds the amount the Bank is will-willing to lend.
Bids must be made for $1,000,000 (or the Approximate Equivalent Amount
thereof) or a larger multiple thereof .
**** Not less than 7 days, as specified in the related Invitation for Money
Market Quotes.
+ Margin over or under the London Interbank Offered Rate determined for the
applicable Interest Period. Specify percentage (rounded to the nearest
1/10,000 of 1%) and specify whether "PLUS" or "MINUS".
++ Specify rate of interest per annum (rounded to the nearest 1/10,000th of
1%).
We understand and agree that the offer(s) set forth above, subject to the
satisfaction of the applicable conditions set forth in Credit Agreement B dated
as of July 23, 1997 (the "Credit
<PAGE>
Agreement") among ARCO Chemical Company, the Banks listed on the signature pages
thereof and yourselves, as Agent, irrevocably obligates us to make the Money
Market Loan(s) for which any offer(s) are accepted, in whole or in part.
Capitalized terms used herein have the meanings assigned to them in the Credit
Agreement.
Very truly yours,
[NAME OF BANK]
Dated:_____________________ By:_________________________
Authorized Officer
Page 2
<PAGE>
EXHIBIT E
---------
CERTIFICATE OF
INCUMBENCY
I, , [Secretary/Assistant Secretary] of ARCO
CHEMICAL COMPANY, a Delaware corporation (the "Borrower"), hereby certify as
follows:
(1) Each of the following named individuals is an Authorized Officer (as
that term is defined in Credit Agreement B, dated as of July 23, 1997 among ARCO
Chemical Company, the Banks named therein and The First National Bank of
Chicago, as Agent (the "Credit Agreement")) of the Borrower and each has been
duly elected to and is now holding the office indicated, and the signature
appearing opposite each name is the genuine signature of such Authorized
Officer:
Title Name Signature
----- ---- ---------
_______________ _______________ _______________
_______________ _______________ _______________
_______________ _______________ _______________
(2) Each of the following named individuals has been duly designated
as an "Authorized Representative" (as that term is defined in the Credit
Agreement) of the Borrower, and the signature appearing opposite each name is
the genuine signature of such Authorized Representative:
Title Name Signature
----- ---- ---------
_______________ _______________ _______________
_______________ _______________ _______________
_______________ _______________ _______________
_______________ _______________ _______________
_______________ _______________ _______________
_______________ _______________ _______________
<PAGE>
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the
Borrower this day of 19 .
______________________________
Secretary/Assistant Secretary
[SEAL]
I, [name], [Treasurer/Assistant Secretary/Secretary] of ARCO Chemical
Company, do hereby certify that is, and at all times since
, 19 has been, the duly elected or appointed, qualified and acting
[Secretary/Assistant Secretary] of the Borrower and that the signature set forth
above is [his][her] genuine signature.
IN WITNESS WHEREOF, I have hereunto set my hand this day of ,
19 .
_________________________________
Treasurer/Assistant Secretary
Page 2
<PAGE>
EXHIBIT F
---------
OPINION OF
COUNSEL FOR THE BORROWER
[Dated as provided in
Section 3.01 of the
Credit Agreement]
To the Banks and the Agent
Referred to Below
c/o The First National Bank
of Chicago, as Agent
One First National Plaza
Chicago, Illinois 60670
Ladies and Gentlemen:
I am [General Counsel] [Associate General Counsel-Corporate] of ARCO
Chemical Company (the "Borrower") and as such have acted as counsel, or
supervised attorneys who have acted as counsel, for the Borrower in connection
with Credit Agreement B, dated as of July 23, 1997 (the "Credit Agreement"),
among ARCO Chemical Company, the banks listed on the signature pages thereof,
and The First National Bank of Chicago, as Agent. Capitalized terms used but not
otherwise defined herein have the meanings assigned to such terms in the Credit
Agreement.
I have examined originals or copies, certified or otherwise identified to
my satisfaction, of such documents, corporate records, certificates of public
officials and other instruments and have conducted such other investigations of
fact and law as I have deemed necessary or advisable for purposes of this
opinion.
Upon the basis of the foregoing, I am of the opinion that:
1. (a) The Borrower (i) is a corporation duly incorporated, validly
existing and in good standing under the laws of Delaware and (ii) either is
qualified to do business and in good standing in each jurisdiction where the
ownership of its properties or the conduct of its business requires such
qualification or is subject to no material liability or disability by reason of
the failure to be so qualified in any such jurisdiction.
(b) The Borrower has all corporate powers and authority, governmental
permits, licenses, consents, authorizations, orders and approvals and other
authorizations as are necessary to carry on its business substantially as
presently conducted except for such of the foregoing the absence of which would
not, in the aggregate, subject the Borrower to any material liability or
disability.
<PAGE>
(c) The execution, delivery and performance by the Borrower of the Credit
Agreement and the Notes, and Borrowings under the Credit Agreement by the
Borrower, are within the corporate power and authority of the Borrower and have
been duly authorized by all necessary corporate proceedings by the Borrower.
(d) Neither such authorization nor the execution, delivery and performance
by the Borrower of the Credit Agreement or of the Notes, nor any Borrowing by
the Borrower when made, will conflict with, result in a breach of or constitute
a default under any of the terms, conditions or provisions of any law or any
regulation, order, writ, injunction or decree of any court or governmental
authority or of the Certificate of Incorporation or By-Laws of the Borrower or
result in the violation or contravention of, or the acceleration of any
obligation under, or cause the creation of any Lien on any of the properties of
the Borrower pursuant to the provisions of, any indenture, agreement or other
instrument to which it is a party or by which it is bound.
(e) Assuming its due execution by the Banks and the Agent, the Credit
Agreement constitutes a legal, valid and binding agreement of the Borrower and
the Notes, when duly executed on behalf of the Borrower and delivered in
accordance with the Credit Agreement, will constitute legal, valid and binding
obligations of the Borrower enforceable in accordance with their respective
terms (subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditors' rights
generally from time to time in effect and to general principles of equity).
2. Except as previously disclosed in writing to the Banks prior to July
23, 1997, there is no action, suit or proceeding pending or, to my knowledge,
threatened against or affecting the Borrower or any of its subsidiaries in any
court or before or by any arbitrator, governmental department, agency or
instrumentality (i) which is likely to have a material adverse effect upon the
Borrower's ability to pay and perform its obligations under the Bank Credit
Documents in accordance with their respective terms or (ii) which in any manner
draws into question the validity of any of the Bank Credit Documents. In this
regard, the Borrower has brought to your attention the Borrower's annual report
on Form 10-K for the year ended December 31, 1996, and the Borrower's quarterly
report on Form 10-Q for the three months ended March 31, 1997.
3. No consent, authorization, order or approval of (or filing or
registration with) any governmental commission, board or other regulatory
authority (other than routine reporting requirements) is required for the
execution, delivery and performance by the Borrower of the Credit Agreement or
the Notes or for Borrowings under the Credit Agreement.
4. The Borrower is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
5. The Cross-Indemnification Agreement, as amended to the date hereof, and
the Tax Sharing Agreement are in full force and effect in accordance with their
respective terms.
Page 2
<PAGE>
6. Each of the Borrower's Subsidiaries that is a corporation is duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all corporate powers and all governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted except for licenses, authorizations, consents or
approvals the absence of which will not materially and adversely affect the
business of the Borrower and its Consolidated Subsidiaries taken as a whole.
I am counsel admitted to practice in the Commonwealth of Pennsylvania. In
giving the foregoing opinion, I express no opinion as to the effect (if any) of
any laws of any jurisdiction other than the general corporate laws of the State
of Delaware and the laws of the Commonwealth of Pennsylvania. I have assumed
for the purposes of this opinion that the applicable laws of the State of
Illinois are the same as the laws of the Commonwealth of Pennsylvania.
Very truly yours,
Page 3
<PAGE>
EXHIBIT G
---------
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of __________, 19__ among [ASSIGNOR] (the "Assignor"),
[ASSIGNEE] (the "Assignee"), ARCO CHEMICAL COMPANY (the "Company") and THE FIRST
NATIONAL BANK OF CHICAGO, as Agent (the "Agent").
WITNESSETH
WHEREAS, this Assignment and Assumption Agreement (the "Agreement") relates
to Credit Agreement B dated as of July 23, 1997 among the Company, the Assignor
and the other Banks party thereto, as Banks, and the Agent (the "Credit
Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor has a
Commitment to make Loans in an aggregate principal amount at any time
outstanding not to exceed $_______________;
WHEREAS, Syndicated Loans made by the Assignor under the Credit Agreement
in the aggregate principal amount of $__________ are outstanding at the date
hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all of the rights
of the Assignor under the Credit Agreement in respect of a portion of its
Commitment thereunder in an amount equal to $___________ (the "Assigned
Amount"), together with a corresponding portion of its outstanding Syndicated
Loans, and the Assignee proposes to accept assignment of such rights and assume
the corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined
-----------
herein shall have the respective meanings set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to the
----------
Assignee all of the rights of the Assignor under the Credit Agreement to the
extent of the Assigned Amount, and the Assignee hereby accepts such assignment
from the Assignor and assumes all of the obligations of the Assignor under the
Credit Agreement to the extent of the Assigned Amount, including the purchase
from the Assignor of the corresponding portion of the principal amount of the
Syndicated Loans made by the Assignor outstanding at the date hereof. Upon the
execution and delivery hereof by the Assignor, the Assignee, the Company and the
Agent and the payment of the amounts specified in Section 3 required to be paid
on the date hereof (i) the Assignee shall,
<PAGE>
as of the date hereof, succeed to the rights and be obligated to perform the
obligations of a Bank under the Credit Agreement with a Commitment in an amount
equal to the Assigned Amount, and (ii) the Commitment of the Assignor shall, as
of the date hereof, be reduced by a like amount and the Assignor released from
its obligations under the Credit Agreement to the extent such obligations have
been assumed by the Assignee. The assignment provided for herein shall be
without recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and sale
--------
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the
date hereof in Federal funds an amount equal to $__________*. It is understood
that facility fees with respect to the Assigned Amount accrued to the date
hereof are for the account of the Assignor and such fees accruing from and
including the date hereof are for the account of the Assignee. Each of the
Assignor and the Assignee hereby agrees that if it receives any amount under the
Credit Agreement which is for the account of the other party hereto, it shall
receive the same for the account of such other party to the extent of such other
party's interest therein and shall promptly pay the same to such other party.
SECTION 4. Consent of the Company and the Agent. This Agreement is
------------------------------------
conditioned upon the consent of the Company and the Agent pursuant to Section
9.07(c) of the Credit Agreement. The execution of this Agreement by the Company
and the Agent is evidence of this consent. Pursuant to Section 9.07(c) the
Company agrees to execute and deliver a Note payable to the order of the
Assignee to evidence the assignment and assumption provided for herein.**
_________________________
* Amount should combine principal together with accrued interest and
breakage compensation, if any, to be paid by the Assignee, net of any
portion of any upfront fee to be paid by the Assignor to the Assignee. It
may be preferable in an appropriate case to specify these amounts
generically or by formula rather than as a fixed sum .
** Delete this Section 4 if no consent is required pursuant to Section
9.07(c) of the Credit Agreement.
Page 2
<PAGE>
SECTION 5. Non-Reliance on Assignor. The Assignor makes no representation
------------------------
or warranty in connection with, and shall have no responsibility with respect
to, the solvency, financial condition, or statements of the Borrower, or the
validity and enforceability of the obligations of the Borrower in respect of the
Credit Agreement or any Note. The Assignee acknowledges that it has,
independently and without reliance on the Assignor, and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and will continue to be responsible for
making its own independent appraisal of the business, affairs and financial
condition of the Borrower. Neither the Assignor nor any of its officers,
directors, employees, agents or attorneys shall be liable for any mistake, error
of judgment, or action taken or omitted to be taken in connection with any
Loans, Note, Commitment or other interest under the Credit Agreement.
SECTION 6. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of Illinois.
SECTION 7. Counterparts. This Agreement may be signed in any number of
------------
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date first above
written.
[ASSIGNOR]
By:__________________________
Title:_______________________
[ASSIGNEE]
By:__________________________
Title:_______________________
Page 3
<PAGE>
ARCO CHEMICAL COMPANY
By:__________________________
Title:_______________________
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By:__________________________
Title:_______________________
Page 4
<PAGE>
EXHIBIT H
---------
NOTICE OF EFFECTIVENESS
July 23, 1997
ARCO Chemical Company
3801 West Chester Pike
Newtown Square, Pennsylvania 19073
Attention: Treasurer
Dear Ladies/Gentlemen:
We hereby notify you that Credit Agreement B dated as of July 23, 1997 among
ARCO Chemical Company, the banks listed on the signature pages thereof and The
First National Bank of Chicago, as Agent, has become effective as of the date
hereof in accordance with Section 9.06 thereof.
Very truly yours,
THE FIRST NATIONAL BANK OF
CHICAGO, as Agent
By:___________________________
Title:________________________
<PAGE>
EXHIBIT I
---------
OPINION OF SPECIAL COUNSEL FOR THE AGENT
[Dated as provided in
Section 3.01 of the
Credit Agreement]
The First National Bank of Chicago, as
Agent, and the other financial institutions
which are parties to each of the Credit
Agreements referred to below
Re: ARCO Chemical Company
---------------------
Ladies and Gentlemen:
We have acted as special counsel to The First National Bank of Chicago, as
Agent (in such capacity, the "Agent"), in connection with Credit Agreement A and
Credit Agreement B (collectively, the "Credit Agreements"), each dated as of
July 23, 1997, among ARCO Chemical Company (the "Borrower"), various financial
institutions, and the Agent. Capitalized terms used herein and not otherwise
defined shall have the meanings attributed to them in each of the Credit
Agreements.
In connection herewith, we have examined counterparts of each Credit
Agreement executed by the Borrower, each of the Banks and the Agent; and each
Note issued by the Borrower on the date hereof pursuant to the Credit Agreements
(the "Notes"). In connection with such examination, we have assumed the
genuineness of all signatures, the authority of the persons signing such
documents and the authenticity of such documents. We also have assumed, without
any independent investigation, that (a) each Credit Agreement and each Note has
been duly authorized, executed and delivered by each of the parties thereto and
(b) each Credit Agreement is the legal, valid and binding obligation of each
party thereto other than the Borrower, enforceable against each such party in
accordance with its terms.
Based upon the foregoing, and subject to the qualifications set forth below,
we are of the opinion that, under the laws of the State of Illinois:
(1) Each Credit Agreement is the legal, valid and binding obligation of the
Borrower, enforceable against the Borrower in accordance with its terms.
(2) The Notes are the legal, valid and binding obligations of the Borrower,
enforceable against the Borrower in accordance with their terms.
<PAGE>
______, 1997
Page 2
Our opinions are subject to the following qualifications:
(a) Our opinions are subject to the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or similar law
affecting creditors' rights generally and to the effect of general principles of
equity (regardless of whether considered in a proceeding in equity or at law),
including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing.
(b) We express no opinion as to indemnification or contribution obligations
which contravene public policy.
(c) We express no opinion as to any provision of either Credit Agreement
purporting to convey rights to Persons other than parties to such Credit
Agreement.
(d) We express no opinion as to any waiver of (i) the right to a jury trial,
(ii) any objection to venue or (iii) any right to bring legal proceedings in any
court having jurisdiction.
(e) Our opinions are limited to the laws of the State of Illinois, and we
express no opinion as to the laws of any other jurisdiction.
This opinion letter is solely for the benefit of the addressees hereof (and
their respective successors and assigns) in connection with the transactions
contemplated by the Credit Agreements, and this opinion letter may not be relied
upon by any other Person or for any other purpose.
Very truly yours,
MAYER, BROWN & PLATT
RCB:DTJ
Page 2
<PAGE>
AMENDMENT NO. 7
TO THE ARCO CHEMICAL COMPANY
1990 LONG-TERM INCENTIVE PLAN
The ARCO Chemical Company 1990 Long-Term Incentive Plan ("Plan"), as
amended, is hereby amended as follows:
Article II, Section 2(f) of the Plan is amended to read as follows:
"(f) Termination of Employment If an optionee's employment is
-------------------------
terminated prior to the expiration of the vesting period prescribed by the
Long-Term Incentive Plan Administration Subcommittee with respect to any granted
Stock Option, such Stock Option, and accumulated DSCs pertaining thereto, shall
be cancelled unless the optionee's termination is due to (i) death, (ii) total
and permanent disability, (iii) termination of employment with a right to an
immediate allowance under a retirement plan of the Employer, or (iv) any other
termination of employment in connection with which the Subcommittee, in its sole
discretion, has determined that the optionee's Stock Options shall not be
cancelled.
If an optionee's employment is terminated following the
expiration of the vesting period prescribed by the Long-Term Incentive Plan
Administration Subcommittee with respect to any granted Stock Option, such Stock
Option, and accumulated DSCs pertaining thereto, shall be cancelled if the
termination is due to (i) discharge for cause, (ii) resignation without approval
of the Employer (except in conjunction with a right to an immediate allowance
under a retirement plan of the Employer) or (iii) resignation at the initiation
of the Employer (except in conjunction with a right to an immediate allowance
under a retirement plan of the Employer, an economic layoff or a reduction in
force).
EXHIBIT 10.4
<PAGE>
Except as set forth herein, the Plan shall not be amended or modified and
shall remain in full force and effect.
Executed this 29th day of July 1997.
---- ----
ATTEST ARCO CHEMICAL COMPANY
BY:/s/ Valerie H. Perry BY:/s/ Frank W. Welsh
- ----------------------------- ------------------
Frank W. Welsh
Vice President - Human Resources
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<PAGE>
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