1
EXHIBIT 4(c)
CONFORMED COPY
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CREDIT AGREEMENT
Dated as of March 1, 1995
Among
CLEVELAND-CLIFFS INC,
THE BANKS NAMED HEREIN
And
CHEMICAL BANK, as Agent
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TABLE OF CONTENTS
Page
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ARTICLE I
Definitions
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SECTION 1.01. Defined Terms ......................................................... 1
SECTION 1.02. Terms Generally ....................................................... 16
ARTICLE II
The Credits
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SECTION 2.01. Commitments ........................................................... 16
SECTION 2.02. Loans ................................................................. 17
SECTION 2.03. Notice of Borrowings .................................................. 19
SECTION 2.04. Notes; Repayment of Loans ............................................. 19
SECTION 2.05. Fees .................................................................. 20
SECTION 2.06. Interest on Loans ..................................................... 20
SECTION 2.07. Default Interest ...................................................... 21
SECTION 2.08. Alternate Rate of Interest ............................................ 22
SECTION 2.09. Termination and Reduction of
Commitments ........................................................... 22
SECTION 2.10. Prepayment ............................................................. 23
SECTION 2.11. Reserve Requirements; Change in
Circumstances ......................................................... 24
SECTION 2.12. Change in Legality .................................................... 26
SECTION 2.13. Indemnity ............................................................. 27
SECTION 2.14. Pro Rata Treatment .................................................... 27
SECTION 2.15. Sharing of Setoffs .................................................... 28
SECTION 2.16. Payments .............................................................. 29
SECTION 2.17. Taxes ................................................................. 29
SECTION 2.18. Termination or Assignment of
Commitments Under Certain
Circumstances ......................................................... 32
ARTICLE III
Representations and Warranties
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SECTION 3.01. Organization, Corporate Powers ........................................ 33
SECTION 3.02. Authorization ......................................................... 34
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Contents, p. 2
SECTION 3.03. Governmental Approvals ................................................ 34
SECTION 3.04. Enforceability ........................................................ 34
SECTION 3.05. Financial Statements .................................................. 34
SECTION 3.06. No Material Adverse Change ............................................ 35
SECTION 3.07. Title to Properties; Possession Under
Leases ................................................................ 35
SECTION 3.08. Litigation; Compliance with Laws ...................................... 35
SECTION 3.09. Agreements ............................................................ 36
SECTION 3.10. Federal Reserve Regulations ........................................... 36
SECTION 3.11. Taxes ................................................................. 37
SECTION 3.12. Employee Benefit Plans ................................................ 37
SECTION 3.13. No Material Misstatements ............................................. 37
SECTION 3.14. Investment Company Act and Public
Utility Holding Company Act ........................................... 38
SECTION 3.15. Use of Proceeds ....................................................... 38
SECTION 3.16. Environmental and Safety Matters ...................................... 38
ARTICLE IV
Conditions of Lending
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SECTION 4.01. All Borrowings ........................................................ 39
SECTION 4.02. First Borrowing ....................................................... 40
ARTICLE V
Affirmative Covenants
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SECTION 5.01. Corporate Existence ................................................... 41
SECTION 5.02. Business and Properties ............................................... 41
SECTION 5.03. Insurance ............................................................. 42
SECTION 5.04. Obligations and Taxes ................................................. 42
SECTION 5.05. Financial Statements, Reports, etc .................................... 43
SECTION 5.06. Litigation and Other Notices . ........................................ 44
SECTION 5.07. ERISA ................................................................. 45
SECTION 5.08. Maintaining Records; Access to
Properties and Inspections ............................................ 45
SECTION 5.09. Use of Proceeds ....................................................... 46
ARTICLE VI
Negative Covenants
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SECTION 6.01. Liens ................................................................. 46
SECTION 6.02. Sale and Leaseback Transactions ....................................... 48
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Contents, p. 3
SECTION 6.03. Mergers and Acquisitions .............................................. 49
SECTION 6.04. Disposition of Assets ................................................. 49
SECTION 6.05. Line of Business ...................................................... 51
SECTION 6.06. Consolidated Tangible Net Worth ....................................... 51
SECTION 6.07. Ratios ................................................................ 51
SECTION 6.08. Transactions with Affiliates .......................................... 51
SECTION 6.09. Fiscal Year; Accounting ............................................... 52
ARTICLE VII
DEFAULTS .............................................................. 52
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ARTICLE VIII
THE AGENT ............................................................. 56
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ARTICLE IX
MISCELLANEOUS
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SECTION 9.01. Notices ............................................................... 60
SECTION 9.02. Survival of Agreement ................................................. 60
SECTION 9.03. Binding Effect ........................................................ 61
SECTION 9.04. Successors and Assigns ................................................ 61
SECTION 9.05. Expenses of the Agent and the Banks;
Indemnity ............................................................. 65
SECTION 9.06. Right of Setoff ....................................................... 67
SECTION 9.07. Applicable Law ........................................................ 67
SECTION 9.08. Payments on Business Days ............................................. 67
SECTION 9.09. Waivers; Amendment .................................................... 67
SECTION 9.10. Interest Rate Limitation .............................................. 68
SECTION 9.11. Waiver of Jury Trial .................................................. 69
SECTION 9.12. Severability .......................................................... 69
SECTION 9.13. Entire Agreement ...................................................... 69
SECTION 9.14. Counterparts .......................................................... 69
SECTION 9.15. Headings .............................................................. 70
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Contents, p. 4
EXHIBITS AND SCHEDULES
EXHIBIT A Form of Note
EXHIBIT B Form of Assignment and Acceptance
EXHIBIT C Administrative Questionnaire
EXHIBIT D Form of Opinion of Counsel of Xxxxx X.
Xxxxxxx, Vice President and General
Counsel to the Borrower
Schedule I Entities Not Deemed Subsidiaries
Schedule 2.01 Commitments
Schedule 3.16 Environmental Matters
Schedule 6.01 Liens
Schedule 6.07 Indebtedness
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CONFORMED COPY
CREDIT AGREEMENT dated as of March 1, 1995,
among CLEVELAND-CLIFFS INC, an Ohio corporation (the
"Borrower"), the banks listed on Schedule 2.01 (the
"Banks"), and CHEMICAL BANK, as agent for the Banks
(in such capacity, the "Agent").
The Borrower has requested the Banks to extend credit in order
to enable the Borrower, subject to the terms and conditions of this Agreement,
to borrow on a revolving basis, at any time and from time to time prior to the
Maturity Date (such term and each other capitalized term used but not defined
herein having the meaning given to it in Article I), an aggregate principal
amount at any time outstanding not in excess of $100,000,000. The proceeds of
such borrowings are to be used for general corporate purposes. The Banks are
willing to extend such credit to the Borrower on the terms and subject to the
conditions set forth herein.
Accordingly, the Borrower, the Banks and the Agent agree as
follows:
ARTICLE I
Definitions
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SECTION 1.01. DEFINED TERMS. As used in this Agreement, the
following terms shall have the meanings specified below:
"ABR BORROWING" shall mean a Borrowing comprised of ABR Loans.
"ABR LOAN" shall mean any Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"ADJUSTED CD RATE" shall mean, with respect to any CD
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/100 of 1%) equal to the sum of (a) a rate per annum
equal to the product of (i) the Fixed CD Rate in effect for such Interest Period
and (ii) Statutory Reserves, plus (b) the Assessment Rate. For purposes hereof,
the term "Fixed CD Rate" shall mean the arithmetic average (rounded upwards, if
necessary,
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to the next 1/100 of 1%) of the prevailing rates per annum bid on or about 10:00
a.m., New York City time, to the Agent on the first Business Day of the Interest
Period applicable to such CD Borrowing by three New York City negotiable
certificate of deposit dealers of recognized standing selected by the Agent for
the purchase at face value of negotiable certificates of deposit of major United
States money center banks in principal amount approximately equal to the Agent's
portion (or, if different, the portion of the Bank having the largest
Commitment) of such CD Borrowing and with a maturity comparable to such Interest
Period.
"ADJUSTED LIBO RATE" shall mean, with respect to any
Eurodollar Borrowing for any Interest Period, an interest rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the product of
(i) the LIBO Rate in effect for such Interest Period and (ii) Statutory
Reserves. For purposes hereof, the term "LIBO Rate" shall mean the rate (rounded
upwards, if necessary, to the next 1/16 of 1%) at which dollar deposits
approximately equal in principal amount to the Agent's portion (or, if
different, the portion of the Bank having the largest Commitment) of such
Eurodollar Borrowing and for a maturity comparable to such Interest Period are
offered to the principal London office of the Agent in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"ADMINISTRATIVE FEE" shall have the meaning assigned to such
term in Section 2.05(b).
"AFFILIATE" shall mean, when used with respect to a specified
person, any other person which directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with the
person specified.
"ALTERNATE BASE RATE" shall mean, for any day, a rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in
effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. For purposes hereof, "PRIME RATE" shall mean the rate
of interest per annum publicly announced from time to time by the Agent as its
prime rate in effect at its principal office in New York City; each change in
the Prime Rate shall be effective on the date such change is publicly announced
as being
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effective. "BASE CD RATE" shall mean the sum of (a) the product of (i) the
Three-Month Secondary CD Rate and (ii) Statutory Reserves and (b) the Assessment
Rate. "THREE-MONTH SECONDARY CD RATE" shall mean, for any day, the secondary
market rate for three-month certificates of deposit in units of $100,000 or more
reported as being in effect on such day (or, if such day shall not be a Business
Day, the next preceding Business Day) by the Board through the public
information telephone line of the Federal Reserve Bank of New York (which rate
will, under the current practices of the Board, be published in Federal Reserve
Statistical Release H.15(519) during the week following such day), or, if such
rate shall not be so reported on such day or such next preceding Business Day,
the average of the secondary market quotations for three-month certificates of
deposit in units of $100,000 or more issued by major money center banks in New
York City received at approximately 10:00 a.m., New York City time, on such day
(or, if such day shall not be a Business Day, on the next preceding Business
Day) by the Agent from three New York City negotiable certificate of deposit
dealers of recognized standing selected by it. "FEDERAL FUNDS EFFECTIVE RATE"
shall mean, for any day, the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for the day of such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it. If for any reason the Agent shall have
determined (which determination shall be conclusive absent manifest error) that
it is unable to ascertain the Base CD Rate or the Federal Funds Effective Rate
or both for any reason, including the inability or failure of the Agent to
obtain sufficient quotations in accordance with the terms thereof, the Alternate
Base Rate shall be determined without regard to clause (b) or (c), or both, of
the first sentence of this definition, as appropriate, until the circumstances
giving rise to such inability no longer exist. Any change in the Alternate Base
Rate due to a change in the Prime Rate, the Three-Month Secondary CD Rate or the
Federal Funds Effective Rate shall be effective on the effective date of such
change in the Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds
Effective Rate, respectively.
"APPLICABLE MARGIN" shall mean, with respect to the Loans
comprising any Eurodollar Borrowing or CD
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Borrowing, on any date, the applicable percentage set forth below under the
caption "EURODOLLAR SPREAD" or "CD SPREAD", as applicable, based upon the ratio
as of the last day of the most recent fiscal quarter for which financial
statements have been delivered as provided below of (a) Total Indebtedness on
such date to (b) the sum of (i) Consolidated Tangible Net Worth on such date
plus (ii) Total Indebtedness on such date:
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EURODOLLAR
RATIO SPREAD CD SPREAD
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CATEGORY 1
Less than or equal to .20 to 1 .375% .500%
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CATEGORY 2
Greater than .20 to 1 and
less than .35 to 1 .400% .525%
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CATEGORY 3
Greater than or equal to .35 to 1 .700% .825%
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Each change in the Applicable Margin resulting from a change
in the ratio of Total Indebtedness to the sum of Consolidated Tangible Net Worth
plus Total Indebtedness as of the end of any fiscal quarter will be effective as
of the first day of the second succeeding fiscal quarter. Notwithstanding the
foregoing, at any time at which the Borrower has failed to deliver such
financial statements or such certificate with respect to such fiscal quarter and
five Business Days shall have elapsed since the Administrative Agent shall have
notified the Borrower of its failure to deliver such financial statements or
such certificate with respect to such fiscal quarter in accordance with such
provisions, the then-current ratio of Total Indebtedness to the sum of
Consolidated Tangible Net Worth plus Total Indebtedness shall be deemed to be
greater than .35 to 1 until such time as the Borrower shall deliver such
financial statements and certificate.
"ASSESSMENT RATE" shall mean for any day the annual rate
(rounded upwards, if necessary, to the next 1/100 of 1%) most recently estimated
by the Agent as the then current net annual assessment rate that will be
employed in determining amounts payable by the Agent to the Federal Deposit
Insurance Corporation (or any successor) for
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insurance by such Corporation (or any successor) of time deposits made in
dollars at the Agent's domestic offices.
"ASSIGNMENT AND ACCEPTANCE" shall mean an assignment and
acceptance entered into by a Bank and an assignee, and accepted by the Agent, in
the form of Exhibit B hereto.
"ATTRIBUTABLE DEBT" shall mean, in connection with a Sale and
Lease Back Transaction, the present value (discounted in accordance with
generally accepted accounting principles at the debt rate implied in the lease)
of the obligations of the lessee for rental payments during the term of the
lease.
"BOARD" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"BORROWING" shall mean a group of Loans of a single Type made
by the Banks on a single date and as to which a single Interest Period is in
effect.
"BUSINESS DAY" shall mean any day, other than a day which is a
Saturday, Sunday or legal holiday in the State of New York, on which banks are
not authorized or required to be closed in New York City; PROVIDED, HOWEVER,
that when used in connection with a Eurodollar Loan, the term "Business Day"
shall also exclude any day on which banks are not open for dealings in dollar
deposits in the London interbank market.
"CAPITALIZED LEASE OBLIGATIONS" of any person shall mean the
obligations of such person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under
generally accepted accounting principles and, for the purposes of this
Agreement, the amount of such obligations at any time shall be the capitalized
amount thereof at such time determined in accordance with generally accepted
accounting principles.
"CD BORROWING" shall mean a Borrowing comprised of CD Loans.
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"CD LOAN" shall mean any Loan bearing interest at a rate
determined by reference to the Adjusted CD Rate in accordance with the
provisions of Article II.
A "CHANGE IN CONTROL" shall be deemed to have occurred if any
person or group (within the meaning of Rule 13d-5 of the Securities and Exchange
Commission as in effect on the date hereof) shall acquire directly or
indirectly, beneficially or of record, shares representing more than 50% of the
aggregate ordinary voting power represented by the issued and outstanding
capital stock of the Borrower.
"CLOSING DATE" shall mean the date of the first Borrowing.
"CODE" shall mean the Internal Revenue Code of 1986, as the
same may be amended from time to time.
"COMMITMENT" shall mean, with respect to any Bank, the
commitment of such Bank to make Loans hereunder as set forth in paragraphs (a)
and (b) of Section 2.01 and in Schedule 2.01 hereto, or in an Assignment and
Acceptance delivered by such Bank under Section 9.04, as the same may be reduced
from time to time pursuant to Section 2.09 or pursuant to one or more
assignments under Section 9.04.
"COMMITMENT FEE" shall have the meaning assigned to such term
in Section 2.05(a).
"COMMITMENT FEE PERCENTAGE" shall mean, on any date, the
applicable percentage set forth below based upon the ratio as of the last day of
the most recent preceding fiscal quarter for which financial statements have
been delivered as provided below of (a) Total Indebtedness on such date to (b)
the sum of (i) Consolidated Tangible Net
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Worth on such date plus (ii) Total Indebtedness on such date:
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COMMITMENT FEE
RATIO PERCENTAGE
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CATEGORY 1
Less than or equal to .20 to 1 .125%
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CATEGORY 2
Greater than .20 to 1 and less than .35 to 1 .150%
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CATEGORY 3
Greater than or equal to .35 to 1 .250%
=================================================================================================
Each change in the Commitment Fee Percentage resulting from a change in the
ratio of Total Indebtedness to the sum of Consolidated Tangible Net Worth plus
Total Indebtedness as of the end of any fiscal quarter will be effective as of
the first day of the second succeeding fiscal quarter. Notwithstanding the
foregoing, at any time at which the Borrower has failed to deliver such
financial statements or such certificate with respect to such fiscal quarter and
five Business Days shall have elapsed since the Administrative Agent shall have
notified the Borrower of its failure to deliver such financial statements or
such certificate with respect to such fiscal quarter in accordance with such
provisions, the then current ratio of Total Indebtedness to the sum of
Consolidated Tangible Net Worth plus Total Indebtedness shall be deemed to be
greater than .35 to 1 until such time as the Borrower shall deliver such
financial statements and certificate.
"CONSOLIDATED NET INCOME" with respect to the Borrower for any
period shall mean the net income (or net deficit) of the Borrower and the
Subsidiaries for such period (excluding charges related to the adoption of
Statement of Financial Accounting Standards ("SFAS") 106 (Employers' Accounting
for Post-Retirement Benefits Other Than Pensions)), computed on a consolidated
basis in accordance with generally accepted accounting principles consistently
applied.
"CONSOLIDATED TANGIBLE NET WORTH" with respect to the Borrower
at any date shall mean (i) the sum of the Borrower's capital stock, capital in
excess of par or stated value of shares of such capital stock, retained earnings
and
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any other account which, in accordance with generally accepted accounting
principles consistently applied, constitutes stockholders' equity, less (ii) the
Borrower's treasury stock, less (iii) the amount of all assets of the Borrower
reflected as goodwill, patents, research and development and all other assets
required to be classified as intangibles in accordance with generally accepted
accounting principles, less (iv) all writeups of assets of the Borrower
occurring after the date hereof, plus (v) the amount of any liability or reserve
related to the Borrower's adoption of SFAS 106.
"CONTROL" (including the terms "Controlling", "Controlled by"
and "under common Control with") shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a person, whether through the ownership of voting securities, by
contract or otherwise.
"DEFAULT" shall mean any event or condition which upon notice,
lapse of time or both would constitute an Event of Default.
"DOLLARS" and the symbol "$" shall mean the lawful currency of
the United States of America.
"ENVIRONMENTAL LAWS" at any date shall mean all provisions of
law, statutes, ordinances, rules, regulations, judgments, writs, injunctions,
decrees, orders, awards and standards promulgated by the government of the
United States of America or by any state or municipality thereof or therein or
by any court, agency, instrumentality, regulatory authority or commission of any
of the foregoing concerning the protection of, or regulating the discharge of
substances into, the environment.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as the same may be amended from time to time.
"ERISA AFFILIATE" shall mean any trade or business (whether or
not incorporated) that is a member of a group of which the Borrower or any
Subsidiary is a member and which is under common Control with the Borrower or
any Subsidiary within the meaning of Section 414 of the Code, and the
regulations promulgated thereunder.
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"EURODOLLAR BORROWING" shall mean a Borrowing comprised of
Eurodollar Loans.
"EURODOLLAR LOAN" shall mean any Loan bearing interest at a
rate determined by reference to the Adjusted LIBO Rate in accordance with the
provisions of Article II.
"EVENT OF DEFAULT" shall have the meaning specified in Article
VII hereof.
"EXISTING CREDIT AGREEMENT" shall mean the Credit Agreement
dated as of April 30, 1992, as amended, among Cleveland-Cliffs Inc, the banks
listed therein and Chemical Bank, as agent.
"FEES" shall mean the Administrative Fees and the Commitment
Fees.
"FINANCIAL OFFICER" of any corporation shall mean its chief
financial officer, principal accounting officer, treasurer, assistant treasurer,
controller or assistant controller.
"FUNDED DEBT" shall mean, with respect to the Borrower and its
Subsidiaries at the time of determination thereof, all Indebtedness of the
Borrower and its Subsidiaries determined at such time on a consolidated basis,
including any portion of such Indebtedness that would be classified as current
in accordance with generally accepted accounting principles, but in all events
excluding any amount of such Indebtedness arising from or attributable to (i)
amounts outstanding under credit lines, revolving credit agreements or similar
agreements so long as all such amounts are fully paid for a period of not less
than 30 consecutive days in each twelve-month period pursuant to the terms of
such agreements, (ii) trade payables and accrued expenses (other than for
borrowed money) constituting current liabilities, (iii) short term letters of
credit, surety bonds and similar instruments issued in commercial transactions
in the ordinary course of business and (iv) any Guarantee of Indebtedness of
Subsidiaries of the types described in any of the foregoing clauses (i), (ii) or
(iii).
"GOVERNMENTAL AUTHORITY" shall mean any Federal, state, local
or foreign court or governmental agency, authority, instrumentality or
regulatory body.
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"GUARANTEE" of or by any person shall mean any obligation,
contingent or otherwise, of such person guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other person (the "PRIMARY
OBLIGOR") in any manner, whether directly or indirectly, and including, without
limitation, any obligation of such person, direct or indirect, (i) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or to purchase (or to advance or supply funds for the purchase of)
any security for the payment of such Indebtedness, (ii) to purchase property,
securities or services for the purpose of assuring the owner of such
Indebtedness of the payment of such Indebtedness, or (iii) to maintain working
capital, equity capital or other financial statement condition or liquidity of
the Primary Obligor so as to enable the Primary Obligor to pay such Indebtedness
(PROVIDED, HOWEVER, that the term Guarantee shall not include endorsements for
collection or deposit, in either case in the ordinary course of business), and
the term "Guaranteed" shall have a correlative meaning.
"INDEBTEDNESS" shall mean, with respect to any person, at any
time, without duplication, (a) all obligations of such person for borrowed
money, or with respect to deposits or advances of any kind, (b) all obligations
of such person evidenced by bonds, debentures, notes or similar instruments, (c)
all obligations of such person upon which interest charges are customarily paid,
(d) all obligations of such person under conditional sale or other title
retention agreements relating to property purchased by such person, (e) all
obligations of such person issued or assumed as the deferred purchase price of
property or services (other than accounts payable to suppliers incurred in the
ordinary course of business and paid when due), (f) all Capitalized Lease
Obligations of such person, (g) all obligations of such person as an account
party in respect of letters of credit and bankers' acceptances, (h) all
Guarantees of such person of the Indebtedness of others, (i) all obligations of
such person in respect of interest rate protection agreements, (j) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on,
or which may be satisfied by or out of the proceeds of, any property owned or
acquired by such person, whether or not the obligations secured thereby have
been assumed and (k) all Indebtedness of others that is serviced by such person,
whether or not such Indebtedness has been assumed; PROVIDED, HOWEVER, that
Indebtedness shall
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not be deemed to include (1) any Indebtedness of any Subsidiary or any of the
entities listed on Schedule I hereto to the extent such Indebtedness (or a
participation interest in such Indebtedness) is owned by the Borrower or any
Subsidiary, (2) intercompany Indebtedness not effectively serviced by such
person from time to time existing between such person and its subsidiaries, or
between two or more such subsidiaries, which would not, in accordance with
generally accepted accounting principles consistently applied, be reflected as
Indebtedness on a consolidated balance sheet of the ultimate parent of such
person or (3) obligations in the nature of performance bonds and other similar
surety arrangements to the extent paid or covered by insurance from financially
sound and reputable insurers. For purposes of this Agreement the principal
amount of any Indebtedness referred to in clause (i) of the preceding sentence
shall be the amount of any such obligation that would be payable upon the
acceleration, termination or liquidation thereof.
"INTEREST PAYMENT DATE" shall mean, with respect to any Loan,
the last day of the Interest Period applicable to the Borrowing of which such
Loan is a part and, in the case of a Eurodollar Borrowing with an Interest
Period of more than three months' duration or a CD Borrowing with an Interest
Period of more than 90 days' duration, each day that would have been an Interest
Payment Date had successive Interest Periods of three months' duration or 90
days' duration, as the case may be, been applicable to such Borrowing, and, in
addition, the date of any refinancing or conversion of such Borrowing with or to
a Borrowing of a different Type.
"INTEREST PERIOD" shall mean, subject to Section 2.02(d), (a)
as to any Eurodollar Borrowing, the period commencing on the date of such
Borrowing or on the last day of the immediately preceding Interest Period
applicable to such Borrowing, as the case may be, and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the last
day) in the calendar month that is 1, 2, 3 or 6 months thereafter, as the
Borrower may elect, (b) as to any CD Borrowing, a period of 30, 60, 90 or 180
days' duration, as the Borrower may elect, commencing on the date of such
Borrowing or on the last day of the immediately preceding Interest Period
applicable to such Borrowing, as the case may be, and (c) as to any ABR
Borrowing, the period commencing on the date of such Borrowing or on the last
day of the immediately
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preceding Interest Period applicable to such Borrowing, as the case may be, and
ending on the earliest of (i) the next succeeding March 31, June 30, September
30 or December 31, (ii) the Maturity Date and (iii) the date such Borrowing is
repaid or prepaid in accordance with Section 2.10; PROVIDED, HOWEVER, that if
any Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless, in the case
of a Eurodollar Borrowing only, such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day. Interest shall accrue from and including the first
day of an Interest Period to but excluding the last day of such Interest Period.
"LIEN" shall mean, with respect to any asset, (i) any
mortgage, lien, pledge, encumbrance, charge or security interest in or on such
asset, (ii) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
asset or (iii) in the case of securities, any purchase option, call or similar
right of a third party with respect to such securities; PROVIDED, that neither
the right of an issuer to redeem its securities upon payment of an amount not
less than the issuance price thereof, nor rights of first refusal or similar
rights granted to any issuer of such securities or to any partner (or any
Affiliates of such partner) of the issuer of such securities or of the person
holding such securities, or any rights or restrictions applicable to any
securities issued in a bankruptcy reorganization, which rights or restrictions
are created pursuant to the applicable court approved plan of reorganization,
shall be deemed to be a Lien.
"LOAN" or "LOANS" shall mean the loans made by the Banks
pursuant to Section 2.01. Each Loan shall be either an ABR Loan, a CD Loan or a
Eurodollar Loan.
"LOAN DOCUMENTS" shall mean this Agreement and the Notes.
"MARGIN STOCK" shall have the meaning assigned to such term in
Regulation U.
"MATERIAL ADVERSE EFFECT" shall mean (a) a materially adverse
effect on the business, assets, operations or financial condition of the
Borrower and the Subsidiaries taken as a whole or (b) material impairment of
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the ability of the Borrower to perform any of its obligations under any Loan
Document to which it is or will be a party.
"MATURITY DATE" shall mean March 1, 2000.
"MULTIEMPLOYER PLAN" shall mean any "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA to which the Borrower or any Subsidiary
or any ERISA Affiliate (other than one considered an ERISA Affiliate only
pursuant to subsection (m) or (o) of Section 414 of the Code) is making or
accruing any obligation to make contributions, or has within any of the
preceding five plan years made or accrued an obligation to make contributions.
"NOTE" or "NOTES" shall mean the promissory notes of the
Borrower issued pursuant to Section 2.04, substantially in the form of Exhibit
A.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
referred to and defined in ERISA.
"PERMITTED LIENS" shall mean liens permitted to be incurred by
the Borrower or a Subsidiary in accordance with Section 6.01, whether presently
in existence or hereafter arising.
"PERSON" shall mean and include any natural person, company,
partnership, joint venture, association, corporation, business trust,
unincorporated organization or government or any department or political
subdivision or agency thereof.
"PLAN" shall mean any pension plan other than a Multiemployer
Plan which is subject to the provisions of Title IV of ERISA or Section 412 of
the Code which is maintained (in whole or in part) for employees of the Borrower
or any ERISA Affiliate.
"REGULATION D" shall mean Regulation D of the Board, as the
same is from time to time in effect, and all official rulings and
interpretations thereunder or thereof.
"REGULATION G" shall mean Regulation G of the Board, as the
same is from time to time in effect, and all official rulings and
interpretations thereunder or thereof.
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"REGULATION U" shall mean Regulation U of the Board, as the
same is from time to time in effect, and all official rulings and
interpretations thereunder or thereof.
"REGULATION X" shall mean Regulation X of the Board, as the
same is from time to time in effect, and all official rulings and
interpretations thereunder or thereof.
"REPORTABLE EVENT" shall mean any reportable event as defined
in Section 4043 of Title IV of ERISA or the regulations issued thereunder with
respect to a Plan (other than a Plan maintained by an ERISA Affiliate which is
considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Section
414 of the Code).
"REQUIRED BANKS" shall mean, at any time, Banks holding Loans
representing at least 66-2/3% of the sum of the aggregate principal amount of
the Loans outstanding or, if no Loans are outstanding, Banks having Commitments
representing at least 66-2/3% of the aggregate Commitments.
"RESPONSIBLE OFFICER" of any corporation shall mean any
executive officer or Financial Officer of such corporation and any other officer
or similar official thereof responsible for the administration of the
obligations of such corporation in respect of this Agreement.
"SALE AND LEASEBACK TRANSACTION" shall have the meaning given
such term in Section 6.02.
"SENIOR DEBT" shall mean, at the time of determination
thereof, the Loans then outstanding hereunder and all other Funded Debt
outstanding at such time, other than any of such Funded Debt which by its terms
or by agreement is subordinated in right of payment to the Loans then
outstanding hereunder in a manner satisfactory to, and approved by, the Required
Banks, and under which no scheduled principal payments are due prior to the
Maturity Date.
"STATUTORY RESERVES" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board and any other banking authority to which
the Agent is
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subject (a) with respect to the Adjusted CD Rate or the Base CD Rate (as such
term is used in the definition of "Alternate Base Rate"), for new negotiable
nonpersonal time deposits in Dollars of $100,000 or more with maturities
approximately equal to (i) the applicable Interest Period, in the case of the
Adjusted CD Rate, and (ii) three months, in the case of the Base CD Rate (as
such term is used in the definition of "Alternate Base Rate"), and (b) with
respect to the Adjusted LIBO Rate, for Eurocurrency Liabilities (as defined in
Regulation D). Such reserve percentages shall include those imposed pursuant to
such Regulation D. Eurodollar Loans shall be deemed to constitute Eurocurrency
Liabilities and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets which may be available from time to
time to any Bank under such Regulation D. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"SUBSIDIARY" shall mean, with respect to any person (the
"Parent"), any corporation, association or other business entity of which
securities or other ownership interests representing more than 50% of the
ordinary voting power are, at the time as of which any determination is being
made, owned or Controlled by the Parent or one or more subsidiaries of the
Parent or by the Parent and one or more subsidiaries of the Parent.
"SUBSIDIARY" shall mean any subsidiary of the Borrower, other
than those entities listed on Schedule I.
"TOTAL INDEBTEDNESS" with respect to the Borrower shall mean
the aggregate amount of all Indebtedness of the Borrower and the Subsidiaries,
calculated on a consolidated basis, without duplication.
"TRANSACTIONS" shall have the meaning assigned to such term in
Section 3.02.
"TYPE", when used in respect of any Loan or Borrowing, shall
refer to the Rate by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined. For purposes hereof, "RATE" shall
include the Adjusted LIBO Rate, the Adjusted CD Rate and the Alternate Base
Rate.
"WITHDRAWAL LIABILITY" shall mean liability to a Multiemployer
Plan as a result of a complete or partial
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withdrawal from such Multiemployer Plan, as such terms are defined in Part 1 of
Subtitle E of Title IV of ERISA.
SECTION 1.02. TERMS GENERALLY. The definitions in Section 1.01
shall apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
All references herein to Articles, Sections, Exhibits and Schedules shall be
deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement unless the context shall otherwise require. Except as otherwise
expressly provided herein, (a) any reference in this Agreement to any Loan
Document shall mean such document as amended, restated, supplemented or
otherwise modified from time to time and (b) all terms of an accounting or
financial nature shall be construed in accordance with generally accepted
accounting principles, as in effect from time to time; PROVIDED, HOWEVER, that,
for purposes of determining compliance with any covenant set forth in Article
VI, such terms shall be construed in accordance with generally accepted
accounting principles, as in effect on the date of this Agreement applied on a
basis consistent with the application used in preparing the Borrower's audited
financial statements referred to in Section 3.05.
ARTICLE II
The Credits
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SECTION 2.01. COMMITMENTS. Subject to the terms and conditions
and relying upon the representations and warranties herein set forth, each Bank
agrees, severally and not jointly, to make Loans to the Borrower, at any time
and from time to time on or after the date hereof and until the earlier of the
Maturity Date and the termination of the Commitment of such Bank in accordance
with the terms hereof, in an aggregate principal amount at any time outstanding
not to exceed the Commitment of such Bank set forth opposite its name on
Schedule 2.01, as the same may be reduced from time to time pursuant to Section
2.09.
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Within the limits set forth in Schedule 2.01, the Borrower may
borrow, pay or prepay and reborrow Loans on or after the date hereof and prior
to the Maturity Date, subject to the terms, conditions and limitations set forth
herein.
SECTION 2.02. LOANS. (a) Each Loan shall be made as part of a
Borrowing consisting of Loans made by the Banks ratably in accordance with their
Commitments; PROVIDED, HOWEVER, that the failure of any Bank to make any Loan
shall not in itself relieve any other Bank of its obligation to lend hereunder
(it being understood, however, that no Bank shall be responsible for the failure
of any other Bank to make any Loan required to be made by such other Bank). The
Loans comprising each Borrowing shall be in an aggregate principal amount which
is an integral multiple of $500,000 and not less than $2,500,000 (or an
aggregate principal amount equal to the remaining balance of the Commitments).
(b) Each Borrowing shall be comprised entirely of ABR Loans,
CD Loans or Eurodollar Loans, as the Borrower may request pursuant to Section
2.03. Each Bank may at its option fulfill its Commitment with respect to any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such
Bank to make such Loan; PROVIDED that any exercise of such option shall not
affect the obligation of the Borrower to repay such Loan in accordance with the
terms of this Agreement and the applicable Note. Borrowings of more than one
Type may be outstanding at the same time; PROVIDED, HOWEVER, that the Borrower
shall not be entitled to request any Borrowing which, if made, would result in
an aggregate of more than seven separate CD Loans or Eurodollar Loans of any
Bank being outstanding hereunder at any one time. For purposes of the foregoing,
Loans having different Interest Periods, regardless of whether they commence on
the same date, shall be considered separate Loans.
(c) Subject to paragraph (d) below, each Bank shall make a
Loan in the amount of its pro rata portion, as determined under Section 2.14, of
each Borrowing hereunder on the proposed date thereof by wire transfer of
immediately available funds to the Agent in New York, New York, not later than
12:00 noon, New York City time, and the Agent shall by 3:00 p.m., New York City
time, credit the amounts so received to the general deposit account of the
Borrower with the Agent or, if a Borrowing shall not occur on such date because
any condition precedent herein specified shall
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not have been met, return the amounts so received to the respective Banks.
Unless the Agent shall have received notice from a Bank prior to the date of any
Borrowing, or, in the case of an ABR Borrowing, by 12:00 noon, New York City
time, on the date of such ABR Borrowing, that such Bank will not make available
to the Agent such Bank's portion of such Borrowing, the Agent may assume that
such Bank has made such portion available to the Agent on the date of such
Borrowing in accordance with this paragraph (c) and the Agent may, in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have made
such portion available to the Agent, such Bank and the Borrower severally agree
to repay to the Agent forthwith on demand such corresponding amount together
with interest thereon, (i) in the case of the Borrower, for each day from the
date such amount is made available to the Borrower to (but not including) the
date on which such amount is repaid to the Agent, at the interest rate
applicable at the time to the Loans comprising such Borrowing (provided that the
Borrower shall not be required to pay any amount as a premium, penalty or
similar prepayment charge in connection with any such repayment) and (ii) in the
case of such Bank, for each day from the date such amount is made available to
the Borrower until the date such amount is repaid to the Agent, at the Federal
Funds Effective Rate. If such Bank shall repay to the Agent such corresponding
amount, such amount shall (so long as such corresponding amount advanced by the
Agent on behalf of such Bank to the Borrower remains part of an outstanding
Borrowing hereunder) constitute such Bank's Loan as part of such Borrowing for
purposes of this Agreement. Without prejudice to any other recourse or remedy
that may be available to the Borrower against such Bank, such Bank shall not be
entitled to receive, and the Borrower shall not be required to pay, a Commitment
Fee pursuant to Section 2.05(a) of this Agreement on any amount that such Bank
is obligated to repay to the Agent as provided above.
(d) The Borrower may refinance all or any part of any
Borrowing with a Borrowing of the same or a different Type, subject to the
conditions and limitations set forth in this Agreement. Any Borrowing or part
thereof so refinanced shall be deemed to be repaid or prepaid in accordance with
Section 2.04 or 2.10, as applicable, with the proceeds of a new Borrowing, and
the proceeds of the new Borrowing, to the extent they do not exceed the
principal amount of the Borrowing being refinanced, shall not be paid by the
Banks
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to the Agent or by the Agent to the Borrower pursuant to paragraph (c) above.
SECTION 2.03. NOTICE OF BORROWINGS. The Borrower shall give
the Agent written, telex or telecopy notice (or telephone notice promptly
confirmed in writing or by telex or telecopy) in the case of Borrowing that is
(a) a Euro- dollar Borrowing, not later than 10:00 a.m., New York City time,
three Business Days before a proposed Borrowing, (b) a CD Borrowing, not later
than 10:00 a.m., New York City time, two Business Days before a proposed
Borrowing and (c) an ABR Borrowing, not later than 11:00 a.m., New York City
time, the day of a proposed Borrowing. Such notice shall be irrevocable and
shall in each case refer to this Agreement and specify (i) whether the Borrowing
then being requested is to be a Eurodollar Borrowing, a CD Borrowing or an ABR
Borrowing; (ii) the date of such Borrowing (which shall be a Business Day) and
the amount thereof; and (iii) if such Borrowing is to be a Eurodollar Borrowing
or CD Borrowing, the Interest Period with respect thereto. If no election as to
the Type of Borrowing is specified in any such notice, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period with respect to any
Eurodollar Borrowing or CD Borrowing is specified in any such notice, then the
Borrower shall be deemed to have selected an Interest Period of one month's
duration, in the case of a Eurodollar Borrowing, or 30 days' duration, in the
case of a CD Borrowing. If the Borrower shall not have given notice in
accordance with this Section 2.03 of its election to refinance a Borrowing prior
to the end of the Interest Period in effect for such Borrowing, then the
Borrower shall (unless such Borrowing is repaid at the end of such Interest
Period) be deemed to have given notice of an election to refinance such
Borrowing with an ABR Borrowing. The Agent shall promptly advise the Banks of
any notice given pursuant to this Section 2.03 and of each Bank's portion of the
requested Borrowing.
SECTION 2.04. NOTES; REPAYMENT OF LOANS. The Loans made by
each Bank shall be evidenced by a Note, duly executed on behalf of the Borrower,
dated the Closing Date, in substantially the form attached hereto as Exhibit A
with the blanks appropriately filled, payable to the order of such Bank in a
principal amount equal to such Bank's Commitment. The outstanding principal
balance of each Loan, as evidenced by such a Note, shall be payable on the last
day of the Interest Period applicable to such Loan. Each Note shall bear
interest from the date of the first Borrow-
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ing hereunder on the outstanding principal balance thereof as set forth in
Section 2.06. Each Bank shall, and is hereby authorized by the Borrower to,
endorse on the schedule attached to each Note delivered to such Bank (or on a
continuation of such schedule attached to such Note and made a part thereof), or
otherwise to record in such Bank's internal records, an appropriate notation
evidencing the date and amount of each Loan from such Bank, each payment and
prepayment of principal of any such Loan, each payment of interest on any such
Loan and the other information provided for on such schedule; PROVIDED, HOWEVER,
that the failure of any Bank to make such a notation or any error therein shall
not affect the obligation of the Borrower to repay the Loans made by such Bank
in accordance with the terms of this Agreement and the applicable Notes.
SECTION 2.05. FEES. (a) The Borrower agrees to pay to each
Bank, through the Agent, on the last Business Day of March, June, September and
December in each year, and on the earlier of the Maturity Date and the date on
which the Commitment of such Bank shall be terminated as provided herein, a
commitment fee (a "Commitment Fee") equal to the applicable Commitment Fee
Percentage on the average daily unused amount of the Commitment of such Bank
during the preceding quarter (or shorter period commencing with the date hereof
or ending with the Maturity Date or the date on which the Commitment of such
Bank shall be terminated). All Commitment Fees shall be computed on the basis of
the actual number of days elapsed in a year of 360 days. The Commitment Fee
due to each Bank shall commence to accrue on the date of this Agreement and
shall cease to accrue on the earlier of the Maturity Date and the date on which
the Commitment of such Bank shall be terminated as provided herein.
(b) The Borrower agrees to pay to the Agent, for its own
account, agent and administrative fees (the "Administrative Fees") in the
amounts agreed upon in the letter agreement dated February 22, 1995, between the
Borrower and the Agent.
(c) All Fees shall be paid on the dates due, in immediately
available funds, to the Agent for distribution, if and as appropriate, among the
Banks. Once paid, none of the Fees shall be refundable under any circumstances.
SECTION 2.06. INTEREST ON LOANS. (a) Subject to the
provisions of Section 2.07, the Loans comprising each
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ABR Borrowing shall bear interest (computed on the basis of the actual number of
days elapsed over a year of 365 or 366 days, as the case may be, when determined
by reference to the Prime Rate and over a year of 360 days at all other times)
at a rate per annum equal to the Alternate Base Rate.
(b) Subject to the provisions of Section 2.07, the Loans
comprising each CD Borrowing shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 360 days) at a rate per annum equal
to the Adjusted CD Rate for the Interest Period in effect for such Borrowing
plus the Applicable Margin with respect to such Loans.
(c) Subject to the provisions of Section 2.07, the Loans
comprising each Eurodollar Borrowing shall bear interest (computed on the basis
of the actual number of days elapsed over a year of 360 days) at a rate per
annum equal to the Adjusted LIBO Rate for the Interest Period in effect for such
Eurodollar Borrowing plus the Applicable Margin with respect to such Loans.
(d) Interest on each Loan shall be payable on the Interest
Payment Dates applicable to such Loan except as otherwise provided in this
Agreement. The applicable Alternate Base Rate, Adjusted CD Rate or Adjusted LIBO
Rate for each Interest Period or day within an Interest Period, as the case may
be, shall be determined by the Agent, and such determination shall be conclusive
absent manifest error. The Agent shall, upon request, advise the Borrower of any
such determination.
SECTION 2.07. DEFAULT INTEREST. If the Borrower shall default
(i) in the payment of the principal of or interest on any Loan or any other
amount becoming due hereunder, by acceleration or otherwise or (ii) in the due
observance of the covenants contained in Section 6.06 or 6.07, the Borrower
shall on demand from time to time pay interest, to the extent permitted by law,
in the case of a default under clause (i) hereof on such defaulted amount up to
(but not including) the date of actual payment (after as well as before
judgment), and, in the case of a default under clause (ii) hereof, on the
aggregate amount of the Loans outstanding on the date of such default from the
date 60 days after such default up to (but not including) the date the Borrower
shall cease to fail to comply with Sections 6.06 or 6.07, in each case at a rate
per annum (computed on the basis of the actual number of days elapsed
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over a year of 360 days) equal to the Alternate Base Rate plus 2%.
SECTION 2.08. ALTERNATE RATE OF INTEREST. (a) In the event,
and on each occasion, that on the day two Business Days prior to the
commencement of any Interest Period for a Eurodollar Borrowing the Agent shall
have determined that dollar deposits in the principal amounts of the Loans
comprising such Borrowing are not generally available in the London interbank
market, or that the rates at which such dollar deposits are being offered will
not adequately and fairly reflect the cost to any Bank of making or maintaining
its Eurodollar Loan during such Interest Period, or that reasonable means do not
exist for ascertaining the Adjusted LIBO Rate, the Agent shall, as soon as
practicable thereafter, give written, telex or telecopy notice of such
determination to the Borrower and the Banks. In the event of any such
determination, any request by the Borrower for a Eurodollar Borrowing pursuant
to Section 2.03 shall, until the Agent shall have advised the Borrower and the
Banks that the circumstances giving rise to such notice no longer exist, be
deemed to be a request for an ABR Borrowing. Each determination by the Agent
hereunder shall be conclusive absent manifest error.
(b) In the event, and on each occasion, that on or before the
day on which the Adjusted CD Rate for a CD Borrowing is to be determined the
Agent shall have determined that such Adjusted CD Rate cannot be determined for
any reason, including the inability of the Agent to obtain sufficient bids in
accordance with the terms of the definition of Fixed CD Rate, or the Agent shall
determine that the Adjusted CD Rate for such CD Borrowing will not adequately
and fairly reflect the cost to any Bank of making or maintaining its CD Loan
during such Interest Period, the Agent shall, as soon as practicable thereafter,
give written, telex or telecopy notice of such determination to the Borrower and
the Banks. In the event of any such determination, any request by the Borrower
for a CD Borrowing pursuant to Section 2.03 shall, until the Agent shall have
advised the Borrower and the Banks that the circumstances giving rise to such
notice no longer exist, be deemed to be a request for an ABR Borrowing. Each
determination by the Agent hereunder shall be conclusive absent manifest
error.
SECTION 2.09. TERMINATION AND REDUCTION OF COMMITMENTS. (a)
Upon at least three Business Days' prior
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irrevocable written, telex or telecopy notice (or telephone notice promptly
confirmed in writing or by telex or telecopy) to the Agent, the Borrower may at
any time in whole permanently terminate, or from time to time in part
permanently reduce, the Commitments; PROVIDED, HOWEVER, that each partial
reduction of the Commitments shall be in an integral multiple of $1,000,000 and
in a minimum aggregate principal amount of $5,000,000.
(b) Each reduction in the Commitments hereunder shall be made
ratably among the Banks in accordance with their respective applicable
Commitments. The Borrower shall pay to the Agent for the account of the Banks,
on the date of each termination or reduction, the Commitment Fees on the amount
of the Commitments so terminated or reduced accrued through the date of such
termination or reduction.
(c) The Commitments shall be automatically terminated at 5:00
p.m., New York City time, on the Maturity Date.
SECTION 2.10. PREPAYMENT. (a) The Borrower shall have the
right at any time and from time to time to prepay any Borrowing, in whole or in
part, upon at least three Business Days' prior written, telex or telecopy notice
(or telephone notice promptly confirmed by written, telex or telecopy notice) to
the Agent; PROVIDED, HOWEVER, that each partial prepayment shall be in an amount
which is an integral multiple of $1,000,000 and not less than $5,000,000.
(b) On the date of any termination or reduction of the
Commitments pursuant to Section 2.09 or 6.04, the Borrower shall pay or prepay
so much of the Borrowings as shall be necessary in order that the aggregate
principal amount of the Loans outstanding will not exceed the aggregate
Commitments after giving effect to such termination or reduction.
(c) Each notice of prepayment shall specify the prepayment
date and the principal amount of each Borrowing (or portion thereof) to be
prepaid, shall be irrevocable and shall commit the Borrower to prepay such
Borrowing by the amount stated therein on the date stated therein. All
prepayments under this Section 2.10 shall be subject to Section 2.13 but
otherwise without premium or penalty. All prepayments under this Section 2.10
shall be accompanied by
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accrued interest on the principal amount being prepaid to the date of payment.
SECTION 2.11. RESERVE REQUIREMENTS; CHANGE IN CIRCUMSTANCES.
(a) Notwithstanding any other provision herein, if after the date of this
Agreement any change in applicable law or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall change the basis of taxation of payments to any Bank of the principal
of or interest on any Eurodollar Loan or CD Loan made by such Bank or any Fees
or other amounts payable hereunder (other than changes in respect of taxes
imposed on the overall net income of such Bank by the jurisdiction in which such
Bank has its principal office or by any political subdivision or taxing
authority therein), or shall impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of, deposits with or for
the account of or credit extended by such Bank (except any such reserve
requirement which is reflected in the Adjusted LIBO Rate or the Adjusted CD
Rate) or shall impose on such Bank or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans or CD Loans made by such
Bank, and the result of any of the foregoing shall be to increase the cost to
such Bank of making or maintaining any Eurodollar Loan or CD Loan or to reduce
the amount of any sum received or receivable by such Bank hereunder or under the
Notes (whether of principal, interest or otherwise) by an amount deemed by such
Bank to be material, then the Borrower will pay to such Bank upon demand such
additional amount or amounts as will compensate such Bank for such additional
costs incurred or reduction suffered.
(b) If any Bank shall have determined that the applicability
of any law, rule, regulation, agreement or guideline adopted pursuant to or
arising out of the July 1988 report of the Basle Committee on Banking
Regulations and Supervisory Practices entitled "International Convergence of
Capital Measurement and Capital Standards", or the adoption after the date
hereof of any other law, rule, regulation, agreement or guideline regarding
capital adequacy, or any change in any of the foregoing or in the interpretation
or administration of any of the foregoing by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or any lending office of such Bank) or any
Bank's holding company with any request or
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directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Bank's capital or on the capital
of such Bank's holding company, if any, as a consequence of this Agreement or
the Loans made by such Bank pursuant hereto to a level below that which such
Bank or such Bank's holding company could have achieved but for such
applicability, adoption, change or compliance (taking into consideration such
Bank's policies and the policies of such Bank's holding company with respect to
capital adequacy) by an amount deemed by such Bank to be material, then from
time to time the Borrower shall pay to such Bank such additional amount or
amounts as will compensate such Bank or such Bank's holding company for any such
reduction suffered.
(c) A certificate of each Bank (i) setting forth such amount
or amounts (and the manner of determining the same) as shall be necessary to
compensate such Bank or its holding company as specified in paragraph (a) or (b)
above, as the case may be, and (ii) identifying the event or circumstance that
caused the cost or reduction in respect of which such compensation is claimed,
shall be delivered to the Borrower and shall be conclusive absent manifest
error. The Borrower shall pay each Bank the amount shown as due on any such
certificate delivered by it within 10 days after its receipt of the same.
(d) Failure on the part of any Bank to demand compensation for
any increased costs or reduction in amounts received or receivable or reduction
in return on capital with respect to any period shall not constitute a waiver of
such Bank's right to demand compensation with respect to such period or any
other period; PROVIDED, HOWEVER, that no Bank shall be entitled to compensation
for any such increased costs or reduction in amounts received or receivable with
respect to any date unless it shall have notified the Borrower that it will
demand compensation therefor not more than 90 days after the later of such date
and the date on which the circumstances giving rise to such increased costs or
reduction in amounts received or receivable shall take effect. The protection of
this Section shall be available to each Bank regardless of any possible
contention of the invalidity or inapplicability of the law, rule, regulation,
guideline or other change or condition which shall have occurred or been
imposed.
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(e) Any Bank claiming any additional amounts payable pursuant
to this Section 2.11 shall use reasonable efforts (consistent with legal and
regulatory restrictions) to change the jurisdiction of its applicable lending
office if the making of such change would avoid the need for or reduce the
amount of any such additional amounts which may thereafter accrue and would not,
in the sole determination of such Bank, be otherwise disadvantageous to such
Bank.
SECTION 2.12. CHANGE IN LEGALITY. (a) Notwithstanding any
other provision herein, if any change in any law or regulation or in the
interpretation thereof by any Governmental Authority charged with the
administration or interpretation thereof shall make it unlawful for any Bank to
make or maintain any Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to any Eurodollar Loan, then, by written notice
to the Borrower and to the Agent, such Bank may:
(i) declare that Eurodollar Loans will not thereafter be made
by such Bank hereunder, whereupon any request by the Borrower for a
Eurodollar Borrowing shall, as to such Bank only, be deemed a request
for an ABR Loan unless such declaration shall be subsequently
withdrawn; and
(ii) require that all outstanding Eurodollar Loans made by it be
converted to ABR Loans, in which event all such Eurodollar Loans shall
be automatically converted to ABR Loans as of the effective date of
such notice as provided in paragraph (b) below.
In the event any Bank shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal which would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Bank or the
converted Eurodollar Loans of such Bank shall instead be applied to repay the
ABR Loans made by such Bank in lieu of- or resulting from the conversion of,
such Eurodollar Loans.
(b) For purposes of this Section 2.12, a notice to the
Borrower by any Bank shall be effective as to each Eurodollar Loan, if lawful,
on the last day of the Interest Period currently applicable to such Eurodollar
Loan; in all other cases such notice shall be effective on the date of receipt
by the Borrower.
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SECTION 2.13. INDEMNITY. The Borrower shall indemnify each
Bank against any loss or reasonable expense which such Bank may sustain or incur
as a consequence of any failure by the Borrower to fulfill on the date of any
Borrowing hereunder the applicable conditions set forth in Article IV, any
failure by the Borrower to borrow or to refinance, convert or to continue any
Loan hereunder after irrevocable notice of such borrowing or refinancing,
conversion or continuation has been given pursuant to Section 2.03, any payment
or prepayment or conversion of a CD Loan or Eurodollar Loan required by any
other provision of this Agreement or otherwise made or deemed made on a date
other than the last day of the applicable Interest Period, any default in
payment or prepayment of the principal amount of any Loan or any part thereof or
interest accrued thereon, as and when due and payable (at the due date thereof,
whether by scheduled maturity, acceleration, irrevocable notice of prepayment or
otherwise), or the occurrence of any Event of Default, including, but not
limited to, in each such case, any loss or reasonable expense sustained or
incurred or to be sustained or incurred in liquidating or employing deposits
from third parties acquired to effect or maintain such Loan or any part thereof
as a CD Loan or Eurodollar Loan. Such loss or reasonable expense shall
include, without limitation, an amount equal to the excess, if any, as
reasonably determined by such Bank of (i) the amount of interest that would have
accrued on the principal amount so paid or prepaid or converted or not borrowed
(based on the Adjusted CD Rate or the Adjusted LIBO Rate applicable thereto) for
the period from the date of such payment or prepayment or conversion or failure
to borrow to the last day of the Interest Period for such Loan (or, in the case
of a failure to borrow, the Interest Period for such Loan which would have
commenced on the date of such failure to borrow) over (ii) the amount of
interest (as reasonably determined by such Bank) that would be realized by such
Bank in reemploying the funds so paid or prepaid or converted or not borrowed
for such period or Interest Period, as the case may be. A certificate of any
Bank setting forth any amount or amounts which such Bank is entitled to receive
pursuant to this Section 2.13, and the manner of determining the same, shall be
delivered to the Borrower and shall be conclusive absent manifest error.
SECTION 2.14. PRO RATA TREATMENT. Except as required under
Section 2.12, each Borrowing, each payment or prepayment of principal of any
Borrowing, each payment of interest on the Loans, each payment of the Commitment
Fees,
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each reduction of the Commitments and each refinancing of any Borrowing with,
conversion of any Borrowing to or continuation of any Borrowing as a Borrowing
of any Type shall be allocated pro rata among the Banks in accordance with their
respective applicable Commitments (or, if such Commitments shall have expired or
been terminated, in accordance with the respective principal amounts of their
outstanding Loans). Each Bank agrees that in computing such Bank's portion of
any Borrowing to be made hereunder, the Agent may, in its discretion, round each
Bank's percentage of such Borrowing, computed in accordance with Section 2.01,
to the next higher or lower whole dollar amount.
SECTION 2.15. SHARING OF SETOFFS. Each Bank agrees that if it
shall, through the exercise of a right of banker's lien, setoff or counterclaim
against the Borrower, including, but not limited to, a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Bank under any
applicable bankruptcy, insolvency or other similar law or otherwise, or by any
other means, obtain payment (voluntary or involuntary) in respect of any Loan or
Loans as a result of which the unpaid principal portion of its Loans shall be
proportionately less than the unpaid principal portion of the Loans of any other
Bank, it shall be deemed simultaneously to have purchased from such other Bank
at face value, and shall promptly pay to such other Bank the purchase price for,
a participation in the Loans of such other Bank, so that the aggregate unpaid
principal amount of the Loans and participations in Loans held by each Bank
shall be in the same proportion to the aggregate unpaid principal amount of all
Loans then outstanding as the principal amount of its Loans prior to such
exercise of banker's lien, setoff or counterclaim or other event was to the
principal amount of all Loans outstanding prior to such exercise of banker's
lien, setoff or counterclaim or other event; PROVIDED, HOWEVER, that if any such
purchase or purchases or adjustments shall be made pursuant to this Section and
the payment giving rise thereto shall thereafter be recovered, such purchase or
purchases or adjustments shall be rescinded to the extent of such recovery and
the purchase price or prices or adjustment restored without interest. The
Borrower expressly consents to the foregoing arrangements and agrees that any
Bank holding a participation in a Loan deemed to have been so purchased may
exercise any and all rights of banker's lien, setoff or counterclaim with
respect to any and all moneys owing by the
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Borrower to such Bank by reason thereof as fully as if such Bank had made a Loan
directly to the Borrower in the amount of such participation.
SECTION 2.16. PAYMENTS. (a) The Borrower shall make each
payment (including principal of or interest on any Borrowing or any Fees or
other amounts) hereunder and under any other Loan Document not later than 1:00
p.m., New York City time, on the date when due in Dollars to the Agent at its
offices at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (or any other office
designated in a notice from the Agent to the Borrower), in immediately available
funds.
(b) Whenever any payment (including principal of or interest
on any Borrowing or any Fees or other amounts) hereunder or under any other Loan
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of
interest or Fees, if applicable.
SECTION 2.17. TAXES. (a) Any and all payments by the Borrower
hereunder shall be made, in accordance with Section 2.16, free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
EXCLUDING taxes imposed on the net income of the Agent or any Bank (or any
transferee or assignee thereof, including a participation holder (any such
entity being called a "Transferee")) and franchise taxes imposed on the Agent or
any Bank (or Transferee) by the United States or any jurisdiction under the laws
of which the Agent or any such Bank (or Transferee) is organized or any
political subdivision thereof (all such nonexcluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder to the Banks (or any Transferee) or
the Agent, (i) the sum payable shall be increased by the amount necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.17) such Bank (or Transferee) or
the Agent (as the case may be) shall receive an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall make
such deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant taxing authority or
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other Governmental Authority in accordance with applicable law; PROVIDED,
HOWEVER, that no Transferee of any Bank shall be entitled to receive any greater
payment under this paragraph (a) than such Bank would have been entitled to
receive with respect to the rights assigned, participated or otherwise
transferred unless such assignment, participation or transfer shall have been
made at a time when the circumstances giving rise to such greater payment did
not exist.
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Document (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Bank (or Transferee) and
the Agent for the full amount of Taxes and Other Taxes paid by such Bank (or
Transferee) or the Agent, as the case may be, and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted by
the relevant taxing authority or other Governmental Authority; PROVIDED,
HOWEVER, that a Bank shall not be entitled to compensation for a Tax or Other
Tax unless such Bank notifies the Borrower of the possible imposition of such
Tax or Other Tax within 90 days after the earlier to occur of (i) the date such
Bank receives a written claim for such Tax or Other Tax from a taxing authority
with respect to any payment made hereunder or the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any other Loan
Document and (ii) the date such Bank becomes aware that such Tax or Other Tax is
due with respect to any payment made hereunder or the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any other Loan
Document; and FURTHER PROVIDED that, as of the date hereof (and assuming that
payments were being made on Loans outstanding hereunder on such date), each Bank
and the Agent hereby confirms to the Borrower that such Bank and the Agent are
aware of no Taxes or Other Taxes that would be assessed against or incurred by
it that could entitle it to compensation from Borrower pursuant to this Section
2.17. Such indemnification shall be made within 30 days after the date any Bank
(or Transferee) or the Agent, as the case may be, makes written demand therefor.
If a Bank (or Transferee) or the Agent shall become aware that it is
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entitled to receive a refund in respect of Taxes or Other Taxes as to which it
has been indemnified by the Borrower pursuant to this Section 2.17, it shall
promptly notify the Borrower of the availability of such refund and shall,
within 30 days after receipt of a request by the Borrower, apply for such refund
at the Borrower's expense. If any Bank (or Transferee) or the Agent receives a
refund in respect of any Taxes or Other Taxes as to which it has been
indemnified by the Borrower pursuant to this Section 2.17, it shall promptly
notify the Borrower of such refund and shall, within 30 days after receipt of a
request by the Borrower (or promptly upon receipt, if the Borrower has requested
application for such refund pursuant hereto), repay such refund to the Borrower
(to the extent of amounts that have been paid by the Borrower under this Section
2.17 with respect to such refund), net of all out-of-pocket expenses of such
Bank and without interest; PROVIDED that the Borrower, upon the request of such
Bank (or Transferee) or the Agent, agrees to return such refund (plus penalties,
interest or other charges) to such Bank (or Transferee) or the Agent in the
event such Bank (or Transferee) or the Agent is required to repay such refund.
Nothing contained in this paragraph (c) shall require any Bank (or Transferee)
or the Agent to make available any of its tax returns (or any other information
relating to its taxes which it deems to be confidential).
(d) Within 30 days after the date of any payment of Taxes or
Other Taxes withheld by the Borrower in respect of any payment to any Bank (or
Transferee) or the Agent, the Borrower will furnish to the Agent, at its address
referred to in Section 9.01, the original or a certified copy of a receipt
evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section 2.17
shall survive the payment in full of the principal of and interest on all Loans
made hereunder.
(f) Upon the written request of the Borrower, each Bank (or
Transferee) that is organized under the laws of a jurisdiction outside the
United States shall, if legally able to do so, prior to the immediately
following due date of any payment by the Borrower hereunder, deliver to the
Borrower such certificates, documents or other evidence, as required by the Code
or Treasury Regulations issued pursuant thereto, including Internal Revenue
Service
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Form 1001 or Form 4224 and any other certificate or statement of exemption
required by Treasury Regulation Section 1.1441-1, 1.1441-4 or 1.1441-6(c) or any
subsequent version thereof or successors thereto, properly completed and duly
executed by such Bank (or Transferee) establishing that such payment is (i) not
subject to United States Federal withholding tax under the Code because such
payment is effectively connected with the conduct by such Bank (or Transferee)
of a trade or business in the United States or (ii) totally exempt from United
States Federal withholding tax, or subject to a reduced rate of such tax under a
provision of an applicable tax treaty. Unless the Borrower and the Agent have
received forms or other documents satisfactory to them indicating that such
payments hereunder or under the Notes are not subject to United States Federal
withholding tax or are subject to such tax at a rate reduced by an applicable
tax treaty, the Borrower or the Agent shall withhold taxes from such payments at
the applicable statutory rate.
(g) The Borrower shall not be required to pay any additional
amounts to any Bank (or Transferee) in respect of United States Federal
withholding tax pursuant to paragraph (a) above if the obligation to pay such
additional amounts would not have arisen but for a failure by such Bank (or
Transferee) to comply with the provisions of paragraph (f) above; PROVIDED,
HOWEVER, that the Borrower shall be required to pay those amounts to any Bank
(or Transferee) that it was required to pay hereunder prior to the failure of
such Bank (or Transferee) to comply with the provisions of such paragraph (f).
(h) Any Bank (or Transferee) claiming any additional amounts
payable pursuant to this Section 2.17 shall use reasonable efforts (consistent
with legal and regulatory restrictions) to file any certificate or document
requested by the Borrower or to change the jurisdiction of its applicable
lending office if the making of such a filing or change would avoid the need for
or reduce the amount of any such additional amounts which may thereafter accrue
and would not, in the sole determination of such Bank, be otherwise
disadvantageous to such Bank (or Transferee).
SECTION 2.18. TERMINATION OR ASSIGNMENT OF COMMITMENTS UNDER
CERTAIN CIRCUMSTANCES. In the event that any Bank shall have delivered a notice
or certificate pursuant to Section 2.11 or 2.12, or the Borrower shall be
required to make additional payments to any Bank under
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Section 2.17, the Borrower shall have the right, at its own expense, upon notice
to such Bank and the Agent, (a) to terminate the Commitment of such Bank or (b)
to require such Bank to transfer and assign without recourse (in accordance with
and subject to the restrictions contained in Section 9.04) all its interests,
rights and obligations under this Agreement to another financial institution
which shall assume such obligations; PROVIDED that (i) no such termination or
assignment shall conflict with any law, rule or regulation or order of any
Governmental Authority and (ii) the Borrower or the assignee, as the case may
be, shall pay to the affected Bank in immediately available funds on the date of
such termination or assignment the principal of and interest accrued to the date
of payment on the Loans made by it hereunder and all other amounts accrued for
its account or owed to it hereunder.
ARTICLE III
Representations and Warranties
------------------------------
The Borrower represents and warrants to each of the Banks
that:
SECTION 3.01. ORGANIZATION, CORPORATE POWERS. (a) Each of the
Borrower and the Subsidiaries is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction in which it is
incorporated, has the requisite corporate power and authority to own its
property and assets and to carry on its business as now conducted and proposed
to be conducted, is qualified to do business in every jurisdiction where the
nature of the business conducted or the property owned or leased by it requires
such qualification, except where the failure so to qualify would not have a
Material Adverse Effect and, in the case of the Borrower, has the corporate
power and authority to execute, deliver and perform its obligations under each
Loan Document to which it is or will be a party and to borrow hereunder.
(b) Each of the Borrower and the Subsidiaries has obtained and
maintains all licenses, permits, franchises, patents, copyrights, trademarks,
trade names, consents and approvals necessary to own its property and assets and
to carry on its business as now conducted, except where the failure to do so
would not have a Material Adverse Effect.
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SECTION 3.02. AUTHORIZATION. The execution, delivery and
performance by the Borrower of each Loan Document to which it is or will be a
party, the borrowings hereunder by the Borrower, the execution and delivery of
the Notes by the Borrower, the use of proceeds of the Loans in accordance with
this Agreement and the other transactions constituting any of the foregoing
(collectively, the "Transactions") (a) have been duly authorized by all
requisite corporate and, if required, stockholder action and (b) will not (i)
violate (A) any provision of any law, statute, rule or regulation applicable to,
or of the certificate or articles of incorporation or the regulations or By-laws
of the Borrower or any Subsidiary, (B) any order of any Governmental Authority
binding upon the Borrower or any Subsidiary or (C) any material provision of any
indenture, agreement or other instrument to which the Borrower or any Subsidiary
is a party, or by which the Borrower or any Subsidiary or any of their
properties or assets are or may be bound, (ii) be in conflict with, result in a
breach of or constitute (alone or with notice or lapse of time or both) a
default under any such indenture, agreement or other instrument or (iii) result
in the creation or imposition of any Lien upon any property or assets now owned
or hereafter acquired by the Borrower or any Subsidiary.
SECTION 3.03. GOVERNMENTAL APPROVALS. No action, consent or
approval of, registration or filing with or any other action by any Governmental
Authority is or will be required in connection with the Transactions, except
such as have been made or obtained and are in full force and effect.
SECTION 3.04. ENFORCEABILITY. This Agreement has been duly
executed and delivered by the Borrower and constitutes, and the Notes, when duly
executed and delivered by the Borrower, will constitute, a legal, valid and
binding obligation of the Borrower, enforceable in accordance with their
respective terms.
SECTION 3.05. FINANCIAL STATEMENTS. The Borrower has
heretofore delivered to the Banks its consolidated balance sheet as of December
31, 1993, consolidated statement of operations for the fiscal year ended
December 31, 1993, and consolidated statement of cash flows for the fiscal year
ended December 31, 1993, of the Borrower and the Subsidiaries, all such
consolidated balance sheets and financial statements audited by Ernst & Young
and certified by a Financial Officer of the Borrower. Such
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statements present fairly the consolidated financial position of the Borrower
and the Subsidiaries as of such dates and the results of their operations for
such periods, in conformity with generally accepted accounting principles
applied on a consistent basis (except as otherwise disclosed in the notes
thereto and subject, where applicable, to year-end audit adjustments). Such
balance sheets and the notes thereto disclose all material liabilities, direct
or contingent, of the Borrower and the Subsidiaries as of the dates thereof.
SECTION 3.06. NO MATERIAL ADVERSE CHANGE. There has been no
material adverse change in the business, assets, operations or financial
condition of the Borrower and the Subsidiaries taken as a whole since December
31, 1993.
SECTION 3.07. TITLE TO PROPERTIES; POSSESSION UNDER LEASES.
(a) Each of the Borrower and the Subsidiaries has good and marketable title to
(or valid leasehold interests in) all their material properties and assets
reflected in the financial statements referred to in Section 3.05 (or, if more
recent, the financial statements referred to in Section 5.05), except for such
properties as are no longer used or useful in the conduct of their businesses or
as have been disposed of since the date of such financial statements in the
ordinary course of business and except for any Permitted Liens affecting title
to such properties.
(b) Each of the Borrower and the Subsidiaries has complied
with all material obligations under all material leases to which any of them is
a party and under which any of them is in occupancy, and all such leases are in
full force and effect. The Borrower and the Subsidiaries enjoy peaceful and
undisturbed possession under all such leases.
SECTION 3.08. LITIGATION; COMPLIANCE WITH LAWS. (a) There are
not any actions, suits or proceedings at law or in equity or by or before any
Governmental Authority now pending or, to the knowledge of the Borrower or any
Subsidiary, threatened against or affecting the Borrower or any Subsidiary or
any business, property or rights of the Borrower or any Subsidiary (i) which
involve any Loan Document or the Transactions or (ii) as to which there is a
reasonable possibility of an adverse determination and which, if adversely
determined, would, individually or in the aggregate, result in a Material
Adverse Effect.
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(b) Neither the Borrower nor any of the Subsidiaries is in
violation of any law, rule or regulation, or in default with respect to any
judgment, writ, injunction or decree of any Governmental Authority, where such
violation or default could result in a Material Adverse Effect; PROVIDED, that
the foregoing is not applicable to ERISA, which is treated separately in Section
3.12, or to Environmental Laws, which are treated separately in Section 3.16.
The Transactions will not violate any law or regulation applicable to or binding
upon the Borrower or the Subsidiaries or violate or be prohibited by any law,
order, judgment, writ, injunction decree or order of any Governmental Authority
applicable to or binding upon the Borrower or the Subsidiaries.
SECTION 3.09. AGREEMENTS. (a) Neither the Borrower nor any
Subsidiary is a party to any agreement or instrument or subject to any corporate
restriction that has resulted or is reasonably expected to result in a Material
Adverse Effect.
(b) Neither the Borrower nor any of its Subsidiaries is in
default in any manner under any provision of any indenture or other agreement or
instrument evidencing Indebtedness, or any other material agreement or
instrument to which it is a party or by which it or any of its properties or
assets are or may be bound, where such default would be reasonably expected to
result in a Material Adverse Effect.
SECTION 3.10. FEDERAL RESERVE REGULATIONS. (a) Neither the
Borrower nor any of its Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
(b) No part of the proceeds of any Loan will be used, whether
directly or indirectly, and whether immediately, incidentally or ultimately, (i)
to purchase or carry Margin Stock or to extend credit to others for the purpose
of purchasing or carrying Margin Stock or to refund indebtedness originally
incurred for such purpose, or (ii) for any purpose which entails a violation of,
or which is inconsistent with, the provisions of the Regulations of the Board,
including, without limitation, Regulations G, U and X.
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SECTION 3.11. TAXES. Each of the Borrower and each Subsidiary
has filed or caused to be filed all Federal, state, local and foreign tax
returns which are required to be filed by it, and has paid or caused to be paid
all taxes shown to be due and payable on such returns or on any assessments
received by it, other than any taxes or assessments the validity of which the
Borrower or such Subsidiary is contesting in good faith by appropriate
proceedings, and with respect to which the Borrower or such Subsidiary shall, to
the extent required by generally accepted accounting principles applied on a
consistent basis, have set aside on its books adequate reserves.
SECTION 3.12. EMPLOYEE BENEFIT PLANS. Each of the Borrower,
the Subsidiaries and their respective ERISA Affiliates is in compliance in all
material respects with those provisions of ERISA and the regulations and
published interpretations thereunder which are applicable to it. No Reportable
Event has occurred with respect to any Plan as to which the Borrower or any
Subsidiary or ERISA Affiliate was required to file a report with the PBGC. As of
January 1, 1995 the present value of all benefit liabilities under each Plan
maintained by the Borrower or any ERISA Affiliate (based on those assumptions
used to fund such Plan) did not exceed by more than $15,000,000 the value of the
assets of such Plan. None of the Borrower and the ERISA Affiliates has incurred
any Withdrawal Liability that could result in a Material Adverse Effect. None of
the Borrower and the ERISA Affiliates has received any notification that any
Multiemployer Plan is in reorganization or has been terminated, within the
meaning of Title IV of ERISA, and no Multiemployer Plan is reasonably expected
to be in reorganization or to be terminated, where such reorganization has
resulted or can reasonably be expected to result through increases in the
contributions required to be made to such Plan or otherwise in a Material
Adverse Effect.
SECTION 3.13. NO MATERIAL MISSTATEMENTS. No information,
report, financial statement, exhibit or schedule furnished on or prior to the
date hereof by or on behalf of the Borrower or any Subsidiary to the Agent or
any Bank in connection with the negotiation of any Loan Document or included in
such Loan Document or delivered pursuant thereto and no information, report,
financial statement, exhibit or schedule delivered pursuant to this Agreement
after the date hereof contained, contains or will contain any material
misstatement of fact or omitted, omits or will omit to state any material fact
necessary to make the
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statements therein, in the light of the circumstances under which they were
made, not misleading; PROVIDED, HOWEVER, that the representation and warranty
contained in this Section 3.13 shall not apply to any financial or other
business projections or pro forma financial statements delivered at any time.
All financial or other business projections and pro forma financial statements
provided to the Banks by the Borrower from time to time have been prepared in
good faith based on estimates, information and assumptions which the Borrower in
good faith believes to be reasonable and which the Borrower will, upon the
request at any time of the Agent or any Bank, disclose and discuss with such
person or its authorized representatives any of such estimates, information and
assumptions.
SECTION 3.14. INVESTMENT COMPANY ACT AND PUBLIC UTILITY
HOLDING COMPANY ACT. Neither the Borrower nor any Subsidiary is (a) an
"investment company" as defined in, or otherwise subject to regulation under,
the Investment Company Act of 1940 or (b) a "holding company" within the meaning
of, or otherwise subject to regulation under, the Public Utility Holding Company
Act of 1935.
SECTION 3.15. USE OF PROCEEDS. The Borrower will use the
proceeds of the Loans only for the general corporate purposes of the Borrower
and the Subsidiaries.
SECTION 3.16. ENVIRONMENTAL AND SAFETY MATTERS. Except as set
forth in Schedule 3.16, the Borrower and each Subsidiary has complied in all
material respects with all Federal, state, local and other statutes, ordinances,
orders, judgments, rulings and regulations relating to environmental pollution
or to environmental regulation or control or to employee health or safety.
Except as set forth in Schedule 3.16, neither the Borrower nor any Subsidiary
has received notice of any material failure so to comply. Except as set forth in
Schedule 3.16, the Borrower's and the Subsidiaries' plants do not manage any
hazardous wastes, hazardous substances, hazardous materials, toxic substances,
toxic pollutants or substances similarly denominated, as those terms or similar
terms are used in the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response Compensation and Liability Act, the Hazardous Materials
Transportation Act, the Toxic Substance Control Act, the Clean Air Act, the
Clean Water Act or any other applicable law relating to environmental pollution
or employee health and safety, in violation of any law or regulations which
violations the Borrower reasonably
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believes either individually or in the aggregate, will have a Material Adverse
Effect. Except as set forth in Schedule 3.16, the Borrower is aware of no
events, conditions or circumstances involving environmental pollution or
contamination or employee health or safety that could reasonably be expected to
result in a Material Adverse Effect.
ARTICLE IV
Conditions of Lending
---------------------
The obligations of the Banks in respect of each Borrowing
shall be subject to satisfaction of the following conditions precedent:
SECTION 4.01. ALL BORROWINGS. On the date of each Borrowing,
including each Borrowing in which Revolving Loans are refinanced with new Loans
as contemplated by Section 2.02(d):
(a) The Agent shall have received a notice of such Borrowing
as required by Section 2.03.
(b) The representations and warranties set forth in Article
III hereof and in each other Loan Document shall be true and correct in
all material respects on and as of the date of such Borrowing with the
same effect as though made on and as of such date (except insofar as
such representations and warranties relate expressly and solely to an
earlier date).
(c) The Borrower shall be in compliance with all the terms and
provisions set forth herein as in each other Loan Document on its part
to be observed or performed, and at the time of and immediately after
such Borrowing no Event of Default or Default shall have occurred and
be continuing.
(d) The Banks shall have received such other instruments and
documents as they may have reasonably requested from the Borrower in
connection with the Loans to be made on such date.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date of
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such Borrowing as to the matters specified in paragraphs (b) and (c) of this
Section 4.01.
SECTION 4.02. FIRST BORROWING. On the date hereof:
(a) Each Bank shall have received a duly executed Note
complying with the provisions of Section 2.04.
(b) The Agent shall have received the favorable written
opinion of Xxxxx X. Xxxxxxx, Counsel to the Borrower, to the effect set
forth in Exhibit D hereto which shall be dated the date hereof,
addressed to the Banks and satisfactory to the Banks.
(c) The Agent shall have received (i) a copy of the
certificate of incorporation or articles of incorporation, as the case
may be, as amended, of the Borrower certified by the Secretary of State
of the state of its incorporation as of a recent date, and a
certificate as to the good standing of and charter documents filed by
the Borrower from such Secretary of State, dated as of a recent date;
(ii) a certificate of the Secretary or an Assistant Secretary of the
Borrower, dated the date hereof and certifying (A) that attached
thereto is a true and complete copy of the By-laws of the Borrower as
in effect on the date of such certificate and at all times since a date
prior to the date of the resolutions of such corporation described in
item (B) below, (B) that attached thereto is a true and complete copy
of resolutions duly adopted by the Board of Directors of the Borrower
authorizing the execution, delivery and performance of all Loan
Documents, the Borrowings by the Borrower hereunder, and that such
resolutions have not been modified, rescinded or amended and are in
full force and effect, (C) that the certificate of incorporation or
articles of incorporation of the Borrower have not been amended since
the date of the certification thereof furnished pursuant to (i) above,
and (D) as to the incumbency and specimen signature of each officer
executing any Loan Document or any other document delivered in
connection therewith; (iii) a certificate of another officer of the
Borrower as to the incumbency and specimen signature of the Secretary
or such Assistant Secretary of the Borrower; and (iv) such other
documents as the Banks or their counsel or Cravath, Swaine & Xxxxx,
counsel for or the Agent, may reasonably request.
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(d) The Revolving Credit Commitment (as defined in the
Existing Credit Agreement) of each bank under the Existing Credit
Agreement shall have been terminated on the date hereof, all Revolving
Credit Loans (as defined in the Existing Credit Agreement) outstanding
and other amounts owed to the banks thereunder (including Term Loans
(as defined in the Existing Credit Agreement) outstanding) shall have
been paid in full on the date hereof.
(e) All legal matters incident to the Loan Documents, the
Loans to be made on such date and the Transactions shall be
satisfactory from a legal point of view to Cravath, Swaine & Xxxxx,
counsel for the Agent.
ARTICLE V
Affirmative Covenants
---------------------
The Borrower covenants and agrees with each Bank that so long
as this Agreement shall remain in effect or the principal of or interest on any
Loan, or any Fee, or any other expenses or amounts payable under any Loan
Document shall be unpaid, unless the Required Banks shall otherwise consent in
writing, it will, and will cause each Subsidiary to:
SECTION 5.01. CORPORATE EXISTENCE. Do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its legal
existence, except as otherwise permitted by Section 6.03.
SECTION 5.02. BUSINESSES AND PROPERTIES. At all times do or
cause to be done all things necessary to obtain, preserve, renew and keep in
full force and effect the rights, licenses, permits (including those required
under Environmental Laws), franchises, authorizations, patents, copyrights,
trademarks and trade names material to the conduct of its businesses; defend all
the foregoing against all claims, actions, demands, suits or proceedings at law
or in equity or by or before any Governmental Authority; maintain and operate
such businesses in substantially the manner in which they are presently
maintained and operated, subject to changes in the ordinary course of business;
comply in all material respects with all laws, rules, regulations and orders,
whether Federal, state, local or
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foreign (including, without limitation, Environmental Laws), applicable to the
operation of such businesses whether now in effect or hereafter enacted; and at
all times maintain, preserve and protect all property material to the conduct of
such businesses and keep such property in good repair, working order and
condition and from time to time make, or cause to be made, all needful and
proper repairs, renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection therewith may be
properly conducted at all times in accordance with customary and prudent
business practices for similar businesses.
SECTION 5.03. INSURANCE. (a) Keep its insurable properties
adequately insured at all times by financially sound and reputable insurers, in
the same manner and to the same extent as is customary with companies similarly
situated and in the same or similar businesses, (b) maintain such other
insurance, to such extent and against such risks, including fire and other risks
insured against by extended coverage, as is customary with companies similarly
situated and in the same or similar businesses, (c) maintain in full force and
effect public liability insurance against claims for personal injury or death or
property damage occurring upon, in, about or in connection with the use of any
properties owned, occupied or controlled by it, in such amount as it shall
reasonably deem necessary, and (d) maintain such other insurance as may be
required by law or any other Loan Document or as may be reasonably requested by
the Required Banks for purposes of assuring compliance with this Section 5.03.
SECTION 5.04. OBLIGATIONS AND TAXES. Pay and discharge
promptly when due all Indebtedness and other obligations, including taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or in respect of its property, before the same shall become
delinquent or in default, as well as all lawful claims for labor, materials and
supplies or otherwise, which, if unpaid, might give rise to a Lien upon such
properties or any part thereof; PROVIDED, HOWEVER, that such payment and
discharge shall not be required with respect to any such Indebtedness,
obligation, tax, assessment, charge, levy or claim so long as the validity or
amount thereof shall be contested in good faith by appropriate proceedings and
the Borrower or Subsidiary shall, to the extent required by generally accepted
accounting principles applied on a
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consistent basis, have set aside on its books adequate reserves with respect
thereto.
SECTION 5.05. FINANCIAL STATEMENTS, REPORTS, ETC. In the case
of the Borrower, furnish to the Agent and each of the Banks:
(a) within 90 days after the end of each fiscal year (being
December 31 in each calendar year), its consolidated balance sheets and
consolidated income statements showing the financial condition of the
Borrower and the Subsidiaries as of the close of such fiscal year and
the results of their operations during such year and a consolidated
statement of cash flows, as of the close of such fiscal year, all the
foregoing financial statements to be audited by Ernst & Young or other
independent certified public accountants of recognized national
standing and accompanied by an opinion of such accountants (which shall
not be qualified in any material respect) to the effect that such
financial statements present fairly the financial condition and results
of operations of such person on a consolidated basis in accordance with
generally accepted accounting principles consistently applied, and to
be in form reasonably acceptable to the Required Banks;
(b) within 60 days after the end of each of the first three
fiscal quarters of each fiscal year, its unaudited consolidated balance
sheets, consolidated income statements and consolidated statements of
cash flows showing the financial condition and results of operations of
the Borrower and the Subsidiaries on a consolidated basis as of the end
of each such quarter and for such quarter and the then elapsed portion
of the fiscal year, all certified by one of its Financial Officers as
presenting fairly the financial position and results of operations of
the Borrower and the Subsidiaries and as having been prepared in
accordance with generally accepted accounting principles consistently
applied, in each case subject to normal year-end audit adjustments;
(c) promptly after the same become publicly available, copies
of such registration statements, annual, periodic and other reports,
and such proxy statements and other information, as shall be filed by
the Borrower or any Subsidiary with the Securities and
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Exchange Commission or with any national securities exchange or, in the
case of the Borrower, distributed to its shareholders;
(d) concurrently with any delivery of financial statements
under paragraph (a) or (b) above, a certificate of the accounting firm
or Financial Officer opining on or certifying such statements (which
certificate furnished by the independent accountants referred to in
paragraph (a) above may be limited to accounting matters and disclaim
responsibility for legal interpretations) (i) certifying that to the
best of its or his knowledge no Event of Default or Default has
occurred, (ii) in the case of a certificate of a Financial Officer of
the Borrower, if such an Event of Default or Default has occurred,
specifying the nature and extent thereof and any corrective action
taken or proposed to be taken with respect thereto and (iii) setting
forth the ratio of Total Indebtedness to the sum of Consolidated
Tangible Net Worth plus Total Indebtedness as of the date of the
balance sheet included in such financial statements;
(e) concurrently with any delivery under paragraph (a) or (b)
above, a certificate of a Financial Officer of the Borrower
demonstrating compliance, as of the date of the financial statements
being furnished at such time, with the covenants set forth in Sections
6.06 and 6.07; and
(f) promptly, from time to time, such other information
regarding the compliance by the Borrower with the terms of any Loan
Document or the affairs, operations or condition (financial or
otherwise) of the Borrower and the Subsidiaries as the Agent or any
Bank may reasonably request.
SECTION 5.06. LITIGATION AND OTHER NOTICES. Give the Agent and
each Bank prompt written notice of the following:
(a) the filing or commencement of, or notice of intention of
any person to file or commence, any action, suit or proceeding against
the Borrower or any Affiliate, whether at law or in equity or by or
before any Governmental Authority which, if adversely determined, would
result in a Material Adverse Effect;
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(b) any Event of Default or Default, specifying the nature and
extent thereof and the corrective action (if any) which is proposed to
be taken with respect thereto; and
(c) any development that has resulted in, or is reasonably
anticipated to result in, a Material Adverse Effect.
SECTION 5.07. ERISA. (a) Comply in all material respects with
the applicable provisions of ERISA and (b) furnish to the Agent and each Bank
(i) as soon as possible, and in any event within 30 days after any Responsible
Officer of the Borrower or any ERISA Affiliate either knows or has reason to
know that any Reportable Event has occurred that alone or together with any
other Reportable Event could reasonably be expected to result in liability of
the Borrower to the PBGC in an aggregate amount exceeding $3,000,000, a
statement of a Financial Officer setting forth details as to such Reportable
Event and the action proposed to be taken with respect thereto, together with a
copy of the notice, if any, of such Reportable Event given to the PBGC, (ii)
promptly after receipt thereof, a copy of any notice the Borrower or any ERISA
Affiliate may receive from the PBGC relating to the intention of the PBGC to
terminate any Plan or Plans (other than a Plan maintained by an ERISA Affiliate
which is considered an ERISA Affiliate only pursuant to subsection (m) or (o) of
Section 414 of the Code) or to appoint a trustee to administer any Plan or
Plans, (iii) within 10 days after the due date for filing with the PBGC pursuant
to Section 412(n) of the Code of a notice of failure to make a required
installment or other payment with respect to a Plan, a statement of a Financial
Officer setting forth details as to such failure and the action proposed to be
taken with respect thereto, together with a copy of such notice given to the
PBGC and (iv) promptly and in any event within 30 days after receipt thereof by
the Borrower or any ERISA Affiliate from the sponsor of a Multiemployer Plan, a
copy of each notice received by the Borrower or any ERISA Affiliate concerning
(A) the imposition of Withdrawal Liability or (B) a determination that a
Multiemployer Plan is, or is expected to be, terminated or in reorganization, in
each case within the meaning of Title IV of ERISA.
SECTION 5.08. MAINTAINING RECORDS; ACCESS TO PROPERTIES AND
INSPECTIONS. Maintain financial records in accordance with generally accepted
accounting practice and,
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upon reasonable notice, at all reasonable times and as often as any Bank may
reasonably request, permit any authorized representative designated by such Bank
to visit and inspect the properties and financial records of the Borrower or any
Subsidiary, and to make extracts from such financial records and permit any
authorized representative designated by such Bank to discuss the affairs,
finances and condition of the Borrower or any Subsidiary with the officers
thereof and its independent public accountants.
SECTION 5.09. USE OF PROCEEDS. Use the proceeds of the Loans
only for the purposes set forth in Section 3.15.
ARTICLE VI
Negative Covenants
------------------
The Borrower covenants and agrees with each Bank that, so long
as this Agreement shall remain in effect, or the principal of or interest on any
Loan, or any Fees, expense or amount payable hereunder shall be unpaid, unless
the Required Banks shall otherwise consent in writing, the Borrower will not,
and it will not cause or permit any Subsidiary to, either directly or
indirectly:
SECTION 6.01. LIENS. Create, incur, assume or permit to exist
any Lien on any property or assets (including, without limitation, stock of any
direct or indirect subsidiary, but not including any shares of capital stock of
the Borrower held as treasury stock) now owned or hereafter acquired by it or on
any income or rights in respect of any thereof, except:
(a) any Lien or privilege vested in any lessor, licensor or
permittor for rent or royalties to become due or for other obligations
or acts to be performed, the payment of which rent or royalties to
become due or the performance of which other obligations or acts is
required under leases, sub-leases, licenses or permits, so long as the
payment of such rent or royalties or the performance of such other
obligation or act is not delinquent;
(b) pledges and deposits made in the ordinary course of
business in connection with workmen's compensation, unemployment
insurance, old-age pensions
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and other social security benefits and Voluntary Employee Benefit Act
Trusts established pursuant to collective bargaining agreements;
(c) deposits to secure the performance of bids, tenders,
leases (other than Capital Lease Obligations), trade contracts (other
than for Indebtedness), statutory obligations, surety, customs and
appeal bonds and other obligations of like nature, incurred as an
incident to and in the ordinary course of business;
(d) Liens imposed by law, such as carriers', warehousemen's,
mechanics', materialmen's, repairmen's, vendors' or other like Liens
arising in the ordinary course of business and securing obligations
which are not yet due or which are being contested in compliance with
Section 5.04;
(e) Liens securing the payment of taxes, assessments and
governmental charges or levies, either not yet due or which are being
contested in compliance with Section 5.04;
(f) zoning restrictions, easements, rights-of-way,
restrictions on the use of property or other similar minor
irregularities of title or encumbrances, which, in the aggregate, are
not substantial in amount, and which do not in any case materially
detract from the value of the property subject thereto or interfere
with the ordinary conduct of the business of the Borrower or
Subsidiary;
(g) any Lien on property or assets existing at or prior to the
time such property is acquired by the Borrower or Subsidiary; PROVIDED,
in each case, that (i) such Liens were not created in contemplation of
or in connection with such acquisition by such person and (ii) such
Lien shall not apply to any other property of the Borrower or
Subsidiary;
(h) purchase money security interests in property hereafter
acquired by the Borrower or any Subsidiary; PROVIDED that (i) such
security interests were incurred, and the Indebtedness secured thereby
was created, substantially simultaneously with the acquisition of such
property by the Borrower or such Subsidiary, (ii) the Indebtedness
secured thereby does not exceed the lesser of the cost or fair market
value
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of such property at the time of acquisition and (iii) such purchase
money security interests shall not apply to any other property of the
Borrower or such Subsidiary;
(i) any Lien in any mining lease or in any direct or indirect
ownership interest in mining properties or in any stock or securities
of or partnership interest in or advance to or contractual rights
against any entity formed to engage in mining operations, provided that
the Borrower or a Subsidiary either owns an equity interest in or acts
as manager of such entity, created in connection with the financing or
joint ownership arrangements of such entity;
(j) Liens on property or assets of the Borrower and its
Subsidiaries existing on the date hereof and set forth on Schedule
6.01, PROVIDED that such Liens shall secure only those obligations
which they secure on the date hereof;
(k) extensions, renewals and replacements of Liens referred to
in paragraphs (a) through (j) of this Section 6.01, but only to the
extent that no Event of Default shall have occurred or be continuing at
the time of any such extension, renewal or replacement; PROVIDED that
any such extension, renewal or replacement Lien shall be limited to the
property or assets covered by the Lien extended, renewed or replaced
and that the obligations secured by any such extension, renewal or
replacement Lien shall be in an amount not greater than the amount of
the obligations secured by the Lien extended, renewed or replaced; and
(l) Liens securing Indebtedness of the Borrower otherwise
prohibited by this Section 6.01, but only to the extent that (A) no
Event of Default shall have occurred or be continuing at the time such
Indebtedness is incurred and such Lien is created, incurred or assumed
and (B) the aggregate amount of (1) all Indebtedness secured by Liens
permitted under this clause (l) and (2) all Attributable Debt of the
Borrower and the Subsidiaries does not exceed 15% of Consolidated
Tangible Net Worth.
SECTION 6.02. SALE AND LEASEBACK TRANSACTIONS. Enter into any
arrangement, directly or indirectly, with any person whereby it shall sell or
transfer any property, real
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or personal, used or useful in its business, whether now owned or hereafter
acquired, and thereafter rent or lease such property or other property which it
intends to use for substantially the same purpose or purposes as the property
being sold or transferred (a "Sale and Leaseback Transaction"); PROVIDED that
the Borrower or a Subsidiary may enter into any Sale and Leaseback Transaction
if (a) at the time of such Transaction no Event of Default shall have occurred
and be continuing, and (b) the aggregate amount of (i) all Indebtedness secured
by Liens permitted under clause (l) of Section 6.01 and (ii) all Attributable
Debt of the Borrower and the Subsidiaries does not exceed 15% of Consolidated
Tangible Net Worth.
SECTION 6.03. MERGERS AND ACQUISITIONS. Acquire all or a
substantial part of the capital stock or assets of any other person (whether in
one transaction or a series of transactions), or merge or consolidate with or
into any other person or take any other action having a similar effect;
PROVIDED, HOWEVER, that, so long as no Event of Default (other than an Event of
Default that would, but for this proviso, arise solely under this Section 6.03)
and no Default (other than a Default that would, but for this proviso, become an
Event of Default solely under this Section 6.03) shall have occurred and be
continuing, both before and after giving effect thereto, this provision shall
not prohibit (i) any such merger or acquisition in which the surviving entity is
the Borrower or a Subsidiary or (ii) any such merger, consolidation or other
action having a similar effect, by a Subsidiary in which the Subsidiary is not
the surviving entity, which would not result in the violation of the covenants
set forth in Section 6.04 below. The Borrower shall furnish to the Agent and
each of the Banks upon the consummation of a transaction under the proviso of
this Section 6.03, a certificate of a Financial Officer of the Borrower
demonstrating compliance, as of the date of the consummation of such transaction
but after giving effect to such transaction, with the covenants set forth in
Sections 6.06 and 6.07.
SECTION 6.04. DISPOSITION OF ASSETS. Sell, lease, transfer,
assign or otherwise dispose of (including any of the foregoing effected by means
of a merger, consolidation or other action having a similar effect by a
Subsidiary, it being agreed that any merger, consolidation or other action
having a similar effect by a Subsidiary shall be deemed to constitute a sale of
such Subsidiary by the owners of the capital stock of such Subsidiary) all or a
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substantial part (defined to be in excess of 10% of consolidated total assets as
determined in accordance with generally accepted accounting principles) of the
assets of the Borrower and its Subsidiaries (other than: in the ordinary course
of business; in a transaction described in clause (i) of the PROVISO to Section
6.03 above; non-cash trades of mining partnership interests in accordance with
past practices; any other dividend or distribution, including regular quarterly
cash dividend payments, made to the shareholders of the Borrower; or any
issuance or sale by the Borrower of its capital stock, or of rights or options
to acquire such capital stock, including any capital stock now or hereafter held
by the Borrower as treasury shares) in any given fiscal year and provided that
such disposition of substantial assets on a cumulative basis from the date of
this Agreement shall not exceed 25% of consolidated total assets as of the end
of the fiscal quarter preceding each sale, except that: (x) any Subsidiary,
other than the Borrower, may sell, lease, transfer, assign or otherwise dispose
of its assets to the Borrower or any other Subsidiary; and (y) the Borrower or
any Subsidiary may sell, lease, transfer, assign or otherwise dispose of assets
(provided that any transfer of assets of the Borrower directly held or owned by
the Borrower to a Subsidiary, other than advances of funds by the Borrower to
its Subsidiaries, must be for consideration (and not merely as a contribution to
capital) and must comply with Section 6.08) in excess of the limitations set
forth above if the proceeds of such dispositions are (i) used to purchase other
property of a similar nature of at least equivalent value within one year of
such sale; or (ii) used to prepay Senior Debt; PROVIDED, that at least the
Applicable Percentage of any proceeds applied pursuant to the foregoing clause
(ii) will be applied to prepay Loans under the Agreement (to the extent such
Loans are outstanding), and the Commitments (to the extent they remain in
effect) shall be permanently reduced by an amount equal to the Adjusted
Applicable Percentage of such proceeds. For purposes of the foregoing,
"Applicable Percentage" shall mean a fraction (expressed as a percentage)
calculated prior, and without giving effect, to any prepayments made or to be
made out of such proceeds, of which (A) the numerator shall be the aggregate
principal amount of the Loans then outstanding hereunder and (B) the denominator
shall be the aggregate principal amount of all Senior Debt then outstanding, and
"Adjusted Applicable Percentage" shall mean a fraction (expressed as a
percentage) calculated prior, and without giving effect, to any prepayments made
or to be made out of such proceeds, of
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which (C) the numerator shall be the sum of (1) the aggregate principal amount
of the Loans outstanding hereunder and (2) the aggregate amount by which the
Commitments exceed such outstanding Loans and (D) the denominator shall be the
sum of (x) the amounts referred to in clause (2) of the preceding clause (C) and
(y) the aggregate principal amount of all Senior Debt then outstanding;
PROVIDED, that if the aggregate Commitments in effect at such time do not exceed
the aggregate principal amount of the Loans then outstanding, the Adjusted
Applicable Percentage shall be equal to the Applicable Percentage.
SECTION 6.05. LINE OF BUSINESS. Engage in any business
activities or operations substantially different from and not reasonably related
to its current activities and operations.
SECTION 6.06. CONSOLIDATED TANGIBLE NET WORTH. Permit
Consolidated Tangible Net Worth to be less at any time than (a) during the
fiscal year ending December 31, 1994, $250,000,000 or (b) during any subsequent
fiscal year, an amount equal to (i) the Consolidated Tangible Net Worth required
to be maintained under this Section during the immediately preceding fiscal year
plus (ii) 50% of Consolidated Net Income, if positive, for such immediately
preceding fiscal year and any loss shall not reduce any other amount added for
any fiscal year.
SECTION 6.07. RATIOS. (a) Permit the ratio of Total
Indebtedness to the sum of (i) Consolidated Tangible Net Worth plus (ii) Total
Indebtedness at any time to exceed .45:1.0.
(b) Permit the ratio of (i) the sum of (A) the aggregate
principal amount of all Indebtedness of Subsidiaries (excluding any Indebtedness
described in Schedule 6.07 and otherwise existing on the date hereof in an
aggregate amount not to exceed $30,000,000 and (B) the aggregate principal
amount of all Indebtedness secured by Liens permitted under 6.01(l) to (ii)
Consolidated Tangible Net Worth at any time to exceed .20:1.0.
SECTION 6.08. TRANSACTIONS WITH AFFILIATES. Sell or transfer
any assets to, or purchase or acquire any assets of, or otherwise engage in any
other material transactions with, any of its Affiliates, except at prices not
less favorable to the Borrower (or any Subsidiary, in any
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transaction involving such Subsidiary and any Affiliate that is not also a
Subsidiary of the Borrower) than fair market prices and on terms and conditions
not less favorable to the Borrower (or any Subsidiary, in any transaction
involving such Subsidiary and any Affiliate that is not also a Subsidiary of the
Borrower) than could be reasonably obtained on an arm's-length basis from
unrelated third parties; PROVIDED, that any such transaction with Affiliates
shall be assessed in light of, and taking into consideration, all related
transactions with the relevant Affiliate or Affiliates (including its or their
Affiliates).
SECTION 6.09. FISCAL YEAR; ACCOUNTING. Change its fiscal year
or method of accounting (other than immaterial changes in methods), except as
required or permitted by generally accepted accounting principles; provided that
any such voluntary change shall not substantially affect compliance with
Sections 6.06 and 6.07.
ARTICLE VII
Defaults
--------
In case of the happening of any of the following events
("Events of Default"):
(a) any representation or warranty made, or deemed made, in or
in connection with any Loan Document or the Borrowings hereunder, or in
any report, certificate, financial statement or other instrument
furnished in connection with or pursuant to any Loan Document or the
Borrowings hereunder shall prove to have been false or misleading in
any material respect when so made, deemed made or furnished;
(b) default shall be made in the payment of any principal of
any Loan, when and as the same shall become due and payable, whether at
the due date thereof or at a date fixed for prepayment thereof or by
acceleration thereof or otherwise when and as the same shall become due
and payable;
(c) default shall be made in the payment of any interest on
any Loan or any Fee or any other amount (other than an amount referred
to in (b) above) due under this Agreement or any other Loan Document,
when and as the same shall become due and payable, and such
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default shall continue unremedied for a period equal to the longer of
(i) three days and (ii) two Business Days;
(d) default shall be made in the due observance of any
covenant, condition or agreement contained in Section 5.06 or Article
VI;
(e) default shall be made in the due observance or performance
of any other covenant, condition or agreement to be observed or
performed on the part of the Borrower or any Subsidiary pursuant to the
terms of this Agreement or any other Loan Document (other than those
specified in (b), (c) or (d) above) and such default shall continue
unremedied for a period of 20 days after notice thereof from any Bank
to the Borrower;
(f) the Borrower or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking relief under Title
11 of the United States Code, as now constituted or hereafter amended,
or any other Federal, state or foreign bankruptcy, insolvency,
receivership or similar law, (ii) consent to the institution of, or
fail to controvert in a timely and appropriate manner, any proceeding
or the filing of any petition referred to in (h) below, (iii) apply for
or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any
Subsidiary or for a substantial part of its property or assets, (iv)
file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for
the benefit of creditors, (vi) become unable, or admit in writing its
inability, or fail generally, to pay its debts as they become due or
(vii) take any corporate action for the purpose of effecting any of the
foregoing;
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of the Borrower or any
Subsidiary or of a substantial part of any of its property or assets,
under Title 11 of the United States Code or any other Federal, state or
foreign bankruptcy, insolvency, receivership or similar law, (ii) the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar
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official for the Borrower or any Subsidiary or for a substantial part
of the property or assets of the Borrower or a Subsidiary or (iii) the
winding up or liquidation of the Borrower or any Subsidiary; and such
proceeding or petition shall continue undismissed for 60 days or an
order or decree approving or ordering any of the foregoing shall be
entered;
(h) the Borrower or any Subsidiary (i) shall fail to pay any
amount of principal of or interest on any of its Indebtedness in a
principal amount in excess of $1,000,000, when and as the same shall
become due and payable, or (ii) shall fail to observe or perform any
term, covenant or agreement contained in any agreement or instrument
evidencing or governing any such Indebtedness, if the effect thereof is
to cause or to permit the holder or obligee of any such Indebtedness
(or any trustee on behalf of such holder or obligee) to cause (with or
without notice or lapse of time or both), such Indebtedness to become
due prior to its stated maturity;
(i) a Reportable Event or Reportable Events or a failure to
make a required installment or other payment (within the meaning of
Section 412(n)(1) of the Code) shall have occurred with respect to any
Plan or Plans that results in or reasonably could be expected to result
in liabilities of the Borrower and the Subsidiaries to the PBGC or to a
Plan or Plans in an aggregate amount in excess of $3,000,000 and,
within 30 days after the reporting of such Reportable Event or
Reportable Events to the Agent or after receipt by the Agent of the
statement required pursuant to Section 5.07(b)(iii) hereof, the Agent
shall have notified the Borrower in writing that (i) the Required Banks
have made a determination that, on the basis of such Reportable Event
or Reportable Events or the failure to make a required payment, there
are reasonable grounds for (A) termination of such Plan or Plans by the
PBGC, (B) the appointment by the appropriate United States District
Court of a trustee to administer such Plan or Plans or (C) the
imposition of a lien in favor of the Plan or Plans and (ii) as a result
of such determination, an Event of Default exists hereunder; or the
PBGC shall have instituted proceedings to terminate any Plan or Plans,
or a trustee shall have been appointed by a United States District
Court to administer any Plan or Plans;
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(j) (i) the Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan, (ii) the Borrower or
such ERISA Affiliate does not have reasonable grounds for contesting
such Withdrawal Liability or is not in fact contesting such Withdrawal
Liability in a timely and appropriate manner and (iii) the amount of
such Withdrawal Liability specified in such notice, when aggregated
with all other amounts required to be paid to Multiemployer Plans in
connection with Withdrawal Liabilities (determined as of the date or
dates of such notification), exceeds $5,000,000 or requires payments
exceeding $2,500,000 in any year;
(k) the Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of
Title IV of ERISA, if solely as a result of such reorganization or
termination the aggregate annual contributions of the Borrower and its
ERISA Affiliates to all Multiemployer Plans that are then in
reorganization or have been or are being terminated have been or will
be increased over the amounts required to be contributed to such
Multiemployer Plans for their most recently completed plan years by an
amount exceeding $2,500,000;
(l) (i) one or more judgments for the payment of money in an
aggregate amount in excess of $1,000,000 (exclusive of amounts paid or
covered by insurance to the satisfaction of the Required Banks) shall
be rendered by a court or other tribunal against the Borrower or (ii)
one or more judgments for the payment of money with respect to which
the aggregate amount of the Borrower's or any Subsidiary's share
(calculated by multiplying the aggregate percentage interest of the
Borrower and the Subsidiaries in the entity or entities against which
such judgment or judgments are rendered by the aggregate amount of such
judgment or judgments) is in excess of $1,000,000 (exclusive of amounts
paid or covered by insurance to the satisfaction of the Required
Banks), and in each case the same shall remain undischarged for a
period of 60 consecutive days during which execution of any such
judgment shall not have been effectively stayed, or any action is
legally taken by a judgment creditor to levy upon any such judgment;
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(m) any of the Loan Documents shall cease to be, or shall be
asserted by the Borrower not to be, a legal, valid and binding
obligation of the Borrower, enforceable in accordance with its terms;
or
(n) there shall have occurred a Change in the Control of the
Borrower;
then, and in any such event (other than an event with respect to the Borrower
described in paragraph (f) or (g) above), and at any time thereafter during the
continuance of such event, the Agent may, and upon the written request of the
Required Banks shall, by notice to the Borrower, take either or both of the
following actions at the same or different times: (i) terminate forthwith the
Commitments of the Banks, and (ii) declare the Loans then outstanding to be
forthwith due and payable in whole or in part, whereupon the principal of the
Loans, together with accrued interest thereon and any unpaid accrued Fees in
respect thereof, and all other liabilities of the Borrower accrued hereunder and
under any other Loan Document, shall become forthwith due and payable both as to
principal and interest, without presentment, demand, protest or any other notice
of any kind, including, without limitation, notice of intent to accelerate or
notice of acceleration, all of which are hereby expressly waived by the
Borrower, anything contained herein or in any Note to the contrary
notwithstanding; and in any event with respect to the Borrower described in
paragraph (f) or (g) above, the Commitments of the Banks shall automatically
terminate and the principal of the Loans then outstanding, together with accrued
interest thereon and any unpaid accrued fees and all other liabilities of the
Borrower accrued hereunder and under any other Loan document, shall
automatically become due and payable, all without presentment, demand, protest
or other notice of any kind, including, without limitation, notice of intent to
accelerate or notice of acceleration, all of which are hereby expressly waived
by the Borrower, anything contained in any Loan Document to the contrary
notwithstanding.
ARTICLE VIII
The Agent
---------
In order to expedite the transactions contemplated by this
Agreement, Chemical Bank is hereby appointed to act as Agent on behalf of the
Banks. Each of the Banks, and
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each subsequent holder of any Note by its acceptance thereof, hereby irrevocably
authorizes the Agent to take such actions on behalf of such Bank or holder and
to exercise such powers as are specifically delegated to the Agent by the terms
and provisions hereof and of the other Loan Documents, together with such
actions and powers as are reasonably incidental thereto. The Agent is hereby
expressly authorized by the Banks, without hereby limiting any implied
authority, (a) to receive on behalf of the Banks all payments of principal of
and interest on the Loans and all other amounts due to the Banks hereunder, and
promptly to distribute to each Bank its proper share of each payment so
received; (b) to give notice on behalf of each of the Banks to the Borrower of
any Event of Default specified in this Agreement of which the Agent has actual
knowledge acquired in connection with its agency hereunder; and (c) to
distribute to each Bank copies of all notices, financial statements and other
materials delivered by the Borrower pursuant to this Agreement as received by
the Agent.
Neither the Agent nor any of its directors, officers,
employees or agents shall be liable as such for any action taken or omitted by
any of them except for its or his own gross negligence or wilful misconduct, or
be responsible for any statement, warranty or representation herein or the
contents of any document delivered in connection herewith, or be required to
ascertain or to make any inquiry concerning the performance or observance by the
Borrower of any of the terms, conditions, covenants or agreements contained in
any Loan Document. The Agent shall not be responsible to the Banks or the
holders of the Notes for the due execution, genuineness, validity,
enforceability or effectiveness of this Agreement, the Notes or any other Loan
Documents or other instruments or agreements. The Agent may deem and treat the
payee of any Note as the owner thereof for all purposes hereof until it shall
have received from the payee of such Note notice, given as provided herein, of
the transfer thereof in compliance with Section 9.04. The Agent shall in all
cases be fully protected in acting, or refraining from acting, in accordance
with written instructions signed by the Required Banks and, except as otherwise
specifically provided herein, such instructions and any action or inaction
pursuant thereto shall be binding on all the Banks and each subsequent holder of
any Note. The Agent shall, in the absence of knowledge to the contrary, be
entitled to rely on any instrument or document believed by it in good faith to
be genuine and correct and to have been signed or sent by
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the proper person or persons. Neither the Agent (in its capacity as such) nor
any of its directors, officers, employees or agents shall have any
responsibility to the Borrower on account of the failure of or delay in
performance or breach by any Bank of any of its obligations hereunder or to any
Bank on account of the failure of or delay in performance or breach by any other
Bank or the Borrower of any of their respective obligations hereunder or under
any other Loan Document or in connection herewith or therewith. The Agent may
execute any and all duties hereunder by or through agents or employees and shall
be entitled to rely upon the advice of legal counsel selected by it with respect
to all matters arising hereunder and shall not be liable for any action taken or
suffered in good faith by it in accordance with the advice of such counsel.
The Banks hereby acknowledge that the Agent shall be under no
duty to take any discretionary action permitted to be taken by it pursuant to
the provisions of this Agreement unless it shall be requested in writing to do
so by the Required Banks.
Subject to the appointment and acceptance of a successor Agent
as provided below, the Agent may resign at any time by notifying the Banks and
the Borrower. Upon any such resignation, the Required Banks shall have the right
to appoint a successor. If no successor shall have been so appointed by the
Required Banks and shall have accepted such appointment within 30 days after the
retiring Agent gives notice of its resignation, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent which shall be a bank organized
in the United States having a combined capital and surplus of at least
$500,000,000 or an Affiliate of any such bank. Upon the acceptance of any
appointment as Agent hereunder by a successor bank, such successor shall succeed
to and become vested with all the rights, powers, privileges and duties of the
retiring Agent and the retiring Agent shall be discharged from its duties and
obligations hereunder. After the Agent's resignation hereunder, the provisions
of this Article and Section 9.05 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
Agent.
With respect to the Loans made by it hereunder and the Notes
issued to it, the Agent in its individual capacity and not as Agent shall have
the same rights and powers as any other Bank and may exercise the same as though
it were not the Agent, and the Agent and its Affiliates may accept
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deposits from, lend money to and generally engage in any kind of business with
the Borrower or any Subsidiary or other Affiliate thereof as if it were not the
Agent.
Each Bank agrees (i) to reimburse the Agent, on demand, in the
amount of its pro rata share (based on its Commitment hereunder) of any expenses
incurred for the benefit of the Banks by the Agent, including counsel fees and
compensation of agents and employees paid for services rendered on behalf of the
Banks, which shall not have been reimbursed by the Borrower and (ii) to
indemnify and hold harmless the Agent and any of its directors, officers,
employees or agents, on demand, in the amount of such pro rata share, from and
against any and all liabilities, taxes, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against it in
its capacity as the Agent or any of them in any way relating to or arising out
of this Agreement or any other Loan Document or any action taken or omitted by
it or any of them under this Agreement or any other Loan Document, to the extent
the same shall not have been reimbursed by the Borrower; PROVIDED that no Bank
shall be liable to the Agent for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the gross negligence or wilful misconduct of the
Agent or any of its directors, officers, employees or agents.
Each Bank acknowledges that it has, independently and without
reliance upon the Agent or any other Bank and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Bank also acknowledges that it will,
independently and without reliance upon the Agent or any other Bank and based on
such documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement or any other Loan Document, any related agreement or any
document furnished hereunder or thereunder.
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ARTICLE IX
Miscellaneous
-------------
SECTION 9.01. NOTICES. Notices and other communications
provided for herein shall be in writing and shall be delivered or mailed (or in
the case of telegraphic communication, delivered by telex, telecopier, graphic
scanning or other telegraphic communications equipment) addressed,
(a) if to the Borrower, at Cleveland-Cliffs Inc, 18th
Floor-Diamond Building, 0000 Xxxxxxxx Xxx., Xxxxxxxxx, Xxxx 00000-0000;
Attention of Secretary
Telecopy No.: (000) 000-0000
Confirm: (000) 000-0000
(b) if to the Agent, at Chemical Bank, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000;
Attention of Xxxxx Xxxx
Telecopy No.: (000) 000-0000
Confirm: (000) 000-0000
(c) if to any Bank, at its address set forth in
Schedule 2.01.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telex, telecopy or other telegraphic communications equipment of the sender, or
on the date five Business Days after dispatch by certified or registered mail if
mailed, in each case delivered, sent or mailed (properly addressed) to such
party as provided in this Section 9.01 or in accordance with the latest
unrevoked direction from such party given in accordance with this Section 9.01.
SECTION 9.02. SURVIVAL OF AGREEMENT. All covenants,
agreements, representations and warranties made by the Borrower herein and in
the certificates or other instruments prepared or delivered in connection with
this Agreement or any other Loan Document shall be considered to have been
relied upon by the Banks and shall survive the making by the Banks of Loans, the
execution and delivery to the Banks of the Notes evidencing such Loans,
regardless of any investigation made by the Banks or on their behalf, and
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shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan, or any Fee or amount payable under this Agreement
or any other Loan Document is outstanding and unpaid, and so long as the
Commitments have not been terminated.
SECTION 9.03. BINDING EFFECT. This Agreement shall become
effective when it shall have been executed by the Borrower and the Agent and
when the Agent shall have received copies hereof which, when taken together,
bear the signatures of each Bank, and thereafter shall be binding upon and inure
to the benefit of the Borrower, the Agent and each Bank and their respective
successors and assigns, except that the Borrower shall not have the right to
assign its rights hereunder or any interest herein without the prior consent of
all the Banks and the Banks may assign their rights hereunder or interests
herein only in compliance with Section 9.04.
SECTION 9.04. SUCCESSORS AND ASSIGNS. (a) Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of the Borrower, the Agent or the Banks
that are contained in this Agreement shall bind and inure to the benefit of
their respective successors and assigns.
(b) Each Bank may assign to one or more assignees all or a
portion of its interests, rights and obligations under this Agreement (including
all or a portion of its Commitment and the Loans at the time owing to it and the
Notes held by it); PROVIDED, HOWEVER, that (i) except in the case of an
assignment to a Bank or an Affiliate of such Bank (other than if at the time of
such assignment, such Bank or Affiliate would be entitled to require the
Borrower to pay greater amounts under Section 2.11, 2.12, or 2.17(a), (b) or (c)
than if no such assignment had occurred, in which case such assignment shall be
subject to the consent requirement of this clause (i)), the Borrower and the
Agent must give their prior written consent to such assignment (which consent
shall not be unreasonably withheld); PROVIDED, that if such assignment may, as
of the date of such assignment, result in an increase in the amount of any
payment required to be made by the Borrower pursuant to Section 2.11, 2.12 or
2.17(a), (b) or (c) over the amount of such payments that would have been
required had such assignment not occurred then, unless the Borrower's written
consent to such
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assignment specifically contains the Borrower's consent to pay such increased
amounts existing on the date of such assignment, such assignee shall be deemed
to have irrevocably waived its right to receive, and the Borrower's obligation
to pay, any such increased amounts, (ii) each such assignment shall be of a
constant, and not a varying, percentage of all the assigning Bank's rights and
obligations under this Agreement, (iii) the amount of the Commitment of the
assigning Bank subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to the
Agent) shall not be less than $5,000,000, (iv) the parties to each such
assignment shall execute and deliver to the Agent an Assignment and Acceptance,
together with the Note or Notes subject to such assignment and a processing and
recordation fee of $2,500 and (v) the assignee, if it shall not be a Bank, shall
deliver to the Agent an Administrative Questionnaire. Upon acceptance and
recording pursuant to paragraph (e) of this Section 9.04, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five Business Days after the execution thereof, (A) the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a
Bank under this Agreement and (B) the assigning Bank thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Bank's rights
and obligations under this Agreement, such Bank shall cease to be a party hereto
but shall continue to be entitled to the benefits of Sections 2.11, 2.13, 2.17
and 9.05, as well as to any Fees accrued for its account and not yet paid, to
the extent such Fees have not been assigned).
(c) By executing and delivering an Assignment and Acceptance,
the assigning Bank thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Bank warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its Commitment, and the outstanding balances of its Revolving Credit Loans
without giving effect to assignments thereof which have not become effective,
are as set forth in such Assignment and Acceptance, (ii) except as set forth in
(i) above, such assigning Bank makes no representation or warranty and
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assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement, or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement, any other Loan Document or any other instrument or document furnished
pursuant hereto, or the financial condition of the Borrower or any Subsidiary or
the performance or observance by the Borrower or any Subsidiary of any of its
obligations under this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto; (iii) such assignee represents
and warrants that it is legally authorized to enter into such Assignment and
Acceptance; (iv) such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 5.05 and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (v) such assignee will independently and
without reliance upon the Agent, such assigning Bank or any other Bank and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (vi) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Agent by the terms hereof, together with such
powers as are reasonably incidental thereto; and (vii) such assignee agrees that
it will perform in accordance with their terms all the obligations which by the
terms of this Agreement are required to be performed by it as a Bank.
(d) The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names and
addresses of the Banks, and the Commitment of, and principal amount of the Loans
owing to, each Bank pursuant to the terms hereof from time to time (the
"Register"). The entries in the Register shall be conclusive in the absence of
manifest error and the Borrower, the Agent and the Banks may treat each person
whose name is recorded in the Register pursuant to the terms hereof as a Bank
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Borrower and any Bank, at any reasonable time and from
time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Bank and
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an assignee together with the Note or Notes subject to such assignment, an
Administrative Questionnaire completed in respect of the assignee (unless the
assignee shall already be a Bank hereunder), the processing and recordation fee
referred to in paragraph (b) above and, if required, the written consent of the
Borrower and the Agent to such assignment, the Agent shall (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Banks. Within five Business
Days after receipt of notice, the Borrower, at its own expense, shall execute
and deliver to the Agent, in exchange for the surrendered Note or Notes, a new
Note or Notes to the order of such assignee in a principal amount equal to the
applicable Commitment assumed by it pursuant to such Assignment and Acceptance
and, if the assigning Bank has retained a Commitment, a new Note to the order of
such assigning Bank in a principal amount equal to the applicable Commitment
retained by it. Such new Note or Notes shall be in an aggregate principal amount
equal to the aggregate principal amount of such surrendered Note; such new Notes
shall be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of Exhibit A hereto. Canceled Notes shall
be returned to the Borrower.
(f) Each Bank may without the consent of the Borrower or the
Agent sell participations to one or more banks or other entities in all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans owing to it and the Notes held by it);
PROVIDED, HOWEVER, that (i) such Bank's obligations under this Agreement shall
remain unchanged, (ii) such Bank shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the participating
banks or other entities shall be entitled to the benefit of the cost protection
provisions contained in Sections 2.13, 2.15 and 2.19 to the same extent as if
they were Banks (provided that additional amounts payable to any Bank pursuant
to Sections 2.13, 2.14 and 2.19 shall be determined as if such Bank had not sold
any participations) and (iv) the Borrower, the Agent and the other Banks shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement, and such Bank shall retain
the sole right to enforce the obligations of the Borrower relating to the Loans
and to approve any amendment, modification or waiver of any provision of this
Agreement (other than amendments, modifications or waivers decreasing
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any fees payable hereunder or the amount of principal of or the rate at which
interest is payable on the Loans, extending any scheduled principal payment date
or date fixed for the payment of interest on the Loans or changing or extending
the Commitments).
(g) Any Bank or participant may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section 9.04, disclose to the assignee or participant or proposed assignee
or participant any information relating to the Borrower furnished to such Bank
by or on behalf of the Borrower; PROVIDED that, prior to any such disclosure of
information, each such assignee or participant or proposed assignee or
participant shall execute an agreement whereby such assignee or participant
shall agree (subject to customary exceptions) to preserve the confidentiality of
such confidential information.
(h) Any Bank may at any time assign all or any portion of its
rights under this Agreement and the Notes issued to it to a Federal Reserve
Bank; PROVIDED that no such assignment shall release a Bank from any of its
obligations hereunder.
(i) The Borrower shall not assign or delegate any of its
rights or duties hereunder.
(j) Except as expressly provided otherwise herein, the costs
and expenses associated with any assignment or participation shall be solely for
the account of the assigning or participating Bank and/or the assignee or
participant, and such parties also shall be solely responsible for effecting
such assignment or such sale of a participation in compliance with all
applicable requirements of any laws, rules or regulations.
SECTION 9.05. EXPENSES OF THE AGENT AND THE BANKS; INDEMNITY.
(a) The Borrower agrees to pay all out-of-pocket expenses incurred by the Agent
in connection with any amendments, modifications or waivers of the provisions of
any Loan Document (whether or not the transactions hereby contemplated shall be
consummated), including the reasonable fees and disbursements of Cravath, Swaine
& Xxxxx, counsel for the Agent, in connection with the preparation of this
Agreement and the other Loan Documents, and any expenses incurred by the Agent
or any Bank in connection with the enforcement or protection of its rights in
connection with
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this Agreement, the other Loan Documents, or the Loans made or the Notes issued
hereunder or in connection with any pending or threatened action, proceeding or
investigation relating thereto, and in connection with any enforcement or
protection, the reasonable fees and disbursements of Xxxxxxx Xxxxxx & Xxxxx,
counsel for the Agent, and any other counsel for the Agent or any Bank. The
Borrower further agrees that it shall indemnify the Agent and each Bank from and
hold it harmless against any documentary taxes, assessments or charges made by
any Governmental Authority by reason of the execution and delivery of any of the
Loan Documents.
(b) The Borrower agrees to indemnify each Bank and the Agent
and their respective directors, officers, employees, agents and affiliates (each
an "Indemnified Party") against, and to hold each such Indemnified Party
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including reasonable counsel fees and expenses (including the
allocated fees of inside counsel), incurred by or asserted against such
Indemnified Party arising out of, in any way connected with, or as a result of
(i) the execution or delivery of this Agreement, any other Loan Document or any
other document contemplated hereby or thereby, the performance by the parties
hereto and thereto of their respective obligations hereunder and thereunder
(including but not limited to the making of the Commitments) and consummation of
the Transactions and the other transactions contemplated hereby and thereby,
(ii) the use of proceeds of the Loans or (iii) any claim, litigation,
investigation or proceedings relating to any of the foregoing, whether or not
such Indemnified Party is a party thereto; PROVIDED, HOWEVER, that: (i) such
indemnity shall not, as to any Indemnified Party, apply to any such losses,
claims, damages, liabilities or related expenses arising from (A) any unexcused
breach by such Indemnified Party of any of its obligations under this Agreement
or (B) the gross negligence or willful misconduct of such Indemnified Party;
(ii) the Borrower shall not be liable for any settlement effected by an
Indemnified Party without the Borrower's prior consent (which shall not be
unreasonably withheld); and (iii) the Borrower shall have the right to
participate in the defense of any proceeding for which indemnification shall be
sought.
(c) The provisions of this Section 9.05 shall remain operative
and in full force and effect regardless of the expiration of the term of this
Agreement or any other Loan Document, the consummation of the transactions
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contemplated hereby, the repayment of any of the Loans, the invalidity or
unenforceability of any term or provision of this Agreement or any other Loan
Document or any investigation made by or on behalf of the Agent or the Banks.
All amounts due under this Section 9.05 shall be payable on written demand
therefor.
SECTION 9.06. RIGHT OF SETOFF. If an Event of Default shall
have occurred and be continuing, each Bank is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Bank to or for
the credit or the account of the Borrower against any of and all the obligations
of the Borrower now or hereafter existing under this Agreement and other Loan
Documents held by such Bank, irrespective of whether or not such Bank shall have
made any demand under this Agreement or such other Loan Document and although
such obligations may be unmatured. The rights of each Bank under this Section
are in addition to other rights and remedies (including other rights of set-
off) which such Bank may have.
SECTION 9.07. APPLICABLE LAW. THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK.
SECTION 9.08. PAYMENTS ON BUSINESS DAYS. Should the principal
of or interest on the Notes, or any fee or other amount payable hereunder become
due and payable on other than a Business Day, payment in respect thereof may be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in computing interest, if any, in connection with such
payment.
SECTION 9.09. WAIVERS; AMENDMENT. (a) No failure or delay of
the Agent or any Bank in exercising any power or right hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such right
or power, or any abandonment or discontinuance of steps to enforce such a right
or power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Agent and the Banks
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies which they would otherwise have. No waiver
of any provision of this Agreement or any other Loan Document or consent to any
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departure by the Borrower therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) below, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice or demand on the Borrower in any case shall entitle the
Borrower to any other or further notice or demand in similar or other
circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Borrower and the Required Banks; PROVIDED, HOWEVER,
that no such agreement shall (i) decrease the principal amount of, or extend the
maturity of or any scheduled principal payment date or date for the payment of
any interest on any Loan, or waive or excuse any such payment or any part
thereof, or decrease the rate of interest on any Loan, without the prior written
consent of each holder of a Note affected thereby, (ii) change or extend the
Commitment or decrease the Commitment Fees of any Bank without the prior written
consent of the Banks, or (iii) amend or modify the provisions of Section 2.14,
the provisions of this Section or the definition of "Required Banks", without
the prior written consent of each Bank; PROVIDED FURTHER that no such agreement
shall amend, modify or otherwise affect the rights or duties of the Agent
hereunder without the prior written consent of the Agent. Each Bank and each
holder of a Note shall be bound by any waiver, amendment or modification
authorized by this Section regardless of whether its Note shall have been marked
to make reference thereto, and any consent by any Bank or holder of a Note
pursuant to this Section shall bind any person subsequently acquiring a Note
from it, whether or not such Note shall have been so marked.
SECTION 9.10. INTEREST RATE LIMITATION. Notwithstanding
anything herein or in the Notes to the contrary, if at any time the applicable
interest rate, together with all fees and charges which are treated as interest
under applicable law (collectively the "Charges"), as provided for herein or in
any other document executed in connection herewith, or otherwise contracted for,
charged, received, taken or reserved by any Bank, shall exceed the maximum
lawful rate (the "Maximum Rate") which may be contracted for, charged, taken,
received or reserved by such Bank in accordance with applicable law, the rate of
interest payable under the Note held by such Bank, together with all
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Charges payable to such Bank, shall be limited to the Maximum Rate.
SECTION 9.11. WAIVER OF JURY TRIAL. Each party hereto hereby
waives, to the fullest extent permitted by applicable law, any right it may have
to a trial by jury in respect of any litigation directly or indirectly arising
out of, under or in connection with this Agreement or any of the other Loan
Documents. Each party hereto (a) certifies that no representative, agent or
attorney of any other party has represented, expressly or otherwise, that such
other party would not, in the event of litigation, seek to enforce the foregoing
waiver and (b) acknowledges that it and the other parties hereto have been
induced to enter into this Agreement and the other Loan Documents, as
applicable, by, among other things, the mutual waivers and certifications in
this Section 9.11.
SECTION 9.12. SEVERABILITY. In the event any one or more of
the provisions contained in this Agreement or in any other Loan Document should
be held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein or therein shall
not in any way be affected or impaired thereby. The parties shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 9.13. ENTIRE AGREEMENT. Except as otherwise expressly
provided herein or in the other Loan Documents, (i) this Agreement and the other
Loan Documents constitute the entire contract between the parties relative to
the subject matter hereof, (ii) any previous agreement among the parties with
respect to the Transactions is superseded by this Agreement and the other Loan
Documents and (iii) nothing in this Agreement or in the other Loan Documents,
expressed or implied, is intended to confer upon any party, other than the
parties hereto or thereto, any rights, remedies, obligations or liabilities
under or by reason of this Agreement or the other Loan Documents.
SECTION 9.14. COUNTERPARTS. This Agreement may be executed in
two or more counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one contract, and shall become
effective when copies hereof which, when taken together,
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bear the signatures of each of the parties hereto shall have been received by
the Agent.
SECTION 9.15. HEADINGS. Article and Section headings and the
Table of Contents used herein are for convenience of reference only and are not
to affect the construction of, or to be taken into consideration in
interpreting, this Agreement.
IN WITNESS WHEREOF, the Borrower, the Agent and the Banks have
caused this Agreement to be duly executed by their duly authorized officers, all
as of the day and year first above written.
CLEVELAND-CLIFFS INC,
by /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Treasurer and Director
Financial Planning
CHEMICAL BANK, individually
and as Agent,
by /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President
NBD BANK,
by /s/ Xxxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
NATIONAL CITY BANK,
by /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
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PNC BANK, NATIONAL ASSOCIATION,
by /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
THE HUNTINGTON NATIONAL BANK,
by /s/ Xxxxxxx X. Xxxx
------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Assistant Vice President
SOCIETY NATIONAL BANK,
by /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
77
EXHIBIT A
[FORM OF]
NOTE
$____________________
New York, New York
[ ], 1995
FOR VALUE RECEIVED, the undersigned, CLEVELAND- CLIFFS INC, an
Ohio corporation (the "Borrower"), hereby promises to pay to the order of
_______________________ (the "Bank"), at the office of Chemical Bank (the
"Agent"), at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (or any other office
designated in a notice from the Agent to the Borrower), (i) on the last day of
each Interest Period, as defined in the Credit Agreement dated as of [
], 1995 (the "Credit Agreement"), among the Borrower, the Banks named
therein and the Agent, the aggregate unpaid principal amount of all Loans (as
defined in the Credit Agreement) made to the Borrower by the Bank pursuant to
the Credit Agreement to which such Interest Period applies and (ii) on the
Maturity Date (as defined in the Credit Agreement) the lesser of the principal
sum of __________________ Dollars ($______________) and the aggregate unpaid
principal amount of all Loans made to the Borrower by the Bank pursuant to the
Credit Agreement, in lawful money of the United States of America in immediately
available funds, and to pay interest from the date hereof on the principal
amount hereof from time to time outstanding, in like funds, at said office, at
the rate or rates per annum and payable on the dates provided in the Credit
Agreement.
The Borrower promises to pay interest, on demand, on any
overdue principal and, to the extent permitted by law, overdue interest from
their due dates at the rate or rates provided in the Credit Agreement.
The Borrower hereby waives diligence, presentment,
demand, protest and notice of any kind whatsoever. The
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2
nonexercise by the holder of any of its rights hereunder in any particular
instance shall not constitute a waiver thereof in that or any subsequent
instance.
All borrowings evidenced by this Note and all payments and
prepayments of the principal hereof and interest hereon and the respective dates
and maturity dates thereof shall be endorsed by the holder hereof on the
schedule attached hereto and made a part hereof or on a continuation thereof
which shall be attached hereto and made a part hereof, or otherwise recorded by
such holder in its internal records; PROVIDED, HOWEVER, that the failure of the
holder hereof to make such a notation or any error in such a notation shall not
affect the obligations of the Borrower under this Note.
This Note is one of the Notes referred to in the Credit
Agreement, which, among other things, contains provisions for the acceleration
of the maturity hereof upon the happening of certain events, for optional and
mandatory prepayment of the principal hereof prior to the maturity hereof and
for the amendment or waiver of certain provisions of the Credit Agreement, all
upon the terms and conditions therein specified. This Note shall be construed in
accordance with and governed by the laws of the State of New York and any
applicable laws of the United States of America.
CLEVELAND-CLIFFS INC,
by
----------------------
Name:
Title:
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3
Loans and Payments
------------------
Loans and Payments
------------------
Amount and Type Maturity Payments Unpaid Principal Name of Person
Date of Loan Date Principal Interest Balance of Note Making Notation
----------------- ---------------------- --------------- ------------------ --------------- ---------------
80
SCHEDULE 2.01
COMMITMENTS
Name and Address of Bank Commitment
------------------------ ----------
CHEMICAL BANK $ 24,000,000
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention of: Xxxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (212) 270-2555
NBD BANK $ 20,000,000
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention of: Xxxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (313) 225-1671
SOCIETY NATIONAL BANK $ 20,000,000
Mail Code: OHO1270606
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attention of: Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (216) 689-4981
PNC BANK, NATIONAL ASSOCIATION $ 12,000,000
One Cleveland Center
0000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000
Attention of: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (216) 348-8594
HUNTINGTON NATIONAL BANK $ 12,000,000
Department Code CM31
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention of: Xxxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (216) 344-6821
NATIONAL CITY BANK $ 12,000,000
0000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
--------------
Total .............................. $100,000,000
==============
