<PAGE> 1
Sequential Page
No. 1 of 10 Pages
UNITED STATES
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 July 31, 1994
--------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
----------- ----------
Commission File Number 1-5111
---------------------
THE J. M. SMUCKER COMPANY
Ohio 34-0538550
- - ------------------------ ------------------------
State of Incorporation IRS Identification No.
STRAWBERRY LANE
ORRVILLE, OHIO 44667
(216) 682-3000
The Company 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 and has been subject to such filing requirements for the
past 90 days.
The Company had 14,391,339 Class A Common Shares and 14,780,839 Class B
Common Shares outstanding on July 31, 1994.
The Exhibit Index is located on Sequential Page No. 9.
<PAGE> 2
Sequential Page
No. 2
<TABLE>
PART I. FINANCIAL INFORMATION
THE J. M. SMUCKER COMPANY
CONDENSED STATEMENTS OF CONSOLIDATED INCOME
(Unaudited)
<CAPTION>
Item I. Financial Statements Three Months Ended
-------------------- July 31,
-----------------------------
1994 1993
---------- ----------
(Dollars in thousands, except
per share data)
<S> <C> <C>
Net sales $ 144,347 $ 112,166
Cost of products sold 94,420 70,634
---------- ----------
49,927 41,532
Selling, distribution, and
administrative expenses 34,722 27,511
---------- ----------
15,205 14,021
Interest income 196 346
Other (expense) income - net 699 302
---------- ----------
16,100 14,669
Interest expense 739 56
---------- ----------
INCOME BEFORE INCOME TAXES 15,361 14,613
Income taxes 6,146 5,706
---------- ----------
NET INCOME $ 9,215 $ 8,907
========== ==========
Net income per Common Share* $ .32 $ .31
========== ==========
Dividends declared on Class A
Common Shares $ .125 $ .115
========== ==========
Dividends declared on Class B
Common Shares $ .125 $ .115
========== ==========
* Computed on the weighted average
number of Class A Common Shares
and Class B Common Shares
outstanding, namely 29,131,744 29,204,731
<FN>
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE> 3
Sequential Page
No. 3
<TABLE>
THE J. M. SMUCKER COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
July 31, 1994 April 30, 1994
(Unaudited)
---------------- --------------
(Dollars in Thousands)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 5,463 $ 14,059
Trade receivables 52,455 47,838
Inventories:
Finished products 56,564 42,463
Raw materials, containers, and supplies 93,193 60,774
-------- --------
149,757 103,237
Other current assets 6,906 6,562
-------- --------
Total Current Assets 214,581 171,686
PROPERTY, PLANT, AND EQUIPMENT
Land and land improvements 13,633 13,532
Buildings and fixtures 69,341 68,362
Machinery and equipment 132,152 130,403
Construction in progress 8,356 6,486
-------- --------
223,482 218,783
Less allowances for depreciation (85,080) (81,278)
-------- --------
Total Property, Plant, and Equipment 138,402 137,505
OTHER NONCURRENT ASSETS
Goodwill, trademarks, and patents 77,516 60,161
Other assets 9,247 9,289
-------- --------
Total Other Noncurrent Assets 86,763 69,450
-------- --------
$439,746 $378,641
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 47,652 $ 37,322
Notes Payable 42,000 -0-
Salaries, wages, and additional compensation 9,458 9,604
Accrued marketing and merchandising 16,582 16,210
Other current liabilities 22,548 20,059
-------- --------
Total Current Liabilities 138,240 83,195
NONCURRENT LIABILITIES 60,874 61,044
SHAREHOLDERS' EQUITY
Class A Common Shares, outstanding shares: 3,598 3,590
14,413,693 and 14,407,493 at stated value
Class B Common Shares, outstanding shares: 3,695 3,687
14,791,173 and 14,791,173 at stated value
Additional capital 10,598 9,261
Retained income 238,993 233,420
Less:
Deferred compensation (1,834) (576)
Amount due from ESOP Trust (10,669) (10,669)
Currency translation adjustment (3,749) (4,311)
-------- --------
Total Shareholders' Equity 240,632 234,402
-------- --------
$439,746 $378,641
======== ========
<FN>
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE> 4
Sequential Page
No. 4
<TABLE>
THE J. M. SMUCKER COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Three Months Ended
July 31
--------------------
(Dollars in Thousands)
1994 1993
--------- --------
<S> <C> <C>
NET CASH USED FOR OPERATING ACTIVITIES $ (19,923) $(13,512)
CASH FLOWS FROM INVESTING ACTIVITIES
Business acquired - net of cash (22,282) (15,861)
Additions to property, plant, and
equipment (4,806) (4,614)
Proceeds from the sale of property,
plant, and equipment 159 702
Other - net (39) (343)
--------- --------
NET CASH USED FOR INVESTING ACTIVITIES (26,968) (20,116)
CASH FLOWS FROM FINANCING ACTIVITIES
Reduction in Long-Term Debt (101) -0-
Proceeds from Short-Term Debt 42,000 -0-
Dividends paid (3,634) (3,341)
Sale of Common Shares -0- 105
Other - Net (84) -0-
--------- --------
NET CASH USED FOR FINANCING ACTIVITIES 38,181 (3,236)
Effect of exchange rate changes 114 (39)
--------- --------
Net Decrease in Cash and
Cash Equivalents (8,596) (36,903)
Cash and Cash Equivalents at
Beginning of Period 14,059 50,445
--------- --------
Cash and Cash Equivalents at
End of Period $ 5,463 $ 13,542
========= ========
<FN>
( ) Denotes use of cash
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE> 5
Sequential Page
No. 5
THE J. M. SMUCKER COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note A - Basis of Presentation
---------------------
The accompanying unaudited, condensed, consolidated financial
statements have been prepared in accordance with the instructions to Form 10-Q
and do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included. Due
to the seasonal nature of the "Mrs. Smith's" business, first quarter results
are not indicative of the estimated results on an annual basis. Due to
anticipated stronger product demand during the upcoming fall and holiday
season, the Company expects "Mrs. Smith" to have a more significant impact on
second and third quarter financial results. For further information, reference
is made to the consolidated financial statements and footnotes included in the
Company's Annual Report on Form 10-K for the year ended April 30, 1994.
Note B - Common Shares
-------------
At July 31, 1994, 35,000,000 Class A Common Shares and 35,000,000
Class B Common Shares were authorized. Outstanding shares of each class are
shown net of 1,820,949 Class A and 1,431,449 Class B treasury shares at July
31 and 1,851,949 Class A and 1,462,449 Class B treasury shares at April 30,
1994.
Note C - Acquisitions
------------
On July 1, 1994, the Company completed its cash acquisition of
substantially all of the assets of After The Fall Products, Inc., located in
Brattleboro, Vermont. That company's business consisted primarily of the sale
of natural juices and juice beverages under the "After The Fall" brand. In
connection with this acquisition, the Company purchased $17,746,500 of
intangible assets, and plans to amortize them over 40 years using the straight
line method. The acquisition was recorded using the purchase method of
accounting.
Note D - Accounting Reclassifications
----------------------------
Certain prior year amounts have been reclassified to conform to current
year classifications.
Note E - Income Per Share
----------------
Income per share has been computed based on the weighted average number
of Class A Common Shares and Class B Common Shares considered outstanding
during the period.
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
------------------------------------
This discussion and analysis deals with comparisons of material changes
in the condensed, consolidated financial statements for the quarters ended July
31, 1994 and 1993, respectively.
<PAGE> 6
Sequential Page
No. 6
Results of Operations
- - ---------------------
Sales for the first quarter ended July 31, 1994 were $144,347,000, up
approximately 29% over the same period last year. Earnings for the same period
were $9,215,000, or $.32 per share, compared to $8,907,000, or $.31 per share,
for the first quarter last year. The increase in sales is attributable to a
combination of growth in existing markets and the impact of recent
acquisitions. While the addition of the "Mrs. Smith's" business accounted for
approximately one-half of the sales increase, all business areas were up over
the prior year with the Foodservice, Industrial, and Specialty Foods areas
achieving double-digit volume and dollar sales growth.
Earnings for the quarter were consistent with expectations and margins
on the Company's core business remain favorable. Although the "Mrs. Smith's"
business contributed significantly to overall sales growth in the first
quarter, that business did not make a comparable contribution to first quarter
earnings. This was due primarily to the fact that the "Mrs. Smith's" business
tends to be seasonal in nature, with the first quarter of the fiscal year being
the weakest quarter. The "Mrs. Smith's" business is expected to make a larger
profit contribution during the second quarter of the year.
In the Consumer area, the grocery and beverage markets accounted for
most of the increase in sales over the prior year. These were offset somewhat
by decreases in the warehouse club and mass retail markets. International
sales were up over 50%, primarily due to the inclusion of sales from Canada
Group East, which was acquired in July 1993, although all markets in the
International area were up over prior year sales levels.
The cost of products sold during the quarter increased as a percentage
of sales over the same period last year due primarily to the acquisitions of
Canada Group East and the "Mrs. Smith's" and "After The Fall" businesses.
These operations currently perform at margins below the Corporate average.
Excluding the acquisitions, margins otherwise were consistent with last year's
results.
The percentage increase in selling, distribution, and administration
costs for the first quarter over the same period last year was slightly less
than the percentage increase in sales. Marketing and selling expenses were up
slightly but at a lesser rate than the increase in sales, thereby helping to
offset higher administrative overhead and amortization costs.
Interest expense increased significantly from the same period last year
due to the additional debt incurred as a result of the recent acquisitions.
Conversely, interest income decreased due to lower investment balances this
year compared to the first quarter of fiscal 1994.
The increase in income taxes was slightly greater than the percentage
increase in income before tax. The Company elected to recognize the increase
in the statutory federal tax rate during the second quarter of fiscal 1994.
<PAGE> 7
Sequential Page
No. 7
Financial Condition - Liquidity and Capital Resources
- - -----------------------------------------------------
The Company's financial position continues to be strong despite the
increase in debt during the first quarter. The acquisition of the "After The
Fall" beverage business and the seasonal procurement of fruit, which primarily
occurs during the first half of the fiscal year, were the major uses of cash
during the quarter. Other significant uses of cash during the quarter were the
payment of dividends and capital expenditures.
During the second quarter, the Company will continue to borrow against
its revolving credit agreement in order to pay for remaining fruit purchases
and other working capital requirements. The Company expects that borrowings
will peak at a level within the $125 million maximum under the agreement. The
Company expects that cash from future operations will be sufficient to allow it
to begin paying down outstanding debt during the latter part of the fiscal
year, assuming there are no additional acquisitions or other extraordinary cash
requirements.
<PAGE> 8
Sequential Page
No. 8
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
--------
See the Index of Exhibits that appears on Sequential
Page No. 9 of this report.
(b) Reports on Form 8-K
-------------------
On June 13, 1994, the Company amended its April 15, 1994,
Form 8-K filing to include both audited financial statements
and proforma information as required under item 7(a) and 7(b)
of Form 8-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
September 13, 1994 THE J. M. SMUCKER COMPANY
/s/ Steven J. Ellcessor
BY STEVEN J. ELLCESSOR
Secretary
/s/ Richard K. Smucker
AND RICHARD K. SMUCKER
President
<PAGE> 9
Sequential Page
No. 9
INDEX OF EXHIBITS
That are filed with the Commission and
the New York Stock Exchange
Assigned Sequential
Exhibit No. * Description Page No.
- - --------------------------------------------------------------------------
4 (a) Industrial Development Revenue Bond Project **
Agreement dated as of December 1, 1986.
(b) Promissory Note between The J. M. Smucker **
Company and First of America Bank - Central
dated as of March 15, 1993.
27 Financial Data Schedule pursuant to Article 5
in Regulation S-X.
99 Revolving credit agreement between The J.M.
Smucker Company and Society National Bank
(Individually and as Agent), National City
Bank and the First National Bank of Chicago
dated as of April 27, 1994.
* Exhibits 2, 10, 11, 15, 18, 19, 20, 23, 24, and 25
are either inapplicable to the Company or require no answer.
** As permitted by Item 601(b)(4)(iii) of Regulation S-K, copies
of these instruments are not filed herewith; however, copies
will be furnished to the Commission upon request.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-1995
<PERIOD-START> MAY-01-1994
<PERIOD-END> JUL-31-1994
<CASH> 5,463
<SECURITIES> 0
<RECEIVABLES> 52,810
<ALLOWANCES> 355
<INVENTORY> 149,757
<CURRENT-ASSETS> 214,581
<PP&E> 223,482
<DEPRECIATION> 85,080
<TOTAL-ASSETS> 439,746
<CURRENT-LIABILITIES> 138,240
<BONDS> 0
<COMMON> 7,293
0
0
<OTHER-SE> 233,338
<TOTAL-LIABILITY-AND-EQUITY> 439,746
<SALES> 144,347
<TOTAL-REVENUES> 144,347
<CGS> 94,420
<TOTAL-COSTS> 94,420
<OTHER-EXPENSES> 34,722
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 739
<INCOME-PRETAX> 15,361
<INCOME-TAX> 6,146
<INCOME-CONTINUING> 9,215
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,215
<EPS-PRIMARY> .32
<EPS-DILUTED> .32
</TABLE>
<PAGE> 1
REVOLVING CREDIT AGREEMENT
REVOLVING CREDIT AGREEMENT dated as of April 27, 1994, among THE J. M.
SMUCKER COMPANY, the BANKS listed on the signature pages hereof and SOCIETY
NATIONAL BANK, as Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein, have the
following meanings:
"Adjusted Euro-Dollar Rate" has the meaning set forth in Section 2.07(b).
"Agent" means SOCIETY NATIONAL BANK, in its capacity as agent for the Banks
hereunder, and its successors in such capacity.
"Bank" means each bank listed on the signature pages hereof as having a
Commitment, and its successors and assigns.
"Borrower" means THE J. M. SMUCKER COMPANY, an Ohio corporation.
"Borrowing" has the meaning set forth in Section 1.03.
"Code" means the Internal Revenue Code of 1986, as amended, or any successor
statute.
"Commitment" means, with respect to each Bank, the amount set forth opposite
the name of such Bank on the signature pages hereof, as such amount may be
reduced from time to time pursuant to Sections 2.09 and 2.10.
"Consolidated" means shall mean the resultant consolidation of the financial
statements of the Borrower and its Subsidiaries in accordance with generally
accepted accounting principles, including principles of consolidation
consistent with those applied in preparation of the Consolidated financial
statements referred to in Section 4.04.
"Controlled Group" means a controlled group of corporations as defined in
Section 1563 of the Code of which Borrower or any Subsidiary is a part.
"Debt" of any Person means 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, (iv) all obligations of such Person as lessee under
capital leases, (v) all obligations of others secured by a Lien on any asset of
such Person, whether or not such obligations are assumed by such Person, and
(vi) all obligations of others Guaranteed by such Person.
"Default" means 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.
"Domestic Business Day" means any day except a Saturday, Sunday or other day
on which commercial banks in Cleveland, Ohio are authorized by law to close.
"Domestic Lending Office" means, as to each Bank, its office located at its
address set forth on the signature pages hereof (or identified on the signature
pages hereof as its Domestic Lending Office) or such other office as such Bank
may hereafter designate as its Domestic Lending Office by notice to the
Borrower and the Agent.
"Domestic Loans" means Prime Rate Loans.
"Domestic Notes" means promissory notes of the Borrower, substantially in the
form of Exhibit A hereto, evidencing the obligation of the Borrower to repay
the Domestic Loans.
"Environmental Laws" means all provisions of law, statutes, ordinances,
rules, regulations, permits, licenses, judgments, writs, injunctions, decrees,
orders, awards and standards promulgated by the government of the United States
of America or by any state or municipality thereof or by any court, agency,
instrumentality, regulatory authority or commission of any of the foregoing
concerning health, safety and protection of, or regulation of the discharge of
substances into, the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time.
"Euro-Dollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office, branch or
affiliate located at its address set forth on the signature pages hereof (or
identified on the signature pages hereof as its Euro-Dollar Lending Office) or
such other office, branch or affiliate of such Bank as it may hereafter
designate as its Euro-Dollar Lending Office by notice to the Borrower and the
Agent.
"Euro-Dollar Loan" means a Loan to be made by a Bank pursuant to Section 2.01
as a Euro-Dollar Loan in accordance with the applicable Notice of Borrowing.
"Euro-Dollar Margin" has the meaning set forth in Section 2.07(b).
"Euro-Dollar Notes" means promissory notes of the Borrower, substantially in
the form of Exhibit B hereto, evidencing the obligation of the Borrower to
repay the Euro-Dollar Loans.
"Euro-Dollar Reference Bank" means the Cayman Islands branch office of SOCIETY
NATIONAL BANK.
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section 2.07(b).
"Event of Default" has the meaning set forth in Section 6.01.
"Fixed Rate Loans" means Euro-Dollar Loans or Money Market Loans or any
combination of the foregoing.
"Interest Period" means: (1) with respect to each Euro-Dollar Borrowing, the
period commencing on the date of such Borrowing, and ending one, two, three or
six months thereafter, 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-Dollar Business Day shall be extended to the next succeeding Euro-Dollar
Business Day unless such Euro-Dollar Business Day falls in another calendar
month, in which case such Interest Period shall end on the next preceding
Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar 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, subject to
clause (c) below, end on the last Euro-Dollar Business Day of a calendar month;
and
<PAGE> 2
(c) any Interest Period which begins before the Termination Date and would
otherwise end after the Termination Date shall end on the Termination Date.
(2) with respect to each Prime Rate Borrowing, the period commencing on the
date of such Borrowing and ending 90 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 Domestic
Business Day shall be extended to the next succeeding Domestic Business Day;
and
(b) any Interest Period which would otherwise include the Termination Date
shall end on the Termination Date.
(3) with respect to each Money Market Rate Borrowing, the period commencing
on the date of such Borrowing and ending on a date up to and including 180 days
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
Domestic Business Day shall be extended to the next succeeding Domestic
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.
"Lending Office" means as to any Bank its Domestic Lending Office or its
Euro- Dollar Lending Office or its Money Market Lending Office, as the context
may require.
"Lien" means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset.
"Loan" means a Domestic Loan or a Euro-Dollar or a Money Market Loan and
"Loans" means Domestic Loans or Euro-Dollar Loans or Money Market Loans or any
combination of the foregoing.
"London Interbank Offered Rate" has the meaning set forth in Section 2.07(b).
"Money Market Lending Office" means, as to each Bank, its Domestic Lending
Office or such other office, branch or affiliate of such Bank as it may
hereafter designate as its Money Market Lending Office by notice to the
Borrower and the Agent.
"Money Market Loan" means a Money Market Rate Loan.
"Money Market Notes" means promissory notes of the Borrower, substantially in
the form of Exhibit C hereto, evidencing the obligation of the Borrower to
repay the Money Market Loans.
"Money Market Quote" means an offer by a Bank to make a Money Market Loan in
accordance with Section 2.03.
"Money Market Rate" has the meaning set forth in Section 2.03(d).
"Money Market Rate Loan" means a Loan to be made by a Bank pursuant to Section
2.03 bearing interest at the Money Market Rate.
"Note" means a Domestic Note or a Euro-Dollar Note or a Money Market Note,
and "Notes" means the Domestic Notes or the Euro-Dollar Notes or the Money
Market Notes or any combination of the foregoing.
"Notice of Borrowing" means 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)).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means 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" means at any time an employee pension benefit plan which is covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Code and is either (i) maintained by a member of the Controlled Group
for employees of a member of the Controlled Group or (ii) maintained pursuant
to a collective bargaining agreement or any other arrangement under which more
than one employer makes contributions and to which a member of the Controlled
Group is then making or accruing an obligation to make contributions or has
within the preceding five plan years made contributions.
"Prime Rate" shall mean that interest rate established from time to time by
SOCIETY NATIONAL BANK as SOCIETY NATIONAL BANK's Prime Rate, whether or not
such rate is publicly announced; the Prime Rate may not be the lowest interest
rate charged by SOCIETY NATIONAL BANK or any Bank for commercial or other
extensions of credit.
"Prime Rate Loan" means a Loan to be made by a Bank pursuant to Section 2.01
as a Prime Rate Loan in accordance with the applicable Notice of Borrowing or
pursuant to Article VIII.
"Refunding Borrowing" means a Borrowing which, after application of the
proceeds thereof, results in no net increase in the outstanding principal
amount of Loans made by any Bank.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Related Writing" shall mean any Note, assignment, mortgage, security
agreement, guaranty agreement, subordination agreement, financial statement,
audit report or other writing furnished by Borrower or any of its officers to
the Agent or the Banks pursuant to or otherwise in connection with this
Agreement.
"Reportable Event" shall mean a reportable event as that term is defined in
Title IV of ERISA, except a reportable event not subject to the provisions for
thirty day notice to the PBGC and actions of general applicability by the
Secretary of Labor under Section 110 of ERISA.
"Required Banks" means at any time Banks having at least 51% of the aggregate
amount of the Commitments or, if the Commitments shall have been terminated,
holding Notes evidencing at least 51% of the aggregate unpaid principal amount
of the Loans.
"Revolving Credit Period" means the period from the date hereof to and
including the Domestic Business Day next preceding the Termination Date.
"Subsidiary" means 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 are at the
time directly or indirectly owned by the Borrower.
"Syndicated Loan" means a Domestic Loan or a Euro-Dollar Loan made by a Bank
pursuant to Section 2.01.
"Tangible Net Worth" means the total assets of the Borrower less the
Borrower's (i) Total Indebtedness and (ii) the aggregate amount of all
intangible assets.
<PAGE> 3
"Termination Date" means April 30, 1997, as such date may be extended
pursuant to Section 2.15 hereof, provided that if such day is not a Euro-Dollar
Business Day, the next preceding Euro-Dollar Business Day.
"Total Indebtedness" means the total of all items of indebtedness or
liability which in accordance with generally accepted accounting principles
would be included in determining total liabilities on the liabilities side of
the balance sheet as of the date of determination.
"Unfunded Vested Liabilities" means, with respect to any Plan at any time,
the amount (if any) by which (i) the present value of all vested nonforfeitable
benefits under such Plan exceeds (ii) the fair market value of all Plan assets
allocable to such benefits, 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 Controlled Group to the PBGC or the Plan
under Title IV of ERISA.
The foregoing definitions shall be applicable to the singulars and plurals of
the foregoing defined terms.
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
generally accepting accounting principles as in effect from time to time,
applied on a basis consistent with the most recent audited Consolidated
financial statements of the Borrower delivered to the Banks.
SECTION 1.03. Types of Borrowings. The term "Borrowing" denotes the
aggregation of Loans 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-Dollar Borrowing" is
a Borrowing comprised of Euro-Dollar Loans) or by reference to the provisions
of Article II under which participation therein is determined (i.e., a
"Syndicated Borrowing" is a Borrowing under Section 2.01 in which all Banks
participate in proportion to their Commitments, while a "Money Market
Borrowing" is a Borrowing under Section 2.03 in which the Bank participants are
determined by the Agent in accordance therewith).
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend. During the Revolving Credit Period each
Bank severally agrees, on the terms and conditions set forth in this Agreement,
(including, without limitation, the limitation set forth in Section 3.01 (b) as
to the aggregate principal amount of Loans at any one time outstanding
hereunder), to lend to the Borrower pursuant to this Section from time to time
amounts such that the aggregate principal amount of Syndicated Loans by such
Bank at any one time outstanding shall not exceed the amount of its Commitment.
Each Borrowing under this Section shall be in an aggregate principal amount of
$500,000 or any larger multiple of $100,000 (except that any such Borrowing may
be in the aggregate amount of the unused Commitments) 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, repay,
or to the extent permitted by Section 2.11, prepay Loans and reborrow at any
time during the Revolving Credit Period under this Section.
SECTION 2.02. Notice of Syndicated Borrowings. The Borrower shall give the
Agent notice (a "Notice of Syndicated Borrowing") not later than 1:00 p.m.
(Cleveland, Ohio time) on (x) the date of each Prime Rate Borrowing, and (y)
the third Euro-Dollar Business Day before each Euro-Dollar Borrowing,
specifying:
(a) the date of such Borrowing, which shall be a Domestic Business Day in
the case of a Domestic Borrowing or a Euro-Dollar Business Day in the case of a
Euro- Dollar Borrowing,
(b) the aggregate amount of such Borrowing,
(c) whether the Loans comprising such Borrowing are to be Prime Rate Loans
or Euro-Dollar Loans, and
(d) in the case of a Euro-Dollar Borrowing, the duration of the Interest
Period applicable thereto, subject to the provisions of the definition of
Interest Period.
SECTION 2.03. Money Market Borrowings.
(a) The Money Market Option. In addition to Syndicated Borrowings pursuant
to Section 2.01, but subject to the terms and conditions of this Agreement
(including, without limitation, the limitation set forth in Section 3.0l(b) as
to the aggregate principal amount of Loans at any time outstanding
hereunder),the Borrower may, as set forth in this Section, request the Banks
during the Revolving Credit Period 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) Money Market Quote Request. When the Borrower wishes to request offers
to make Money Market Loans under this Section, it shall transmit to the Agent
by telex or telecopy a Money Market Quote Request, substantially in the form of
Exhibit D hereto so as to be received no later than 1:00 p.m. (Cleveland, Ohio
time) on the Domestic Business Day next preceding the date of Borrowing
proposed therein, specifying:
(i) the proposed date of Borrowing, which shall be a Domestic Business Day,
(ii) the aggregate amount of such Borrowing, which shall be $500,000 or a
larger multiple of $100,000,
(iii) the duration of the Interest Period applicable thereto, subject to the
provisions of the definition of Interest Period, and
(iv) a request for a Money Market Rate Quote.
The Borrower may request offers to make Money Market Loans for more than one
Interest Period in a single Money Market Quote Request. No Money Market Quote
Request shall be given more frequently than once a day.
(c) Invitation for Money Market Quotes. Promptly upon receipt of a Money
Market Quote Request, the Agent shall send to the Banks by telex or telecopy an
Invitation for Money Market Quotes substantially in the form of Exhibit E
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) Submission and Contents of Money Market Quotes.
<PAGE> 4
(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 (d) and must be submitted to the Agent by telecopy or telex at its
offices specified in or pursuant to Section 9.01 not later than 10:45 a.m.
(Cleveland, Ohio time) on the proposed date of Borrowing (or such other time
and date as the Borrower and the Agent may agree); 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 10:30 a.m. (Cleveland, Ohio time) on the proposed date
of borrowing. Subject to clause (f) of this Section, and 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
F hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan for which each such
offer is being made, which principal amount (x) may not be greater than
the Commitment of the quoting Bank, (y) must be $500,000 or a larger
multiple of $100,000 and (z) may not exceed the principal amount of
Money Market Loans for which offers were requested,
(C) The fixed rate of interest per annum (rounded to the nearest 1/100th of
1%) (the "Money Market Rate") offered for each such Money Market
Loan, and
(D) the identity of the quoting Bank.
(iii) Any Money Market Quote shall be disregarded that:
(A) is not substantially in the form of Exhibit F hereto or does not specify
all of the information required by subsection (d) (ii);
(B) contains qualifying conditions 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).
(e) Notice to Borrower. The Agent shall promptly notify the Borrower of the
terms (x) of any Money Market Quote submitted by a Bank that is in accordance
with subsection (d) and (y) of any 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. 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
(A) the aggregate principal amount of Money Market Loans for which offers have
been received for each Interest Period specified in the related Money Market
Quote Request and (B) the respective principal amounts and Money Market Rates
so offered.
(f) Acceptance and Notice by Borrower. Not later than 1:00 p.m. (Cleveland,
Ohio time) on the proposed date of Borrowing (or such other time and date as
the Borrower and the Agent may agree), the Borrower shall notify the Agent of
its acceptance or nonacceptance of the offers so notified to it pursuant to
subsection (e). 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 $500,000
or a larger multiple of $100,000,
(iii) acceptance of offers may only be made on the basis of ascending Money
Market Rates, and
(iv) the Borrower may not accept any offer that otherwise fails to comply
with the requirements of this Agreement (including but not limited to Section
3.01(b)).
Notwithstanding the foregoing, if the Borrower shall notify the Agent of its
acceptance of such offers after 11:30 a.m. (Cleveland, Ohio time) on the
proposed date of Borrowing, each of the Banks may, in its sole discretion,
withdraw its presently existing Money Market Quote and immediately resubmit
such quote to the Agent, and in such event Section 2.03(d) [except for the
response time set forth in said clause], (e) [except for the second sentence in
said clause] and (f) shall apply.
(g) Allocation by Agent. If offers are made by two or more Banks with the
same Money Market Rates for a greater aggregate principal amount than the
amount in respect of which offers are accepted for the related Interest Period,
the principal amount of Money Market Loans in respect of which such offers are
accepted shall be allocated by the Agent among such Banks as nearly as possible
(in such multiples, not greater than $100,000, 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 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.
(b) Not later than 2:00 P.M. (Cleveland, Ohio time) 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, in Federal or other funds immediately available in Cleveland, Ohio,
to the Agent at its address specified in or pursuant to Section 9.01. 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 a day on which the Borrower is
to repay all or any part of an outstanding Loan from such Bank, 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
amount being repaid shall be made available by such Bank to the Agent as
provided in subsection (b), or remitted by the Borrower to the Agent as
provided in Section 2.12, as the case may be.
SECTION 2.05. Notes.
(a) The Domestic Loans of each Bank shall be evidenced by a single Domestic
Note payable to the order of such Bank for the account of its Domestic Lending
Office in an amount equal to the aggregate unpaid principal amount of such
Bank's Domestic Loans.
(b) The Euro-Dollar Loans of each Bank shall be evidenced by a single
Euro-Dollar Note payable to the order of such Bank for the account of its
Euro-Dollar Lending Office in an amount equal to the aggregate unpaid principal
amount of such Bank's Euro-Dollar Loans.
<PAGE> 5
(c) The Money Market Loans of each Bank shall be evidenced by a single Money
Market Note payable to the order of such Bank for the account of its Money
Market Lending Office in an amount equal to the aggregate unpaid principal
amount of such Bank's Money Market Loans.
(d) Upon receipt of each Bank's Notes pursuant to Section 3.02(a), the Agent
shall mail such Notes to such Bank. Each Bank shall record, and prior to any
transfer of its Notes shall endorse on the schedules forming a part thereof
appropriate notations to evidence, the date, amount and maturity of each Loan
made by it 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 its Notes and to attach to and make a
part of any 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 Prime 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 Prime 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 Prime
Rate Loan shall bear interest, payable on demand, for each day until paid at a
rate per annum equal to 3% in excess of the Prime Rate for such day.
(b) Each Euro-Dollar 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 Euro- Dollar Margin plus the applicable Adjusted
Euro-Dollar 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.
"Euro-Dollar Margin" means one-fourth percent (1/4 of 1%).
The "Adjusted Euro-Dollar Rate" applicable to any Interest Period means a
rate per annum equal to the quotient obtained (rounded upwards, if necessary,
to the next higher 1/100 of 1%) by dividing (i) the applicable London Interbank
Offered Rate by (ii) 1.00 minus the Euro-Dollar Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Interest Period means
the respective rate per annum (rounded upward, if necessary, to the next higher
1/16th of 1%) at which deposits and dollars are offered to the Euro-Dollar
Reference Bank in any Eurodollar market reasonably selected by the Euro-Dollar
Reference Bank at approximately 11:00 A.M. (London time), or as soon
thereafter as practicable, two Euro-Dollar Business Days before the first day
of such Interest Period in an amount approximately equal to the principal
amount of the Euro-Dollar Loan of such Euro-Dollar Reference Bank to which such
Interest Period is to apply and for a period of time comparable to such
Interest Period.
"Euro-Dollar Reserve Percentage" means 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
maximum reserve requirement (including, without limitation, all basic,
supplemental, marginal, emergency, special and other reserves and taking into
account any transitional adjustments or other scheduled changes in reserve
requirements) for a member bank of the Federal Reserve System in Cleveland,
Ohio, 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-Dollar Loans is determined or any category of extensions
of credit or other assets which includes loans by a non-United States office of
any Bank to United States residents). The Adjusted Euro-Dollar Rate shall be
adjusted automatically on and as of the effective date of any change in the
Euro-Dollar Reserve Percentage.
(c) Any overdue principal of and, to the extent permitted by law, overdue
interest on any Euro-Dollar 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 3% in excess of the
Prime Rate for such day.
(d) 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 and, if such Interest Period is longer than
three months, at intervals of three months after the first 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 3% in excess of the Prime Rate for such
day.
(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 cable of each rate of interest so determined,
and its determination thereof shall be conclusive in the absence of manifest
error.
SECTION 2.08. Fees. (a) During the Revolving Credit Period, the Borrower
shall pay to the Agent for the account of each Bank a commitment fee which
shall be computed at the rate of .12% per annum on the average daily difference
between the amount of that Bank's Commitment from time to time in effect and
the aggregate unpaid principal balance of that Bank's Loans then outstanding.
The Borrower shall pay such commitment fee in arrears on the 1st day of August,
1994 and quarter-annually thereafter and on the Termination Date.
(b) During the Revolving Credit Period, the Borrower shall pay to the Agent
for the sole benefit and account of the Agent, an annual Agent's fee in the
amount of Ten Thousand Dollars ($10,000), which fee shall be paid on the date
hereof and annually thereafter or on the Termination Date, if earlier.
SECTION 2.09. Optional Termination or Reduction of Commitments. During the
Revolving Credit Period, the Borrower may, upon at least three Domestic
Business Days' notice to the Agent, terminate at any time, or proportionately
reduce from time to time by an aggregate amount of $1,000,000 or any larger
multiple thereof, the aggregate amount of the Commitments in excess of the
aggregate outstanding principal amount of the Loans, provided that, after
giving effect to such termination or any such reduction, the aggregate
principal amount of Loans of each Bank then outstanding shall not exceed the
Commitment of such Bank.
SECTION 2.10. Mandatory Termination of Commitments. The Commitments shall
terminate on the last day of the Revolving Credit Period and any Loans then
outstanding (together with accrued interest thereon) shall be due and payable
on such date.
SECTION 2.11. Optional Prepayments. (a) The Borrower may, upon at least
two Domestic Business Days' notice to the Agent, prepay any Prime Rate
Borrowing in whole at any time, or from time to time in part in amounts
aggregating $500,000 of any larger multiple of $100,000, 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.
(b) Except as provided in Section 8.02 the Borrower may not prepay all or
any portion of the principal amount of any Fixed Rate Loan prior to the
maturity thereof.
(c) 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.
<PAGE> 6
SECTION 2.12. General Provisions as to Payments. The Borrower shall make
each payment of principal of, and interest on, the Loans and of additional
compensation hereunder, not later than 12:00 Noon (Cleveland, Ohio time) on the
date when due, in Federal or other funds immediately available in Cleveland,
Ohio, to the Agent at its address referred to in Section 9.01. The Agent will
promptly distribute to each Bank its ratable share (if any) of each such
payment received by the Agent for the account of the Banks. Whenever any
payment of principal of, or interest on, the Domestic 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-Dollar Loans shall be due on a day which is not a Euro- Dollar Business
Day, the date for payment thereof shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another
calendar month, in which case the date for payment thereof shall be the next
preceding Euro-Dollar 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
Domestic Business Day, the date for payment thereof shall be extended to the
next succeeding Domestic 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.
SECTION 2.13. Funding Losses. If the Borrower makes any payment of
principal with respect to any Fixed Rate Loan (pursuant to Article VI or VIII
or otherwise) on any day other than the last day of the Interest Period
applicable thereto, or if the Borrower fails to borrow any Fixed Rate Loans
after notice has been given to any Bank in accordance with Section 2.04(a), the
Borrower shall reimburse each Bank on demand for any resulting loss or expense
incurred by it (or by an existing or prospective participant in the related
Loan), including (without limitation) any loss incurred in obtaining,
liquidating or employing deposits from third parties, but excluding loss of
margin for the period after any such payment or failure to borrow, provided
that such Bank shall have delivered to the Borrower a certificate as to the
amount of such loss or expense, which certificate shall be accompanied by
supporting documentation containing the pertinent calculations and shall be
conclusive in the absence of manifest error.
SECTION 2.14. Computation of Interest and Fees. All interest and fees
(including the commitment fees and the agent's fee) 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. Extension. Each Bank, in its absolute and sole discretion,
may, upon the Borrower's request, extend the Termination Date for successive
one (1) year periods. The first of such requests by the Borrower shall be made
in writing addressed to each Bank and shall be made not less than thirty (30)
days prior to April 30, 1995. Any subsequent request for an extension of the
Termination Date shall likewise be made to the Banks not less than thirty (30)
days prior to the next succeeding April 30 in the applicable year. If all the
Banks grant such request, the Termination Date shall be automatically extended
to the date of such extension, without any further act or deed of any party
hereto. No such extension shall be effective unless consented to in writing by
all the Banks.
SECTION 2.16. Use of Proceeds. The Borrower shall apply the proceeds of the
first borrowing obtained hereunder to pay in full all loans obtained by the
Borrower from Society National Bank under a certain master promissory note
dated March 31, 1994, in the aggregate principal amount of $125,000,000, and
all other amounts owing by the Borrower to Society National Bank pertaining to
such financial arrangement. Proceeds from the Loans may not be used to fund
acquisitions made without the prior approval of the acquired entity's board of
directors.
ARTICLE III
CONDITIONS TO BORROWINGS
The obligations of any Bank to make a Loan on the occasion of any Borrowing is
subject to the satisfaction of the following conditions:
SECTION 3.01. All Borrowings. In the case of each Borrowing:
(a) receipt by the Agent of a Notice of Borrowing as required by Section 2.02
or 2.03, as the case may be;
(b) the fact that, immediately after such Borrowing, (i) the aggregate
outstanding principal amount of the Loans will not exceed the aggregate amount
of the Commitments; and (ii) no Bank shall have outstanding Loans exceeding in
the aggregate the amount of its Commitment;
(c) the fact that, immediately after such Borrowing, no Default shall have
occurred and be continuing; and
(d) 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.
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
(b), (c) and (d) of this Section.
SECTION 3.02. First Borrowing. In the case of the first Borrowing:
(a) receipt by the Agent for the account of each Bank of a duly executed
Domestic Note, Euro-Dollar Note and Money Market Note, each dated on or before
the date of such Borrowing, complying with the provisions of Section 2.05;
(b) receipt by the Agent of an opinion of counsel for the Borrower, covering
the subject matter of Sections 4.01, 4.02, 4.03, 4.05 and 4.08 hereof and such
additional matters relating to the transactions contemplated hereby as the
Required Banks may reasonably request;
(c) receipt by the Agent of a certificate signed by the president and
controller of the Borrower, to the effect set forth in clauses (c) and (d) of
Section 3.01; and
(d) receipt by the Agent of all documents it 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.
The certificate and opinions referred to in clauses (b) and (c) above shall be
dated no more than three Euro-Dollar Business Days before the date of the first
Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The Borrower is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Ohio and has all corporate power and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.
SECTION 4.02. Corporate and Governmental Authorization; Contravention. The
execution, delivery and performance by the Borrower of this Agreement and the
Notes are within the Borrower's corporate powers, have been duly authorized by
all necessary corporate action, require no action by or in respect of, or
filing with, any governmental body, agency or official and do not contravene,
or constitute a default under, any provision of applicable law or regulation or
of the articles of incorporation or regulations of the Borrower or of any
agreement, judgment, injunction, order, decree or other instrument binding upon
the Borrower or result in the creation or imposition of any Lien on any asset
of the Borrower or any of its
<PAGE> 7
Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement constitutes a valid and
binding agreement of the Borrower and the Notes, when executed and delivered in
accordance with this Agreement, will constitute valid and binding obligations
of the Borrower, subject to bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, or other similar statutes, rules, regulations, or other
laws affecting the enforcement of creditors' rights and remedies generally and
to the unavailability of, or limitation on the availability of, a particular
right or remedy (whether in equity or at law) because of an equitable principle
or a requirement as to commercial reasonableness, conscionability, or good
faith.
SECTION 4.04. Financial Information. The annual audited Consolidated
financial statements of Borrower prepared as of April 30, 1993 certified by
Ernst & Young and heretofore furnished to each Bank, are accurate and complete,
have been prepared in accordance with generally accepted accounting principles
applied on a basis consistent with those used by Borrower during its
immediately preceding full fiscal year and fairly present its financial
condition as of that date and the results of its operations for the fiscal year
then ending. Since that date there has been no material adverse change in
Borrower's financial condition, properties or business or in the financial
condition, properties or business of any Subsidiary other than any change which
has been previously disclosed to the Banks.
SECTION 4.05. Litigation. There is no action, suit or proceeding pending
against, or to the knowledge of the Borrower threatened against, the Borrower
or any of its Subsidiaries before any court or arbitrator or any governmental
body, agency or official which, if adversely determined, could materially
adversely affect the business, consolidated financial position or consolidated
results of operations of the Borrower and its Subsidiaries, considered as a
whole, or which in any manner draws into question the validity or
enforceability of this Agreement or the Notes.
SECTION 4.06 Compliance with ERISA. Each member of the Controlled Group has
fulfilled its obligations under the minimum funding standards of ERISA and the
Code with respect to each Plan and has not incurred any liability to the PBGC
(other than for PBGC insurance premiums) or a Plan (other than for annual
contributions) under Title IV of ERISA and each of the Borrower and its
Subsidiaries is in compliance in all material respects with the presently
applicable provisions of ERISA and the Code.
SECTION 4.07. Taxes. United States Federal income tax returns of the
Borrower and its Subsidiaries have been examined and closed through the fiscal
year ended April 30, 1992. The Borrower and its Subsidiaries have filed all
United States Federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all taxes due pursuant to
such returns or pursuant to any assessment received by the Borrower or any
Subsidiary. The charges, accruals and reserves on the books of the Borrower
and its Subsidiaries in respect of taxes are, in the opinion of the Borrower,
adequate.
SECTION 4.08. Subsidiaries. Each of the Borrower's corporate Subsidiaries
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 material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted.
SECTION 4.09. Regulation U. The proceeds of the Loans made under this
Agreement will not be used, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of purchasing or carrying any "margin
stock", as defined in Regulation U.
SECTION 4.10. Environmental Compliance. Borrower and each Subsidiary are in
substantial compliance with any and all Environmental Laws including, without
limitation, all Environmental Laws in all jurisdictions in which Borrower or
any Subsidiary owns or operates a facility or site, arranges for disposal or
treatment of hazardous substances, solid waste or other wastes, accepts for
transport any hazardous substances, solid waste or other wastes or holds any
interest in real property or otherwise. Further, to the best of Borrower's
knowledge, it and each Subsidiary also are in substantial compliance with any
and all Environmental Laws in all jurisdictions in which any of them have owned
or operated a facility or site, have arranged for disposal or treatment of
hazardous substances, solid wastes, or other wastes, have accepted for
transport any hazardous substances, solid wastes, or other wastes, or have held
any interest in real property or otherwise. No material litigation or
proceeding arising under, relating to or in connection with any Environmental
Law is pending or threatened against Borrower or any Subsidiary, any real
property in which Borrower or any Subsidiary holds or has held an interest or
any past or present operation of Borrower or any Subsidiary. No release,
threatened release or disposal of hazardous waste, solid waste or other wastes
is occurring, or has occurred, on, under or to any real property in which
Borrower or any Subsidiary holds any interest or performs any of its
operations, in violation of any Environmental Law which would have a material
adverse effect upon Borrower and its Subsidiaries, taken as a whole. As used in
this subsection, "litigation or proceeding" means any demand, claim, notice,
suit, suit in equity, action, administrative action, investigation or inquiry
whether brought by any governmental authority, private person or entity or
otherwise.
SECTION 4.11. Solvency. Borrower has received consideration which is the
reasonable equivalent value of the obligations and liabilities that Borrower
has incurred to the Banks. Borrower is not insolvent as defined in any
applicable state or federal statute, nor will Borrower be rendered insolvent by
the execution and delivery of this Agreement or any Note to the Banks. Borrower
is not engaged or about to engage in any business or transaction for which the
assets retained by it shall be an unreasonably small capital, taking into
consideration the obligations to the Banks incurred hereunder. Borrower does
not intend to, nor does it believe that it will, incur debts beyond its ability
to pay them as they mature.
SECTION 4.12. No Default. No event has occurred and is continuing which
constitutes, or which, with the passage of time or the giving of notice or
both, would constitute, a default under or in respect of any material
agreement, instrument or undertaking to which the Borrower or any Subsidiary is
a party or by which the Borrower or any Subsidiary or any of their respective
assets are bound.
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. Financial Information. Borrower will furnish to each Bank
(a) within forty-five (45) days after the end of each of the first three
quarter- annual fiscal periods of each of Borrower's fiscal years, an unaudited
consolidating and Consolidated balance sheet of Borrower and its Subsidiaries
as at the end of that period and an unaudited consolidating and Consolidated
statement of earnings of Borrower and its Subsidiaries for Borrower's current
fiscal year to the end of that period, all prepared in form and detail in
accordance with generally accepted accounting principles, consistently applied,
and certified by a financial officer of Borrower, subject to changes resulting
from year-end adjustments,
(b) within one hundred twenty (120) days after the end of each of Borrower's
fiscal years, a complete annual audit report of Borrower and its Subsidiaries
for that year prepared on a Consolidated basis and in form and detail and
certified by Ernst & Young or other independent public accountants satisfactory
to the Banks, together with a statement of the firm of independent public
accountants which prepared such report, whether anything has come to their
attention to cause them to believe that any Default existed on the date of such
report,
<PAGE> 8
(c) as soon as available, copies of all notices, reports, proxy statements
and other similar documents sent by Borrower to its shareholders, to the
holders of any of its debentures or notes or the trustee of any indenture
securing the same or pursuant to which they may be issued, to any securities
exchange or to the Securities and Exchange Commission or any similar federal
agency having regulatory jurisdiction over the issuance of Borrower's
securities, and
(d) forthwith upon any Bank's written request, such other information about
the financial condition, properties and operations of Borrower and its
Subsidiaries as that Bank may from time to time reasonably request.
SECTION 5.02. Inspection. Borrower and each Subsidiary will permit their
properties and records to be examined at all reasonable times by each of the
Banks, upon reasonable advance notice and in such a manner as to not disrupt
the operations of Borrower or such Subsidiary.
SECTION 5.03. Notice. Borrower will cause its treasurer, or in his absence
another officer designated by the treasurer, to promptly notify the Banks
whenever any Default may occur hereunder or any other representation or
warranty made in Article IV hereof or elsewhere in this credit agreement or in
any Related Writing may for any reason cease in any material respect to be true
and complete.
SECTION 5.04. Environmental Compliance. Borrower and each Subsidiary will
comply in all material respects with any and all Environmental Laws including,
without limitation, all Environmental Laws in jurisdictions in which Borrower
or any Subsidiary owns or operates a facility or site, arranges for disposal or
treatment of hazardous substances, solid waste or other wastes, accepts for
transport any hazardous substances, solid waste or other wastes or holds any
interest in real property or otherwise. Borrower will furnish to the Agent
(who will forward to the Banks) , promptly after receipt thereof, a copy of any
notice Borrower or any Subsidiary may receive from any governmental authority,
private person or entity or otherwise that any litigation or proceeding
pertaining to any environmental, health or safety matter has been filed or is
threatened against Borrower or such Subsidiary, any real property in which
Borrower or such Subsidiary holds any interest or any past or present operation
of Borrower or such Subsidiary. Neither Borrower nor any Subsidiary will allow
the release or disposal of hazardous waste, solid waste or other wastes on,
under or to any real property in which Borrower or such Subsidiary holds any
interest or performs any of its operations, in material violation of any
Environmental Law. As used in this subsection "litigation or proceeding" means
any demand, claim, notice, suit, suit in equity, action, administrative action,
investigation or inquiry whether brought by any governmental authority, private
person or entity or otherwise. Borrower shall defend, indemnify and hold the
Banks harmless against all costs, expenses, claims, damages, penalties and
liabilities of every kind or nature whatsoever (including attorneys fees)
arising out of or resulting from the noncompliance of Borrower or any
Subsidiary with any Environmental Law.
SECTION 5.05. ERISA Compliance. Neither the Borrower nor any Subsidiary
will incur any material accumulated funding deficiency within the meaning of
the ERISA, and the regulations thereunder, or any material liability to the
PBGC, established thereunder in connection with any Plan. Borrower will
furnish to the Banks (i) simultaneously with a filing with the PBGC of a notice
regarding any Reportable Event and in any event within thirty (30) days after
Borrower knows or has reason to know that any Reportable Event with respect to
any Plan has occurred, a statement of the treasurer of Borrower setting forth
details as to such Reportable Event and the action which Borrower or the
applicable Subsidiary proposes to take with respect thereto, together with a
copy of the notice of such Reportable Event given to the PBGC if a copy of such
notice is available to Borrower, (ii) promptly after the filing thereof with
the Internal Revenue Service, copies of each annual report with respect to each
Plan established or maintained by Borrower and each of its Subsidiaries for
each plan year, including (x) where required by law, a statement of assets and
liabilities of such Plan as of the end of such plan year and statements of
changes in fund balance and in financial position, or a statement of changes in
net assets available for plan benefits, for such plan year, certified by an
independent public accountant satisfactory to the Banks and (y) an actuarial
statement of such Plan applicable to such plan year, certified by an enrolled
actuary of recognized standing acceptable to the Banks, and (iii) promptly
after receipt thereof a copy of any notice Borrower, any Subsidiary or any
member of the Controlled Group may receive from the PBGC or the Internal
Revenue Service with respect to any Plan administered by Borrower; provided,
that this latter clause shall not apply to notices of general application
promulgated by the PBGC or the Internal Revenue Service. Borrower will
promptly notify the Banks of any taxes assessed, proposed to be assessed or
which Borrower has reason to believe may be assessed against Borrower or any
Subsidiary by the Internal Revenue Service with respect to any Plan. As used
in this subsection "material" means the measure of a matter of significance
which shall be determined as being an amount equal to five percent (5%) of
Borrower's Consolidated Tangible Net Worth.
SECTION 5.06. Plan. Neither Borrower nor any Consolidated Subsidiary will
suffer or permit any Plan to be amended if, as a result of such amendment, the
current liability under the Plan is increased to such an extent that security
is required pursuant to section 307 of the Employee Retirement Income Security
Act of 1974, as amended from time to time. As used herein, "current liability"
means current liability as defined in section 307 of such Act.
SECTION 5.07. Insurance. The Borrower and each Subsidiary will (a) keep
itself and all of its insurable properties insured at all times to such extent,
by such insurers, and against such hazards and liabilities as is generally and
prudently done by like businesses, it being understood that each such company's
insurance coverage at the date of this Agreement meets the standards
contemplated by this Section, (b) give the Agent prompt written notice of each
material change in such company's insurance coverage and the details of the
change and (c) forthwith upon each Bank's written request, furnish to such Bank
such information about each company's insurance as that Bank may from time to
time reasonably request, which information shall be prepared in form and detail
satisfactory to such Bank and certified by an officer of the company in
question.
SECTION 5.08. Money Obligations. The Borrower and each Subsidiary will pay
in full (a) prior in each case to the date when penalties would attach, all
material taxes, assessments and governmental charges and levies (except only
those so long as and to the extent that the same shall be contested in good
faith by appropriate and timely proceedings) for which it may be or become
liable or to which any or all of its properties may be or become subject, (b)
all of its wage obligations to its employees in material compliance with the
Fair Labor Standards Act (29 U.S.C. o206-207) or any comparable provisions, and
(c) all of its other material obligations calling for the payment of money
(except only those so long as and to the extent that the same shall be
contested in good faith) before such payment becomes overdue.
SECTION 5.09. Records. The Borrower and each Subsidiary will (a) at all
times maintain true and complete records and books of account and, without
limiting the generality of the foregoing, maintain appropriate reserves for
possible losses and liabilities, all in accordance with generally accepted
accounting principles consistently applied, and (b) at all reasonable times
permit the Banks to examine each such company's books and records and to make
excerpts therefrom and transcripts thereof.
SECTION 5.10. Franchises. The Borrower and each Subsidiary will preserve
and maintain its corporate existence, rights and franchises; provided, that
this Section shall not prevent any merger, consolidation or transfer permitted
by Section 5.13 hereof.
SECTION 5.11. Earnings Ratio. The Borrower shall maintain at all times a
ratio of (a)(i) Consolidated net income plus (ii) its Consolidated taxes
including, but not limited to, Consolidated taxes on Consolidated net income or
based on Consolidated net income and the amount of any deferred Consolidated
taxes, plus (iii) all interest on all Consolidated indebtedness of the Borrower
accrued during the period in question, to (b) all interest on all Consolidated
indebtedness of the Borrower accrued during the period in question, of no less
than 3.50 to 1.00, based upon the Borrower's Consolidated financial statements
for the most recent fiscal quarter and the previous three fiscal quarters.
<PAGE> 9
SECTION 5.12. Debt to Capital Ratio. The Borrower will not permit the ratio
of its Consolidated indebtedness for borrowed money to the sum of its
Consolidated Tangible Net Worth plus its Consolidated indebtedness for borrowed
money to be at any time more than .50 to 1.00, based upon the Borrower's
Consolidated financial statements for the most recent fiscal quarter and the
previous three fiscal quarters.
SECTION 5.13. Acquisitions, Bulk Transfers. Neither Borrower nor any
Subsidiary will (a) be a party to any consolidation or merger, or (b) lease,
sell or otherwise transfer any assets (other than such chattels, if any, as may
have become obsolete or no longer useful in the continuance of its present
business) in excess of Ten Million Dollars ($10,000,000) during any fiscal
year, except in the normal course of its present business; provided, that this
Section shall not apply (i) to any merger of a Subsidiary or any other entity
into Borrower or to Borrower's acquisition of any or all of the assets of a
Subsidiary or another entity, if no Default shall then exist or immediately
thereafter will begin to exist, or (ii) to any merger of a Subsidiary into
another Subsidiary or to any Subsidiary's acquisition of any or all of the
assets of another Subsidiary if no Default shall then exist or immediately
thereafter will begin to exist..
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of any Loan or the
Borrower shall fail to pay within 10 days of the due date thereof any interest
on any Loan or any fees or any other amounts payable hereunder;
(b) the Borrower shall fail to observe or perform any covenant or agreement
contained in this Agreement or any Related Writing (other than those covered by
clause (a) above) for 15 days after written notice thereof has been given to
the Borrower by the Agent at the request of any Bank;
(c) any representation, warranty, certification or statement made by the
Borrower in this Agreement or in any certificate, financial statement or other
Related Writing delivered pursuant to this Agreement shall prove to have been
incorrect in any material respect when made (or deemed made);
(d) the Borrower or any Subsidiary shall fail to make any payment in respect
of any Debt (other than the Notes) having a principal amount then outstanding
of not less than $1,000,000 when due and such failure shall continue beyond any
applicable grace period;
(e) any event or condition shall occur which results in the acceleration of
the maturity of any Debt having a principal amount then outstanding of not less
than $1,000,000 of the Borrower or any Subsidiary or enables (or, with the
giving of notice or lapse of time or both, would enable) the holder of such
Debt or any Person acting on such holder's behalf to accelerate the maturity
thereof;
(f) the Borrower or any Subsidiary shall commence a voluntary case or other
proceeding seeking rehabilitation, dissolution, conservation, 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, rehabilitator,
dissolver, conservator, 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) an involuntary case or other proceeding shall be commenced against the
Borrower or any Subsidiary seeking rehabilitation, dissolution, conservation,
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,
rehabilitator, dissolver, conservator, 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 or any Subsidiary under
the federal bankruptcy laws as now or hereafter in effect; or any governmental
body, agency or official shall apply for, or commence a case or other
proceeding to seek, an order for the rehabilitation, conservation, dissolution
or other liquidation of the Borrower or any Subsidiary or of the assets or any
substantial part thereof of the Borrower or any Subsidiary or any other similar
remedy;
(h) any member of the Controlled Group shall fail to pay when due an amount
or amounts aggregating in excess of $1,000,000 which it shall have become
liable to pay to the PBGC or to a Plan under Title IV of ERISA; or notice of
intent to terminate a Plan or Plans having aggregate Unfunded Vested
Liabilities in excess of an amount equal to five percent (5%) of Borrower's
Consolidated Tangible Net Worth (collectively, a "Material Plan") shall be
filed under Title IV of ERISA by any member of Controlled Group, any plan
administrator or any combination of the foregoing; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate or to cause a trustee to be
appointed to administer any Material Plan or a proceeding shall be instituted
by a fiduciary of any Material Plan against any member of the Controlled Group
to enforce Section 515 of ERISA and such proceeding shall not have been
dismissed within 30 days thereafter; 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;
then, and in every such event, the Agent shall (i) if requested by Banks having
more than 51% 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 more than 51% in aggregate
principal amount of the Loans, by notice to the Borrower declare the Notes
(together with accrued interest thereon) and all of Borrower's other Debt to
the Banks, or any thereof, to be, and the Notes and such Debt shall thereupon
become, immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower;
provided that in the case of any of the Events of Default specified in clause
(f) or (g) above with respect to the Borrower, without any notice to the
Borrower or any other act by the Agent or the Banks, the Commitments shall
thereupon terminate and the Notes (together with accrued interest thereon) and
all of Borrower's other Debt to the Banks, or any thereof, shall become
immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower.
SECTION 6.02. Notice of Default. The Agent shall give notice to the
Borrower under Section 6.01(b) 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.
SECTION 7.02. Agent's Fee. The Borrower shall pay to the Agent for its own
account fees in the amounts and at the times previously agreed upon between the
Borrower and the Agent.
<PAGE> 10
SECTION 7.03. Agent and Affiliates. Society National Bank shall have the
same rights and powers under this Agreement as any other Bank and may exercise
or refrain from exercising the same as though it were not the Agent, and
Society National Bank 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 affiliate of the Borrower as if it were not the Agent hereunder.
SECTION 7.04. 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 7.05. Consultation with Experts. The Agent may consult with legal
counsel (who may be 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 7.06. Liability of Agent. Neither the Agent nor any of its
directors, officers, agents, attorneys 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 nor any of its directors,
officers, agents, attorneys 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. The Agent
shall not incur any liability by acting in reliance upon any notice, consent,
certificate, statement, or other writing (which may be a bank wire, telex or
telecopy or similar writing) believed by it to be genuine or to be signed by
the proper party or parties.
SECTION 7.07. Indemnification. Each Bank shall, ratably in accordance with
its Commitment (or if any Loans are outstanding hereunder, ratably in
accordance with its ratable portion of the then outstanding aggregate principal
balance of such Loans), indemnify the Agent (to the extent not reimbursed by
the Borrower) against any cost, expense (including counsel fees and
disbursements), claim, demand, action, loss or liability (except such as result
from the Agent's gross negligence or willful misconduct) that the Agent may
suffer or incur in connection with this Agreement or any action taken or
omitted by the Agent hereunder.
SECTION 7.08. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank, and based
on such 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 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 7.09. Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Banks and the Borrower. Upon any such
resignation, the Required Banks, with the consent of the Borrower, shall have
the right to appoint a successor Agent. 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 of notice of resignation, then
the retiring Agent, with the consent of the Borrower, may, on behalf of the
Banks, appoint a successor Agent, which shall be a commercial bank organized
under the laws of the United States of America or of any State thereof and
having a combined capital and surplus of at least Fifty Million Dollars
($50,000,000). Upon the acceptance of its appointment as Agent hereunder by a
successor Agent, such successor Agent 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. 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.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair. If
on or prior to the first day of any Interest Period for any Fixed Rate
Borrowing:
(a) the Agent is advised by the Euro-Dollar Reference Bank that deposits in
dollars (in the applicable amounts) are not being offered to the Euro-Dollar
Reference Bank in the relevant market for such Interest Period, or
(b) Banks having 50% or more of the aggregate amount of the Commitments
advise the Agent that the Adjusted Euro-Dollar Rate, as determined by the Agent
will not adequately and fairly reflect the cost to such Banks of funding their
Euro-Dollar Loans 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 suspension no longer exist, the obligations of the Banks to make
Euro-Dollar Loans shall be suspended. Unless the Borrower notifies the Agent
at least by 1:00 p.m. on 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, if such Fixed Rate Borrowing is a Syndicated Borrowing, such
Borrowing shall instead be made as a Prime Rate Borrowing.
SECTION 8.02. Illegality. If, after the date of this Agreement, 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 Euro-Dollar 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 Euro-Dollar Lending Office) to make,
maintain or fund its Euro-Dollar 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-Dollar Loans shall be suspended. Before
giving any notice to the Agent pursuant to this Section, such Bank shall
designate a different Euro- Dollar Lending Office if such designation will
avoid the need for giving such notice and will not, in the judgment of such
Bank, be otherwise disadvantageous to such Bank. If such Bank shall determine
that it may not lawfully continue to maintain and fund any of its outstanding
Euro- Dollar 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 Euro-Dollar Loan, together with accrued interest thereon.
Concurrently with prepaying each such Euro-Dollar Loan, the Borrower shall
borrow a Prime Rate Loan in an equal principal amount from such Bank (on which
interest and principal shall be payable contemporaneously with the related
Euro-Dollar Loans of the other Banks), and such Bank shall make such a Prime
Rate Loan.
SECTION 8.03. Increased Cost and Reduced Return. (a) If on or after (x)
the date hereof, 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 Lending Office) with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency:
<PAGE> 11
(i) shall subject any Bank (or its Lending Office) to any tax, duty or other
charge with respect to its Fixed Rate Loans, its Notes or its obligation to
make Fixed Rate Loans, or shall change the basis of taxation of payments to any
Bank (or its 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 Fixed Rate Loans (except for changes in
the rate of tax on the overall net income of such Bank or its Lending Office);
or
(ii) shall impose, modify or deem applicable any reserve, special deposit 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-Dollar Loan any such requirement included in an
applicable Euro-Dollar Reserve Percentage) against assets of, deposits with or
for the account of, or credit extended by, any Bank (or its Lending Office) or
shall impose on any Bank (or its Lending Office) or on the London interbank
market any other condition affecting its Fixed Rate Loans, its Notes or its
obligation to make Fixed Rate Loans;
and the result of any of the foregoing is to increase the cost to such Bank (or
its 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 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 such
additional amount or amounts as will compensate such Bank for such increased
cost or reduction.
(b) If after the date hereof, any Bank shall have determined that the
adoption of any applicable law, rule, regulation or guideline regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Bank (or its Lending 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 would have the effect of
reducing the rate of return on such Bank's capital (or the capital of its
holding company) as a consequence of its obligations hereunder to a level below
that which such Bank (or its holding company) could have achieved but for such
adoption, change or compliance (taking into consideration such Bank's policies
or the policies of its holding company 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 such additional amount or amounts as a will compensate such
Bank (or its holding company) for such reduction.
(c) Each Bank will promptly notify the Borrower and the Agent of any event
of which it has knowledge, occurring after the date hereof, which will entitle
such Bank to compensation pursuant to this Section and will designate a
different 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 disadvantageous to such Bank. A certificate of any Bank claiming
compensation under this Section and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. Such certificate shall contain the pertinent calculations. In
determining such amount, such Bank may use any reasonable averaging and
attribution methods. Failure on the part of any Bank to demand compensation
for any such increased cost or reduction with respect to any period shall not
constitute a waiver of such Bank's rights to demand compensation for any
increased cost or reduction in such period or in any other period. The
protection of this Section shall be available to each Bank regardless of any
possible contention of the invalidity or inapplicability of the law, regulation
or other condition which shall have been imposed. If, however, any such law,
regulation or other condition which shall have been imposed is determined to
have been invalid or inapplicable with the result that any Bank is reimbursed
for any increased cost or reduction with respect to which compensation pursuant
to this Section was paid, the Borrower will be commensurately reimbursed for
such compensation.
SECTION 8.04. Prime Rate Loans Substituted for Affected Fixed Rate Loans.
If (i) the obligation of any Bank to make Euro-Dollar Loans has been suspended
pursuant to Section 8.02 or (ii) any Bank has demanded compensation under
Section 8.03(a) and the Borrower shall, by at least five Euro-Dollar 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 which would otherwise be made by such Bank as Euro-Dollar
Loans shall be made instead as Prime Rate Loans (on which interest and
principal shall be payable contemporaneously with the related Fixed Rate Loans
of the other Banks), and
(b) after each of its Euro-Dollar Loans has been repaid, all payments of
principal which would otherwise be applied to repay such Fixed Rate Loans shall
be applied to repay its Prime Rate Loans instead.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including bank wire, telex or telecopy
or similar writing) and shall be given to such party at its address or telex or
telecopy number set forth on the signature pages hereof or such other address
or telex or telecopy number as such party may hereafter specify for the purpose
by notice to the Agent and the Borrower. Each such notice, request or other
communication shall be effective (i) if given by telex, when such telex is
transmitted to the telex number specified in this Section and the appropriate
answerback is received, (ii) if given by telecopy, when such telecopy is
transmitted to the telecopy number specified in this Section and the
appropriate confirmation is received, (iii) if given by registered or certified
mail, after such communication is received or (iv) 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 Article VIII shall not be effective until
received.
SECTION 9.02. No Waivers. No failure or delay by the Agent or any Bank in
exercising any right, power or privilege hereunder or under any Note shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
SECTION 9.03. Expenses; Documentary Taxes.
(a) The Borrower shall pay (i) all out-of-pocket expenses of the Agent,
including fees and disbursements of in-house counsel and special counsel for
the Banks and the Agent, in connection with the preparation of this Agreement
and any Related Writing, any waiver or consent pertaining thereto or any
amendment or restructuring thereof or any Default or alleged Default hereunder
and (ii) if an Event of Default occurs, all out-of-pocket expenses incurred by
the Agent or any Bank, including fees and disbursements of counsel, in
connection with such Event of Default and collection and other enforcement
proceedings resulting therefrom. The Borrower shall indemnify each Bank
against any transfer taxes, documentary taxes, assessments or charges made by
any governmental authority by reason of the execution and delivery of this
Agreement or the Notes.
<PAGE> 12
(b) The Borrower agrees to indemnify each Bank and hold each Bank harmless
from and against any and all liabilities, losses, damages, costs and expenses
of any kind (including, without limitation, the reasonable fees and
disbursements of counsel for any Bank in connection with any investigative,
administrative or judicial proceeding, whether or not such Bank shall be
designated a party thereto) which may be incurred by any Bank (or by the Agent
in connection with its actions as Agent hereunder), relating to or arising out
of any actual or proposed use of proceeds of Loans hereunder; provided, that no
Bank shall have the right to be indemnified hereunder for its own gross
negligence or willful misconduct as determined by a court of competent
jurisdiction.
SECTION 9.04. Sharing of Set-Offs. Each Bank agrees that if it shall, by
exercising any right of set-off 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, 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 set-off or counterclaim it may have and to apply the amount subject to
such exercise to the payment of indebtedness of the Borrower other than its
indebtedness under the Notes. 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 set-off 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 9.05. Amendments and Waivers. 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 the Commitment of any Bank or subject any Bank to any additional
obligation, (ii) reduce the principal of or rate of interest on any Loan or any
fees hereunder, (iii) postpone the date fixed for any payment of principal of
or interest on any Loan or any fees hereunder or (iv) 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.
SECTION 9.06. 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;
provided, however, that (i) the Borrower may not assign or otherwise transfer
any of its rights or obligations under this Agreement, without the prior
written consent of the Banks, (ii) no Bank shall assign or otherwise transfer
its Notes or its rights hereunder without the prior written consent of the
Borrower and the Agent (which will not be unreasonably withheld) except, upon
prior written notice to the Borrower and the Agent (x) to any Person which
controls, is controlled by, or is under common control with, or is otherwise
substantially affiliated with, such Bank, or (y) to any Bank, or (z) to any
Federal Reserve Bank and (iii) each assignment or other transfer by any Bank
shall be in the minimum amount of Ten Million Dollars ($10,000,000) and no Bank
may assign or otherwise transfer any of its Notes or other rights hereunder in
an aggregate amount in excess of fifty percent (50%) of its Commitment; and
provided further that nothing herein shall be deemed to prohibit or require the
consent of the Agent or notice to the Agent with respect to the granting of
participations by any Bank in any of its Loans. No Bank shall grant any
participation with respect to this Agreement and its Loans without the prior
written consent of the Borrower, which will not be unreasonably withheld. Any
agreement pursuant to which any Bank may grant such a participation shall
provide that, with respect to any such Loan or Loans, such Bank shall retain
the sole right and responsibility to enforce the obligations of the Borrower
relating to such Loan or Loans 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
without the consent of the participant which would reduce the principal of or
rate of interest on any Loan granted hereunder, or postpone the date fixed for
any payment of principal of or interest on any such Loan. No assignment or
transfer by any Bank of any of its Loans or rights hereunder shall release any
Bank from its obligations hereunder.
(b) The Agent and the Borrower may, for all purposes of this Agreement,
treat any Bank as the holder of any Note drawn to its order (and owner of the
Loans evidenced thereby) until written notice of assignment, or other transfer
in accordance with subsection (a) of this Section shall have been received by
them.
(c) No assignee, participant or other transferee of any Bank's rights shall
be entitled to receive any greater payment under Section 8.03 than such Bank
would have been entitled to receive with respect to the rights transferred,
unless such transfer is made with the Borrower's prior written consent or by
reason of the provisions of Section 8.02 or 8.03 requiring such Bank to
designate a different Lending Office under certain circumstances or at a time
when the circumstances giving rise to such greater payment did not exist.
(d) If the Euro-Dollar Reference Bank assigns its Notes to an unaffiliated
institution, the Agent shall, with the consent of the Borrower and the Required
Banks, appoint another bank to act as the Euro-Dollar Reference Bank hereunder.
(e) Subject to the prior written consent of the Borrower, which will not be
unreasonably withheld, a Bank may furnish any information concerning the
Borrower and its Subsidiaries in the possession of such Bank from time to time
to assignees and participants (including perspective participants), provided,
that such Bank shall request that each such Person comply with the provisions
of Section 9.12 as if it were a Bank hereunder.
SECTION 9.07. 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 9.08. Ohio Law. This Agreement and each Note shall be construed in
accordance with and governed by the laws of the State of Ohio, without regard
to principles of conflict of laws.
SECTION 9.09. Submission to Jurisdiction. The Borrower hereby submits to
the non- exclusive jurisdiction of any United States Federal or Ohio State
court sitting in Cleveland, Ohio for purposes of all suits, actions and
proceedings which may arise under, or relate to, this Agreement or the Notes.
The Borrower irrevocably waives, to the fullest extent permitted by law, any
objection which it may have to the laying of the venue of any such suit, action
or proceeding brought in such a court and any claim that any such suit, action
or proceeding brought in such a court has been brought in an inconvenient
forum. The Borrower hereby consents to process being served in any such suit,
action or proceeding by the mailing of a copy thereof by registered or
certified mail, postage prepaid, to its address referred to in Section 9.01 or
in any other manner permitted by law.
SECTION 9.10. Severability of Provisions; Captions. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. The several captions to Sections and Subsections herein are
inserted for convenience only and shall be ignored in interpreting the
provisions of this Agreement.
<PAGE> 13
SECTION 9.11. Obligations Several; No Fiduciary Obligations. The
obligations of the Banks hereunder are several and not joint. Nothing
contained in this Agreement and no action taken by Agent or the Banks pursuant
hereto shall be deemed to constitute the Banks a partnership, association,
joint venture or other entity. No default by any Bank hereunder shall excuse
the other Banks from any obligation under this Agreement; but no Bank shall
have or acquire any additional obligation of any kind by reason of such
default. The relationship among Borrower and the Banks with respect to this
Agreement, any Note and any Related Writing is and shall be solely that of
debtor and creditor, respectively, and no Bank has any fiduciary obligation
toward Borrower with respect to any such documents or the transactions
contemplated thereby.
SECTION 9.12. Confidentiality. Each Bank agrees to take reasonable
precautions and exercise due care in accordance with safe and sound banking
practices to maintain the confidentiality of all confidential information
provided to it by or on behalf of the Borrower and its Subsidiaries in
connection with this Agreement; provided, however, that any Bank may disclose
such information (a) at the request of any bank regulatory authority or in
connection with an examination of such Bank by any such authority, (b) pursuant
to subpoena or other court process or in legal proceedings between or among the
parties hereto, (c) when required to do so in accordance with the provisions of
any applicable law, (d) to such Bank's independent auditors and other
professional advisors (including counsel), (e) to the Agent, (f) to any
affiliate of such Bank, and (g) as contemplated by Section 9.06(e) hereof;
provided that the obligation of each Bank to keep any information confidential
pursuant to this Section 9.12 shall cease with respect to any information upon
such information's becoming public (other than by reason of a breach by such
Bank of the provisions of this Section 9.12); and provided, further, that any
Person to be provided with any such confidential information will be advised by
the disclosing Bank of its confidential nature and (to the extent possible)
will be required by such Bank, as a condition of disclosure, to maintain its
confidentiality; and provided, further, that in connection with any such
contemplated disclosure under clause (b) or (c) of this Section, such Bank will
notify the Borrower of the intended disclosure in order to allow Borrower to
seek a protective order or take other appropriate actions to protect its
interests.
SECTION 9.13. Entire Agreement. This Agreement, any Note and any other
agreement, document or instrument attached hereto or referred to herein or
executed on or as of the date hereof integrate all the terms and conditions
mentioned herein or incidental hereto and supersede all oral representations
and negotiations and prior writings with respect to the subject matter hereof.
SECTION 9.14. Counterparts; Effectiveness. 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.
This Agreement shall become effective when the Agent shall have received
counterparts hereof signed by all of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
THE J. M. SMUCKER COMPANY
By:_________________________
Title:_________________________
Address: One Strawberry Lane
Orrville, Ohio 44667
Attn: Assistant Treasurer
Copy to: Legal Department
Telex number: 241612
Telecopier: (216) 684-3475
Commitments
$50,000,000 SOCIETY NATIONAL BANK,
Individually and as Agent
By:__________________________
Title:_______________________
Domestic Lending Office
127 Public Square
Cleveland, Ohio 44114-1306
Telex Number: 985517SOCCLV
Telecopier Number: (216) 689-9132
Euro-Dollar Lending Office
Society Company National
Cayman Islands Branch
c/o 127 Public Square
Cleveland, Ohio 44114-1306
Telex Number: 985517SOCCLV
Telecopier Number: (216) 689-9132
$45,000,000 NATIONAL CITY BANK
By:__________________________
Title:_______________________
Domestic Lending Office
____
Telex Number:________________
Telecopier Number:____________
Euro-Dollar Lending Office
____
____________________________
Telex Number:_________________
Telecopier Number:_____________
$30,000,000 THE FIRST NATIONAL BANK OF CHICAGO
By:__________________________
Title:_______________________
Domestic Lending Office
____
<PAGE> 14
Telex Number:________________
Telecopier Number:____________
Euro-Dollar Lending Office
____
____________________________
Telex Number:_________________
Telecopier Number:_____________
EXHIBIT A
DOMESTIC NOTE
Cleveland, Ohio
April 27, 1994
For value received, THE J. M. SMUCKER COMPANY, an Ohio corporation (the
"Borrower"), promises to pay to the order of
______________________________________ (the "Bank"), for the account of its
Domestic Lending Office, the unpaid principal amount of each Domestic 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 Domestic
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 in lawful
money of the United States in Federal or other immediately available funds at
the office of Society National Bank, 127 Public Square, Cleveland, Ohio
44114-1306.
All Domestic 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 records of the Bank;
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 Domestic Notes referred to in the Revolving Credit
Agreement dated as of April 27, 1994 among the Borrower, the banks listed on
the signature pages thereof and Society National Bank, 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.
THE J. M. SMUCKER COMPANY
By:________________________
Title:_____________________
EXHIBIT B
EURO-DOLLAR NOTE
Cleveland, Ohio
April 27, 1994
For value received, THE J. M. SMUCKER COMPANY, an Ohio corporation (the
"Borrower"), promises to pay to the order of ________________(the "Bank"), for
the account of its Euro-Dollar Lending Office, the unpaid principal amount of
each Euro-Dollar 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 Euro-Dollar 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 in lawful money of the United States in Federal or other
immediately available funds at the office of Society National Bank, 127 Public
Square, Cleveland, Ohio 44114-1306.
All Euro-Dollar 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 records of the Bank;
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 Euro-Dollar Notes referred to in the Revolving Credit
Agreement dated as of April 27, 1994 among the Borrower, the banks listed on
the signature pages thereof and Society National Bank, 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.
THE J. M. SMUCKER COMPANY
By:___________________________
Title:________________________
EXHIBIT C
MONEY MARKET NOTE
Cleveland, Ohio
April 27, 1994
For value received, THE J. M. SMUCKER COMPANY, an Ohio corporation (the
"Borrower"), promises to pay to the order of ________________(the "Bank"), for
the account of its Money Market Lending Office, the unpaid principal amount of
each Money Market 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 Money Market 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 in lawful money of the United States in Federal or other
immediately available funds at the office of Society National Bank, 127 Public
Square, Cleveland, Ohio 44114- 1306.
All Money Market 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 records of the Bank;
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.
<PAGE> 15
This note is one of the Money Market Notes referred to in the Revolving
Credit Agreement dated as of April 27, 1994 among the Borrower, the banks
listed on the signature pages thereof and Society National Bank, 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.
THE J. M. SMUCKER COMPANY
By:____________________________
Title:_________________________
EXHIBIT D
Form of Money Market Quote Request
[Date]
To: Society National Bank (the "Agent")
From:
Re: Revolving Credit Agreement (the "Credit Agreement") dated as of April
27, 1994, among the Borrower, the Banks listed in 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: ________________________
Principal Amount* Interest Period**
$
Such Money Market Quotes should offer a Money Market Rate.
Terms used herein have the meanings assigned to them in the Credit Agreement.
______________________________
By:___________________________
Title:________________________
_______________
* Amount must be $500,000 or a larger multiple of $100,000.
** Any number of days up to and including 180 days after the Date of Borrowing
set forth above, subject to the provisions of the definition of Interest
Period.
EXHIBIT E
Form of Invitation for Money Market Quotes
To: [Name of Bank]
Re: Invitation for Money Market Quotes
to The J. M. Smucker Company (the "Borrower")
Pursuant to Section 2.03 of the Revolving Credit Agreement dated as of April
27, 1994, among the Borrower, the Banks parties thereto 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: _____________________
Principal Amount Interest Period
$
Such Money Market Quotes should offer a Money Market Rate.
Please respond to this invitation by no later than 10:45 a.m. (Cleveland, Ohio
time) on [date].
SOCIETY NATIONAL BANK
By:______________________________
Authorized Officer
EXHIBIT F
Form of Money Market Quote
SOCIETY NATIONAL BANK, as Agent
127 Public Square
Cleveland, Ohio 44114-1306
Attention:
Re: Money Market Quote to
The J. M. Smucker Company (the "Borrower")
In response to your invitation on behalf of the Borrower dated
__________________, 19___, we hereby make the following Money Market Quote on
the following terms:
<PAGE> 16
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
Amount** Period*** Rate______
$
$
_________________
* As specified in the related Invitation.
** Principal amount bid for each Interest Period may not exceed principal
amount
requested. Bids must be made for $500,000 or a larger multiple of $100,000.
*** The number of days requested by the Borrower, as specified in the related
Invitation up to 180 days.
***** Specify rate of interest per annum (rounded to the nearest 1/100th of
1%).
We understand and agree that the offer(s) set forth above, subject to the
satisfaction of the applicable conditions set forth in the Revolving Credit
Agreement dated as of April 27, 1994, among the Borrower, 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.
Very truly yours,
[NAME OF BANK]
Dated:____________________ By:_______________________________
Authorized Officer
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS 1
SECTION 1.01. DEFINITIONS 1
SECTION 1.02. ACCOUNTING TERMS AND DETERMINATIONS 6
SECTION 1.03. TYPES OF BORROWINGS 6
ARTICLE II. THE CREDITS 7
SECTION 2.01. COMMITMENTS TO LEND 7
SECTION 2.02. NOTICE OF SYNDICATED BORROWINGS 7
SECTION 2.03. MONEY MARKET BORROWINGS 8
(a) THE MONEY MARKET OPTION 8
(b) MONEY MARKET QUOTE REQUEST 8
(c) INVITATION FOR MONEY MARKET QUOTES 8
(d) SUBMISSION AND CONTENTS OF MONEY MARKET QUOTES 8
(e) NOTICE TO BORROWER 9
(f) ACCEPTANCE AND NOTICE BY BORROWER 10
(g) ALLOCATION BY AGENT 10
SECTION 2.04. NOTICE TO BANKS; FUNDING OF LOANS 11
SECTION 2.05. NOTES 11
SECTION 2.06. MATURITY OF LOANS 12
SECTION 2.07. INTEREST RATES 12
SECTION 2.08. FEES 13
SECTION 2.09. OPTIONAL TERMINATION OR REDUCTION OF COMMITMENTS 13
SECTION 2.10. MANDATORY TERMINATION OF COMMITMENTS 14
SECTION 2.11. OPTIONAL PREPAYMENTS 14
SECTION 2.12. GENERAL PROVISIONS AS TO PAYMENTS 14
SECTION 2.13.. FUNDING LOSSES 14
SECTION 2.14. COMPUTATION OF INTEREST AND FEES 15
SECTION 2.15. EXTENSION 15
SECTION 2.16. USE OF PROCEEDS 15
ARTICLE III. CONDITIONS TO BORROWINGS 15
SECTION 3.01. ALL BORROWINGS 15
SECTION 3.02. FIRST BORROWING 16
ARTICLE IV. REPRESENTATIONS AND WARRANTIES 16
SECTION 4.01. CORPORATE EXISTENCE AND POWER 16
SECTION 4.02. CORPORATE AND GOVERNMENTAL AUTHORIZATION 16
SECTION 4.03. BINDING EFFECT 17
SECTION 4.04. FINANCIAL INFORMATION 17
SECTION 4.05. LITIGATION 17
SECTION 4.06. COMPLIANCE WITH ERISA 17
SECTION 4.07. TAXES 17
SECTION 4.08. SUBSIDIARIES 18
SECTION 4.09. REGULATION U 18
SECTION 4.10. ENVIRONMENTAL COMPLIANCE 18
SECTION 4.11. SOLVENCY 18
SECTION 4.12. NO DEFAULT 19
ARTICLE V. COVENANTS 19
SECTION 5.01. FINANCIAL INFORMATION 19
SECTION 5.02. INSPECTION 19
SECTION 5.03. NOTICE 20
SECTION 5.04. ENVIRONMENTAL COMPLIANCE 20
SECTION 5.05. ERISA COMPLIANCE 20
SECTION 5.06. PLAN 21
SECTION 5.07. INSURANCE 21
SECTION 5.08. MONEY OBLIGATIONS 21
SECTION 5.09. RECORDS 21
SECTION 5.10. FRANCHISES 22
SECTION 5.11. EARNINGS RATIO 22
SECTION 5.12. DEBT TO CAPITAL RATIO 22
SECTION 5.13. ACQUISITIONS, BULK TRANSFERS 22
ARTICLE VI. DEFAULTS 22
SECTION 6.01. EVENTS OF DEFAULT 22
SECTION 6.02. NOTICE OF DEFAULT 24
ARTICLE VII. THE AGENT 24
SECTION 7.01. APPOINTMENT AND AUTHORIZATION 24
SECTION 7.02. AGENT'S FEE 25
SECTION 7.03. AGENT AND AFFILIATES 25
SECTION 7.04. ACTION BY AGENT 25
SECTION 7.05. CONSULTATION WITH EXPERTS 25
SECTION 7.06. LIABILITY OF AGENT 25
SECTION 7.07. INDEMNIFICATION 25
SECTION 7.08. CREDIT DECISION 26
SECTION 7.09. SUCCESSOR AGENT 26
ARTICLE VIII. CHANGE IN CIRCUMSTANCES 26
<PAGE> 17
SECTION 8.01. BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR
UNFAIR 26
SECTION 8.02. ILLEGALITY 27
SECTION 8.03. INCREASED COST AND REDUCED RETURN 27
SECTION 8.04. PRIME RATE LOANS SUBSTITUTED FOR AFFECTED FIXED RATE
LOANS 29
ARTICLE IX. MISCELLANEOUS 29
SECTION 9.01. NOTICES 29
SECTION 9.02. NO WAIVERS 29
SECTION 9.03. EXPENSES; DOCUMENTARY TAXES 30
SECTION 9.04. SHARING OF SET-OFFS 30
SECTION 9.05. AMENDMENTS AND WAIVERS 30
SECTION 9.06. SUCCESSORS AND ASSIGNS 31
SECTION 9.07. COLLATERAL 32
SECTION 9.08. OHIO LAW 32
SECTION 9.09. SUBMISSION TO JURISDICTION 32
SECTION 9.10. SEVERABILITY OF PROVISIONS; CAPTIONS 32
SECTION 9.11. OBLIGATIONS SEVERAL; NO FIDUCIARY OBLIGATIONS 33
SECTION 9.12. CONFIDENTIALITY 33
SECTION 9.13. ENTIRE AGREEMENT 33
SECTION 9.14. COUNTERPARTS; EFFECTIVENESS 33
EXHIBIT A - DOMESTIC NOTE 36
EXHIBIT B - EURO-DOLLAR NOTE 37
EXHIBIT C - MONEY MARKET NOTE 38
EXHIBIT D - FORM OF MONEY MARKET QUOTE REQUEST 39
EXHIBIT E - FORM OF INVITATION FOR MONEY MARKET QUOTES 40
EXHIBIT F - FORM OF MONEY MARKET QUOTE 41
REVOLVING CREDIT AGREEMENT
dated as of April 27, 1994
among
THE J. M. SMUCKER COMPANY
and
SOCIETY NATIONAL BANK,
Individually and as Agent
NATIONAL CITY BANK
and
THE FIRST NATIONAL BANK OF CHICAGO
To: Marianne Meil, Large Corporate
From: Gerald M. Smith, Law Group
01-127-0200, 689-4958
Date: April 26, 1994
Subject: THE J. M. SMUCKER COMPANY
Enclosed please find four execution copies of the J. M. Smucker Revolving
Credit Agreement, as well as a Domestic Note, Euro-Dollar Note and Money Market
Note for each of the Banks.
To date, I have spent _______ hours on this matter, which will result in a
charge back to your cost center of $______________.
If you have any questions, please let me know.
___________________________
Gerald M. Smith
7/19/90 3716w
-1-
GMS/lgm40294 4/26/94 -47-
GMS/lgm40294 4/26/94
