1
EXHIBIT 4.f
Dated 14 September 1998
MASCO GMBH
as Borrower
and
MASCO CORPORATION
as Guarantor
and
COMMERZBANK AKTIENGESELLSCHAFT
as Arranger
and
COMMERZBANK INTERNATIONAL S.A.
as Agent
and
OTHERS
---------------------------------------------
DM 350,000,000 MULTICURRENCY REVOLVING CREDIT FACILITY
----------------------------------------------
HENGELER XXXXXXX XXXXXXX XXXXX
Frankfurt am Main
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CONTENTS
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Page
SECTION 1 Interpretation 3
SECTION 2 The Facility 3
SECTION 3 The Lenders 3
SECTION 4 Cancellation 4
SECTION 5 Fees and Expenses 4
SECTION 6 Advance of Funds 5
SECTION 7 Currency Option 7
SECTION 8 Interest 8
SECTION 9 Repayment of Advances 9
SECTION 10 Prepayment of Advances 9
SECTION 11 Guarantee 9
SECTION 12 Changes of Circumstances 11
SECTION 13 Payments 15
SECTION 14 Late Payment 17
SECTION 15 Sharing among Lenders 17
SECTION 16 Representations and Warranties 19
SECTION 17 Delivery of Information 23
SECTION 18 General Covenants 26
SECTION 19 Early Termination 30
SECTION 20 The Agent and the Arranger 33
SECTION 21 Evidence and Certificates 37
SECTION 22 Notices 37
SECTION 23 Transfers and Substitution 38
SECTION 24 Waivers and Amendments 40
SECTION 25 Miscellaneous 41
SECTION 26 Law and Jurisdiction 42
SECTION 27 Confidentiality 42
Annex: Definitions, References and Construction 46
SCHEDULES
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Schedule 1: Lenders and Commitments; Address Details 57
Schedule 2: Conditions Precedent 60
Schedule 3: Form of Substitution Certificate 61
Schedule 4: Form of Borrowing Notice 63
Schedule 5: Form of Tax Confirmation 65
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CREDIT AGREEMENT dated 14 September 1998 between:
(1) MASCO GMBH, as borrower (the "Borrower"),
(2) MASCO CORPORATION, as guarantor (the "Guarantor"),
(3) COMMERZBANK AKTIENGESELLSCHAFT, as arranger (the "Arranger"),
(4) COMMERZBANK INTERNATIONAL S.A., as agent, and
(5) THE FINANCIAL INSTITUTIONS listed in Schedule 1, as lenders.
THE PARTIES agree as follows:
SECTION 1 INTERPRETATION
The defined expressions used in this Agreement are set out in the Annex.
SECTION 2 THE FACILITY
(1) Amount and Nature. The Facility is a five-year DM 350,000,000 multicurrency
revolving credit facility.
(2) Purpose. The Borrower agrees to use the proceeds of the Facility to
refinance debt of the Borrower outstanding at the date of this Agreement or for
general corporate funding purposes, but no Syndicate Party needs to concern
itself with the application of amounts taken up by the Borrower under the
Facility.
(3) Availability. The Borrower may borrow under the Facility after the Agent has
received all the items listed in Schedule 2 in a form satisfactory to the Agent.
(4) Expiry of Availability. The Borrower may not borrow under the Facility after
the Commitment Expiry Date.
SECTION 3 THE LENDERS
(1) Rights and Obligations. The rights and obligations of each Lender under this
Agreement are separate and independent from the rights and obligations of each
other Lender. A Lender may take proceedings against any Obligor on its own
without involving any other Lender in those proceedings.
(2) Failure to Perform. If a Lender fails to perform its obligations the
Borrower will have rights solely against that Lender. The obligations of any
Obligor
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to the Agent, the Arranger and the other Lenders will not be affected by this
failure.
SECTION 4 CANCELLATION
(1) Voluntary Cancellation. The Borrower may cancel the whole or any part of the
Available Facility by giving notice in writing to the Agent. This notice will
take effect thirty days after it is received by the Agent unless a later date is
specified in the notice. In that case the notice will take effect on the
specified date. The Borrower may only cancel a part of the Available Facility
which is a minimum amount of DM 10,000,000 or any higher integral multiple of DM
5,000,000.
(2) Effect of Cancellation. The Borrower may not borrow any part of the
Available Facility which has been cancelled or which is the subject of a notice
of voluntary cancellation. The Available Commitments of the Lenders will be
reduced by an aggregate amount equal to the reduction of the Available Facility.
Each Lender's Available Commitment will be reduced proportionately. No amount of
the Available Facility cancelled under this Agreement may subsequently be
reinstated. The Available Facility shall be cancelled automatically on the Final
Maturity Date.
SECTION 5 FEES AND EXPENSES
(1) Management Fee. The Borrower will pay to the Agent for the account of the
Arranger a management fee. The amount of this fee and the timing of payment are
described in a letter from the Arranger to the Borrower dated the same date as
this Agreement.
(2) Agency Fee. The Borrower agrees to pay to the Agent an agency fee. The
amount of this fee and the timing of payment are described in a letter from the
Agent to the Borrower dated the same date as this Agreement.
(3) Reimbursement of Initial Expenses. The Borrower agrees to reimburse the
Arranger for all reasonable out-of-pocket expenses incurred in connection with
the negotiation, preparation and signing (including, but not limited to, legal
expenses, travelling expenses and communication charges) of this Agreement and
the syndication of the Facility. In addition, the Borrower agrees to bear and
pay all expenses related to the publication of any advertisements in connection
with the Facility made with the approval of the Borrower.
(4) Commitment Fee. A commitment fee will accrue on the undrawn and uncancelled
amount of the Commitment of each Lender. This fee will accrue from the date of
this Agreement until the Final Maturity Date. The rate of the fee will be 50 per
cent. of the Margin as most recently determined according to the Definition of
Margin. The Borrower agrees to pay the fee to the Agent for the
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benefit of each Lender in arrear at quarterly intervals and on the Final
Maturity Date.
(5) Protection of Rights. A Syndicate Party may incur expenses in protecting,
preserving or enforcing its rights under this Agreement. The Borrower agrees to
reimburse that Syndicate Party for the amount of expenses reasonably incurred.
(6) Documentary Taxes. The Borrower agrees to bear and pay any duty, fee or
other similar charge required to be paid on this Agreement, any document
referred to in or contemplated by this Agreement or any judgment obtained in
connection with this Agreement or payable in order for this Agreement or any of
these documents to be valid, binding and enforceable or for any of them to be
admitted as evidence in court. Alternatively, a Syndicate Party may make the
payment; if it does so, the Borrower agrees to reimburse that Syndicate Party
for the amount paid.
SECTION 6 ADVANCE OF FUNDS
(1) Notice to the Agent. When the Borrower wishes to borrow under the Facility,
it will deliver a notice to the Agent substantially in the form attached hereto
as Schedule 4. The notice shall specify the amount of the Advance, the currency
of the Advance, the length of the Term of the Advance and the proposed Advance
Date. The Advance Date must be no sooner than three (or, in the case of Optional
Currency other than USD, four) Business Days after the date the Agent receives
the notice. For this purpose, if the Agent receives the notice on a day which is
not a Business Day or after 2.00 p.m. on a Business Day, it will be treated as
having received the notice on the following Business Day.
(2) Limitations on Advances.The following limitations apply to Advances:
(a) No Advance may exceed the Available Facility. This limitation will be
applied as at the Advance Date. For this purpose:
(i) any part of the Facility which is subject to a notice of voluntary
cancellation will be treated as cancelled;
(ii) any amount due to be repaid on the Advance Date will be
treated as having been repaid; and
(iii) Advances in Optional Currencies will be taken at their Original DM
Amount.
(b) An Advance must be a minimum of DM 10,000,000 or any higher integral
multiple of DM 5,000,000 or be the Available Facility (or in each case the
equivalent in Optional Currency).
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(c) If the Advance is not to be in DM, SECTION 7 applies.
(d) The Term of the Advance must be a period of 1, 2, 3 or 6 months (or any
longer period agreed by all Lenders).
(e) The Advance Date must be a Business Day on or prior to the Commitment Expiry
Date and at least three (or, in the case of Optional Currency other than
USD, four) Business Days after the Facility has become available under
SECTION 2(3).
(f) No more than six Advances may be outstanding at any time.
(g) The Term of the Advance must expire on or before the Final Maturity Date.
(3) Amount of the Lenders' Participation in the Advance. The amount of a
Lender's participation in an Advance shall be that proportion of the Advance
which its Commitment bears to the Total Commitments on the date of receipt by
the Agent of the relevant notice of borrowing. For this purpose any amount due
to be repaid on the Advance Date will be treated as having been repaid. The
Agent may round participations upwards or downwards to the nearest unit of
currency not exceeding each Lender's Commitment.
(4) Notice to the Lenders. The Agent agrees to provide details of the notice of
borrowing to each Lender not later than close of business on the third Business
Day preceding the Advance Date. These details will also include the amount of
each Lender's participation in the Advance, and in case of a borrowing under
SECTION 7, the Exchange Rate and the Original DM Amount.
(5) Conditions to Borrowing. The Lenders will only be obliged to make an Advance
to the Borrower if:
(a) the Facility is available in accordance with SECTION 2 and SECTION 4;
(b) a properly completed and signed notice of borrowing has been received by the
Agent;
(c) the representations and warranties in SECTION 16(1) and SECTION 16(2) except
the representations set forth in SECTION 16(2)(d)(iii), (e), (f) (other than
clause (i) thereof), (g) and (j) are true on the date of delivery of the
notice of borrowing and on the Advance Date; and
(d) on the date of delivery of the borrowing notice and on the Advance Date, no
Termination Event or Potential Termination Event exists.
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(6) Obligation to make an Advance. If the requirements of this SECITON 6 are
satisfied, each Lender agrees to make the amount of its participation in the
Advance available to the Agent for the Borrower on the Advance Date. The Advance
will be made available to the Borrower in the case of DM by 11.00 a.m. on the
Advance Date, in the case of USD by 11.00 a.m. New York time on the Advance Date
and in the case of an Optional Currency other than USD by such other time on the
Advance Date as is customary for the relevant Optional Currency.
(7) Consequences of an Advance not being made. If a notice of borrowing is
delivered but no Advance is made due to any of the Conditions in SECTION 6(5)
not being satisfied, the Borrower agrees to reimburse each Lender for the losses
and expenses incurred by such Lender as a result of liquidating or otherwise
utilizing amounts taken up by it to fund its participation in the Advance or
terminating commitments relating to the funding or hedging open positions
resulting from the Advance not being made.
(8) Adjustment of the Term. The Term will end on the last day of a calendar
month if it is for a number of complete months and either:
(a) it commenced on the last Business Day of a calendar month; or
(b) it commenced on a day for which there is no corresponding day in the month
in which it is due to end.
SECTION 7 CURRENCY OPTION
(1) Request for Optional Currency. If a notice of borrowing specifies a currency
other than DM, the Advance requested will be made in the currency specified if
all the following are true:
(a) The currency specified is an Optional Currency.
(b) The conditions to borrowing pursuant to SECTION 6 are satisfied.
(c) If the Advance is made the Loan will not be outstanding in more than five
different currencies.
(2) Non-availability of Optional Currency. A Lender (an "Affected Lender") may
notify the Agent that it is unable to make its participation in an Advance
available in the specified Optional Currency for the requested Term. Each of the
following applies if this notice is received by the Agent by 9.30 a.m. on the
Rate Fixing Day:
(a) The Affected Lender will not be obliged to make its participation in the
Advance available in the specified Optional Currency. Instead the Affected
Lender agrees to make the participation available in DM.
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(b) The amount the Affected Lender is required to advance will be the Original
DM Amount of the participation it would otherwise have been required to make
available in the Optional Currency.
(c) The Agent agrees to notify the Borrower and the other Lenders of the receipt
of the notice from the Affected Lender. This notification will be made
before 11.00 a.m. on the Rate Fixing Day.
(d) The time at which LIBOR (or, in the case of GBP, PIBOR) is determined will
be postponed to 1 p.m. London (or, in the case of PIBOR, Paris) time on the
Rate Fixing Day.
(3) Impracticality of Drawing in Optional Currency. An Advance which was to have
been made in an Optional Currency will not be required to be made if all the
following are true:
(a) An event described in SECTION 7(4) occurs.
(b) The Agent notifies the Borrower of this event and states that as a result
the Advance cannot be made in the Optional Currency.
(c) The notice from the Agent is received by the Borrower by 9.00 a.m. on the
Advance Date.
The Agent agrees to deliver a notice under this sub-paragraph if it is
instructed by an Instructing Group to do so.
(4) Events Making Drawing in Optional Currency Impractical. An event referred to
in SECTION 7(3) occurs if both:
(a) there is a change in national or international financial, political or
economic conditions or in currency exchange rates or exchange controls; and
(b) this change would mean that the Advance cannot reasonably be denominated in
the Optional Currency in question.
(5) DM-Advance in the Event of Impracticality. If an event referred to in
SECTION 7(3) has occurred the Advance will, if so elected in the notice of
borrowing, be made in the Original DM Amount of the Optional Currency, provided
that
(a) the Rate Fixing Day of the Advance will be postponed to the day on which the
Agent has given notice pursuant to SECTION 7(3)(b); and
(b) the Advance Date will be the second Business Day following the Rate Fixing
Day.
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SECTION 8 INTEREST
(1) Accrual of Interest. Interest will accrue on each Advance during its Term.
(2) Rate of Interest. The rate of interest applicable during the Term of an
Advance will be a rate per annum equal to LIBOR (or, in the case of GBP, PIBOR)
for the currency of that Advance for that Term plus the Margin. The rate of
interest will be fixed on the Rate Fixing Day.
(3) Accrual and Payments. Interest on each Advance shall:
(a) accrue from day to day and be calculated for the actual number of days
elapsed and on the basis of a year of 360 days (or 365 days if this is
market practice for the relevant Optional Currency) and
(b) be payable in arrear on the last day of the Term, and in the case of a Term
in excess of six months, also on the day falling six months after the
Advance was made, and thereafter at six months' intervals.
SECTION 9 REPAYMENT OF ADVANCES
The Borrower agrees to repay each Advance made to the Borrower on the last day
of its Term together with interest and all other amounts due in respect of such
Advance. Amounts repaid may be redrawn.
SECTION 10 PREPAYMENT OF ADVANCES
The Borrower may repay an Advance early. In this case the Borrower shall
reimburse each Lender for the costs and expenses incurred as a result of the
prepayment. These costs and expenses will be calculated in accordance with
SECTION 12(5).
SECTION 11 GUARANTEE
(1) Guarantee. The Guarantor unconditionally and irrevocably guarantees to each
Syndicate Party the performance of any and all obligations of the Borrower under
this Agreement and the payment of each amount expressed herein to be payable by
the Borrower as and when such amount becomes due and in the same currency as the
amount due. Payment shall be made forthwith upon the written demand of the Agent
or any Lender through the Agent.
(2) Nature of Guarantee Obligation. This Guarantee constitutes a "Garantie" and
not a "Burgschaft". Accordingly the obligations of the Guarantor under this
Guarantee (i) are separate and independent from the obligations of the Borrower
under this Agreement, (ii) exist irrespective of the legality, validity, binding
effect or enforceability of the obligations of the Borrower under this
Agreement,
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and (iii) are not affected by any event, condition or circumstance of whatever
nature, whether factual or legal, save the full, definitive and irrevocable
satisfaction of any and all payment obligations expressed herein to be payable
by the Borrower.
(3) Preservation of Rights. Any obligations of the Guarantor under this
Guarantee will not be affected by:
(a) Any change, waiver or release of the Borrower's obligations.
(b) Any concession or time being given to the Borrower.
(c) The winding-up or re-organisation of the Borrower.
(d) Any change in the condition, nature or status of the Borrower.
(e) Any of the above events occurring in relation to another guarantor or
provider of security of its obligations.
(f) Any failure of any Syndicate Party to take, retain or enforce any other
guarantee or security.
(g) Any circumstances affecting or preventing recovery of amounts due by the
Borrower.
(h) Any other matter which might discharge the Guarantor (other than full and
unconditional payment under the Guarantee).
(4) Covenants of the Guarantor. The Guarantor agrees as follows:
(a) Security. The Guarantor will not have the benefit of any Security provided
by the Borrower in respect of this Guarantee.
(b) Exercise of Rights. The Guarantor will not:
(i) take the benefit of any rights against the Borrower or any other person
in respect of amounts paid under this Guarantee; or
(ii) claim or exercise against the Borrower any right to any payment
(whether or not in connection with this Agreement).
(c) Competing Claim. An Instructing Group may request the Guarantor to submit a
claim in insolvency proceedings for amounts due to it by the Borrower or any
other guarantor. The Guarantor agrees to submit such claim promptly in
accordance with this request. The Guarantor hereby assigns to the Agent (for
the benefit of the Syndicate Parties) for security purposes all its rights
in respect of that claim.
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The obligations in this SECTION 11(4) will cease to have effect when the
Facility has ceased to be available and there are no amounts outstanding
under the Facility. Paragraph (b) only applies for so long as there is a
current Termination Event.
(5) Discharge Conditional. Any settlement with, or discharge of, the Guarantor
will be subject to the condition that the settlement or discharge will be set
aside if any prior payment, or any other guarantee or security relating to any
amount due under this Agreement, is set aside, invalidated or reduced. In this
event the Guarantor agrees to reimburse each Syndicate Party for the value of
the payment, guarantee or security which is set aside, invalidated or reduced.
(6) Additional Security. This Guarantee is in addition to and is not in any
way prejudiced by any other security now or hereafter held by any Syndicate
Party.
SECTION 12 CHANGES OF CIRCUMSTANCES
(1) Illegality.
(a) Notice of Illegality. Each Lender may notify the Borrower if it determines
that it is or will be acting illegally (rechtswidrig) in relation to the
Facility. The illegality may relate to the performance of the Lender's
obligations, the maintenance of the Facility or the Lender's funding
arrangements.
(b) Cancellation and Prepayment. If a Lender delivers a notice of illegality
any outstanding Commitment of that Lender will be cancelled on the date of
that notice. The Borrower agrees to prepay the participation of that
Lender in the Loan on the last day of the Term during which the notice is
received, unless the Lender certifies that, because of a legal requirement
(law, regulation or any action by a court or administrative authority)
applicable to the Lender, it must be repaid earlier. In this event the
Borrower agrees to prepay the participation on the date specified by the
Lender. SECTION 12(5) applies to any cancellation or prepayment under this
paragraph.
(2) Increased Costs.
(a) Notice of Increased Costs. A Lender may give notice of increased costs to
the Borrower if:
(i) either:
(aa) there is a change in a legal or other requirement applicable to the
Lender (or its holding company) (including any change relating to
taxation or reserve asset, special deposit, cash ratio, liquidity or
capital adequacy requirements or any other form of banking or
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monetary control) or a change in its interpretation or application; or
(bb) the Lender (or its holding company) complies with a direction or
request (whether or not having the force of law) of any central bank
or other fiscal, monetary or other authority; and
(ii) as a result, any of the following occurs:
(aa) the Lender (or its holding company) incurs an expense;
(bb) the Lender's (or its holding company's) effective return from the
Facility or on its overall capital is reduced;
(cc) any amount payable to the Lender (or its holding company) is reduced;
or
(dd) the Lender (or its holding company) does not recover an amount which
would otherwise have been paid to it.
No account will be taken of tax on the overall net income of a Lender in
the country in which it has its principal office or the office through
which it is acting for the purposes of this Agreement; and the losses,
(iii) reductions and expenses arising as a result are wholly or partly
attributable to the Facility or the arrangements made by a Lender in
connection with the Facility.
(b) Payment of Additional Amounts. The Borrower agrees to reimburse each
Lender for the losses, reductions and expenses described in paragraph
(a)(ii) which are attributable to the Facility (as certified by the
Lender, which certification shall include a calculation of the amount to
be reimbursed). No reimbursement will be made for losses, reductions or
expenses attributable to the period which is more than 30 days prior to
the receipt of the notice described in paragraph (a).
(c) Prepayment. If a Lender delivers a notice of increased costs the Borrower
may, on giving not less than 5 Business Days prior notice to that Lender,
prepay the participation of that Lender in the Loan, together with
compensation for such increased costs on the last day of the Term during
which the notice is received and all other amounts then due to such Lender
under the Facility, and any outstanding Commitment of the Lender will be
cancelled on the date of that notice.
(3) Market Disruption.
(a) Notice of Market Disruption. The Agent agrees to give notice of market
disruption if:
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(i) the Agent determines, upon consultation with the Reference Banks, that
there are no reasonable means to ascertain LIBOR (or, in the case of GPB,
PIBOR) because of circumstances affecting the London or, as the case may
be, Paris, Interbank Market generally;
(ii) Lenders with Commitments exceeding in aggregate 35% of the Total
Commitments, or with participations exceeding in aggregate 35% of the
Loan, notify the Agent that they determine that LIBOR (or, in the case of
GBP, PIBOR) would not reflect fairly the cost to them of funding an amount
outstanding under this Agreement;
(iii) LIBOR (or, in the case of GBP, PIBOR) cannot be determined because less
than two Reference Banks provide quotations; or
(iv) Lenders with Commitments exceeding in aggregate 35% of the Total
Commitments, or with participations exceeding in aggregate 35% of the
Loan, notify the Agent that funds necessary to fund their participation in
the Loan are not readily available in the London or, as the case may be,
Paris, Interbank Market.
(b) Alternative Interest Rate Arrangements. If the Agent gives a notice of
market disruption, the following applies:
(i) The Advance will be made and shall have a term of one month.
(ii) The means of determining the rates of interest applicable under this
Agreement will be suspended. Instead the Borrower agrees to pay interest
to the Lenders in the manner requested by the Agent. A request by the
Agent must specify the rate of interest to apply for a period of one
month. This rate will be the rate determined by the Agent to reflect the
cost to each Lender of funding for the period plus the applicable Margin.
In order to assist the Agent in this determination each Lender agrees to
provide to the Agent any information which the Agent may reasonably
request. If this information is received by the Agent within any time
period specified by the Agent it will be taken into account by the Agent
in making its determination.
(iii) The Borrower and the Agent will negotiate the terms of an alternative
arrangement for determining a rate of interest. The negotiations will be
carried on in good faith. Neither party is bound to continue the
negotiations after the date 30 days after the Borrower receives the
Agent's notice. If agreement is reached and if it is approved by an
Instructing Group, the rate of interest will be determined in accordance
with such agreement. Sub-paragraph (ii) will not apply to the extent that
it is expressly excluded by such agreement.
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(iv) If the circumstances described in paragraph (a) cease to apply, the Agent
will notify the Borrower and the Lenders. The Borrower agrees to pay
interest to the Lenders in the manner described in sub-paragraph (ii) or
(iii) for the remainder of the period for which an alternative interest
rate arrangement has been made in respect of each affected Advance unless
a different arrangement is agreed by the Agent and the Borrower and
approved by an Instructing Group. In this case the Borrower agrees to pay
interest to the Lenders in the manner agreed.
(4) Withholdings.
(a) Notice of Withholding. The Borrower agrees to give notice of withholding
or deduction on account of any taxes, duties or charges ("taxes") to the
Agent if it is required by law to make a payment under this Agreement net
of a withholding or deduction on account of taxes.
(b) Grossing Up. If the Borrower is so required, the Borrower agrees to
increase the amount of any payment which is subject to a withholding or
deduction on account of taxes. As a result of this increase the person
entitled to the payment will be entitled to receive the same amount it
would have received if there had been no withholding or deduction on
account of taxes.
(c) Payment of Tax. The Borrower will pay to the appropriate authority all
amounts withheld or deducted. If a receipt or other evidence of payment
can be issued, the Borrower agrees to deliver this to the Agent as soon as
practicable.
(d) Refund of Tax Credits. If the Borrower makes a payment under this SECTION
12(4) (a "Tax Payment"), the relevant Lender agrees to notify the Borrower
if it has obtained a refund of tax or obtained and used a credit against
tax on its overall net income (a "Tax Credit") which that Lender is able
to identify as directly attributable to that Tax Payment. To the extent
that it can in its opinion do so without prejudicing its ability to retain
such Tax Credit, the Lender shall reimburse the Borrower such amount as
that Lender shall have determined to be the proportion of that Tax Credit
as will leave the Lender (after that reimbursement) in no better or worse
position in respect of its worldwide tax liabilities than it would have
been in had no Tax Payment been required. Nothing in this paragraph
affects the right of any Syndicate Party to arrange its tax affairs as it
thinks fit or gives the Borrower or the Guarantor the right to inquire
into those tax affairs.
(e) SECTION 12(4) applies, mutatis mutandis, to payments to be made by the
Guarantor in respect of the Guarantee.
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(5) Prepayment. If the Borrower is obliged to prepay the Loan or any part of it
under this SECTION 12 or SECTION 19(2), the Borrower agrees to pay on the date
on which payment is due interest accrued on the Loan (or the amount to be
repaid) up to that date. If the date on which repayment is due is not the last
day of a Term, the Borrower will reimburse each affected Lender for the losses
and expenses which that Lender has incurred, or will incur, in liquidating or
otherwise utilizing amounts taken up by the Lender to fund the Loan or in
hedging open positions resulting from the payment (excluding loss of margin for
the period after any such repayment).
SECTION 13 PAYMENTS
(1) Method, Timing and Currency of Payments. All payments under the Facility
must be made in immediately available and freely transferable funds. Each
payment must be received by 10 a.m. (time at the place of payment) on the due
date.
(2) Currency of Payment. Each Advance is to be repaid in the currency in which
it is denominated. Interest on an Advance is to be paid in the same currency as
the Advance. Payments under SECTION 5(1) to (4) are to be made in DM; losses and
expenses are to be compensated in the currency in which such losses and expenses
were incurred.
(3) Payments through the Agent
(a) Normal Arrangements. All payments under this Agreement will be made through
the Agent. Each payment, if in Deutsche Xxxx, will be made to the account of
the Agent, as notified by the Agent to the Borrower, if in other currency to
such account as the Agent may designate. The Agent will pay on to the
Lenders an amount received as soon as the Agent has ascertained that it has
been received.
(b) Alternative Arrangements. If the Agent determines that it is, or will be,
illegal or impossible for it to pay on to a Lender in accordance with
paragraph (a), it agrees to notify the Borrower and that Lender. In this
case the Borrower and that Lender may agree on alternative arrangements for
payments to be made to that Lender. Paragraph (a) will not apply to the
extent excluded by those alternative arrangements. The Lender agrees to
provide notice of the arrangements to the Agent and will notify the Agent of
payments in accordance with SECTION 15(1).
(4) Payments to the Borrower. Each payment by the Agent to the Borrower will be
made to the account of the Borrower specified by it in the request for
borrowing.
(5) Payments to Lenders. Each payment by the Agent to a Lender will be made to
the account of that Lender notified to the Agent for this purpose.
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(6) Change of Account. The Borrower or a Lender may change its receiving account
by not less than five Business Days' notice to the Agent. The Agent may change
its receiving account by not less than five Business Days' notice to each
Obligor and the Lenders.
(7) Refunding of Payments by the Agent. If the Agent makes a payment out in the
mistaken belief that it has received or will receive an incoming payment on a
particular day, the person which received the payment from the Agent agrees to
return it. It will also reimburse the Agent for all losses and expenses incurred
by the Agent as a result of the payment. This SECTION 13(7) does not affect the
rights of the person which received the payment against the person which failed
to make the payment to the Agent.
(8) Non-Business Days. If a payment would be due on a non-Business Day the
payment obligation will be deferred until the next Business Day.
Interest will be adjusted accordingly.
(9) Payment in Full. All payments by any Obligor will be made in full and
without set-off, counterclaim, or retention. No payment by any Obligor will be
made net of a withholding or deduction, unless this is required by law. In this
event SECTION 12(4) applies.
(10)Set-off. After a Termination Event or Potential Termination Event has
occurred, any Syndicate Party may set off any obligation which it owes to any
Obligor against any obligation which that Obligor owes to that Syndicate Party
under this Agreement. The obligation of the Syndicate Party may be in a
different currency, arise on a separate transaction, provide for a different
place of payment, or involve another branch. If its obligation is in a different
currency, the Syndicate Party may convert the amount owed into the same currency
as the obligation of that Obligor using the then current exchange rate. If a
Lender sets off an obligation, that Lender agrees to notify the Agent thereof.
The notice will provide details of the amount set off.
(11) Application of Partial Payments. If the Agent receives a payment
insufficient to discharge all the amounts then due and payable by the Borrower
under this Agreement, the Agent shall apply that payment towards the obligations
of the Borrower under this Agreement in the following order:
(a) first, in or towards payment pro rata of any unpaid costs or expenses due to
the Agent in its capacity as such under or in connection with this
Agreement;
(b) secondly, in or towards payment pro rata of any agency fee due but unpaid
under SECTION 5;
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(c) thirdly, in or towards payment pro rata of any other accrued fees due but
unpaid under SECTION 5;
(d) fourthly, in or towards payment pro rata of any accrued interest due but
unpaid under this Agreement;
(e) fifthly, in or towards payment pro rata of any principal due but unpaid
under this Agreement;
(f) sixthly, in or towards payment pro rata of any other sums due but unpaid
under this Agreement.
The Agent will vary the order set out in paragraphs (d) to (f) inclusive above
if requested by all the Lenders. The provisions of this SECTION 13(11) will
override any appropriation made by the Borrower.
(12)Currency Indemnity. Where a payment due by any Obligor under or in
connection with this Agreement is made in a currency other than the currency
owed, to the extent that the amount received, when converted into the currency
owed, is less than the amount due that Obligor agrees to reimburse the person
entitled to the payment for the difference. For the purposes of the computation
of this amount that person will apply to the amount received a rate of exchange
prevailing on an established currency market on the date of receipt. If,
however, that person is unable to use the amount received to buy the currency
owed on the date of receipt, the rate of exchange prevailing on the first date
on which that person could buy the currency owed will be used instead. The obli-
gation in this SECTION 13(12) is a separate and independent obligation.
SECTION 14 LATE PAYMENT
(1) Default Interest. If any Obligor fails to make a payment other than interest
on its due date, that Obligor agrees to pay interest on the amount unpaid from
its due date for payment. This interest will be computed by reference to
successive periods not exceeding six months selected by the Agent. The first of
these periods will start on the due date for payment of the unpaid amount. The
rate of interest applicable during each of these periods will be a rate per
annum equal to 1% plus LIBOR (or, in the case of GBP, PIBOR) for that period
plus the applicable Margin. This interest will be paid in arrear on the last day
of each of these periods and on the date of payment of the unpaid amount.
(2) Indemnity. If the Borrower fails to make a payment other than interest on
the due date the Borrower agrees to reimburse the person entitled to the payment
for the losses and expenses (including loss of profit) that person incurs, or
will incur, as a result. The computation of these losses and expenses will take
into account any amount received under SECTION 14(1).
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(3) Late Interest Payment. If the Borrower fails to pay an amount of interest on
the due date the Borrower agrees to pay to the Agent by way of indemnification
and in addition to such amount, a lump sum computed on that amount due from the
due date up to the date of payment by reference to the sum of (i) 1.6 per cent.
per annum and (ii) LIBOR (or, in the case of GBP, PIBOR) for the period selected
by the Agent if SECTION 14(1) were to apply.
SECTION 15 SHARING AMONG LENDERS
(1) Notice. If an amount due to a Lender (the "Recipient") under this Agreement
is discharged other than by payment through the Agent the Lender agrees to
notify the Agent. This may occur because of the exercise of a right of set-off,
by virtue of a combination of accounts, because of a voluntary or involuntary
payment by the Borrower direct to the Lender or otherwise. The notification will
provide details of the amount discharged and will be delivered no later than ten
Business Days after the discharge.
(2) Determination by the Agent. Where a Lender has issued a notice under SECTION
15(1) the Agent will determine what payments, if any, are due under SECTION
15(4). This determination will be made on the basis of the information contained
in all the notices delivered to the Agent under SECTION 15(1). The determination
will be notified to the Borrower and the Lenders.
(3) Litigation. In determining the amount due under SECTION 15(4) no account
will be taken of an amount due to a Lender which has declined to participate
in legal proceedings which resulted in the payment described in SECTION 15(1).
This only applies if that Lender could have joined in the proceedings or could
have instituted its own proceedings, but failed to do so.
(4) Payment to the Agent. The Recipient agrees to pay to the Agent an amount
equal to the amount discharged, less the amount which would have been received
by the Recipient if the discharge had been made by payment to the Agent. This
amount will be paid no later than five Business Days after receipt of a notice
from the Agent under SECTION 15(2).
(5) Obligations of the Borrower. Any amount due to the Recipient which would
otherwise have been discharged as described in SECTION 15(1) will be treated as
not having been discharged to the extent of an amount which is or will be
payable under SECTION 15(4) as a result. Accordingly the Borrower agrees to pay
this amount to the Recipient as if it had not been discharged. This payment is
required to be made by the Borrower whether or not the Agent has issued a
determination under SECTION 15(2).
(6) Distribution. The Agent agrees to distribute to the Lenders (other than the
Recipient) the amount received by it under SECTION 15(4) as if that amount had
been received from the Borrower in discharge of amounts due under the Agreement.
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(7) Recovery. If an amount discharged as described in SECTION 15(1) is recovered
by the Borrower or is required to be repaid to the Borrower by the Recipient,
each Lender which received the benefit of a payment made under SECTION 15(6)
from the Agent agrees to repay to the Recipient the amount it received. Each of
these Lenders will also reimburse the Recipient for any interest or other losses
or expenses which the Recipient has incurred in connection with the discharged
amount or its recovery or repayment. The rights and obligations of the parties
shall be restored to the position before any payment became due under SECTION
15(4).
SECTION 16 REPRESENTATIONS AND WARRANTIES
(1) By the Borrower. The Borrower represents and warrants that:
(a) Corporate Existence and Power. The Borrower is a corporation duly
incorporated and validly existing, and the Borrower and its Subsidiaries
have the power and all material governmental licenses, authorizations,
consents and approvals required to own their assets and conduct their
businesses, considered as a whole, substantially as now being conducted.
(b) Binding Obligations. This Agreement has been duly authorized, signed and
delivered by the Borrower and the obligations of the Borrower under this
Agreement are valid and binding obligations of the Borrower in accordance
with their terms.
(c) Legality and Contraventions. Its signing and delivery of this Agreement
and its exercise of rights and performance of obligations under this
Agreement:
(i) do not require any approval, filing, registration or exemption (except for
filings under the Securities Exchange Act of 1934);
(ii) do not contravene any provision of its Articles of Association or any law,
regulation or order;
(iii) are not prohibited by, and do not constitute a default under, and do not
result in an obligation to create Security under, any document or
arrangement to which it is a party.
(d) No Termination Event. No Termination Event or Potential Termination Event
has occurred and is continuing and none will occur as a result of the
exercise of the Borrower's rights or the performance of its obligations
under this Agreement.
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(e) Accuracy of Information. All information supplied, and to be supplied, on
behalf of the Borrower to any Syndicate Party is, and will be, accurate and
not misleading in any material respect.
(f) No Breach. Neither the Borrower nor any of its Subsidiaries is in breach of
any agreement to which it is a party or which is binding on it or any of its
assets which breach has a material adverse effect on the ability of the
Borrower to perform any of its obligations under this Agreement.
(g) Financial Statements. Its audited financial statements for the year ended
November 30, 1997 and the partial year (Rumpfgeschaftsjahr) ended December
31, 1997 give a true and fair view of the results of its operations and
financial position as of the date or period to which they relate. They were
prepared in accordance with German law and generally accepted accounting
principles consistently applied except to the extent otherwise described in
the accompanying notes.
(2) By the Guarantor. The Guarantor represents and warrants that:
(a) Corporate Existence and Power. The Guarantor and its United States
Subsidiaries are corporations duly incorporated, validly existing and in
good standing under the laws of their respective states of incorporation,
and have all corporate powers and all material governmental licences,
authorizations, consents and approvals required to carry on their
businesses, considered as a whole, substantially as now conducted.
(b) Corporate and Governmental Authorization; No Contravention. The execution,
delivery and performance by the Guarantor of this Agreement are within the
Guarantor's corporate powers, have been duly authorized by all necessary
corporate action, require no action by or in respect of, or filing with, any
governmental body, agency or official (except filings under the Securities
Exchange Act of 1934) and do not contravene, or constitute a default under,
any provision of applicable law or regulation or of the certificate of
incorporation or by-laws of the Guarantor or of any agreement, judgement,
injunction, order, decree or other instrument binding upon the Guarantor or
result in the creation or imposition of any Lien on any asset of the
Guarantor or any of its Subsidiaries.
(c) Binding Effect. This Agreement constitutes a valid and binding agreement of
the Guarantor.
(d) Financial statements.
(i) The consolidated balance sheet of the Guarantor and its Consolidated
Subsidiaries as of December 31, 1997 and the related consolidated statements
of income and cash flows for the fiscal year then ended, reported on by
Coopers & Xxxxxxx L.L.P. and set forth in the Guarantor's
21
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1997 Form 10-K, a copy of which has been delivered to each of the Lenders,
fairly present, in conformity with generally accepted accounting
principles, the consolidated financial position of the Guarantor and its
Consolidated Subsidiaries as of such date and the consolidated results of
their operations and their cash flows for such fiscal year.
(ii) The unaudited condensed consolidated balance sheet of the Guarantor and
its Consolidated Subsidiaries as of March 31, 1998 and the re lated
unaudited condensed statements of consolidated income and consolidated
cash flows for the three months then ended, set forth in the Guarantor's
quarterly report for the Fiscal Quarter ended March 31, 1998 as filed with
the Securities and Exchange Commission on Form 10-Q, a copy of which has
been delivered to each of the Lenders, fairly present, on a basis
consistent with the financial statements referred to in sub-paragraph
(2)(d)(i) of this Clause, the consolidated financial position of the
Guarantor and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such three-months
period (subject to normal year-end adjustments).
(iii) There has been no material adverse change since December 31, 1997 in the
business or financial position of the Guarantor and its Consolidated
Subsidiaries, considered as a whole, as reflected in the financial
statements referred to in sub-paragraph (2)(d)(i) of this Clause.
(e) Litigation. There is no action, suit or proceeding pending against, or to
the knowledge of the Borrower threatened against or affecting, the
Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official which, in the reasonable opinion of
the Guarantor, is likely to have a material adverse effect on the business
or financial position of the Guarantor and its Consolidated Subsidiaries,
considered as a whole, or which in any manner draws into question the
validity of this Agreement.
(f) Compliance with ERISA. Each member of the ERISA Group (i) has fulfilled
its obligations under the minimum funding standards of ERISA and the
Internal Revenue Code with respect to each Plan and (ii) is in compliance
in all material respects with the presently applicable provisions of ERISA
and the Internal Revenue Code with respect to each Plan. No member of the
ERISA Group has (x) sought a waiver of the minimum funding standard under
Section 412 of the Internal Revenue Code in respect of any Plan, (y)
failed to make any contribution or payment to any Plan or Multiemployer
Plan or in respect of any Benefit Arrangement, or made any amendment to
any Plan or Benefit Arrangement, which has resulted or could result in the
imposition of a Lien or the posting of a bond or other security under
ERISA or the Internal Revenue Code, in each case securing an amount
greater than US $ 10,000,000 or (z) incurred any liability under Title IV
of ERISA other than a liability to the
22
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PBGC for premiums under Section 4007 of ERISA which could materially
adversely affect the business, consolidated financial position or
consolidated results of operations of the Guarantor and its Consolidated
Subsidiaries.
(g) Environmental Matters. In the ordinary course of its business, the Guarantor
conducts appropriate reviews of the effect of Environmental Laws on the
business, operations and properties of the Guarantor and its Subsidiaries,
in the course of which it identifies and evaluates pertinent liabilities and
costs (including, without limitation, capital or operating expenditures
required for clean-up or closure of properties presently or previously owned
or for the lawful operation of its current facilities, required constraints
or changes in operating activities, and evaluation of liabilities to third
parties, including employees, together with pertinent costs and expenses).
On the basis of this review, the Guarantor has reasonably concluded that
Environmental Laws are not likely to have a material adverse effect on the
business, financial position or results of operations of the Guarantor and
its Consolidated Subsidiaries, considered as a whole.
(h) Taxes. United States Federal income tax returns of the Guarantor and its
Subsidiaries have been examined and closed through the Fiscal Year ended
December 31, 1993. The Guarantor and its Subsidiaries have filed all United
States Federal income tax returns and all other material tax returns which
are required to be filed by them and have paid all taxes shown as due
pursuant to such returns or pursuant to any assessment received by the
Guarantor or any Subsidiary, except such taxes, if any, as are being
contested in good faith and as to which, in the opinion of the Guarantor,
adequate reserves have been provided. The charges, accruals and reserves on
the books of the Guarantor and its Subsidiaries in respect of taxes or
related governmental charges are in the opinion of the Guarantor adequate.
(i) Not an Investment Company. The Guarantor is not an "investment company"
within the meaning of the Investment Company Act of 1940, as amended,
(j) Compliance with Laws. The Guarantor complies, and has caused each Subsidiary
to comply, in all material respects with all applicable laws, ordinances,
rules, regulations, and requirements of governmental authorities (including,
without limitation, Environmental Laws and ERISA and the rules and
regulations thereunder), except where (i) the necessity of compliance
therewith is contested in good faith by appropriate proceedings, (ii) no
officer of the Guarantor is aware that the Guarantor or the relevant
Subsidiary has failed to comply therewith or (iii) the Guarantor has
reasonably concluded that failure to comply is not likely to have a material
adverse effect on the business, financial position or results of
23
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operations of the Guarantor and its Consolidated Subsidiaries, taken as a
whole.
(3) Repetition. The representations in SECTION 16(1 and SECTION 16(2)(except the
representations set forth in SECTION 16(2)(d)(iii), (e), (f) (other than
clause (i) thereof), (g) and (j)) will be deemed repeated by the Borrower
and the Guarantor, respectively, at the time of delivery of a notice of
borrowing and on the first day of each Term. This repetition will be by
reference to the facts on that day. If on that day audited accounts for a
period subsequent to December 31, 1997 have been finalised SECTION 16(1)(g)
and SECTION 16(2)(d)(i) will be treated as referring to the audited profit
and loss accounts and audited balance sheets contained in the then latest
audited financial statements of the Borrower or the Guarantor, respectively.
If on that day unaudited, condensed quarterly accounts of the Guarantor for
a period subsequent to March 31, 1998 have been finalised, SECTION
16(2)(d)(ii) will be treated as referring to the then latest quarterly
accounts of the Guarantor.
(4) Survival of representations. Each of the representations made under this
Agreement shall survive the making of the Advances.
SECTION 17 DELIVERY OF INFORMATION
(1) By the Borrower.
(a) Periodic Reports. The Borrower agrees to deliver each of the following to
the Agent as soon as they become available and, in any event, by the latest
date indicated:
Document/Information Latest date
-------------------- -----------
Consolidated audited annual 90 days after the end of the
financial statements of the Borrower's financial year
Borrower
Half-year consolidated 60 days after the end of the
financial statements of the first half of the Borrower's
Borrower financial year (except for
the first half of 1998 for which the
consolidated financial statements shall be
delivered within 90 days after the end of such
half year)
(b) Other information. The Borrower agrees to deliver to the Agent such
additional information regarding the financial position or business of the
Borrower as the Agent may reasonably request from time to time.
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(c) Termination Events. The Borrower agrees to deliver to the Agent within 15
days after any officer of the Borrower becomes aware of the existence of any
Termination Event or Potential Termination Event (unless such Termination
Event or Potential Termination Event shall have been cured before the end of
such 15 day period) a certificate signed by the chief financial officer or
the chief accounting officer of the Borrower setting forth the details of
such Termination Event or Potential Termination Event and the action which
the Borrower is taking or proposes to take with respect thereto;
(2) By the Guarantor.
(a) Reports, Documents and Certificates. The Guarantor agrees to
deliver to the Agent:
(i) as soon as available and in any event within 90 days after the end of
each fiscal year, a consolidated balance sheet of the Guarantor and
its Consolidated Subsidiaries as of the end of such fiscal year and
the related consolidated statements of income and cash flows for such
fiscal year, setting forth in each case in comparative form the
corresponding figures for the previous fiscal year, all reported on by
Coopers & Xxxxxxx L.L.P. or other independent public accountants of
nationally recognized standing, whose report shall be without material
qualification;
(ii) as soon as available and in any event within 45 days after the end of
each of the first three quarters of each fiscal year, a condensed
consolidated balance sheet of the Guarantor and its Consolidated
Subsidiaries as of the end of such quarter, the related condensed
consolidated statement of income for such quarter and the related
condensed consolidated statements of income and cash flows for the
portion of such fiscal year ended at the end of such quarter, setting
forth in each case in comparative form the corresponding figures for
the corresponding periods of the previous fiscal year, all in
reasonable detail and certified, to the best of its knowledge (subject
to normal year-end adjustments), as to fairness of presentation, and
consistency with generally accepted accounting principles (except for
changes concurred in by the Guarantor's independent public
accountants) by the chief financial officer or the chief accounting
officer of the Guarantor.
(iii) simultaneously with the delivery of each set of financial statements
referred to in sub-paragraphs (i) and (ii), a certificate of the chief
financial officer or the chief accounting officer of the Guarantor (x)
setting forth in reasonable detail the calculations required to
establish whether the Guarantor was in compliance with the re-
25
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quirements of SECTION 18(2)(a) to (c), inclusive, on the date of such
financial statements, (y) stating, to the best of its knowledge,
whether any Termination Event or Potential Termination Event exists on
the date of such certificate and (z) if any Termination Event or
Potential Termination Event then exists, setting forth the details
thereof and the action which the Guarantor is taking or proposes to
take with respect thereto;
(iv) within 15 days after any officer of the Guarantor becomes aware of the
existence of any Termination Event or Potential Termination Event
(unless such Termination Event or Potential Termination Event shall
have been cured before the end of such 15 day period) a certificate of
the chief financial officer or the chief accounting officer of the
Guarantor setting forth the details of such Termination Event or
Potential Termination Event and the action which the Guarantor is
taking or proposes to take with respect thereto;
(v) promptly upon the mailing thereof to the shareholders of the Guarantor
generally, copies of all financial statements, reports and proxy
statements so mailed;
(vi) promptly upon the filing thereof, copies of all reports on Forms 10-K,
10-Q and 8-K and similar regular and periodic reports which the
Guarantor shall have filed with the Securities and Exchange
Commission;
(vii) if and when any member of the ERISA Group (i) gives or is required to
give notice to the PBGC of any "reportable event" (as defined in
Section 4043 of ERISA) with respect to any Plan which might constitute
grounds for a termination of such Plan under Title IV of ERISA, or
knows that the plan administrator of any Plan has given or is required
to give notice of any such reportable event, a copy of the notice of
such reportable event given or required to be given to the PBGC; (ii)
receives notice of complete or partial withdrawal liability under
Title IV of ERISA or notice that any Multiemployer Plan is in
reorganization, is insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of
an intent to terminate, impose liability (other than for premiums
under Section 4007 of ERISA) in respect of, or appoint a trustee to
administer any Plan, a copy of such notice; (iv) applies for a waiver
of the minimum funding standard under Section 412 of the Internal
Revenue Code, a copy of such application; (v) gives notice of intent
to terminate any Plan under Section 4041(c) of ERISA, a copy of such
notice and other information filed with the PBGC, (vi) gives notice of
withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of
such notice; or (vii) fails to make any payment or contribution to any
26
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Plan or Multiemployer Plan or in respect of any Benefit Arrangement or
makes any amendment to any Plan or Benefit Arrangement which has
resulted or could result in the imposition of a Lien or the posting of
a bond or other security, a certificate of the chief financial officer
or the chief accounting officer of the Guarantor setting forth details
as to such occurrence and action, if any, which the Guarantor or
applicable member of the ERISA Group is required or proposes to take;
provided that no such certificate shall be required unless the
aggregate unpaid actual or potential liability of members of the ERISA
Group involved in all events referred to in (i) through (vii) above of
which officers of the Guarantor have obtained knowledge and have not
previously reported under this sub-paragraph (vii) exceeds US $
25,000,000;
(viii)immediately after any officer of the Guarantor obtains knowledge of a
change or a proposed change in the rating of the Guarantor's
outstanding senior unsecured long-term debt securities by Xxxxx'x
Investor Service, Inc. or Standard & Poor's Rating Group, a
certificate of the chief financial officer or chief accounting officer
of the Guarantor setting forth the details thereof; and
(b) Other Information. The Guarantor agrees to deliver to the Agent from time to
time such additional information regarding the financial position or
business of the Guarantor as the Agent may reasonably request.
SECTION 18 GENERAL COVENANTS
(1) By the Borrower. The Borrower agrees as follows:
(a) Disposal of Assets. The Borrower and its Subsidiaries, considered as a
whole, will not, without the prior approval of an Instructing Group, dispose
of the whole or the substantial part of their assets. This does not apply to
disposals on commercial terms for full market value and on an arms-length
basis.
(b) Maintenance of Representations. It will take all steps necessary to ensure
that the representations and warranties in Section 16(1) remain true and
correct.
(c) Insurance. The Borrower and its Subsidiaries, considered as a whole, will
maintain insurances on and in relation to their businesses, assets and
operations with reputable insurance companies which are, in the reasonable
opinion of the Borrower, appropriate to insure the Borrower and its
Subsidiaries against risks involved in carrying on their businesses,
including, in particular, product liability and environmental liability.
27
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(2) By the Guarantor. The Guarantor agrees as follows:
(a) Minimum Consolidated Net Worth. At no time will Consolidated Net Worth be
less than Minimum Consolidated Net Worth. "Minimum Consolidated Net Worth"
means US $ 1,700,000,000; provided that such amount shall be adjusted at the
end of each Fiscal Quarter ending after March 31, 1998 as follows:
(i) increased by 50% of Consolidated Net Income for such Fiscal Quarter;
provided that, if Consolidated Net Income for such Fiscal Quarter is a
negative number (a "Consolidated Net Loss"), an amount up to 50% of
such Consolidated Net Loss shall be applied first to reduce Minimum
Consolidated Net Worth to the extent of offsetting prior increases (if
any) in Minimum Consolidated Net Worth made pursuant to this sub-
paragraph (i) during the same fiscal year and second to reduce (but
not below zero) any future increase in Minimum Consolidated Net Worth
that would otherwise be made pursuant to this sub-paragraph (i) during
the same fiscal year; and
(ii) increased by an amount equal to 50% of all increases in Consolidated
Net Worth during such Fiscal Quarter attributable to sales or
issuances of the Guarantor's Equity Securities; provided that an
amount up to 50% of all decreases in Consolidated Net Worth during
such Fiscal Quarter attributable to purchases or other retirements of
the Guarantor's Equity Securities shall be applied first to offset any
increase in Minimum Consolidated Net Worth that would otherwise be
made pursuant to this sub-paragraph (ii) at the end of such Fiscal
Quarter, second to reduce Minimum Consolidated Net Worth to the extent
of offsetting prior increases (if any) in Minimum Consolidated Net
Worth made pursuant to this sub-paragraph (ii) and third to reduce
(but not below zero) any future increase in Minimum Consolidated Net
Worth that would otherwise be made pursuant to this sub-paragraph
(ii).
(b) Limitations on Debt.
(i) It will not at any time, and will not suffer or permit any
Consolidated Subsidiary at any time to, create, incur, issue,
guarantee or assume any Debt if, immediately after giving effect
thereto, the ratio of (y) Consolidated Debt to (z) the sum of
Consolidated Debt and Consolidated Adjusted Net Worth would exceed
53%.
(ii) It will not at any time suffer or permit any Consolidated Subsidiary
to create, incur, issue, guarantee or assume any Debt if, immediately
after giving effect thereto, the aggregate outstanding amount
(determined at that time) of Debt of all Consolidated Subsidiaries
28
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(other than Debt owed to the Borrower or one or more other
Consolidated Subsidiaries) would exceed 30% of Consolidated Net Worth.
(iii) Sub-paragraphs (i) and (ii) shall not prevent (i) the Guarantor from
creating, incurring, issuing, guaranteeing or assuming Debt for the
purpose of extending, renewing or Refunding (as such term is defined
in this subsection) an equal or greater principal amount of Debt then
outstanding of the Guarantor or of Debt then outstanding of a
Consolidated Subsidiary or (ii) a Consolidated Subsidiary from
creating, incurring, issuing, guaranteeing or assuming Debt for the
purpose of extending, renewing or Refunding an equal or greater
principal amount of Debt then outstanding of such Consolidated
Subsidiary, or (iii) the creation, incurrence, issuance, guarantee or
assumption of Debt owed to or owned by the Guarantor or a Consolidated
Subsidiary. For purposes of this sub-paragraph (iii), Debt is deemed
to be for the purpose of "Refunding" other Debt if and to the extent
that (x) no later than 5 Domestic Business Days after the refunding
Debt is incurred, the Guarantor delivers to the Agent written notice
stating that the purpose of such Debt is to refund outstanding Debt
and specifying the Debt to be refunded, (y) the proceeds of such
refunding Debt are held in the form of cash or High Quality
Investments (free of any Lien except a Lien securing the specified
Debt to be refunded) until such specified Debt is repaid and (z) such
specified Debt to be refunded is repaid within 45 days after the
refunding Debt is incurred.
(iv) For purposes of the limitations provided in, and computations under,
this SECTION 18(2)(b), (x) when a corporation becomes a Consolidated
Subsidiary it shall be deemed to create at such time all the Debt it
has outstanding immediately after such time (provided that, if after
giving effect to this clause (x), the aggregate outstanding amount of
Debt of all Consolidated Subsidiaries (other than Debt owed to the
Guarantor or one or more other Consolidated Subsidiaries) would be
greater than 30% but less than 60% of Consolidated Net Worth, this
clause (x) shall not apply at the time such corporation becomes a
Consolidated Subsidiary, but such corporation shall be deemed to
create on the 15th day after it becomes a Consolidated Subsidiary all
the Debt it has outstanding on such 15th day), (y) the disposition
(other than to a Consolidated Subsidiary or the Guarantor) by the
Guarantor or a Subsidiary of capital stock of any Consolidated
Subsidiary which holds Debt of the Guarantor or any other Consolidated
Subsidiary so that the Consolidated Subsidiary ceases to be a
Consolidated Subsidiary after such disposition) shall be deemed the
creation of such Debt, and (z) the disposition (other than to a
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Consolidated Subsidiary or the Guarantor) of Debt of the Guarantor or
any Consolidated Subsidiary by any Consolidated Subsidiary or the
Guarantor shall be deemed the creation of such Debt.
(c) Negative Pledge. Neither the Guarantor nor any Consolidated Subsidiary will
create, assume or suffer to exist any Lien on any asset now owned or
hereafter acquired by it, except:
(i) Liens existing on March 31, 1998 securing Debt outstanding on March
31, 1998 in an aggregate principal amount not exceeding
US $30,000,000;
(ii) any Lien existing on any asset of any corporation at the time such
corporation becomes a Consolidated Subsidiary and not created in
contemplation of such event;
(iii) any Lien on any asset securing Debt incurred or assumed solely for
the purpose of financing all or any part of the cost of acquiring
such asset (or acquiring a corporation or other entity which owned
such asset); provided that such Lien attaches to such asset
concurrently with or within 90 days after such acquisition;
(iv) any Lien on any asset of any corporation existing at the time such
corporation is merged or consolidated with or into the Guarantor or a
Consolidated Subsidiary and not created in contemplation of such
event;
(v) any Lien existing on any asset prior to the acquisition thereof by
the Guarantor or a Consolidated Subsidiary and not created in
contemplation of such acquisition;
(vi) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the
foregoing clauses of this Section; provided that such Debt is not
increased and is not secured by any additional assets;
(vii) any Lien in favour of the holder of Debt (or any person or entity
acting for or on behalf of such holder) arising pursuant to any order
of attachment, distraint or similar legal process arising in
connection with court proceedings so long as the execution or other
enforcement thereof is effectively stayed and the claims secured
thereby are being contested in good faith by appropriate proceedings;
(viii) Liens incidental to the normal conduct of its business or the
ownership of its assets which (x) do not secure Debt, (y) do not
secure
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any obligation in an amount exceeding US $ 100,000,000 and (z) do not
in the aggregate materially detract from the value of the assets of
the Guarantor and its Consolidated Subsidiaries taken as a whole or in
the aggregate materially impair the use thereof in the operation of
the business of the Guarantor and its Consolidated Subsidiaries taken
as a whole; and
(ix) Liens securing Debt which are not otherwise permitted by the foregoing
clauses of this subparagraph (c); provided that (y) the aggregate
outstanding principal amount of Debt secured by all such Liens on
current assets shall not at any time exceed 20% of Consolidated
Current Assets and (z) the aggregate outstanding principal amount of
Debt secured by all such Liens (including Liens referred to in clause
(y) of this proviso) shall not at any time exceed the sum of (A) 20%
of Consolidated Current Assets plus (B) 3% of Consolidated Net Worth.
(d) Consolidations, Mergers and Sale of Assets.
(i) The Guarantor will not directly or indirectly sell, lease, transfer or
otherwise dispose of all or substantially all of its assets, or merge
or consolidate with any other Person, or acquire any other Person
through purchase of assets or capital stock, unless either (y) the
Guarantor shall be the continuing or surviving corporation or (z) the
successor or acquiring corporation (if other than the Guarantor) shall
be a corporation organized under the laws of one of the States of the
United States of America and shall assume, by a writing satisfactory
in form and substance to the Instructing Group, all of the obligations
of the Guarantor under this Agreement, including all covenants herein
and therein contained, in which case such successor or acquiring
corporation shall succeed to and be substituted for the Guarantor with
the same effect as if it had been named herein as a party hereto.
(ii) No disposition of assets, merger, consolidation or acquisition
referred to in sub-paragraph (i) shall be permitted if, immediately
after giving effect thereto, the Guarantor would be in default under
any of the terms or provisions of this Agreement.
(e) Compliance with Laws. The Guarantor will comply, and cause each Subsidiary
to comply, in all material respects with all applicable laws, ordinances,
rules, regulations, and requirements of governmental authorities (including,
without limitation, Environmental Laws and ERISA and the rules and
regulations thereunder) except where (x) the necessity of compliance
therewith is contested in good faith by appropriate proceedings, (y) no
officer of the Guarantor is aware that the Guarantor or the relevant
Subsidiary has failed to comply therewith or (z) the Guarantor
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has reasonably concluded that failure to comply is not likely to have a
material adverse effect on the business, financial position or results of
operations of the Guarantor and its Consolidated Subsidiaries, taken as a
whole.
(3) Duration of covenants. The obligations of the Borrower and the Guarantor
under this SECTION 18 and SECTION 17 will cease to have effect when the Facility
has ceased to be available and there are no amounts outstanding under the
Facility.
SECTION 19 EARLY TERMINATION
(1) Termination Events. Each of the following is a Termination Event:
(a) Non-payment. The Borrower fails to pay when due any principal, or fails to
pay within five days of the due date thereof, any other sum payable under
this Agreement.
(b) Certain Covenants. The Borrower fails to observe or perform any covenant
contained in SECTION 18(1)(a) to (c) or the Guarantor fails to observe or
perform any covenant contained in SECTION 18(2)(a) to (d).
(c) Other Covenants. Any of the Obligors fails to observe or perform any other
covenant or agreement contained in this Agreement for 30 days after written
notice thereof has been given to the Borrower and the Guarantor by the
Agent;
(d) Incorrect Statements. Any statement made by any of the Obligors in SECTION
16 or in any document delivered pursuant to this Agreement is incorrect in
any material respect when made or deemed to have been repeated; provided
that, if any statement deemed to have been made by the Obligor pursuant to
SECTION 16(3) shall have been incorrect solely by reason of the existence of
a Termination Event or Potential Termination Event of which the Obligor was
not aware when such statement was deemed to have been made and which was
cured before or promptly after the Obligor became aware thereof, then such
statement shall be deemed not to have been incorrect in any material
respect.
(e) Cross Default. The Guarantor or any Subsidiary fails to make one or more
payments in respect of Material Debt (other than Acquired Debt in an
aggregate outstanding principal amount not exceeding US $ 50,000,000) when
due or within any applicable grace period, and such failure has not been
waived.
(f) Default on Other Obligations. The Guarantor or any Consolidated Subsidiary
fails to observe or perform any term, covenant or agreement contained in any
instrument or agreement (other than this Agreement) by
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which it is bound relating to Material Debt (other than Acquired Debt in an
aggregate outstanding principal amount not exceeding US $ 50,000,000), or
any other event or condition referred to therein shall occur, and the effect
of all such failures, events and conditions (each a "default") is to cause
the maturity of Material Debt to be accelerated or to permit (any applicable
period of grace having expired) the holder or holders of Material Debt (or
any Person acting on their behalf) to accelerate the maturity thereof.
(g) Voluntary Insolvency. The Borrower, the Guarantor or any Significant
Subsidiary commences a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or its
debts under any bankruptcy, insolvency or other similar law or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property under any such law,
or consents to any such relief or to the appointment of or taking possession
by any such official in an involuntary case or other proceeding commenced
against it under any such law, or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they
become due, or a resolution shall be adopted by either the shareholders or
the board of directors of such corporation to authorize any of the
foregoing.
(h) Involuntary Insolvency. An involuntary case or other proceeding is commenced
against the Borrower, the Guarantor or any Significant Subsidiary in any
court of competent jurisdiction seeking in each case liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or
any substantial part of its property under any such law, and in each case
such involuntary case or other proceeding shall remain undismissed and
unstayed for a period of 60 days; or an order for relief shall be entered
against the Guarantor or any Significant Subsidiary as debtors under the
federal bankruptcy laws of the United States as now or hereafter in effect.
(i) ERISA. Any member of the ERISA Group fails to pay when due an amount or
amounts aggregating in excess of US $ 1,000,000 which it shall have become
liable to pay to the PBGC or to a Plan under Title IV of ERISA; or notice of
intent to terminate a Plan or Plans having aggregate Unfunded Liabilities in
excess of US $ 50,000,000 (collectively, a "Material Plan") is filed under
Title IV of ERISA by any member of the ERISA Group, any plan administrator
or any combination of the foregoing; or the PBGC institutes proceedings
under Title IV of ERISA to terminate, to impose liability (other than for
premiums under Section 4007 of ERISA) in respect of, or to cause a trustee
to be appointed to administer any Material Plan; or a condition exists by
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reason of which the PBGC would be entitled to obtain a decree adjudicating
that any Material Plan must be terminated; or there occurs a complete or
partial withdrawal from, or a default, within the meaning of Section
4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans which
could cause one or more members of the ERISA Group to incur a current
payment obligation in excess of US $ 50,000,000; provided that no
Termination Event shall exist under this sub-clause (i) with respect to any
Prior Plan unless it is reasonably likely that one or more members of the
ERISA Group is liable with respect to the relevant Unfunded Liabilities or
current payment obligation, as the case may be.
(j) Judgement Unsatisfied. A judgement or order for the payment of money in
excess of US $ 10,000,000 shall be rendered against any of the Obligors or
any of their respective Subsidiaries and such judgment or order shall
continue unsatisfied and unstayed for a period of 45 days.
(k) Change of Ownership of Guarantor. Any person or group of persons (within the
meaning of Section 13 or 14 of the Securities Exchange Act of 1934, as
amended) shall have acquired beneficial ownership (within the meaning of
Rule 13d-3 promulgated by the Securities and Exchange Commission under said
Act) of 30 % or more of the outstanding shares of common stock of the
Guarantor; or Continuing Directors shall cease to constitute a majority of
the board of directors of the Guarantor.
(l) Change of Ownership of Borrower. The Guarantor ceases to hold, directly or
indirectly, the entire voting share capital of the Borrower.
(m) Unlawfulness or Repudiation. It is unlawful for any of the Obligors to
comply with, or any of the Obligors repudiates, any of its material
obligations under this Agreement.
(n) Change of Business. The Guarantor ceases, or threatens to cease, to conduct,
as a major portion of its business, the sale of building products.
(o) Material Adverse Change. There is a change in the financial condition or
business of the Guarantor and its Subsidiaries, considered as a whole, which
will in any material respect affect the ability of the Guarantor to perform
its material obligations under this Agreement.
(2) Consequences of a Termination Event. If a Termination Event occurs the Agent
may by notice to the Borrower:
(a) cancel the undrawn Facility; or
(b) demand immediate repayment of the Loan,
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or both. The Agent agrees to deliver a notice under this SECTION 19(2) if an
Instructing Group instructs the Agent to do so. In the case of cancellation the
Lenders will be under no further obligation to make an Advance. In the case of a
demand for repayment the Borrower agrees to pay the Lenders in accordance with
the notice.
(3) Indemnity. If there is a Termination Event the Borrower agrees to reimburse
the Agent and each Lender for the losses and expenses the Agent or that Lender
incurs, or will incur, as a result.
SECTION 20 THE AGENT AND THE ARRANGER
(1) Appointment. The Agent is appointed as an agent by each Lender. The Agent is
not acting as agent of the Borrower or the Guarantor under this Agreement.
(2) Authority. The Agent is authorised to exercise the rights, powers,
discretions and duties which are specified by this Agreement. The Agent may also
act in a manner reasonably incidental to these matters. The Agent shall be freed
from the restrictions of SECTION 181 of the Civil Code (Burgerliches
Gesetzbuch).
(3) Duties. In addition to the obligations of the Agent set out elsewhere in
this Agreement the Agent agrees as follows:
(a) Notices. The Agent will notify each Lender of the contents of each notice
received from the Borrower or the Guarantor under the terms of this
Agreement. If the notice only affects particular Lenders, the Agent may
elect to notify only those Lenders.
(b) Other Documents. When the Borrower or the Guarantor delivers to the Agent
any other document required to be delivered under this Agreement the Agent
will provide a copy to each Lender.
(c) Termination Events. The Agent will notify each Lender of any Termination
Event or Potential Termination Event. This obligation will not arise,
however, until there is a default of which the Agent has actual knowledge or
until the Agent receives express notice with reasonable supporting evidence
of the Termination Event or Potential Termination Event. Until this time the
Agent is entitled to assume that there is no Termination Event or Potential
Termination Event. The Agent is not required to make inquiries. Information
referred to in SECTION 20(11) does not have to be disclosed under this
paragraph.
(d) Other Information. The Agent will request the Borrower or the Guarantor, as
the case may be, to deliver to the Agent any information reasonably
requested by a Lender.
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(4) Powers. In addition to the powers of the Agent set out elsewhere in this
Agreement the Agent has the following powers:
(a) Professional Advisers. The Agent may instruct professional advisers
to provide advice in connection with the Facility.
(b) Authority from Instructing Group. The Agent may take any action which is not
inconsistent with this Agreement and which is authorised by an Instructing
Group.
(c) Views of Instructing Group. In exercising any of its rights, powers or
discretions the Agent may have regard to the views of an Instructing Group.
If it exercises those rights, powers or discretions in accordance with those
views the Agent will incur no liability.
(d) Proceedings. The Agent may institute legal proceedings against the Obligors
or any of them in the name of the Lenders if these proceedings are
authorised by an Instructing Group. No proceedings may be commenced in the
name of a Lender without such Lender's prior written consent.
(e) Compliance with Law. The Agent may take any action necessary for it to
comply with applicable laws.
The Agent is not required to exercise any of these powers and will incur no
liability if it fails to do so. In the context of legal proceedings the Agent
may decline to take any step until it has received indemnities or security
satisfactory to it.
(5) Reliance. The Agent is entitled to rely upon each of the following:
(a) Advice received from professional advisers.
(b) A certificate of fact received from the Borrower or the Guarantor and signed
by an Authorised Person.
(c) Any communication or document believed by the Agent to be genuine.
The Agent will not be liable for any of the consequences of relying on these
items.
(6) Extent of Agent's Duties.
(a) No Other Duties. The Agent has no obligations or duties other than
those expressly set out in this Agreement.
(b) Illegality and Liability. The Agent is not obliged to do anything which is
illegal or which may expose it to liability to any person.
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(c) Not a Fiduciary. The Agent is not acting as a fiduciary for any purpose in
connection with this Agreement.
(7) Responsibility of the Lenders. Each Lender is responsible for its own
decision to become involved in the Facility and its decision to take or not take
action under the Facility. It shall make its own credit appraisal of the
Obligors and the terms of the Facility. Neither the Agent nor the Arranger makes
any representation that any information provided to a Lender before or after the
date of this Agreement is true. Accordingly each Lender should take whatever
action it believes is necessary to verify that information. In addition neither
the Agent nor the Arranger is responsible for the legality, validity or adequacy
of this Agreement. Each Lender will satisfy itself on these issues.
(8) Limitation of Liability.
(a) Agent. The Agent will not be liable for any action or non-action under or in
connection with the Facility unless caused by its gross negligence or
willful misconduct.
(b) Directors, Employees and Agents. No director, employee or agent of the Agent
will be liable to a Lender, the Borrower or the Guarantor in relation to the
Facility. Each Lender, the Borrower and the Guarantor agree not to seek to
impose this liability upon them.
(9) Business of the Agent. Despite its role as agent of the Lenders the Agent
may:
(a) participate as a Lender in the Facility,
(b) carry on all types of business with the Borrower and the Guarantor, and
(c) act as agent for other groups of lenders to the Borrower, the Guarantor or
other borrowers.
(10)Indemnity. Each Lender agrees to reimburse the Agent for all losses and
expenses reasonably incurred by the Agent as a result of its appointment as
Agent or arising from its activities as Agent. These losses and expenses will
take into account amounts reimbursed to the Agent by any Obligor. The liability
of each Lender under this SECTION 20(10) will be limited to the share of the
total losses and expenses which corresponds to that Lender's share of the Total
Commitments or, if an Advance has been made, the Loan. If the losses or expenses
are at tributable to an activity of the Agent which relates to only some of the
Lenders, the Agent may instead notify the Lenders of a different sharing
arrangement. In this case the limit of liability of a Lender under this
sub-clause will be determined by the Agent. The Lenders are not liable for
losses and expenses arising from the gross negligence or willful misconduct of
the Agent.
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(11) Information. The Agent is not required to disclose to the Lenders
any information which is not received by it in its capacity as Agent.
(12) Resignation. The Agent may resign by giving notice to the Borrower,
the Guarantor and the Lenders. The Agent may be removed by notice given
by the Instructing Group to the Agent, the Guarantor and the Lenders. In
either event the following shall apply:
(a) Appointment by Instructing Group. An Instructing Group may appoint
a new Agent.
(b) Appointment by the Resigning Agent. If an Instructing Group has not
appointed a new Agent within 30 days after the resigning Agent's notice,
the resigning Agent may appoint a new Agent.
(c) Mode of Appointment. A new Agent will be appointed in consultation with the
Borrower, by notice to the Borrower, the Guarantor and the Lenders. A new
Agent cannot be appointed without its consent.
(d) Timing of Appointment. If the Agent has resigned, the new Agent will become
Agent at a time agreed between the new Agent and the resigning Agent. If no
time is agreed, the new Agent will become Agent ten Business Days after the
notice referred to in paragraph (c). Any removal or resignation of the
Agent will not be effective until a new Agent has been appointed and
accepted its appointment.
(e) Effect of Appointment. Upon a new Agent becoming Agent the resigning or
removed Agent will cease to be Agent. Accordingly it will be discharged
from its obligations and duties as Agent. It will, however, continue to be
able to rely on the terms of this SECTION 20 in respect of all matters
relating to the period of its appointment. The new Agent will assume the
role of Agent. It will have all the rights, powers, discretions and duties
of the Agent provided for in this Agreement.
(f) Transition. The resigning or removed Agent and the new Agent agree to
co-operate to ensure an orderly transition. The resigning or removed Agent
agrees to deliver or make available to the new Agent all records, files and
information held by it as Agent. This obligation will not require the
resigning or removed Agent to disclose any confidential information.
(13) Arranger. The Arranger has no continuing role in connection with
the Facility and is not liable in respect of any matter concerning the
Facility.
SECTION 21 EVIDENCE AND CERTIFICATES
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(1) Evidence of Debt. The Agent will maintain in its books an account showing
all liabilities accrued and payments made in relation to the Facility. Details
of amounts outstanding recorded in this account will be prima facie evidence of
the Borrower's or Guarantor's obligations.
(2) Certificates. Each certificate delivered under this Agreement must contain
reasonable detail of the matters being certified. A certificate delivered by the
Agent or a Lender will be conclusive unless there is an obvious error.
SECTION 22 NOTICES
(1) Nature of Notices. No notice given by any of the Obligors under this
Agreement may be withdrawn or revoked. Each notice delivered by any of the
Obligors must be unconditional. It must also be signed by an Authorised Person.
(2) Delivery of Notices. A notice under this Agreement will only be effective if
it is in writing and is received. Notices may be given by post, telex, fax or
(in the case of notices among the Lenders and the Agent) SWIFT. If a notice
under SECTION 6(1) is given by fax, a hard copy must also be delivered.
(3) Notices through the Agent. Each notice from any of the Obligors or a Lender
will be delivered to the Agent. The Agent agrees to pass on the details of
notices received by it to the appropriate recipient as soon as practicable.
(4) Language.
(a) All notices given under this Agreement must be in English.
(b) All other documents delivered under this Agreement may be in English or
German and must be delivered in sufficient copies for the Agent and all
Lenders.
(5) Address Details. Notices will be delivered to the address of the intended
recipient as set out in Schedule 1. The Borrower, the Guarantor or a Lender may
change its address details by not less than 5 Business Days' notice to the
Agent. The Agent may change its address details by 5 Business Days' notice to
the Borrower, the Guarantor and the Lenders.
SECTION 23 TRANSFERS AND SUBSTITUTION
(1) Transfers by the Obligors. No Obligor may transfer or otherwise dispose of
any of its rights or obligations under this Agreement.
(2) Substitution of Lender. If a Lender fails to perform its obligations, or the
obligations of a Lender have been suspended or any Lender has demanded
compensation under SECTION 12, the Borrower shall have the right, with the
consent of
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the Agent (such consent not to be
unreasonably withheld) to substitute such Lender by another bank or financial
institution which assumes such Lender's Commitment or, as the case may be,
participations in the Advances.
(3) Transfers by Lenders.
(a) General Right. A Lender (the "Existing Lender") may at any time transfer any
of its rights and/or obligations under this Agreement to:
(i) any other Lender,
(ii) any affiliate of any Lender being a bank or other financial
institution or,
(iii) with the prior consent of the Borrower (such consent not to be
unreasonably withheld) to another bank or other financial institution,
or
(iv) to any other party following the occurrence of a Termination Event.
(in each case the "New Lender").
If an Existing Lender transfers any of its rights and/or obligations under
this Agreement and at the time of such transfer there arises an obligation
on the part of the Borrower under SECTION 12(2)(b) or SECTION 12(4)(b) to
pay immediately or in respect of any future payment to the New Lender any
amount in excess of the amount it would have been obliged to pay to the
Existing Lender, the Borrower shall not be obliged to pay the amount of such
excess.
(b) Effectiveness. Any transfer to a New Lender other than a Lender will be
effective only if either:
(i) the obligations are transferred in accordance with SECTION 23(4); or
(ii) the New Lender in form and substance satisfactory to the Agent
confirms to the Agent, the Borrower and the Guarantor that it
undertakes to be bound by the terms of this Agreement as a Lender. On
the transfer becoming effective in this manner the Existing Lender
shall be released from its obligations under this Agreement to the
extent that they are transferred to the New Lender.
(c) Minimum Amount. Partial transfers may only be made for a minimum amount of
DM 5,000,000.
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(d) Sub-participation. Nothing in this Agreement restricts the ability of a
Lender to sub-participate its rights and obligations under this Agreement to
another person if that Lender remains liable under this Agreement for its
obligations.
(e) Agent's Fee. On each occasion an Existing Lender transfers any of its rights
and/or obligations under this Agreement, the New Lender shall, on the date
the transfer takes effect, pay to the Agent for its own account a fee of DM
2,000.
(f) Disclosure. A Lender may disclose to a proposed transferee or sub-
participant details of this Agreement and any information received by the
Lender under or in connection with this Agreement.
(4) Substitution.
(a) Procedure. A substitution of a Lender is effected if:
(i) the Existing Lender and the New Lender deliver to the Agent a duly
completed certificate, substantially in the form of Schedule 3 (a
"Substitution Certificate"); and
(ii) the Agent executes it.
(b) Authority of Agent. Each Party (other than the Existing Lender and the New
Lender) irrevocably authorises the Agent to execute any duly completed
Substitution Certificate on its behalf.
(c) Effects of Substitution. To the extent that they are expressed to be the
subject of the substitution in the Substitution Certificate:
(i) the Existing Lender and the other Parties (the "existing Parties")
will be released from their obligations to each other (the "discharged
obligations");
(ii) the New Lender and the existing Parties will assume obligations
towards each other which differ from the discharged obligations
insofar as they are owed to or assumed by the New Lender instead of
the Existing Lender;
(iii) the rights of the Existing Lender against the existing Parties and
vice versa (the "discharged rights") will be cancelled; and
(iv) the New Lender and the existing Parties will acquire rights against
each other which differ from the discharged rights only insofar as
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they are exercisable by or against the New Lender instead of the
Existing Lender,
all on the date of signing of the Substitution Certificate by the Agent or,
if later, the date specified in the Substitution Certificate.
SECTION 24 WAIVERS AND AMENDMENTS
(1) Authority of the Agent. If authorised by an Instructing Group the Agent may
grant waivers and agree amendments with the Obligors. These waivers and
amendments will be made on behalf of and be binding on all the Lenders,
including those which were not part of the Instructing Group. The Agent is not
authorized to grant any waiver or agree any amendment affecting any of the
following:
(a) The amount or method of calculation of interest;
(b) An alteration of the date for the payment of any sum;
(c) The definitions of "Commitment Expiry Date" or "Instructing Group";
(d) SECTIONS 3(1), 6(5)(c) and (d), 11, 13(9) and (10), 15, 20(4)(c), 20(10) and
this SECTION 24(1);
(e) The obligations of the Lenders;
(f) Any requirement (including the one in this sub-clause) that all the Lenders
or a certain proportion of them consent to a matter or deliver a notice.
Waivers or amendments affecting these matters require the consent of all
Lenders.
(2) Expenses. The Borrower agrees to reimburse the Agent and each Lender for the
expenses they incur as a result of any proposal made by the Borrower to waive or
amend a term of this Agreement.
SECTION 25 MISCELLANEOUS
(1) Exercise of Rights. If the Agent or a Lender does not exercise a right or
power when it is able to do so this will not prevent it exercising that right or
power. When it does exercise a right or power it may do so again in the same or
a different manner. The Agent's and the Lenders' rights and remedies under this
Agreement are in addition to any other rights and remedies they may have. Those
other rights and remedies are not affected by this Agreement.
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(2) Counterparts. There may be several signed copies of this Agreement. There is
intended to be a single Agreement and each signed copy is a counterpart of that
Agreement.
(3) Entire Agreement. This Agreement constitutes the whole and only agreement
between the parties relating to the Facility.
(4) SECTION 0x XXxX Xxxxxxxxxxxx. Each Lender undertakes to the Borrower to
confirm in writing substantially in the form as attached in Schedule 5 within
the first quarter of a calendar year (commencing in 1999) that any interest paid
to such Lender under this Agreement is subject to taxation in Germany (after
deduction of related expenses) and that (according to the relevant Lender's
credit files pertaining to the Facility) the respective Lender has not made any
payment (directly or indirectly) to any entity belonging to the Masco Group (as
notified by the Guarantor to the Agent) that would be treated as a payment
related to the Facility.
(5) Introduction of EURO.
(a) As from the beginning of the third stage of the European Monetary Union,
except as provided in the following sentences, all payments by an Obligor
expressed to be made in a sub-denomination of EURO in respect of the Loan
or, as the case may be, the Guarantee will be made in EUROs. If upon the
introduction of the EURO an Obligor has the option whether to make payments
in respect of the Loan or, as the case may be, the Guarantee in EUROs or in
a sub-denomination of the EURO, the Obligor will make payments in the
relevant sub- denomination of the EURO until it has notified the Agent that
thereafter payments will be made in EURO.
(b) The parties agree to make such operational and administrative changes as are
necessary and appropriate in the circumstances of the above, having regard
to market practice existing at the time of the introduction of the EURO as
the lawful currency in the states participating in the third stage of the
European Monetary Union, provided that the parties hereby agree on the
EURIBOR (Euro Interbank Offered Rate) as the new reference interest rate for
EURO or any of its subdenominations.
(c) The introduction of the EURO as currency and any amendments of this
Agreement resulting therefrom will not entitle any party to this Agreement
to any legal remedy, including, without limitation, any right of rescission
or claim for damages.
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SECTION 26 LAW AND JURISDICTION
(1) Law. This Agreement is governed by the law of the Federal Republic of
Germany.
(2) Submission. The courts of Frankfurt am Main shall have non-exclusive
jurisdiction for any proceedings arising under or in connection with this
Agreement. This submission to the jurisdiction of the courts in Frankfurt am
Main shall not limit the right of any Syndicate Party to take proceedings
against any of the Obligors in any other court of competent jurisdiction.
(3) Service of Process. Without prejudice to any other mode of service Masco
Corporation irrevocably appoints Masco GmbH, Xxxxxxx Xxxx 00, 00000 Xxxxxxxxxx
as its agent for service of process relating to any proceedings before the
German courts arising under or in connection with this Agreement.
SECTION 27 CONFIDENTIALITY
Each Lender agrees that all documentation and other information made available
by any of the Obligors to such Lender, whether under the terms of this Agreement
or any other loan agreement, shall (except to the extent required by legal or
governmental process or otherwise by law, or if such documentation and other
information is publicly available or thereafter becomes publicly available other
than by action of any Lender, or was theretofore known to such Lender
independent of any disclosure thereto by the Obligors) be held in the strictest
confidence by such Lender and used solely in connection with the administration
of loans from time to time outstanding from such Lender to any of the Obligors;
provided that (i) such Lender may disclose such documentation and other
information to any of its affiliates or any other bank, in each case, to which
such Lender sells or proposes to sell its Commitment or participation in the
Advances, or such Lender's advisers, if such affiliate or other bank or
advisers, prior to such disclosure, agrees for the benefit of the Obligors to
comply with the provisions of this SECTION 27, (ii) such Lender may disclose the
provisions of this Agreement and the amounts, maturities and interest rates of
the Advances to any purchaser or potential purchaser of such Lender's Commitment
or participation in any Advances and (iii) such Lender may disclose such
documentation and other information to the extent required, in such Lender's
good faith judgement, to enforce its rights under this Agreement.
Frankfurt am Main, ___________________
MASCO GMBH
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By:
____________________________________
MASCO CORPORATION
By:
____________________________________
COMMERZBANK AKTIENGESELLSCHAFT
(in its capacity as Arranger)
By:
____________________________________
COMMERZBANK INTERNATIONAL S.A.
(in its capacity as Agent)
By:
____________________________________
45
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COMMERZBANK AKTIENGESELLSCHAFT
Filiale Heidelberg
By:
____________________________________
BARCLAYS BANK PLC
DEUTSCHE BANK AG
Filiale Heidelberg
DRESDNER BANK AKTIENGESELLSCHAFT
Filiale Heidelberg
LANDESGIROKASSE
OFFENTLICHE BANK UND LANDESSPARKASSE
BANCA COMMERCIALE ITALIANA SPA
Frankfurt am Main Branch
BANCA MONTE DEI PASCHI DI SIENA
Frankfurt am Main Branch
BANK BRUSSEL XXXXXXX XX
Niederlassung Koln
THE BANK OF NEW YORK
THE FIRST NATIONAL BANK OF CHICAGO
Frankfurt/Main Branch
KBC BANK N.V.
Zweigniederlassung Frankfurt
By:
____________________________________
(by power of attorney)
46
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Without prejudice to the foregoing execution of the Agreement by the parties
hereto, COMMERZBANK INTERNATIONAL S.A. hereby expressly and specifically
confirms its agreement with the provisions of SECTION 26(2) hereof for the
purposes of Article 1 of the Protocol annexed to the Convention on Jurisdiction
and the Enforcement of Judgements in Civil and Commercial Matters signed at
Brussels on September 27, 1968.
COMMERZBANK INTERNATIONAL S.A.
By:
___________________________
47
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ANNEX
INTERPRETATION
DEFINITIONS, REFERENCES AND CONSTRUCTION
1. DEFINITIONS
In this Agreement:
"ACQUIRED DEBT" means with respect to any person which becomes a Subsidiary
after the date of this Agreement. Debt of such person which was outstanding
before such person became a Subsidiary and which was not created in
contemplation of such person becoming a Subsidiary, provided that such Debt
shall no longer constitute "ACQUIRED DEBT" at any time that is more than six
months after such person becomes a Subsidiary
"ADVANCE" means an advance made, or to be made, under SECTION 6.
"ADVANCE DATE" means the date, or proposed date, of an Advance.
"AFFILIATE" means at any date a person (other than a Consolidated Subsidiary)
whose earnings or losses (or the appropriate proportionate share thereof) would
be included in determining the Consolidated Net Income of the Guarantor and its
Consolidated Subsidiaries for a period ending on such date under the equity
method of accounting for investments in common stock (and certain other
investments).
"AGENT" means Commerzbank International S.A. in its capacity as agent for the
Lenders, acting through its office at Luxembourg or any other office which it
may notify to the Borrower, the Guarantor and the Lenders. If there is a change
of agent in accordance with SECTION 20(12), "Agent" will instead mean the new
agent appointed under SECTION 20(12).
"AUTHORISED PERSON" means a person authorised to sign notices on behalf of the
Borrower or the Guarantor under this Agreement. In the case of the Borrower, the
authorisation is evidenced by a list of "Authorised Persons" duly signed on
behalf of the Borrower by one or more Geschaftsfuhrer (as appropriate), which
list has been delivered to the Agent. In the case of the Guarantor, the
authorisation is constituted by a resolution of the directors of the Guarantor,
a certified copy of which has been delivered to the Agent. A person will cease
to be an "Authorised Person" upon notice by the Borrower or the Guarantor, as
the case may be, to the Agent.
"AVAILABLE COMMITMENT" means the amount of a Lender's Commitment which
is available to be drawn by the Borrower. On any day it is the Lender's
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Commitment on that day less that Lender's participation in all
outstanding Advances. Participations in Advances in an Optional Currency
will be determined at their Original DM Amount.
"AVAILABLE FACILITY" means the aggregate amount which is available to the
Borrower under the Facility. On any day it is the Total Commitments on that day
less the Loan.
"BENEFIT ARRANGEMENT" means at any time an employee benefit plan within the
meaning of Section 3(3) of ERISA which is not a Plan or Multiemployer Plan and
which is maintained or otherwise contributed to by any member of the ERISA
Group.
"BUSINESS DAY" means a day on which banks
(a) with respect to the determination of an interest rate, are open for general
business in Luxembourg and London (or, with respect to Eurosterling, Paris);
(b) with respect to payments, are open for interbank payments in Luxembourg and
in the principal financial center of the relevant currency (which in the
case of payments in euro is Frankfurt),
(c) with respect to the determination of an Exchange Rate, are open for general
business in Luxembourg and London;
(d) in all other cases are open for general business in Luxembourg.
"COMMITMENT" means the amount of principal which a Lender has committed to the
Facility. Each Lender's initial "Commitment" is set out next to its name in
Schedule 1. This may be reduced or cancelled in accordance with this Agreement.
"COMMITMENT EXPIRY DATE" means the date which falls one month prior to the Final
Maturity Date.
"CONSOLIDATED ADJUSTED NET WORTH" means at any date (i) Consolidated Net Worth
at such date less (ii) the amount (if any) by which the aggregate amount of all
equity and other investments in Affiliates of the Guarantor reflected in such
Consolidated Net Worth exceeds US $ 350,000,000.
"CONSOLIDATED CURRENT ASSETS" means at any date the consolidated current assets
of the Guarantor and its Consolidated Subsidiaries determined as of such date.
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"CONSOLIDATED DEBT" means at any date the Debt of the Guarantor and its
Consolidated Subsidiaries, determined on a consolidated basis as of such date.
"CONSOLIDATED NET INCOME" means, for any period, the consolidated net in come of
the Guarantor and its Consolidated Subsidiaries for such period (considered as a
single accounting period), but excluding the net income or deficit of any person
(other than the equity in earnings or losses of an Affiliate previously included
in such consolidated net income determined under the equity method of accounting
for investments) prior to the effective date on which it becomes a Consolidated
Subsidiary or is merged into or consolidated with the Guarantor or a
Consolidated Subsidiary.
"CONSOLIDATED NET WORTH" means at any date the consolidated shareholders' equity
of the Guarantor and its Consolidated Subsidiaries determined as of such date.
"CONSOLIDATED SUBSIDIARY" means at any date any Subsidiary the accounts of which
would be consolidated with those of the Guarantor in its consolidated financial
statements as of such date.
"CONSOLIDATED TOTAL LIABILITIES" means at any date the aggregate of all
liabilities or other items which would appear on the liability side of a
consolidated balance sheet of the Guarantor and its Consolidated Subsidiaries as
of such date, except the amount so appearing which constitutes Consolidated Net
Worth.
"CONTINUING DIRECTOR" means any member of the Guarantor's board of directors
who either (i) is a member of such board as of 1st September 1998 or (ii) is
thereafter elected to such board, or nominated for election by stockholders, by
a vote of at least two-thirds of the directors who are Continuing Directors at
the time of such vote; provided that an individual who is so elected or
nominated in connection with a merger, consolidation, acquisition or similar
transaction shall not be a Continuing Director unless such individual was a
Continuing Director prior thereto.
"DEBT" of any person means at any date, without duplication, (i) all obligations
of such person for borrowed money, (ii) all obligations of such person evidenced
by debentures, notes or other similar instruments, (iii) all obligations of such
person to pay the deferred purchase price of property, except trade accounts
payable, (iv) all obligations of such person as lessee which are capitalized in
accordance with generally accepted accounting principles, (v) all Debt of others
secured by a Lien on any asset of such person, whether or not such Debt is
assumed by such Person, and (iv) all Debt of others for which such person is
contingently liable. In calculating the amount of any Debt at any date for
purposes of this Agreement, accrued interest shall be excluded to the extent
that it would be properly classified as a current liability for interest under
the heading "Accrued liabilities" (and not under the heading "Notes payable") in
a balance sheet prepared as of such date in accordance with the accounting
50
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principles and practices used in preparing the balance sheet referred to in
SECTION 16(2)(d)(i) and the related footnotes thereto.
"DOMESTIC BUSINESS DAY" means each day other than a Saturday, Sunday or public
holiday in New York City.
"ENVIRONMENTAL LAWS" means any and all United States federal, state and local
statutes, laws, judicial decisions, regulations, ordinances, rules, judgements,
orders, decrees, injunctions, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to the
environment, the effect of the environment on human health or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes into
the environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes or the clean-up or other
remediation thereof.
"EQUIVALENT AMOUNT" means the amount in an Optional Currency equivalent to the
specified amount in DM. The Equivalent Amount will be calculated using the
Exchange Rate applicable to the date on which the amount in the Optional
Currency is to be or was advanced.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA GROUP" means the Guarantor, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Guarantor or any
Subsidiary, are treated as a single employer under Section 414 of the Internal
Revenue Code.
"EXCHANGE RATE" means a rate of exchange for converting an amount in DM into an
amount in an Optional Currency or vice versa. The Exchange Rate applicable to
any date will be the mean of the Agent's spot buying and selling rates for the
exchange of these currencies at or around 11.00 a.m. on the third Business Day
before that date.
"FACILITY" means the loan facility provided by this Agreement.
"FINAL MATURITY DATE" means the date which falls on the fifth anniversary of the
date of this Agreement. If the Final Maturity Date is not a Business Day, the
Final Maturity Date will instead be the next Business Day.
"FISCAL QUARTER" means a fiscal quarter of the Guarantor.
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"GBP" means Eurosterling.
"GUARANTEE" means the guarantee contained in SECTION 11.
"GUARANTOR'S 1997 FORM 10-K" means the Guarantor's annual report on Form 10-K
for the year ended December 31, 1997, as filed with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as amended.
"GUARANTOR'S EQUITY SECURITIES" means shares of any class of the Guarantor's
capital stock or options, warrants or other rights to acquire such shares.
"HIGH QUALITY INVESTMENT" means any investment in (i) direct obligations of the
United States of America or any agency thereof, or obligations guaranteed by the
United States of America or any agency thereof, (ii) commercial paper rated at
least A-1 by S&P and at least P-1 by Moody's or (iii) time deposits with,
including certificates of deposit issued by, any bank which was a party to US $
750,000,000 Amended and Restated Credit Agreement dated as of November 14, 1996
among the Guarantor, the banks party thereto and the Agent named therein on its
effective date or any office located in the United States of America of any bank
or trust company which is organized under the laws of the United States of
America or any State thereof and has capital, surplus and undivided profits
aggregating at least US $ 500,000,000; provided in each case that such
investment matures within six months from the date of acquisition thereof by the
Guarantor or a Subsidiary.
"INSTRUCTING GROUP" means Lenders whose Commitments exceed 50% in aggregate,
or, if an Advance has been made, Lenders whose participations in the Loan exceed
50% in aggregate.
"INTERNAL REVENUE CODE" means the United States Internal Revenue Code of 1986,
as amended, or any successor statute.
"LENDER" means a lender listed in Schedule 1 acting through the office appearing
under its name or any other office which it may notify to the Agent. A lender
which acquires an interest in this Facility by way of transfer or substitution
under SECTION 23 will become a "Lender" and will act through its office notified
to the Agent. The expression also includes universal successors to Lenders.
"LIBOR", in relation to any Term or other period in respect of which an interest
rate is to be determined pursuant to this Agreement, means:
(a) the interest rate per annum appearing on the Telerate Screen page 3740 or
3750 (or any successor page displaying this information) for the currency of
the Advance (as determined by the Agent) (the "Telerate
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Screen") at or about 11:00 a.m. London time on the applicable Rate Fixing
Day, as being the interest rate offered in the London Interbank Market for
deposits in the currency of the relevant Advance for delivery on the first
day of the Term of the Advance and for a period equal to such Term or any
other period selected by the Agent in accordance with this Agreement; and
(b) if such interest rate per annum does not appear on the Telerate Screen or
the Agent determines that no rate for a period of the duration of the
relevant Term (or other period selected by the Agent pursuant to the
provisions of this Agreement) appears on the Telerate Screen, the arithmetic
mean (rounded upwards, if necessary, to four decimal places) of the
respective rates of interest per annum, as supplied to the Agent at its
request, quoted by the Reference Banks to leading banks in the London
Interbank Market at or about 11:00 a.m. London time on the applicable Rate
Fixing Date for the offering of deposits in the relevant currency during
such Term in an amount comparable to the amount of the Advance to which such
Term relates; provided that:
(i) if any Reference Bank does not supply such quotation by 12 noon on the
applicable Rate Fixing Day, the relevant arithmetic mean shall be
determined on the basis of the quotations supplied by the remaining
Reference Banks; and
(ii) if fewer than two Reference Banks supply a quotation, SECTION 12(3).
shall apply.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or similar encumbrance of any kind in respect of such asset;
provided that a subordination agreement shall not be deemed to create a Lien.
For the purposes of this Agreement, the Guarantor or any Consolidated Subsidiary
shall be deemed to own subject to a Lien any asset which it has acquired or
holds subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other similar title retention agreement relating to
such asset.
"LOAN" means the principal amount borrowed and not repaid under the
Facility.
"MARGIN", in relation to any Term or other period in respect of which an
interest rate or commitment fee is to be determined pursuant to this Agreement,
means the rate determined by the Agent by reference to the credit rating
assigned from time to time by Xxxxx'x Investor Service, Inc. ("Moody's") or
Standard & Poors ("S&P") to the long-term debt of the Guarantor and shall be:
(a) 0.300 per cent. per annum if such rating is A2 (Moody's) or A (S&P)
or better;
(b) 0.325 per cent. per annum if such rating is A3 (Moody's) or A- (S&P);
53
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(c) 0.350 per cent. per annum if such rating is Baa1, Baa2 or Baa3 (Moody's) or
BBB+, BBB or BBB- (S&P); or
(d) 0.600 per cent. per annum if such rating is Ba1 (Moody's) or BB+ (S&P) or
worse.
provided that a change in rating shall not affect the Margin applicable to a
running Term.
In case the assigned credit ratings are not of an equal level, the better of the
two ratings shall be decisive, provided that if one of the ratings is worse than
Baa3 (Moody's) or BBB- (S&P) the worse of the two ratings shall be decisive.
"MASCO GROUP" means the Guarantor and its Subsidiaries.
"MATERIAL DEBT" means Debt of the Guarantor and/or one or more of its
Subsidiaries, arising in one or more related or unrelated transactions, in an
aggregate outstanding principal amount exceeding US $ 25,000,000.
"MATERIAL PLAN" has the meaning set forth in SECTION 19(1)(i).
"MULTIEMPLOYER PLAN" means at any time an employee pension benefit plan within
the meaning of Section 4001(a)(3) of ERISA to which any member of the ERISA
Group is then making or, pursuant to an applicable collective bargaining
agreement, accruing an obligation to make contributions or has within the
preceding five plan years made contributions, including for these purposes any
Person which ceased to be a member of the ERISA Group during such five year
period.
"OBLIGOR" at any time means the Borrower or the Guarantor.
"OPTIONAL CURRENCY" means a currency:
(a) which is freely transferable,
(b) which is freely convertible into DM, and
(c) deposits of which are readily available and freely dealt on the London
Interbank Market or, in the case of GBP, the Paris Interbank Market.
"ORIGINAL DM AMOUNT" means the DM equivalent of an amount in an Optional
Currency calculated using the Exchange Rate applicable to the date on which the
amount in the Optional Currency is to be or was advanced.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.
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"PIBOR" means the arithmetic mean (rounded upwards, if necessary, to four
decimal places) of the respective rates of interest per annum as supplied to
the Agent at its request, quoted by the Reference Banks to leading banks in
the Paris Interbank Market at or about 11.00 a.m. Paris time on the Rate
Fixing Day for the offering of GBP deposits for a period comparable to the
Term of the relevant Advance, provided that:
(i) if any Reference Bank does not supply such quotation by 12 noon on the
applicable Rate Fixing Day, the relevant arithmetic mean shall be
determined on the basis of the quotations supplied by the remaining
Reference Banks; and
(ii) if fewer than two Reference Banks supply a quotation, SECTION 12(3).
shall apply.
"PLAN" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.
"POTENTIAL TERMINATION EVENT" means any event or circumstance which, with the
giving of notice and/or the lapse of time and/or the fulfillment of any other
condition, is likely to constitute a Termination Event.
"PRIOR PLAN" means at any time (i) any Plan which at such time is no longer
maintained or contributed to by any member of the ERISA Group or (ii) any
Multiemployer Plan to which no member of the ERISA Group is at such time any
longer making contributions or, pursuant to an applicable collective bargaining
agreement, accruing an obligation to make contributions.
"RATE FIXING DAY" means, in relation to any Term or other period for which an
interest rate is to be determined pursuant to this Agreement, the second
Business Day before the commencement of the Term or such other period.
"REFERENCE BANKS" means, initially, the principal London (for the determination
of LIBOR) or Paris (for the determination of PIBOR) offices of Commerzbank
Aktiengesellschaft, Deutsche Bank AG and Barclays Bank PLC. The Agent, following
consultation with the Borrower and the Lenders, may replace a "Reference Bank"
with another Lender or an affiliate of a Lender. This replacement will take
effect when notice is delivered to the Borrower and the Lenders.
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"SECURITY" means security of any type created or existing over an asset.
"Security" includes also any arrangement providing a creditor with a prior right
to an asset, or its proceeds of sale, over other creditors in an insolvency or
liquidation.
"SIGNIFICANT SUBSIDIARIES" means any one or more Subsidiaries which, if
considered in the aggregate as a single Subsidiary, would be a "significant
subsidiary" as defined in Rule 1-02 of Regulation S-X under the Securities
Exchange Act of 1934. For purposes of this Agreement, a type of event shall not
be deemed to have occurred with respect to Significant Subsidiaries unless such
type of event has occurred with respect to each of the Subsidiaries required to
be included to constitute "Significant Subsidiaries" as defined in the
preceding sentence.
"SUBSIDIARY", in relation to the Borrower, means a company controlled or
majority-owned by the Borrower within the meaning of Sections 16 and 17 of the
Stock Corporation Act ("Aktiengesetz"), and, in relation to the Guarantor, means
any corporation or other entity of which securities or other ownership interests
having ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions are at the time owned by the
Guarantor or by the Guarantor and one or more Subsidiaries or by one or more
Subsidiaries.
"SUBSTITUTION CERTIFICATE" means a document substantially in the form
set out in Schedule 3.
"SYNDICATE PARTY" means the Agent, the Arranger and any Lender.
"TERM" means the period for which an Advance is to be outstanding. If the last
day of this period is not a Business Day that Term will instead end on the next
Business Day, unless that day is in another calendar month. Where it is in
another calendar month the last day of that Term will be the previous Business
Day.
"TERMINATION EVENT" has the meaning described in Section 19(1).
"TOTAL COMMITMENTS" means the aggregate of the Commitments of all the
Lenders.
"UNFUNDED LIABILITIES" means, with respect to any Plan at any time, the amount
(if any) by which (i) the value of all benefit liabilities under such Plan,
determined on a plan termination basis using the assumptions prescribed by the
PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market value
of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
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excess represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.
"UNITED STATES SUBSIDIARY" means a Subsidiary which is incorporated under the
laws of the United States of America or any State thereof.
2. CERTAIN REFERENCES
Unless otherwise indicated, a reference in this Agreement to:
"Deutsche Xxxx" or "DM" is to the lawful currency for the time being of Germany
and, following the commencement of the third stage of the European Monetary
Union in Germany, is a reference to EURO or, as the case may be, to a
sub-denomination of EURO;
"EURO" is to the lawful currency of the member states of the European Monetary
Union participating in the third stage of the European Monetary Union to
commence on 1 January 1999;
"fees" or "expenses" includes any value added tax on those fees or expenses;
"Germany" is to the Federal Republic of Germany;
unless stated otherwise, a "time of day" is to Luxembourg time.
3. CONSTRUCTION
In relation to the Guarantor, and unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all accounting determinations
hereunder shall be made, and all financial statements required to be delivered
hereunder shall be prepared in accordance with United States generally accepted
accounting principles as in effect from time to time, applied on a basis
consistent (except for changes concurred in by the Guarantor's independent
public accountants) with the most recent audited consolidated financial
statements of the Guarantor and its Consolidated Subsidiaries delivered to the
Lenders; provided that, if the Guarantor notifies the Agent that the Guarantor
wishes to amend any covenant in SECTION 18(2) to eliminate the effect of any
change in United States generally accepted accounting principles on the
operation of such covenant (or if the Agent notifies the Guarantor that an
Instructing Group wishes to amend SECTION 18(2) for such purpose), then the
Guarantor's compliance with such covenant shall be determined on the basis of
generally accepted accounting principles in effect immediately before the
relevant change in United States generally accepted accounting principles became
effective, until either such notice is with drawn or such covenant is amended in
a manner satisfactory to the Guarantor and the Instructing Group.
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SCHEDULE 1
LENDERS AND COMMITMENTS
ADDRESS DETAILS
Lender Commitment in DM
COMMERZBANK AKTIENGESELLSCHAFT 70,000,000
Xxxxxxx Xxxxxxxxxx
Xxxxxxxxxxxxxxxx 00 - 00
00000 Xxxxxxxxxx
Telefax-No.: 06221-901846
BARCLAYS BANK PLC 40,000,000
Bockenheimer Landstrabbe 00 - 00
00000 Xxxxxxxxx xx Xxxx
Telefax-No.: 069-00000000
DEUTSCHE BANK AG 40,000,000
Filiale Heidelberg
Unternehmungen & Immobilien
Xxxxxxxx Xxxxx 0
00000 Xxxxxxxxxx
Telefax-No.: 06221-501316
DRESDNER BANK AKTIENGESELLSCHAFT 40,000,000
Filiale Heidelberg
FK-Team Xxxxx-Xxxxxx I
Xxxxxxxx 00 00 00
00000 Xxxxxxxx
Telefax-No.: 0000-000-0000
LANDESGIROKASSE OFFENTLICHE BANK 40,000,000
UND LANDESSPARKASSE
Xxxxxxxxxxxx 00
00000 Xxxxxxxxx
Telefax-No.: 0000-000-0000
BANCA COMMERCIALE ITALIANA SPA 20,000,000
Frankfurt am Main Branch
Xxxxxxxxxxxxx 00 - 00
00000 Xxxxxxxxx xx Xxxx
Telefax-No.: 000-0000-00/7452-34
BANCA MONTE DEI PASCHI DI SIENA 20,000,000
Frankfurt am Main Branch
Xxxx Xxxxxxx Xxxxxx 00
00000 Xxxxxxxxx xx Xxxx
Telefax-No.: 069-235536
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BANK BRUSSEL XXXXXXX XX 20,000,000
Niederlassung Koln
An Lyskirchen 14, Ecke Filzengraben
50676 Koln
Telefax-No.: 0221-0000000
THE BANK OF NEW YORK 20,000,000
Xxxxxxxx 00-00
00000 Xxxxxxxxx xx Xxxx
Telefax-No.: 069-721798/172198
THE FIRST NATIONAL BANK OF CHICAGO 20,000,000
Frankfurt/Main Branch
Xxxxxxxxxx 00 - 00
00000 Xxxxxxxxx xx Xxxx
Telefax-No.: 000-000000-00/283840
KBC BANK N.V. 20,000,000
Zweigniederlassung Frankfurt
Xxxxxxxxxxxxxxxxx 00 - 00
00000 Xxxxxxxxx xx Xxxx
Telefax-No.: 069-75619366
-----------
Total: 350,000,000
===========
Arranger:
Commerzbank Aktiengesellschaft
Xxxxxxxxxxx
00000 Xxxxxxxxx xx Xxxx
Telephone-No.: 000-0000-0000
Telefax-No.: 000-0000-0000
Agent:
Commerzbank International S.A.
00, Xxx Xxxxx Xxxx
X-0000 Xxxxxxxxxx
Telephone-No.: 00000-000 000-0
Telefax-No.: 00352-477 911 419
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Borrower:
Masco GmbH
Xxxxxxx Xxxx 00
00000 Xxxxxxxxxx
Telephone-No.: 00000-00000
Telefax-No.: 06224-52709
Guarantor:
Masco Corporation
00000 Xxx Xxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
XXX
Telephone-No.: 001313-3746258
Telefax-No.: 001313-3746135
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SCHEDULE 2
CONDITIONS PRECEDENT
1. IN RESPECT OF THE BORROWER:
(a) A copy of the Articles of Association (Gesellschaftsvertrag) of the Borrower
as last filed with the Commercial Register and of the related certificate of
the Notary Public pursuant to SECTION 54(1) GmbHG, certified by two
Authorized Persons to be correct and up-to-date.
(b) An extract from the Commercial Register dated not earlier than 1 September
1998, certified by the Commercial Register.
(c) A list of Authorized Persons complying with the definition of "Authorized
Person".
2. IN RESPECT OF THE GUARANTOR:
A copy of the charter, by-laws and authorizing resolutions of the Guarantor,
certified by the corporate secretary of the Guarantor to be a true, correct
and up-to-date copy.
3. LEGAL OPINIONS FROM:
(a) Xxxx X. Xxxxxxx, General Counsel of the Guarantor;
(b) Xxxxx Xxxx & Xxxxxxxx, legal advisers in the United States of America to the
Lenders; and
(c) Hengeler Xxxxxxx Xxxxxxx Xxxxx, legal advisers in Germany to the Lenders,
all legal opinions to be addressed to the Syndicate Parties and in the form of
drafts circulated to the Lenders prior to signing.
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SCHEDULE 3
FORM OF SUBSTITUTION CERTIFICATE
To: Commerzbank International S.A.
From: [The Existing Lender] and [The New Lender]
MASCO GMBH - DM 350,000,000 MULTICURRENCY REVOLVING CREDIT FACILITY AGREEMENT
DATED 14 SEPTEMBER 1998 (THE "AGREEMENT")
We refer to SECTION 23(4) of the Agreement.
1. We (the "Existing Lender") and (the "New Lender")
agree to the New Lender substituting the Existing Lender in respect of all
the Existing Lender's rights and obligations referred to in the Schedule in
accordance with SECTION 23(4).
2. The specified date for the purposes of SECTION 23(4) is [date of
substitution].
3. The office through which the New Lender will be acting and the address for
notices of the New Lender for the purposes of SECTION 22(5) are set out in
the Schedule.
4. This Substitution Certificate is governed by the laws of the Federal
Republic of Germany.
The Existing Lender and the New Lender agree as follows:
1. The New Lender is responsible for its own decision to become
involved in the Facility. It should make its own credit appraisal
of the Borrower and the Guarantor and the terms of the Facility.
The Existing Lender makes no representation that any information
provided to the New Lender before or after the date of this
certificate is true. Accordingly the New Lender should take
whatever action it believes is necessary to verify that
information. In addition the Existing Lender is not responsible for
the legality, validity or adequacy of the Loan Agreement. The New
Lender will satisfy itself on these issues.
2. There is no obligation on the Existing Lender to accept any transfer back of
the rights and obligations referred to in this Substitution Certificate. The
Existing Lender accepts no obligation to indemnify the New Lender
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for any losses incurred as a result of a failure by the Borrower or the
Guarantor to perform their obligations or for any other losses.
This Substitution Certificate is to be governed by the law of the Federal
Republic of Germany.
Existing Lender: New Lender:
[Name of Existing Lender] [Name of New Lender]
By: By:
-------------------------- --------------------------
Agent (on behalf of the other Lenders, the Borrower and itself)
Commerzbank International S.A.
By:
--------------------------
Date:
THE SCHEDULE
RIGHTS AND OBLIGATIONS TO BE SUBJECT TO THE SUBSTITUTION
[Insert details of the rights and obligations of the Existing Lender to
be subject to the substitution].
NAME OF NEW LENDER:
------------------------
Office through which the New Lender will be acting and address for notices:
Address:
------------------------
Fax Number:
------------------------
Telex Number:
------------------------
Attention:
------------------------
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SCHEDULE 4
FORM OF BORROWING NOTICE
To: Commerzbank International S.A., in its capacity as Agent
From: Masco GmbH
MASCO GMBH
DM 350,000,000 MULTICURRENCY REVOLVING CREDIT FACILITY
Dear Sirs,
(1) With reference to SECTION 6(1) of the Credit Agreement, dated 14 September
1998 (the "Agreement") we herewith give notice of our intention to borrow under
the Facility, subject to the following conditions:
(a) Currency: [________] If Optional Currency is not
available according to SECTION
7(3), Advance shall be made in
DM
[ ] [ ]
Yes No
(b) Amount: [________]
(c) Advance Date: [________]
(d) Term: [________]
(2) We herewith confirm
(a) that the representations and warranties in SECTION 16(1) and SECTION 16(2)
except the representations set forth in SECTION 16(2)(d)(iii), (e), (f)
(other than clause (i) thereof), (g) and (j) of the Agreement are true on
the date of delivery of this notice and on the Advance Date; and
(b) no Termination Event or Potential Termination Event exists on the date of
delivery of this notice and on the Advance Date.
We request that the Advance be disbursed to our account No. [________]
with [________].
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(3) Terms not defined herein shall have the meaning attributed to them in the
Agreement.
Yours sincerely
Masco GmbH
By:
-------------------------------
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SCHEDULE 5
FORM OF TAX CONFIRMATION
[Letterhead of Lender]
Masco GmbH
[address]
MASCO GMBH
DM 350,000,000 MULTICURRENCY REVOLVING CREDIT FACILITY
Dear Sirs,
With reference to SECTION 25(4) of the Facility Agreement, dated 14 September
1998, entered into in connection with the DM 350,000,000 Multicurrency Revolving
Facility made available to you by a syndicate of banks including our
institution, we herewith confirm the following to you with respect to the
calendar year [___]:
Any interest paid to ourselves in respect of the Facility is subject to taxation
in Germany (after deduction of related expenses). We have not made any payments
(directly or indirectly) to any entity belonging to the Masco Group (in which
respect we have relied on the Schedule of entities belonging to the Masco Group
supplied by Masco Corporation to the Agent) that would according to our credit
files pertaining to the Facility be treated as a payment related to the
Facility.
Yours sincerely
