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 April 4, 1998
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: 1-13736
U.S. INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of 22-3369326
incorporation or organization) (I.R.S.Employer Identification No.)
101 WOOD AVENUE SOUTH
ISELIN, NJ 08830
(Address of principal executive offices)
(732) 767-0700
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days:
Yes [X] No [ ]
As of May 8, 1998, U.S. Industries, Inc. had one class of common stock, of which
77,270,736 shares were outstanding.
<PAGE>
U.S. INDUSTRIES, INC.
INDEX
<TABLE>
<CAPTION>
Page
No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
<S> <C>
Consolidated Statements of Operations
for the Three and Six Months Ended March 31, 1998 and 1997....................... 1
Consolidated Balance Sheets, March 31, 1998
and September 30, 1997........................................................... 2
Consolidated Statements of Cash Flows
for the Six Months Ended March 31, 1998 and 1997................................. 3
Consolidated Statement of Changes in Stockholders'
Equity for the Six Months Ended March 31, 1998................................... 4
Notes to Consolidated Financial Statements....................................... 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations . . . . . ............................................. 10
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders . . . . . ................... 16
Item 6. Exhibits and Reports on Form 8-K . . . . . ...................................... 16
SIGNATURE ............................................................................................ 17
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION.
ITEM 1. FINANCIAL STATEMENTS.
U.S. INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN MILLIONS EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31,
--------- ---------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales $ 690$ 549$ 1,286$ 1,061
Operating costs and expenses:
Cost of products sold 487 379 897 726
Selling, general and administrative expenses 142 117 278 232
----------- ------------ ------------ ------------
Operating income 61 53 111 103
Interest expense 13 11 24 23
Interest income (1) (1) (2) (2)
Other (income) expense, net (1) 1 (2) 2
----------- ------------ ------------ ------------
Income before income taxes, discontinued operations and
extraordinary loss 50 42 91 80
Provision for income taxes 20 18 37 35
----------- ------------ ------------ ------------
Income from continuing operations 30 24 54 45
Discontinued operations:
Income from operations of discontinued operations
(net of income tax of $-, $1, $- and $2) - 2 - 3
Gain on disposal of discontinued operations
(net of income tax of $-, $23, $- and $24) - 82 - 83
----------- ------------ ------------ ------------
Income from discontinued operations - 84 - 86
----------- ------------ ------------ ------------
Income before extraordinary loss 30 108 54 131
Extraordinary loss (net of income tax benefit of $-, $-, $- and $1) - - - 2
----------- ------------ ------------ ------------
Net income $ 30$ 108$ 54$ 129
=========== ============ ============ ============
Earnings per basic common share:
Income from continuing operations $ 0.40$ 0.33$ 0.73$ 0.62
Income from discontinued operations - 1.15 - 1.17
Extraordinary loss - - - (0.03)
----------- ------------ ------------ ------------
Net income $ 0.40$ 1.48$ 0.73$ 1.76
=========== ============ ============ ============
Earnings per diluted common share:
Income from continuing operations $ 0.39$ 0.32$ 0.71$ 0.60
Income from discontinued operations - 1.10 - 1.13
Extraordinary loss - - - (0.03)
----------- ------------ ------------ ------------
Net income $ 0.39$ 1.42$ 0.71$ 1.70
=========== ============ ============ ============
Weighted average shares outstanding, basic 74.7 73.0 73.7 73.2
=========== ============ ============ ============
Weighted average shares outstanding, diluted 77.3 75.9 76.5 76.0
=========== ============ ============ ============
Cash dividend per share $ 0.05$ -$ 0.10$ -
=========== ============ ============ ============
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
1
<PAGE>
U.S. INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(IN MILLIONS EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
March 31, September 30,
1998 1997
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 39 $ 56
Trade receivables, net 500 388
Inventories 482 401
Deferred income taxes 49 51
Other current assets 41 37
------------- -------------
Total current assets 1,111 933
Property, plant and equipment, net 448 343
Deferred income taxes 5 6
Other assets 136 126
Goodwill, net 481 423
------------- -------------
$ 2,181 $ 1,831
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 6 $ 4
Current maturities of long-term debt 8 1
Trade accounts payable 186 156
Accrued expenses and other liabilities 197 190
Income taxes payable 49 72
------------- -------------
Total current liabilities 446 423
Long-term debt 751 551
Other liabilities 175 152
------------- -------------
Total liabilities 1,372 1,126
------------- -------------
Commitments and contingencies
Stockholders' equity:
Common stock (par value $.01 per share), authorized 300,000,000 shares;
issued 84,542,082 and 80,856,562,
respectively; outstanding 77,124,738 and 74,592,615, respectively 1 1
Paid in capital 665 568
Retained earnings 307 261
Unearned restricted stock (14) (16)
Other equity (10) (3)
Treasury stock (7,417,344 and 6,263,947 shares, respectively) at cost (140) (106)
------------- -------------
Total stockholders' equity 809 705
------------- -------------
$ 2,181 $ 1,831
============= =============
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
2
<PAGE>
U.S. INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS-UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
March 31,
1998 1997
---- ----
<S> <C> <C>
OPERATING ACTIVITIES:
Income from continuing operations $ 54 $ 45
Adjustments to reconcile income from continuing operations to net cash
used in operating activities of continuing operations:
Depreciation and amortization 39 27
Provision for doubtful accounts 2 2
Gain on sale of excess real estate (3) (1)
Gain on sale of subsidiary stock - (1)
Changes in operating assets and liabilities, excluding the effects of
acquisitions and dispositions (124) (104)
---------- ----------
NET CASH USED IN OPERATING
ACTIVITIES OF CONTINUING OPERATIONS (32) (32)
---------- ----------
Income from discontinued operations - 86
Adjustments to reconcile income from discontinued operations to
net cash used in operating activities of discontinued operations:
Gain on disposal of net assets held for disposition - (83)
Net cash used by net assets held for disposition (31) (7)
---------- ----------
NET CASH USED IN OPERATING ACTIVITIES
OF DISCONTINUED OPERATIONS (31) (4)
---------- ----------
NET CASH USED IN OPERATING ACTIVITIES (63) (36)
---------- ----------
INVESTING ACTIVITIES:
Proceeds from sale of net assets held for disposition 10 186
Acquisition of companies, net of cash acquired (53) (67)
Purchases of property, plant and equipment (45) (35)
Other changes in investing activities 6 9
---------- ----------
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES (82) 93
---------- ----------
FINANCING ACTIVITIES:
Proceeds from long-term debt 585 1,125
Repayment of long-term debt (411) (1,172)
Repayment of notes payable, net (3) -
Payment of dividends (8) -
Proceeds from exercise of stock options 3 2
Purchase of treasury stock (35) (27)
---------- ----------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 131 (72)
---------- ----------
Effect of exchange rate changes on cash (3) (4)
DECREASE IN CASH AND CASH EQUIVALENTS (17) (19)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 56 45
---------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 39 $ 26
========== ==========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
3
<PAGE>
U.S. INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED MARCH 31, 1998
(IN MILLIONS EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
Unearned Total
Common Paid in Retained Restricted Other Treasury Stockholders'
Stock Capital Earnings Stock Equity Stock Equity
----- ------- -------- ----- ------ ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at September 30, 1997 $ 1 $ 568 $ 261 $ (16) $ (3) $ (106) $ 705
Net income 54 54
Cash dividend ($0.10 per share) (8) (8)
Amortization of unearned restricted
stock 3 3
Purchase of 1,260,900 shares of
common stock (35) (35)
Forfeiture of 214,420 shares of
unearned restricted stock - 1 (3) (2)
Treasury stock issued (321,923
shares) to employees, directors and
upon exercise of options 1 (2) 4 3
Common stock issued (3,685,520
shares) for acquisition - 96 96
Translation adjustment (7) (7)
------ ------- ------- -------- -------- --------- --------
Balance at March 31, 1998 $ 1 $ 665 $ 307 $ (14) $ (10) $ (140) $ 809
====== ======= ======= ======== ======== ========= ========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
4
<PAGE>
U.S. INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1998
NOTE 1 - BASIS OF PRESENTATION
U.S. Industries, Inc. (the "Company") is a diversified manufacturer of consumer
and industrial products. The accompanying financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information, Article 10 of Regulation S-X and with the instructions to
Form 10-Q. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. The interim financial data for the three and six months ended March
31, 1998 and 1997 are unaudited and, in the opinion of management, reflect all
necessary adjustments for a fair presentation of the financial position and
results of operations for the interim periods on a consistent basis. Such
adjustments were of a normal and recurring nature. The results of operations for
the three and six month periods ended March 31, 1998 are not necessarily
indicative of those for the full fiscal year ending October 3, 1998. For further
information, refer to the Consolidated (Combined) Financial Statements and
footnotes thereto included in the Company's Annual Report on Form 10-K for the
fiscal year ended September 27, 1997, as amended.
The Company's fiscal year ends on the Saturday nearest to September 30. All
three and six month data contained herein reflect results of operations for the
13-week and 27 and 26-week periods ended on the Saturday closest to March 31,
1998 and 1997, respectively, but are presented as of such date for convenience.
NOTE 2 - INVENTORIES
Inventories consist of the following:
(in millions)
March 31, September 30,
1998 1997
(unaudited)
Finished products $ 218 $ 188
Work-in process 104 96
Raw materials 160 117
----------- --------
Inventories, net $ 482 $ 401
=========== ========
5
<PAGE>
NOTE 3 - LONG-TERM DEBT
Long-term debt consists of the following:
(in millions)
March 31, September 30,
1998 1997
(unaudited)
7.25% Senior Notes, net $ 123 $ 123
Revolving credit facility-U.S. dollar 429 350
Revolving credit facility-foreign currencies 113 -
Other long-term debt 94 79
----------- -----------
759 552
Less current maturities 8 1
----------- -----------
Long-term debt $ 751 $ 551
=========== ===========
During the second quarter of fiscal 1998, USI American Holdings, Inc. ("USIAH"),
a wholly owned subsidiary of the Company amended its credit agreement (the
"Credit Agreement") to allow a portion of the available facility to be used for
borrowings in currencies other than the U.S. dollar and to eliminate the
previous restriction limiting certain unsecured indebtedness to $200 million.
The maximum amount which may be borrowed under the Credit Agreement has not
changed and the Company's ability to incur indebtedness outside of the Credit
Agreement is still limited by certain restrictions and covenants contained
therein. For further details regarding the Credit Agreement, see Note 5 to the
Consolidated (Combined) Financial Statements included in the Company's Annual
Report on Form 10-K for the fiscal year ended September 27, 1997, as amended.
At March 31, 1998, the Company had long-term indebtedness of $63 million and $50
million denominated in German marks and British pounds, respectively. These
borrowings are hedges of the Company's net investments in SiTeco and Spear &
Jackson, respectively.
Other long-term debt includes $50 million of notes payable maturing within one
year which the Company expects to repay using borrowings under the Credit
Agreement.
NOTE 4 - COMMITMENTS AND CONTINGENCIES
The Company is subject to a wide range of environmental protection laws. The
Company has remedial and investigatory activities underway at approximately 33
sites. In addition, the Company has been named as a Potentially Responsible
Party ("PRP") at 16 "Superfund" sites pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA") or
comparable statutes.
It is often difficult to estimate the future impact of environmental matters,
including potential liabilities. The Company accrues for losses associated with
environmental remediation obligations when such losses are probable and
reasonably estimable. This practice is followed whether the claims are asserted
or unasserted. Accruals for estimated losses from environmental remediation are,
depending on the site, based primarily upon internal or third party
environmental studies, and estimates as to the number, participation level and
financial viability of any other PRP's, to the extent of contamination and the
nature of required remedial actions. Such accruals are adjusted as further
information develops or circumstances change. Costs of future expenditures for
environmental remediation obligations are not discounted to their present fair
value. Recoveries of environmental remediation costs from other parties are
recognized as assets when their receipt is deemed probable. Management expects
that the amount accrued will be paid out over the periods of remediation for the
applicable sites which range up to 30 years and that all such reserves are
adequate based on all current data. Each of the sites in question is at various
stages of investigation or remediation; however, no information currently
available reasonably suggests that projected expenditures associated with
remedial action or compliance with environmental laws, for any single site or
for all sites in the aggregate, will have a material adverse affect on the
Company's financial condition, results of operations or cash flows.
6
<PAGE>
NOTE 4 - COMMITMENTS AND CONTINGENCIES (CONTINUED)
At March 31, 1998, the Company had accrued approximately $18 million for various
environmental related liabilities of which the Company is aware. The Company
believes that the range of liability for such matters is between approximately
$5 million and $20 million.
NOTE 5 - EARNINGS PER SHARE
In February 1997, the FASB issued Statement No. 128 ("SFAS 128"), "Earnings Per
Share" which was adopted on December 31, 1997. The Company has restated all
prior periods. The adoption of SFAS 128 did not have a material impact on the
earnings per share information previously presented.
<TABLE>
<CAPTION>
Income Income
From From
Continuing Per Share Continuing Per Share
Operations Shares Amount Operations Shares Amount
---------- ------ ------ ---------- ------ ------
(For the Three Months Ended (For the Six Months Ended
March 31, 1998) March 31, 1998)
<S> <C> <C> <C> <C> <C> <C>
Basic Earnings Per Share $ 30 74.7$ 0.40 $ 54 73.7 $ 0.73
Effect of dilutive securities
Stock options 1.3 1.3
Nonvested stock 1.3 1.5
--------- ------ ----- --------- ------ -----
Diluted Earnings Per Share $ 30 77.3$ 0.39 $ 54 76.5 $ 0.71
========= ====== ===== ========= ====== =====
(For the Three Months Ended (For the Six Months Ended
March 31, 1997) March 31, 1997)
Basic Earnings Per Share $ 24 73.0$ 0.33 $ 45 73.2 $ 0.62
Effect of dilutive securities
Stock options 1.5 1.4
Nonvested stock 1.4 1.4
--------- ------ ----- --------- ------ -----
Diluted Earnings Per Share $ 24 75.9$ 0.32 $ 45 76.0 $ 0.60
========= ====== ===== ========= ====== =====
</TABLE>
Diluted common shares include shares that would be outstanding assuming the
fulfillment of conditions that would remove the restriction on nonvested shares
and the exercise of stock options. Options to purchase 59,500 shares in the
three and six months ended March 31, 1998 and options to purchase 34,500 shares
in the three and six months ended March 31, 1997 were not included in the
computation of earnings per share because the options exercise prices were
greater than the average market price of the common shares.
NOTE 6 - MERGERS AND ACQUISITIONS
In January 1998, the Company acquired certain semiconductor leadframe assets of
Philips Electronics ("Philips"), for approximately $14 million in cash. The
acquired manufacturing facilities are located in the Netherlands.
In December 1997, the Company purchased Spear & Jackson plc ("Spear & Jackson")
for $11 million in cash and $96 million in the Company's Common Stock, resulting
in goodwill of approximately $63 million. Spear & Jackson, headquartered in
Sheffield, England, is a manufacturer and distributor of a diverse line of hand
tools, lawn and garden tools, saws, cutting and industrial tools. Spear &
Jackson operates manufacturing facilities in England
7
<PAGE>
NOTE 6 - MERGERS AND ACQUISITIONS (CONTINUED)
and France and distribution facilities in the United States, Australia and New
Zealand. The purchase price is subject to additional cash contingently payable
at the end of a 30-month period based upon a combination of certain performance
criteria and the market value of the Company's stock.
In October 1997, the Company purchased Siemens Lighting, a division of Siemens
A.G., for $67 million in cash. Siemens Lighting is a leading European
manufacturer and marketer of standard and customized indoor and outdoor lighting
products for commercial and industrial use. Siemens Lighting (renamed SiTeco
Beleuchtungstechnik GmbH) ("SiTeco") operates manufacturing facilities in
Germany, Austria and Slovenia.
These transactions have been accounted for as purchases and their results are
included in the financial statements from the respective dates of acquisition.
The allocation of purchase price is preliminary and subject to adjustment upon
receipt of final valuation information and management's final estimates as to
the fair value of the respective assets acquired and liabilities assumed.
In March 1997, the Company purchased certain assets of the outdoor furniture
division of Sunbeam Corporation for approximately $60 million in cash, resulting
in goodwill of $14 million. The acquired business, now known as SunLite Casual
Furniture, Inc. ("SunLite"), manufactures casual outdoor furniture.
In January 1997, the Company purchased the assets of Woodings-Verona Tool Works,
Inc. ("Woodings-Verona") for $5 million in cash plus the assumption of $1.2
million of debt. Woodings-Verona manufactures hot-forged heavy striking tools
including sledge hammers, axes, bars, picks and railroad tools.
These transactions have been accounted for as purchases and their results are
included in the financial statements from the respective dates of acquisition.
In February 1998, the Company entered into a merger agreement through which the
Company will combine with Zurn Industries, Inc. ("Zurn") in a stock for stock
transaction. The stockholder meetings to approve the transaction have been
called for June 11, 1998, and the Company expects that the transaction will be
completed shortly thereafter. The Company's successor in the merger will issue
approximately 20 million shares of common stock to the current shareholders of
Zurn. Zurn manufactures and markets plumbing and, through its wholly owned
subsidiary Eljer Industries, Inc. ("Eljer"), bath products. Zurn also produces
heating, ventilating and air conditioning (HVAC) products and fire protection
systems, and provides water resource construction services. Upon completion,
this transaction will be accounted for as a pooling of interests and,
accordingly, the Company's consolidated financial statements will be restated to
include the accounts and operations of Zurn for all periods prior to the merger.
In connection with the closing of the Zurn transaction, the Company expects to
review its operations based on the long-term strategy for the newly combined
company, with any costs that arise to be recognized during the third and/or
fourth quarter as the Company's analysis is completed.
8
<PAGE>
NOTE 7 - SUMMARIZED FINANCIAL INFORMATION OF SUBSIDIARY
Summarized consolidated financial information of USIAH, the issuer of the 7.25%
Senior Notes, is as follows:
<TABLE>
<CAPTION>
(in millions - unaudited) (in millions - unaudited)
Three Months Ended Six Months Ended
March 31, March 31,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Income Statement Data:
Net sales $ 690 $ 549 $ 1,286 $ 1,061
Gross profit 203 170 389 335
Income from continuing operations 31 25 56 47
Net income 31 109 56 131
(in millions)
March 31, September 30,
1998 1997
---- ----
(unaudited)
-----------
Balance Sheet Data:
Current assets $ 1,111 $ 933
Non-current assets 1,070 898
Current liabilities 442 419
Non-current liabilities 926 703
</TABLE>
Separate consolidated financial statements of USIAH are not presented as
management has determined that they would not be material to investors.
NOTE 8 - SUBSEQUENT EVENTS
In May 1998, the Company purchased certain shadow mask assets from Philips for
approximately $31 million in cash, subject to customary post closing
adjustments. The Company has entered into a multi-year agreement to supply
Philips with such products, which are components of television tubes. The
acquired manufacturing facilities are located in the Netherlands. This
transaction has been accounted for as a purchase and its results will be
included in the financial statements from the date of acquisition.
In May 1998, the Company also entered into an agreement to purchase Sundance
Spas for approximately $32 million in cash, subject to customary closing
conditions and post closing adjustments. Sundance Spas, based in Chino,
California, is a manufacturer of high quality self-contained bath spas.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The Company's operations are grouped into two segments: Consumer and Industrial
Products. As of March 31, 1998, the outdoor furniture operations were
reclassified from Bath Products to Other Consumer Products to better reflect
product classification. The results of all discontinued operations are excluded
from the table below and are discussed separately under "Discontinued
Operations".
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
(IN MILLIONS) (IN MILLIONS)
THREE MONTHS ENDED SIX MONTHS ENDED
MARCH 31, MARCH 31,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
NET SALES
Consumer Group
Housewares Products ...... . . . $ 160 $ 132 $ 268 $ 243
Bath Products................... 94 86 168 154
Other Consumer Products.......... 122 98 236 212
------- --------- --------- ----------
376 316 672 609
Industrial Group
Lighting Products................ 190 134 379 265
Other Industrial Products........ 124 99 235 187
------- --------- --------- ---------
314 233 614 452
TOTAL NET SALES................ $ 690 $ 549 $ 1,286 $ 1,061
======= ========= ======== ========
OPERATING INCOME
Consumer Group
Housewares Products.............. $ 24 $ 25 $ 40 $ 46
Bath Products.................... 12 12 18 18
Other Consumer Products.......... 8 5 20 16
------- --------- --------- ---------
44 42 78 80
------- --------- --------- ---------
Industrial Group
Lighting Products................ 12 9 24 19
Other Industrial Products........ 11 8 22 17
------- --------- --------- ---------
23 17 46 36
------- --------- --------- ---------
Corporate expenses................. (6) (6) (13) (13)
------- --------- --------- ---------
TOTAL OPERATING INCOME........ $ 61 $ 53 $ 111 $ 103
======= ========= ========= =========
</TABLE>
10
<PAGE>
DISCLOSURE CONCERNING FORWARD-LOOKING STATEMENTS
All statements, other than statements of historical fact, included in the
following Management's Discussion or elsewhere in this Quarterly Report are, or
may deemed to be, forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. Such forward-looking statements include, without limitation, the
statements set forth in Outlook, below, and all statements that are preceded by,
followed by or include the words "believes", "expects", "anticipates" or similar
expressions. Various economic and competitive factors could cause actual results
to differ materially from those discussed in such forward-looking statements,
including factors which are outside of the control of the Company, such as
interest rates, foreign currency exchange rates, consumer spending patterns,
availability of consumer credit, levels of residential and commercial
construction, levels of automotive production and changes in raw material costs,
along with the other factors noted in this Quarterly Report and the Company's
Annual Report on Form 10-K for fiscal 1997, as amended, with respect to the
Company's businesses.
THREE MONTHS ENDED MARCH 31, 1998
COMPARED TO THREE MONTHS ENDED MARCH 31, 1997
INTRODUCTION
The Company had sales of $690 million and operating income of $61 million for
the quarter ended March 31, 1998. Sales and operating income increased $141
million (25.7%) and $8 million (15.1%), respectively, over the second quarter of
fiscal 1997.
CONSUMER GROUP
The Consumer Group had sales of $376 million and operating income of $44 million
for the quarter ended March 31, 1998, increases of $60 million (19.0%) and $2
million (4.8%), respectively, over the second quarter of fiscal 1997.
The Housewares Operations had sales of $160 million and operating income of $24
million for the quarter ended March 31, 1998, an increase of $28 million (21.2%)
and a decrease of $1 million (4.0%), respectively, from the second quarter of
fiscal 1997. The increase in sales is primarily attributable to the first time
inclusion of Spear & Jackson, which was acquired in December 1997, partially
offset by reduced sales of vacuum cleaners and ladders. Operating profits
declined due to sharp reductions in sales of high margin vacuum cleaners and
ladders, partially offset by the contribution from Spear & Jackson. Revenues and
operating income from vacuum cleaner sales declined due to lower sales in
certain foreign markets, particularly Poland and the Czech Republic.
The Bath Products Operations had sales of $94 million and operating income of
$12 million for the quarter ended March 31, 1998, an increase of $8 million
(9.3%) and comparable operating income to the prior fiscal period. Significant
increases in sales and operating profits in the North American operations
resulted from continued strength in residential construction. European
operations improved substantially from the prior year, but were offset by
declines in the Brazilian and Asian markets.
The Other Consumer Operations had sales of $122 million and operating income of
$8 million for the quarter ended March 31, 1998, representing increases of $24
million (24.5%) and $3 million (60.0%), respectively, from the second quarter of
fiscal 1997. The increase in sales is primarily due to the inclusion of the
Company's outdoor furniture division which was acquired in March 1997. The
Company's toy business realized a gain on the sale of an investment in one of
its suppliers which offset unexpected start-up losses at the Company's outdoor
furniture business.
INDUSTRIAL GROUP
The Industrial Group had sales of $314 million and operating income of $23
million for the quarter ended March 31, 1998, increases of $81 million (34.8%)
and $6 million (35.3%), respectively, from the second quarter of fiscal 1997.
11
<PAGE>
The Lighting Products Operations had sales of $190 million and operating income
of $12 million for the quarter ended March 31, 1998, increases of $56 million
(41.8%) and $3 million (33.3%), respectively, over the second quarter of fiscal
1997. The increase in sales and operating income is primarily due to the October
1997 acquisition of SiTeco Lighting, formerly Siemens Lighting, and higher sales
of architectural outdoor and residential lighting. Sales of commercial indoor
fluorescent fixtures continue to be affected by price competition.
The Other Industrial Products Operations had sales of $124 million and operating
income of $11 million for the quarter ended March 31, 1998, increases of $25
million (25.3%) and $3 million (37.5%), respectively, from the second quarter of
fiscal 1997. The increase in sales and operating income is due to higher sales
of leadframes, fabricated metal automotive parts and refurbished aircraft
bearings. The January 1998 acquisition of the leadframe business of Philips
contributed to the improvement. Sales of automotive leather increased
significantly while hide quality and low scrap prices resulted in flat operating
income.
DISCONTINUED OPERATIONS AND EXTRAORDINARY LOSS
For the quarter ended March 31, 1998, the Company recorded no income from
discontinued operations. In the comparable period of the prior year, the Company
reported income from discontinued operations of $84 million, net-of-tax,
consisting of gains on disposals of discontinued operations of $82 million and
income from discontinued operations of $2 million. The gains resulted from the
dispositions of SCM Metals Products, Inc. and QPF Inc. The income from
operations of discontinued operations consisted of the results of the companies
sold and the Armour Golf Operations (Tommy Armour Golf and Odyssey Golf).
Discontinued operations are not expected to have a material impact on the future
operations or liquidity of the Company.
INTEREST AND TAXES
Interest expense was $13 million for the quarter ended March 31, 1998, a $2
million (18.2%) increase from the comparable period of fiscal 1997. The increase
in interest expense was due to the higher average debt levels for the comparable
periods. Interest income was $1 million for the quarter ended March 31, 1998,
which is unchanged from the comparable period of fiscal 1997.
The provision for income taxes on continuing operations was $20 million for the
quarter ended March 31, 1998, on pre-tax income of $50 million (a 40.0%
effective tax rate) as compared to a $18 million provision on pre-tax income of
$42 million (a 42.9% effective tax rate) in the comparable period of fiscal
1997. The decrease in the effective tax rate is primarily attributable to the
increased utilization of foreign tax credits.
SIX MONTHS ENDED MARCH 31, 1998
COMPARED TO SIX MONTHS ENDED MARCH 31, 1997
INTRODUCTION
The Company had sales of $1,286 million and operating income of $111 million for
the six months ended March 31, 1998. Sales and operating income increased $225
million (21.2%) and $8 million (7.8%), respectively, over the comparable period
of fiscal 1997.
CONSUMER GROUP
The Consumer Group had sales of $672 million and operating income of $78 million
for the six months ended March 31, 1998, an increase of $63 million (10.3%) and
a decrease of $2 million (2.5%), respectively, over the comparable period of
fiscal 1997.
The Housewares Operations had sales of $268 million and operating income of $40
million for the six months ended March 31, 1998, an increase of $25 million
(10.3%) and a decrease of $6 million (13.0%), respectively, from the comparable
period of fiscal 1997. The increase in sales was primarily due to the first-time
inclusion of Spear & Jackson, acquired in December 1997, which was offset in
large part by reduced sales of ladders and vacuum cleaners. Sales of winter
tools were lower due to unusually mild winter weather conditions. Operating
profits were lower due to reduced contributions from ladder operations, the
winter tool line and vacuum cleaners, partially offset by the contribution from
Spear & Jackson. Revenue and operating income from high margin vacuum cleaners
declined due to lower sales in certain foreign markets, particularly Poland and
the Czech Republic.
12
<PAGE>
The Bath Products Operations had sales of $168 million and operating income of
$18 million for the six months ended March 31, 1998, an increase of $14 million
(9.1%) and comparable operating income to the prior fiscal period. The
improvement in sales and operating income is due to increased sales in the North
American operations due to continued strength in residential building and
increased sales in the company's European operations, partially offset by
reduced sales and profits in Brazil, Chile and Asia due to difficult local
economic conditions.
The Other Consumer Operations had sales of $236 million and operating income of
$20 million for the six months ended March 31, 1998, representing increases of
$24 million (11.3%) and $4 million (25.0%), respectively, from the comparable
period of fiscal 1997. The increase in sales was due to the contribution of the
Company's outdoor furniture division which was acquired in March 1997 and
slightly increased sales in footwear operations, partially offset by reduced toy
sales. The increase in operating income was due to a gain on the sale of an
investment in a supplier of the company's toy business and the impact of a
favorable settlement of certain environmental claims in footwear operations,
partially offset by unexpected start-up losses in the outdoor furniture
division. The Company's toy operations benefitted from reduced obsolescence and
markdown exposures associated with the exit from the promotional toy business.
INDUSTRIAL GROUP
The Industrial Group had sales of $614 million and operating income of $46
million for the six months ended March 31, 1998, increases of $162 million
(35.8%) and $10 million (27.8%), respectively, from the comparable period of
fiscal 1997.
The Lighting Products Operations had sales of $379 million and operating income
of $24 million for the six months ended March 31, 1998, increases of $114
million (43.0%) and $5 million (26.3%), respectively, over the comparable period
of fiscal 1997. The increase in sales and operating profits was due to the
October 1997 acquisition of SiTeco and the strength of architectural outdoor and
residential lighting which was partially offset by softness in the commercial
indoor fluorescent fixture business which is experiencing intense price
competition.
The Other Industrial Products Operations had sales of $235 million and operating
income of $22 million for the six months ended March 31, 1998, increases of $48
million (25.7%) and $5 million (29.4%), respectively, from the comparable period
of fiscal 1997. Sales and operating income increased due to strong sales of
leadframes, which includes the January 1998 acquisition of Phillips' leadframe
business, fabricated metal automotive parts and refurbished aircraft bearings.
While sales of automotive leather increased significantly, hide quality and low
scrap prices resulted in a flat operating income contribution.
DISCONTINUED OPERATIONS AND EXTRAORDINARY LOSS
For the six months ended March 31, 1997, the Company reported income from
discontinued operations of $86 million, consisting of gains on disposals of
discontinued operations of $83 million and income from operations of
discontinued operations of $3 million. The gains on dispositions resulted from
the sales of Tubular Textile Machinery, SCM Metals Products, Inc. and the assets
of QPF, Inc. The income from operations of discontinued operations consisted of
the results of the above named companies as well as the Armour Golf Operations
(Tommy Armour Golf and Odyssey Golf). Discontinued operations are not expected
to have a material impact on the future operations or liquidity of the Company.
In conjunction with the repayment of all outstanding indebtedness under a prior
credit agreement, during the six months ended March 31, 1997, a net-of-tax,
non-cash, extraordinary charge of $2 million was incurred to write off
unamortized deferred financing costs and for previously deferred losses
associated with interest rate protection agreements.
INTEREST AND TAXES
Interest expense was $24 million for the six months ended March 31, 1998, a $1
million (4.4%) increase from the comparable period of fiscal 1997. Interest
income was $2 million for the six months ended March 31, 1998, which is
unchanged from the comparable period of fiscal 1997.
13
<PAGE>
The provision for income taxes on continuing operations was $37 million for the
six months ended March 31, 1998, on pre-tax income of $91 million (a 40.7%
effective tax rate) as compared to a $35 million provision on pre-tax income of
$80 million (a 43.8% effective tax rate) in the comparable period of fiscal
1997. The decrease in the effective tax rate is primarily attributable to the
increased utilization of foreign tax credits.
MERGER WITH ZURN INDUSTRIES, INC.
In February 1998, the Company entered into a merger agreement through which the
Company will combine with Zurn Industries, Inc. ("Zurn") in a stock for stock
transaction. The stockholder meetings to approve the transaction have been
called for June 11, 1998, and the Company expects that the transaction will be
completed shortly thereafter. The Company's successor in the merger will issue
approximately 20 million shares of common stock to the current shareholders of
Zurn. Zurn manufactures and markets plumbing and, through its wholly owned
subsidiary Eljer Industries, Inc. ("Eljer"), bath products. Zurn also produces
heating, ventilating and air conditioning (HVAC) products and fire protection
systems, and provides water resource construction services. Upon completion,
this transaction will be accounted for as a pooling of interests and,
accordingly, the Company's consolidated financial statements will be restated to
include the accounts and operations of Zurn for all periods prior to the merger.
In connection with the closing of the Zurn transaction, the Company expects to
review its operations based on the long-term strategy for the newly combined
company, with any costs that arise to be recognized during the third and/or
fourth quarter as the Company's analysis is completed.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of liquidity and capital resources are cash and
cash equivalents, cash provided from operations and available borrowings under
the Company's revolving credit facility.
Net cash used in operating activities was $32 million for the six months ended
March 31, 1997 and 1998. The current period was impacted by the related working
capital increases from the seasonal nature of the outdoor furniture business
which was acquired in March of 1997, and reduced cash flows from the reduction
in sales of vacuum cleaners and ladders.
Cash used in discontinued operations in the first six months of 1998 is
primarily due to tax payments in connection with the sale of discontinued
operations.
Investing activities used net cash of $82 million in the six months ended March
31, 1998 compared to cash provided by investing activities of $93 million for
the comparable period of fiscal 1997. The six months ended March 31, 1998
included net cash used for the acquisitions of SiTeco, Spear & Jackson, and the
Philips leadframe operations of $53 million and capital expenditures of $45
million, partially offset by the cash proceeds from the sale of Tommy Armour
Golf of $10 million. The prior year included proceeds of $186 million from the
sale of net assets held for disposition, which resulted in an after tax gain of
$83 million, partially offset by capital expenditures of $35 million.
Financing activities provided net cash of $131 million in the six months ended
March 31, 1998 compared to usage of $72 million for the comparable period of
fiscal 1997. The current period included proceeds from long-term debt in excess
of repayments of $174 million, primarily used to finance acquisitions and
operations, the purchase of $35 million of the Company's common stock for
treasury and dividend payments of $8 million. The prior period included
repayments of long-term debt in excess of proceeds of $47 million and the
purchase of $27 million in treasury stock.
During the second quarter of fiscal 1998, USI American Holdings, Inc. ("USIAH"),
a wholly owned subsidiary of the Company amended the revolving credit facility
to allow a portion of the available facility to be used for borrowings in
currencies other than the U.S. dollar and to eliminate the previous restriction
limiting certain unsecured indebtedness to $200 million. The maximum amount
which may be borrowed under the facility has not changed and the Company's
ability to incur indebtedness outside of the facility is still limited by
certain restrictions and covenants contained therein. Upon completion of the
Zurn transaction, the Company expects to use availability under this facility to
repay approximately $210 million of Zurn's indebtedness which will then become
due and payable.
At March 31, 1998 the Company has long-term debt of $63 million denominated in
German marks and $50 million denominated in British pounds. These borrowings are
hedges of the Company's net investments in SiTeco and Spear & Jackson,
14
<PAGE>
respectively. Other long-term debt also includes $50 million of notes payable
maturing within one year which the Company expects to repay using borrowings
under its revolving credit facility.
OUTLOOK
The Company believes that it is operating in a market characterized by a strong
domestic economy but challenged by pricing pressure due to a lack of inflation.
The Company believes that, assuming these present conditions continue, full-year
earnings per share from continuing operations will be within the range of
estimates of $1.70 to $1.80 per share and that longer term, the Company will
achieve its stated goal of growing its earnings per share at a minimum of 15%
annually.
15
<PAGE>
PART II. OTHER INFORMATION.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Annual Meeting of Stockholders of the Company was held on February 6, 1998.
At the meeting:
1. The following persons were elected as Directors of the Company in Class
III to serve until the 2001 Annual Meeting and until their successors are
elected and qualified:
Name Votes For Votes Withheld
---- --------- --------------
David H. Clarke 63,707,963 562,901
Sir Harry Solomon 63,945,629 325,235
Mark Vorder Bruegge 63,932,493 338,371
The terms of Directors of the Company in Class I and Class II will continue
until the 1999 and 2000 Annual Meetings of Stockholders, respectively.
2. The selection of Ernst & Young LLP as the Company's independent auditors
for the fiscal year ending September 30, 1998 was ratified by the
stockholders, as follows:
Votes For: 64,171,351
Votes Against: 28,849
Abstentions: 70,664
The names of the Class I and Class III directors are included in, and are
incorporated by reference to, the Company's definitive proxy statement for
its 1998 Annual Meeting of Stockholders, which was filed with the
Commission on December 11, 1997.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
2.1 Agreement and Plan of Merger, dated as of February 16, 1998, by
and among U.S. Industries, Inc., USI, Inc., Blue Merger Corp.,
Zoro Merger Corp. and Zurn Industries, Inc.*
10.1 Stock Option Agreement, dated as of February 16, 1998, by and
between U.S. Industries, Inc. and Zurn Industries, Inc.*
10.2 Credit Agreement dated December 12, 1996, as amended through
February 11, 1998, among USI American Holdings, Inc., USI
Funding, Inc., U.S. Industries, Inc. and Bank of America
National Trust and Savings Association, as Agent, and BA
Securities, Inc., as Arranger.
27 Financial Data Schedule
(b) Report on Form 8-K
The Company filed a current report on Form 8-K on February 16, 1998,
responsive to Item 5 of such Form, relating to the proposed merger
transaction involving the Company and Zurn Industries, Inc. No financial
statements were filed.
- ----------------
* Incorporated by reference to the Company's Report on 8-K filed on February
16, 1998.
16
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
U.S. INDUSTRIES, INC.
Date: May 18, 1998 /s/ Frank R. Reilly
--------------------------------
Frank R. Reilly
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
17
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
2.1 Agreement and Plan of Merger, dated as of February 16, 1998, by
and among U.S. Industries, Inc., USI, Inc., Blue Merger Corp.,
Zoro Merger Corp. and Zurn Industries, Inc.*
10.1 Stock Option Agreement, dated as of February 16, 1998, by and
between U.S. Industries, Inc. and Zurn Industries, Inc.*
10.2 Credit Agreement dated December 12, 1996, as amended through
February 11, 1998, among USI American Holdings, Inc., USI
Funding, Inc., U.S. Industries, Inc. and Bank of America
National Trust and Savings Association, as Agent, and BA
Securities, Inc., as Arranger.
27 Financial Data Schedule
- ----------------
* Incorporated by reference to the Company's Report on 8-K filed on February
16, 1998.
AS AMENDED THROUGH FEBRUARY 11, 1998
================================================================================
CREDIT AGREEMENT
among
USI AMERICAN HOLDINGS, INC.,
USI FUNDING, INC.,
U.S. INDUSTRIES, INC.,
VARIOUS BANKS,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Issuing Bank, Swingline Bank and Agent,
and
BA SECURITIES INC.,
as Arranger
----------------------------------
Dated as of December 12, 1996
----------------------------------
================================================================================
0000HOIS.W51
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS......................................... 1
1.01 Defined Terms....................................... 1
1.02 Other Definitional Provisions....................... 26
1.03 Accounting Principles............................... 27
1.04 Exchange Rates...................................... 28
ARTICLE II. THE CREDIT FACILITIES............................... 28
2.01 Amounts and Terms of Commitments.................... 28
(a) The Committed Loans............................ 28
(b) The Swingline Loans............................ 29
(c) The Multicurrency Loans........................ 30
2.02 Loan Accounts; Notes................................ 32
2.03 Procedure for Committed Borrowing, Swingline Borrowing
and Multicurrency Borrowing......................... 32
2.04 Conversion and Continuation Elections for Committed
Borrowings and Multicurrency Borrowings............. 36
2.05 Bid Borrowings...................................... 38
2.06 Procedure for Bid Borrowings........................ 38
2.07 Voluntary Reduction and Termination of Commitments.. 43
2.08 Mandatory Reduction of Loan Commitments............. 44
2.09 Voluntary Prepayments of Committed Loans, Swingline
Loans and Multicurrency Loans....................... 44
2.10 Mandatory Prepayments............................... 45
2.11 Repayment of Principal.............................. 46
(a) The Committed Loans............................ 46
(b) The Swingline Loans............................ 46
(c) Multicurrency Loans............................ 46
(d) Bid Loans...................................... 47
2.12 Interest............................................ 47
2.13 Fees................................................ 49
(a) Facility Fees.................................. 49
(b) Other Fees..................................... 50
2.14 Computation of Fees and Interest.................... 50
2.15 Payments by the Borrowers........................... 51
2.16 Payments by the Banks to the Agent.................. 52
2.17 Sharing of Payments, etc............................ 53
(i)
<PAGE>
Page
2.18 Guaranty............................................ 54
2.19 Termination Date Extensions......................... 54
2.20 Rounding and Other Consequential Changes............ 55
ARTICLE III. THE LETTERS OF CREDIT............................... 56
3.01 The Letter of Credit Subfacility.................... 56
3.02 Issuance, Amendment and Renewal of Letters of Credit 57
3.03 Participations, Drawings and Reimbursements......... 59
3.04 Repayment of Participations......................... 61
3.05 Role of the Issuing Bank............................ 61
3.06 Obligations Absolute................................ 62
3.07 Cash Collateral Pledge.............................. 63
3.08 Letter of Credit Fees............................... 64
3.09 Uniform Customs and Practice........................ 64
ARTICLE IV. TAXES, YIELD PROTECTION AND ILLEGALITY.............. 65
4.01 Taxes............................................... 65
4.02 Illegality.......................................... 70
4.03 Increased Costs and Reduction of Return............. 70
4.04 Funding Losses...................................... 71
4.05 Inability to Determine Rates........................ 72
4.06 Reserves on Eurodollar Committed Loans, Eurodollar
Multicurrency Loans or IBOR Loans................... 73
4.07 Certificates of Banks............................... 73
4.08 Change of Lending Office, Replacement Bank.......... 73
4.09 Survival............................................ 74
ARTICLE V. CONDITIONS PRECEDENT................................ 74
5.01 Conditions to the Effective Date.................... 74
(a) Credit Agreement............................... 75
(b) Resolutions; Incumbency........................ 75
(c) Bring-down Certificate......................... 75
(d) Legal Opinions................................. 75
(e) Payment of Fees and Expenses................... 76
(f) Certificates................................... 76
(g) Senior Notes................................... 76
(h) Existing Credit Agreement; etc................. 76
(i) Other Documents................................ 77
(ii)
<PAGE>
Page
5.02 Conditions to all Borrowings and the Issuance of any
Letters of Credit................................... 77
(a) Notice......................................... 77
(b) Continuation of Representations and Warranties. 77
(c) No Existing Default............................ 77
(d) No Material Adverse Effect..................... 77
ARTICLE VI. REPRESENTATIONS AND WARRANTIES...................... 78
6.01 Corporate Existence and Power....................... 78
6.02 Corporate Authorization; No Contravention........... 78
6.03 Governmental Authorization.......................... 79
6.04 Binding Effect...................................... 79
6.05 Litigation.......................................... 79
6.06 No Default.......................................... 79
6.07 ERISA Compliance.................................... 79
6.08 Use of Proceeds; Margin Regulations................. 80
6.09 Title to Properties................................. 81
6.10 Taxes............................................... 81
6.11 Financial Statements................................ 81
6.12 Securities Law, etc.; Compliance.................... 81
6.13 Governmental Regulation............................. 81
6.14 Accuracy of Information............................. 81
6.15 Hazardous Materials................................. 82
6.16 Senior Notes........................................ 82
ARTICLE VII. AFFIRMATIVE COVENANTS............................... 83
7.01 Financial Statements................................ 83
7.02 Certificates; Other Information..................... 84
7.03 Notices............................................. 84
7.04 Maintenance of Corporate Existence, etc............. 85
7.05 Foreign Qualification, etc.......................... 85
7.06 Payment of Taxes, etc............................... 85
7.07 Maintenance of Property; Insurance.................. 86
7.08 Compliance with Laws, etc........................... 86
7.09 Books and Records................................... 86
7.10 Use of Proceeds..................................... 86
7.11 End of Fiscal Years; Fiscal Quarters................ 86
(iii)
<PAGE>
Page
ARTICLE VIII. NEGATIVE COVENANTS.................................. 87
8.01 Limitation on Liens................................. 87
8.02 Disposition of Assets............................... 88
8.03 Consolidations, Merger, etc......................... 89
8.04 Limitation on Indebtedness.......................... 90
8.05 Transactions with Affiliates........................ 91
8.06 Use of Credits; Compliance With Margin Regulations.. 91
8.07 Preferred Stock..................................... 91
8.08 Demerger Transaction Documents...................... 91
8.09 Environmental Liabilities........................... 92
8.10 Financial Covenants................................. 92
(a) Consolidated Leverage Ratio.................... 92
(b) Maximum Total Funded Debt...................... 92
8.11 Special Covenants of the Parent..................... 92
ARTICLE IX. EVENTS OF DEFAULT................................... 93
9.01 Event of Default.................................... 93
(a) Non-Payment.................................... 93
(b) Representation or Warranty..................... 93
(c) Specific Defaults.............................. 93
(d) Other Defaults................................. 93
(e) Cross-Default.................................. 94
(f) Insolvency; Voluntary Proceedings.............. 94
(g) Involuntary Proceedings........................ 94
(h) ERISA.......................................... 94
(i) Judgments...................................... 95
(j) Change of Control.............................. 95
(k) Guaranty....................................... 95
(l) Tax Status..................................... 95
9.02 Remedies............................................ 96
9.03 Rights Not Exclusive................................ 96
ARTICLE X. THE GUARANTY........................................ 97
10.01 Guaranty from the Guarantor Parties................. 97
ARTICLE XI. THE AGENT, THE ISSUING BANK AND THE
ARRANGER............................................101
11.01 Appointment and Authorization.......................101
11.02 Delegation of Duties................................101
(iv)
<PAGE>
Page
11.03 Liability of Agent..................................102
11.04 Reliance by Agent...................................102
11.05 Notice of Default...................................103
11.06 Credit Decision.....................................103
11.07 Indemnification.....................................104
11.08 Agent in Individual Capacity........................105
11.09 Successor Agent.....................................105
11.10 The Arranger........................................105
11.11 Co-Agents; Managing Agents..........................105
ARTICLE XII. MISCELLANEOUS.......................................106
12.01 Amendments and Waivers..............................106
12.02 Notices.............................................107
12.03 No Waiver; Cumulative Remedies......................108
12.04 Costs and Expenses..................................108
12.05 Indemnity...........................................109
12.06 Successors and Assigns..............................110
12.07 Assignments, Participations, etc....................110
12.08 Confidentiality.....................................112
12.09 Set-off.............................................113
12.10 Notification of Addresses, Lending Offices, etc.....113
12.11 Counterparts........................................113
12.12 Severability........................................113
12.13 No Third Parties Benefited..........................114
12.14 Governing Law and Jurisdiction......................114
12.15 Waiver of Jury Trial................................114
12.16 Conversion of Currencies............................115
SCHEDULE 1.01(a) Lending Offices SCHEDULE 1.01(b) Commitments SCHEDULE 1.04(a)
Exchange Rate SCHEDULE 3.01(b) Existing Letters of Credit SCHEDULE 6.15
Environmental Matters SCHEDULE 8.04(a) Existing Indebtedness
(v)
<PAGE>
EXHIBIT A Form of Notice of Borrowing
EXHIBIT B Form of Notice of Conversion/Continuation
EXHIBIT C Form of Competitive Bid Request
EXHIBIT D Form of Competitive Bid
EXHIBIT E Form of Leverage Ratio Certificate
EXHIBIT F Form of Davis Polk & Wardwell Opinion
EXHIBIT G Form of George MacLean, Esq. Opinion
EXHIBIT H Form of White & Case Opinion
EXHIBIT I Form of Compliance Certificate
EXHIBIT J Form of Assignment and Acceptance
(vi)
<PAGE>
CREDIT AGREEMENT, dated as of December 12, 1996, among USI AMERICAN
HOLDINGS, INC., a Delaware corporation (the "Company"), USI FUNDING, INC. a
Delaware corporation ("USI Funding" and together with the Company, each a
"Borrower" and, collectively, the "Borrowers"), U.S. INDUSTRIES, INC. (the
"Parent"), the several financial institutions from time to time party to this
Agreement (the "Banks"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Issuing Bank, Swingline Bank and Agent, and BA SECURITIES, INC., as Arranger.
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions herein set forth,
the Banks are willing to make available to the Borrowers the respective credit
facilities provided for herein;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE I.
DEFINITIONS
1.01 Defined Terms. As used in this Agreement, the capitalized terms in
the preamble and the recitals hereto shall have the meanings therein given them,
and the following words and terms shall have the meanings specified below:
"Absolute Rate" has the meaning specified in Section 2.06(c)(ii)(D).
"Absolute Rate Auction" means a solicitation of Competitive Bids setting
forth Absolute Rates pursuant to Section 2.06.
"Absolute Rate Bid Loan" means a Bid Loan that bears interest at a rate
determined with reference to the Absolute Rate.
"Adjusted EBITDA" means, for any Measurement Period, EBITDA for such
period, adjusted, on a pro forma basis, to reflect the financial effects of any
Asset Sales and/or asset acquisitions made by the Company or its Subsidiaries
during such period as if such Asset Sales and/or asset acquisitions, as the case
may be, occurred on the first day of such period.
-1-
<PAGE>
"Affiliate" means, with respect to any Person, any other Person (i)
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person or (ii) that directly or indirectly owns more
than 10% of any class of the capital stock, of or equity interests in, such
Person. A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such other Person, whether through the ownership
of voting securities, by contract or otherwise.
"Agent" means Bank of America in its capacity as agent for the Banks
hereunder, and any successor agent.
"Agent-Related Persons" has the meaning specified in Section 11.03.
"Agent's Payment Office" means the address for payments set forth on the
signature page hereto in relation to the Agent or such other address as the
Agent may from time to time specify in accordance with Section 12.02.
"Aggregate Commitment" means the combined Commitments of the Banks, in
the initial amount of $750,000,000, as such amount may be reduced from time to
time pursuant to this Agreement.
"Agreement" means this Credit Agreement as from time to time amended,
modified or supplemented.
"Agreement Currency" has the meaning specified in Section 12.16(b).
"Applicable Creditor" has the meaning specified in Section 12.16(b).
"Applicable Margin" means the margin to be added to the Base Rate, IBOR
or LIBOR, as the case may be, in accordance with Section 2.12(a).
"Arranger" has the meaning specified in the preamble hereto.
"Asset Sale" means the direct or indirect sale, lease, transfer,
conveyance or other disposition (including, without limitation, dispositions
pursuant to Sale and Leaseback Transactions), in a single transaction or a
series of transactions, by the Company or any of its Subsidiaries to any Person
(other than the Company or any of its Wholly-Owned Subsidiaries) of any property
of the Company or any of its Subsidiaries, other than (i) assets disposed of in
the ordinary course of business and (ii) inventory, real property or equipment
no longer used or useful in the business of the Company or any of its
Subsidiaries provided (A) in any event that "Asset Sale" shall include
dispositions of (x) principal divisions or lines of business of any Person or
capital stock of any Subsidiary of
-2-
<PAGE>
such Person or (y) Investments held on the Effective Date in Ground Round
Restaurants, Inc. and (B) the fair market value of Asset Sales arising from any
Receivables Sale shall be the Receivables Sale Amount with respect to such
Receivables Sale.
"Assignee" has the meaning specified in Section 12.07(a).
"Assignment and Acceptance" has the meaning specified in Section
12.07(a).
"Attorney Costs" means and includes all reasonable documented fees and
disbursements of any law firm or other external counsel and, without
duplication, the allocated cost of internal legal services and all reasonable
disbursements of internal counsel.
"Bank Affiliate" means a Person engaged primarily in the business of
commercial banking that is an Affiliate of a Bank.
"Bank of America" means Bank of America National Trust and Savings
Association, a national banking association, in its individual capacity.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C. ss. 101, et seq.).
"Banks" has the meaning specified in the preamble hereto.
"Base Rate" means, for any day, the higher of (a) the Reference Rate or
(b) the Federal Funds Rate plus 1/2%, in each case as in effect for such day.
"Base Rate Borrowing" means a Borrowing comprised of loans bearing
interest at a rate determined by reference to the Base Rate in accordance with
Article II.
"Base Rate Committed Loan" means a Committed Loan that bears interest
based on the Base Rate.
"Base Rate Loan" means any Base Rate Committed Loan, or a Swingline Loan
that bears an interest rate based on the Base Rate.
"Bid Borrowing" means a Borrowing hereunder consisting of one or more
Bid Loans made to a Borrower on the same day by one or more Banks.
"Bid Loan" means a Loan by a Bank to a Borrower under Section 2.05,
which may be a Eurodollar Bid Loan or an Absolute Rate Bid Loan.
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"Bid Loan Exposure" means, with respect to any Bank at any time, the
aggregate principal amount at such time of all outstanding Bid Loans made by
such Bank.
"Bid Loan Lender" means, in respect of any Bid Loan, the Bank making
such Bid Loan to a Borrower.
"Borrower" has the meaning specified in the preamble hereto.
"Borrowing" means a borrowing hereunder consisting of one or more Loans
made to a Borrower on the same Borrowing Date by the Banks, the Swingline Bank,
the Multicurrency Banks or the Bid Loan Lenders pursuant to Section 2.01, and
may be a Committed Borrowing, a Swingline Borrowing, a Multicurrency Borrowing
or a Bid Borrowing.
"Borrowing Date" means, in relation to any Loan, the date of the
borrowing of such Loan as specified in the relevant Notice of Borrowing for a
Committed Borrowing or Multicurrency Borrowing, request for a Swingline Loan or
Competitive Bid Request.
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks in San Francisco or New York City are authorized or
required by law to close and, if such term is used in relation to any Eurodollar
Loan or IBOR Loan or the Interest Period therefor, any such day on which
dealings are carried on by and between banks in Dollar deposits in the
applicable interbank market, and if such term is used in relation to any
Multicurrency Loan or the Interest Period therefor, any such day on which
dealings are carried on by and between commercial banks in London for the
applicable Eligible Currency; provided, however, that on and from the
Commencement of the Third Stage of EMU, if such reference to "Business Day"
relates to a date for the payment or purchase of a sum denominated in the Euro
or in a National Currency Unit, "Business Day" shall also mean in the case of
Multicurrency Loans (a) a day such clearing or settlement system as is
determined by the Agent to be suitable for clearing or settlement of the Euro is
open for business and (b) a day that banks are generally open for business in
such financial center as is determined by the Agent to be suitable for clearing
or settlement of such National Currency Unit.
"Calculation Date" means (a) the last Business Day of each calendar
quarter, (b) at any time when the aggregate amount of the Dollar Credit
Exposures exceeds 85% of the Aggregate Commitment, the last Business Day of each
two-calendar week period and (c) any day on which a Multicurrency Borrowing is
made.
"Capital" means, at any time, the sum of (x) Total Funded Debt and (y)
Net Worth at such time.
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"Capital Adequacy Regulation" means any guideline, request or directive
of any central bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, regarding capital adequacy
of any bank or of any corporation controlling a bank.
"Capital Lease" has the meaning specified in the definition of "Capital
Lease Obligations".
"Capital Lease Obligations" means all monetary obligations of the
Company or any of its Subsidiaries under any leasing or similar arrangement
which, in accordance with GAAP, is classified as a capital lease ("Capital
Lease").
"Cash Collateralize" means to pledge and deposit with or deliver to the
Agent, for the benefit of the Agent, the Issuing Bank and the Banks, as
collateral for the Letter of Credit Obligations, cash or deposit account
balances pursuant to documentation in form and substance satisfactory to the
Agent and the Issuing Bank (which documents are hereby consented to by the
Banks). Derivatives of such term shall have corresponding meanings. The relevant
Borrower hereby grants to the Agent, for the benefit of the Agent, the Issuing
Bank and the Banks, a security interest in all such cash and deposit account
balances. Cash collateral shall be invested in Cash Equivalents of a tenor
satisfactory to the Agent and as instructed by such Borrower, which Cash
Equivalents shall be held in the name of such Borrower and under the control of
the Agent in a manner satisfactory to the Agent.
"Cash Equivalents" means any or all of the following: (i) obligations
of, or guaranteed as to interest and principal by, the United States Government
maturing within one year after the date on which such obligations are purchased;
(ii) open market commercial paper of any corporation (other than the Parent, the
Company or any of its Subsidiaries) incorporated under the laws of the United
States or any State thereof or the District of Columbia rated P-1 or its
equivalent by Moody's or A-1 or its equivalent or higher by S&P; (iii) time
deposits or certificates of deposit maturing within one year after the issuance
thereof issued by commercial banks organized under the laws of any country which
is a member of the OECD and having a combined capital and surplus in excess of
$250,000,000 or which is a Bank; (iv) repurchase agreements with respect to
securities described in clause (i) above entered into with an office of a bank
or trust company meeting the criteria specified in clause (iii); and (v) money
market funds investing only in investments described in clauses (i) through
(iv).
"Change of Control" means (a) the acquisition by any Person, or two or
more Persons acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended) of (i) more than 25% of the outstanding voting
shares of the Parent or (ii) 20% or more of the outstanding voting shares of the
Parent if, following such acquisition, the
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board of directors of the Parent shall cease to consist of a majority of
Continuing Directors, (b) the Company shall cease to be a Wholly-Owned
Subsidiary of the Parent, (c) USI Funding shall cease to be a direct or indirect
Wholly-Owned Subsidiary of the Company or (d) the occurrence of a Senior Note
Change of Control.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any regulations promulgated thereunder.
"Commencement of the Third Stage of EMU" means commencement of the third
stage of EMU or circumstances which (in the opinion of the Majority
Multicurrency Banks) have substantially the same effect and result in
substantially the same consequences as the third stage of EMU as contemplated by
the Treaty on European Union.
"Commitment" means, for each Bank, the amount set forth opposite such
Bank's name under the caption "Commitment" on Schedule 1.01(b), as such amount
may be reduced from time to time pursuant to the provisions hereof.
"Commitment Percentage" means, as to any Bank, the percentage equivalent
of such Bank's Commitment divided by the Commitments of all the Banks, provided
that if the Commitments have been terminated in full, the "Commitment
Percentage" of each Bank shall be determined by dividing such Bank's Commitment
immediately prior to such termination by all the Banks' Commitments immediately
prior to such termination.
"Committed Borrowing" means a Borrowing hereunder consisting of
Committed Loans made on the same day by the Banks ratably according to their
respective pro rata shares and, in the case of Eurodollar Committed Loans,
having the same Interest Periods.
"Committed Loan" means a Loan by a Bank to any Borrower under Section
2.01(a), and may be a Eurodollar Committed Loan or a Base Rate Committed Loan
(each, a "Type" of Committed Loan).
"Committed Loan Exposure" means, with respect to any Bank at any time,
the aggregate principal amount at such time of all outstanding Committed Loans
made by such Bank.
"Company" has the meaning specified in the preamble hereto.
"Competitive Bid" means an offer by a Bank to make a Bid Loan in
accordance with Section 2.06(b).
"Competitive Bid Request" has the meaning specified in Section 2.06(a).
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"Compliance Certificate" means the compliance certificate in
substantially the form of Exhibit I, to be executed by a Responsible Officer of
the Company and delivered pursuant to Section 7.02(a).
"Consolidated Leverage Ratio" means, as at the end of any Measurement
Period, the ratio of:
(a) Total Funded Debt on the last day of such period
to
(b) Adjusted EBITDA for such period.
"Consolidated Net Tangible Assets" means, at any date, the total amount
of assets appearing on the most recent consolidated balance sheet of the Parent
and its Subsidiaries, prepared in accordance with generally accepted accounting
principles, less (i) all current liabilities (due within one year) as shown on
such balance sheet (excluding current maturities of long term indebtedness and
intercompany items), (ii) applicable depreciation, amortization and other
valuation reserves not already reflected in such total amount of assets and
(iii) Intangible Assets and liabilities relating thereto. As used in the
previous sentence, the term "Intangible Assets" means the value (net of any
applicable reserves), as shown on or reflected in such balance sheet, of: (a)
all trade names, trademarks, licenses, patents, copyrights, service marks,
goodwill and other like intangibles and (b) unamortized debt discount and
expense, less unamortized premium.
"Continuation Date" means any date on which a Borrower elects to
continue a Eurodollar Committed Loan as a Eurodollar Committed Loan for a
further Interest Period in accordance with the provisions of Section 2.04.
"Continuing Directors" means the directors of the Company on the
Effective Date and each other director, if such director's nomination for
election to the board of directors of the Company is recommended by a majority
of the then Continuing Directors.
"Contractual Obligations" means, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or agreement to
which such Person is a party or by which it or any of its property is bound.
"Conversion Date" means any date on which a Borrower elects to convert a
Base Rate Committed Loan to a Eurodollar Committed Loan, or a Eurodollar
Committed Loan to a Base Rate Committed Loan, in each case in accordance with
the provisions of Section 2.04.
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"Default" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured or otherwise remedied
during such time) constitute an Event of Default.
"Demerger Transaction Documents" means each of the agreements and
documents entered into between the Parent and/or any of its Subsidiaries and
Hanson and/or any of its Subsidiaries on or about May 31, 1995 in connection
with the demerger of the Parent from Hanson.
"Disbursement Date" has the meaning specified in Section 3.03(b).
"Dividend" with respect to any Person means that such Person has
declared or paid a dividend or returned any equity capital to its stockholders
as such or made any other distribution, payment or delivery of property or cash
to its stockholders as such, or redeemed, retired, purchased or otherwise
acquired, directly or indirectly, for a consideration any shares of any class of
its capital stock outstanding on or after the Effective Date (or any options or
warrants issued by such Person with respect to its capital stock), or set aside
any funds for any of the foregoing purposes, or shall have permitted any of its
Subsidiaries to purchase or otherwise acquire for a consideration any shares of
any class of the capital stock of such Person outstanding on or after the
Effective Date (or any options or warrants issued by such Person with respect to
its capital stock).
"Dollar Credit Exposure" means, with respect to any Bank at any time,
the sum of the Committed Loan Exposure, the Bid Loan Exposure and the
Multicurrency Loan Exposure of such Bank at such time.
"Dollar Equivalent" means, on any date of determination, with respect to
any amount in any Eligible Currency, the equivalent in Dollars of such amount,
determined by the Agent using the Exchange Rate with respect to such Eligible
Currency then in effect as determined pursuant to Section 1.04(a).
"Dollars" and "$" each mean lawful money of the United States.
"Domestic Lending Office" has the meaning specified in the definition of
"Lending Office".
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"EBITDA" means, for any Measurement Period:
(i) the sum for such period of
(a) Net Income;
(b) Net Interest Expense to the extent deducted in
determining such Net Income;
(c) all taxes on or measured by income to the extent
deducted in determining such Net Income;
(d) all charges in respect of foreign currency
translations; and
(e) the aggregate amount of depreciation expense,
amortization expense and other similar non-cash charges
(including, without limitation, losses due to equity
investments) to the extent deducted in determining such Net
Income;
minus
(ii) for any period, the aggregate non-cash gains for such period
from equity investments to the extent added in determining Net Income for
such period;
provided, however, that for purposes of this definition, Net Income shall be
computed without giving effect to (x) non-cash effects of changes to GAAP after
the Effective Date and (y) extraordinary losses or extraordinary gains or gains
or losses arising from Asset Sales.
"Effective Date" means December 12, 1996.
"Eligible Assignee" means and includes a commercial bank, financial
institution or other "accredited investor" (as defined in Regulation D of the
Securities Act of 1933).
"Eligible Currency" means Pounds Sterling and any other currency
(other than Dollars) that shall be designated by a Borrower in a notice
delivered to the Agent and each Multicurrency Bank by a Borrower and that is
freely tradeable and exchangeable into Dollars in the London market and for
which an Exchange Rate can be determined by reference to the applicable Telerate
screen or another publicly available service for displaying exchange rates
agreed upon by the Agent and such Borrower, or quoted by the
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Multicurrency Reference Banks; provided, however, that if and to the extent that
any EMU Legislation provides that following the Commencement of the Third Stage
of EMU an amount denominated either in Euro or in the National Currency Unit of
a Participating Member State and payable within that Participating Member State
by crediting an account of the creditor can be paid by the debtor in either the
Euro Unit or in that National Currency Unit, "Eligible Currency" shall also
include such Euro Unit and National Currency Unit and the Borrowers shall be
entitled under this Agreement to pay or repay any such amount either in the Euro
Unit or in such National Currency Unit.
"EMU" means Economic and Monetary Union as contemplated in the Treaty on
European Unions.
"EMU Legislation" means legislative measures of the European Council
for the introduction of, changeover to or operation of a single or unified
European currency (whether known as the Euro or otherwise), being in part the
implementation of the third stage of EMU.
"Environmental Claims" means all actions, suits, proceedings or
claims by any Governmental Authority or other Person alleging potential
liability or responsibility for violation of any Environmental Law or for
release or injury to the environment or threat to public health, personal injury
(including sickness, disease or death), property damage, natural resources
damage, or otherwise alleging liability or responsibility for damages (punitive
or otherwise), cleanup, removal, remedial or response costs, restitution, civil
or criminal penalties, injunctive relief, or other type of relief, resulting
from or based upon (a) the presence, placement, discharge, emission or release
(including intentional and unintentional, negligent and non-negligent, sudden or
non-sudden, accidental or non-accidental placement, spills, leaks, discharges,
emissions or releases) of any Hazardous Material at, in, or from property,
whether or not owned by any Borrower, or (b) any other circumstances forming the
reasonable basis of any violation, or alleged violation, of any Environmental
Law.
"Environmental Law" has the meaning specified in the definition of
"Hazardous Material".
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and the rules and regulations promulgated thereunder as from time to
time in effect.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Parent, the Company or any of their
respective Subsidiaries within the meaning of Section 414(b) or (c) of the Code
(and Sections 414(m) and (o) for purposes of provisions relating to Sections
412, 414(t)(2) and 4971 of the Code).
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"ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan or a Multiemployer Plan which could reasonably be expected to result in a
material liability to the Parent and/or the Company; (b) a withdrawal by the
Parent, the Company or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations which
is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete
or partial withdrawal by the Parent, the Company or any ERISA Affiliate from a
Multiemployer Plan which could reasonably be expected to result in a material
liability to the Parent and/or the Company or notification that a Multiemployer
Plan is insolvent or in reorganization; (d) the filing of a notice of intent to
terminate other than a standard termination pursuant to Section 4041(b) of ERISA
where such standard termination or the process of affecting such standard
termination will not result in a material liability to the Parent, the Company
or an ERISA Affiliate, the treatment of a plan amendment as a termination under
Section 4041 or 4041A of ERISA or the commencement of proceedings by the PBGC to
terminate a Pension Plan or Multiemployer Plan; (e) a failure by the Parent, the
Company or any ERISA Affiliate to make required contributions to a Pension Plan,
Multiemployer Plan or other Plan subject to Section 412 of the Code; (f) an
event or condition which might reasonably be expected to constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; (g) the
imposition of any material liability under Title IV of ERISA, other than PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the Company or
any ERISA Affiliate; or (h) an application for a funding waiver or an extension
of any amortization period pursuant to Section 412 of the Code with respect to
any Plan.
"Euro" means the single currency of Participating Member States of the
European Union.
"Eurodollar Auction" means a solicitation of Competitive Bids
setting forth a Eurodollar Bid Margin pursuant to Section 2.06.
"Eurodollar Bid Loan" means any Bid Loan that bears interest at a
rate based on LIBOR.
"Eurodollar Bid Margin" has the meaning specified in Section
2.06(c)(ii)(C).
"Eurodollar Committed Loan" means a Committed Loan that bears
interest based on LIBOR.
"Eurodollar Lending Office" has the meaning specified in the definition
of "Lending Office".
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"Eurodollar Loan" means any Eurodollar Committed Loan, Eurodollar
Multicurrency Loan or Eurodollar Bid Loan.
"Eurodollar Multicurrency Loan" means any Multicurrency Loan bearing
interest at a rate determined by reference to LIBOR in accordance with the
provisions of Article II.
"Euro Unit" means the currency unit of the Euro.
"Event of Default" means any of the events or circumstances specified in
Section 9.01.
"Exchange Rate" means, with respect to any Eligible Currency on a
particular date, the rate at which such Eligible Currency may be exchanged into
Dollars, as set forth on such date at 11:00 A.M., London time on the applicable
Telerate screen for such Eligible Currency. In the event that such rate does not
appear on such Telerate screen, the Exchange Rate with respect to such Eligible
Currency shall be determined by reference to such other publicly available
service for displaying exchange rates as may be agreed upon by the Agent and the
Borrowers or quoted by the Multicurrency Reference Banks, or, in the absence of
such agreement or quotation, such Exchange Rate shall instead be the arithmetic
average of the spot rates of exchange of the Agent in the market where its
foreign currency exchange operations in respect of such Eligible Currency are
then being conducted, at or about 11:00 A.M., London time, at such date for the
purchase of Dollars with such Eligible Currency for delivery two Business Days
later, provided, however, that if at the time of any such determination, for any
reason, no such spot rate is being quoted, the Agent may use any reasonable
method it deems appropriate to determine such rate, and such determination shall
be conclusive absent manifest error.
"Existing Credit Agreement" means the Credit Agreement, dated as of
May 12, 1995, and amended and restated as of December 21, 1995, among the
Company, USI Funding, the Parent, the several financial institutions party
thereto, Bank of America Illinois, as Issuing Bank and Swingline Bank, Bank of
America National Trust and Savings Association, as Agent, and BA Securities,
Inc., as Arranger, as amended, modified or supplemented through the Effective
Date.
"Federal Funds Rate" means, for any day, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, "H.15(519)") for such day opposite the caption "Federal Funds
(Effective)". If on any relevant day the appropriate rate for such previous day
is not yet published in H.15(519), the rate for such day will be the arithmetic
mean of the rates for the last transaction in overnight federal funds arranged
prior to
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9:00 A.M. (New York City time) on that day by each of three leading brokers of
federal funds transactions in New York City selected by the Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any successor thereto.
"Form 1001" has the meaning specified in Section 4.01(f).
"Form 4224" has the meaning specified in Section 4.01(f).
"GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the accounting
profession), or in such other statements by such other entity as may be in
general use by significant segments of the U.S. accounting profession, which are
applicable to the circumstances as of the date of determination.
"Governmental Authority" means any nation or government, any state
or other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Guaranteed Obligations" means (i) with respect to the Parent as a
Guarantor Party, all Obligations of the Borrowers under this Agreement and the
other Loan Documents, and (ii) with respect to the Company as a Guarantor Party,
all Obligations of USI Funding under this Agreement and the other Loan
Documents.
"Guaranteed Party" means (i) with respect to the Parent as a
Guarantor Party, the Borrowers, and (ii) with respect to the Company as a
Guarantor Party, USI Funding.
"Guarantor Party" means, with respect to its obligations under
Article X of this Agreement, each of the Parent and the Company.
"Guaranty Obligation" means, as applied to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness, lease,
dividend, letter of credit or other obligation (the "primary obligations") of
another Person (the "primary obligor"), including any obligation of that Person,
whether or not contingent, (a) to purchase, repurchase or otherwise acquire such
primary obligations or any property constituting direct or indirect security
therefor; (b) to advance or provide funds (i) for the payment or discharge of
any such primary obligation, or (ii) to maintain working capital or equity
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capital of the primary obligor or otherwise to maintain the net worth or
solvency or any balance sheet item, level of income or financial condition of
the primary obligor; (c) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation; or
(d) otherwise to assure or hold harmless the holder of any such primary
obligation against loss in respect thereof; in each case, including arrangements
wherein the rights and remedies of the holder of the primary obligation are
limited to repossession or sale of certain property of such Person. The amount
of any Guaranty Obligation shall be deemed equal to the stated or determinable
amount of the primary obligation in respect of which such Guaranty Obligation is
made (or if less, the stated or determinable amount of such Guaranty Obligation)
or, if not stated or if indeterminable, the maximum reasonably anticipated
liability in respect thereof.
"Hanson" means Hanson PLC, a public limited company incorporated in
England and Wales.
"Hazardous Material" means and includes (a) any asbestos,
urea-formaldehyde, PCBs or dioxins or insulation or other material composed of
or containing asbestos, PCBs or dioxins, (b) crude oil, any fraction thereof,
and any petroleum product, (c) any natural gas, natural gas liquids, liquefied
natural gas or other natural gas product or synthetic gas, and (d) any hazardous
or toxic waste, substance or material or pollutant or contaminant defined as
such in (or for purposes of) or that may result in the imposition of liability
under any "Environmental Law", defined as the Comprehensive Environmental
Response, Compensation and Liability Act, any so-called "Superfund", or any
other applicable Federal, state, local or other statute, law, ordinance, code,
rule, regulation, order or decree, as now or at any time hereafter in effect,
regulating, relating to, or imposing liability concerning the environment, the
impact of the environment on human health, or any hazardous or toxic waste,
substance or material or pollutant or contaminant.
"HMH" means HM Holdings Inc., a Delaware corporation.
"IBOR" means for each Interest Period for a Swingline Loan the rate
of interest per annum at which Dollar deposits in the approximate amount of such
Swingline Loan and having a maturity comparable to such Interest Period would be
offered by Bank of America to major banks in the offshore dollar interbank
market upon request of such banks at the time such request is received by the
Agent on the first day of such Interest Period.
"IBOR Loan" means a Swingline Loan that bears interest based on
IBOR.
"Indebtedness" of any Person means, without duplication, (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred
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purchase price of property or services (other than (i) trade payables entered
into in the ordinary course of business pursuant to ordinary terms and (ii)
ordinary course purchase price adjustments); (c) all reimbursement or payment
obligations with respect to letters of credit or non-contingent reimbursement or
payment obligations with respect to bankers' acceptances, surety bonds and
similar documents; (d) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses; (e) all indebtedness
created or arising under any conditional sale or other title retention agreement
or sales of accounts receivable, in any such case with respect to property
acquired by the Person (even though the rights and remedies of the seller or
bank under such agreement in the event of default are limited to repossession or
sale of such property); (f) all Capital Lease Obligations; (g) all net
obligations with respect to Interest Rate Protection Agreements; (h) all
indebtedness referred to in clauses (a) through (g) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in property (including accounts
and contracts rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness; and (i) all
Guaranty Obligations in respect of obligations of the kinds referred to in
clauses (a) through (g) above.
"Indemnification Agreement" means each of the Indemnification
Agreements executed and delivered by the parties thereto substantially in the
form attached to the related Demerger Transaction Documents.
"Indemnified Liabilities" has the meaning specified in Section
12.05.
"Indemnified Person" has the meaning specified in Section 12.05.
"Insolvency Proceeding" means (a) any case, action or proceeding
before any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or (b) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors, or other, similar
arrangement in respect of its creditors generally; in each case undertaken under
U.S. Federal, State or foreign law, including the Bankruptcy Code.
"Interest Payment Date" means, (a) with respect to any Base Rate
Committed Loan or Swingline Loan, the fifteenth day of the last calendar month
of each calendar quarter and the Termination Date, (b) with respect to any
Eurodollar Committed Loan, the last day of each Interest Period applicable to
such Eurodollar Committed Loan and the date such Eurodollar Committed Loan is
repaid or prepaid and (c) with respect to any Eurodollar Multicurrency Loan, the
last day of each Interest Period applicable to such Eurodollar Multicurrency
Loan; provided, however, that if any Interest Period for any Eurodollar
Committed Loan or Eurodollar Multicurrency Loan exceeds three months, then
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also the date which falls three months after the beginning of such Interest
Period and, if applicable, at three month intervals thereafter shall also be an
"Interest Payment Date" and (c) with respect to any Bid Loan, the last day of
the applicable Interest Period and such intervening dates prior to the maturity
thereof as may be specified by the relevant Borrower and agreed to by the
applicable Bid Loan Lender in the applicable Competitive Bid.
"Interest Period" means, (a) in relation to any Eurodollar Loan, the
period commencing on the applicable Borrowing Date or (in the case of any
Eurodollar Committed Loan) any Conversion Date or Continuation Date with respect
thereto and ending on the date one, two, three or six months (and, in the case
of Eurodollar Bid Loans, four or five months) thereafter (or, in the case of
Eurodollar Committed Loans, if the applicable Borrowing Date, Conversion Date or
Continuation Date occurs prior to December 12, 1997, such period consisting of
less than three months as the relevant Borrower may select (a "Non-Standard
Interest Period")), as selected or deemed selected by the relevant Borrower in
its Notice of Borrowing, Notice of Conversion/Continuation or Competitive Bid
Request; (b) in relation to any IBOR Loan, the period commencing on the
Borrowing Date with respect thereto and ending on the date one, two or three
weeks thereafter as selected by the relevant Borrower in its request for IBOR
Loans; and (c) as to any Absolute Rate Bid Loan, a period of not less than 14
days and not more than 365 days as selected by the Borrower in the applicable
Competitive Bid Request; provided that:
(i) if any Interest Period would otherwise end on a day which is not
a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month, in which event
such Interest Period shall end on the immediately preceding Business Day;
(ii) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month which is
one, two, three or six months (or in the case of IBOR Loans, shall end on
the day that is one, two or three weeks after the Borrowing Date with
respect thereto), as the case may be, after the calendar month in which
such Interest Period began;
(iii) no Interest Period for any Loan shall extend beyond the
Termination Date; and
(iv) the Borrowers shall select, in the aggregate, no more than ten
NonStandard Interest Periods.
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"Interest Rate Protection Agreement" means an interest rate swap,
cap, collar or similar arrangement entered into to hedge interest rate risk (and
not for speculative purposes).
"Issuing Bank" means Bank of America National Trust and Savings
Association or any Affiliate thereof in its capacity as issuer of one or more
Letters of Credit hereunder.
"Judgment Currency" has the meaning specified in Section 12.16(b).
"Lending Office" means, with respect to any Bank, the office or
offices of such Bank specified as its "Lending Office", "Domestic Lending
Office" or "Eurodollar Lending Office", as the case may be, on Schedule 1.01(a)
hereto, or such other office or offices of the Bank as it may from time to time
notify the Company and the Agent.
"Letter of Credit" means any letter of credit issued by the Issuing
Bank pursuant to Article III.
"Letter of Credit Amendment Application" means an application form
for amendment of outstanding standby or commercial documentary letters of credit
as shall at any time be in use by the Issuing Bank, as the Issuing Bank shall
request.
"Letter of Credit Application" means an application form for
issuances of standby or commercial documentary letters of credit as shall at any
time be in use at the Issuing Bank, as the Issuing Bank shall request.
"Letter of Credit Borrowing" means an extension of credit resulting
from a drawing under any Letter of Credit which shall not have been reimbursed
on the Disbursement Date when made nor converted into a Committed Borrowing
under Section 3.03(b).
"Letter of Credit Commitment" means the commitment of the Issuing
Bank to issue Letters of Credit, the Letter of Credit Obligations in respect
thereof not to exceed in aggregate amount on any date the lesser of (i) the
Aggregate Commitment on such date and (ii) $50,000,000.
"Letter of Credit Obligations" means at any time the sum of (a) the
aggregate undrawn amount of all Letters of Credit then outstanding, plus (b) the
amount of all outstanding Letter of Credit Borrowings.
"Letter of Credit Related Documents" means the Letters of Credit, the
Letter of Credit Applications, the Letter of Credit Amendment Applications and
any other docu-
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ment relating to any Letter of Credit, including any of the Issuing Bank's
standard form documents for letter of credit issuances.
"Leverage Ratio Certificate" means a certificate duly executed by a
Responsible Officer of the Company, substantially in the form of Exhibit E (with
such changes thereto as may be agreed upon from time to time by the Agent and
the Company), and including therein, among other things, calculations supporting
the information contained therein.
"LIBOR" means, for each Interest Period for Eurodollar Loans
comprising the same Borrowing, the rate of interest per annum determined by the
Agent to be the arithmetic mean (rounded upward to the nearest whole multiple of
1/16th%) of the rates of interest per annum notified to the Agent by (i) each
Reference Bank as the rate at which Dollar deposits or (ii) each Multicurrency
Reference Bank as the rate at which the applicable Eligible Currency deposits,
as the case may be, for such Interest Period would be offered, or in the case of
a Non-Standard Interest Period that is greater than one month the rate at which
Dollar or the applicable Eligible Currency deposits for a three-month Interest
Period would be offered, or in the case of a Non-Standard Interest Period that
is less than one-month, the rate at which Dollar or the applicable Eligible
Currency deposits for a one-month Interest Period would be offered, and in an
amount approximately equal to the amount of the Eurodollar Loan of such
Reference Bank or Multicurrency Reference Bank, as the case may be, during such
Interest Period would be offered by its Eurodollar Lending office to major banks
in the London interbank market at or about 11:00 A.M. (London time) on the
Second Business Day prior to the commencement of such Interest Period (or, in
the case of a Multicurrency Loan in Pounds Sterling, on the Business Day of the
commencement of such Interest Period).
"Lien" means any interest in any real or personal property or
fixture which secures payment or performance of any obligation and shall include
any mortgage, lien, pledge, encumbrance, charge or other security interest of
any kind, whether arising under a Security Instrument or as a matter of law,
judicial process or otherwise, including the retained security title of a
conditional vendor or lessor.
"Loan" means an extension of credit by a Bank to a Borrower pursuant
to Article II and shall include Committed Loans, Swingline Loans, Multicurrency
Loans and Bid Loans.
"Loan Documents" means this Agreement (including the guaranty set
forth in Article X) and all other agreements, instruments, certificates or other
documents evidencing the Loans, Letter of Credit Borrowings or the other
obligations of the Parent or any Borrower hereunder.
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"Majority Banks" means at any time Banks holding more than 50% of
the then Aggregate Commitment, provided that if the Commitments shall have been
terminated in full, "Majority Banks" shall mean Banks holding (including as a
result of participations pursuant to Sections 2.01(b)(iv) and 3.03(a) and (d))
more than 50% of the then aggregate unpaid amount of the Total Exposure.
"Majority Multicurrency Banks" means at any time Multicurrency Banks
holding more than 50% of the then Total Multicurrency Commitment, provided that
if the Multicurrency Commitments shall have been terminated in full, "Majority
Multicurrency Banks" shall mean Multicurrency Banks holding more than 50% of the
then aggregate unpaid amount of all outstanding Multicurrency Loans.
"Margin Stock" means "margin stock" as such term is defined in
Regulation G, T, U or X of the Federal Reserve Board.
"Material Adverse Effect" means, relative to any occurrence of
whatever nature (including any adverse determination in any litigation,
arbitration or governmental investigation or proceeding), a material adverse
effect on the operations, business, assets, properties, condition (financial or
otherwise) or prospects of (i) the Parent and its Subsidiaries taken as a whole
or (ii) the Company and its Subsidiaries taken as a whole.
"Material Subsidiary" of a Person means any Subsidiary representing
5% or more of the consolidated gross assets of such Person, as shown on the most
recently prepared audited consolidated financial statements of such Person and
its consolidated Subsidiaries, provided, that USI Funding shall in any event
constitute a Material Subsidiary of the Parent. Solely for purposes of
determining whether a Subsidiary represents 5% or more of such consolidated
gross assets, such Subsidiary shall be deemed to own the consolidated gross
assets of its Subsidiaries in which it owns, directly or indirectly, at least
51% of the combined voting power of its then outstanding securities entitled to
vote generally in the election of directors.
"Measurement Period" means any period of four consecutive fiscal
quarters of the Company.
"Moody's" means Moody's Investors Service, Inc., and its successors.
"Multicurrency Bank" means any Bank (or any Affiliate, branch or
agency thereof) that has a Multicurrency Commitment, as set forth on Schedule
1.01(b), as amended from time to time.
"Multicurrency Borrowing" means a Borrowing comprised of Multicurrency
Loans.
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"Multicurrency Commitment" means, with respect to each Multicurrency
Bank, the commitment of such Bank (expressed in Dollars) to make Multicurrency
Loans hereunder as set forth on Schedule 1.01(b) under the heading
"Multicurrency Commitments", as the same may be permanently terminated or
reduced or increased from time to time pursuant to Section 2.01(c)(ii), Section
2.07, Section 2.08 or Article IX or increased or reduced from time to time
pursuant to assignments under Section 12.06.
"Multicurrency Commitment Percentage" means, as to any Multicurrency
Bank, the percentage equivalent of such Bank's Multicurrency Commitment divided
by the Multicurrency Commitments of all the Multicurrency Banks, provided that
if the Multicurrency Commitments have been terminated in full the "Multicurrency
Commitment Percentage" of each Multicurrency Bank shall be determined by
dividing such Bank's Multicurrency Commitment immediately prior to such
termination by all the Multicurrency Banks' Multicurrency Commitments
immediately prior to such termination.
"Multicurrency Loan" means any loan denominated in an Eligible
Currency and made pursuant to Section 2.01(c).
"Multicurrency Loan Exposure" means, with respect to any Bank at any
time, an amount equal to such Bank's Commitment Percentage of the Dollar
Equivalent of the aggregate principal amount of the outstanding Multicurrency
Loans.
"Multicurrency Reference Banks" means Bank of America, London
branch, Deutsche Bank AG, London branch, and The Chase Manhattan Bank, London
branch.
"Multiemployer Plan" means a "multiemployer plan" (within the
meaning of Section 4001(a)(3) of ERISA) and to which the Parent, the Company or
any ERISA Affiliate makes, is making, or is obligated to make contributions or,
during the preceding three calendar years, has made, or been obligated to make,
contributions.
"National Currency Unit" means the unit of currency (other than the
Euro Unit) of a Participating Member State.
"Negotiated Rate" means an interest rate agreed upon by the relevant
Borrower and the Swingline Bank for a negotiated interest period.
"Negotiated Rate Loan" means a Swingline Loan that bears interest at
the Negotiated Rate for an interest period (not to exceed 30 days) to be agreed
upon by the relevant Borrower and the Swingline Bank.
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"Net Income" means, for any Measurement Period, the net income (or
net loss) of the Company and its Subsidiaries for such period on a consolidated
basis in accordance with GAAP.
"Net Interest Expense" means, for any Measurement Period:
(a) the aggregate amount of interest expense of the Company and its
consolidated Subsidiaries for such period, as determined on a consolidated
basis in accordance with GAAP:
less
(b) the sum for such period of:
(i) the aggregate interest income of the Company and its consolidated
Subsidiaries, as determined in accordance with GAAP; and
(ii) the amortization of all fees (including, other than in connection
with a calculation of the Consolidated Leverage Ratio, upfront costs and
expenses under Interest Rate Protection Agreements fairly allocated to
such Interest Rate Protection Agreements as expenses for such period)
payable in connection with the incurrence of Indebtedness to the extent
included in interest expense.
"Net Worth" means, at any time, all amounts which, in accordance
with GAAP, would be included under shareholders' equity on a consolidated
balance sheet of the Company and its Subsidiaries, without giving effect to (i)
foreign currency translations and (ii) non-cash effects resulting from changes
in GAAP after the Effective Date.
"Non-Standard Interest Period" has the meaning specified in the
definition of "Interest Period".
"Notice of Borrowing" means a notice given by the relevant Borrower
to the Agent pursuant to Section 2.03(a), in substantially the form of Exhibit
A.
"Notice of Conversion/Continuation" means a notice given by the
relevant Borrower to the Agent pursuant to Section 2.04(c), in substantially the
form of Exhibit B.
"Obligations" means all Loans, Letter of Credit Borrowings and other
indebtedness, advances, debts, liabilities, obligations, expenses (including,
without limitation, Attorney Costs), covenants and duties, of any kind or
nature, owing by the Parent or any Borrower to any Bank (or any Bank Affiliate
(or any Affiliate of such Bank engaged in capital market transactions
generally)), the Agent, the Issuing Bank or the
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Swingline Bank in connection with (a) this Agreement, or (b) any other Loan
Document, or in each case whether direct or indirect, absolute or contingent,
due or to become due, now existing or hereafter arising, and however acquired
(including those acquired by assignment) or arising and whether or not for the
payment of money or evidenced by any note, guarantee or other instrument.
"OECD" means the Organization for Economic Cooperation and
Development.
"Originating Bank" has the meaning specified in Section 12.07(d).
"Other Taxes" has the meaning specified in Section 4.01(b).
"Parent" has the meaning specified in the preamble hereto.
"Participant" has the meaning specified in Section 12.07(d).
"Participating Member State" means each state so described in any EMU
Legislation.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any of its principal functions under ERISA.
"Pension Plan" means a pension plan (as defined in Section 3(2) of
ERISA) subject to Title IV of ERISA which the Parent, the Company or any ERISA
Affiliate sponsors or maintains, or to which it makes, is making, or is
obligated to make contributions, or in the case of a multiple employer plan (as
described in Section 4064(a) of ERISA) has made contributions at any time during
the immediately preceding five (5) plan years, but excluding any Multiemployer
Plan.
"Permitted Liens" has the meaning specified in Section 8.01.
"Person" means any natural person, corporation, firm, trust,
partnership, business trust, association, government, governmental agency or
authority, or any other entity, whether acting in an individual, fiduciary, or
other capacity.
"Plan" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which the Parent, the Company or any ERISA Affiliate sponsors or
maintains or to which the Parent, the Company or any ERISA Affiliate makes, is
making, or is obligated to make contributions and includes any Pension Plan or
Multiemployer Plan.
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"Qualified Preferred Stock" means any pay-in-kind preferred stock of
the Parent, or any other preferred stock of the Parent which, by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event (including an event which
would constitute a Change of Control), cannot mature (excluding any maturity as
the result of an optional redemption by the issuer thereof) and is not
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, and
is not redeemable, or required to be repurchased, at the sole option of the
holder thereof (including, without limitation, upon the occurrence of an event
which would constitute a Change of Control), in whole or in part, on or prior to
the first anniversary of the Termination Date then in effect.
"Receivables Sale" means any Asset Sale consisting of the sale of
accounts or notes receivable and associated assets, other than any such sale in
bulk as part of a sale or other disposition of all or substantially all of the
assets or stock of any Person or of any principal division or lines of business
of any Person.
"Receivables Sale Amount" means in the case of a single sale of
receivables, the cash proceeds received by the transferor, and, in the case of a
revolving receivables sales facility, the cash proceeds received by the seller
representing incremental new funding in excess of any previous level of funding
made available under such facility, net of repayments of Indebtedness or
repurchases under, or proceeds otherwise required to refinance, any previous
receivables sales facility.
"Reference Banks" means Bank of America, The Chase Manhattan Bank
and Citibank, N.A.
"Reference Rate" means the rate of interest publicly announced from
time to time by Bank of America in San Francisco as its "reference rate". It is
a rate set by Bank of America based upon various factors, including Bank of
America's costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may be
priced at, above or below such announced rate. Any change in the Reference Rate
announced by Bank of America shall take effect at the opening of business on the
day specified in the public announcement of such change.
"Replaced Bank" has the meaning specified in Section 4.08(b).
"Replacement Bank" has the meaning specified in Section 4.08(b).
"Reportable Event" means, any of the events set forth in Section
4043(c) of ERISA or the regulations thereunder, other than any such event for
which the 30-day notice requirement under ERISA has been waived in regulations
issued by the PBGC.
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"Requested Extension Effective Date" has the meaning specified in
Section 2.19.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of a court or of a
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject.
"Reset Date" has the meaning specified in Section 1.04(a).
"Responsible Officer" means, for the Parent, the Company or any
Subsidiary thereof, its chief executive officer, its president, any
vice-president, its chief financial officer, controller, vice president-finance,
treasurer or assistant treasurer, or any other officer having substantially the
same authority and responsibility.
"S&P" means Standard & Poor's Ratings Group, a division of The
McGraw-Hill Companies, Inc., and its successors.
"Sale and Leaseback Transaction" means any arrangement, directly or
indirectly, with any Person whereby a seller or transferor shall sell or
otherwise transfer any real or personal property and then or thereafter lease,
or repurchase under an extended purchase contract, conditional sales or other
title retention agreement, the same or similar property.
"Scheduled Commitment Reduction Date" has the meaning specified in
Section 2.08(c).
"Secured Obligations" has the meaning specified in Section 8.01(l).
"Security Instrument" means any security agreement, chattel
mortgage, assignment, pledge agreement, financing or similar statement or
notice, continuation statement, other agreement or instrument, or amendment or
supplement to any thereof, providing for, evidencing or perfecting any security
interest.
"Senior Note Change of Control" means a "Change of Control" under,
and as defined in, the Senior Notes Indenture.
"Senior Notes" mean the Senior Notes, issued by the Company, as in
effect on the Effective Date and after giving effect to any changes, amendments
or supplements thereto (and shall include any Senior Notes into which the Senior
Notes are exchanged pursuant to the Senior Notes Documents).
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"Senior Notes Documents" mean and include each of the Senior Notes,
the Senior Notes Indenture and all securities purchase agreements and other
documents and agreements related thereto, as in effect on the Effective Date and
after giving effect to any changes, amendments or supplements thereto.
"Senior Notes Indenture" means the Indenture dated on or about the
Effective Date, between the Company and a trustee satisfactory to the Agent, as
in effect on the Effective Date and after giving effect to any changes,
amendments or supplements thereto.
"Subscription Agreement" means the Subscription Agreement,
substantially in the form delivered to the Agent prior to the Effective Date.
"Subsidiary" of a Person means any corporation, association,
partnership or other business entity of which more than 50% of the voting stock
or other equity interests (in the case of Persons other than corporations) is
owned or controlled directly or indirectly by such Person, or one or more of the
Subsidiaries of the Person, or a combination thereof; provided that if Jade
Technologies Inc. ("Jade") shall issue shares in a public offering, selling at
least 10% of its shares, Jade and each of its Subsidiaries shall not be deemed
to be a Subsidiary of the Company or the Parent for purposes of Article VI and
Section 8.01, 8.02, 8.03, 8.04, 8.05, 8.07, 8.09, 9.01(e), 9.01(f), 9.01(g) and
9.01(i).
"Swingline Amount" means an aggregate amount of $50,000,000.
"Swingline Bank" means Bank of America National Trust and Savings
Association.
"Swingline Borrowing" means a Borrowing of a Swingline Loan
hereunder on any Borrowing Date.
"Swingline Loan" means a Loan by the Swingline Bank to any Borrower
pursuant to Section 2.01(b).
"Taxes" has the meaning specified in Section 4.01(a).
"Termination Date" means the earlier to occur of: (a) December 12,
2001, as same may be extended pursuant to Section 2.19; and (b) the date on
which the Commitments shall terminate in accordance with the provisions of this
Agreement.
"Total Exposure" means the sum of all outstanding Loans and Letter
of Credit Obligations.
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"Total Funded Debt" means (a) all Loans and Letter of Credit
Borrowings and (b) all other Indebtedness for borrowed money of the Company and
its Subsidiaries (including the current portion of all such Indebtedness).
"Total Multicurrency Commitment" means, at any time, the lesser of
(a) the Aggregate Commitment at such time and (b) the sum of the Multicurrency
Commitments of the Multicurrency Banks at such time.
"Transferee" has the meaning specified in Section 12.08.
"Treaty on European Union" means the Treaty of Rome dated March 25,
1957, as amended by the single European Act 1986 and the Maastricht Treaty
(which was signed at Maastricht on February 1, 1992 and came into force on
November 1, 1993), as amended from time to time.
"Type" has the meaning specified in the definition of "Committed
Loan".
"Unfunded Pension Liability" means the excess of a Pension Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.
"United States" and "U.S." each means the United States of America.
"USI Funding" has the meaning specified in the preamble hereto.
"Wholly-Owned Subsidiary" means, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's or other
qualifying shares) is at the time owned by such Person and/or one or more
Wholly-Owned Subsidiaries of such Person and (ii) any partnership, association
or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time.
1.02 Other Definitional Provisions.
(a) Defined Terms. Unless otherwise specified herein or therein, all
terms defined in this Agreement shall have such defined meanings when used
in any certificate or other document made or delivered pursuant hereto.
The meaning of defined terms shall be equally applicable to the singular
and plural forms of the defined terms.
(b) The Agreement. The words "hereof", "herein", "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement
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as a whole and not to any particular provision of this Agreement; and
section, subsection, schedule and exhibit references are to this Agreement
unless otherwise specified.
(c) Certain Common Terms.
(i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(ii) The terms "including" or "include" are not limiting and
mean "including without limitation" or "include without limitation".
(d) Performance; Time. Subject to the definition of the term
"Interest Period" in Section 1.01, whenever any performance obligation
hereunder shall be stated to be due or required to be satisfied on a day
other than a Business Day, such performance shall be made or satisfied on
the next succeeding Business Day. In the computation of periods of time
from a specified date to a later specified date, the word "from" means
"from and including"; the words "to" and "until" each mean "to but
excluding", and the word "through" means "to and including." If any
provision of this Agreement refers to any action taken or to be taken by
any Person, or which such Person is prohibited from taking, such provision
shall be interpreted to encompass any and all means, direct or indirect,
of taking, or not taking, such action.
(e) Contracts. Unless otherwise expressly provided herein,
references to agreements and other contractual instruments shall be deemed
to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not
prohibited by the terms of any Loan Document.
(f) Laws. References to any statute or regulation are to be
construed as including all statutory and regulatory provisions
consolidating, amending or replacing such statute or regulation.
1.03 Accounting Principles. Except as provided to the contrary
herein, all accounting terms used herein shall be interpreted in accordance with
GAAP. Unless the context otherwise clearly requires, all financial computations
required under this Agreement shall be made in accordance with GAAP; provided
that, if the Company notifies the Agent that the Company wishes to amend any
covenant in Article VIII or the definition of any term used therein to eliminate
the effect of any change in GAAP occurring after the Effective Date or the
operation of such covenant (or if the Agent notifies the Company that
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the Majority Banks wish to amend Article VIII or any such definition for such
purpose), then the Company's compliance with such covenant shall be determined
on the basis of GAAP in effect immediately before the relevant change in GAAP
became effective, until either such notice is withdrawn or such covenant or
definition is amended in a manner satisfactory to the Company and the Majority
Banks.
1.04 Exchange Rates. (a) Not later than 1:00 P.M. (New York City
time), on each Calculation Date, the Agent shall (i) determine the Exchange Rate
as of such Calculation Date with respect to each Eligible Currency and (ii) give
notice thereof to the Banks and the Borrowers. The Exchange Rates so determined
shall become effective on the first Business Day immediately following the
relevant Calculation Date (a "Reset Date"), shall remain effective until the
next succeeding Reset Date, and shall for all purposes of this Agreement (other
than Section 2.01(a), Section 2.01(b)(i), Section 2.01(c)(i), Section
2.01(c)(ii), Section 12.16 or any other provision expressly requiring the use of
a current Exchange Rate) be the Exchange Rates employed in converting any
amounts between Dollars and Eligible Currencies.
(b) Not later than 5:00 P.M. (New York City time) on each Reset Date
and each Borrowing Date, the Agent shall (i) determine the Dollar Equivalent of
the aggregate principal amount of the Multicurrency Loans then outstanding
(after giving effect to any Multicurrency Loans to be made or repaid on such
date) and (ii) notify the Banks and the Borrowers of the results of such
determination.
ARTICLE II.
THE CREDIT FACILITIES
2.01 Amounts and Terms of Commitments.
(a) The Committed Loans. Each Bank severally agrees, on the terms
and conditions hereinafter set forth, to make Committed Loans to any
Borrower from time to time on any Business Day during the period from the
Effective Date to the Termination Date, in an aggregate amount not to
exceed at any time outstanding the amount of such Bank's Commitment;
provided, however, that, after giving effect to any Committed Borrowing
(and to any concurrent repayment or prepayment of Loans), (i) the
aggregate principal amount of all outstanding Committed Loans together
with (w) the aggregate principal amount of all outstanding Swingline
Loans, plus (x) the aggregate principal amount of all outstanding Bid
Loans, plus (y) the Dollar Equivalent of the aggregate principal amount of
all outstanding Multicurrency Loans, plus (z) all outstanding Letter of
Credit Obligations, shall not exceed the Aggregate Commitment, (ii) the
sum of the
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Committed Loan Exposure and the Multicurrency Loan Exposure of any Bank
shall not exceed such Bank's Commitment or (iii) the Dollar Equivalent of
the aggregate principal amount of the Multicurrency Loans outstanding
shall not exceed the Total Multicurrency Commitment. Within such limits,
and subject to the other terms and conditions hereof, each Borrower may
borrow Committed Loans under this Section 2.01(a), prepay pursuant to
Section 2.09 or 2.10(a) and reborrow pursuant to this Section 2.01(a).
(b) The Swingline Loans. (i) The Swingline Bank agrees, on the terms
and conditions hereinafter set forth, to make Swingline Loans to any
Borrower on any Business Day during the period from the Effective Date to
the Termination Date, in an aggregate amount not to exceed at any time
outstanding the Swingline Amount; provided, however, that (A) on the
Effective Date the Swingline Bank shall be permitted to make a Swingline
Loan up to an amount equal to the Aggregate Commitment provided that any
Interest Period related thereto shall not exceed one week) and (B) that
after giving effect to any Swingline Borrowing (and to any concurrent
repayment or prepayment of Loans), (i) the aggregate principal amount of
all outstanding Swingline Loans together with (w) the aggregate principal
amount of all outstanding Committed Loans, plus (x) the aggregate
principal amount of all outstanding Bid Loans, plus (y) the Dollar
Equivalent of the aggregate principal amount of all outstanding
Multicurrency Loans plus, (z) all outstanding Letter of Credit
Obligations, shall not exceed the Aggregate Commitment, (ii) the sum of
the Committed Loan Exposure and the Multicurrency Loan Exposure of any
Bank shall not exceed such Bank's Commitment or (iii) the Dollar
Equivalent of the aggregate principal amount of the Multicurrency Loans
outstanding shall not exceed the Total Multicurrency Commitment. Within
such limits, and subject to the other terms and conditions hereof, each
Borrower may borrow Swingline Loans under this Section 2.01(b), repay
pursuant to Section 2.11(b) or prepay pursuant to Section 2.09 or 2.10(a)
and reborrow pursuant to this Section 2.01(b).
(ii) The Swingline Bank shall not be responsible for or liable to
any Bank for determining whether (A) any representation or warranty of any
Borrower in connection with any request for a Swingline Loan is correct or
(B) any Default or Event of Default exists or would result from the making
of any such Swingline Loan; provided, however, that the Swingline Bank
shall not make any Swingline Loan after receiving a written notice from
any Borrower or any Bank stating that a Default or an Event of Default
exists and is continuing until such time as the Swingline Bank shall have
received written notice from the Agent that such Default or Event of
Default has been cured or waived.
(iii) Each Swingline Loan shall reduce the available Aggregate
Commitment. It is understood that the aggregate principal amount of
Swingline
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Loans at any time outstanding may exceed the otherwise unutilized portion
of the Commitment of the Swingline Bank.
(iv) Upon demand by the Swingline Bank, the relevant Borrower shall
promptly borrow Committed Loans from all the Banks pursuant to Section
2.01(a) in an aggregate principal amount equal to the principal amount of
outstanding Swingline Loans made to such Borrower, and such Borrower and
the Banks hereby irrevocably authorize the Agent to apply the proceeds of
such Committed Loans to the repayment of such Swingline Loans (and solely
for the purpose of such a Borrowing (x) the conditions precedent set forth
in Section 5.02 need not be met, (y) the minimum borrowing denominations
set forth in Section 2.03(a) need not be met and (z) the borrowing
limitations set forth in this Agreement need not be met to the extent the
Aggregate Commitment has been terminated or reduced after the making of
Swingline Loans which are so being repaid). If any Borrower fails to repay
any Swingline Loan within one Business Day after such a demand, or to
repay any Swingline Loan when due, then each Bank shall irrevocably and
unconditionally purchase from the Swingline Bank, without recourse or
warranty, an undivided interest and participation in such Swingline Loan
in an amount equal to such Bank's Commitment Percentage, by forthwith
paying such amount to the Swingline Bank in Dollars and in immediately
available funds, and such payment shall be made (A) whether or not a
Default or an Event of Default is then continuing (including any Event of
Default under Sections 9.01(f) and (g)) or any other condition precedent
set forth in Section 5.02 is then met, (B) whether or not such Borrower
has requested a Borrowing or (C) whether or not the Aggregate Commitment
has been terminated or reduced below the amount of such Swingline Loan
prior to the time of such payment. If such amount is not paid to the
Swingline Bank by any Bank, the Swingline Bank shall be entitled to
recover such amount on demand from such Borrower or such Bank, together
with accrued interest thereon from the date of demand therefor (if made
prior to 12:00 Noon (New York City time) on any Business Day (or, if made
at a later time on a Business Day or on a day which is not a Business Day,
from the next Business Day) until the date such amount is paid to the
Swingline Bank by such Bank at the Federal Funds Rate for the first three
Business Days and thereafter at the Base Rate. The failure of any Bank to
pay such amount to the Swingline Bank shall not relieve any other Bank of
its obligation to make the payment to be made by it.
(c) The Multicurrency Loans. (i) Each Multicurrency Bank severally
agrees, on the terms and conditions hereinafter set forth, to make
Multicurrency Loans ratably to any Borrower on any Business Day during the
period from the Effective Date to the Termination Date, in an aggregate
amount not to exceed at any time outstanding the amount of its
Multicurrency Commitment; provided, however, that after giving effect to
any Multicurrency Borrowing (and to any
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concurrent repayment or prepayment of Loans), (A) the Dollar Equivalent of
the aggregate principal amount of all outstanding Multicurrency Loans
together with (1) the aggregate principal amount of all outstanding
Committed Loans, plus (2) the aggregate principal amount of all
outstanding Swingline Loans, plus (3) the aggregate principal amount of
all outstanding Bid Loans, plus (4) all outstanding Letter of Credit
Obligations, shall not exceed the Aggregate Commitment, (B) the sum of the
Committed Loan Exposure and the Multicurrency Loan Exposure of any Bank
shall not exceed such Bank's Commitment or (C) the Dollar Equivalent of
the aggregate principal amount of the Multicurrency Loans outstanding
shall not exceed the Total Multicurrency Commitment. Within such limits,
and subject to the other terms and conditions hereof, each Borrower may
borrow Multicurrency Loans under this Section 2.01(c), repay pursuant to
Section 2.11(c) or prepay pursuant to Section 2.09 or 2.10(a) and reborrow
pursuant to this Section 2.01(c).
(ii) In the event that (A) the principal of or interest on any
Multicurrency Borrowing shall not be paid within five Business Days after
the date on which it is due and any Multicurrency Bank shall deliver to
the Agent a request that the provisions of this paragraph take effect with
respect to such Borrowing or (B) the Aggregate Commitment shall be
terminated or the Loans accelerated pursuant to Article IX, then (x) the
Obligations of the applicable Borrower in respect of the principal of and
interest on such Multicurrency Borrowing shall without further action be
converted into Obligations denominated in Dollars at the applicable
Exchange Rate on the date of such conversion, as determined by the Agent,
(y) such converted Obligations will bear interest at the rate applicable
to Base Rate Borrowings under Section 2.12 and (z) each Bank shall acquire
a participation in such converted Obligations in an amount equal to its
Commitment Percentage of the face amount thereof and shall pay the
purchase price therefor by wire transfer of immediately available funds in
Dollars to the Agent in the manner provided in Section 2.03(c) (and the
Agent shall promptly wire the amounts so received to the Multicurrency
Banks ratably in accordance with their respective Multicurrency Loans
comprising such Multicurrency Borrowing). Upon receipt by the Agent for
the account of the Multicurrency Banks of funds from the applicable
Borrower in respect of such Obligations, the Agent shall pay to each
participating Bank ratably the amount of such Bank's participation in such
Obligations. Such acquisition in clause (z) above shall be made (1)
whether or not a Default or an Event of Default is then continuing
(including any Event of Default under Sections 9.01(f) and (g)) or any
other condition precedent set forth in Section 5.02 is then met, (2)
whether or not such Borrower has requested a Borrowing and (3) whether or
not the Aggregate Commitment has been terminated or reduced below the
amount of such Multicurrency Loan prior to the time of such payment. If
such amount is not paid to the Multicurrency Bank by any Bank, the
Multicurrency Bank shall be entitled to recover such amount on demand from
such Borrower or such Bank, together with
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accrued interest thereon from the date of demand therefor (if made prior
to 12:00 Noon (New York City time) on any Business Day (or, if made at a
later time on a Business Day or on a day which is not a Business Day, from
the next Business Day)) until the date such amount is paid to the
Multicurrency Bank by such Bank. The failure of any Bank to pay such
amount to the Multicurrency Bank shall not relieve any other Bank of its
obligation to make the payment to be made by it. Upon any event specified
in clause (B) above, the Multicurrency Commitments shall be permanently
terminated. The obligations of the Banks to acquire and pay for
participations in Multicurrency Borrowings pursuant to this paragraph
shall be absolute and unconditional under any and all circumstances.
2.02 Loan Accounts; Notes.
(a) The Loans made by each Bank shall be evidenced by one or more
loan accounts maintained by such Bank and the Agent in the ordinary course
of business. The loan accounts maintained by the Agent shall, in the event
of a discrepancy between the entries in the Agent's books and any Bank's
books relating to such loan accounts, be controlling and, absent manifest
error, shall be conclusive as to the amount of the Loans made by the Banks
to the Borrowers, the interest and payments thereon and any other amounts
owing in respect of this Agreement. Any failure to make a notation in any
such loan account or any error in doing so shall not limit or otherwise
affect the obligations of the Borrowers hereunder to pay any amount owing
with respect to the Loans.
(b) If requested by any Bank for purposes of Section 12.07(e), the
Borrowers shall execute and deliver to such Bank (and deliver a copy
thereof to the Agent) one or more promissory notes evidencing the Loans
owing to such Bank pursuant to this Agreement. Any such note shall be in a
form prescribed by the Borrowers and the Agent and shall be entitled to
all of the rights and benefits of this Agreement.
2.03 Procedure for Committed Borrowing, Swingline Borrowing and
Multicurrency Borrowing.
(a) Each Committed Borrowing (other than a Borrowing of Committed
Loans pursuant to Section 2.01(b)(iv) or Section 3.03(b)) shall be made
upon a Borrower's irrevocable written notice delivered to the Agent in
accordance with Section 12.02 in the form of a Notice of Borrowing, which
notice must be received by the Agent (i) prior to 1:00 P.M. (New York City
time) not less than three Business Days prior to the requested Borrowing
Date, in the case of Eurodollar Committed Loans; and (ii) prior to 11:00
A.M. (New York City time) on the requested Borrowing Date, in the case of
Base Rate Committed Loans, specifying:
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(A) the amount of the Committed Borrowing, which shall be in
an aggregate minimum principal amount of $5,000,000 or any multiple
of $1,000,000 in excess thereof;
(B) the requested Borrowing Date, which shall be a Business
Day;
(C) whether the Committed Borrowing is to be comprised of
Eurodollar Committed Loans or Base Rate Committed Loans; and
(D) the duration of the Interest Period, if any, applicable to
such Committed Loans included in such notice. If the Notice of
Borrowing shall fail to specify the duration of the Interest Period
for any Borrowing comprised of Eurodollar Committed Loans, such
Interest Period shall be one month;
provided that for purposes of borrowing the initial Base Rate Committed
Loans made on the Effective Date, such Notice of Borrowing shall be
effective if received by the Agent not later than 10 A.M. (New York City
time) on the Effective Date.
(b) Upon receipt of the Notice of Borrowing, the Agent will promptly
notify each Bank thereof and of the amount of such Bank's Commitment
Percentage of the Committed Borrowing.
(c) Each Bank will make the amount of its Commitment Percentage of
each Committed Borrowing available to the Agent for the account of the
relevant Borrower at the Agent's Payment Office by 1:00 P.M. (New York
City time) (or, in the case of Base Rate Committed Loans, 2:00 P.M. (New
York City time)) on the Borrowing Date requested by such Borrower in funds
immediately available to the Agent. Unless any applicable condition of
Article V has not been satisfied, the proceeds of all such Committed Loans
will then be made available to such Borrower by the Agent by wire transfer
in accordance with written instructions provided to the Agent by such
Borrower.
(d) Upon the request of the Majority Banks during the existence of
an Event of Default, no Borrower shall elect to have a Committed Loan be
made as a Eurodollar Committed Loan.
(e) After giving effect to any Committed Borrowing, there shall not
be more than fifteen different Interest Periods in effect in respect of
all Committed Loans then outstanding.
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(f) (i) Whenever a Borrower desires to make a Swingline Borrowing
hereunder, it shall give the Agent and the Swingline Bank not later than
1:00 P.M. (New York City time) on the date that a Swingline Loan is to be
made, written notice or telephonic notice promptly confirmed in writing of
each Swingline Loan to be made hereunder. Each such notice shall be
irrevocable and specify in each case:
(A) the amount of the Swingline Loan, which shall be in an
aggregate minimum principal amount of $100,000 or any multiple of
$50,000 in excess thereof;
(B) the requested Borrowing Date, which shall be a Business
Day;
(C) whether the Swingline Loan is to be a Base Rate Loan, an
IBOR Loan or a Negotiated Rate Loan; and
(D) the duration of the Interest Period, if any, applicable to
such Swingline Loan. If the borrowing request shall fail to specify
the duration of the Interest Period for any Swingline Loan to bear
interest based on IBOR, such Interest Period shall be one week.
(ii) The Swingline Bank shall not incur any liability to any
Borrower in acting upon any telephonic notice which the Swingline Bank
believes in good faith to have been given by officers authorized to act on
behalf of such Borrower.
(iii) The Agent shall notify the Banks on a monthly basis of any
Swingline Borrowings hereunder.
(iv) After giving effect to any Swingline Borrowing, there shall
be no more than ten Borrowings of Swingline Loans outstanding at any time.
(v) The Swingline Bank will make the amount of the Swingline
Loan requested by the relevant Borrower available to the Agent for the
account of the relevant Borrower at the Agent's Payment Office by 1:00
P.M. (New York City time) on the Borrowing Date requested by such Borrower
in funds immediately available to the Agent. The proceeds of the Swingline
Loan will then be made available promptly to such Borrower by the Agent by
wire transfer in accordance with written instructions provided to the
Agent by such Borrower.
(g) (i) Whenever a Borrower desires to make a Multicurrency
Borrowing hereunder, it shall give the Agent not later than 3:00 P.M.
(New York City time)
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not less than four Business Days prior to the requested Borrowing Date,
written notice or telephonic notice promptly confirmed in writing of each
Multicurrency Loan to be made hereunder. Each such notice shall be
irrevocable and specify in each case:
(A) the amount of the Multicurrency Borrowing, which shall be
in an aggregate minimum principal amount the Dollar Equivalent of
which is not less than the lesser of $10,000,000 and the remaining
aggregate balance of the unutilized Multicurrency Commitments;
(B) the requested Borrowing Date, which shall be a Business
Day; and
(C) the duration of the Interest Period, if any, applicable to
such Multicurrency Borrowing. If the borrowing request shall fail to
specify the duration of the Interest Period for any Multicurrency
Borrowing to bear interest based on LIBOR, such Interest Period
shall be one month.
(ii) The Agent shall not incur any liability to any Borrower in
acting upon any telephonic notice which the Agent believes in good faith
to have been given by officers authorized to act on behalf of such
Borrower.
(iii) The Agent shall notify the Banks (A) of each Notice of
Borrowing received by the Agent for a Multicurrency Borrowing and of the
Dollar Equivalent of such Borrowing and (B) on a quarterly basis of
outstanding Multicurrency Loans hereunder, including the amount, currency,
Dollar Equivalent and applicable interest rates thereof.
(iv) After giving effect to any Multicurrency Borrowing, there
shall be no more than ten Borrowings of Multicurrency Loans outstanding at
any time.
(v) Upon receipt of the Notice of Borrowing of Multicurrency
Loans, the Agent will promptly notify each Multicurrency Bank thereof and
of the amount of the Multicurrency Commitment Percentage of the
Multicurrency Borrowing of such Multicurrency Bank.
(vi) Each Multicurrency Bank will make the amount of its
Multicurrency Commitment Percentage of each Multicurrency Borrowing
available to the Agent for the account of the relevant Borrower at the
Agent's Payment Office by 11:00 A.M. (London time) on the Borrowing Date
requested by such Borrower in funds immediately available to the Agent.
Unless any applicable condition of Article V has not been satisfied, the
proceeds of all such Multicurrency Loans will then be
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made available to such Borrower by the Agent by wire transfer in
accordance with written instructions provided to the Agent by such
Borrower.
2.04 Conversion and Continuation Elections for Committed Borrowings
and Multicurrency Borrowings.
(a) A Borrower may upon irrevocable written notice to the Agent in
accordance with paragraph (c) below:
(i) elect to convert on any Business Day, any Base Rate
Committed Loans (or any part thereof in an amount of not less than
$5,000,000 or an integral multiple of $1,000,000 in excess thereof)
into Eurodollar Committed Loans;
(ii) elect to convert on the last day of the Interest Period
with respect thereto, any Eurodollar Committed Loans (or any part
thereof in an amount of not less than $5,000,000 or an integral
multiple of $1,000,000 in excess thereof) into Base Rate Committed
Loans; or
(iii) elect to continue on the last day of the Interest Period
with respect thereto, any Eurodollar Committed Loans (or any part
thereof in an amount not less than $5,000,000 or an integral
multiple of $1,000,000 in excess thereof);
provided, however, that (w) if the aggregate amount of a Committed
Borrowing comprised of Eurodollar Committed Loans shall have been reduced,
by payment, prepayment, or conversion of part thereof to be less than
$1,000,000, the Eurodollar Committed Loans comprising such Committed
Borrowing shall automatically convert into Base Rate Committed Loans, and
on and after such date the right of such Borrower to continue such
Committed Loans as, and convert such Committed Loans into, Eurodollar
Committed Loans shall terminate, (x) if fewer than all of the
Multicurrency Loans comprising any Multicurrency Borrowing are to be
continued, such continuation shall be made pro rata among the
Multicurrency Banks in accordance with the respective Multicurrency Loans
of such Banks that are part of such Borrowing immediately prior to such
conversion or continuation, (y) accrued interest on a Multicurrency Loan
(or any portion thereof) being continued shall be paid by the appropriate
Borrower at the time of continuation and (z) no Multicurrency Loan may be
continued as a Eurodollar Multicurrency Loan with an Interest Period
ending after the Termination Date.
(b) A Borrower may upon irrevocable written notice to the Agent in
accordance with paragraph (c) below elect to continue on the last day of
the Interest
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Period with respect thereto, any Eurodollar Multicurrency Loans (or any
part thereof in an amount not less than the Dollar Equivalent of
$10,000,000 or an integral multiple of $1,000,000 in excess thereof).
Except as required under Section 4.02, each continuation of any
Multicurrency Borrowing shall be allocated pro rata among the
Multicurrency Banks in accordance with the respective principal amounts of
their outstanding Multicurrency Loans comprising such Borrowing.
(c) The relevant Borrower shall deliver a Notice of
Conversion/Continuation in accordance with Section 12.02 to be received by
the Agent not later than (A) in the case of Committed Loans, (i) 1:00 P.M.
(New York City time) not less than three Business Days in advance of the
Conversion Date or Continuation Date, if the Committed Loans are to be
converted into or continued as Eurodollar Committed Loans, or (ii) 1:00
P.M. (New York City time) on the Conversion Date, if the Committed Loans
are to be converted into Base Rate Committed Loans and (B) in the case of
Eurodollar Multicurrency Loans, 3:00 P.M. (New York City time) not less
than four Business Days prior to continuation, if the Eurodollar
Multicurrency Loans are to be continued as such, in each case specifying:
(A) the proposed Conversion Date or Continuation Date, which
shall be a Business Day;
(B) the aggregate principal amount of Committed Loans to be
converted or continued or the aggregate principal amount of the
Eurodollar Multicurrency Loans to be continued, as the case may be;
(C) the nature of the proposed conversion or continuation; and
(D) the duration of the requested Interest Period, if
applicable.
(d) If upon the expiration of any Interest Period applicable to (i)
Eurodollar Committed Loans of any Borrower, such Borrower has failed to
select timely a new Interest Period, such Committed Loans shall
automatically convert into Base Rate Committed Loans and (ii) Eurodollar
Multicurrency Loans of any Borrower, such Borrower has failed to select
timely a new Interest Period, such new Interest Period shall be one month.
(e) Upon receipt of a Notice of Conversion/Continuation, the Agent
will promptly notify each Bank thereof, or, if no timely notice is
provided by the relevant Borrower, the Agent will promptly notify each
Bank of the details of any
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automatic conversion. All conversions and continuations shall be made pro
rata according to the respective outstanding principal amounts of the
Committed Loans with respect to which the notice was given.
(f) Upon the request of the Majority Banks during the existence of
an Event of Default, no Borrower shall elect to have a Committed Loan
converted into or continued as a Eurodollar Committed Loan.
(g) Notwithstanding any other provision contained in this Agreement,
after giving effect to any conversion or continuation of any Committed
Loans, there shall not be more than fifteen different Interest Periods in
effect in respect of all Committed Loans then outstanding.
2.05 Bid Borrowings. In addition to Committed Borrowings pursuant to
Section 2.03, each Bank severally agrees that each Borrower may, as set forth in
Section 2.06, from time to time, request the Banks from and after the Effective
Date and prior to the Termination Date to submit offers to make Bid Loans to
such Borrower; provided, however, that the Banks may, but shall have no
obligation to, submit such offers and such Borrower may, but shall have no
obligation to, accept any such offers; and provided further, that, (a) after
giving effect to any Bid Borrowing, the aggregate principal amount of all
outstanding Bid Loans together with (w) the outstanding aggregate principal
amount of all Committed Loans made by all Banks, plus (x) the outstanding
aggregate principal amount of all Swingline Loans made by the Swingline Bank,
plus (y) the Dollar Equivalent of the outstanding aggregate principal amount of
all Multicurrency Loans made by the Multicurrency Banks, plus (z) all
outstanding Letter of Credit Obligations, shall not exceed the Aggregate
Commitment.
2.06 Procedure for Bid Borrowings.
(a) When any Borrower wishes to request the Banks to submit offers
to make Bid Loans hereunder, it shall transmit to the Agent by telephone
call followed promptly by facsimile transmission a notice in substantially
the form of Exhibit C (a "Competitive Bid Request") so as to be received
no later than 1:00 P.M. (New York City time) (x) not less than four
Business Days prior to the date of a proposed Bid Borrowing in the case of
a Eurodollar Auction, or (y) not less than two Business Days prior to the
date of a proposed Bid Borrowing in the case of an Absolute Rate Auction,
specifying:
(i) the date of such Bid Borrowing, which shall be a Business Day;
(ii) the aggregate amount of such Bid Borrowing, which shall be a
minimum amount of $5,000,000 or in multiples of $1,000,000 in excess
thereof;
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(iii) whether the Competitive Bids requested are to be for Eurodollar
Bid Loans or Absolute Rate Bid Loans or both; and
(iv) the duration of the Interest Period applicable thereto (subject
to the provisions of the definition of "Interest Period" herein).
The Borrowers may not request Competitive Bids for more than three
Interest Periods in a single Competitive Bid Request and may not request
Competitive Bids more than once in any period of five Business Days.
(b) Upon receipt of a Competitive Bid Request, the Agent will
promptly send to the Banks by facsimile transmission an invitation for
Competitive Bids which shall constitute an invitation by the respective
Borrower to each Bank to submit Competitive Bids offering to make the Bid
Loans to which such Competitive Bid Request relates in accordance with
this Section 2.06.
(c) (i) Each Bank may at its sole and absolute discretion submit a
Competitive Bid containing an offer or offers to make Bid Loans in
response to any Invitation for Competitive Bids. Each Competitive Bid must
comply with the requirements of this Section 2.06(c) and must be submitted
to the Agent by facsimile transmission at the Agent's office for notices
set forth on the signature pages hereto not later than (1) 9:30 A.M. (New
York City time) three Business Days prior to the proposed date of Bid
Borrowing, in the case of a Eurodollar Auction or (2) 9:30 A.M. (New York
City time) on the proposed date of Bid Borrowing in the case of an
Absolute Rate Auction; provided that Competitive Bids 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 respective Borrower of the terms of the offer or offers
contained therein not later than (A) 9:15 A.M. (New York City time) three
Business Days prior to the proposed date of Bid Borrowing, in the case of
a Eurodollar Auction or (B) 9:15 A.M. (New York City time) on the proposed
date of Bid Borrowing, in the case of an Absolute Rate Auction.
(ii) Each Competitive Bid shall be in substantially the form of
Exhibit D, specifying therein:
(A) the proposed date of Bid Borrowing;
(B) the principal amount of each Bid Loan for which such
Competitive Bid is being made, which principal amount (x) may be
equal to, greater than or less than the Commitment of the quoting
Bank, (y) must be a minimum principal amount of $5,000,000 or in
multiples of
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$1,000,000 in excess thereof and (z) may not exceed the principal amount
of Bid Loans for which Competitive Bids were requested;
(C) in case the respective Borrower elects a Eurodollar
Auction, the margin above or below LIBOR (the "Eurodollar Bid
Margin") offered for each such Bid Loan, expressed as a percentage
(rounded upward to the nearest 1/1000th of 1%) to be added to or
subtracted from the applicable LIBOR and the Interest Period
applicable thereto;
(D) in case the respective Borrower elects an Absolute Rate
Auction, the rate of interest per annum (rounded upward to the
nearest 1/100th of 1%) (the "Absolute Rate") offered for each such
Bid Loan; and
(E) the identity of the quoting Bank.
A Competitive Bid may contain up to three separate offers by the
quoting Bank with respect to each Interest Period specified in the
related Invitation for Competitive Bids.
(iii) Any Competitive Bid shall be disregarded if it:
(A) is not substantially in conformity with Exhibit D or does
not specify all of the information required by Section (c)(ii) of
this Section;
(B) contains qualifying, conditional or similar language;
(C) proposes terms other than or in addition to those set
forth in the applicable Invitation for Competitive Bids; or
(D) arrives after the time set forth in Section (c)(i).
(iv) Notwithstanding anything to the contrary contained in this
Section 2.06(c), a Competitive Bid may be greater than or less than the
respective Commitment of any Bid Loan Lender.
(d) Promptly on receipt and not later than 10:00 A.M. (New York City
time) three Business Days prior to the proposed date of Bid Borrowing in
the case of a Eurodollar Auction, or 10:00 A.M. (New York City time) on
the proposed date of Bid Borrowing, in the case of an Absolute Rate
Auction, the Agent will notify the respective Borrower of the terms (i) of
any Competitive Bid submitted by a Bank that is in accordance with Section
2.06(c), and (ii) of any Competitive Bid that amends, modifies or is
otherwise inconsistent with a previous Competitive Bid
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submitted by such Bank with respect to the same Competitive Bid Request.
Any such subsequent Competitive Bid shall be disregarded by the Agent
unless such subsequent Competitive Bid is submitted solely to correct a
manifest error in such former Competitive Bid and only if received within
the times set forth in Section 2.06(c). The Agent's notice to the
respective Borrower shall specify (1) the aggregate principal amount of
Bid Loans for which offers have been received for each Interest Period
specified in the related Competitive Bid Request; and (2) the respective
principal amounts and Eurodollar Bid Margins or Absolute Rates, as the
case may be, so offered. Subject only to the provisions of Sections 4.02,
4.05 and 5.02 hereof and the provisions of this subsection (d), any
Competitive Bid shall be irrevocable except with the written consent of
the Agent given on the written instructions of the respective Borrower.
(e) Not later than 11:00 A.M. (New York City time) three Business
Days prior to the proposed date of Bid Borrowing, in the case of a
Eurodollar Auction, or 10:30 A.M. (New York City time) on the proposed
date of Bid Borrowing, in the case of a Absolute Rate Auction, the
respective Borrower shall notify the Agent of its acceptance or
non-acceptance of the offers so notified to it pursuant to Section
2.06(d). The respective Borrower shall be under no obligation to accept
any offer and may choose to reject all offers. In the case of acceptance,
such notice shall specify the aggregate principal amount of offers for
each Interest Period that is accepted. The respective Borrower may accept
any Competitive Bid in whole or in part; provided that:
(i) the aggregate principal amount of each Bid Borrowing may not
exceed the applicable amount set forth in the related Competitive Bid
Request;
(ii) the principal amount of each Bid Borrowing must be $5,000,000
or in any multiple of $1,000,000 in excess thereof;
(iii) acceptance of offers may only be made on the basis of
ascending Eurodollar Bid Margins or Absolute Rates within each Interest
Period, as the case may be; and
(iv) the respective Borrower may not accept any offer that is
described in Section 2.06(c)(iii) or that otherwise fails to comply with
the requirements of this Agreement.
(f) If offers are made by two or more Banks with the same Eurodollar
Bid Margins or Absolute Rates, as the case may be, for a greater aggregate
principal amount than the amount in respect of which such offers are
accepted for the related Interest Period, the principal amount of Bid
Loans in respect of which
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such offers are accepted shall be allocated by the Agent among such Banks
as nearly as possible (in such multiples not less than $1,000,000 as the
Agent may deem appropriate) in proportion to the aggregate principal
amounts of such offers. Determination by the Agent of the amounts of Bid
Loans shall be conclusive in the absence of manifest error.
(g) (i) The Agent will promptly notify each Bank having submitted a
Competitive Bid if its offer has been accepted and, if its offer has been
accepted, of the amount of the Bid Loan or Bid Loans to be made by it on
the date of the Bid Borrowing.
(ii) Each Bank which has received notice pursuant to Section
2.06(g)(i) that its Competitive Bid has been accepted, shall make the
amounts of such Bid Loans available to the Agent for the account of the
respective Borrower at the Agent's Payment Office, by 2:00 P.M. (New York
City time), on such date of Bid Borrowing, in funds immediately available
to the Agent for the account of the respective Borrower at the Agent's
Payment Office.
(iii) Promptly following each Bid Borrowing, the Agent shall notify
each Bank of the ranges of bids submitted and the highest and lowest bids
accepted for each Interest Period requested by the respective Borrower and
the aggregate amount borrowed pursuant to such Bid Borrowing.
(iv) From time to time, the Borrowers and the Banks shall furnish
such information to the Agent as the Agent may request relating to the
making of Bid Loans, including the amounts, interest rates, dates of
borrowings and maturities thereof, for purposes of the allocation of
amounts received from the Borrowers for payment on all amounts owing
hereunder.
(h) If, on or prior to the proposed date of the Bid Borrowing, the
Aggregate Commitment has not been terminated and if, on such proposed date
of Bid Borrowing all applicable conditions to funding referenced in
Section 4.02, 4.05 and 5.02 hereof are satisfied, the Bank or Banks whose
offers the respective Borrower has accepted will fund each Bid Loan so
accepted. Nothing in this Section 2.06 shall be construed as a right of
first offer in favor of the Banks or to otherwise limit the ability of the
Borrowers to request and accept credit facilities from any Person
(including any of the Banks), provided that no Default or Event of Default
would otherwise arise or exist as a result of the Borrowers executing,
delivering or performing under such credit facilities.
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2.07 Voluntary Reduction and Termination of Commitments.
(a) The Borrowers may, upon not less than five Business Days' prior
notice to the Agent, terminate the Aggregate Commitment (including the
Letter of Credit Commitment) or permanently reduce the Aggregate
Commitment (including the Letter of Credit Commitment) by an aggregate
minimum amount of $5,000,000 or any multiple of $1,000,000 in excess
thereof; provided, however, that no such reduction or termination shall be
permitted if after giving effect thereto and to any prepayment of the
Committed Loans, Swingline Loans, Multicurrency Loans and/or Bid Loans
made on the effective date thereof, (i) the then outstanding principal
amount of the Committed Loans, Swingline Loans, Multicurrency Loans
(Dollar Equivalent thereof) and Bid Loans plus the outstanding Letter of
Credit Obligations would exceed the Aggregate Commitment then in effect,
(ii) the then outstanding principal amount of Multicurrency Loans would
exceed the Total Multicurrency Commitment or (iii) the aggregate amount of
Letter of Credit Obligations would exceed the Letter of Credit Commitment
then in effect; and, provided further, that once reduced in accordance
with this Section 2.07, the Aggregate Commitment (including the Letter of
Credit Commitment) may not be increased.
(b) Any reduction of the Aggregate Commitment and the Letter of
Credit Commitment pursuant to this Section 2.07 shall be applied pro rata
to each Bank's Commitment in accordance with such Bank's Commitment
Percentage. The amount of any such reduction of the Aggregate Commitment
shall not be applied to the Letter of Credit Commitment or the Total
Multicurrency Commitment unless otherwise specified by the Borrowers or
required by the definition thereof. All accrued commitment and letter of
credit fees to the effective date of any reduction or termination of
Aggregate Commitment, shall be paid on the effective date of such
reduction or termination. The Agent shall promptly notify the Banks of any
reduction or termination of the Aggregate Commitment.
(c) Upon not less than three Business Days' prior irrevocable notice
to the Agent, the Borrowers may, at any time, in whole permanently
terminate, or from time to time, in part reduce, the Multicurrency
Commitments, provided, however, that (i) each such partial reduction shall
be in a minimum amount of $5,000,000 or any multiple of $1,000,000 in
excess thereof and (ii) no such termination or reduction shall be made (x)
which would reduce the Total Multicurrency Commitment to an amount less
than the Dollar Equivalent of the aggregate Multicurrency Loan Exposures
or (y) which would reduce the Multicurrency Commitment of any
Multicurrency Bank to an amount that is less than the Dollar Equivalent of
the aggregate principal amount of such Multicurrency Bank's outstanding
Multicurrency Loans. The Multicurrency Commitments shall automatically
terminate on the date of any termination of the Commitments.
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2.08 Mandatory Reduction of Loan Commitments. (a) The Aggregate
Commitment (and the Commitment of each Bank) shall terminate in its entirety on
December 31, 1996 unless the Effective Date shall have occurred on or prior to
such date.
(b) In addition to any other mandatory commitment reductions
pursuant to this Agreement, the Aggregate Commitment shall terminate in its
entirety on the Termination Date.
(c) In addition to any other mandatory commitment reductions
pursuant to this Agreement, on each date set forth below (each, a "Scheduled
Commitment Reduction Date"), the Aggregate Commitment shall be permanently
reduced by the amount set forth opposite such date:
Scheduled Commitment Reduction Date Amount
----------------------------------- ------
December 12, 1999 $100,000,000
December 12, 2000 $150,000,000
December 12, 2001 Remaining Aggregate
Commitment
(d) Each reduction to the Aggregate Commitment pursuant to this
Section 2.08 shall be applied pro rata to reduce the Commitment of each Bank.
2.09 Voluntary Prepayments of Committed Loans, Swingline Loans and
Multicurrency Loans.
(a) (i) Each Borrower may, prior to 1:00 P.M. (New York City time),
upon at least three Business Days' notice to the Agent in the case of
Eurodollar Committed Loans, and prior to 10:00 A.M. (New York City time),
upon same Business Day notice in the case of Base Rate Committed Loans,
ratably prepay Committed Loans, in whole or in part, in amounts of
$5,000,000 or an integral multiple of $1,000,000 in excess thereof.
(ii) Each Borrower may at any time prepay Swingline Loans (other
than Swingline Loans maintained as Negotiated Rate Loans), in whole or in
part, in minimum amounts of $100,000 or an integral multiple of $50,000 in
excess thereof; provided, however, that notice of such prepayment shall be
required to be delivered to the Agent and the Swingline Bank by 1:00 P.M.
(New York City time) on the date of such prepayment.
(iii) Each Borrower may at any time prepay Multicurrency Loans, in
whole or in part, in minimum amounts of the Dollar Equivalent of
$5,000,000 or
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an integral multiple of $1,000,000 in excess thereof; provided, however,
that notice of such prepayment shall be required to be delivered to the
Agent by 3:00 P.M. (New York City time) not less than four Business Days
prior to the date of such prepayment. Except as required under Section
4.02, each prepayment of principal of any Multicurrency Borrowing shall be
allocated pro rata among the Multicurrency Banks in accordance with the
respective principal amounts of their outstanding Multicurrency Loans
comprising such Borrowing.
(b) Any notice of prepayment delivered pursuant to this Section 2.09
shall specify the date and amount of such prepayment and the type of Loans
to be prepaid, including in the case of Committed Loans whether such
prepayment is of Base Rate Committed Loans or Eurodollar Committed Loans
or any combination thereof and in the case of any Swingline Loan whether
such prepayment is of a Base Rate Loan or an IBOR Loan or any combination
thereof. Each such notice shall be irrevocable by the relevant Borrower
and the Agent will promptly notify each Bank or Multicurrency Bank, as the
case may be, thereof and of such Bank's Commitment Percentage or
Multicurrency Bank's Multicurrency Commitment Percentage of such
prepayment, if applicable. If such notice is given by a Borrower, such
Borrower shall make such prepayment and the payment amount specified in
such notice shall be due and payable on the date specified therein,
together with accrued interest to each such date on the amount prepaid and
the amounts, if any, required pursuant to Section 4.04; provided that
interest shall be paid in connection with any such prepayment of Base Rate
Committed Loans (other than a prepayment in full) on the next occurring
Interest Payment Date.
(c) Bid Loans may not be voluntarily prepaid.
2.10 Mandatory Prepayments.
(a) (i) If on any date (A) the aggregate unpaid principal amount of
outstanding Committed Loans, Swingline Loans, Multicurrency Loans (Dollar
Equivalent thereof) and Bid Loans plus the outstanding Letter of Credit
Obligations (to the extent not Cash Collateralized pursuant to clause (ii)
below or as provided for in Section 3.07) exceeds the Aggregate Commitment
or (B) the aggregate unpaid principal amount of Swingline Loans exceeds
the Swingline Amount, in each such case the Borrowers shall immediately
prepay the amount of such excess, which shall be applied, in the case of
subclause (A) above, first to Swingline Loans, second to Committed Loans,
third to Multicurrency Loans, and fourth to Bid Loans.
(ii) If on any date, (x) the Dollar Equivalent of the aggregate
principal amount of the Multicurrency Loans outstanding would exceed the
Total Multicurrency Commitment by 5% or (y) the Dollar Equivalent of the
aggregate
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principal amount of a Multicurrency Bank's outstanding Multicurrency Loans
would exceed the Multicurrency Commitment of such Multicurrency Bank by
5%, in each such case the Borrowers shall prepay the amount of such excess
within four Business Days, which shall be applied to Multicurrency Loans;
(iii) If on any date the aggregate amount of all Letter of Credit
Obligations shall exceed the Letter of Credit Commitment, the Borrowers
shall Cash Collateralize on such date their obligations in respect of
Letters of Credit in an amount equal to the excess of the Letter of Credit
Obligations over the Letter of Credit Commitment.
(b) The Borrowers shall pay, together with each prepayment made by
the Borrowers under this Section 2.10, accrued interest on the amount
prepaid and any amounts required pursuant to Section 4.04; provided that
interest shall be paid in connection with any such prepayment of Base Rate
Loans (other than a pre-payment in full) on the next occurring Interest
Payment Date.
(c) Any prepayments pursuant to this Section 2.10 made on a day
other than an Interest Payment Date for any Loan shall be applied first to
any Base Rate Loans then outstanding and then to Eurodollar Loans with the
shortest Interest Periods remaining.
2.11 Repayment of Principal.
(a) The Committed Loans. The Borrowers shall repay to the Banks in
full on the Termination Date the aggregate principal amount of the
Committed Loans outstanding on the Termination Date.
(b) The Swingline Loans. Each Swingline Loan shall mature, and the
principal amount thereof shall be due and payable, and the Borrowers shall
repay such Swingline Loan (i) if such Swingline Loan is a Base Rate Loan,
on the date which is 30 days after the relevant Borrowing Date, (ii) if
such Swingline Loan is an IBOR Loan, on the last day of the Interest
Period therefor, (iii) if such Swingline Loan is a Negotiated Rate Loan,
on the last day of the interest period determined by the Borrowers and the
Swingline Bank applicable thereto and (iv) in any event, on the
Termination Date.
(c) Multicurrency Loans. Each Multicurrency Loan shall mature, and
the principal amount thereof shall be due and payable, and the Borrowers
shall repay such Multicurrency Loan on the Termination Date. Except as
required under Section 4.02, each payment of principal of any
Multicurrency Borrowing shall be allocated pro rata among the
Multicurrency Banks in accordance with the respective
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principal amounts of their outstanding Multicurrency Loans comprising such
Borrowing.
(d) Bid Loans. The Company shall repay each Bid Loan on the last day
of the Interest Period applicable thereto.
2.12 Interest.
(a) Except as provided in paragraphs (c) or (g) below, each Loan
shall bear interest on the outstanding principal amount thereof from the
Borrowing Date applicable thereto until it becomes due at a rate per annum
equal to the Base Rate, IBOR or LIBOR, as the case may be, plus the
Applicable Margin then in effect based on the higher of the senior
unsecured long term debt ratings for the Company as issued by Moody's and
S&P as set forth below:
Senior Unsecured Debt Applicable
Rating Margin
Base
S&P Moody's IBOR/LIBOR Rate
--- ------- ---------- ----
Greater than or equal
to the higher of A- and A3 0.150% 0%
Greater than or equal
to the higher of BBB+ and Baa1 0.185% 0%
Greater than or equal
to the higher of BBB and Baa2 0.225% 0%
Greater than or equal
to the higher of BBB- and Baa3 0.250% 0%
Greater than or equal
to the higher of BB+ and Ba1 0.350% 0%
Greater than or equal
to the higher of BB and Ba2 0.450% 0%
Less than the higher of BB and Ba2 0.625% 0%
(provided, however, that if more than a one level split exists
between the S&P and Moody's ratings, Applicable Margin will be
determined assuming
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that the Company's senior unsecured long term debt rating is one
level below the higher of the two ratings).
(b) Any change in the Applicable Margin due to a change in the
Company's senior unsecured debt rating shall be effective on the date of
such rating change and shall apply to all Committed Loans that are
outstanding at any time during the period commencing on the date of such
rating change and ending on the date immediately preceding the next date
of such rating change.
(c) Each Bid Loan shall bear interest on the outstanding principal
amount thereof from the relevant Borrowing Date at a rate per annum equal
to LIBOR plus (or minus) the Eurodollar Bid Margin, or, at the Absolute
Rate, as the case may be, as agreed in the related Competitive Bid
therefor.
(d) Interest on each Loan shall be paid in arrears on each Interest
Payment Date. Interest shall also be paid on the date of any prepayment of
any portion of Committed Loans (excluding Base Rate Committed Loans, on
which such interest shall be paid on the next occurring Interest Payment
Date) or Multicurrency Loans for the portion of such Loans so prepaid and
upon payment (including pre-payment) of any Committed Loans (including
Base Rate Committed Loans) or Multicurrency Loans in full thereof. During
the existence of any Event of Default, interest shall be paid on demand.
(e) Each payment of interest on any Multicurrency Borrowing (i) with
respect to the portion of such payment that is equal to the interest on
the outstanding principal amount of such Multicurrency Borrowing
calculated at a rate per annum equal to LIBOR, shall be allocated pro rata
among the Multicurrency Banks and (ii) with respect to the portion of such
payment that is equal to the interest on the outstanding principal amount
of such Multicurrency Borrowing calculated at a rate per annum equal to
the Applicable Margin for a Eurodollar Multicurrency Loan as set forth in
Section 2.12(a), shall be allocated pro rata among all of the Banks in
accordance with their Multicurrency Loan Exposures with respect to such
Multicurrency Loans comprising such Borrowing with (x) each Multicurrency
Bank receiving its payment in the currency applicable to such Eurodollar
Multicurrency Loan and (y) each Bank (other than a Multicurrency Bank)
receiving the Dollar Equivalent of its payment with the Agent using the
Exchange Rate in effect on such date to convert the currency applicable to
such Eurodollar Multicurrency Loan into Dollars.
(f) If any amount of principal of or interest on any Loan, or any
other regularly scheduled amount payable hereunder or under any other Loan
Document is not paid in full when due, after giving effect to any
applicable grace period
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(whether at stated maturity, by acceleration, demand or otherwise), the
Borrowers shall pay interest (after as well as before judgment) on the
principal amount of all outstanding Loans at the applicable rate per annum
provided in this Section 2.12 plus 2% and on all other amounts (including
interest), at a rate per annum equal to the Base Rate plus 2%.
(g) Anything herein to the contrary notwithstanding, the obligations
of the Borrowers hereunder shall be subject to the limitation that
payments of interest shall not be required, for any period for which
interest is computed hereunder, to the extent (but only to the extent)
that contracting for or receiving such payment by the respective Bank
would be contrary to the provisions of any law applicable to such Bank
limiting the highest rate of interest which may be lawfully contracted
for, charged or received by such Bank, and in such event the Borrowers
shall pay such Bank interest at the highest rate permitted by applicable
law.
(h) Each Negotiated Rate Loan shall bear interest on the outstanding
principal amount thereof from the Borrowing Date applicable thereto until
such Negotiated Rate Loan becomes due at the applicable Negotiated Rate.
2.13 Fees. In addition to fees described in Section 3.08:
(a) Facility Fees.
(i) The Borrowers shall pay to the Agent for the account of
each Bank a facility fee on the average of such Bank's Commitment,
regardless of the utilization thereof, computed on a quarterly basis
in arrears on each Interest Payment Date for Base Rate Committed
Loans based upon the average daily amount of such Bank's Commitment
for the previous three month period as calculated by the Agent and
payable on such date, equal to the rate per annum based on the
higher of the senior unsecured debt ratings for the Company issued
by Moody's and S&P as set forth below:
Facility
Senior Unsecured Debt Rating Fee
---------------------------- ---
S&P Moody's
--- -------
Greater than or equal
to the higher of A- and A3 0.075%
Greater than or equal
to the higher of BBB+ and Baa1 0.090%
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Greater than or equal
to the higher of BBB and Baa2 0.100%
Greater than or equal
to the higher of BBB- and Baa3 0.125%
Greater than or equal
to the higher of BB+ and Ba1 0.150%
Greater than or equal
to the higher of BB and Ba2 0.200%
Less than the higher
of BB and Ba2 0.250%
(provided, however, that if more than a one level split exists
between the S&P and Moody's ratings, the facility fee will be
determined assuming that the Company's senior unsecured long term
debt rating is one level below the higher of the two ratings).
(ii) On each Interest Payment Date for a Multicurrency Loan
the Borrowers shall pay to the Agent for the account of each
Multicurrency Bank in U.S. Dollars a fronting fee on the Dollar
Equivalent of the daily average outstanding principal amount of such
Multicurrency Loan during such Interest Period, computed in arrears
for such Interest Period as calculated by the Agent and payable on
such date, equal to 0.07% per annum. Such fee for each respective
Multicurrency Loan shall be computed on the basis of the Exchange
Rate in effect on the date on which such Multicurrency Loan was
incurred.
(b) Other Fees. The Borrowers shall pay such fees as have or may be
agreed between the Borrowers and the Agent from time to time.
2.14 Computation of Fees and Interest.
(a) All computations of interest payable in respect of Base Rate
Loans and Multicurrency Loans denominated in Pounds Sterling shall be made
on the basis of a year of 365 or 366 days, as the case may be, and actual
days elapsed. All other computations of fees and interest under this
Agreement shall be made on the (i) basis of a 360-day year and actual days
elapsed or (ii) or such other basis that
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is customary for an Eligible Currency (other than Pounds Sterling).
Interest and fees shall accrue during each period during which interest or
such fees are computed from the first day thereof to the last day thereof.
(b) The Agent will promptly notify the Borrowers and the Banks of
each determination of LIBOR; provided, however, that any failure to do so
shall not relieve the Borrowers of any liability hereunder. Any change in
the interest rate on a Loan resulting from a change in the senior debt
rating shall become effective as of the opening of business on the
relevant date of such change. The Agent will promptly notify the Borrowers
and the Banks of the effective date and the amount of each such change,
provided, however, that any failure to do so shall not relieve the
Borrowers of any liability hereunder.
(c) Each determination of an interest rate by the Agent shall be
conclusive and binding on the Borrowers and the Banks in the absence of
manifest error.
(d) If any Reference Bank's Commitment shall terminate (otherwise
than on termination of all the Commitments), or for any reason whatsoever
any Reference Bank shall cease to be a Bank hereunder, or any Reference
Bank, at the request of the Company, elects (at its sole discretion) not
to continue to be a Reference Bank hereunder, that Reference Bank shall
thereupon cease to be a Reference Bank, and LIBOR shall be determined on
the basis of the rates as notified by the remaining Reference Banks or
Reference Bank.
(e) Each Reference Bank shall use its best efforts to furnish
quotations of rates to the Agent as contemplated hereby. If any of the
Reference Banks shall be unable or otherwise fails to supply such rates to
the Agent upon its request, the rate of interest shall be determined on
the basis of the quotations of the remaining Reference Banks or Reference
Bank.
2.15 Payments by the Borrowers.
(a) All payments (including prepayments) to be made by the Borrowers
on account of principal, interest, drawings under Letters of Credit, fees
and other amounts required hereunder shall be made without set-off or
counterclaim and shall, except as otherwise expressly provided with
respect to drawings under Letters of Credit and elsewhere herein, be made
to the Agent for the ratable account of the Banks at the Agent's Payment
Office, and shall be made in Dollars or the applicable Eligible Currency
in the case of Multicurrency Loans (or where such amount is denominated in
the Euro and payment thereof is to be made in the Euro and in immediately
available, freely transferable, cleared funds to such account with such
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bank in such principal financial center as the Agent shall have specified
for this purpose) and in immediately available funds, no later than 1:00
P.M. (New York City time) (or 3:00 P.M. (New York City time) in the case
of Swingline Loans) (or 1:00 P.M. (London time) in the case of
Multicurrency Loans) on the date specified herein. The Agent will promptly
distribute to each Bank its share, if any, of such principal, interest,
fees or other amounts, in like funds as received (except as set forth in
Section 2.12(e)). Any payment which is received by the Agent later than
1:00 P.M. (New York City time) (or 3:00 P.M. (New York City time) in the
case of Swingline Loans) (or 1:00 P.M. (London time) in the case of
Multicurrency Loans) shall be deemed to have been received on the
immediately succeeding Business Day and any applicable interest or fee
shall continue to accrue until such payment is deemed to have been
received.
(b) Whenever any payment hereunder shall be stated to be due on a
day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of interest or fees, as the case may be
(subject to the provisions set forth in the definition of the term of
"Interest Period" herein).
(c) Unless the Agent shall have received notice from a Borrower
prior to the date on which any payment is due to the Banks hereunder that
such Borrower will not make such payment in full, the Agent may assume
that such Borrower has made such payment in full to the Agent as required
hereunder on such date in immediately available funds and the Agent may
(but shall not be so required), in reliance upon such assumption, cause to
be distributed to each Bank on such due date an amount equal to the amount
then due such Bank. If and to the extent such Borrower shall not have made
such payment in full to the Agent, each Bank shall repay to the Agent on
demand such amount distributed to such Bank, together with interest
thereon for each day from the date such amount is distributed to such Bank
until the date such Bank repays such amount to the Agent, at the Federal
Funds Rate as in effect for each such day.
2.16 Payments by the Banks to the Agent.
(a) Unless the Agent shall have received notice from a Bank on the
Effective Date or, with respect to each Borrowing after the Effective
Date, at least one Business Day prior to the date of any proposed
Borrowing (other than a Borrowing of a Swingline Loan which in accordance
with Section 2.03(f) is funded directly by the Swingline Bank), that such
Bank will not make available to the Agent for the account of the relevant
Borrower the amount of such Bank's Commitment Percentage of the Committed
Loans, or Multicurrency Commitment Percentage of the Multicurrency Loans,
as the case may be, included in such
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Borrowing, the Agent may assume that each Bank has made such amount
available to the Agent as required hereunder on the Borrowing Date and the
Agent may (but shall not be so required), in reliance upon such
assumption, make available to such Borrower on such date a corresponding
amount. If and to the extent any Bank shall not have made its full amount
available to the Agent in immediately available funds and the Agent in
such circumstances has made available to such Borrower such amount, such
Bank shall immediately make such amount available to the Agent, together
with interest at the Federal Funds Rate from the date of such Borrowing to
the date on which the Agent recovers such amount from such Bank or such
Borrower. A notice of the Agent submitted to any Bank with respect to
amounts owing under this Section 2.16(a) shall be conclusive, absent
manifest error. If such amount is so made available, such payment to the
Agent shall constitute such Bank's Loan on the Borrowing Date for all
purposes of this Agreement. If such amount is not made available to the
Agent on the next Business Day following such Borrowing Date, the Agent
shall notify such Borrower of such failure to fund and, upon demand by the
Agent, such Borrower shall pay such amount to the Agent for the Agent's
account, together with interest thereon for each day elapsed since such
Borrowing Date, at a rate per annum equal to the interest rate applicable
at the time to the Committed Loans or the Multicurrency Loans, as the case
may be, comprising such Borrowing.
(b) The failure of any Bank to make any Committed Loan or any
Multicurrency Bank to make any Multicurrency Loan, respectively, on any
Borrowing Date shall not relieve any other Bank or Multicurrency Bank of
any obligation hereunder to make a Committed Loan or Multicurrency Loan on
such Borrowing Date, but no Bank shall be responsible for the failure of
any other Bank to make the Committed Loan or Multicurrency Loan to be made
by such other Bank on any Borrowing Date.
2.17 Sharing of Payments, etc.
(a) If, other than as expressly provided elsewhere herein, any Bank
shall obtain on account of the Committed Loans, or any Multicurrency Bank
shall obtain on account of the Multicurrency Loans, owing to it any
payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise) in excess of its Commitment Percentage, or
Multicurrency Commitment Percentage, as the case may be, of payments on
account of the Obligations of the same kind obtained by all the Banks or
Multicurrency Banks, as applicable, such Bank shall forthwith (i) notify
the Agent of such fact, and (ii) purchase from the other Banks such
participations in such Committed Loans or Multicurrency Loans, as the case
may be, made by them as shall be necessary to cause such purchasing Bank
to share the excess payment ratably with each of them; provided, however,
that if all or any
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portion of such excess payment is thereafter recovered from the purchasing
Bank, such purchase shall to that extent be rescinded and each other Bank
shall repay to the purchasing Bank the purchase price paid therefor,
together with an amount equal to such paying Bank's Commitment Percentage
or Multicurrency Commitment Percentage, as the case may be, (according to
the proportion of (A) the amount of such paying Bank's required repayment
to (B) the total amount so recovered from the purchasing Bank) of any
interest or other amount paid or payable by the purchasing Bank in respect
of the total amount so recovered. The Agent will keep records (which shall
be conclusive and binding in the absence of manifest error) of
participations purchased pursuant to this Section 2.17 and will in each
case notify the Banks following any such purchases.
(b) Any Bank having outstanding Committed Loans, Multicurrency Loans
and Bid Loans at any time a right of set-off is exercised by such Bank
shall apply the proceeds of such set-off first to such Bank's Committed
Loans until its Committed Loans are reduced to zero, second to such Bank's
Multicurrency Loans until its Multicurrency Loans are reduced to zero, and
third to its Bid Loans.
(c) Each Borrower agrees that any Bank so purchasing a participation
from another Bank pursuant to this Section 2.17 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right
of set-off, but subject to Section 12.09) with respect to such
participation as fully as if such Bank were the direct creditor of such
Borrower in the amount of such participation.
2.18 Guaranty. All Obligations of the Borrowers under this Agreement
and all other Loan Documents shall be unconditionally guaranteed by the Parent
pursuant to Article X hereof and all Obligations of USI Funding under this
Agreement and the other Loan Documents shall be unconditionally guaranteed by
the Company pursuant to Article X hereof.
2.19 Termination Date Extensions. Not less than 180 days and not
more than 210 days prior to the second anniversary of the Effective Date and
every second anniversary of such second anniversary (the "Requested Extension
Effective Date"), the Company may make a written request to the Agent, who shall
forward a copy of each such request to each of the Banks, that the Termination
Date then in effect be extended to the date which occurs two years after such
Termination Date. Each request pursuant to the first sentence of this Section
2.19 shall also be accompanied by a certificate of an officer of the Company
stating that no Default or Event of Default has occurred and is continuing. Each
Bank, acting in its sole discretion and with no obligation to grant any
extension pursuant to this Section 2.19, shall, by written notice to the Company
and the Agent, such notice to be given on or prior to the Requested Extension
Effective Date, advise the Company and the Agent whether or not such Bank agrees
to such extension, provided that
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any Bank which fails to so notify the Borrower and the Agent as provided above
shall be deemed to have elected not to grant such extension. The Agent shall
notify the Company and each of the Banks as to which Banks have agreed to such
extension and as to the new Termination Date, if any, as a result thereof. The
extension of the Termination Date pursuant to the terms of this Section 2.19
must be approved by each Bank.
2.20 Rounding and Other Consequential Changes. With effect on and
from the Commencement of the Third Stage of EMU:
(a) Without prejudice and in addition to any method of conversion
or rounding prescribed by any EMU Legislation, each reference
in this Agreement to a fixed amount or fixed amounts in a
National Currency Unit to be paid to or by the Agent shall be
replaced by a reference to such comparable and convenient
fixed amounts or fixed amounts in the Euro Unit as the Agent
may from time to time reasonably specify; and
(b) Except as expressly provided in this clause (b), each
provision of this Agreement shall be subject to such changes
of construction as the Agent may from time to time reasonably
specify to be necessary to reflect the changeover to the Euro
in Participating Member States.
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ARTICLE III.
THE LETTERS OF CREDIT
3.01 The Letter of Credit Subfacility.
(a) On the terms and conditions set forth herein (i) the Issuing
Bank agrees, (A) from time to time, on any Business Day during the period
from the Effective Date to the date which is 30 days prior to the
Termination Date to issue Letters of Credit for the account of each of the
Borrowers, and to amend or renew Letters of Credit previously issued by
it, in accordance with Sections 3.02(b) and 3.02(d), and (B) to honor
drafts under the Letters of Credit; and (ii) the Banks severally agree to
participate in Letters of Credit issued for the account of each of the
Borrowers; provided, however, that the Issuing Bank shall not issue any
Letter of Credit if as of the date of, and after giving effect to, the
issuance of such Letter of Credit, (x) the sum of (A) the aggregate amount
of all Letter of Credit Obligations, plus (B) the aggregate principal
amount of all Committed Loans, plus (C) the aggregate principal amount of
all Bid Loans, plus (D) the aggregate principal amount of all Swingline
Loans, plus (E) the Dollar Equivalent of the aggregate principal amount of
all Multicurrency Loans, shall exceed the Aggregate Commitment or (y) the
Letter of Credit Obligations shall exceed the Letter of Credit Commitment.
(b) Schedule 3.01(b) hereto contains a description of certain
letters of credit issued by an Affiliate of Bank of America prior to the
Effective Date in support of obligations of the Company and/or its
Subsidiaries and which remain outstanding on the Effective Date. Each such
letter of credit, including any extension thereof, issued by such
Affiliate of Bank of America and listed on such Schedule 3.01(b) shall
remain outstanding on and after the Effective Date and constitute a
"Letter of Credit" for all purposes of this Agreement, and shall be deemed
issued on the Effective Date.
(c) The Issuing Bank shall be under no obligation to issue any
Letter of Credit if:
(i) any order, judgment or decree of any Governmental
Authority shall by its terms purport to enjoin or restrain the
Issuing Bank from issuing such Letter of Credit, or any Requirement
of Law applicable to the Issuing Bank or any request or directive
(whether or not having the force of law) from any Governmental
Authority with jurisdiction over the Issuing Bank shall prohibit, or
request that the Issuing Bank refrain from, the issuance of letters
of credit generally or such Letter of Credit in
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particular or shall impose upon the Issuing Bank with respect to
such Letter of Credit any restriction, reserve or capital
requirement (for which the Issuing Bank is not otherwise compensated
hereunder) not in effect on the Effective Date or shall impose upon
the Issuing Bank any unreimbursed loss, cost or expense which was
not applicable on the Effective Date and which the Issuing Bank in
good faith deems material to it;
(ii) the Issuing Bank has received written notice from any
Bank, the Agent or any Borrower on or prior to the Business Day
prior to the requested date of issuance, of such Letter of Credit,
that one or more of the applicable conditions contained in Article V
is not then satisfied;
(iii) the expiry date of any requested Letter of Credit (x) is
more than one year after the date of issuance, unless the Majority
Banks and the Issuing Bank have approved such expiry date in writing
or (y) is later than the Termination Date;
(iv) any requested Letter of Credit is not in form and
substance acceptable to the Issuing Bank, or the issuance, of a
Letter of Credit shall violate any applicable policies of the
Issuing Bank;
(v) any standby Letter of Credit is for the purpose of
supporting the issuance of any letter of credit by any other Person;
or
(vi) such Letter of Credit is in a face amount less than
$250,000 or to be denominated in a currency other than Dollars.
3.02 Issuance, Amendment and Renewal of Letters of Credit.
(a) Each Letter of Credit shall be issued upon the irrevocable
written request of a Borrower received by the Issuing Bank (with a copy
sent by such Borrower to the Agent) at least four days (or such shorter
time as the Issuing Bank may agree in a particular instance in its sole
discretion) prior to the proposed date of issuance. Each such request for
issuance of a Letter of Credit shall be by facsimile, confirmed
immediately in an original writing, in the form of a Letter of Credit
Application, and shall specify in form and detail satisfactory to the
Issuing Bank: (i) the proposed date of issuance of the Letter of Credit
(which shall be a Business Day); (ii) the face amount of the Letter of
Credit; (iii) the expiry date of the Letter of Credit; (iv) the name and
address of the beneficiary thereof; (v) the documents to be presented by
the beneficiary of the Letter of Credit in case of any drawing thereunder;
(vi) the full text of any certificate to be presented by the beneficiary
in
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case of any drawing thereunder; and (vii) such other matters as the
Issuing Bank may reasonably require.
(b) From time to time while a Letter of Credit is outstanding and
prior to the Termination Date, the Issuing Bank will, upon the written
request of a Borrower received by the Issuing Bank (with a copy sent by
such Borrower to the Agent) at least five days (or such shorter time as
the Issuing Bank may agree in a particular instance in its sole
discretion) prior to the proposed date of amendment, amend any Letter of
Credit issued by it. Each such request for amendment of a Letter of Credit
shall be made by facsimile, confirmed immediately in an original writing,
made in the form of a Letter of Credit Amendment Application and shall
specify in form and detail satisfactory to the Issuing Bank: (i) the
Letter of Credit to be amended; (ii) the proposed date of amendment of the
Letter of Credit (which shall be a Business Day); (iii) the nature of the
proposed amendment; and (iv) such other matters as the Issuing Bank may
reasonably require. The Issuing Bank shall be under no obligation to amend
any Letter of Credit if: (A) the Issuing Bank would have no obligation at
such time to issue such Letter of Credit in its amended form under the
terms of this Agreement; or (B) the beneficiary of any such Letter of
Credit does not accept the proposed amendment to the Letter of Credit.
(c) The Agent will promptly notify the Banks of the receipt by it of
any Letter of Credit Application or Letter of Credit Amendment
Application.
(d) The Issuing Bank and the Banks agree that, while a Letter of
Credit is outstanding and prior to the Termination Date, at the option of
any Borrower and upon the written request of such Borrower received by the
Issuing Bank (with a copy sent by such Borrower to the Agent) at least
five days (or such shorter time as the Issuing Bank may agree in a
particular instance in its sole discretion) prior to the proposed date of
notification of renewal, the Issuing Bank shall be entitled to authorize
the automatic renewal of any Letter of Credit issued by it. Each such
request for renewal of a Letter of Credit shall be made by facsimile,
confirmed immediately in an original writing, in the form of a Letter of
Credit Amendment Application, and shall specify in form and detail
satisfactory to the Issuing Bank: (i) the Letter of Credit to be renewed;
(ii) the proposed date of notification of renewal of the Letter of Credit
(which shall be a Business Day); (iii) the revised expiry date of the
Letter of Credit; and (iv) such other matters as the Issuing Bank may
reasonably require. The Issuing Bank shall be under no obligation to renew
any Letter of Credit if the Issuing Bank would have no obligation at such
time to issue or amend such Letter of Credit in its renewed form under the
terms of this Agreement. If any outstanding Letter of Credit shall provide
that it shall be automatically renewed unless the beneficiary thereof
receives notice from the Issuing Bank that such Letter of Credit shall not
be renewed, and if at the time of renewal
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the Issuing Bank would be entitled to authorize the automatic renewal of
such Letter of Credit in accordance with this Section 3.02(d) upon the
request of the relevant Borrower but the Issuing Bank shall not have
received any Letter of Credit Amendment Application from such Borrower
with respect to such renewal or other written direction by such Borrower
with respect thereto, the Issuing Bank shall nonetheless be permitted to
allow such Letter of Credit to be renewed, and such Borrower and the Banks
hereby authorize such renewal, and, accordingly, the Issuing Bank shall be
deemed to have received a Letter of Credit Amendment Application from such
Borrower requesting such renewal.
(e) This Agreement shall control in the event of any conflict with
any Letter of Credit Related Document (other than any Letter of Credit).
(f) The Issuing Bank will also deliver to the Agent, concurrently or
promptly following its delivery of a Letter of Credit, or amendment to or
renewal of a Letter of Credit, to an advising bank or a beneficiary, a
true and complete copy of each such Letter of Credit or amendment to or
renewal of a Letter of Credit.
3.03 Participations, Drawings and Reimbursements.
(a) Immediately upon the issuance of each Letter of Credit, each
Bank shall be deemed to, and hereby irrevocably and unconditionally agrees
to, purchase from the Issuing Bank a participation in such Letter of
Credit and each drawing thereunder in an amount equal to the product of
(i) the Commitment Percentage of such Bank times (ii) the maximum amount
available to be drawn under such Letter of Credit and the amount of such
drawing, respectively.
(b) In the event of any request for a drawing under a Letter of
Credit by the beneficiary or transferee thereof, the Issuing Bank will
promptly notify the relevant Borrower. Such Borrower shall reimburse the
Issuing Bank prior to 12:00 Noon (New York City time), on each date that
any amount is paid by the Issuing Bank under any Letter of Credit (each
such date, a "Disbursement Date"), in an amount equal to the amount so
paid by the Issuing Bank, provided, that if such drawing occurs after
12:00 Noon (New York City time), the Disbursement Date shall be deemed to
be the day following the date of such drawing. In the event any Borrower
shall fail to reimburse the Issuing Bank for the full amount of any
drawing under any Letter of Credit by 12:00 Noon (New York City time) on
the Disbursement Date, the Issuing Bank will promptly notify the Agent and
the Agent will promptly notify each Bank thereof, and such Borrower shall
be deemed to have requested that Committed Loans consisting of Base Rate
Committed Loans be made by the Banks (and hereby irrevocably consents to
such deemed request) pursuant to Section 2.01(a) to be disbursed on the
Disbursement Date under such Letter of
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Credit, subject to the amount of the unutilized portion of the Aggregate
Commitment and subject to the conditions set forth in Section 5.02. Any
notice given by the Issuing Bank or the Agent pursuant to this Section
3.03(b) may be oral if immediately confirmed in writing (including by
facsimile); provided, however, that the lack of such an immediate
confirmation shall not affect the conclusiveness or binding effect of such
notice.
(c) Each Bank shall upon receipt of any notice pursuant to Section
3.03(b) make available to the Agent for the account of the Issuing Bank an
amount in Dollars and in immediately available funds equal to its
Commitment Percentage of the amount of the drawing, whereupon the
participating Banks shall (subject to Section 3.03(d)) each be deemed to
have made a Committed Loan consisting of a Base Rate Committed Loan to the
relevant Borrower in that amount. If any Bank so notified shall fail to
make available to the Agent for the account of the Issuing Bank the amount
of such Bank's Commitment Percentage of the amount of the drawing by no
later than 2:00 P.M. (New York City time) on the Disbursement Date, then
interest shall accrue on such Bank's obligation to make such payment, from
the Disbursement Date to the date such Bank makes such payment, at a rate
per annum equal to (i) the Federal Funds Rate in effect from time to time
during the period commencing on the later of the Disbursement Date and the
date such Bank receives notice of the Disbursement Date prior to 2:00 P.M.
(New York City time) on such date and ending on the date three Business
Days thereafter, and (ii) thereafter at the Base Rate as in effect from
time to time. The Agent will promptly give notice of the occurrence of the
Disbursement Date, but failure of the Agent to give any such notice on the
Disbursement Date or in sufficient time to enable any Bank to effect such
payment on such date shall not relieve such Bank from its obligations
under this Section 3.03.
(d) With respect to any unreimbursed drawing which is not converted
into Committed Loans consisting of Base Rate Committed Loans to any
Borrower in whole or in part, because of such Borrower's failure to
satisfy the conditions set forth in Section 5.02 or for any other reason,
such Borrower shall be deemed to have incurred from the Issuing Bank a
Letter of Credit Borrowing in the amount of such drawing, which Letter of
Credit Borrowing shall be due and payable on demand (together with
interest) and shall bear interest at a rate per annum equal to the Base
Rate, plus the Applicable Margin for Base Rate Loans, plus in the case of
any Letter of Credit Borrowing outstanding after the Disbursement Date, 2%
per annum, and each Bank's payment to the Issuing Bank pursuant to Section
3.03(c) shall be deemed payment in respect of its participation in such
Letter of Credit Borrowing.
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(e) Each Bank's obligation in accordance with this Agreement to make
the Committed Loans or fund its participation in any Letter of Credit
Borrowing, as contemplated by this Section 3.03, as a result of a drawing
under a Letter of Credit shall be absolute and unconditional and without
recourse to the Issuing Bank and shall not be affected by any
circumstance, including (i) any set-off, counterclaim, defense or other
right which such Bank may have against the Issuing Bank, any Borrower or
any other Person for any reason whatsoever; (ii) the occurrence or
continuance of a Default, an Event of Default or a Material Adverse
Effect; or (iii) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.
3.04 Repayment of Participations.
(a) Upon (and only upon) receipt by the Agent for the account of the
Issuing Bank of funds from any Borrower (i) in reimbursement of any
payment made by the Issuing Bank under the Letter of Credit with respect
to which any Bank has paid the Agent for the account of the Issuing Bank
for such Bank's participation in the Letter of Credit pursuant to Section
3.03, or (ii) in payment of interest on amounts described in clause (i),
the Agent will pay to each Bank, in the same funds as those received by
the Agent for the account of the Issuing Bank, the amount of such Bank's
Commitment Percentage of such funds, and the Issuing Bank shall receive
the amount of the Commitment Percentage of such funds of any Bank that did
not so pay the Agent for the account of the Issuing Bank.
(b) If the Agent or the Issuing Bank is required at any time to
return to any Borrower, or to a trustee, receiver, liquidator, custodian,
or any similar official in any Insolvency Proceeding, any portion of the
payments made by such Borrower to the Agent for the account of the Issuing
Bank pursuant to Section 3.04(a) in reimbursement of a payment made under
the Letter of Credit or interest or fee thereon, each Bank shall, on
demand of the Agent, forthwith return to the Agent or the Issuing Bank the
amount of its Commitment Percentage of any amounts so returned by the
Agent or the Issuing Bank plus interest thereon from the date such demand
is made to the date such amounts are returned by such Bank to the Agent or
the Issuing Bank, at a rate per annum equal to the Federal Funds Rate in
effect from time to time.
3.05 Role of the Issuing Bank.
(a) Each Bank and the Borrowers agree that, in paying any drawing
under a Letter of Credit, the Issuing Bank shall not have any
responsibility to obtain any document (other than any sight draft and
certificates expressly required by the
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Letter of Credit) or to ascertain or inquire as to the validity or
accuracy of any such document or the authority of the Person executing or
delivering any such document.
(b) Neither the Issuing Bank nor any of the respective
correspondents, participants or assignees of the Issuing Bank shall be
liable to any Bank for: (i) any action taken or omitted in connection
herewith at the request or with the approval of the Majority Banks; (ii)
any action taken or omitted in the absence of gross negligence or willful
misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any Letter of Credit Related Document.
(c) Each Borrower hereby assumes all risks of the acts or omissions
of any beneficiary or transferee with respect to its use of any Letter of
Credit. Neither the Issuing Bank nor any of the respective correspondents,
participants or assignees of the Issuing Bank, shall be liable or
responsible for any of the matters described in clauses (i) through (vii)
of Section 3.06; provided, however, that a Borrower may have a claim
against the Issuing Bank, and the Issuing Bank may be liable to such
Borrower, to the extent, but only to the extent, of any direct, as opposed
to consequential or exemplary, damages suffered by such Borrower which
such Borrower proves were caused by the Issuing Bank's willful misconduct
or gross negligence or the Issuing Bank's willful failure to pay under any
Letter of Credit after the presentation to it by the beneficiary of a
sight draft and certificate(s) strictly complying with the terms and
conditions of a Letter of Credit. In furtherance and not in limitation of
the foregoing: (i) the Issuing Bank may accept documents that appear on
their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary;
and (ii) the Issuing Bank shall not be responsible for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits thereunder
or proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason.
3.06 Obligations Absolute. The obligations of the Borrowers under
this Agreement and any Letter of Credit Related Document to reimburse the
Issuing Bank for a drawing under a Letter of Credit, and to repay any Letter of
Credit Borrowing and any drawing under a Letter of Credit converted into
Committed Loans, shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement and each such other
Letter of Credit Related Document under all circumstances, including the
following:
(i) any lack of validity or enforceability of this Agreement or any
Letter of Credit Related Document;
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(ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the obligations of any Borrower in
respect of any Letter of Credit or any other amendment or waiver of or any
consent to departure from all or any of the Letter of Credit Related
Documents;
(iii) the existence of any claim, set-off, defense or other right
that any Borrower may have at any time against any beneficiary or any
transferee of any Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the Issuing Bank or any
other Person, whether in connection with this Agreement, the transactions
contemplated hereby or by the Letter of Credit Related Documents or any
unrelated transaction;
(iv) any draft, demand, certificate or other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any
Letter of Credit;
(v) any payment by the Issuing Bank under any Letter of Credit
against presentation of a draft or certificate that does not strictly
comply with the terms of any Letter of Credit; or any payment made by the
Issuing Bank under any Letter of Credit to any Person purporting to be a
trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or successor to
any beneficiary or any transferee of any Letter of Credit, including any
arising in connection with any Insolvency Proceeding;
(vi) any exchange, release or non-perfection of any collateral, or
any release or amendment or waiver of or consent to departure from any
other guaranty, for all or any of the obligations of any Borrower in
respect of any Letter of Credit; or
(vii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of, any
Borrower or a guarantor.
3.07 Cash Collateral Pledge. Upon (a) the request of the Agent, (i)
if the Issuing Bank has honored any full or partial drawing request on any
Letter of Credit and such drawing has resulted in a Letter of Credit Borrowing
hereunder, or (ii) if, as of the Termination Date, any Letters of Credit may for
any reason remain outstanding and partially or wholly undrawn, or (b) the
occurrence of the circumstances described in Section 2.10(a) requiring a
Borrower to Cash Collateralize Letters of Credit, then such Borrower
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shall immediately Cash Collateralize the Letter of Credit Obligations in an
amount equal to such Letter of Credit Obligations (or in the case of clause (ii)
above, the excess amount required pursuant to Section 2.10(a)) and such cash
will be held as security for all Obligations of the Borrowers to the Banks
hereunder in a cash collateral account to be established by the Agent, and
during the existence of an Event of Default, the Agent may, upon the request of
the Majority Banks, apply such amounts so held to the payment of such
outstanding Obligations.
3.08 Letter of Credit Fees.
(a) The Borrowers shall pay to the Agent for the account of each
Bank a letter of credit fee with respect to the Letters of Credit computed
on the average daily maximum amount available to be drawn of the
outstanding Letters of Credit, on each Interest Payment Date for Base Rate
Committed Loans based upon Letters of Credit outstanding for the previous
three-month period and such Letter of Credit fee shall be due and payable
in arrears on each such Interest Payment Date for Base Rate Committed
Loans. The letter of credit fee shall be equal to the Applicable Margin
for Loans bearing interest based on IBOR/LIBOR as set forth in Section
2.12(a), as in effect from time to time during the periods of calculation
thereof.
(b) The Borrowers shall pay to the Issuing Bank a letter of credit
fronting fee for each Letter of Credit issued by the Issuing Bank equal to
.0625% per annum of the face amount of such Letter of Credit. Such Letter
of Credit fronting fee shall be due and payable in arrears on each
Interest Payment Date for Base Rate Committed Loans.
(c) The Borrowers shall pay to the Issuing Bank from time to time on
demand the normal issuance, presentation, amendment and other processing
fees, and other standard costs and charges, of the Issuing Bank relating
to letters of credit as from time to time in effect.
3.09 Uniform Customs and Practice. The Uniform Customs and Practice
for Documentary Credits as most recently published by the International Chamber
of Commerce shall in all respects be deemed a part of this Article III as if
incorporated herein and (unless otherwise expressly provided in the Letters of
Credit) shall apply to the Letters of Credit.
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ARTICLE IV.
TAXES, YIELD PROTECTION AND ILLEGALITY
4.01 Taxes.
(a) Subject to Section 4.01(g), any and all payments by the Parent
and each Borrower to any Bank or the Agent under this Agreement shall be
made free and clear of, and without deduction or withholding for or on
account of, any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Bank and the Agent, as the case
may be, such taxes (including income taxes or franchise taxes) as are
imposed on or measured by such Person's net income by the jurisdiction
under the laws of which such Person is organized or has its principal
office or maintains a Lending Office or any political subdivision thereof
(all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes").
(b) In addition, the Borrowers and the Parent shall pay any present
or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies which arise from any payment made
hereunder or from the execution, delivery or registration of, or otherwise
with respect to, this Agreement or any other Loan Document (hereinafter
referred to as "Other Taxes").
(c) Subject to Section 4.01(g), the Borrowers and the Parent shall
indemnify and hold harmless each Bank and the Agent for the full amount of
Taxes or Other Taxes (including any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under Section 4.01(d)) paid by such Bank
or the Agent and any liability (including penalties, interest, additions
to tax and expenses) arising therefrom or with respect thereto, whether or
not such Taxes or Other Taxes were correctly or legally asserted.
(d) If any Borrower or the Parent shall be required by law to deduct
or withhold any Taxes or Other Taxes from or in respect of any sum payable
hereunder to any Bank or the Agent, then, subject to Section 4.01(g):
(i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions
applicable to additional sums payable under this Section 4.01(d))
such Bank or the Agent, as the case may be, receives an amount equal
to the sum it would have received had no such deductions or
withholdings been made;
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(ii) the relevant Borrower or the Parent shall make such
deductions; and
(iii) the relevant Borrower or the Parent shall pay the full
amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.
(e) Within 30 days after the date of any payment by any Borrower or
the Parent of Taxes or Other Taxes, such Person shall furnish to the
Agent, at its address referred to in Section 12.02, the original or a
certified copy of a receipt evidencing payment thereof, or other evidence
of payment satisfactory to the Agent.
(f) Each Bank which is organized under the laws of a jurisdiction
outside the United States agrees that:
(i) it shall, no later than the Effective Date (or, in the case
of a Bank which becomes a party hereto pursuant to Section 12.07
after the Effective Date, the date upon which such Bank becomes a
party hereto) deliver to each Borrower through the Agent two
accurate and complete signed originals of Internal Revenue Service
Form 4224 or any successor thereto ("Form 4224"), or two accurate
and complete signed originals of Internal Revenue Service Form 1001
or any successor thereto ("Form 1001"), as appropriate, in each case
indicating that such Bank is on the date of delivery thereof
entitled to receive all payments under this Agreement free from
withholding of United States Federal income tax;
(ii) if at any time such Bank makes any changes, including a
change of a Lending Office or its principal office, place of
incorporation or fiscal residence, necessitating a new Form 4224 or
Form 1001, it shall, to the extent it is legally entitled to do so,
promptly deliver to each Borrower through the Agent in replacement
for, or in addition to, the forms previously delivered by it
hereunder, two accurate and complete signed originals of Form 4224
or Form 1001, as appropriate, in each case indicating that such Bank
is on the date of delivery thereof entitled to receive all payments
under this Agreement free from withholding of United States Federal
income tax;
(iii) it shall, to the extent it is legally entitled to do so,
before or promptly after the occurrence of any event (including the
passing of time but excluding any event mentioned in clause (ii)
above) requiring a change in or renewal of the most recent Form 4224
or Form 1001 previously delivered by such Bank, deliver to each
Borrower through the Agent two accu-
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rate and complete original signed copies of Form 4224 or Form 1001
in replacement for the forms previously delivered by such Bank
indicating that such Bank continues to be entitled to receive all
payments under this Agreement free from any withholding of any
United States Federal income tax; and
(iv) it shall, to the extent it is legally entitled to do so,
promptly upon a Borrower's or the Agent's reasonable request to that
effect, deliver to such Borrower or the Agent (as the case may be)
such other forms or similar documentation as may be required from
time to time by any applicable law, treaty, rule or regulation in
order to establish such Bank's complete exemption from withholding
on all payments under this Agreement;
(v) if such Bank claims or is entitled to claim exemption from
withholding tax under a United States tax treaty by providing a Form
1001 and such Bank sells or grants a participation of all or part of
its rights under this Agreement, such Bank shall notify the Agent of
the percentage amount in which it is no longer the beneficial owner
under this Agreement. To the extent of this percentage amount, the
Agent shall treat such Bank's Form 1001 as no longer in compliance
with this Section 4.01(f). In the event a Bank claiming exemption
from United States withholding tax by filing Form 4224 with the
Agent sells or grants a participation in its rights under this
Agreement, such Bank agrees to undertake sole responsibility for
complying with the withholding tax requirements imposed by sections
1441 and 1442 of the Code; and
(vi) without limiting or restricting any Bank's right to
increased amounts under Section 4.01(d) from the Borrowers and the
Parent upon satisfaction of such Bank's obligations under the
provisions of this Section 4.01(f), if such Bank is entitled to a
reduction in the applicable withholding tax, the Agent may (but
shall not be obligated to) withhold from any interest to such Bank
an amount equivalent to the applicable withholding tax after taking
into account such reduction. If the forms or other administrative
documentation required by clause (i) are not delivered to the Agent,
then the Agent shall withhold from any interest payment to Bank not
providing such forms or other documentation, an amount equivalent to
the applicable withholding tax and in addition, the Agent shall also
withhold against periodic payments other than interest payments to
the extent United States withholding tax is not eliminated by
obtaining Form 4224 or Form 1001. The Borrowers shall indemnify and
hold harmless the Agent and each of its officers, directors,
employees, counsel, agents and attorney-in-fact, on an after tax
basis, from and against all liabilities, obligations, losses,
damages, penal-
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ties, actions, judgments, suits, costs, charges, expenses or
disbursements (including reasonable attorney's fees) of any kind
whatsoever incurred as a result of or in connection with the Agent's
failure to withhold as provided pursuant to the preceding sentence,
unless such failure constitutes gross negligence or willful
misconduct of the Agent itself as the same is determined by a final
judgment of a court of competent jurisdiction and the obligations in
this sentence shall survive payment of all other Obligations.
(g) Neither any Borrower nor the Parent will be required to pay any
additional amounts in respect of Taxes imposed by the United States
Federal government pursuant to Sections 4.01(a) or 4.01(d) to any Bank:
(i) if and to the extent the obligation to pay such additional
amounts would not have arisen but for a failure by such Bank to
comply with its obligations under Section 4.01(f) in respect of its
Lending Office;
(ii) if such Bank shall have delivered to the Borrowers a Form
4224 in respect of its Lending Office pursuant to Section
4.01(f)(i)-(iii) or such other forms or similar documentation
pursuant to Section 4.01(f)(iv), to the extent such Bank shall not
at any time be entitled to exemption from all withholding of United
States Federal income tax in respect of payments by the Borrowers or
the Parent hereunder for the account of such Lending Office for any
reason other than a change in United States law or regulations or in
the official interpretation of such law or regulations by any
Governmental Authority charged with the interpretation or
administration thereof (whether or not having the force of law)
after the date of delivery of such Form 4224 or such other forms or
similar documentation; or
(iii) if such Bank shall have delivered to the Borrowers a Form
1001 in respect of its Lending Office pursuant to Section
4.01(f)(i)-(iii) or such other forms or similar documentation
pursuant to Section 4.01(f)(iv), to the extent such Bank shall not
at any time be entitled to exemption from all deductions or
withholding of United States Federal income tax in respect of
payments by any Borrower or the Parent hereunder for the account of
such Lending Office for any reason other than a change in United
States law or regulations or any applicable tax treaty or
regulations or in the official interpretation of any such law,
treaty or regulations by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the
force of law) after the date of delivery of such Form 1001 or such
other forms or similar documentation.
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(h) Each Bank agrees that it shall, at any time upon reasonable
advance request in writing by a Borrower or the Agent, promptly deliver
such certification or other documentation as may be required under the law
or regulation in any applicable jurisdiction and which such Bank is
entitled to submit to avoid or reduce withholding taxes on amounts to be
paid by any Borrower or the Parent and received by such Bank pursuant to
this Agreement or any other Loan Document.
(i) The Borrowers and the Parent shall indemnify each Bank and the
Agent, to the extent required by this Section 4.01 within 30 days after
receipt of written request from such Bank or the Agent thereof accompanied
by a written statement describing in reasonable detail the Taxes or Other
Taxes that are the subject of the basis for such indemnity and the
computation of the amount payable.
(j) If a Bank or the Agent shall become aware that it is entitled to
claim a refund of any withholding Taxes or Other Taxes paid by the Parent
or any Borrower under this Section 4.01 from the taxing authority imposing
such Taxes or Other Taxes, such Bank or the Agent, as the case may be,
shall, at the expense of the Borrowers, use reasonable efforts to obtain
such refund and upon receipt thereof, shall promptly pay to the Parent or
such Borrower the amount so received.
(k) If any Borrower or the Parent is required to pay additional
amounts to any Bank or the Agent pursuant to Section 4.01(d), then such
Bank shall, upon such Borrower's request, use its reasonable best efforts
(consistent with policy considerations of such Bank) to change the
jurisdiction of its Lending Office so as to reduce or eliminate any such
additional payment which may thereafter accrue if such change in the
reasonable judgment of such Bank is not otherwise disadvantageous to such
Bank.
(l) Each Bank agrees that it will (i) take all reasonable actions
reasonably requested by the Parent or any Borrower (consistent with policy
considerations by such Bank) to maintain all exemptions, if any, available
to it from withholding taxes (whether available by treaty or existing
administrative waiver), and (ii) to the extent reasonable, otherwise
cooperate with the Parent or any Borrower to minimize any amounts payable
by the Parent or any Borrower under this Section 4.01, in any case
described in the preceding clauses (i) and (ii), however, only if such
action or cooperation is not disadvantageous to such Bank in the
reasonable judgment of such Bank.
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4.02 Illegality.
(a) If any Bank shall determine that (i) the introduction of any
Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration thereof, has made it unlawful, or (ii)
any central bank or other Governmental Authority has asserted that it is
unlawful for any Bank or its Lending Office to make a Eurodollar Loan or
IBOR Loan or to convert any Base Rate Committed Loan to a Eurodollar
Committed Loan, then, on notice thereof by such Bank to the Borrowers
through the Agent, the obligation of such Bank to make or convert any such
Loans (including in respect of any Eurodollar Bid Loan as to which the
Company has accepted such Bank's Competitive Bid, but as to which the
Borrowing Date has not occurred) shall be suspended until such Bank shall
have notified the Agent and the Borrowers that the circumstances giving
rise to such determination no longer exist.
(b) If a Bank shall determine that it is unlawful to maintain any
Eurodollar Loan or IBOR Loan, the Borrowers shall, unless otherwise
permitted under paragraph (c) below, prepay in full such Eurodollar Loan
or IBOR Loan of such Bank then outstanding, together with interest accrued
thereon, either on the last day of the Interest Period thereof if such
Bank may lawfully continue to maintain such Eurodollar Loan or IBOR Loan
to such day, or immediately, if the Bank may not lawfully continue to
maintain such Eurodollar Loan, together with any amounts required to be
paid in connection therewith pursuant to Section 4.04.
(c) If the Borrowers are required to prepay any Eurodollar Committed
Loan, Eurodollar Multicurrency Loan or IBOR Loan immediately, then
concurrently with such prepayment, the Borrowers shall borrow from the
affected Bank, in the aggregate amount of such repayment, Base Rate
Committed Loans.
(d) Before giving any notice to the Agent pursuant to this Section
4.02, the affected Bank shall designate a different Lending Office with
respect to its Eurodollar Loans or IBOR Loans if such designation will
avoid the need for giving such notice or making such demand and will not,
in the judgment of such Bank, be illegal, inconsistent with the policies
of such Bank or otherwise disadvantageous to such Bank.
4.03 Increased Costs and Reduction of Return.
(a) If any Bank or the Issuing Bank shall determine that, due to
either (i) the introduction of or any change in or in the interpretation
or administration of any law or regulation (other than any law or
regulation relating to taxes, including those relating to Taxes or Other
Taxes) after the Effective Date or (ii) the compli-
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ance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law) made after
the Effective Date, there shall be any increase in the cost to such Bank
of agreeing to make or making, funding or maintaining any Eurodollar Loans
or IBOR Loans or participating in any Letter of Credit Obligations, or any
increase in the cost to the Issuing Bank of agreeing to issue, issuing or
maintaining any Letter of Credit or of agreeing to make or making, funding
or maintaining any unpaid drawing under any Letter of Credit, then the
Borrowers shall be liable for, and shall from time to time, upon demand
therefor by such Bank or the Issuing Bank, as the case may be (with a copy
of such demand to the Agent), pay to the Agent for the account of such
Bank or the Issuing Bank, additional amounts as are sufficient to
compensate such Bank or the Issuing Bank for such increased costs.
(b) If any Bank or the Issuing Bank shall have determined that (i)
the introduction of any Capital Adequacy Regulation after the Effective
Date, (ii) any change in any Capital Adequacy Regulation after the
Effective Date, (iii) any change in the interpretation or administration
of any Capital Adequacy Regulation by any central bank or other
Governmental Authority charged with the interpretation or administration
thereof after the Effective Date, or (iv) compliance by any Bank (or its
Lending Office) or the Issuing Bank, as the case may be, or any
corporation controlling such Bank or the Issuing Bank, as the case may be,
with any Capital Adequacy Regulation adopted after the Effective Date,
affects or would affect the amount of capital required or expected to be
maintained by such Bank or the Issuing Bank or any corporation controlling
such Bank or the Issuing Bank and (taking into consideration such Bank's,
the Issuing Bank's or such corporation's policies with respect to capital
adequacy and such Bank's, the Issuing Bank's or corporation's desired
return on capital) determines that the amount of such capital is (or is
required to be) increased as a consequence of its Commitment, Loans,
participations in Letters of Credit, or obligations under this Agreement,
then, upon demand of such Bank or the Issuing Bank (with a copy to the
Agent), the Borrowers shall be liable for and shall immediately pay to
such Bank or the Issuing Bank, from time to time as specified by such Bank
or the Issuing Bank, additional amounts sufficient to compensate such Bank
or the Issuing Bank for such increase.
4.04 Funding Losses. The Borrowers shall reimburse each Bank and to
hold each Bank harmless from any loss, cost or expense (other than loss of
margin) which such Bank may sustain or incur as a consequence of:
(a) any failure by any Borrower to make any payment of principal of
any Eurodollar Loan or IBOR Loan (including payments made after any
acceleration thereof);
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(b) any failure by any Borrower to borrow a Eurodollar Committed
Loan, Eurodollar Multicurrency Loan or IBOR Loan or continue a Eurodollar
Committed Loan or a Eurodollar Multicurrency Loan or convert a Base Rate
Committed Loan to a Eurodollar Committed Loan after such Borrower has
given (or is deemed to have given) a Notice of Borrowing, a request for a
Borrowing of Swingline Loans or a Notice of Conversion/ Continuation as
the case may be;
(c) any failure by any Borrower to make any prepayment of a
Eurodollar Committed Loan or Eurodollar Multicurrency Loan after such
Borrower has given a notice in accordance with Section 2.09;
(d) any payment or prepayment (including pursuant to Sections 2.09
or 2.10 or after acceleration thereof) of any Eurodollar Loan or IBOR Loan
for any reason whatsoever on a day which is not the last day of the
Interest Period with respect thereto; or
(e) any prepayment of a Bid Loan before such payment is due and
owing;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain any Eurodollar Loan, IBOR Loan or Bid Loan
hereunder or from fees payable to terminate the deposits from which such funds
were obtained.
4.05 Inability to Determine Rates.
(a) Notwithstanding any provisions herein to the contrary, if, in
relation to any proposed Eurodollar Loan or IBOR Loan, (i) the Agent or the
Swingline Bank shall have determined (which determination shall be conclusive
and binding upon all parties hereto) that by reason of circumstances affecting
the interbank markets adequate and fair means do not exist for ascertaining
LIBOR or IBOR to be applicable to such Eurodollar Loan or IBOR Loan or (ii) the
Agent shall have received notice from the Majority Banks or the Swingline Bank
that LIBOR or IBOR determined or to be determined for any Interest Period will
not adequately and fairly reflect the cost to such Banks or the Swingline Bank
(as conclusively certified by such Banks or the Swingline Bank) of making or
maintaining their affected Loans during such affected Interest Period, then, the
obligation of the Banks to make, continue or maintain their affected Eurodollar
Committed Loans or Eurodollar Multicurrency Loans or to convert Base Rate
Committed Loans into Eurodollar Committed Loans which would be so affected or
the obligation of the Swingline Bank to make or maintain IBOR Loans which are so
affected shall be suspended until the Agent upon the instruction of the Majority
Banks or the Swingline Bank, as applicable, revokes such notice in writing. If,
notwithstanding the provisions of this Section 4.05, any Bank has made available
to any Borrower its Commitment Percentage of any such proposed Eurodollar
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Committed Loan, then such Borrower shall immediately repay the amount so made
available to it by such Bank, together with accrued interest thereon, if any.
(b) In the event, and on each occasion, that on the day three
Business Days prior to the commencement of any Interest Period for a
Multicurrency Borrowing the Agent or the Multicurrency Banks shall have
determined that deposits in the applicable currency in the requested principal
amounts of the Eurodollar Multicurrency Loans are not generally available in the
London interbank market or the international interbank market, as applicable, to
the Majority Multicurrency Banks, the Agent shall, as soon as practicable
thereafter, give written or telecopy notice of such determination to the
Borrowers and any request by any Borrower for a Multicurrency Borrowing in any
affected currency shall be of no force or effect (and such Borrowing, if already
outstanding, shall be prepaid at the end of the Interest Period currently in
effect therefor).
4.06 Reserves on Eurodollar Committed Loans, Eurodollar
Multicurrency Loans or IBOR Loans. The Borrowers shall pay to each Bank, if and
as long as such Bank shall be required under regulations of the Federal Reserve
Board or any other governmental or monetary authority, as applicable, to
maintain reserves, deposits or credit balances with respect to liabilities or
assets consisting of or including Eurocurrency funds or deposits (currently
known as "Eurocurrency liabilities"), other Eligible Currencies, additional
costs on the unpaid principal amount of each Eurodollar Committed Loan,
Eurodollar Multicurrency Loan or IBOR Loan equal to actual costs of such
reserves allocated to such Committed Loan or such Multicurrency Loan by such
Bank (as determined by such Bank in good faith, which determination shall be
conclusive absent manifest error), payable on each date on which interest is
payable on such Committed Loan or such Eurodollar Multicurrency Loan provided
that the Borrowers shall have received at least 15 days' prior written notice
(with a copy to the Agent) of such additional interest from the Bank. If a Bank
fails to give such notice 15 days prior to the relevant Interest Payment Date,
such additional interest shall be payable 15 days after receipt by the Borrowers
of such notice.
4.07 Certificates of Banks. Any Bank, the Swingline Bank or the
Issuing Bank claiming reimbursement or compensation pursuant to this Article IV
shall deliver to the Borrowers or the Parent, as applicable (with a copy to the
Agent) a certificate setting forth in reasonable detail the amount payable to
such Person hereunder and such certificate shall be conclusive and binding on
the Borrowers or the Parent in the absence of manifest error.
4.08 Change of Lending Office, Replacement Bank.
(a) Each Bank agrees that upon the occurrence of an event giving
rise to the operation of Section 4.02 or 4.03 with respect to such Bank,
it will if so requested by the Borrowers, use reasonable efforts
(consistent with its internal
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policy and legal and regulatory restrictions) to designate a different
Lending Office for any Loans affected by such event with the object of
avoiding the consequence of the event giving rise to the operation of such
section; provided, however, that such designation would not, in the sole
judgment of such Bank, be otherwise disadvantageous to such Bank. Nothing
in this Section 4.08(a) shall affect or postpone any of the obligations of
the Borrowers or the right of any Bank provided in Section 4.02 or 4.03.
(b) Notwithstanding anything to the contrary contained herein or in
any other Loan Document, (x) upon the occurrence of any event that
obligates any Borrower or the Parent to pay any amount under Section 4.01
or giving rise to the operation of Section 4.02 or Section 4.03 with
respect to such Bank or (y) as provided in Section 12.01(b) in the case of
certain refusals by a Bank to consent to certain proposed changes,
waivers, discharges or terminations with respect to this Agreement which
have been approved by the Majority Banks, the Borrowers shall have the
right, if no Default or Event of Default then exists or will exist
immediately after giving effect to the respective replacement, to replace
such Bank (the "Replaced Bank") by designating another Bank or an Eligible
Assignee (such Bank or Eligible Assignee being herein called a
"Replacement Bank") to which such Replaced Bank shall assign, in
accordance with Section 12.07 and without recourse to or warranty by, or
expense to, such Replaced Bank, the rights and obligation of such Replaced
Bank hereunder (except for such rights as survive repayment of the Loans),
and, upon such assignment, such Replaced Bank shall no longer be a party
hereto or have any rights hereunder and such Replacement Bank shall
succeed to the rights and obligations of such Replaced Bank hereunder. The
Borrowers shall pay to such Replaced Bank in same day funds on the date of
replacement all interest, fees and other amounts then due and owing such
Replaced Bank by the Borrowers hereunder to and including the date of
replacement, including, without limitation, costs incurred under Sections
4.01, 4.02 or 4.03.
4.09 Survival. The agreements and obligations of the Parent and the
Borrowers in this Article IV shall survive the payment of all other Obligations.
ARTICLE V.
CONDITIONS PRECEDENT
5.01 Conditions to the Effective Date. The occurrence of the
Effective Date, the obligation of each Bank to make Committed Loans and
Multicurrency Loans hereunder, to receive through the Agent the initial
Competitive Bid Request, and the obligation of the Issuing Bank to issue Letters
of Credit on the Effective Date is subject to
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the condition that the Agent shall have received on or before the date for
making such Committed Loans and Multicurrency Loans and issuing such Letters of
Credit all of the following, in form and substance reasonably satisfactory to
the Agent and each Bank and in sufficient copies for each Bank:
(a) Credit Agreement. This Agreement executed by each Borrower, the
Parent, the Agent, the Issuing Bank, the Swingline Bank and each of the
Banks (or, in the case of any party as to which an executed counterpart
shall not have been received, receipt by the Agent in form satisfactory to
it of facsimile or other written confirmation from such party of execution
of a counterpart hereof by such party);
(b) Resolutions; Incumbency.
(i) Copies of the resolutions of the board of directors of each
Borrower approving and authorizing the execution, delivery and
performance by such Borrower of this Agreement and the other Loan
Documents to be delivered by such Borrower hereunder, and
authorizing the borrowing of the Loans and the issuance of the
Letters of Credit, certified as of the Effective Date by the
secretary or an assistant secretary of such Borrower;
(ii) Copies of the resolutions of the board of directors of the
Parent approving and authorizing the execution, delivery and
performance by the Parent of this Agreement (including the guaranty
of the Obligations of the Borrowers) and the other Loan Documents to
be delivered by the Parent hereunder, certified by the secretary or
an assistant secretary of the Parent;
(iii) Certificates of the secretary or assistant secretary of the
Parent and each Borrower certifying the names and true signatures of
the officers of the Parent and such Borrower authorized to execute,
deliver and perform, as applicable, this Agreement and all other
Loan Documents, notices, requests and other communications to be
delivered hereunder or thereunder;
(c) Bring-down Certificate. Bring-down certificate of the Parent and
each Borrower from the Secretary of State of the State of Delaware, dated the
Effective Date;
(d) Legal Opinions.
(i) A satisfactory opinion of Davis Polk & Wardwell, counsel to
the Parent and the Borrowers, addressed to the Agent and the Banks,
containing opinions substantially in the form of Exhibit F and as to
such other matters as the Agent may reasonably request;
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(ii) A satisfactory opinion of George MacLean, Esq., general
counsel to the Parent and the Borrowers addressed to the Agent and
the Banks, containing opinions substantially in the form of Exhibit
G and as to such other matters as the Agent may reasonably request;
and
(iii) An opinion of White & Case, special counsel to the Agent and
the Banks, containing opinions substantially in the form of Exhibit
H;
(e) Payment of Fees and Expenses. Evidence that all fees and
reasonable costs and expenses (including Attorney Costs) payable by the
Borrowers on or before the Effective Date have been paid;
(f) Certificates. Certificates signed by a Responsible Officer of
the Parent and each Borrower, dated as of the Effective Date stating that:
(A) The representations and warranties of the Parent and each
Borrower contained in Article VI are true and correct on and as of
such date, as though made on and as of such date (except to the
extent such representations and warranties expressly relate to an
earlier date, in which case such representations and warranties
shall be true and correct as of such earlier date);
(B) no Default or Event of Default exists or would result from any
Borrowing on the Effective Date; and
(C) neither the Parent nor any Borrower shall have any
Indebtedness outstanding except as shall be permitted under Section
8.04;
(g) Senior Notes. On or prior to the Effective Date, (i) the Company
shall have issued the Senior Notes and received gross cash proceeds
therefrom (before the payment of fees and expenses in connection
therewith) in an aggregate amount of at least $100,000,000, (ii) the Agent
shall have received copies of the Senior Note Documents certified as true
and correct by an appropriate officer of the Company, and (iii) the Senior
Note Documents shall be in full force and effect and the terms and
conditions thereof shall be in form and substance reasonably satisfactory
to the Agent and Majority Banks;
(h) Existing Credit Agreement; etc. On the Effective Date,
concurrently with the incurrence of Loans hereunder, the total commitments
under the Existing Credit Agreement shall have been terminated, and all
loans thereunder shall have been repaid in cash in full, together with all
accrued interest and fees thereon, all letters of credit issued thereunder
shall have been terminated or assumed as Letters
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of Credit hereunder, and all other amounts owing pursuant to the Existing
Credit Agreement shall have been repaid in full. The Agent shall have
received evidence in form, scope and substance satisfactory to it that the
matters set forth in this Section 5.01(h) have been satisfied on such
date; and
(i) Other Documents. Such other approvals, opinions or documents,
including financing statements, as the Agent or any Bank may reasonably
request.
5.02 Conditions to all Borrowings and the Issuance of any Letters of
Credit. The obligation of each Bank to make any Loan agreed to be made by it
hereunder, or any Bid Loan as to which any Borrower has accepted the relevant
Competitive Bid, and the obligation of the Issuing Bank to issue, renew or amend
any Letter of Credit is subject to the satisfaction of the following conditions
precedent on the relevant Borrowing Date or date of issuance:
(a) Notice. The Agent shall have received a Notice of Borrowing in
the case of Committed Loans or Multicurrency Loans, or in the case of a
Swingline Loan, the notice required under Section 2.03(f); or in the case
of any issuance of any Letter of Credit, the Issuing Bank and the Agent
shall have received a Letter of Credit Application, as required under
Section 3.02;
(b) Continuation of Representations and Warranties. The
representations and warranties made by the Parent and each Borrower
contained in Article VI and in any other Loan Document shall be true and
correct in all material respects on and as of such Borrowing Date or date
of issuance (except to the extent such representations and warranties
expressly refer to an earlier date, in which case they shall be true and
correct as of such earlier date);
(c) No Existing Default. No Default or Event of Default shall exist
or shall result from such Borrowing or issuance of Letter of Credit; and
(d) No Material Adverse Effect. Since the Effective Date, no events
have occurred which, individually or in the aggregate, have had a Material
Adverse Effect.
Each Notice of Borrowing, Competitive Bid Request, request for a Swingline Loan
or Letter of Credit Application submitted by any Borrower hereunder shall be
deemed to constitute a representation and warranty by such Borrower hereunder,
as of the date of each such notice or application and as of the date of each
Borrowing that the applicable conditions in this Section 5.02 are satisfied.
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ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants with respect to itself and its
Subsidiaries and the Parent represents and warrants with respect to itself, in
each case to the Agent and each Bank that:
6.01 Corporate Existence and Power. It and each of its Material
Subsidiaries:
(a) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation;
(b) has the power and authority and all governmental licenses,
authorizations, consents and approvals to own or hold under lease its
property or assets, conduct its business and execute, deliver, and perform
its obligations under, the Loan Documents;
(c) is duly qualified to do business as a foreign corporation, and
licensed and in good standing, under the laws of each jurisdiction where
its ownership, lease or operation of property or the nature or conduct of
its business requires such qualification or license except where the
failure so to qualify could not reasonably be expected to have a Material
Adverse Effect; and
(d) is in compliance with all Requirements of Law, except to the
extent that the failure to do so could not reasonably be expected to have
a Material Adverse Effect.
6.02 Corporate Authorization; No Contravention. The execution,
delivery and performance by each Borrower and its Subsidiaries and the Parent of
this Agreement, and any other Loan Document to which such Person is party, have
been duly authorized by all necessary corporate action, and do not and will not:
(a) contravene the terms of any of such Person's charter or by-laws;
(b) conflict with or result in any breach or contravention of, or
the creation of any Lien under, any document evidencing any material
Contractual Obligation to which such Person is a party or any order,
injunction, writ or decree of any Governmental Authority to which such
Person or its property is subject; or
(c) violate any Requirement of Law.
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6.03 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with (except for any
registrations or approvals required under state blue sky securities laws in
connection with the sale of the Senior Notes), any Governmental Authority is
necessary or required in connection with the execution, delivery or performance
by, or enforcement against, the Company or any of its Subsidiaries or the Parent
of this Agreement or any other Loan Document.
6.04 Binding Effect. This Agreement and each other Loan Document to
which the Company or any of its Subsidiaries or the Parent is a party constitute
the legal, valid and binding obligations of the Company and each of its
Subsidiaries and the Parent to the extent such Person is a party thereto,
enforceable against such Person in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency, or
similar laws affecting the enforcement of creditors' rights generally or by
equitable principles of general applicability.
6.05 Litigation. There are no actions, suits, proceedings, claims or
disputes pending, or to the best knowledge of any Borrower or the Parent,
threatened at law, in equity, in arbitration or before any Governmental
Authority, against the Company or any of its Subsidiaries or the Parent or any
of their respective properties or assets which:
(a) purport to affect or pertain to this Agreement or any other Loan
Document, or any of the transactions contemplated hereby or thereby; or
(b) would reasonably be expected to have a Material Adverse Effect.
No injunction, writ, temporary restraining order or any order of any
nature has been issued by any court or other Governmental Authority purporting
to enjoin or restrain the execution, delivery or performance of this Agreement
or any other Loan Document, or directing that any other transaction provided for
herein not be consummated as herein provided.
6.06 No Default. No Default or Event of Default exists or would
result from the incurring of any Obligations by any Borrower or the Parent.
Neither the Company nor any of its Subsidiaries nor the Parent is in default
under or with respect to any Contractual Obligation in any respect which,
individually or together with all such defaults, could reasonably be expected to
have a Material Adverse Effect.
6.07 ERISA Compliance.
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state law.
Each Plan which is intended to qualify under Section 401(a) of the Code
(i) has received a
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favorable determination letter from the Internal Revenue Service or (ii)
has been recently established and has not received such a determination
letter and such Plan complies with the requirements of Section 401(a) of
the Code; and to the best knowledge of any Borrower or the Parent nothing
has occurred which would cause the loss of such qualification or the
revocation of such determination letter.
(b) There are no pending or, to the best knowledge of any Borrower
or the Parent, threatened claims, actions or lawsuits, or action by any
Governmental Authority, with respect to any Plan which has resulted or
could reasonably be expected to result in a Material Adverse Effect. There
has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan which has resulted or could
reasonably be expected to result in a Material Adverse Effect.
(c) No ERISA Event has occurred or is reasonably expected to occur
with respect to any Pension Plan or Multiemployer Plan.
(d) As of the date hereof, the aggregate Unfunded Pension Liability
for all Pension Plans that have an Unfunded Pension Liability does not
exceed $18,000,000.
(e) Neither the Parent, the Company nor any ERISA Affiliate has
incurred, nor reasonably expects to incur, any liability under Title IV of
ERISA with respect to any Pension Plan (other than premiums due and not
delinquent under Section 4007 of ERISA).
(f) Neither the Parent, the Company nor any ERISA Affiliate has
incurred nor reasonably expects to incur any liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA,
would result in such liability) under Section 4201 or 4243 of ERISA with
respect to a Multiemployer Plan.
(g) Neither the Parent, the Company nor any ERISA Affiliate has
transferred any Unfunded Pension Liability to any Person or otherwise
engaged in a transaction that could be subject to Section 4069 or 4212(c)
of ERISA.
6.08 Use of Proceeds; Margin Regulations. The proceeds of the Loans
are intended to be and shall be used solely for the purposes set forth in and
permitted by Section 7.10, and are intended to be and shall be used in
compliance with Section 8.06. Neither the Company nor any of its Subsidiaries
shall purchase Margin Stock other than purchases made in compliance with
Regulations G, T, U and X of the Federal Reserve Board.
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6.09 Title to Properties. The Parent, the Company and each of its
Subsidiaries have good record and marketable title in fee simple to, or valid
leasehold interests in, all real property necessary or used in the ordinary
conduct of their respective businesses, except for such defects in title as
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. As of the Effective Date, the property of the Parent,
the Company and its Subsidiaries is subject to no Liens, other than Permitted
Liens.
6.10 Taxes. The Parent, the Company and its Subsidiaries have filed
all federal and other material tax returns and reports required to be filed and
paid the tax thereon shown to be due, and have paid all federal and other
material taxes, assessments, fees and other governmental charges levied or
imposed upon them or their properties, income or assets otherwise due and
payable, except those which are being contested in good faith by appropriate
proceedings and for which adequate reserves have been provided in accordance
with GAAP. There is no proposed tax assessment against the Parent, the Company
or any of its Subsidiaries which could reasonably be expected to have a Material
Adverse Effect.
6.11 Financial Statements. All balance sheets, statements of
operations and other financial data which have been or shall hereafter be
furnished to the Agent and the Banks for the purposes of or in connection with
this Agreement or any transaction contemplated hereby do and will present
fairly, in all material respects, the financial condition of the Persons
involved as of the dates thereof and the results of their operations for the
period(s) covered thereby.
6.12 Securities Law, etc.; Compliance. All transactions contemplated
by this Agreement and the other Loan Documents comply in all material respects
with (x) Regulations G, T, U and X of the Federal Reserve Board and (y) all
other applicable laws and any rules and regulations thereunder, except where the
failure to comply, in the case of this clause (y), could not reasonably be
expected to have a Material Adverse Effect.
6.13 Governmental Regulation. Neither the Parent nor any Borrower is
an "investment company" within the meaning of the Investment Company Act of 1940
or a "holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a holding
company," within the meaning of the Public Utility Holding Company Act of 1935.
6.14 Accuracy of Information. All factual information (excluding, in
any event, financial projections) heretofore or contemporaneously herewith
furnished by or on behalf of it in writing to the Agent or any Bank for purposes
of or in connection with this Agreement or any transaction contemplated hereby,
and all other such factual information hereafter furnished by or on behalf of it
to the Agent or any Bank will be, true and accurate
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in every material respect on the date as of which such information is dated or
certified and not incomplete by omitting to state any material fact necessary to
make such information, in the light of the circumstances existing at the time
such information was delivered, not misleading.
6.15 Hazardous Materials. Except as disclosed on Schedule 6.15,
neither it nor its Subsidiaries have caused or permitted any Hazardous Material
to be disposed of or otherwise released, to its best knowledge, either from, on
or under any property currently or formerly legally or beneficially owned or
operated by, or otherwise used by, it or any of its Subsidiaries which has or is
reasonably likely to have a Material Adverse Effect. To its best knowledge, no
such property has ever been used as a dump site or storage site for any
Hazardous Materials or otherwise contains or contained Hazardous Materials which
has or is reasonably likely to have a Material Adverse Effect. The failure, if
any, of it or its Subsidiaries, in connection with their current and former
properties or their businesses, to be in compliance with any Environmental Law
or to obtain any permit, certificate, license, approval and other authorization
under such Environmental Laws has not had, nor is reasonably likely to have, a
Material Adverse Effect. Neither it nor its Subsidiaries have entered into, have
agreed to or are subject to any judgment, decree or order or other similar
requirement of any Governmental Authority under any Environmental Law, including
without limitation, relating to compliance or to investigation, cleanup,
remediation or removal of Hazardous Materials, which has or is reasonably likely
to have a Material Adverse Effect. Neither it nor its Subsidiaries have
contractually assumed any liabilities or obligations under any Environmental Law
which have or are reasonably likely to have a Material Adverse Effect. There are
no facts or circumstances which exist that could give rise to liabilities with
respect to Hazardous Materials or any Environmental Law, which have or are
reasonably likely to have a Material Adverse Effect.
6.16 Senior Notes. As of the Effective Date, the Senior Notes have
been duly authorized (except with respect to filings, registrations or approvals
that may be required under state blue sky securities laws in connection with the
sale of the Senior Notes), issued and delivered in accordance with applicable
law and the offering memorandum relating thereto, and such offering memorandum,
as of the date of its issue, does not contain any untrue statement of a material
fact nor omit to state a material fact necessary in order to make the statements
contained therein, in the light of the circumstances under which they were made,
not misleading.
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ARTICLE VII.
AFFIRMATIVE COVENANTS
The Borrowers and the Parent agree with the Agent and each Bank
that, until all Commitments and Letters of Credit have terminated and all
Obligations (other than indemnities for which no request for payment has been
made) have been paid and performed in full:
7.01 Financial Statements. The Parent and each Borrower shall
deliver to the Agent in form and detail satisfactory to the Agent and the
Majority Banks, with sufficient copies for each Bank:
(a) as soon as available, but not later than 95 days after the end
of each fiscal year, a copy of the audited consolidated balance sheet of
the Parent and its consolidated Subsidiaries as at the end of such year
and the related consolidated statements of income or operations,
shareholders' equity and cash flows for such fiscal year, setting forth in
each case in comparative form the figures for the previous fiscal year,
and accompanied by the opinion of Ernst & Young LLP or another
nationally-recognized independent public accounting firm which report
shall state that such consolidated financial statements present fairly, in
all material respects, the financial position for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years
(except for changes agreed upon by the Borrowers and such auditors which
are disclosed and described in such statements). Such opinion shall not be
qualified or limited because of a restricted or limited examination by
such accountant of any material portion of the records of the Parent or
any of its Subsidiaries; and
(b) as soon as available, but not later than 50 days after the end
of each of the first three fiscal quarters of each fiscal year, a copy of
the unaudited consolidated balance sheet of the Parent and its
consolidated Subsidiaries as of the end of such quarter and the related
consolidated statements of income, shareholders' equity and cash flows for
the period commencing on the first day and ending on the last day of such
quarter, and certified by any Responsible Officer as being complete and
correct and fairly presenting in all material respects, in accordance with
GAAP, the financial position and the results of operations of the Parent
and its Subsidiaries.
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7.02 Certificates; Other Information. The Parent and each Borrower
shall furnish to the Agent, with sufficient copies for each Bank:
(a) concurrently with the delivery of the financial statements
referred to in Sections 7.01(a) and (b) above, a Compliance Certificate;
(b) concurrently with the delivery of the financial statements
referred to in Sections 7.01(a) and (b), a Leverage Ratio Certificate duly
executed by a Responsible Officer of the Company;
(c) promptly after the same are sent, copies of all financial
statements and reports which the Parent sends to its shareholders; and
promptly after the same are filed, copies of all financial statements and
regular, periodical or special reports which the Parent may make to, or
file with, the Securities and Exchange Commission, other than filings on
Form 11-K and S-8;
(d) promptly after the same are sent, copies of all financial
statements and reports which the Parent or any of its Subsidiaries sends
to the holders of the Senior Notes (to the extent not theretofore
delivered to the Banks pursuant to this Agreement); and
(e) promptly, such additional business, financial and other
information with respect to the Parent or the Company or any of its
Subsidiaries as the Agent, at the request of any Bank, may from time to
time reasonably request.
7.03 Notices. The Parent and each Borrower shall, upon any
Responsible Officer of the Parent or such Borrower obtaining knowledge thereof,
give notice (accompanied by a reasonably detailed explanation with respect
thereto) promptly to the Agent, the Issuing Bank and each Bank of:
(a) the occurrence of any Default or Event of Default;
(b) any litigation, arbitration, or governmental investigation or
proceeding not previously disclosed by the Parent or the Borrowers to the
Banks which has been instituted or, to the knowledge of the Parent or the
Borrowers, is threatened against the Parent or the Company or any of its
respective Subsidiaries or to which any of their respective properties is
subject (i) which has a reasonable likelihood of resulting in a Material
Adverse Effect or (ii) relates to this Agreement, any other Loan Document
or any of the transactions contemplated hereby;
(c) any development which shall occur in any litigation,
arbitration, or governmental investigation or proceeding previously
disclosed by the Parent or the
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Borrowers to the Banks which has a reasonable likelihood of resulting in
a Material Adverse Effect; or
(d) any of the following events affecting the Parent or the Company
or any ERISA Affiliate (but in no event more than ten days after such
event), together with a copy of any notice with respect to such event that
may be required to be filed with a Governmental Authority and any notice
delivered by a Governmental Authority to the Parent, the Company or any
ERISA Affiliate with respect to such event:
(i) an ERISA Event; or
(ii) if any of the representations and warranties in Section
6.07 ceases to be true and correct.
7.04 Maintenance of Corporate Existence, etc. The Parent and each
Borrower will cause to be done at all times all things necessary to maintain and
preserve the corporate existences of the Parent and each Borrower. The Parent
will continue to own and hold directly all of the outstanding shares of capital
stock of the Company.
7.05 Foreign Qualification, etc. The Parent and the Company will,
and the Company will cause each of its Subsidiaries to, cause to be done at all
times all things necessary to maintain and preserve the rights and franchises of
the Parent, each Borrower and each Material Subsidiary to be duly qualified to
do business and be in good standing as a foreign corporation in each
jurisdiction where the nature of its business makes such qualification necessary
and where the failure to maintain and preserve or so qualify could reasonably be
expected to have a Material Adverse Effect.
7.06 Payment of Taxes, etc. The Parent and the Company will, and the
Company will cause each of its Subsidiaries to, pay and discharge, as the same
may become due and payable, all federal and material state and local taxes,
assessments, and other governmental charges or levies against or on any of its
income, profits or property, as well as material claims of any kind which, if
unpaid, might become a lien upon any one of its properties, and will pay (before
they become delinquent) all other material obligations and liabilities;
provided, however, that the foregoing shall not require the Parent or the
Company or any of its Subsidiaries to pay or discharge any such tax, assessment,
charge, levy, lien, obligation or liability so long as it shall contest the
validity thereof in good faith by appropriate proceedings and shall set aside on
its books adequate reserves in accordance with accounting principles generally
accepted in the country in which it has its principal place of business.
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7.07 Maintenance of Property; Insurance. The Company will, and will
cause each of its Subsidiaries to, keep all of its material property that is
useful and necessary in its business in good working order and condition (except
for ordinary wear and tear and any failures that could not reasonably be
expected to have a Material Adverse Effect) and will maintain, and cause each of
its Subsidiaries to maintain, such insurance as may be required by law and such
other insurance, to such extent and against such hazards and liabilities, as is
customarily maintained by companies similarly situated to the Company.
7.08 Compliance with Laws, etc. The Parent and the Company will, and
the Company will cause each of its Subsidiaries to, comply with the Requirements
of Law of any Governmental Authority, noncompliance with which could reasonably
be expected to have a Material Adverse Effect.
7.09 Books and Records. The Parent and each Borrower will keep
proper books and records reflecting all of their business affairs and
transactions in accordance with GAAP and the Company will cause each of its
other Subsidiaries to keep proper books and records reflecting all of their
business affairs and transactions. The Parent and each Borrower shall permit the
Agent or, after the occurrence and during the continuance of any Default under
Section 7.01 or Event of Default, any Bank, or any of their respective
representatives or agents, upon reasonable notice and at reasonable times and
intervals during ordinary business hours (or at any time if an Event of Default
has occurred and is continuing), to visit all of their offices, discuss their
financial matters with their officers and, subject to the right of each
Borrower's representatives to be present, independent accountants (and hereby
authorizes such independent accountants to discuss their financial matters with
the Agent, any Bank or its representatives pursuant to the foregoing) and
examine and make abstracts or photocopies from any of their books or other
corporate records, all at the Parent's or the Borrowers' expense for any charges
imposed by such accountants or for making such abstracts or photocopies, but
otherwise at the Agent's or such Bank's expense.
7.10 Use of Proceeds. The Borrowers shall use the proceeds of the
Loans to repay obligations to the Banks under the Existing Credit Agreement and
for working capital and general corporate requirements of the Company and its
respective Subsidiaries.
7.11 End of Fiscal Years; Fiscal Quarters. The Company will, for
financial reporting purposes, cause (i) its fiscal years to end on the Saturday
closest to the last day in September of each year and (ii) its fiscal quarters
to end in a manner consistent therewith (on a 52/53 week basis).
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ARTICLE VIII.
NEGATIVE COVENANTS
The Parent and the Company agree with the Agent and each Bank that,
until all Commitments and Letters of Credit have terminated and all Obligations
(other than indemnities for which no request for payment has been made) have
been paid and performed in full:
8.01 Limitation on Liens. The Parent will not and the Company will
not, and will not permit any of its Subsidiaries to, create, incur, assume, or
suffer to exist any Lien upon any of its revenues, property (including fixed
assets, inventory, real property, intangible rights and stock) or other assets,
whether now owned or hereafter acquired, other than the following ("Permitted
Liens"):
(a) Liens which were granted prior to the date hereof securing
Indebtedness or other obligations having an aggregate principal or face
amount not exceeding $5,000,000, and refinancings, renewals and extensions
thereof to the extent not encumbering additional property;
(b) Liens for taxes, assessments, or other governmental charges or
levies to the extent that payment thereof shall not at the time be
required to be made in accordance with the provisions of Section 7.06;
(c) Liens encumbering property of the Company or its Subsidiaries of
carriers, warehousemen, mechanics, materialmen and landlords incurred in
the ordinary course of business for sums not overdue or being contested in
good faith by appropriate proceedings and for which appropriate reserves
with respect thereto have been established and maintained on the
consolidated books of the Company in accordance with GAAP;
(d) Liens encumbering property of the Company or its Subsidiaries
incurred in the ordinary course of business (x) in connection with
workers' compensation, unemployment insurance, or other forms of
governmental insurance or benefits, or to secure performance of tenders,
statutory obligations, leases, and contracts (other than for borrowed
money) entered into in the ordinary course of business or (y) to secure
obligations on surety or appeal bonds so long as the obligations secured
by Liens under this clause (y) do not exceed $20,000,000;
(e) easements, rights-of-way, zoning and similar restrictions and
other similar encumbrances or title defects which, in the aggregate, are
not substantial in amount, and which do not in any case materially detract
from the value of the
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property subject thereto or interfere with the ordinary conduct of the
business of the Company or its Subsidiaries;
(f) judgment Liens securing amounts not in excess of (A) $20,000,000
(i) in existence less than 30 days after the entry thereof, (ii) with
respect to which execution has been stayed or (iii) with respect to which
the appropriate insurance carrier has agreed in writing that there is
coverage by insurance or (B) $5,000,000;
(g) Liens securing documentary letters of credit; provided such
Liens attach only to the property or goods to which such letter of credit
relates;
(h) in addition to Liens referred to in clause (i) below, purchase
money security interests encumbering, or Liens otherwise encumbering at
the time of the acquisition thereof by the Company and/or its Subsidiaries
(x) real property and improvements thereto provided such security
interests and other Liens do not secure at any time amounts in excess of
$25,000,000 in the aggregate for the Company and its Subsidiaries combined
and (y) equipment, furniture, machinery or other assets hereafter acquired
by the Company or its Subsidiaries for normal business purposes, and
refinancings, renewals and extensions of such security interests and
Liens;
(i) Liens on the assets of any Person hereafter acquired by the
Company or any of its Subsidiaries, provided that (i) such acquisition is
permitted by Section 8.03 and (ii) such Liens were not created in
contemplation of or do not arise as result of or otherwise in connection
with such acquisition;
(j) Liens securing the obligations of the Company and/or its
Subsidiaries in connection with letters of credit permitted by Section
8.04(f)(y);
(k) interests in leases under which the Company and/or any of its
Subsidiaries are lessors and such leases are otherwise not prohibited by
the terms of this Agreement; and
(l) Liens granted by the Company or its Subsidiaries after the date
hereof and not covered by clauses (a) through (j) above (including Liens
arising from Sale and Leaseback Transactions and Receivables Sales)
securing obligations ("Secured Obligations") which, when added to the
aggregate principal amount of Indebtedness incurred by Subsidiaries of the
Company (not constituting Secured Obligations) and permitted pursuant to
Section 8.04(j), shall not exceed in the aggregate, 10% of Consolidated
Net Tangible Assets.
8.02 Disposition of Assets. The Parent will not and the Company will
not, and will not suffer or permit any of its Subsidiaries to, directly or
indirectly, sell, assign,
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lease, convey, transfer or otherwise dispose of (whether in one or a series of
transactions) any property (including accounts and notes receivable, with or
without recourse) or enter into any agreement to do any of the foregoing,
except:
(a) dispositions of assets not constituting Asset Sales;
(b) Asset Sales (other than Receivables Sales); and
(c) Receivables Sales provided that the aggregate Receivables Sale
Amount of all such Receivables Sales shall not exceed $100,000,000.
8.03 Consolidations, Merger, etc. The Parent will not and the
Company will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve itself (or suffer any thereof), consolidate or amalgamate
with or merge into or with any other corporation or any other Person, or
purchase or otherwise acquire all or substantially all of the assets of any
Person (or of any division thereof) or convey, sell, transfer, lease or
otherwise dispose of all or substantially all of the assets of any such Person
or, in the case of the Company's Subsidiaries only, stock in one transaction or
a series of transactions, to any other Person or Persons except:
(a) so long as no Event of Default or Default has occurred and is
continuing or would occur after giving effect thereto, any Subsidiary of
the Company (other than USI Funding) may liquidate or dissolve voluntarily
into, and may merge with and into, the Company or any other Wholly-Owned
Subsidiary of the Company;
(b) so long as no Event of Default or Default has occurred and is
continuing or would occur after giving effect thereto, the purchase or
acquisition by the Company or any Subsidiary of the Company after the
Effective Date, of all or substantially all of the assets or stock of any
Person or any division thereof if the Company is in pro forma compliance
with all covenants hereunder both before and after giving effect to such
transaction;
(c) so long as no Event of Default or Default has occurred and is
continuing or would occur after giving effect thereto, any Subsidiary of
the Company may purchase and merge with any other Person permitted to be
acquired pursuant to paragraph (b) above and may be created and
capitalized for such purposes;
(d) so long as no Event of Default or Default has occurred and is
continuing or would occur after giving effect thereto, the Company may
make asset dispositions, as would otherwise be permitted under Section
8.02; and
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(e) so long as no Event of Default or Default has occurred and is
continuing or would occur after giving effect thereto, any Subsidiary of
the Company (other than USI Funding), may be liquidated or dissolved.
8.04 Limitation on Indebtedness. The Parent will not and the Company
will not, and will not suffer or permit any of its Subsidiaries to, create,
incur, assume, suffer to exist, or otherwise become or remain directly or
indirectly liable with respect to, any Indebtedness, except:
(a) Indebtedness existing on the Effective Date and described on
Schedule 8.04(a), and in each case, refinancings or renewals thereof;
(b) Indebtedness incurred pursuant to any Loan Document;
(c) Indebtedness among the Company and its Subsidiaries;
(d) Indebtedness of the Company and its Subsidiaries secured by
Liens permitted by Section 8.01(h) and 8.01(i);
(e) unsecured Indebtedness of the Borrowers at any time outstanding;
(f) letters of credit and reimbursement obligations of the Company
and/or its Subsidiaries under (x) documentary letters of credit and (y)
letters of credit, so long as the sum of undrawn face amounts and
reimbursement obligations under this clause (y) shall not exceed
$55,000,000;
(g) Indebtedness (i) of the Company under the Senior Notes in an
aggregate principal amount of $125,000,000 and (ii) constituting a
guaranty by the Parent of the Senior Notes on a basis that is pari passu
with the obligations owed by the Parent to the Banks and, in each case,
any refinancings or renewals thereof;
(h) Indebtedness arising under Interest Rate Protection Agreements
entered into by the Company or any of its Subsidiaries relating to
Indebtedness permitted hereunder so long as the notional amount thereof
does not exceed the principal amount of such Indebtedness;
(i) unsecured guaranties by the Parent of any Indebtedness of its
Subsidiaries permitted to be outstanding hereunder; and
(j) Indebtedness of the Subsidiaries of the Company not otherwise
permitted by this Section 8.04, in an aggregate amount not to exceed, when
added to the principal amount of obligations secured by Liens securing
Secured
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Obligations and permitted pursuant to Section 8.01(l), 10% of Consolidated
Net Tangible Assets at such time.
No provision of the foregoing shall permit any Subsidiary of the Company to
guaranty any amounts under or in connection with the Senior Notes.
8.05 Transactions with Affiliates. The Parent will not and the
Company will not, and will not permit any of its Subsidiaries to, enter into, or
cause, suffer, or permit to exist:
(a) any arrangement or contract with any of its Affiliates (other
than the Company or a Subsidiary of the Company, as the case may be), of a
nature customarily entered into by Persons which are Affiliates of each
other (including management or similar contracts or arrangements relating
to the allocation of revenues, taxes, and expenses or otherwise) requiring
any payments to be made by the Parent, the Company or any Subsidiary of
the Company to any such Affiliate unless such arrangement or contract is
fair and equitable to the Parent, the Company or such Subsidiary; or
(b) any other transaction, arrangement, or contract with any of its
Affiliates (other than the Parent, the Company or a Subsidiary of the
Company) which would not be entered into by a prudent Person in the
position of the Parent, the Company or such Subsidiary with, or which is
on terms which are less favorable than are obtainable from, any Person
which is not one of its Affiliates.
8.06 Use of Credits; Compliance With Margin Regulations. The Company
will not, and will not suffer or permit any of its Subsidiaries to, use any
portion of the Loan proceeds or any Letter of Credit, directly or indirectly, to
purchase or carry Margin Stock other than in compliance with Regulations G, T, U
and X of the Federal Reserve Board. At no time shall the value of the Margin
Stock owned by the Parent and its Subsidiaries or the Company and its
Subsidiaries (as determined in accordance with Regulation U of the Federal
Reserve Board), as the case may be, exceed 25% of the value (as determined in
accordance with Section 221.2(g)(2) of Regulation U of the Federal Reserve
Board) of the assets of the Parent and its Subsidiaries or the Company and its
Subsidiaries, as the case may be.
8.07 Preferred Stock. The Parent will not, and will not permit any
of its Subsidiaries to, issue any preferred stock (other than Qualified
Preferred Stock).
8.08 Demerger Transaction Documents. (a) The Parent will not and the
Company will not, and will not permit any of their Subsidiaries to (a) amend,
modify, supplement, waive or otherwise modify any provision of, the Demerger
Transaction
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Documents, or (b) take or fail to take any action (except as required by the
terms thereof) under the Demerger Transaction Documents, that in the case of
either (a) or (b) could reasonably be expected to have a Material Adverse
Effect.
(b) The Parent will not and the Company will not, and will not
permit any of their Subsidiaries to, make any payment contemplated by Section
VIII of the Indemnification Agreement relating to the Subscription Agreement at
any time that such payment would be prohibited by the terms of such Section
VIII.
8.09 Environmental Liabilities. The Company will not and will not
permit any of its Subsidiaries to violate any Environmental Law to an extent
sufficient to give rise to a Material Adverse Effect; and, without limiting the
foregoing, the Company will not, and will not permit any Person to, dispose of
any Hazardous Material into or onto, or (except in accordance with applicable
law) from, any real property owned, operated or otherwise used by the Company or
any of its Subsidiaries nor allow any Lien imposed pursuant to any Environmental
Law to be imposed or to remain on such real property, any of which events are
reasonably likely to have a Material Adverse Effect, except as contested in
reasonable good faith by appropriate proceedings and the pendency of such
proceedings will not have a Material Adverse Effect and except and unless
adequate reserves have been established and are being maintained on its books in
accordance with GAAP.
8.10 Financial Covenants.
(a) Consolidated Leverage Ratio. The Company shall not permit its
Consolidated Leverage Ratio as determined for any Measurement Period to be
greater than 3.5:1.0.
(b) Maximum Total Funded Debt. The Company will not permit its ratio
of Total Funded Debt to Capital to exceed (A) at any time prior to or on
December 31, 1997, 0.65:1.00 or (B) at any time on or after January 1,
1998, 0.60:1.00.
8.11 Special Covenants of the Parent.
(a) The Parent shall not take, or fail to take, any action that
would result in a breach of, or constitute non-compliance with, any of the
representations and undertakings made by Hanson in that certain letter of
February 23, 1995 from Hanson to the United Kingdom Inland Revenue.
(b) The Parent shall not, directly or indirectly, take any action
(or fail to take any action) which would cause a loss of its dual tax
residency status under
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the laws of the United Kingdom and of the United States that would
reasonably be expected to have a Material Adverse Effect.
(c) The Parent shall engage in no business activities and shall have
no material assets or liabilities (other than debt permitted to be
incurred by the Parent pursuant to Section 8.04), other than (a) the
management of its affairs and, in its capacity as a stockholder thereof,
the affairs of the Company, including those activities (i) relating to the
Parent's status as a reporting company under the Securities Exchange Act
of 1934 and (ii) relating to the requirements of clauses (a) and (b)
above, (b) its ownership of the capital stock of the Company, (c) its
liabilities pursuant to the Loan Documents and (d) its rights and
obligations pursuant to the Demerger Transaction Documents.
ARTICLE IX.
EVENTS OF DEFAULT
9.01 Event of Default. Any of the following shall constitute an
"Event of Default":
(a) Non-Payment. Any Borrower fails to pay, (i) when and as required
to be paid herein, any amount of principal of any Loan or any amount of
any Letter of Credit Obligation, or (ii) within five days after the same
shall become due, any interest, fee or any other amount payable hereunder;
or
(b) Representation or Warranty. Any representation or warranty by
the Company or any of its Subsidiaries or the Parent made or deemed made
herein or in any other Loan Document, or which is contained in any
certificate, document or financial or other statement by the Company, any
of its Subsidiaries, the Parent or their respective Responsible Officers,
furnished at any time under this Agreement or in or under any other Loan
Document, shall prove to have been incorrect in any material respect on or
as of the date made or deemed made; or
(c) Specific Defaults. Any Borrower or the Parent fails to perform
or observe any term, covenant or agreement contained in Sections 7.03(a),
7.10, 7.11 or Article VIII; or
(d) Other Defaults. The Parent, the Company or any of its
Subsidiaries fails to perform or observe any other term or covenant
contained in this Agreement or any other Loan Document, and such default
shall continue unremedied for a
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period of 30 days after the date upon which written notice thereof is
given to the Borrowers by the Agent or any Bank; or
(e) Cross-Default. The Parent, the Company or any of its
Subsidiaries (i) fails to make any payment in respect of any Indebtedness
having an aggregate principal amount of $20,000,000 or more when due
(whether by scheduled maturity, required prepayment, acceleration, demand,
or otherwise) and such failure continues after the applicable grace or
notice period, if any, specified in the document relating thereto on the
date of such failure; or (ii) fails to perform or observe any other
condition or covenant, or any other event shall occur or condition exist,
under any agreement or instrument relating to any such Indebtedness, and
such failure continues after the applicable grace or notice period, if
any, specified in the document relating thereto on the date of such
failure if the effect of such failure, event or condition is to cause, or
to permit the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Indebtedness (or a trustee or agent on behalf of
such holder or holders or beneficiary or beneficiaries) to cause such
Indebtedness to be declared to be due and payable prior to its stated
maturity; or
(f) Insolvency; Voluntary Proceedings. The Parent, the Company or
any of its Material Subsidiaries (i) generally fails to pay its debts as
they become due; (ii) commences any Insolvency Proceeding with respect to
itself; or (iii) takes any action to effectuate or authorize any of the
foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency
Proceeding is commenced or filed against the Parent, the Company or any of
its Material Subsidiaries, or any writ, judgment, warrant of attachment,
execution or similar process, is issued or levied against a substantial
part of the Parent's, the Company's or any of its Material Subsidiaries'
properties, and any such proceeding or petition shall not be dismissed, or
such writ, judgment, warrant of attachment, execution or similar process
shall not be released, vacated or fully bonded within 60 days after
commencement, filing or levy; (ii) the Parent, the Company or any of its
Material Subsidiaries admits the material allegations of a petition
against it in any Insolvency Proceeding, or an order for relief (or
similar order under non-U.S. law) is ordered in any Insolvency Proceeding;
or (iii) the Parent, the Company or any of its Material Subsidiaries
acquiesces in the appointment of a receiver, trustee, custodian,
conservator, liquidator, mortgagee in possession (or agent therefor), or
other similar Person for itself or a substantial portion of its property
or business; or
(h) ERISA. (i) An ERISA Event shall occur with respect to a Pension
Plan or Multiemployer Plan which has resulted or could reasonably be
expected to
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result in liability of the Parent, the Company or an ERISA Affiliate under
Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in
an aggregate amount in excess of $10,000,000; (ii) the commencement or
increase of contributions to, or the adoption of or the amendment of a
Pension Plan by the Parent, the Company or an ERISA Affiliate which has
resulted or could reasonably be expected to result in an increase in
Unfunded Pension Liability among all Pension Plans with Unfunded Pension
Liabilities in an aggregate amount in excess of $30,000,000; (iii) any of
the representations and warranties contained in Section 6.07 shall cease
to be true and correct in any material respect and which cessation has
resulted or could reasonably be expected to result in a Material Adverse
Effect; or (iv) the Parent, the Company or an ERISA Affiliate shall fail
to pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section
4201 of ERISA under a Multiemployer Plan, which has resulted or could
reasonably be expected to result in a Material Adverse Effect; or
(i) Judgments. One or more non-interlocutory judgments, orders or
decrees shall be entered against the Company or any of its Subsidiaries or
the Parent involving in the aggregate a liability (not covered by
independent third-party insurance) as to any single or related series of
transactions, incidents or conditions, of $20,000,000 or more, and the
same shall remain unsatisfied, unvacated and unstayed pending appeal for a
period of 30 days after the entry thereof; or
(j) Change of Control. Any Change of Control shall occur; or
(k) Guaranty. Any provision of Article X of this Agreement shall for
any reason cease to be valid and binding on or enforceable against the
Parent, any Borrower or any other Guarantor Party or the Parent, any
Borrower or any Guarantor Party shall so state in writing or bring an
action to limit its obligations or liabilities thereunder; or
(l) Tax Status.
(i) the Parent or any of its Subsidiaries shall incur a
liability to Hanson of the type referred to in Section VIII of the
Indemnification Agreement relating to the Subscription Agreement; or
(ii) there shall be a final, nonappealable determination by
the applicable Governmental Authority that the Parent has failed to
maintain its dual tax residency in the United States and the United
Kingdom that would reasonably be expected to have a Material Adverse
Effect.
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9.02 Remedies. If any Event of Default occurs and is continuing, the
Agent shall, at the request of, or may, with the consent of, the Majority Banks,
(a) declare the Commitment of each Bank to make Committed Loans and
the obligation of any Multicurrency Bank to make Multicurrency Loans and
any obligation of the Issuing Bank to issue Letters of Credit to be
terminated, whereupon such Commitments and obligation shall forthwith be
terminated;
(b) declare the unpaid principal amount of all outstanding Loans,
all interest accrued and unpaid thereon, and all other amounts owing or
payable hereunder or under any other Loan Document to be immediately due
and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived by each Borrower and the
Parent;
(c) demand that the Borrowers Cash Collateralize Letter of Credit
Obligations to the extent of outstanding and wholly or partially undrawn
Letters of Credit, whereupon the Borrowers shall so Cash Collateralize;
(d) exercise on behalf of itself, the Issuing Bank and the Banks all
rights and remedies available to it and the Banks under the Loan Documents
or applicable law; and
(e) apply any cash collateral as provided in Section 3.07 to the
payment of outstanding Obligations;
provided, however, that upon the occurrence of any event specified above in
paragraph (f) or (g) of Section 9.01 with respect to any Borrower (in the case
of clause (i) of paragraph (g) upon the expiration of the 60-day period
mentioned therein), the obligation of each Bank to make Loans and any obligation
of the Issuing Bank to issue Letters of Credit shall automatically terminate,
and all reimbursement obligations under Letters of Credit and the unpaid
principal amount of all outstanding Loans and all interest and other amounts as
aforesaid shall automatically become due and payable without further act or
notice by the Agent, the Issuing Bank or any Bank, which are hereby expressly
waived by each Borrower and the Parent.
9.03 Rights Not Exclusive. The rights provided for in this Agreement
and the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
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ARTICLE X.
THE GUARANTY
10.01 Guaranty from the Guarantor Parties.
(a) In order to induce the Banks to make Loans to the Borrowers
under this Agreement and to induce the Issuing Bank to issue Letters of
Credit, each Guarantor Party hereby unconditionally and irrevocably
guarantees the prompt payment and performance in full by its respective
Guaranteed Party when due (whether at stated maturity, by acceleration or
otherwise) of all Guaranteed Obligations of such Guaranteed Party. The
obligations of each Guarantor Party hereunder are those of a primary
obligor, and not merely a surety, and are independent of the Obligations
of the Guaranteed Party. A separate action or actions may be brought
against a Guarantor Party whether or not an action is brought against its
respective Guaranteed Party, any other guarantor or other obligor in
respect of the Guaranteed Obligations or whether its respective Guaranteed
Party, any other guarantor or any other obligor in respect of the
Guaranteed Obligations is joined in any such action or actions. Each
Guaranteed Party waives, to the extent permitted by applicable law, the
benefit of any statute of limitation affecting its liability hereunder and
agrees that its liability hereunder shall not be subject to any right of
set-off, counterclaim or recoupment (each of which rights is hereby waived
to the extent permitted by applicable law).
(b) Each Guarantor Party guarantees that the obligations guaranteed
by it hereby will be paid and performed strictly in accordance with the
terms of this Agreement and the other Loan Documents regardless of any
law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Agent, the Issuing Bank
or the Banks with respect thereto. To the extent permitted by law, the
liability of each Guarantor Party under this guaranty shall be absolute
and unconditional irrespective of, and each Guarantor Party hereby
irrevocably waives (to the extent permitted by applicable law) any
defenses it may now or hereafter have in any way relating to, any and all
of the following:
(i) any lack of genuineness, validity, legality or
enforceability against any respective Guaranteed Party or any other
guarantor of this Agreement, any other Loan Document or any
document, agreement or instrument relating hereto or any assignment
or transfer of this Agreement or any other Loan Document or any
defense that any respective Guaranteed Party may have with respect
to its liability hereunder or thereunder;
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(ii) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Guaranteed Obligations, or
any waiver, indulgence, compromise, renewal, extension, amendment,
modification of, or addition, consent, supplement to, or consent to
departure from, or any other action or inaction under or in respect
of, this Agreement, any other Loan Document or any document,
instrument or agreement relating to the Guaranteed Obligations or
any other instrument or agreement referred to herein or any
assignment or transfer of this Agreement;
(iii) any release or partial release of any other guarantor or
other obligor in respect of the Guaranteed Obligations;
(iv) any exchange, release or non-perfection of any collateral
for all or any of the Guaranteed Obligations, or any release, or
amendment or waiver of, or consent to departure from, any guaranty
or security, for any or all of the Guaranteed Obligations;
(v) any furnishing of any additional security for any of the
Guaranteed Obligations;
(vi) the liquidation, bankruptcy, insolvency or reorganization
of any Guaranteed Party, any other guarantor or other obligor in
respect of the Guaranteed Obligations or any action taken with
respect to this guaranty or otherwise by any trustee or receiver, or
by any court, in any such proceeding;
(vii) any modification or termination of any intercreditor or
subordination agreement pursuant to which the claims of other
creditors of any Guaranteed Party or any guarantor are subordinated
to those of the Banks, the Issuing Bank or the Agent; or
(viii) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, any
Guaranteed Party or any Guarantor Party.
(c) This guaranty shall continue to be effective or be reinstated,
as the case may be, if at any time payment or performance of the
Guaranteed Obligations, or any part thereof, is, upon the insolvency,
bankruptcy or reorganization of any Guaranteed Party or otherwise pursuant
to applicable law, rescinded or reduced in amount or must otherwise be
restored or returned by any of the Agent, the Issuing Bank or any Bank,
all as though such payment or performance had not been made.
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(d) If an event permitting the acceleration of any of the Guaranteed
Obligations shall at any time have occurred and be continuing and such
acceleration shall at such time be prevented by reason of the pendency
against any Borrower of a case or proceeding under any bankruptcy or
insolvency law, the relevant Guarantor Party agrees that, for purposes of
this guaranty and its obligations hereunder, the Guaranteed Obligations
shall be deemed to have been accelerated and such Guarantor Party shall
forthwith pay such Guaranteed Obligations (including interest which but
for the filing of a petition in bankruptcy with respect to such Borrower
would accrue on such Obligations), and the other obligations hereunder,
forthwith upon demand.
(e) Each Guarantor Party hereby waives (i) promptness, diligence,
presentment, notice of nonperformance, protest or dishonor, notice of
acceptance and any and all other notices with respect to any of the
Guaranteed Obligations or this Agreement or any other Loan Document, and
(ii) to the extent permitted by applicable law, any right to require that
any Agent, the Issuing Bank or any Bank protect, secure, perfect or insure
any Lien in or any Lien on any property subject thereto or exhaust any
right or pursue any remedy or take any action against any Guaranteed
Party, any other guarantor or any other Person or any collateral or
security or to any balance of any deposit accounts or credit on the books
of the Agent, the Issuing Bank or any Bank in favor of such Guaranteed
Party.
(f) Each Guarantor Party expressly waives until the Guaranteed
Obligations under this Agreement are paid in full any and all rights of
subrogation, reimbursement, contribution and indemnity (contractual,
statutory or otherwise), including any claim or right of subrogation under
the Bankruptcy Code or any successor statute, arising from the existence
or performance of this guaranty and each Guarantor Party irrevocably
waives until the Guaranteed Obligations under this Agreement are paid in
full any right to enforce any remedy which the Agent, the Issuing Bank or
the Banks now have or may hereafter have against any Guaranteed Party and
waives, to the extent permitted by law, until the Guaranteed Obligations
under this Agreement are paid in full any benefit of, and any right to
participate in, any security now or hereafter held by the Agent, the
Issuing Bank or any Bank.
(g) If, in the exercise of any of its rights and remedies, the Agent
or any Bank shall forfeit any of its rights or remedies, including its
right to enter a deficiency judgment against any Guaranteed Party or any
other Person, whether because of any applicable laws pertaining to
"election of remedies" or the like, each Guarantor Party hereby consents
to such action and waives any claim based upon such action (to the extent
permitted by applicable law). Any election of remedies which results in
the denial or impairment of the right of the Agent, the Issuing Bank or
any Bank to seek a deficiency judgment against any Guaranteed Party shall
not
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impair the relevant Guarantor Party's obligation to pay the full amount
of the Guaranteed Obligations.
(h) This guaranty is a continuing guaranty and shall (i) remain in
full force and effect until payment in full of the Guaranteed Obligations
and all other amounts payable under this guaranty and the termination of
the Commitments; (ii) be binding upon each Guarantor, its successors and
assigns; and (iii) inure, together with the rights and remedies hereunder,
to the benefit of the Agent, the Issuing Bank, the Banks and their
respective successors, transferees and assigns. Without limiting the
generality of the foregoing clause (iii), any Bank may, subject to the
terms of this Agreement, assign or otherwise transfer its rights and
obligations under this Agreement to any other Person, and such other
Person shall thereupon become vested with all the benefits in respect
hereof granted to such Bank pursuant to this guaranty or otherwise, all as
provided in, and to the extent set forth in, this Agreement.
(i) Any obligations of any Guaranteed Party to its respective
Guarantor Party, now or hereafter existing, are hereby subordinated to the
Guaranteed Obligations. Such obligations of such Guaranteed Party to its
respective Guarantor Party, if the Majority Banks so request, shall be
enforced and amounts recovered shall be received by such Guarantor Party
as trustee for the Banks and the proceeds thereof shall be paid over to
the Banks on account of the Guaranteed Obligations, but without reducing
or affecting in any manner the liability of such Guarantor Party under the
provisions of this guaranty.
(j) Upon failure of the Guaranteed Party to pay any Guaranteed
Obligation when and as the same shall become due, whether at maturity, by
acceleration or otherwise, the respective Guarantor Party hereby agrees
immediately on demand by any of the Banks or the Agent to pay or cause to
be paid in accordance with the terms hereof an amount equal to the full
unpaid amount of the Guaranteed Obligations then due in Dollars.
(k) All payments by a Guarantor Party hereunder shall be made free
and clear of, and without deduction or withholding for or on account of,
any Taxes, unless such deduction or withholding is required by law. If a
Guarantor Party shall be required by law to make any such deduction or
withholding, then such Guarantor Party shall pay such additional amounts
as may be necessary in order that the net amount received by the
applicable Bank, the Issuing Bank or the Agent, as the case may be, after
all deductions and withholdings, shall be equal to the full amount that
such Person would have received, after all deductions and withholdings,
had the respective Guaranteed Party discharged its obligations (including
its tax gross-up obligations) pursuant to Section 4.01.
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(l) Any amounts deducted or withheld by a Guarantor Party for or on
account of Taxes shall be paid over to the government or taxing authority
imposing such Taxes on a timely basis, and such Guarantor Party shall
provide the applicable Bank, the Issuing Bank or the Agent, as the case
may be, as soon as practicable with such tax receipts or other official
documentation (and such other certificates, receipts and other documents
as may reasonably be requested by such Person) with respect to the payment
of such Taxes as may be available.
ARTICLE XI.
THE AGENT, THE ISSUING BANK AND THE ARRANGER
11.01 Appointment and Authorization.
(a) Each of the Banks, the Issuing Bank and the Swingline Bank
hereby irrevocably appoints, designates and authorizes the Agent to take
such action on its behalf under the provisions of this Agreement and each
other Loan Document and to exercise such powers and perform such duties as
are expressly delegated to it by the terms of this Agreement or any other
Loan Document, together with such powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary contained elsewhere
in this Agreement or in any other Loan Document, the Agent shall not have
any duties or responsibilities, except those expressly set forth herein,
nor shall the Agent have or be deemed to have any fiduciary relationship
with any Bank, the Issuing Bank or the Swingline Bank, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or otherwise
exist against the Agent.
(b) The Issuing Bank shall have all of the benefits and immunities
(i) provided to the Agent in this Article XI with respect to any acts
taken or omissions suffered by the Issuing Bank in connection with Letters
of Credit issued by it or proposed to be issued by it and the Letter of
Credit Applications pertaining to the Letters of Credit as fully as if the
term "Agent", as used in this Article XI, included the Issuing Bank with
respect to such acts or omissions, and (ii) as additionally provided in
this Agreement with respect to the Issuing Bank.
11.02 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
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11.03 Liability of Agent. None of the Agent, its Affiliates or any
of their officers, directors, employees, agents or attorneys-in-fact
(collectively, the "Agent-Related Persons") shall (a) be liable for any action
taken or omitted to be taken by any of them under or in connection with this
Agreement or any other Loan Document (except for their own gross negligence or
willful misconduct), or (b) be responsible in any manner to any of the Banks for
any recital, statement, representation or warranty made by the Parent, the
Company or any Subsidiary or Affiliate thereof, or any officer thereof,
contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or any
other Loan Document, or the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document, or for any failure
of any Borrower, the Parent or any other party to any Loan Document to perform
its obligations hereunder or thereunder. No Agent-Related Person shall be under
any obligation to any Bank to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of any Borrower, the Parent or any of their respective Subsidiaries or
Affiliates.
11.04 Reliance by Agent.
(a) The Banks agree that the Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or
telephone message, statement or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons, and upon advice and statements of legal counsel
(including counsel to the Borrowers or the Parent), independent
accountants and other experts selected by the Agent. The Banks agree that
the Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall
first receive such advice or concurrence of the Majority Banks or, as
required by Section 12.01, all the Banks as it deems appropriate and, if
it so requests, it shall first be indemnified to its satisfaction by the
Banks against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. The Agent
shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with
a request or consent of the Majority Banks or, as required by Section
12.01 all the Banks, and such request and any action taken or failure to
act pursuant thereto shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the conditions
specified in Section 5.01 as it relates to the initial Borrowing and
issuances of Letters of Credit on the Effective Date, each Bank that has
executed this Agreement shall be
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deemed to have consented to, approved or accepted or to be satisfied with
each document or other matter either sent by the Agent to such Bank for
consent, approval, acceptance or satisfaction, or required thereunder to
be consented to or approved by or acceptable or satisfactory to such Bank,
unless an officer of the Agent responsible for the transactions
contemplated by the Loan Documents shall have received notice from such
Bank prior to the initial Borrowing and issuances of Letters of Credit on
the Effective Date specifying in reasonable detail its objection thereto
and either such objection shall not have been withdrawn by notice to the
Agent to that effect or such Bank shall not have made available to the
Agent such Bank's ratable portion of such Borrowing.
11.05 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest and fees required
to be paid to the Agent for the account of the Banks or the Issuing Bank, unless
the Agent shall have received written notice from a Bank or the Borrowers
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the Agent
receives such a notice, the Agent shall give notice thereof to the Banks and the
Issuing Bank. The Agent shall take such action with respect to such Default or
Event of Default as shall be requested by the Majority Banks in accordance with
Article IX; provided, however, that unless and until the Agent shall have
received any such request, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable or in the best interest of the
Banks.
11.06 Credit Decision. Each Bank expressly acknowledges that none of
the Agent-Related Persons has made any representation or warranty to it and that
no act by the Agent hereinafter taken, including any review of the affairs of
the Borrowers, the Parent and their Subsidiaries shall be deemed to constitute
any representation or warranty by the Agent to any Bank. Each Bank represents to
the Agent that it has, independently and without reliance upon the Agent and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrowers,
the Parent and their Subsidiaries, and all applicable bank regulatory laws
relating to the transactions contemplated thereby, and made its own decision to
enter into this Agreement and extend credit to the Borrowers hereunder. Each
Bank also represents that it will, independently and without reliance upon the
Agent and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action under this Agreement and the other Loan
Documents, and to make such investigations as it deems necessary to inform
itself as to the business, prospects, operations, property, financial and other
condition and creditworthiness of the Borrowers, the Parent and their
Subsidiaries. Except for
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notices, reports and other documents expressly herein required to be furnished
to the Banks by the Agent, the Agent shall not have any duty or responsibility
to provide any Bank with any credit or other information concerning the
business, prospects, operations, property, financial and other condition or
creditworthiness of the Borrowers, the Parent and their Subsidiaries which may
come into the possession of any of the Agent-Related Persons.
11.07 Indemnification. Whether or not the transactions contemplated
hereby shall be consummated, the Banks shall indemnify, upon demand, each of the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Borrowers and without limiting the obligation of the Borrowers to do so),
ratably from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements of any
kind whatsoever which may at any time (including at any time following the
expiration of the Letters of Credit and the repayment of the Loans and the
termination or resignation of the Agent) be imposed on, incurred by or asserted
against any such Person in any way relating to or arising out of this Agreement,
any other Loan Document or any document contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by any such Person under or in connection with any of the foregoing;
provided, however, that no Bank shall be liable for the payment to any of the
Agent-Related Persons of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from such Person's gross negligence or willful misconduct.
Without limitation of the foregoing, each Bank shall reimburse the Agent upon
demand for its ratable share of any costs or out-of-pocket expenses (including
Attorney Costs) incurred by the Agent in connection with the administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein to the extent that the Agent is not
reimbursed for such expenses by or on behalf of the Borrowers. Without limiting
the generality of the foregoing, if the Internal Revenue Service or any other
Governmental Authority of the United States or other jurisdiction asserts a
claim that the Agent did not properly withhold tax from amounts paid to or for
the account of any Bank (because the appropriate form was not delivered, was not
properly executed, or because such Bank failed to notify the Agent of a change
in circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason) such Bank shall indemnify the Agent
fully for all amounts paid as a result thereof, directly or indirectly, by the
Agent as tax or otherwise, including penalties and interest, and including any
taxes imposed by any jurisdiction on the amounts payable to the Agent under this
Section 11.07, together with all costs and expenses (including Attorney Costs).
The obligation of the Banks in this Section 11.07 shall survive the payment of
all Obligations hereunder.
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11.08 Agent in Individual Capacity. Bank of America and its
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory or other business with the Borrowers, the
Parent and their Subsidiaries and Affiliates as though Bank of America were not
the Agent or the Issuing Bank hereunder and without notice to or consent of the
Banks. With respect to its Loans and participation in Letters of Credit, Bank of
America shall have the same rights and powers under this Agreement and the other
Loan Documents as any other Bank and may exercise the same as though it were not
the Agent or the Issuing Bank, and the terms "Bank" and "Banks" shall include
Bank of America in its individual capacity.
11.09 Successor Agent. The Agent may resign as Agent upon 30 days'
notice to the Banks and the Borrowers. If the Agent shall resign as Agent under
this Agreement, the Majority Banks shall appoint from among the Banks a
successor agent for the Banks which successor agent shall be subject to the
approval of the Borrowers if no Event of Default has occurred and is continuing,
such approval not to be unreasonably withheld or delayed. If no successor agent
is appointed prior to the effective date of the resignation of the Agent, the
Agent may appoint, after consulting with the Banks and subject to the approval
of the Borrowers if no Event of Default has occurred and is continuing, such
approval not to be unreasonably withheld or delayed, a successor agent from
among the Banks or any Bank Affiliate. Any successor Agent appointed under this
Section 11.09 shall be a commercial bank organized under the laws of the United
States or any State thereof, and having a combined capital and surplus of at
least $500,000,000. Upon the acceptance of its appointment as successor agent
hereunder, such successor agent shall succeed to all the rights, powers and
duties of the retiring Agent and the term "Agent" shall mean such successor
agent and the retiring Agent's appointment, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article XI and Sections 12.04 and 12.05 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement. If no successor agent has accepted appointment as Agent by
the date which is 30 days following a retiring Agent's notice of resignation,
the retiring Agent's resignation shall nevertheless thereupon become effective
and the Banks shall perform all of the duties of the Agent hereunder until such
time, if any, as the Majority Banks appoint a successor agent as provided for
above.
11.10 The Arranger. The Arranger, in such capacity, shall have no
duties or responsibilities, and shall incur no obligations or liabilities, under
this Agreement. Each Bank acknowledges that it has not relied, and will not
rely, on the Arranger in deciding to enter into this Agreement.
11.11 Co-Agents; Managing Agents. None of the Banks identified on
the facing page or signature pages of this Agreement as a "co-agent" or
"managing agent" shall
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have any right, power, obligation, liability, responsibility or duty under this
Agreement other than those applicable to all Banks as such. Each Bank
acknowledges that it has not relied, and will not rely, on any of the Banks so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.
ARTICLE XII.
MISCELLANEOUS
12.01 Amendments and Waivers. (a) No amendment or waiver of, any
provision of this Agreement or any other Loan Document and no consent with
respect to any departure by any Borrower or the Parent therefrom, shall be
effective unless the same shall be in writing and signed by the Parent, each
Borrower and the Majority Banks and acknowledged by the Agent, and then such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that no such
waiver, amendment or consent shall, unless in writing and signed by all the
Banks affected thereby and acknowledged by the Agent, do any of the following:
(i) increase or extend the Commitment of such Bank (or reinstate
any Commitment terminated pursuant to Section 9.02(a)) (except as provided
in Section 12.07);
(ii) postpone or delay any Scheduled Commitment Reduction Date or
any date for any payment of interest or fees due to the Banks (or any of
them) hereunder or under any other Loan Document or extend the Termination
Date (pursuant to Section 2.19 or otherwise);
(iii) reduce the principal of, or the rate of interest specified
herein on, any Loan or Letter of Credit Borrowing (other than with respect
to post-default rates), or of any fees or other amounts payable hereunder
or under any other Loan Document or reduce the Applicable Margin provided
for herein;
(iv) reduce the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans which shall be required for the Banks
or any of them to take any action hereunder;
(v) amend this Section 12.01, the definition of the term "Majority
Banks" or any provision of this Agreement expressly requiring the consent
of all the Banks in order to take or refrain from taking any action; or
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(vi) release the guaranty of any Guarantor Party under its guaranty
pursuant to Article X, except in accordance with the express provisions
thereof;
and, provided further, that (A) no amendment, waiver or consent shall, unless in
writing and signed by the Issuing Bank in addition to the Majority Banks or all
the Banks, as the case may be, affect the rights or duties of the Issuing Bank
under this Agreement or any Letter of Credit Related Document, (B) no amendment,
waiver or consent shall, unless in writing and signed by the Swingline Bank in
addition to the Majority Banks or all the Banks, as the case may be, affect the
rights and duties of the Swingline Bank under this Agreement, (C) no amendment,
waiver or consent shall, unless in writing and signed by the Agent in addition
to the Majority Banks or all the Banks, as the case may be, affect the rights or
duties of the Agent under this Agreement or any other Loan Document or (D) no
amendment, waiver or consent shall, unless in writing and signed by the Majority
Multicurrency Banks or all the Multicurrency Banks, as the case may be, affect
the rights or duties of the Multicurrency Banks under this Agreement.
(b) If, in connection with any proposed change, waiver, discharge or
any termination to any of the provisions of this Agreement as contemplated by
clauses (ii) through (vi), inclusive, of the first proviso to Section 12.01(a),
the consent of the Majority Banks is obtained but the consent of one or more
other Banks whose consent is required is not obtained, then the Borrowers shall
have the right, so long as all non-consenting Banks whose individual consent is
required are treated the same, to replace each such nonconsenting Bank or Banks
with one or more Replacement Banks pursuant to Section 4.08(b) so long as at
such time of such replacement, each such Replacement Bank consents to the
proposed change, waiver, discharge or termination.
12.02 Notices.
(a) All notices, requests and other communications provided for
hereunder shall be in writing (including, unless the context expressly
otherwise provides, facsimile transmission) and mailed, transmitted by
facsimile or delivered, (A) if to the Borrowers, the Parent, the Agent,
the Issuing Bank or the Swingline Bank, to the address or facsimile number
specified for notices on the applicable signature page hereof; (B) if to
any Bank, to the notice address of such Bank set forth on Schedule
1.01(a); or (C) as directed to the Borrowers or the Agent, to such other
address as shall be designated by such party in a written notice to the
other parties, and as directed to each other party, at such other address
as shall be designated by such party in a written notice to the Borrowers
and the Agent.
(b) All such notices, requests and communications shall be effective
when delivered or transmitted by facsimile machine, respectively, provided
that any matter transmitted by the Borrowers by facsimile (i) shall be
immediately confirmed
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by a telephone call to the recipient at the number specified on the
applicable signature page hereof or on Schedule 1.01(a), and (ii) shall be
followed promptly by a hard copy original thereof; except that notices to
the Agent shall not be effective until actually received by the Agent,
notices to the Swingline Bank pursuant to Section 2.03 shall not be
effective until received by the Swingline Bank, and notices pursuant to
Article III to the Issuing Bank shall not be effective until actually
received by the Issuing Bank.
(c) The Borrowers acknowledge and agree that any agreement of the
Agent, the Issuing Bank, the Swingline Bank and the Banks at Articles II
and III herein to receive certain notices by telephone and facsimile is
solely for the convenience and at the request of the Borrowers. The Agent,
the Issuing Bank, the Swingline Bank and the Banks shall be entitled to
rely on the authority of any Person purporting to be a Person authorized
by the relevant Borrower to give such notice and the Agent, the Issuing
Bank, the Swingline Bank and the Banks shall not have any liability to
such Borrower or any other Person on account of any action taken or not
taken by the Agent, the Issuing Bank, the Swingline Bank or the Banks in
reliance upon such telephonic or facsimile notice. The obligation of the
Borrowers to repay the Loans and drawings under Letters of Credit shall
not be affected in any way or to any extent by any failure by the Agent,
the Issuing Bank, the Swingline Bank and the Banks to receive written
confirmation of any telephonic or facsimile notice or the receipt by the
Agent, the Issuing Bank, the Swingline Bank and the Banks of a
confirmation which is at variance with the terms understood by the Agent,
the Issuing Bank, the Swingline Bank or the Banks to be contained in the
telephonic or facsimile notice.
12.03 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Agent, the Issuing Bank, the Swingline
Bank or any Bank, any right, remedy, power or privilege hereunder, shall operate
as a waiver thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege.
12.04 Costs and Expenses. The Borrowers shall, whether or not the
transactions contemplated hereby shall be consummated:
(a) pay or reimburse on demand for all reasonable costs and expenses
incurred by the Agent, in connection with the development, preparation,
delivery, administration, syndication of the Commitments under and
execution of, and any amendment, supplement, waiver or modification to (in
each case, whether or not consummated), this Agreement, any other Loan
Document and any other documents prepared in connection herewith or
therewith, and the consummation of the transac-
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tions contemplated hereby and thereby, including the reasonable Attorney
Costs incurred by the Agent with respect thereto;
(b) pay or reimburse each Bank, the Issuing Bank and the Agent on
demand for all reasonable costs and expenses incurred by them in
connection with the enforcement, attempted enforcement, or preservation of
any rights or remedies (including in connection with any "workout" or
restructuring regarding the Loans, and including in any Insolvency
Proceeding) under this Agreement (including the guaranty contained in
Article X), any other Loan Document, and any such other documents,
including Attorney Costs or the cost of any consultants incurred by the
Agent and any Bank; and
(c) pay or reimburse the Agent and the Issuing Bank on demand for
all appraisal (including, without duplication, the allocated cost of
internal appraisal services), audit, environmental inspection and review
(including, without duplication, the allocated cost of such internal
services), search and filing costs, fees and expenses, incurred or
sustained by the Agent in connection with the matters referred to under
paragraphs (a) and (b) of this Section 12.04.
12.05 Indemnity. Whether or not the transactions contemplated hereby
shall be consummated, the Borrowers shall pay, indemnify, and hold each Bank,
the Issuing Bank, the Swingline Bank, the Agent and each of their respective
officers, directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses or disbursements (including Attorney Costs) of any kind or
nature whatsoever with respect to (a) any investigation, litigation or
proceeding (including any Insolvency Proceeding) related to this Agreement or
the Loan Documents or the Loans or the Letters of Credit, or the use of the
proceeds thereof, whether or not any Indemnified Person is a party thereto and
(b) the actual or alleged presence of Hazardous Materials in the air, surface
water or groundwater or on the surface or subsurface of any property owned or at
any time operated by the Company or any of its Subsidiaries, the generation,
storage, transportation, handling or disposal of Hazardous Materials at any
location by the Company or any of its Subsidiaries, whether or not owned or
operated by the Company or any of its Subsidiaries, the noncompliance of any
property with Environmental Laws (including applicable permits thereunder)
applicable to any property, or any Environmental Claim asserted against the
Parent, the Company, any of its Subsidiaries or any property owned or at any
time operated by the Company or any of its Subsidiaries, (all the foregoing
described in (a) and (b) above, collectively, the "Indemnified Liabilities");
provided, however, that the Borrowers shall have no obligation hereunder to any
Indemnified Person with respect to Indemnified Liabilities arising from the
gross negligence or willful misconduct of such Indemnified Person as the same is
determined by a final judgment of a court
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of competent jurisdiction. The obligations in this Section 12.05 shall survive
payment of all other Obligations.
12.06 Successors and Assigns. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that neither the Company nor the
Parent nor USI Funding may assign or transfer any of its rights or obligations
under this Agreement without the prior written consent of the Agent and each
Bank, provided that USI Funding may assign or transfer any of its rights or
obligations under this Agreement to another direct or indirect Wholly-Owned
Subsidiary of the Company with the prior written consent of the Majority Banks
and the Agent so long as (i) such Subsidiary assumes all of the obligations of
USI Funding as a Borrower hereunder and (ii) any obligations of such Subsidiary
that are assigned or transferred under this proviso are guaranteed on a similar
basis as the obligations of USI Funding are guaranteed.
12.07 Assignments, Participations, etc.
(a) Any Bank may, with the written consent of the Borrowers and the
Agent, which consents shall not be unreasonably withheld, at any time
assign and delegate to one or more Eligible Assignees (provided that no
written consent of the Borrowers shall be required in connection with any
assignment and delegation by a Bank to an Eligible Assignee that is a Bank
Affiliate of such Bank) (each an "Assignee") all, or any ratable part of
all, of the Loans, the Commitment and the other rights and obligations of
such Bank hereunder; provided, however, that any such assignment to an
Eligible Assignee shall be in a minimum amount equal to $5,000,000 or the
then remaining commitment of such Bank and provided, further, that the
Borrowers, the Issuing Bank, the Swingline Bank and the Agent may continue
to deal solely and directly with such Bank in connection with the interest
so assigned to an Assignee until (i) written notice of such assignment,
together with payment instructions, addresses and related information with
respect to the Assignee, shall have been given to the Borrowers and the
Agent by such Bank and the Assignee; (ii) such Bank and its Assignee shall
have delivered to the Borrowers and the Agent an Assignment and Acceptance
in the form of Exhibit J ("Assignment and Acceptance"); and (iii) in the
case of any assignment to an Assignee which is not already a Bank, the
assignor bank or Assignee has paid to the Agent a processing fee in the
amount of $3,000; and provided, still further, that any assignment
hereunder of a Bank's Commitment (other than such Bank's Multicurrency
Commitment, if any) must include an equal percentage of the assignor
Bank's Commitment (other than such Bank's Multicurrency Commitment, if
any) and Committed Loans.
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(b) From and after the date that the Agent notifies the assignor
Bank that the requirements of paragraph (a) above are satisfied, (i) the
Assignee thereunder shall be a party hereto and, to the extent that rights
and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and obligations of a Bank
under the Loan Documents, and (ii) the assignor Bank shall, to the extent
that rights and obligations hereunder and under the other Loan Documents
have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Loan
Documents. Anything herein to the contrary notwithstanding, any Bank
assigning all of its Loans, Commitments and other rights and obligations
hereunder to an Assignee shall continue to have the benefit of all
indemnities hereunder following such assignment.
(c) Immediately upon each Assignee's making its payment under the
Assignment and Acceptance, this Agreement, shall be deemed to be amended
to the extent, but only to the extent, necessary to reflect the addition
of the Assignee and the resulting adjustment of the Aggregate Commitment
arising therefrom. The Commitment allocated to an Assignee shall reduce
the Commitment of the assigning Bank pro tanto.
(d) Any Bank may at any time sell to one or more banks or other
Persons not Affiliates of any Borrower (a "Participant") participating
interests in any Loans, the Commitment of such Bank and the other
interests of such Bank (the "Originating Bank") hereunder and under the
other Loan Documents; provided, however, that (i) the Originating Bank's
obligations under this Agreement shall remain unchanged, (ii) the
Originating Bank shall remain solely responsible for the performance of
such obligations, (iii) the Borrowers, the Parent, the Issuing Bank, the
Swingline Bank and the Agent shall continue to deal solely and directly
with the Originating Bank in connection with the Originating Bank's rights
and obligations under this Agreement and the other Loan Documents, and
(iv) no Bank shall transfer or grant any participating interest under
which the Participant shall have rights to approve any amendment to, or
any consent or waiver with respect to, this Agreement or any other Loan
Document, provided that such Participant shall have the right to approve
any amendment, consent or waiver described in clauses (i), (ii) and (iii)
of the first proviso to Section 12.01. In the case of any such
participation, the Participant shall be entitled to the benefit of
Sections 4.01, 4.03 and 12.05, subject to the same limitations, as though
it were also a Bank hereunder, subject to clause (f) below, and if amounts
outstanding under this Agreement are due and unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of an
Event of Default, each Participant shall, to the extent permitted under
applicable law, be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to the same
extent as if the
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amount of its participating interest were owing directly to it as a Bank
under this Agreement.
(e) Notwithstanding any other provision contained in this Agreement
or any other Loan Document to the contrary, any Bank may assign all or any
portion of the Loans held by it to any Federal Reserve Bank or the United
States Treasury as collateral security pursuant to Regulation A of the
Federal Reserve Board and any Operating Circular issued by such Federal
Reserve Bank, provided that any payment in respect of such assigned Loans
made by the Borrowers or the Parent to or for the account of the assigning
or pledging Bank in accordance with the terms of this Agreement shall
satisfy the Borrowers' or the Parent's obligations hereunder in respect to
such assigned Loans to the extent of such payment. No such assignment
shall release the assigning Bank from its obligations hereunder.
(f) No Participant shall be entitled to receive any greater payment
under Sections 4.01 or 4.03 than such Originating Bank would have been
entitled to receive with respect to the rights transferred unless such
transfer is made with the Borrowers' prior written consent.
12.08 Confidentiality. Each Bank agrees to take normal and
reasonable precautions and exercise due care to maintain the confidentiality of
all information identified as "confidential" by any Borrower and provided to it
by the Parent, the Company or any Subsidiary of the Company, or by the Agent on
the Parent's, the Company's or such Subsidiary's behalf, in connection with this
Agreement or any other Loan Document, and neither it nor any of its Affiliates
shall use any such information for any purpose or in any manner other than
pursuant to the terms contemplated by this Agreement; except to the extent such
information (a) was or becomes generally available to the public other than as a
result of a disclosure by the Bank, or (b) was or becomes available on a
non-confidential basis from a source other than any Borrower or the Parent,
provided that such source is not bound by a confidentiality agreement with any
Borrower or the Parent, known to the Bank; provided, further, however, that any
Bank may disclose such information (i) at the request or pursuant to any
requirement of any Governmental Authority to which the Bank is subject or in
connection with an examination of such Bank by any such authority; (ii) pursuant
to subpoena or other court process; (iii) when required to do so in accordance
with the provisions of any applicable Requirement of Law; (iv) to the extent
reasonably required in connection with any litigation or proceeding to which the
Agent, any Bank or their respective Affiliates may be party; (v) to the extent
reasonably required in connection with the exercise of any remedy hereunder or
under any other Loan Document; and (vi) to such Bank's independent auditors,
other professional advisors and employees of such Bank's Bank Affiliates (or any
Affiliate of such Bank engaged in capital market transactions generally)
retained by such Bank in connection with this Agreement. Notwithstanding the
foregoing, the Borrowers authorize each Bank to disclose to any Participant or
Assignee (each, a
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"Transferee") and to any prospective Transferee, such financial and other
information in such Bank's possession concerning the Company or its Subsidiaries
or the Parent which has been delivered to Agent or the Banks pursuant to this
Agreement or which has been delivered to the Agent or the Banks by the Borrowers
or the Parent in connection with the Banks' credit evaluation of the Borrowers
prior to entering into this Agreement; provided that, unless otherwise agreed by
the Borrowers or the Parent, such Transferee agrees in writing to such Bank to
keep such information confidential to the same extent required of the Banks
hereunder.
12.09 Set-off. In addition to any rights and remedies of the Banks
provided by law, if an Event of Default occurs and is continuing, each Bank is
authorized at any time and from time to time, without prior notice to the
Borrowers or the Parent, any such notice being waived by the Borrowers and the
Parent to the fullest extent permitted by law, to set off and apply, to the
extent permitted by applicable law, any and all deposits (general or special,
time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing to, such Bank to or for the credit or the account
of the Borrowers or the Parent against any and all Obligations owing to such
Bank, now or hereafter existing, irrespective of whether or not the Agent or
such Bank shall have made demand under this Agreement or any other Loan Document
and although such Obligations may be contingent or unmatured. Each Bank agrees
promptly to notify the Borrowers or the Parent and the Agent after any such
set-off and application made by such Bank; provided, however, that the failure
to give such notice shall not affect the validity of such set-off and
application. The rights of each Bank under this Section 12.09 are in addition to
the other rights and remedies (including other rights of set-off) which the Bank
may have.
12.10 Notification of Addresses, Lending Offices, etc. Each Bank
shall notify the Agent in writing of any changes in the address to which notices
to the Bank should be directed, of addresses of its Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably request.
12.11 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement in any number of separate counterparts, each of
which, when so executed, shall be deemed an original, and all of said
counterparts taken together shall be deemed to constitute but one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Borrowers and the Agent.
12.12 Severability. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
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12.13 No Third Parties Benefited. This Agreement is made and entered
into for the sole protection and legal benefit of the parties hereto and their
permitted successors and assigns, and no other Person shall be a direct or
indirect legal beneficiary of, or have any direct or indirect cause of action or
claim in connection with, this Agreement or any of the other Loan Documents.
None of the Agent, the Issuing Bank, the Swingline Bank or any Bank shall have
any obligation to any Person not a party to this Agreement or any other Loan
Document.
12.14 Governing Law and Jurisdiction.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
AND ANY OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW
YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HERETO CONSENTS,
FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF
THOSE COURTS. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES
HERETO IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING
OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION
IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE PARTIES HERETO
EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH
MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
12.15 Waiver of Jury Trial. THE PARTIES HERETO EACH WAIVE THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR
PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE
PARTIES HERETO EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED
BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES
FURTHER AGREE THAT THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY ARE WAIVED BY
OPERATION OF THIS SECTION 12.15 AS TO ANY ACTION,
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COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE
THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR
ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS.
12.16 Conversion of Currencies.
(a) If, for the purpose of obtaining judgment in any court, it is
necessary to convert a sum owing hereunder in one currency into another
currency, each party hereto agrees, to the fullest extent that it may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures in the relevant jurisdiction the first
currency could be purchased with such other currency on the Business Day
immediately preceding the day on which final judgment is given.
(b) The obligations of each Borrower and each Guarantor Party in
respect of any sum due to any party hereto or any holder of the obligations
owing hereunder (the "Applicable Creditor") shall, notwithstanding any judgment
in a currency (the "Judgment Currency") other than the currency in which such
sum is stated to be due hereunder (the "Agreement Currency"), be discharged only
to the extent that, on the Business Day following receipt by the Applicable
Creditor of any sum adjudged to be so due in the Judgment Currency, the
Applicable Creditor may in accordance with normal banking procedures in the
relevant jurisdiction purchase the Agreement Currency with the Judgment
Currency; if the amount of the Agreement Currency so purchased is less than the
sum originally due to the Applicable Creditor in the Agreement Currency, each of
such Borrower and such Guarantor Party agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Applicable Creditor against
such loss. The obligations of the Borrowers and the Guarantor Parties contained
in this Section 12.16 shall survive the termination of this Agreement and the
payment of all other amounts owing hereunder.
* * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
USI AMERICAN HOLDINGS, INC.
By
Title:
Address for notices:
101 Wood Avenue South
Iselin, NJ 08830
Attn: Peter F. Reilly,
Assistant Treasurer
Facsimile: (908) 767-2390
Tel: (908) 767-2252
USI FUNDING, INC.
By
Title:
Address for notices:
101 Wood Avenue South
Iselin, NJ 08830
Attn: Peter F. Reilly
Assistant Treasurer
Facsimile: (908) 767-2390
Tel: (908) 767-2252
-116-
<PAGE>
U.S. INDUSTRIES, INC.
By
Title:
Address for notices:
101 Wood Avenue South
Iselin, NJ 08830
Attn: Peter F. Reilly
Assistant Treasurer
Facsimile: (908) 767-2390
Tel: (908) 767-2252
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By
Title:
Address for notices:
1455 Market Street, 13th Floor
San Francisco, CA 94103
Attn: Steven Low
Agency Administrative
Services (#5596)
Facsimile: (415) 436-2700
Tel: (415) 436-3338
-117-
<PAGE>
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION,
as Issuing Bank
By
Title:
Address for notices:
Bank of America National Trust
and Savings Association
Letter of Credit (#1580)
231 LaSalle Street
Chicago, IL 60697
Attn: Marie Calvin, VP
Facsimile: (312) 987-6828
Tel: (312) 923-5962
With a copy to:
1455 Market Street, 13th Floor
San Francisco, CA 94103
Attn: Steven Low
Agency Administrative
Services (#5596)
Facsimile: (415) 436-2700
Tel: (415) 436-3338
-118-
<PAGE>
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION,
as Swingline Bank
By
Title:
Address for notices:
200 West Jackson Boulevard
9th Floor
Chicago, IL 60697
Attn: Novona Dillard
Account Administration
Facsimile: (312) 974-9626
Tel: (312) 828-6148
With a copy to:
1455 Market Street, 13th Floor
San Francisco, CA 94103
Attn: Steven Low
Agency Administrative
Services (#5596)
Facsimile: (415) 436-2700
Tel: (415) 436-3338
-119-
<PAGE>
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION,
as Bank
By
Title:
Address for notices:
335 Madison Avenue
New York, NY 10017
Attn: Steve Aronowitz
Credit Products
Facsimile: (212) 503-7771
Tel: (212) 503-7950
BA SECURITIES, INC.,
as Arranger
By
Title:
Address for notices:
335 Madison Avenue
New York, New York 10017
Attn: Frank Brittan
Syndications (#2698)
Facsimile: (212) 503-7355/7031
Tel.: (212) 503-8339
-120-
<PAGE>
SCHEDULE 1.01(a)
LENDING OFFICES
EURODOLLAR LENDING OFFICE
DOMESTIC LENDING OFFICE (IF DIFFERENT)
BANK OF AMERICA NATIONAL BANK OF AMERICA NATIONAL
TRUST AND SAVINGS TRUST AND SAVINGS
ASSOCIATION ASSOCIATION
335 Madison Avenue 231 S. LaSalle Street
New York, NY 10017 Chicago, IL 60697
Fax: (212) 503-7771 Fax: (312) 828-6747
ATTN: STEVE ARONOWITZ ATTN: BONNIE PTASZKOWSKI
Tel: (212) 503-7066 Tel: (312) 828-6747
Copy to:
Domestic Lending Office
ABN AMRO BANK N.V.
500 Park Avenue, 2nd Floor
New York, NY 10022
Fax: (212) 832-7468
ATTN: JOHN DEEGAN
Tel: (212) 446-4263
<PAGE>
SCHEDULE 1.01(a)
Page 2
BANCA NAZIONALE DEL LAVORO
S.P.A., NEW YORK BRANCH
25 West 51st Street
New York, NY 10019
Fax: (212) 765-2978
ATTN: GIULIO GIOVINE/MIGUEL
MEDIDA
Tel: (212) 581-0710
ATTN: LILLIAN FRANCAVILLA
Tel: (212) 581-0710
THE BANK OF NEW YORK
One Wall Street
New York, NY 10286
Fax: (212) 635-7970
ATTN: RANDOLPH E.J. MEDRANO
Tel: (212) 635-6804
THE BANK OF NOVA SCOTIA
One Liberty Plaza
New York, NY 10006
Fax: (212) 225-5090 or 5091
ATTN: MARK ALEXANDER
Tel: (212) 225-5029
ATTN: PETER COLLETTA
Tel: (212) 225-5069
<PAGE>
SCHEDULE 1.01(a)
Page 3
BANK OF TOKYO-MITSUBISHI
TRUST COMPANY
1251 Avenue of the Americas
12th Floor
New York, NY 10020-1104
Fax: (212) 782-6445
ATTN: BILL DERASMO
Tel: (212) 782-4359
ATTN: MICHAEL IRWIN
Tel: (212) 782-4316
BANKERS TRUST COMPANY
130 Liberty Street
New York, NY 10006
Fax: (212) 250-7218
ATTN: ANTHONY LOGRIPPO
Tel: (212) 250-4886
ATTN: DAN WILSON
Tel: (212) 250-8173
BANQUE PARIBAS
787 Seventh Avenue
New York, NY 10019
Fax: (212) 841-2333
ATTN: TRACIE ELLIOT
Tel: (212) 841-2384
<PAGE>
SCHEDULE 1.01(a)
Page 4
THE CHASE MANHATTAN BANK THE CHASE MANHATTAN BANK
270 Park Avenue, 9th Floor European Loan Services
New York, NY 10017 1 Chaseside
Fax: (212) 270-1403 Bournemouth Dorsett
BH7-7DB England
ATTN: MICHAEL LANCIA Fax: (011)(44)(1202) 34-3706
Tel: (212) 270-2468
ATTN: TINA HOLES
Tel: 011-44-1202-34-2020
CIBC, INC.
425 Lexington Avenue
New York, NY 10017
Fax: (212) 856-3991
ATTN: JEAN-PAUL MAROTTA
Tel: (212) 856-4196
CITIBANK, N.A.
399 Park Avenue, 8th Floor
New York, NY 10043
Fax: (212) 793-0289
ATTN: DIANE POCKAJ
Tel: (212) 559-4649
<PAGE>
SCHEDULE 1.01(a)
Page 5
CREDIT LYONNAIS NEW YORK
BRANCH
1301 Avenue of the Americas
18th Floor
New York, NY 10019
Fax: (212) 459-3179
ATTN: ROD HURST
Tel: (212) 261-7362
THE DAI-ICHI KANGYO BANK,
LIMITED
One World Trade Center, Suite 4911
New York, NY 10048
Fax: (212) 488-8955
ATTN: TAKAYUKI KUMAGAI
Tel: (212) 432-6651
ATTN: ANITA KALLICHARRAN
Tel: (212) 432-6653
<PAGE>
SCHEDULE 1.01(a)
Page 6
DEUTSCHE BANK AG, NEW YORK DEUTSCHE BANK AG, CAYMAN
BRANCH ISLANDS BRANCH, C/O NEW YORK
31 West 52nd Street, 24th Floor BRANCH
New York, NY 10019 31 West 52nd Street, 24th Floor
Fax: (212) 469-8212 New York, NY 10019
Fax: (212) 469-8212
ATTN: JEANNINE PALLARINO
Tel: (212) 469-4099 ATTN: JEANNINE PALLARINO
Tel: (212) 469-4099
ATTN: STEPHAN WIEDEMANN
Tel: (212) 469-8663 ATTN: STEPHAN WIEDEMANN
Tel: (212) 469-8663
THE FIRST NATIONAL BANK OF
CHICAGO
1 First National Plaza
Chicago, IL 60670
Fax: (312) 732-4840
ATTN: BEN OLIVA
Tel: (312) 732-5987
Copy to:
153 West 51st Street
New York, NY 10019
Fax: (212) 373-1388
ATTN: AMY ROBBINS
Tel: (212) 373-1023
<PAGE>
SCHEDULE 1.01(a)
Page 7
FLEET NATIONAL BANK
One Landmark Square
12th Floor
Stamford, CT 06904
Fax: (203) 358-6111
ATTN: BARBARA AGOSTINI KEEGAN
Tel: (203) 358-6195
ATTN: GINNY ROCKWOOD
Tel: (203) 358-6146
THE FUJI BANK, LIMITED, NEW
YORK BRANCH
2 World Trade Center, 79th Floor
New York, NY 10058
Fax: (212) 912-0516
ATTN: KATHELEEN BARSOTTI
Tel: (212) 898-2065
ATTN: CHIGUSA TADA/
MASANOBU
KOBAYASHI
Tel: (212) 898-2067
ATTN: MASANOBU KOBAYASHI
Tel: (212) 898-2140
<PAGE>
SCHEDULE 1.01(a)
Page 8
THE INDUSTRIAL BANK OF
JAPAN, LIMITED, NEW YORK
BRANCH
1251 Avenue of the Americas,
32nd Floor
New York, NY 10020
Fax: (212) 282-4488
ATTN: JOHN VELTRI
Tel: (212) 282-3440
ATTN: YOSHI FUJITA
Tel: (212) 282-3442
ATTN: KRISTIE LI
Tel: (212) 282-3444
LTCB TRUST COMPANY
165 Broadway, 49th Floor
New York, NY 10006
Fax: (212) 608-3081
ATTN: NAOYOSHI KASUGA
Tel: (212) 335-4607
ATTN: WINSTON BROWN
Tel: (212) 335-4854
<PAGE>
SCHEDULE 1.01(a)
Page 9
MARINE MIDLAND BANK
140 Broadway, 4th Floor
New York, NY 10005
Fax: (212) 658-5109
ATTN: ROCHELLE FORSTER
Tel: (212) 658-5114
MELLON BANK, N.A.
3 Mellon Bank Center
Room 153-2302
Pittsburgh, PA 15259
Fax: (412) 236-2028
ATTN: JACQUELINE TERRY
Tel: (412) 234-8285
Copy to:
1735 Market Street
7th Floor
Philadelphia, PA 19103
Fax: (215) 553-4899
ATTN: DAVID SMITH
Tel: (212) 553-3235
<PAGE>
SCHEDULE 1.01(a)
Page 10
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK
60 Wall Street
New York, NY 10260-0060
Fax: (212) 648-5023/5014
ATTN: JIM FINCH
Tel: (212) 648-7141
NATIONAL WESTMINSTER BANK NATIONAL WESTMINSTER BANK
PLC PLC, NASSAU BRANCH
175 Water Street 175 Water Street
New York, NY 10038 New York, NY 10038
Fax: (212) 602-4500 Fax: (212) 602-4118
ATTN: DONNA WEISS ATTN: DONNA WEISS
Tel: (212) 602-4317 Tel: (212) 602-4317
ATTN: CHRIS FAHEY ATTN: GREG STOECKLE
Tel: (212) 602-4324 Tel: (212) 602-4663
<PAGE>
SCHEDULE 1.01(a)
Page 11
NATIONSBANK, N.A.
101 N. Tyron Street
NC1-001-15-03
Charlotte, NC 28255
Fax: (704) 386-8694
ATTN: CHARLIE FRANKLIN
Tel: (704) 386-4199
Copy to:
767 Fifth Avenue, Fifth Floor
New York, NY 10153-0083
Fax: (212) 503-1083
ATTN: MARCUS A. BOYER
Tel: (212) 407-5333
PNC BANK, NATIONAL ASSOCIATION Two Tower Center Blvd.
Corporate Banking Dept, 16th Floor
East Brunswick, NJ 08816
Fax: (908) 220-3231
ATTN: MICHAEL NARDO
Tel: (908) 220-3229
<PAGE>
SCHEDULE 1.01(a)
Page 12
ROYAL BANK OF CANADA ROYAL BANK OF CANADA-
Financial Square, 24th Floor GRAND CAYMAN (NORTH AMER.
New York, NY 10005 #1 BRANCH)
Fax: (212) 428-6459 Financial Square, 24th Floor
New York, NY 10005-3531
ATTN: SHERYL L. GREENBERG Fax: (212) 428-6459 or 428-2310
Tel: (212) 428-6476
ATTN: SHERYL L. GREENBERG
ATTN: KARENE MURPHY Tel: (212) 428-6476
Tel: (212) 428-6332
ATTN: KARENE MURPHY
Tel: (212) 428-6332
THE ROYAL BANK OF SCOTLAND PLC Wall Street Plaza 88 Pine Street, 26th Floor New
York, NY 10005-1801 Fax: (212) 480-0791
ATTN: RUSSELL GIBSON
Tel: (212) 269-1706
ATTN: HELAINE GRIFFIN
Tel: (212) 269-1700
(Ext. 213)
<PAGE>
SCHEDULE 1.01(a)
Page 13
THE SANWA BANK, LIMITED, NEW YORK BRANCH 55 East 52nd Street Park Avenue Plaza
New York, NY 10055 Fax: (212) 754-1304
ATTN: JEAN-MICHEL FATOVIC, VP
Tel: (212) 339-6397
SOCIETE GENERALE
1221 Avenue of the Americas
New York, NY 10020
Fax: (212) 278-7462
ATTN: KAREN SAGER
Tel: (212) 278-6937
THE SUMITOMO BANK, LIMITED,
NEW YORK BRANCH
277 Park Avenue
New York, NY 10172
Fax: (212) 224-5188
ATTN: ED MCCOLLY
Tel: (212) 224-4139
<PAGE>
SCHEDULE 1.01(a)
Page 14
THE SUMITOMO TRUST &
BANKING CO., LTD., NEW YORK
BRANCH
527 Madison Avenue
New York, NY 10022
Fax: (212) 418-4848
ATTN: TIM NG
Tel: (212) 326-0751
ATTN: CHARLOTTE YUNG
Tel: (212) 326-0631
TORONTO-DOMINION (NEW
YORK), INC.
909 Fannin, Suite 1700
Houston, Texas 77010
Fax: (713) 951-9921
ATTN: DAVID G. PARKER
Tel: (713) 653-8248
Copy to:
31 West 52nd Street
New York, NY 10019
Fax: (212) 262-1926
ATTN: WILLIAM EVENSON
Tel: (212) 468-0593
<PAGE>
SCHEDULE 1.01(b)
COMMITMENTS
Multicurrency
Bank Commitment Commitment
ABN AMRO BANK, N.V. $30,000,000.00 -
BANCA NAZIONALE DEL LAVORO S.P.A.,
NEW YORK BRANCH $10,000,000.00 -
BANK OF AMERICA $40,000,000.00 $70,000,000.00
THE BANK OF NEW YORK $20,000,000.00 -
THE BANK OF NOVA SCOTIA $20,000,000.00 -
BANK OF TOKYO-MITSUBISHI TRUST COMPANY $20,000,000.00 -
BANKERS TRUST COMPANY $20,000,000.00 -
BANQUE PARIBAS $30,000,000.00 -
THE CHASE MANHATTAN BANK $30,000,000.00 $70,000,000.00
CIBC, INC. $17,500,000.00 -
CITIBANK, N.A. $30,000,000.00 -
CREDIT LYONNAIS NEW YORK BRANCH $20,000,000.00 -
THE DAI-ICHI KANGYO BANK,
LIMITED $17,500,000.00 -
DEUTSCHE BANK AG, NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCH $17,500,000.00 $70,000,000.00
THE FIRST NATIONAL BANK OF CHICAGO $17,500,000.00 -
FLEET NATIONAL BANK $35,000,000.00 -
<PAGE>
SCHEDULE 1.01(b)
Page 2
THE FUJI BANK, LIMITED, NEW YORK BRANCH $20,000,000.00 -
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
NEW YORK BRANCH $30,000,000.00 -
LTCB TRUST COMPANY $20,000,000.00 -
MARINE MIDLAND BANK $20,000,000.00 -
MELLON BANK, N.A. $20,000,000.00 -
MORGAN GUARANTY TRUST COMPANY OF $30,000,000.00 -
NEW YORK
NATIONAL WESTMINSTER BANK PLC $30,000,000.00 -
NATIONSBANK, N.A. $30,000,000.00 -
PNC BANK, NATIONAL ASSOCIATION $20,000,000.00 -
ROYAL BANK OF CANADA $20,000,000.00 -
THE ROYAL BANK OF SCOTLAND PLC $17,500,000.00 -
THE SANWA BANK, LIMITED,
NEW YORK BRANCH $20,000,000.00 -
SOCIETE GENERALE $20,000,000.00 $70,000,000.00
THE SUMITOMO BANK, LIMITED,
NEW YORK BRANCH $30,000,000.00 -
THE SUMITOMO TRUST & BANKING CO., LTD,
NEW YORK BRANCH $17,500,000.00 -
TORONTO-DOMINION (NEW YORK), INC. $30,000,000.00 -
Total
Aggregate Multicurrency
Commitment Commitment
$750,000,000 $280,000,000
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS INCLUDED IN THE ACCOMPANYING FORM 10-Q AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-27-1997
<PERIOD-END> APR-04-1998
<CASH> 39
<SECURITIES> 0
<RECEIVABLES> 535
<ALLOWANCES> (35)
<INVENTORY> 482
<CURRENT-ASSETS> 1,111
<PP&E> 884
<DEPRECIATION> (436)
<TOTAL-ASSETS> 2,181
<CURRENT-LIABILITIES> 446
<BONDS> 751
0
0
<COMMON> 1
<OTHER-SE> 808
<TOTAL-LIABILITY-AND-EQUITY> 2,181
<SALES> 1,286
<TOTAL-REVENUES> 1,286
<CGS> 897
<TOTAL-COSTS> 897
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 2
<INTEREST-EXPENSE> 24
<INCOME-PRETAX> 91
<INCOME-TAX> 37
<INCOME-CONTINUING> 54
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 54
<EPS-PRIMARY> .73
<EPS-DILUTED> .71
</TABLE>
