1
Exhibit 10.1
EXECUTION COPY
************************************************************
RPM, INC.
CREDIT AGREEMENT
Dated as of February 3, 1997
$500,000,000
NATIONAL CITY BANK
as Documentation Agent
THE CHASE MANHATTAN BANK
as Administrative Agent
************************************************************
2
TABLE OF CONTENTS
PAGE
SECTION 1. Definitions and Accounting Matters..............................1
1.01 Certain Defined Terms..............................................1
1.02 Accounting Terms and Determinations...............................13
1.03 Class and Types of Loans..........................................14
SECTION 2. Commitments....................................................14
2.01 Loans.............................................................14
2.02 Reductions of Commitments.........................................15
2.03 Fees..............................................................15
2.04 Lending Offices...................................................16
2.05 Several Obligations...............................................16
2.06 Notes.............................................................16
2.07 Use of Proceeds...................................................16
SECTION 3. Borrowings, Conversions and Prepayments........................17
3.01 Borrowings........................................................17
3.02 Prepayments and Conversions.......................................17
3.03 Competitive Bid Procedure.........................................17
SECTION 4. Payments of Principal and Interest.............................20
4.01 Repayment of Loans................................................20
4.02 Interest..........................................................20
SECTION 5. Payments; Pro Rata Treatment; Computations; Etc................22
5.01 Payments..........................................................22
5.02 Pro Rata Treatment................................................23
5.03 Computations......................................................23
5.04 Minimum and Maximum Amounts; Types................................23
5.05 Certain Notices...................................................23
5.06 Non-Receipt of Funds by the Administrative Agent..................24
5.07 Sharing of Payments, Etc..........................................25
5.08 Taxes.............................................................25
i
3
PAGE
SECTION 6. Yield Protection and Illegality................................28
6.01 Additional Costs..................................................28
6.02 Limitation on Types of Loans......................................29
6.03 Illegality........................................................30
6.04 Substitute Base Rate Loans........................................30
6.05 Compensation......................................................31
6.06 Capital Adequacy..................................................31
6.07 Substitution of Lender............................................32
SECTION 7. Conditions Precedent...........................................32
7.01 Initial Loans.....................................................32
7.02 Initial and Subsequent Loans......................................34
SECTION 8. Representations and Warranties.................................34
8.01 Corporate Existence...............................................34
8.02 Information.......................................................34
8.03 Litigation........................................................36
8.04 No Breach.........................................................36
8.05 Corporate Action..................................................36
8.06 Approvals.........................................................37
8.07 Regulations U and X...............................................37
8.08 ERISA.............................................................37
8.09 Taxes.............................................................37
8.10 Subsidiaries......................................................37
8.11 Investment Company Act............................................38
8.12 Public Utility Holding Company Act................................38
8.13 Ownership and Use of Properties...................................38
8.14 Environmental Matters.............................................38
SECTION 9. Covenants......................................................38
9.01 Information.......................................................38
9.02 Taxes and Claims..................................................40
9.03 Insurance.........................................................41
9.04 Maintenance of Existence; Conduct of Business.....................41
9.05 Maintenance of and Access to Properties...........................41
9.06 Compliance with Applicable Laws...................................41
9.07 Litigation........................................................42
ii
4
PAGE
9.08 Leverage Ratio....................................................42
9.09 Interest Coverage Ratio...........................................42
9.10 Mergers, Asset Dispositions, Etc..................................42
9.11 Liens.............................................................42
9.12 Investments.......................................................43
9.13 Transactions with Affiliates......................................43
9.14 Lines of Business.................................................44
9.15 Environmental Matters.............................................44
9.16 Lease Payments....................................................44
SECTION 10. Defaults......................................................45
10.01 Events of Default.................................................45
SECTION 11. The Administrative Agent......................................48
11.01 Appointment, Powers and Immunities................................48
11.02 Reliance by Administrative Agent..................................48
11.03 Defaults..........................................................49
11.04 Rights as a Lender................................................49
11.05 Indemnification...................................................49
11.06 Non-Reliance on Administrative Agent and Other Lenders............50
11.07 Failure to Act....................................................50
11.08 Resignation or Removal of Administrative Agent....................50
11.09 Documentation Agent...............................................51
SECTION 12. Miscellaneous.................................................51
12.01 Waiver............................................................51
12.02 Notices...........................................................51
12.03 Expenses, Etc.....................................................52
12.04 Indemnification...................................................52
12.05 Amendments, Etc...................................................52
12.06 Successors and Assigns............................................53
12.07 Confidentiality...................................................54
12.08 Survival..........................................................54
12.09 Captions..........................................................55
12.10 Counterparts; Integration.........................................55
12.11 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF
JURY TRIAL........................................................55
iii
5
SCHEDULES
PRICING SCHEDULE
SCHEDULE I - Subsidiaries and Joint Ventures
EXHIBITS
EXHIBIT A - Form of Note
EXHIBIT B-1 - Form of Opinion of Counsel to
the Company
EXHIBIT B-2 - Form of Opinion of General Counsel
of the Company
EXHIBIT C - Form of Opinion of Special Counsel to
the Administrative Agent
iv
6
CREDIT AGREEMENT
AGREEMENT dated as of February 3, 1997 among: RPM, INC., a corporation
duly organized and validly existing under the laws of the State of Ohio
(together with its successors, the "COMPANY"); each of the lenders which is or
which may from time to time become a signatory hereto (individually, together
with its successors, a "LENDER" and, collectively, together with their
respective successors, the "LENDERS"); NATIONAL CITY BANK, as documentation
agent for the Lenders (in such capacity, the "DOCUMENTATION AGENT"); and THE
CHASE MANHATTAN BANK, as administrative agent for the Lenders (in such capacity,
together with its successors in such capacity, the "ADMINISTRATIVE AGENT").
The parties hereto agree as follows:
SECTION 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms. As used herein, the following terms shall
have the following meanings (all terms defined in this Section 1.01 or in other
provisions of this Agreement in the singular to have the same meanings when used
in the plural and vice versa):
"ABSOLUTE RATE" shall mean, with respect to any Competitive Loan (other
than a Eurodollar Competitive Loan), the fixed rate of interest per annum
specified by the Lender making such Competitive Loan in its related Competitive
Bid.
"ACCEPTABLE INSURER" means an insurance company (i) having an A.M. Best
rating of "A-" or better and being in a financial size category of X or larger
(as such category is defined as of the date hereof) or (ii) otherwise acceptable
to the Majority Lenders. First Colonial Insurance Company, a wholly-owned
Subsidiary of the Company, is deemed to be acceptable with respect to the dollar
amount of insurance it is providing on the date of this Agreement.
"ACQUIRED BUSINESS" shall mean all of the stock of Tremco Incorporated,
an Ohio corporation, and certain of its Affiliates, but specifically excluding
Tremco S.A. (France).
"ACQUISITION" shall mean the acquisition by the Company of the Acquired
Business and all other transactions contemplated by the Acquisition Documents to
be consummated on or before the Closing Date.
7
"ACQUISITION DOCUMENTS" shall mean the Stock Purchase Agreement, dated
October 21, 1996, as amended by Amendment No. 1 thereto dated as of February 1,
1997, between the Company and The ▇.▇.▇▇▇▇▇▇▇▇ Company, including the exhibits
and schedules thereto, and all material agreements, documents and instruments
executed and delivered by or addressed to or specifically required by the
Company pursuant to or in connection with any of the foregoing.
"ADJUSTED CD RATE", for any CD Loans, shall mean for the Interest
Period for such Loans a rate per annum determined by the Administrative Agent
pursuant to the following formula:
[ CDBR ]
ACDR = ______________ + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate for the Interest
Period for such Loans (rounded
upward, if necessary, to the
next higher 1/100 of 1%)
DRP = Domestic Reserve Percentage
AR = Assessment Rate
"AFFILIATE" shall mean, as to any Person, any other Person which
directly or indirectly controls, or is under common control with, or is
controlled by, such Person and, if such Person is an individual, any member of
the immediate family (including parents, siblings, spouse, children,
stepchildren, nephews, nieces and grandchildren) of such individual and any
trust whose principal beneficiary is such individual or one or more members of
such immediate family and any Person who is controlled by any such member or
trust. As used in this definition, "CONTROL" (including, with correlative
meanings, "CONTROLLED BY" and "UNDER COMMON CONTROL WITH") shall mean
possession, directly or indirectly, of power to direct or cause the direction of
management or policies (whether through ownership of securities or partnership
or other ownership interests, by contract or otherwise), provided that, in any
event, any Person which owns directly or indirectly more than 5% of the
securities having ordinary voting power for the election of directors or other
governing body of a corporation or more than 5% of the partnership or other
ownership interests of any other Person (other than as a limited partner of such
other Person) will be deemed to control such corporation or other Person.
"APPLICABLE LENDING OFFICE" shall mean, for each Lender and for each
Type of Loan, the Lending Office of such Lender (or of an affiliate of such
Lender) designated for such Type of Loan below its name on the signature pages
hereof or
2
8
such other office of such Lender (or of an affiliate of such Lender) as such
Lender may from time to time specify to the Administrative Agent and the Company
as the office by which its Loans of such Type are to be made and/or issued and
maintained.
"APPLICABLE MARGIN" shall mean, with respect to any Loan, the rate per
annum (calculated as a function of the Type of such Loan) determined in
accordance with the Pricing Schedule.
"ASSESSMENT RATE" shall mean, for any day, the annual assessment rate
in effect on such day which is payable by a member of the Bank Insurance Fund
classified as adequately capitalized and within supervisory subgroup "A" (or a
comparable successor assessment risk classification) within the meaning of 12
C.F.R. ss. 327.3(d) (or any successor provision) to the Federal Deposit
Insurance Corporation (or any successor) for such Corporation's (or such
successor's) insuring time deposits at offices of such institution in the United
States. The Adjusted CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Assessment Rate.
"BANKRUPTCY CODE" shall mean the United States Bankruptcy Code, as now
or hereafter in effect, or any successor statute.
"BASE RATE" shall mean, with respect to any Base Rate Loan for any day,
the rate per annum equal to the higher as of such day of (i) the Federal Funds
Rate plus 1/2 of 1% or (ii) the Prime Rate.
"BASE RATE LOANS" shall mean Loans which bear interest at a rate based
upon the Base Rate.
"BASIC DOCUMENTS" shall mean this Agreement, the Notes and the
Acquisition Documents.
"BUSINESS DAY" shall mean any day other than a day on which commercial
banks are authorized or required to close in New York City and, where such term
is used in the definition of "Quarterly Date" in this Section 1.01 or if such
day relates to a borrowing of, a payment or prepayment of principal of or
interest on, a conversion of or into, or an Interest Period for, a Eurodollar
Loan or a notice by the Company with respect to any such borrowing, payment,
prepayment, conversion or Interest Period, which is also a day on which dealings
in Dollar deposits are carried out in the London interbank market.
"CAPITAL LEASE OBLIGATIONS" shall mean, as to any Person, the
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement
3
9
conveying the right to use) real and/or personal property to the extent such
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP (including Statement of Financial
Accounting Standards No. 13 of the Financial Accounting Standards Board) and,
for purposes of this Agreement, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP (including such
Statement No. 13).
"CD BASE RATE" shall mean, with respect to any CD Loans, the arithmetic
mean, as calculated by the Administrative Agent, of the respective rates per
annum (rounded upwards, if necessary, to the nearest 1/20 of 1%) of the
Reference Lenders, in each such case determined by the Reference Lender to be
the average of the bid rates quoted to it at its principal office at
approximately 10:00 a.m. New York City time (or as soon thereafter as
practicable) on the first day of the Interest Period for such Loan by New York
certificate of deposit dealers of recognized standing selected by such Reference
Lender for the purchase at face value of certificates of deposit of such
Reference Lender with a term, and in an amount, comparable to such Interest
Period and the principal amount of the CD Loan which shall be made by such
Reference Lender and outstanding during such Interest Period; provided that, if
such quotations from such dealers are not available to such Reference Lender,
such Lender shall notify the Administrative Agent of a reasonably equivalent
rate determined by it on the basis of another source or sources selected by it.
"CD LOANS" shall mean Loans, the interest on which is determined on the
basis of rates referred to in the definition of "CD Base Rate" in Section 1.01.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time, and
regulations promulgated thereunder.
"CHASE" shall mean The Chase Manhattan Bank and its successors.
"CLASS" shall have the meaning assigned to such term in Section 1.03
hereof.
"CLOSING DATE" shall mean the date of the initial Loans hereunder.
"CODE" shall mean the Internal Revenue Code of 1986, as amended, or any
successor statute.
"COMMITMENT" shall mean, as to any Lender, the obligation of such
Lender to make Loans in an aggregate principal amount at any one time
outstanding up to
4
10
but not exceeding the amount set forth opposite such Lender's name on the
signature pages hereof under the caption "Commitment" (as the same may be
reduced from time to time pursuant to Section 2.02 hereof).
"COMPETITIVE BID" shall mean an offer by a Lender to make a Competitive
Loan in accordance with Section 3.03 hereof.
"COMPETITIVE BID RATE" shall mean, with respect to any Competitive Bid,
the Competitive Margin or the Absolute Rate, as applicable, offered by the
Lender making such Competitive Bid.
"COMPETITIVE BID REQUEST" shall mean a request by the Company for
Competitive Bids in accordance with Section 3.03 hereof.
"COMPETITIVE LOAN" shall mean a loan made pursuant to Section 3.03
hereof.
"COMPETITIVE MARGIN" shall mean, with respect to any Eurodollar
Competitive Loan, the marginal rate of interest, if any, to be added to or
subtracted from the Eurodollar Rate to determine the rate of interest applicable
to such Loan, as specified by the Lender making such Loan in its related
Competitive Bid.
"CONTROLLED GROUP" shall mean all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Company, are treated as a single
employer under Section 414 of the Code.
"DEFAULT" shall mean an Event of Default or an event which with notice
or lapse of time or both would, unless cured or waived, become an Event of
Default.
"DISCLOSURE DOCUMENTS" shall mean the Company's annual report on Form
10-K for 1996 and quarterly reports on Form 10-Q for the quarterly periods ended
August 31, 1996 and November 30, 1996, in each case as filed with the Securities
and Exchange Commission pursuant to the Securities Exchange Act of 1934, and the
audited consolidated financial statements of Tremco Incorporated as of and for
the ten-month period ended October 31, 1996 delivered as one of the Acquisition
Documents.
"DOLLARS" and "$" shall mean lawful money of the United States of
America.
5
11
"DOMESTIC RESERVE PERCENTAGE" shall mean, for any day, that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor), for
determining the maximum reserve requirement (including without limitation any
basic, supplemental or emergency reserves) for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of new non-personal time deposits in dollars in New York City having a
maturity comparable to the Interest Period for which the Adjusted CD Rate is
being determined and in an amount of $100,000 or more. The Adjusted CD Rate
shall be adjusted automatically on and as of the effective date of any change in
the Domestic Reserve Percentage.
"EBIT" shall mean, for any period, determined on a consolidated basis
for the Company and its Subsidiaries, net operating income of the Company and
its Subsidiaries (calculated before provision for income taxes, interest
expense, extraordinary items and income attributable to equity in affiliates)
for such period.
"ENVIRONMENTAL LAWS" shall mean any and all applicable federal, state,
local and foreign statutes, laws, judicial decisions, regulations, ordinances,
rules, judgments, orders, decrees, codes, injunctions, permits, concessions,
grants, franchises, licenses, agreements and other governmental restrictions
relating to the environment or the effect of the environment on human health or
to emissions, discharges or release of pollutants, contaminants, Hazardous
Substances or wastes into the environment, including, without limitation,
ambient air, surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, Hazardous Substances or
wastes or the clean-up or other remediation thereof.
"ENVIRONMENTAL LIABILITIES" shall mean all liabilities in connection
with or relating to the business, assets, presently or previously owned or
leased property, activities (including, without limitation, off-site disposal)
or operations of the Company and each Subsidiary, whether vested or unvested,
contingent or fixed, actual or potential, known or unknown, which arise under or
relate to matters covered by Environmental Laws.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"EURODOLLAR BASE RATE" shall mean, with respect to any Eurodollar
Loans, the rate per annum appearing on Page 3750 of the Telerate Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on
6
12
such page of such Service, as determined by the Administrative Agent from time
to time for purposes of providing quotations of interest rates applicable to
dollar deposits in the London interbank market) at approximately 11:00 a.m.,
London time, two Business Days prior to the first day of the Interest Period for
such Eurodollar Loans, as the rate for Dollar deposits for a period comparable
to such Interest Period. In the event that such rate is not available at such
time for any reason, then the "Eurodollar Base Rate" with respect to such
Eurodollar Loans for such Interest Period shall be the arithmetic mean, as
calculated by the Administrative Agent, of the respective rates per annum
(rounded upwards, if necessary, to the nearest 1/16 of 1%) quoted by the
Reference Lenders at approximately 11:00 a.m. London time by the principal
London branch of each of the Reference Lenders on the day two Business Days
prior to the first day of the Interest Period for such Loans for the offering to
leading banks in the London interbank market of Dollar deposits in immediately
available funds, for a period, and in an amount, comparable to such Interest
Period and the principal amount of the Eurodollar Loan which shall be made by
such Reference Lender and outstanding during such Interest Period. If any
Reference Lender is not participating in any Eurodollar Loans during the
Interest Period therefor (pursuant to Section 3.03 or 6.04 hereof or for any
other reason), the Eurodollar Base Rate for such Loans for such Interest Period
shall be determined by reference to the amount of the Loan which such Reference
Lender would have made had such Loans been Revolving Loans in which it was
participating. If any Reference Lender does not furnish a timely quotation, the
Administrative Agent shall determine the relevant interest rate on the basis of
the quotation or quotations furnished by the remaining Reference Lender or
Lenders or, if none of such quotations is available on a timely basis, the
provisions of Section 6.02 shall apply.
"EURODOLLAR LOANS" shall mean Loans the interest on which is determined
on the basis of rates referred to in the definition of "Eurodollar Base Rate" in
this Section 1.01.
"EURODOLLAR RATE" shall mean, for any Eurodollar Loans, a rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) determined by
the Administrative Agent to be equal to (i) the Eurodollar Base Rate for such
Loans for the Interest Period for such Loans divided by (ii) 1 minus the
Eurodollar Reserve Requirement for such Loans for such Interest Period.
"EURODOLLAR RESERVE REQUIREMENT" shall mean, for any Eurodollar Loans
for any Interest Period therefor, the average maximum rate at which reserves
(including any marginal, supplemental or emergency reserves) are required to be
maintained during such Interest Period under Regulation D by member banks of the
Federal Reserve System in New York City with deposits exceeding one billion
Dollars against "Eurocurrency liabilities" (as such term is used in Regulation
D).
7
13
Without limiting the effect of the foregoing, the Eurodollar Reserve Requirement
shall reflect any other reserves required to be maintained by such member banks
by reason of any Regulatory Change against (i) any category of liabilities which
includes deposits by reference to which the Eurodollar Rate is to be determined
as provided in the definition of "Eurodollar Base Rate" in this Section 1.01 or
(ii) any category of extensions of credit or other assets which include
Eurodollar Loans.
"EVENT OF DEFAULT" shall have the meaning assigned to such term in
Section 10.01 hereof.
"FEDERAL FUNDS RATE" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate charged to
Chase on such day on such transactions as determined by the Administrative
Agent.
"FIXED RATE LOANS" shall mean CD Loans or Eurodollar Revolving Loans or
both, as the context may require, and for purposes of Section 6 hereof only,
shall also mean Eurodollar Competitive Loans.
"GAAP" shall mean generally accepted accounting principles as in effect
from time to time in the United States consistently applied.
"GUARANTY" by any Person shall mean any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Indebtedness
of any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness (whether arising by virtue of partnership arrangements, by
agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise, other
than agreements to purchase goods at an arm's length price in the ordinary
course of business) or (ii) entered into for the purpose of assuring in any
other manner the holder of such Indebtedness of the payment thereof or to
protect such holder against loss in respect thereof (in whole or in part),
provided that the term Guaranty shall not include endorsements for collection or
deposit in the ordinary course of business. The term "Guarantee" used as a verb
has a corresponding meaning.
8
14
"HAZARDOUS SUBSTANCES" shall mean any toxic, radioactive, caustic or
otherwise hazardous substance, including petroleum, its derivatives, by-products
and other hydrocarbons, or any substance having constituent elements displaying
any of the foregoing characteristics, regulated under Environmental Laws.
"INDEBTEDNESS" shall mean, as to any Person (determined without
duplication): (i) indebtedness of such Person for borrowed money (whether by
loan or the issuance and sale of debt securities) or for the deferred purchase
or acquisition price of property or services, other than accounts payable (other
than for borrowed money) incurred in the ordinary course of business; (ii)
obligations of such Person in respect of letters of credit or similar
instruments issued or accepted by banks and other financial institutions for the
account of such Person (whether or not such obligations are contingent); (iii)
Capital Lease Obligations of such Person; (iv) obligations of such Person to
redeem or otherwise retire shares of capital stock of such Person; (v)
indebtedness of others of the type described in clause (i), (ii), (iii) or (iv)
above secured by a Lien on the property of such Person, whether or not the
respective obligation so secured has been assumed by such Person; and (vi)
indebtedness of others of the type described in clause (i), (ii), (iii) or (iv)
above Guaranteed by such Person.
"INTEREST EXPENSE" shall mean, for any period, the sum (determined
without duplication) of the aggregate amount of interest accruing during such
period on Indebtedness of the Company and its Subsidiaries (on a consolidated
basis), including the interest portion of payments under Capital Lease
Obligations and any capitalized interest, and excluding amortization of debt
discount and expense.
"INTEREST PERIOD" shall mean,
(1) with respect to any Eurodollar Loans, the period commencing on the
date such Loans are made or converted from other types of Loans or the last day
of the next preceding Interest Period with respect to such Loans and ending on
the numerically corresponding day in the first, second (subject to the
availability of deposits of the corresponding maturity to each of the Lenders in
the London interbank market), third or sixth calendar month thereafter, as the
Company may select as provided in Section 5.05 hereof, except that each such
Interest Period which commences on the last Business Day of a calendar month (or
on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month;
(2) with respect to any CD Loans, the period commencing on the date
such Loans are made or converted from other Types of Loans or the last day of
the next preceding Interest Period with respect to such Loans and ending on the
9
15
day 30, 60, 90 or 180 days thereafter, as the Company may select as provided in
Section 5.05 hereof; and
(3) with respect to any Absolute Rate Competitive Loans, the period
(which shall not be less than seven days or more than 360 days) commencing on
the date such Loans are made and ending on the date specified in the applicable
Competitive Bid Request.
Notwithstanding the foregoing: (i) each Interest Period which would
otherwise end on a day which is not a Business Day shall end on the next
succeeding Business Day (or, in the case of an Interest Period for Eurodollar
Loans, if such next succeeding Business Day falls in the next succeeding
calendar month, on the next preceding Business Day); and (ii) no Interest Period
for any Fixed Rate Loans shall have a duration of less than one month (in the
case of Eurodollar Loans) or 30 days (in the case of CD Loans) and, if the
Interest Period for any Fixed Rate Loan would otherwise be a shorter period,
such Loans shall not be available hereunder.
"INVESTMENTS" shall have the meaning assigned to such term in Section
9.12 hereof.
"LIEN" shall mean, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset. For the purposes of this Agreement, the Company and each of its
Subsidiaries shall be deemed to own subject to a Lien any asset which it has
acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such asset.
"LIQUID INVESTMENTS" shall mean (i) certificates of deposit maturing
within 90 days of the acquisition thereof denominated in Dollars and issued by
(X) a Lender or (Y) a bank or trust company having combined capital and surplus
of at least $500,000,000 and which has (or which is a Subsidiary of a bank
holding company which has) publicly traded debt securities rated A- or higher by
Standard & Poor's Corporation or A-3 or higher by ▇▇▇▇▇'▇ Investors Service,
Inc.; (ii) obligations issued or guaranteed by the United States of America,
with maturities not more than one year after the date of issue; and (iii)
commercial paper with maturities of not more than 90 days and a published rating
of not less than A-1 from Standard & Poor's Corporation or P-1 from ▇▇▇▇▇'▇
Investors Service, Inc.
"LOANS" shall mean the loans made by the Lenders to the Company
pursuant to this Agreement.
10
16
"MAJORITY LENDERS" shall mean, at any time while no Revolving Loans are
outstanding, Lenders having at least 51% of the aggregate amount of the
Commitments and, at any time while Revolving Loans are outstanding, Lenders
holding at least 51% of the outstanding aggregate principal amount of the
Revolving Loans; provided that for purposes of declaring the Loans to be due and
payable pursuant to Section 10.01 and for all purposes after the Loans become
due and payable pursuant to Section 10.01 hereof or the Commitments terminate,
the outstanding principal amount of the Competitive Loans shall be added to the
outstanding principal amount of the Revolving Loans in determining the Majority
Lenders.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect on the
condition (financial or otherwise), results of operations, properties, assets,
liabilities (including, without limitation, tax and ERISA liabilities and
Environmental Liabilities), business, operations, capitalization, shareholders'
equity, franchises or prospects of the Company and its Subsidiaries, taken as a
whole; or (ii) a material adverse effect on the ability of the Company to
perform its obligations under the Credit Agreement or the Notes.
"MULTIEMPLOYER PLAN" shall mean at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which the Company or
any member of the Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding five plan years made
contributions, including for these purposes any Person which ceased to be a
member of the Controlled Group during such five year period.
"NOTES" shall have the meaning assigned to such term in Section 2.06
hereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"PERSON" shall mean an individual, a corporation, a company, a
voluntary association, a partnership, a trust, an unincorporated organization or
a government or any agency, instrumentality or political subdivision thereof.
"PLAN" shall mean an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code and either (i) is
maintained or contributed to, by the Company or any member of the Controlled
Group for employees of the Company or any member of the Controlled Group or (ii)
has at any time within the preceding five years been maintained, or contributed
to, by the Company or any Person which was at such time a member of the
11
17
Controlled Group for employees of any Person which was at such time a member of
the Controlled Group.
"POST-DEFAULT RATE" shall mean, in respect of any principal of any Loan
or any other amount payable by the Company under this Agreement, a rate per
annum equal to the sum of 2% plus the higher of (i) the Base Rate as in effect
from time to time PLUS the Applicable Margin for Base Rate Loans and (ii) in the
case of any Loan, the rate of interest (if any) otherwise applicable to such
Loan.
"PRICING SCHEDULE" shall mean the Pricing Schedule attached hereto.
"PRIME RATE" shall mean the rate of interest from time to time
announced by Chase at the Principal Office as its prime commercial lending rate.
Each change in the interest rate provided for herein resulting from a change in
the Prime Rate shall take effect at the time of such change in the Prime Rate.
"PRINCIPAL OFFICE" shall mean the principal office of Chase, presently
located at ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"QUARTERLY DATES" shall mean the last Business Day of each March, June,
September and December.
"REFERENCE LENDERS" shall mean each of National City Bank, The First
National Bank of Chicago and Chase.
"REGULATION D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time to
time.
"REGULATORY CHANGE" shall mean, with respect to any Lender, any change
on or after the date of this Agreement in United States federal, state or
foreign laws or regulations (including Regulation D) or the adoption or making
on or after such date of any interpretations, directives or requests applying to
a class of lenders including such Lender of or under any United States federal
or state, or any foreign, laws or regulations (whether or not having the force
of law) by any court or governmental or monetary authority charged with the
interpretation or administration thereof.
"RELEASE" shall mean any discharge, emission or release, including a
"Release" as defined in CERCLA at 42 U.S.C. Section 9601(22). The term
"Released" shall have a corresponding meaning.
12
18
"REVOLVING CREDIT PERIOD" shall mean the period from and including the
date hereof to but not including February 3, 2002.
"REVOLVING LOAN" shall mean a Loan made pursuant to Section 2.01(a)
hereof.
"SENIOR OFFICER" shall mean the chief executive officer, president,
chief financial officer or vice president-finance and treasurer of the Company.
"SIGNIFICANT SUBSIDIARY" shall mean at any time any Subsidiary of the
Company, except Subsidiaries of the Company which, if aggregated and considered
as a single Subsidiary at the time of occurrence with respect to such
Subsidiaries of any event or condition of the kind described in clause (e), (f)
or (g) of Section 10.01, would not meet the definition of a "significant
subsidiary" contained as of the date hereof in Regulation S-X of the Securities
and Exchange Commission.
"SUBSIDIARY" shall mean, with respect to any Person, any corporation of
which at least a majority of the outstanding shares of stock having by the terms
thereof ordinary voting power to elect a majority of the board of directors of
such corporation (irrespective of whether or not at the time stock of any other
class or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more of the Subsidiaries
of such Person or by such Person and one or more of the Subsidiaries of such
Person.
"TYPE" shall have the meaning assigned to such term in Section 1.03
hereof.
"UNFUNDED LIABILITIES" shall mean, with respect to any Plan, at any
time, the amount (if any) by which (i) the value of all benefits liabilities
under such Plan, determined on a plan termination basis using the assumptions
prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the
fair market value of all Plan assets allocable to such benefits under Title IV
of ERISA (excluding any accrued but unpaid contributions), all determined as of
the then most recent valuation date for such Plan, but only to the extent that
such excess represents a potential liability of the Company or any member of the
Controlled Group to the PBGC or any other Person under Title IV of ERISA.
1.02 Accounting Terms and Determinations. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be
13
19
delivered hereunder shall be prepared, in accordance with GAAP; provided that if
any change in GAAP in itself materially affects the calculation of any financial
covenant in Section 9, the Company may by notice to the Administrative Agent, or
the Administrative Agent (at the request of the Majority Lenders) may by notice
to the Company, require that such covenant thereafter be calculated in
accordance with GAAP as in effect, and applied by the Company, immediately
before such change in GAAP occurs. If such notice is given, the compliance
certificates delivered pursuant to Section 9.01 after such change occurs shall
be accompanied by reconciliations of the difference between the calculation set
forth therein and a calculation made in accordance with GAAP as in effect from
time to time after such change occurs. To enable the ready determination of
compliance with the covenants set forth in Section 9 hereof, the Company will
not change from May 31 in each year the date on which its fiscal year ends, nor
from August 31, November 30 and February 28 the dates on which the first three
fiscal quarters in each fiscal year end.
1.03 Class and Types of Loans. Loans hereunder are distinguished by
"Class" and "Type". The "Class" of a Loan refers to whether such Loan is a
Revolving Loan or a Competitive Loan. The "Type" of a Loan refers to whether
such Loan is a Eurodollar Loan, a CD Loan or a Base Rate Loan or, in the case of
a Competitive Loan, a Eurodollar Loan or an Absolute Rate Loan. Thus, for
example, a "Eurodollar Competitive Loan" is a Competitive Loan which is also a
Eurodollar Loan.
SECTION 2. Commitments.
2.01 Loans.
(a) Revolving Loans. Each Lender severally agrees, on the terms and
subject to the conditions of this Agreement, to make Revolving Loans from time
to time during the Revolving Credit Period to the Company in an aggregate
principal amount at any one time outstanding which shall not (i) exceed its
Commitment, as reduced from time to time pursuant to Section 2.02 hereof or (ii)
result in the aggregate principal amount of Loans exceeding the aggregate amount
of the Commitments, as so reduced from time to time.
(b) Competitive Loans. In addition to Revolving Loans, the Company may
from time to time during the Revolving Credit Period request the Lenders to make
offers to make Competitive Loans to the Company as set forth in Section 3.03.
The Lenders may, but shall have no obligation to, make such offers and the
Company may, but shall have no obligation to, accept any such offers; provided
that the aggregate principal amount of all Loans shall not at any time exceed
the
14
20
aggregate amount of the Commitments, as reduced from time to time pursuant to
Section 2.02 hereof.
2.02 Reductions of Commitments.
(a) Mandatory. The Commitments shall terminate on the last day of the
Revolving Credit Period; provided, that if the Closing Date shall not have
occurred by March 31, 1997, the Commitments shall terminate on such date.
(b) Optional. The Company shall have the right to terminate or reduce
the Commitments at any time or from time to time, provided that: (i) the Company
shall give notice of each such termination or reduction to the Administrative
Agent as provided in Section 5.05 hereof and (ii) each partial reduction shall
be in an aggregate amount equal to $10,000,000 or any greater multiple of
$5,000,000.
(c) No Reinstatement. Commitments once terminated or reduced may not
be reinstated.
2.03 Fees.
(a) Facility Fees. The Company shall pay to the Administrative Agent
for the account of each Lender facility fees on the daily average amount of such
Lender's Commitment (whether used or unused), for the period from the Closing
Date to but excluding the earlier of the date the Commitments are terminated or
the last day of the Revolving Credit Period, at a facility fee rate per annum
determined in accordance with the Pricing Schedule; provided that, if such
Lender continues to have any Revolving Loans outstanding after its Commitment
terminates, then such facility fee shall continue to accrue on the daily
outstanding principal amount of such Lender's Revolving Loans from and including
the date on which its Commitment terminates to but excluding the date on which
such Lender ceases to have any Revolving Loans outstanding. Accrued facility
fees shall be payable on the Quarterly Dates and on the earlier of the date the
Commitments are terminated or the last day of the Revolving Credit Period;
provided that any facility fees accruing after the date on which the Commitments
terminate shall be payable on demand.
(b) Other Fees. The Company shall pay to the Administrative Agent on
the Closing Date other fees in the amounts heretofore mutually agreed. The
Company shall pay to the Administrative Agent on the Closing Date and on each
anniversary thereof, so long as any of the Commitments are in effect and until
payment in full of all Loans hereunder, all interest thereon and all other
amounts payable hereunder, an annual administrative agency fee in the amount
heretofore mutually agreed.
15
21
2.04 Lending Offices. The Loans of each Type made by each Lender shall
be made and maintained at such Lender's Applicable Lending Office for Loans of
such Type.
2.05 Several Obligations. The failure of any Lender to make any Loan to
be made by it on the date specified therefor shall not relieve any other Lender
of its obligation to make its Loan on such date, but neither the Administrative
Agent nor any Lender shall be responsible for the failure of any other Lender to
make a Loan to be made by such other Lender.
2.06 Notes. The Loans made by each Lender shall be evidenced by a
single Note of the Company (each a "NOTE") in substantially the form of Exhibit
A hereto, dated the Closing Date, payable to the order of such Lender in an
amount equal to the aggregate unpaid principal amount of such Lender's Loans and
otherwise duly completed. Each Lender may, by notice to the Company and the
Administrative Agent, request that its Loans of a particular Class or Type be
evidenced by a separate Note in an amount equal to the aggregate unpaid
principal amount of such Loans. Each such Note shall be in substantially the
form of Exhibit A hereto with appropriate modifications to reflect the fact that
it evidences solely Loans of the relevant Class or Type. Each reference in this
Agreement to the "Note" of such Lender shall be deemed to refer to and include
any or all of such Notes, as the context may require. Each Lender is hereby
authorized by the Company to endorse on the schedule (or a continuation thereof)
attached to each Note of such Lender, to the extent applicable, the date, amount
and Class or Type of and the Interest Period (if any) for each Loan made by such
Lender to the Company hereunder, and the date and amount of each payment or
prepayment of principal of such Loan received by such Lender, provided that any
failure by such Lender to make any such endorsement or any error in such
endorsement shall not affect the obligations of the Company under such Note or
hereunder in respect of such Loan.
2.07 Use of Proceeds. The proceeds of the Loans shall be used by the
Company to refinance certain existing indebtedness, to finance the consummation
of the Acquisition and for working capital and other general corporate purposes.
None of such proceeds shall be used, directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of buying or carrying any margin
stock (within the meaning of Regulation U or X of the Board of Governors of the
Federal Reserve System).
16
22
SECTION 3. Borrowings, Conversions and Prepayments.
3.01 Borrowings.
(a) Revolving Loans. The Company shall give the Administrative Agent
notice of each borrowing of Revolving Loans to be made hereunder as provided in
Section 5.05 hereof. Not later than 11:00 a.m. (or, in the case of Base Rate
Loans, 1:00 p.m.) New York time on the date specified for each such borrowing
hereunder, each Lender shall make available the amount of the Revolving Loan to
be made by it on such date to the Administrative Agent, at the Principal Office,
in immediately available funds, for the account of the Company. The amount so
received by the Administrative Agent shall, subject to the terms and conditions
of this Agreement, be made available to the Company by depositing the same, in
immediately available funds, in an account designated by the Company maintained
with the Administrative Agent at the Principal Office.
(b) Competitive Loans. Requests by the Company of offers to make
Competitive Loans shall be made as provided in Section 3.03.
3.02 Prepayments and Conversions.
(a) Optional Prepayments and Conversions. The Company shall have the
right to prepay Revolving Loans or to convert Revolving Loans of one Type into
Revolving Loans of another Type, at any time or from time to time, provided
that: (i) the Company shall give the Administrative Agent notice of each such
prepayment or conversion as provided in Section 5.05 hereof, and (ii) except to
the extent required pursuant to Section 6.04 hereof, Fixed Rate Loans may be
prepaid or converted only on the last day of an Interest Period for such Loans.
The Company may not prepay Competitive Loans or convert Competitive Loans from
one Type to a different Type, except that the Company may prepay Competitive
Loans to the extent required pursuant to Section 3.02(b).
(b) Mandatory Prepayments. On the date of each reduction of Commitments
pursuant to Section 2.02(b), the Company shall prepay Loans, together with
accrued interest on the principal amount prepaid, to the extent (if any)
required so that the aggregate principal amount of Loans outstanding immediately
after such prepayment will not exceed the aggregate amount of the Commitments
after giving effect to such reduction. Any prepayment pursuant to this
subsection (b) shall be applied, FIRST, to Revolving Loans and SECOND, to
Competitive Loans, pro rata.
3.03 Competitive Bid Procedure. (a) Subject to the terms and conditions
set forth herein, from time to time during the Revolving Credit Period
17
23
the Company may request Competitive Bids and may (but shall not have any
obligation to) accept Competitive Bids and borrow Competitive Loans; provided
that the aggregate principal amount of outstanding Loans at any time shall not
exceed the total Commitments. To request Competitive Bids, the Company shall
notify the Administrative Agent of such request by telephone, in the case of a
Eurodollar borrowing, not later than 11:00 a.m., New York City time, four
Business Days before the date of the proposed borrowing, and, in the case of an
Absolute Rate borrowing, not later than 10:00 a.m., New York City time, one
Business Day before the date of the proposed borrowing; provided that the
Company may submit up to (but not more than) three Competitive Bid Requests on
the same day, but a Competitive Bid Request shall not be made within five
Business Days after the date of any previous Competitive Bid Request, unless any
and all such previous Competitive Bid Requests shall have been withdrawn or all
Competitive Bids received in response thereto rejected. Each such telephonic
Competitive Bid Request shall be confirmed promptly by hand delivery or telecopy
to the Administrative Agent of a written Competitive Bid Request in a form
approved by the Administrative Agent and signed by the Company. Each such
telephonic and written Competitive Bid Request shall specify the following
information:
(i) the aggregate amount of the requested borrowing;
(ii) the date of such borrowing, which shall be a Business
Day;
(iii) whether such borrowing is to be a Eurodollar borrowing
or a Absolute Rate borrowing; and
(iv) the Interest Period to be applicable to such borrowing,
which shall be a period contemplated by the definition of the term
"Interest Period".
Promptly following receipt of a Competitive Bid Request in accordance
with this Section, the Administrative Agent shall notify the Lenders of the
details thereof by telecopy, inviting the Lenders to submit Competitive Bids.
(b) Each Lender may (but shall not have any obligation to) make one or
more Competitive Bids to the Company in response to a Competitive Bid Request.
Each Competitive Bid by a Lender must be in a form approved by the
Administrative Agent and must be received by the Administrative Agent by
telecopy, in the case of a Eurodollar borrowing, not later than 10:00 a.m., New
York City time, three Business Days before the proposed date of such borrowing,
and in the case of an Absolute Rate borrowing, not later than 10:00 a.m., New
York City time, on the proposed date of such borrowing. Competitive Bids that
18
24
do not conform substantially to the form approved by the Administrative Agent
may be rejected by the Administrative Agent, and the Administrative Agent shall
notify the applicable Lender as promptly as practicable. Each Competitive Bid
shall specify (i) the principal amount (which shall be a minimum of $5,000,000
and an integral multiple of $1,000,000 and which may equal the entire principal
amount of the borrowing requested by the Company) of the Competitive Loan or
Loans that the Lender is willing to make, (ii) the Competitive Bid Rate or Rates
at which the Lender is prepared to make such Loan or Loans (expressed as a
percentage rate per annum in the form of a decimal to no more than four decimal
places) and (iii) the Interest Period applicable to each such Loan and the last
day thereof.
(c) The Administrative Agent shall promptly notify the Company by
telecopy of the Competitive Bid Rate and the principal amount specified in each
Competitive Bid and the identity of the Lender that shall have made such
Competitive Bid.
(d) Subject only to the provisions of this paragraph, the Company may
accept or reject any Competitive Bid. The Company shall notify the
Administrative Agent by telephone, confirmed by telecopy in a form approved by
the Administrative Agent, whether and to what extent it has decided to accept or
reject each Competitive Bid, in the case of a Eurodollar borrowing, not later
than 11:00 a.m., New York City time, three Business Days before the date of the
proposed Borrowing, and in the case of an Absolute Rate borrowing, not later
than 11:00 a.m., New York City time, on the proposed date of the borrowing;
provided that (i) the failure of the Company to give such notice shall be deemed
to be a rejection of each Competitive Bid, (ii) the Company shall not accept a
Competitive Bid made at a particular Competitive Bid Rate if the Company rejects
a Competitive Bid made at a lower Competitive Bid Rate, (iii) the aggregate
amount of the Competitive Bids accepted by the Company shall not exceed the
aggregate amount of the requested Competitive borrowing specified in the related
Competitive Bid Request, (iv) to the extent necessary to comply with clause
(iii) above, the Company may accept Competitive Bids at the same Competitive Bid
Rate in part, which acceptance, in the case of multiple Competitive Bids at such
Competitive Bid Rate, shall be made pro rata in accordance with the amount of
each such Competitive Bid, and (v) except pursuant to clause (iv) above, no
Competitive Bid shall be accepted for a Competitive Loan unless such Competitive
Loan is in a minimum principal amount of $5,000,000 and an integral multiple of
$1,000,000; provided further that if a Competitive Loan must be in an amount
less than $5,000,000 because of the provisions of clause (iv) above, such
Competitive Loan may be for a minimum of $1,000,000 or any integral multiple
thereof, and in calculating the pro rata allocation of acceptances of portions
of multiple Competitive Bids at a particular Competitive Bid Rate pursuant to
clause (iv) the amounts shall be rounded to integral multiples of $1,000,000 in
a manner
19
25
determined by the Company. A notice given by the Company pursuant to this
paragraph shall be irrevocable.
(e) The Administrative Agent shall promptly notify each bidding Lender
by telephone (to be followed by telecopy) whether or not its Competitive Bid has
been accepted (and, if so, the amount and Competitive Bid Rate so accepted), and
each successful bidder will thereupon become bound, subject to the terms and
conditions hereof, to make the Competitive Loan in respect of which its
Competitive Bid has been accepted.
(f) If the Administrative Agent shall elect to submit a Competitive Bid
in its capacity as a Lender, it shall submit such Competitive Bid directly to
the Company at least one quarter of an hour earlier than the time by which the
other Lenders are required to submit their Competitive Bids to the
Administrative Agent pursuant to subsection (b) of this Section.
SECTION 4. Payments of Principal and Interest.
4.01 Repayment of Loans. (a) The Revolving Loans shall mature on the
last day of the Revolving Credit Period.
(b) Each Competitive Loan shall mature on the last day of the Interest
Period applicable thereto.
4.02 Interest. The Company will pay to the Administrative Agent for the
account of each Lender interest on the unpaid principal amount of each Loan made
by such Lender for the period commencing on the date of such Loan to but
excluding the date such Loan shall be paid in full, at the following rates per
annum:
(a) if such Loan is a Base Rate Loan, the Base Rate PLUS the Applicable
Margin;
(b) if such Loan is a Eurodollar Revolving Loan, the Eurodollar Rate
PLUS the Applicable Margin;
(c) if such Loan is a CD Loan, the Adjusted CD Rate PLUS the Applicable
Margin;
(d) if such Loan is a Eurodollar Competitive Loan, the Eurodollar Rate
PLUS (or MINUS) the Competitive Margin quoted by the Lender making such Loan in
accordance with Section 3.03 hereof; and
20
26
(e) if such Loan is an Absolute Rate Loan, the Absolute Rate for such
Loan for the Interest Period therefor quoted by the Lender making such Loan in
accordance with Section 3.03 hereof.
Notwithstanding any of the foregoing, the Company will pay to the
Administrative Agent for the account of each Lender interest at the applicable
Post-Default Rate on the principal of any Loan made by such Lender and on any
other amount payable by the Company hereunder to or for the account of such
Lender (but, if such amount is interest, only to the extent legally
enforceable), which shall not be paid in full when due (whether at stated
maturity, by acceleration or otherwise) for the period commencing on the due
date thereof until the same is paid in full.
Accrued interest on each Loan shall be payable (i) if such Loan is a
Base Rate Loan, on each Quarterly Date, (ii) if such Loan is a Fixed Rate Loan
or Competitive Loan, on the last day of the Interest Period for such Loan (and,
if such Interest Period exceeds 90 days' (in the case of a CD Loan or Absolute
Rate Loan) or three months' (in the case of a Eurodollar Loan) duration,
quarterly, commencing on the first quarterly anniversary of the first day of
such Interest Period), and (iii) in any event, upon the payment, prepayment or
conversion thereof, but only on the principal so paid or prepaid or converted;
provided that interest payable at the Post-Default Rate shall be payable from
time to time on demand of the Administrative Agent or the Majority Lenders.
Promptly after the determination of any interest rate provided for herein or any
change therein, the Administrative Agent shall notify the Lenders and the
Company thereof.
Notwithstanding the foregoing provisions of this Section 4.02, if at
any time the rate of interest set forth above on any Loan of or other obligation
payable to any Lender (the "STATED RATE") exceeds the maximum non-usurious
interest rate permissible for such Lender to charge commercial borrowers under
applicable law (the "MAXIMUM RATE" for such Lender), the rate of interest
charged on such Loan of or other obligation payable to such Lender hereunder
shall be limited to the Maximum Rate for such Lender.
If the Stated Rate for any Loan of a Lender that has theretofore been
subject to the preceding paragraph at any time is less than the Maximum Rate for
such Lender, the principal amount of such Loan shall bear interest at the
Maximum Rate for such Lender until the total amount of interest paid to such
Lender or accrued on its Loans hereunder equals the amount of interest which
would have been paid to such Lender or accrued on such Lender's Loans hereunder
if the Stated Rate had at all times been in effect.
21
27
If, upon payment in full of all amounts payable hereunder, the total
amount of interest paid to any Lender or accrued on such Lender's Loans under
the terms of this Agreement is less than the total amount of interest which
would have been paid to such Lender or accrued on such Lender's Loans if the
Stated Rate had, at all times, been in effect, then the Company shall, to the
extent permitted by applicable law, pay to the Administrative Agent for the
account of such Lender an amount equal to the difference between (a) the lesser
of (i) the amount of interest which would have accrued on such Lender's Loans if
the Maximum Rate for such Lender had at all times been in effect or (ii) the
amount of interest which would have accrued on such Lender's Loans if the Stated
Rate had at all times been in effect and (b) the amount of interest actually
paid to such Lender or accrued on its Loans under this Agreement.
If any Lender ever receives, collects or applies as interest any sum in
excess of the Maximum Rate for such Lender, such excess amount shall be applied
to the reduction of the principal balance of its Loans or to other amounts
(other than interest) payable hereunder, and if no such principal is then
outstanding, such excess or part thereof remaining shall be paid to the Company.
SECTION 5. Payments; Pro Rata Treatment; Computations; Etc.
5.01 Payments. Except to the extent otherwise provided herein, all
payments of principal, interest and other amounts to be made by the Company
hereunder and under the Notes shall be made in Dollars, in immediately available
funds, to the Administrative Agent at the Principal Office, not later than 11:00
a.m. New York time on the date on which such payment shall become due (each such
payment made after such time on such due date to be deemed to have been made on
the next succeeding Business Day). The Administrative Agent, or any Lender for
whose account any such payment is made, may (but shall not be obligated to)
debit the amount of any such payment which is not made by such time to any
ordinary deposit account of the Company with the Administrative Agent or such
Lender, as the case may be. The Company shall, at the time of making each
payment hereunder or under any Note, specify to the Administrative Agent the
Loans or other amounts payable by the Company hereunder to which such payment is
to be applied (and in the event that it fails to so specify, or if an Event of
Default has occurred and is continuing, the Administrative Agent may apply such
payment as it may elect in its sole discretion to amounts then due, but subject
to the other terms and conditions of this Agreement, including, without
limitation, Section 5.02 hereof). Each payment received by the Administrative
Agent hereunder or under any Note for the account of a Lender shall be paid
promptly to such Lender, in immediately available funds, for the account of such
Lender's Applicable Lending Office. If the due date of any payment hereunder or
under any Note would otherwise fall on a day which is not a Business Day such
date shall be
22
28
extended to the next succeeding Business Day and interest shall be payable for
any principal so extended for the period of such extension.
5.02 Pro Rata Treatment. Except to the extent otherwise provided
herein: (a) each borrowing from the Lenders under Section 2.01(a) hereof shall
be made from the Lenders, each payment of facility fees under Section 2.03
hereof shall be made for the account of the Lenders, and each termination or
reduction of the Commitments under Section 2.02 hereof shall be applied to the
Commitments of the Lenders, pro rata according to the Lenders' respective
percentages of the Commitments; (b) each payment by the Company of principal of
or interest on Revolving Loans of a particular Type (other than payments in
respect of Revolving Loans of individual Lenders provided for by Section 6
hereof) shall be made to the Administrative Agent for the account of the Lenders
pro rata in accordance with the respective unpaid principal amounts of such
Revolving Loans held by the Lenders; and (c) each conversion of Revolving Loans
of a particular Type (other than conversions of Revolving Loans of individual
Lenders pursuant to Section 6.04 hereof) shall be made pro rata among the
Lenders in accordance with the respective principal amounts of such Revolving
Loans held by the Lenders.
5.03 Computations. Interest and fees shall be computed on the basis of
a year of 360 days and actual days elapsed, except that interest on Base Rate
Loans when the Base Rate is based on the Prime Rate shall be computed on the
basis of a year of 365 or 366 days and actual days elapsed (in each case,
including the first day but excluding the last day), in the period for which
payable.
5.04 Minimum and Maximum Amounts; Types. Each borrowing, conversion and
prepayment of principal of Revolving Loans shall be in an aggregate principal
amount equal to (a) in the case of Eurodollar Loans, $5,000,000 or any larger
multiple of $1,000,000, (b) in the case of CD Loans, $10,000,000 or any larger
multiple of $1,000,000, and (c) in the case of Base Rate Loans, at least
$5,000,000, except that any borrowing of Revolving Loans may be in the aggregate
amount of the unused portion of the Commitments (borrowings, conversions or
prepayments of Revolving Loans of different Types or, in the case of Fixed Rate
Loans, having different Interest Periods, at the same time hereunder to be
deemed separate borrowings, conversions and prepayments for purposes of the
foregoing, one for each Type or Interest Period). Notwithstanding anything to
the contrary contained in this Agreement there shall not be, at any one time,
more than six Interest Periods in effect with respect to Fixed Rate Loans.
5.05 Certain Notices. Except as specified in Section 3.03 with respect
to Competitive Loans, notices to the Administrative Agent of terminations or
reductions of Commitments, of borrowings, conversions and prepayments of Loans
and of the duration of Interest Periods shall be irrevocable and shall be
23
29
effective only if received by the Administrative Agent not later than 12:00 noon
(or, in the case of borrowings or prepayments of Base Rate Loans, 10:30 a.m.)
New York time on the number of Business Days prior to the date of the relevant
termination, reduction, borrowing, conversion and/or prepayment specified below:
Number of
Business
NOTICE DAYS PRIOR
------ ----------
Termination or reduction of Commitments 3
Borrowing or prepayment of Base Rate
Loans 0
Borrowing or prepayment of, conversion of
or into, or duration of Interest Period
for, Fixed Rate Loans 3
Each notice of termination or reduction shall specify the amount of the
Commitments to be terminated or reduced. Each notice of borrowing, conversion or
prepayment shall specify the amount and Type of the Loans to be borrowed,
converted or prepaid (subject to Sections 3.02 and 5.04 hereof), the date of
borrowing, conversion or prepayment (which shall be a Business Day) and, in the
case of Fixed Rate Loans, the duration of the Interest Period therefor (subject
to the definition of Interest Period). Each such notice of duration of an
Interest Period shall specify the Loans to which such Interest Period is to
relate. The Administrative Agent shall promptly notify the affected Lenders of
the contents of each such notice. In the event that the Company fails to select
the duration of any Interest Period for any Fixed Rate Loans within the time
period and otherwise as provided in this Section 5.05, such Loans (if
outstanding as Fixed Rate Loans) will be automatically converted into Base Rate
Loans on the last day of the then current Interest Period for such Loans or (if
outstanding as Base Rate Loans) will remain as, or (if not then outstanding)
will be made as, Base Rate Loans.
5.06 Non-Receipt of Funds by the Administrative Agent. Unless the
Administrative Agent shall have been notified by a Lender or the Company (the
"PAYOR") prior to the date on (or, in the case of Base Rate Loans, prior to the
time by) which such Lender is to make payment to the Administrative Agent of the
proceeds of a Loan to be made by it hereunder or the Company is to make a
payment to the Administrative Agent for the account of one or more of the
Lenders, as the case may be (such payment being herein called the "REQUIRED
PAYMENT"), which notice shall be effective upon receipt, that the Payor does not
24
30
intend to make the Required Payment to the Administrative Agent, the
Administrative Agent may assume that the Required Payment has been made and may,
in reliance upon such assumption (but shall not be required to), make the amount
thereof available to the intended recipient on such date (or at such time) and,
if the Payor has not in fact made the Required Payment to the Administrative
Agent, the recipient of such payment shall, on demand, pay to the Administrative
Agent the amount made available to it together with interest thereon in respect
of the period commencing on the date such amount was so made available by the
Administrative Agent until the date the Administrative Agent receives such
amount at a rate per annum equal to the Federal Funds Rate for such period.
5.07 Sharing of Payments, Etc. The Company agrees that, in addition to
(and without limitation of) any right of set-off, bankers' lien or counterclaim
a Lender may otherwise have, each Lender shall be entitled, at its option, to
offset balances held by it for the account of the Company at any of its offices,
in Dollars or in any other currency, against any principal of or interest on any
of such Lender's Loans to the Company hereunder which is not paid when due
(regardless of whether such balances are then due to the Company), in which case
it shall promptly notify the Company and the Administrative Agent thereof,
provided that such Lender's failure to give such notice shall not affect the
validity thereof. If a Lender shall obtain payment of any principal of or
interest on any Revolving Loan made by it under this Agreement, through the
exercise of any right of set-off, banker's lien, counterclaim or similar right,
or otherwise, it shall promptly purchase from the other Lenders participations
in the Revolving Loans made by the other Lenders in such amounts, and make such
other adjustments from time to time as shall be equitable, to the end that all
the Lenders shall share the benefit of such payment (net of any expenses which
may be incurred by such Lender in obtaining or preserving such benefit) pro rata
in accordance with the unpaid principal and interest on the Revolving Loans then
due to each of them. To such end all the Lenders shall make appropriate
adjustments among themselves (by the resale of participations sold or otherwise)
if such payment is rescinded or must otherwise be restored. The Company agrees,
to the fullest extent it may effectively do so under applicable law, that any
Person purchasing a participation in the Loans made by another Person, whether
or not acquired pursuant to the foregoing arrangements, may exercise all rights
of set-off, bankers' lien, counterclaim or similar rights with respect to such
participation as fully as if such Lender were a direct holder of Loans or other
obligations in the amount of such participation. Nothing contained herein shall
require any Lender to exercise any such right or shall affect the right of any
Lender to exercise, and retain the benefits of exercising, any such right with
respect to any other indebtedness or obligation of the Company.
5.08 Taxes. (a) Any and all payments by the Company hereunder shall be
made, in accordance with Section 5.01, free and clear of and without deduction
25
31
for any and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender and the Administrative Agent, taxes imposed on its income, and
franchise taxes imposed on it, by the jurisdiction under the laws of which such
Lender or the Administrative Agent (as the case may be) is organized or any
political subdivision thereof and, in the case of each Lender, taxes imposed on
its income, and franchise taxes imposed on it, by the jurisdiction of such
Lender's Applicable Lending Office or any political subdivision thereof (all
such non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "TAXES"). If the Company shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to any Lender or the Administrative Agent, (i) except as provided in
subsection (g) below, the sum payable shall be increased as may be necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 5.08), such Lender or the
Administrative Agent (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Company shall
make such deductions and (iii) the Company shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with applicable
law.
(b) In addition, the Company agrees to pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, the
Notes or any other document referred to herein or therein (hereinafter referred
to as "OTHER TAXES").
(c) The Company will indemnify each Lender and the Administrative Agent
for the full amount of Taxes or Other Taxes (including related penalties,
interest and expenses) imposed by any jurisdiction on amounts payable under this
Section 5.08 paid by such Lender or the Administrative 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. This indemnification shall be made within 30 days
from the date such Lender or the Administrative Agent (as the case may be) makes
written demand therefor. It is understood that Taxes do not include any
withholdings or other obligations imposed on a Lender with respect to payments
by such Lender to a participant in such Lender's Loans.
(d) Within 30 days after the date of any payment of Taxes, the Company
or a Lender, in the case of any Taxes paid by such Lender, will furnish to the
Administrative Agent, at its address referred to in Section 12.02, the original
or a certified copy of a receipt evidencing payment thereof.
26
32
(e) At the reasonable request of the Company, a Lender or the
Administrative Agent shall apply at the Company's expense for a refund in
respect of Taxes or Other Taxes previously paid by the Company pursuant to this
Section 5.08 if in the opinion of such Lender or Administrative Agent there is a
reasonable basis for such refund. Notwithstanding the foregoing, none of the
Lenders or the Administrative Agent shall be obligated to pursue such refund if,
in its sole good faith judgment, such action would be disadvantageous to it. If
any Lender subsequently receives from a taxing authority a refund of any Tax
previously paid by the Company and for which the Company has indemnified the
Lender pursuant to this Section 5.08, such Lender shall within 30 days after
receipt of such refund, and to the extent permitted by applicable law, pay to
the Company the net amount of any such recovery after deducting taxes and
expenses attributable thereto.
(f) Not later than the Closing Date or, in the case of any bank or
financial institution that becomes a Lender after the Closing Date pursuant to
Section 12.06, the date of the instrument of assignment pursuant to which such
bank or financial institution became a Lender, and annually thereafter or at
such other times as the Administrative Agent or the Company may request, each
Lender organized under the laws of a jurisdiction outside the United States
shall provide the Administrative Agent and the Company with duly completed
copies of Form 1001 or Form 4224 or any successor form prescribed by the
Internal Revenue Service of the United States certifying that such Lender is
exempt from United States withholding taxes with respect to all payments to be
made to such Lender hereunder or other documents satisfactory to the Company and
the Administrative Agent indicating that all payments to be made to such Lender
hereunder are not subject to such taxes (an "EXEMPTION CERTIFICATE"). In the
case of payments to or for any Lender organized under the laws of a jurisdiction
outside the United States, unless the Administrative Agent and the Company have
received an Exemption Certificate from such Lender, the Company, or the
Administrative Agent if the Company has not withheld, may withhold taxes from
such payments at the applicable statutory rate; provided that if the Company has
withheld it shall so notify the Administrative Agent. If the Company is required
to pay additional amounts to any Lender pursuant to this Section 5.08, such
Lender shall use reasonable efforts to designate a different Applicable Lending
Office if such designation will thereafter avoid the need for any additional
payments under this Section 5.08 and will not, in the sole judgment of such
Lender, be otherwise disadvantageous to such Lender. A Lender which ceases to be
exempt from United States withholding taxes shall notify the Administrative
Agent and the Company promptly thereof.
(g) If a Lender organized under the laws of a jurisdiction outside the
United States fails to comply with the provisions of subsection (f) above, then
the Company shall not have any obligation to increase the sum payable to such
Lender
27
33
pursuant to Section 5.08(a) or to indemnify such Lender pursuant to Section
5.08(c) for Taxes (including related penalties, interest and expenses) imposed
by the United States or any political subdivision thereof.
SECTION 6. Yield Protection and Illegality.
6.01 Additional Costs.
(a) The Company shall pay to the Administrative Agent for the account
of each Lender from time to time such amounts as such Lender may determine to be
necessary to compensate it for any costs incurred by such Lender which such
Lender determines are attributable to its making or maintaining of any Fixed
Rate Loans hereunder or its obligation to make any of such Loans hereunder, or
any reduction in any amount receivable by such Lender hereunder in respect of
any of such Loans or such obligation (such increases in costs and reductions in
amounts receivable being herein called "ADDITIONAL COSTS"), in each case
resulting from any Regulatory Change which:
(i) changes the basis of taxation of any amounts payable to
such Lender under this Agreement or its Notes in respect of any of such
Loans (other than changes which affect taxes measured by or imposed on
the overall net income of such Lender or of its Applicable Lending
Office for any of such Loans by the jurisdiction in which such Lender
has its principal office or such Applicable Lending Office); or
(ii) imposes or modifies any reserve, special deposit,
insurance assessment or similar requirements relating to any extensions
of credit or other assets of, or any deposits with or other liabilities
of, such Lender (including any of such Loans or any deposits referred
to in the definitions of "CD Base Rate" or "Eurodollar Base Rate" in
Section 1.01 hereof but excluding, with respect to any such Fixed Rate
Loan, any such requirements included in the applicable Domestic Reserve
Requirement or Eurodollar Reserve Requirement); or
(iii) imposes any other condition affecting this Agreement (or
any of such extensions of credit or liabilities).
Each Lender will notify the Company through the Administrative Agent of
any event occurring after the date of this Agreement which will entitle such
Lender to compensation pursuant to this Section 6.01(a) as promptly as
practicable after it obtains knowledge thereof and determines to request such
compensation, and (if so requested by the Company through the Administrative
Agent) will designate a different Applicable Lending Office for the relevant
Type of Fixed Rate Loans of
28
34
such Lender if such designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the sole opinion of such Lender, be
disadvantageous to such Lender (provided that such Lender shall have no
obligation to so designate an Applicable Lending Office located in the United
States of America). Each Lender will furnish the Company with a statement
setting forth the basis and amount of each request by such Lender for
compensation under this Section 6.01(a). If any Lender requests compensation
from the Company under this Section 6.01(a), the Company may, by notice to such
Lender through the Administrative Agent, suspend the obligation of such Lender
to make additional Fixed Rate Loans of the relevant Type to the Company until
the Regulatory Change giving rise to such request ceases to be in effect (in
which case the provisions of Section 6.04 hereof shall be applicable).
(b) Without limiting the effect of the foregoing provisions of this
Section 6.01, if, by reason of any Regulatory Change, any Lender either (i)
incurs Additional Costs based on or measured by the excess above a specified
level of the amount of a category of deposits or other liabilities of such
Lender which includes deposits by reference to which the interest rate on any
Type of Fixed Rate Loans is determined as provided in this Agreement or a
category of extensions of credit or other assets of such Lender which includes
any Type of Fixed Rate Loans or (ii) becomes subject to restrictions on the
amount of such a category of liabilities or assets which it may hold, then, if
such Lender so elects by notice to the Company (with a copy to the
Administrative Agent), the obligation of such Lender to make Fixed Rate Loans of
the relevant Type hereunder shall be suspended until the date such Regulatory
Change ceases to be in effect (in which case the provisions of Section 6.04
hereof shall be applicable).
(c) Determinations and allocations by any Lender for purposes of this
Section 6.01 of the effect of any Regulatory Change on its costs of maintaining
its obligations to make Loans or of making or maintaining Loans or on amounts
receivable by it in respect of Loans, and of the additional amounts required to
compensate such Lender in respect of any Additional Costs, shall be presumed
correct absent manifest error.
(d) Notwithstanding the foregoing, the Company shall not be required to
compensate any Lender for any Additional Costs incurred more than one year prior
to the date that such Lender notifies the Company thereof, unless such
Additional Costs were caused by the retroactive application of a Regulatory
Change to a date more than one year prior to the date of such notice.
6.02 Limitation on Types of Loans. Anything herein to the contrary
notwithstanding, if, with respect to any Fixed Rate Loans:
29
35
(a) the Administrative Agent determines (which determination
shall be conclusive) that quotations of interest rates for the relevant
deposits referred to in the definition of "CD Base Rate" or "Eurodollar
Base Rate", as the case may be, in Section 1.01 hereof are not being
provided by the Reference Lenders in the relevant amounts or for the
relevant maturities for purposes of determining the rate of interest
for such Loans for Interest Periods therefor as provided in this
Agreement; or
(b) the Majority Lenders determine (which determination shall
be conclusive) and notify the Administrative Agent that the relevant
rates of interest referred to in the definition of "CD Base Rate" or
"Eurodollar Base Rate", as the case may be, in Section 1.01 hereof upon
the basis of which the rates of interest for such Loans are to be
determined do not accurately reflect the cost to such Lenders of making
or maintaining such Loans for Interest Periods therefor;
then the Administrative Agent shall promptly notify the Company and each Lender
thereof, and so long as such condition remains in effect, the Lenders shall be
under no obligation to make Fixed Rate Loans of the relevant Type or to convert
Base Rate Loans into Fixed Rate Loans of the relevant Type and the Company
shall, on the last day(s) of the then current Interest Period(s) for the
outstanding Fixed Rate Loans of the relevant Type, either prepay such Loans or
convert such Loans into Base Rate Loans in accordance with Section 3.02 hereof.
6.03 Illegality. Notwithstanding any other provision of this Agreement
to the contrary, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to (a) honor its obligation to make Fixed Rate Loans
of any Type hereunder, or (b) maintain Fixed Rate Loans of any Type hereunder,
then such Lender shall promptly notify the Company thereof through the
Administrative Agent and such Lender's obligation to make Fixed Rate Loans of
such Type hereunder shall be suspended until such time as such Lender may again
make and maintain Fixed Rate Loans of such Type (in which case the provisions of
Section 6.04 hereof shall be applicable).
6.04 Substitute Base Rate Loans. If the obligation of any Lender to
make Fixed Rate Loans of any Type shall be suspended pursuant to Section 6.01,
6.02 or 6.03 hereof, all Loans which would otherwise be made by such Lender as
Fixed Rate Loans of such Type shall be made instead as Base Rate Loans (and, if
an event referred to in Section 6.01(b) or 6.03 hereof has occurred and such
Lender so requests by notice to the Company with a copy to the Administrative
Agent, each Fixed Rate Loan of such Type of such Lender then outstanding shall
be automatically converted into a Base Rate Loan on the date specified by such
Lender in such notice) and, to the extent that Fixed Rate Loans of such Type are
30
36
so made as (or converted into) Base Rate Loans, all payments of principal which
would otherwise be applied to such Fixed Rate Loans of such Type shall be
applied instead to such Base Rate Loans.
6.05 Compensation. The Company shall pay to the Administrative Agent
for the account of each Lender, upon the request of such Lender through the
Administrative Agent, such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost or
expense incurred by it as a result of:
(a) any payment, prepayment or conversion of a Fixed Rate Loan
made by such Lender on a date other than the last day of an Interest
Period for such Loan; or
(b) any failure by the Company to borrow a Fixed Rate Loan to
be made by such Lender on the date for such borrowing specified in the
relevant notice of borrowing under Section 5.05 hereof or Section 3.03
hereof.
Notwithstanding the foregoing, the Company shall not be required to
compensate any Lender for any such loss, cost or expense incurred more than one
year prior to the date that such Lender notifies the Company thereof.
6.06 Capital Adequacy. If any Lender shall determine that the adoption
or implementation of any applicable law, rule, regulation or treaty regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its Applicable Lending Office) with any request or directive
issued after the date hereof 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 capital of such
Lender or any Person controlling such Lender (a "PARENT") as a consequence of
its obligations hereunder to a level below that which such Lender (or its
Parent) could have achieved but for such adoption, change or compliance (taking
into consideration its policies with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time, within 15 days
after demand by such Lender (with a copy to the Administrative Agent), the
Company shall pay to such Lender such additional amount or amounts as will
compensate such Lender for such reduction. A statement of any Lender claiming
compensation under this Section and setting forth the additional amount or
amounts to be paid to it hereunder shall be presumed correct absent manifest
error. In determining such amount, such Lender may use any reasonable averaging
and attribution methods.
31
37
6.07 Substitution of Lender. If (i) the Company is required to withhold
with respect to any Lender pursuant to Section 5.08, (ii) any Lender has
demanded compensation under Section 6.01(a) or Section 6.06 or (iii) the
obligation of any Lender to make Fixed Rate Loans has been suspended pursuant to
Section 6.01(b)(ii) or Section 6.03, and so long as no Default shall have
occurred and be continuing, the Company shall have the right to request one or
more substitute banks, financial institutions or funds (which may be one or more
of the Lenders) reasonably satisfactory to the Administrative Agent to purchase
such Lender's Note and assume such Lender's Commitment hereunder by paying to
such Lender an amount equal to all of the obligations of the Company to such
Lender hereunder including, without limitation, principal and accrued interest
and fees. Any costs or expenses incurred by the Administrative Agent in
connection with assisting the Company pursuant hereto shall be paid upon demand
by the Company. The Administrative Agent shall respond promptly to any request
by the Company for its consent to a substitute for a Lender.
SECTION 7. Conditions Precedent.
7.01 Initial Loans. The obligation of each Lender to make the initial
Loans to be made by it hereunder is subject to the following conditions
precedent, each of which shall have been fulfilled to the satisfaction of the
Administrative Agent:
(a) Corporate Action. The Administrative Agent shall have
received certified copies of the Articles of Incorporation and Code of
Regulations of the Company and of all corporate action taken by the
Company authorizing the execution, delivery and performance of this
Agreement and the Notes (including, without limitation, a certificate
of the Company setting forth the resolutions authorizing the
transactions contemplated thereby).
(b) Incumbency. The Company shall have delivered to the
Administrative Agent a certificate in respect of the name and signature
of each of the officers (i) who is authorized to sign on its behalf
this Agreement and the Notes and (ii) who will, until replaced by
another officer or officers duly authorized for that purpose, act as
its representative for the purposes of signing documents and giving
notices and other communications in connection with this Agreement and
the Notes. The Administrative Agent and each Lender may conclusively
rely on such certificates until it receives notice in writing from the
Company to the contrary.
32
38
(c) Notes. The Administrative Agent shall have received a
Note for each Lender, duly completed and executed.
(d) Acquisition. All of the conditions to the consummation of
the Acquisition (other than the initial borrowing hereunder) shall have
been duly satisfied in accordance with the Acquisition Documents
(subject to waivers and other modifications thereof which, in the
aggregate, are not material), and the Administrative Agent shall have
received (or arrangements satisfactory to the Administrative Agent
shall have been made for it to receive) a copy of each Acquisition
Document (including, without limitation, each certificate, opinion of
counsel or other material writing delivered in connection with the
consummation of the Acquisition) and a certificate of the Company to
the effect set forth in the first clause of this Section 7.01(d).
(e) Fees and Expenses. The Company shall have paid to the
Administrative Agent for its account fees in the amount previously
agreed upon by the Company.
(f) Opinion of Counsel to the Company. The Administrative
Agent shall have received an opinion of ▇▇▇▇▇▇, Halter & ▇▇▇▇▇▇▇▇ LLP,
counsel to the Company, and the General Counsel of the Company,
substantially in the form of Exhibit B-1 and B-2 hereto, respectively.
(g) Opinion of Special Counsel to the Administrative Agent.
The Administrative Agent shall have received an opinion of ▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇, special counsel to the Administrative Agent, substantially in
the form of Exhibit C hereto.
(h) Counterparts. The Administrative Agent shall have received
counterparts of this Agreement executed and delivered by or on behalf
of each of the parties hereto (or, in the case of any Lender as to
which the Administrative Agent shall not have received such a
counterpart, the Administrative Agent shall have received evidence
satisfactory to it of the execution and delivery by such Lender of a
counterpart hereof).
(i) Existing Credit Agreement. The Administrative Agent shall
have received evidence that, after giving effect to the application of
the proceeds of the initial Loans to be made hereunder, all amounts
outstanding under the $250,000,000 Amended and Restated Credit
Agreement dated as of July 19, 1996 among the Company, the lenders
listed on the signature pages thereof and Chase, as administrative
agent,
33
39
shall have been paid in full and all commitments thereunder shall have
been terminated.
(j) Other Documents. The Administrative Agent shall have
received such other documents relating to the transactions contemplated
hereby as the Administrative Agent may reasonably request.
7.02 Initial and Subsequent Loans. The obligation of each Lender to
make any Loan to be made by it hereunder is subject to the conditions precedent
that, as of the date of such Loan, and before and after giving effect thereto:
(a) no Default shall have occurred and be continuing; and
(b) the representations and warranties made by the Company in
this Agreement shall be true on and as of the date of the making of
such Loan, with the same force and effect as if made on and as of such
date.
Each notice of borrowing by the Company hereunder or Competitive Bid
Request shall constitute a certification by the Company to the effect set forth
in the preceding sentence (both as of the date of such notice or Competitive Bid
Request and as of the date of such borrowing).
SECTION 8. Representations and Warranties. The Company represents and
warrants to the Lenders and the Administrative Agent as follows (including, in
the case of any representation or warranty made as of the Closing Date, both
before and immediately after giving effect to the Acquisition):
8.01 Corporate Existence. Each of the Company and its Subsidiaries: (a)
is a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation; (b) has all requisite corporate
power, and has all governmental licenses, authorizations, consents and approvals
necessary to own its assets and carry on its business as now being or as
proposed to be conducted, except in the case of such licenses, authorizations,
consents and approvals, where the failure to obtain them would not have a
Material Adverse Effect; and (c) is qualified to do business in all
jurisdictions in which the nature of the business conducted by it makes such
qualification necessary and where failure so to qualify would have a Material
Adverse Effect.
8.02 Information. (a) All information heretofore furnished by the
Company to the Administrative Agent or any Lender for purposes of or in
connection with this Agreement or any transaction contemplated hereby did not as
of the date thereof and will not as of the Closing Date contain any untrue
statement of a material fact or assumption or omit to state a material fact or
34
40
assumption necessary in order to make the statements contained therein not
misleading; provided that (i) the Company makes no representation as to any
materials prepared by or on behalf of Tremco Incorporated in connection with the
offer for sale of Tremco Incorporated and (ii) although the management of the
Company believes that the projections presented in the pro forma consolidated
balance sheet of the Company and its Subsidiaries as of May 31, 1997 are
reasonable, they were not prepared in accordance with GAAP and the Company makes
no representation as to their attainability.
(b) Without limiting the generality of paragraph (a):
(i) The audited consolidated balance sheet of the Company and
its Subsidiaries as of May 31, 1996 and the audited consolidated
statements of income, shareholders' equity and cash flows for the
fiscal year ended May 31, 1996 (collectively, the "FINANCIAL
STATEMENTS") have been prepared in accordance with generally accepted
accounting principles consistently applied. The Financial Statements
fairly present the financial position of the Company and its
Subsidiaries as of May 31, 1996 and the results of their operations and
their cash flows for the fiscal year ended May 31, 1996 in conformity
with generally accepted accounting principles.
(ii) The unaudited consolidated balance sheet of the Company
and its Subsidiaries as of November 30, 1996 and the unaudited
consolidated statements of income, shareholders' equity and cash flows
for the six months then ended have been prepared in accordance with
generally accepted accounting principles consistently applied, and
fairly present the financial position of the Company and its
Subsidiaries as of November 30, 1996 and the results of their
operations and their cash flows for the six months then ended in
conformity with generally accepted accounting principles (subject to
normal year-end adjustments).
(iii) The Company and its Subsidiaries did not on the date of
the balance sheet referred to in clause (ii) above, and will not on the
Closing Date, have any material contingent liabilities, material
liabilities for taxes, unusual and material forward or long-term
commitments or material unrealized or anticipated losses from any
unfavorable commitments, except as referred to or reflected or provided
for in said balance sheet.
(c) The Company has disclosed to the Lenders in writing any and all
facts (other than general economic and industry conditions) which have or may
have a Material Adverse Effect.
35
41
(d) Since November 30, 1996 no event has occurred and no condition has
come into existence which has had, or is reasonably likely to have, a Material
Adverse Effect.
8.03 Litigation. Except as disclosed in the Disclosure Documents, there
are no legal or arbitral proceedings or any proceedings by or before any
governmental or regulatory authority or agency, now pending or, to the knowledge
of the Company, threatened against or affecting the Company or any of its
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect or which in any manner draw into question the validity of the Credit
Agreement or the Notes. The disclosure of litigation to the Lenders pursuant to
this Section does not necessarily mean that such litigation is of the type
described in this Section or that the Company believes that such litigation has
any merit whatsoever.
8.04 No Breach. None of the execution and delivery of the Basic
Documents, the consummation of the Acquisition or the transactions therein
contemplated or compliance with the terms and provisions thereof will conflict
with or result in a breach of, or require any consent under, the Articles of
Incorporation or Codes of Regulation or comparable instruments of the Company or
any of its Subsidiaries, or any applicable law or regulation, or any order,
writ, injunction or decree of any court or governmental authority or agency, or
any Basic Document or other material agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which it is bound or to
which it is subject, or constitute a default under any such material agreement
or instrument, or result in the creation or imposition of any Lien upon any of
the revenues or assets of the Company or any of its Subsidiaries pursuant to the
terms of any such agreement or instrument.
8.05 Corporate Action. The Company has all necessary corporate power
and authority to consummate the Acquisition and to execute, deliver and perform
its obligations under the Basic Documents to which it is a party; the
consummation of the Acquisition and the execution, delivery and performance by
the Company of the Basic Documents to which it is a party have been duly
authorized by all necessary corporate action; and this Agreement has been duly
and validly executed and delivered by the Company and constitutes the legal,
valid and binding obligation of the Company and, on the Closing Date, each of
the other Basic Documents to which the Company is to be a party will constitute
its legal, valid and binding obligation, in each case enforceable in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization or moratorium or other similar laws
relating to the enforcement of creditors' rights generally and by general
equitable principles.
36
42
8.06 Approvals. Each of the Company and its Subsidiaries has obtained
all authorizations, approvals and consents of, and has made all filings and
registrations with, any governmental or regulatory authority or agency and any
third party necessary for the consummation of the Acquisition and the execution,
delivery or performance by it of any Basic Document to which it is a party, or
for the validity or enforceability thereof.
8.07 Regulations U and X. Neither the Company 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 (within the meaning of Regulation U or X of the Board of Governors
of the Federal Reserve System) and no part of the proceeds of any Loan hereunder
will be used to purchase or carry any such margin stock.
8.08 ERISA. The Company and each member of the Controlled Group have
fulfilled their obligations under the minimum funding standards of ERISA and the
Code with respect to each Plan and are in compliance in all material respects
with the presently applicable provisions of ERISA and the Code with respect to
each Plan. No such Person has (i) sought a waiver of the minimum funding
standard under Section 412 of the Code in respect of any Plan, (ii) failed to
make any contribution or payment to any Plan or Multiemployer Plan, or made any
amendment to any Plan, which has resulted or could result in the imposition of a
Lien or the posting of a bond or other security under ERISA or the Code or (iii)
incurred any liability under Title IV of ERISA (other than a liability to the
PBGC for premiums under Section 4007 of ERISA).
8.09 Taxes. Each of the Company and its Subsidiaries has filed all
United States Federal income tax returns and all other material tax returns
which are required to be filed by it and has paid all taxes due pursuant to such
returns or pursuant to any assessment received by it, except to the extent the
same may be contested as permitted by Section 9.02 hereof. There are no material
tax disputes or contests pending as of the Closing Date. The charges, accruals
and reserves on the books of the Company and its Subsidiaries in respect of
taxes and other governmental charges are, in the opinion of the Company,
adequate.
8.10 Subsidiaries. Schedule I hereto is a complete and correct list, as
of the date of this Agreement, of all Subsidiaries of the Company and of all
Investments held by the Company or any of its Subsidiaries in any material joint
venture or other similar Person. The Company owns, free and clear of Liens, all
outstanding shares of its Subsidiaries and all such shares are validly issued,
fully paid and non-assessable and the Company (or the respective Subsidiary of
the Company) also owns, free and clear of Liens, all such Investments.
37
43
8.11 Investment Company Act. Neither the Company nor any of its
Subsidiaries is an investment company within the meaning of the Investment
Company Act of 1940, as amended, or, directly or indirectly, controlled by or
acting on behalf of any Person which is an investment company, within the
meaning of said Act.
8.12 Public Utility Holding Company Act. Neither the Company nor any of
its Subsidiaries is a "holding company", or an "affiliate" of a "holding
company" or a "subsidiary company" of a "holding company", within the meaning of
the Public Utility Holding Company Act of 1935, as amended.
8.13 Ownership and Use of Properties. Each of the Company and its
Subsidiaries will have on the Closing Date and at all times thereafter, legal
title or ownership of, or the right to use pursuant to enforceable and valid
agreements or arrangements, all tangible property, both real and personal, and
all franchises, licenses, copyrights, patents and know-how which is material to
the operation of its business as proposed to be conducted.
8.14 Environmental Matters. Except as disclosed in the Disclosure
Documents, neither the Company nor any of its Subsidiaries has (i) failed to
obtain any permits, certificates, licenses, approvals, registrations and other
authorizations which are required under any applicable Environmental Law where
failure to have any such permit, certificate, license, approval, registration or
authorization would have a Material Adverse Effect; (ii) failed to comply with
the terms and conditions of all such permits, certificates, licenses, approvals,
registrations and authorizations, and are also in compliance with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in any applicable Environmental
Law or in any notice or demand letter from any regulatory authority issued,
entered, promulgated or approved thereunder where failure to comply would have a
Material Adverse Effect; or (iii) failed to conduct its business so as to comply
in all respects with applicable Environmental Laws where failure to so comply
would have a Material Adverse Effect. The disclosure of any failure or alleged
failure to the Lenders pursuant to this Section does not necessarily mean that
such failure is of the type described in this Section or that any such
allegation has any merit whatsoever.
SECTION 9. Covenants. The Company agrees that, so long as any of the
Commitments are in effect and until payment in full of all Loans hereunder, all
interest thereon and all other amounts payable hereunder, unless the Majority
Lenders shall agree otherwise as contemplated by Section 12.05 hereof:
9.01 Information. The Company shall deliver to each of the Lenders:
38
44
(a) as soon as available and in any event within 90 days after the end
of each fiscal year of the Company, consolidated statements of income,
shareholders' equity and cash flows of the Company and its Subsidiaries for such
year and the related consolidated balance sheet as at the end of such year,
setting forth in each case in comparative form the corresponding figures for the
preceding fiscal year, and accompanied by an opinion thereon of ▇▇▇▇▇▇, ▇▇▇▇▇ &
▇▇▇▇ LLP or other independent certified public accountants of recognized
national standing, which opinion shall state that said consolidated financial
statements fairly present in all material respects the consolidated financial
condition and results of operations of the Company and its Subsidiaries as at
the end of, and for, such fiscal year;
(b) as soon as available and in any event within 60 days after the end
of each fiscal quarter of the Company other than the last fiscal quarter in each
fiscal year, consolidated statements of income, shareholders' equity and cash
flows of the Company and its Subsidiaries for such fiscal quarter and for the
portion of the fiscal year ended at the end of such fiscal quarter, and the
related consolidated balance sheet as at the end of such fiscal quarter,
accompanied, in each case, by a certificate of a Senior Officer, which
certificate shall state that said consolidated financial statements fairly
present in all material respects the consolidated financial condition and
results of operations of the Company in accordance with GAAP (except for
footnotes of the type required by the Securities and Exchange Commission to be
included in quarterly reports on Form 10-Q), consistently applied, as at the end
of, and for, such period (subject to normal year-end audit adjustments);
(c) promptly upon the mailing thereof to the shareholders of the
Company generally, copies of all financial statements, reports and proxy
statements so mailed;
(d) promptly upon the filing thereof, copies of all registration
statements (other than any registration statements on Form S-8 or its
equivalent) and any reports which the Company shall have filed with the
Securities and Exchange Commission;
(e) if and when the Company or any member of the Controlled Group (i)
gives or is required to give notice to the PBGC of any "reportable event" (as
defined in Section 4043 of ERISA) with respect to any Plan which might
constitute grounds for a termination of such Plan under Title IV of ERISA, or
knows that the plan administrator of any Plan has given or is required to give
notice of any such reportable event, a copy of the notice of such reportable
event given or required to be given to the PBGC, (ii) receives notice of
complete or partial withdrawal liability under Title IV of ERISA or notice that
any Multiemployer Plan is in reorganization, is insolvent or has been
terminated, a
39
45
copy of such notice; (iii) receives notice from the PBGC under Title IV of ERISA
of an intent to terminate or appoint a trustee to administer any Plan, a copy of
such notice; (iv) applies for a waiver of the minimum funding standard under
Section 412 of the Code, a copy of such application; (v) gives notice of intent
to terminate any Plan under Section 4041(c) of ERISA, a copy of such notice and
other information filed with the PBGC; (vi) gives notice of withdrawal from any
Plan pursuant to Section 4063 of ERISA, a copy of such notice; or (vii) fails to
make any payment or contribution to any Plan or Multiemployer Plan or makes any
amendment to any Plan which has resulted or could result in the imposition of a
Lien or the posting of a bond or other security, a certificate of a Senior
Officer setting forth details as to such occurrence and action, if any, which
the Company or member of the Controlled Group is required or proposes to take;
(f) promptly after management of the Company knows that any Default has
occurred and is continuing, a notice of such Default, describing the same in
reasonable detail; and
(g) from time to time such other information regarding the financial
condition, operations, prospects or business of the Company as the
Administrative Agent or any Lender through the Administrative Agent may
reasonably request.
The Company will furnish to each Lender, at the time it furnishes each
set of financial statements pursuant to paragraph (a) or (b) above, a
certificate of a Senior Officer (i) to the effect that, to the best of his
knowledge after due inquiry, no Default has occurred and is continuing (or, if
any Default has occurred and is continuing, describing the same in reasonable
detail) and (ii) setting forth in reasonable detail the computations necessary
to determine whether it was in compliance with Sections 9.08 to 9.12, inclusive,
and 9.16 hereof as of the end of the respective fiscal quarter or fiscal year.
9.02 Taxes and Claims. The Company will pay and discharge, and will
cause each of its Subsidiaries to pay and discharge, all material taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any property belonging to it, prior to the date on
which penalties attach thereto, and all lawful claims which, if unpaid, might
become a Lien upon the property of the Company or such Subsidiary, provided that
neither the Company nor such Subsidiary shall be required to pay any such tax,
assessment, charge, levy or claim the payment of which is being contested in
good faith and by proper proceedings if it maintains adequate reserves with
respect thereto and if such contest, proceedings and reserves have been
described in a certificate of a Senior Officer delivered to the Lenders.
40
46
9.03 Insurance. The Company will maintain, and will cause each of its
Subsidiaries to maintain, insurance with responsible companies in such amounts
and against such risks as is usually carried by companies of established repute
engaged in the same or similar businesses, owning similar properties, and
located in the same general areas as the Company and its Subsidiaries.
9.04 Maintenance of Existence; Conduct of Business. The Company will
preserve and maintain, and will cause each of its Subsidiaries to preserve and
maintain, its corporate existence and all of its rights, privileges and
franchises necessary or desirable in the normal conduct of its business, and
will conduct its business in a regular manner; provided that nothing herein
shall prevent (i) the merger and dissolution of any Subsidiary of the Company
into the Company so long as the Company is the surviving corporation, (ii) the
merger of any Subsidiary of the Company into any other Subsidiary of the
Company, or (iii) the sale of any Subsidiary of the Company other than the
following Subsidiaries and their successors: Dryvit Systems, Inc., a Rhode
Island corporation, Stonhard, Inc., a Delaware corporation, Carboline Company, a
Delaware corporation, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Incorporated, a New Jersey
corporation, Rust-Oleum Corporation, an Illinois corporation, and Tremco
Incorporated, an Ohio corporation. It is understood that the preservation and
maintenance of rights, privileges and franchises shall not prevent the Company
and its Subsidiaries from disposing of assets in any transaction not otherwise
prohibited pursuant to this Section 9.04 or Section 9.10 hereof.
9.05 Maintenance of and Access to Properties. The Company will keep,
and will cause each of its Subsidiaries to keep, all of its properties necessary
in its business in good working order and condition (having regard to the
condition of such properties at the time such properties were acquired by the
Company or such Subsidiary), ordinary wear and tear excepted, and proper books
of record and account in which full, true and correct entries in conformity with
GAAP shall be made of all dealings and transactions in relation to its business
activities, and will permit representatives of the Lenders to inspect such
properties and, upon reasonable notice and at reasonable times, to examine and
make extracts and copies from the books and records of the Company and any such
Subsidiary.
9.06 Compliance with Applicable Laws. The Company will comply, and will
cause each of its Subsidiaries to comply, with the requirements of all
applicable laws, rules, regulations and orders of any governmental body or
regulatory authority (including, without limitation, all Environmental Laws), a
breach of which would have a Material Adverse Effect, except where contested in
good faith and by proper proceedings.
41
47
9.07 Litigation. The Company will promptly give to the Administrative
Agent (which shall promptly notify each Lender) notice in writing of all
litigation and of all proceedings of which it is aware before any courts,
arbitrators or governmental or regulatory agencies affecting the Company or any
of its Subsidiaries which could reasonably be expected to have a Material
Adverse Effect.
9.08 Leverage Ratio. The Company will not permit Indebtedness of the
Company and its Subsidiaries, determined on a consolidated basis, on any date to
exceed 65% of the sum of such Indebtedness and consolidated shareholders' equity
of the Company and its Subsidiaries on such date.
9.09 Interest Coverage Ratio. The Company will not permit the ratio,
calculated as at the end of each fiscal quarter ending after the Closing Date
for the four fiscal quarters then ended, of EBIT for such period to Interest
Expense for such period to be less than 3:1.
9.10 Mergers, Asset Dispositions, Etc. The Company will not (i)
consolidate or merge with or into any other Person or (ii) sell, lease or
otherwise transfer, directly or indirectly, in one transaction or a series of
related transactions, all or substantially all of its business or assets;
provided that the Company may merge with another Person if (A) the Company is
the corporation surviving such merger and (B) immediately after giving effect to
such merger, no Default shall have occurred and be continuing.
9.11 Liens. The Company will not, and will not permit any of its
Subsidiaries to, create or suffer to exist any Lien upon any property or assets,
now owned or hereafter acquired, securing any Indebtedness or other obligation,
except:
(i) Liens existing on the Closing Date and securing
Indebtedness in an aggregate principal amount not exceeding $6,000,000;
(ii) Liens existing on other assets at the date of acquisition
thereof or which attach to such assets concurrently with or within 90
days after the acquisition thereof, securing Indebtedness incurred to
finance the acquisition thereof in an aggregate principal amount at any
time outstanding not exceeding $10,000,000;
(iii) any Lien existing on any asset of any corporation at the
time such corporation becomes a Subsidiary of the Company or is merged
or consolidated with or into the Company or one of its Subsidiaries and
not created in contemplation of such event;
42
48
(iv) any Lien arising out of the refinancing, extension,
renewal or refunding of any Indebtedness secured by any Lien permitted
by any of the foregoing clauses of this Section 9.11, provided that
such Indebtedness is not increased and is not secured by any additional
assets;
(v) other Liens arising in the ordinary course of the business
of the Company or such Subsidiary which are not incurred in connection
with the borrowing of money or the obtaining of advances or credit, do
not secure any obligation in an amount exceeding $10,000,000 and do not
materially detract from the value of its property or assets or
materially impair the use thereof in the operation of its business; and
(vi) Liens not otherwise permitted by the foregoing clauses of
this Section 9.11 securing Indebtedness in an aggregate principal or
face amount at any date not to exceed $10,000,000.
9.12 Investments. The Company will not, and will not permit any of its
Subsidiaries to, make or permit to remain outstanding any advances, loans or
other extensions of credit or capital contributions (other than prepaid expenses
in the ordinary course of business) to (by means of transfers of property or
assets or otherwise), or purchase or own any stocks, bonds, notes, debentures or
other securities of, any Person (all such transactions being herein called
"INVESTMENTS"), except: (i) operating deposit accounts; (ii) Liquid Investments;
(iii) subject to Section 9.13 hereof, Investments in accounts and notes
receivable acquired in the ordinary course of business as presently conducted;
(iv) Investments existing on the Closing Date in Subsidiaries or joint ventures,
and Investments after the Closing Date by First Colonial Insurance Company, a
wholly-owned Subsidiary of the Company, in the ordinary course of its business;
(v) Investments not otherwise permitted by the foregoing clauses of this Section
9.12 in Subsidiaries of the Company and in Persons which become Subsidiaries of
the Company as the result of such Investments; (vi) Investments not otherwise
permitted by the foregoing clauses of this Section 9.12 in joint ventures in an
aggregate amount not to exceed $25,000,000; and (vii) Investments not otherwise
permitted by the foregoing clauses of this Section 9.12 in an aggregate amount
not to exceed $5,000,000.
9.13 Transactions with Affiliates. Except as expressly permitted by
this Agreement the Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly: (i) make any Investment in an Affiliate of the
Company (other than a Subsidiary of the Company); (ii) transfer, sell, lease,
assign or otherwise dispose of any assets to an Affiliate of the Company (other
than a Subsidiary of the Company); (iii) merge into or consolidate with or
purchase or acquire assets from an Affiliate of the Company (other than a
Subsidiary of the Company); or (iv) enter into any other transaction directly or
indirectly with or for
43
49
the benefit of an Affiliate of the Company (other than a Subsidiary of the
Company) (including, without limitation, Guaranties and assumptions of
obligations of an Affiliate of the Company (other than a Subsidiary of the
Company)); provided that (a) any Affiliate of the Company who is an individual
may serve as a director, officer or employee of the Company and receive
reasonable compensation or indemnification in connection with his or her
services in such capacity; and (b) any transaction entered into by the Company
or a Subsidiary of the Company with an Affiliate of the Company which is not a
Subsidiary of the Company providing for the leasing of property, the rendering
or receipt of services or the purchase or sale of inventory and other assets in
the ordinary course of business must be for a monetary or business consideration
which would be substantially as advantageous to the Company or such Subsidiary
as the monetary or business consideration which would obtain in a comparable
arm's length transaction with a Person not an Affiliate of the Company.
9.14 Lines of Business. The Company and its Subsidiaries, taken as a
whole, shall not engage to any substantial extent in any line or lines of
business activity other than present or related product lines.
9.15 Environmental Matters. The Company will promptly give to the
Lenders notice in writing of any complaint, order, citation, notice or other
written communication from any Person with respect to, or if the Company becomes
aware after due inquiry of, (i) the existence or alleged existence of a
violation of any applicable Environmental Law or Environmental Liability at,
upon, under or within any property now or previously owned, leased, operated or
used by the Company or any of its Subsidiaries or any part thereof, or due to
the operations or activities of the Company, any Subsidiary on or in connection
with such property or any part thereof (including receipt by the Company or any
Subsidiary of any notice of the happening of any event involving the Release of
a reportable quantity under any applicable Environmental Law or cleanup of any
Hazardous Substance), (ii) any Release on such property or any part thereof in a
quantity that is reportable under any applicable Environmental Law, (iii) the
commencement of any cleanup pursuant to or in accordance with any applicable
Environmental Law of any Hazardous Substances on or about such property or any
part thereof and (iv) any pending or threatened proceeding for the termination,
suspension or non-renewal of any permit required under any applicable
Environmental Law, in each case which individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect.
9.16 Lease Payments. Neither the Company nor any of its Subsidiaries
will incur or assume (whether pursuant to a Guaranty or otherwise) any liability
for rental payments under a lease with a lease term (as defined in Financial
Accounting Standards No. 13 of the Financial Accounting Standards Board, as in
effect on the
44
50
date hereof) if (i) such lease is of an asset previously owned by the Company or
any of its Subsidiaries and (ii) after giving effect thereto, the aggregate
amount of minimum lease payments that the Company and its Subsidiaries have so
incurred or assumed (excluding payments in respect of a lease (whether now or
hereafter existing) of Rust-Oleum Corporation's corporate headquarters located
in Vernon Hills, Illinois) will exceed, on a consolidated basis, $5,000,000 for
any calendar year under all such leases.
SECTION 10. Defaults.
10.01 Events of Default. If one or more of the following events (herein
called "EVENTS OF DEFAULT") shall occur and be continuing:
(a) default in the payment of (i) any principal of any Loan
when due or of (ii) any interest on any Loan or other amount payable
hereunder within five Business Days after the due date thereof; or
(b) the Company or any of its Subsidiaries shall default in
the payment when due of any principal of or interest on Indebtedness
having an aggregate outstanding principal amount of at least
$20,000,000 (other than the Loans); or any event or condition shall
occur which results in the acceleration of the maturity of any such
Indebtedness or enables (or, with the giving of notice or lapse of time
or both, would enable) the holder of any such Indebtedness or any
Person acting on such holder's behalf to accelerate the maturity
thereof; or
(c) any representation or warranty made or deemed made by the
Company or any Subsidiary herein or in any certificate furnished to any
Lender or the Administrative Agent pursuant to the provisions hereof,
shall prove to have been false or misleading in any material respect as
of the time made or furnished; or
(d) (i) the Company shall default in the performance of any of
its obligations under Section 2.07 or Sections 9.08 through 9.13 and
9.16 hereof; or (ii) the Company or any Subsidiary shall default in the
performance of any of its other obligations hereunder, and such default
described in this subclause (ii) shall continue unremedied for a period
of 30 days after notice thereof to the Company by the Administrative
Agent or any Lender (through the Administrative Agent); or
(e) the Company or any of its Significant Subsidiaries shall
admit in writing its inability to, or be generally unable to, pay its
debts as such debts become due; or
45
51
(f) the Company or any of its Significant Subsidiaries shall
(i) apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of itself
or of all or a substantial part of its property, (ii) make a general
assignment for the benefit of its creditors, (iii) commence a voluntary
case under the Bankruptcy Code, (iv) file a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or readjustment of debts,
(v) fail to controvert in a timely and appropriate manner, or acquiesce
in writing to, any petition filed against it in an involuntary case
under the Bankruptcy Code, or (vi) take any corporate or partnership
action for the purpose of effecting any of the foregoing; or
(g) a proceeding or case shall be commenced, without the
application or consent of the Company or any of its Significant
Subsidiaries in any court of competent jurisdiction, seeking (i) its
liquidation, reorganization, dissolution or winding-up, or the
composition or readjustment of its debts, (ii) the appointment of a
trustee, receiver, custodian, liquidator or the like of such Person or
of all or any substantial part of its assets, or (iii) similar relief
in respect of such Person under any law relating to bankruptcy,
insolvency, reorganization, winding-up, or composition or adjustment of
debts, and such proceeding or case shall continue undismissed, or an
order, judgment or decree approving or ordering any of the foregoing
shall be entered and continue unstayed and in effect, for a period of
90 days; or an order for relief against such Person shall be entered in
an involuntary case under the Bankruptcy Code; or
(h) a final judgment or judgments for the payment of money
shall be rendered by a court or courts against the Company or any of
its Subsidiaries in excess of $35,000,000 in the aggregate (excluding
any amount of such judgment as to which an Acceptable Insurer has
acknowledged liability), and the same shall not be discharged (or
provision shall not be made for such discharge), or a stay of execution
thereof shall not be procured, within 10 days from the date of entry
thereof, or the Company or such Subsidiary shall not, within said
period of 10 days, or such longer period during which execution of the
same shall have been stayed, appeal therefrom and cause the execution
thereof to be stayed during such appeal; or
(i) the Company or any member of the Controlled Group shall
fail to pay when due an amount or amounts aggregating in excess of
$20,000,000 for which it shall have become liable under Title IV of
ERISA; or notice of intent to terminate a Plan or Plans having
aggregate Unfunded Liabilities in excess of $20,000,000 shall be filed
under Title IV
46
52
of ERISA by the Company or any member of the Controlled Group, any plan
administrator or any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate, to impose
liability (other than for premiums under Section 4007 of ERISA) in
respect of, or to cause a trustee to be appointed to administer, any
Plan or Plans having aggregate Unfunded Liabilities in excess of
$20,000,000; or a condition shall exist by reason of which the PBGC
would be entitled to obtain a decree adjudicating that any Plan or
Plans having aggregate Unfunded Liabilities in excess of $20,000,000
must be terminated; or there shall occur a complete or partial
withdrawal from, or a default, within the meaning of Section 4219(c)(5)
of ERISA, with respect to, one or more Multiemployer Plans which could
cause the Company or one or more members of the Controlled Group to
incur a current payment obligation in excess of $20,000,000; or
(j) (i) as a result of one or more transactions after the date
of this Agreement, any "person" or "group" of persons shall have
"beneficial ownership" (within the meaning of Section 13(d) or 14(d) of
the Securities Exchange Act of 1934, as amended, and the applicable
rules and regulations thereunder) of 30% or more of the outstanding
common stock of the Company; or (ii) without limiting the generality of
the foregoing, during any period of 12 consecutive months, commencing
after the date of this Agreement, individuals who at the beginning of
such 12-month period were directors of the Company shall cease for any
reason to constitute a majority of the board of directors of the
Company;
THEREUPON: the Administrative Agent may (and, if directed by the Majority
Lenders, shall) by notice to the Company (a) declare the Commitments terminated
(whereupon the Commitments shall be terminated) and/or (b) declare the principal
amount then outstanding of and the accrued interest on the Loans and commitment
fees and all other amounts payable hereunder and under the Notes to be forthwith
due and payable, whereupon such amounts shall be and become immediately due and
payable, without other notice, presentment, demand, protest or other formalities
of any kind (all of which are hereby expressly waived by the Company); provided
that in the case of the occurrence of an Event of Default with respect to the
Company referred to in clause (f) or (g) of this Section 10.01, the Commitments
shall be automatically terminated and the principal amount then outstanding of
and the accrued interest on the Loans and commitment fees and all other amounts
payable hereunder and under the Notes shall be and become automatically and
immediately due and payable, without notice (including, without limitation,
notice of intent to accelerate), presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by the
Company. Each Lender hereby agrees that, unless so requested by the
Administrative Agent
47
53
with the consent of the Majority Lenders, it shall not take or cause to be taken
any action to declare the Commitments terminated or to declare payable or
collect the amounts referred to above that is independent from any action taken
or to be taken by the Administrative Agent, unless such action is taken in
connection with an Event of Default described in clause (a), (e), (f) or (g) of
this Section 10.01.
SECTION 11. The Administrative Agent.
11.01 Appointment, Powers and Immunities. Each Lender hereby
irrevocably appoints and authorizes the Administrative Agent to act as its agent
hereunder and under the Notes with such powers as are specifically delegated to
the Administrative Agent by the terms hereof and thereof, together with such
other powers as are reasonably incidental thereto. The Administrative Agent
(which term as used in this Section 11 shall include reference to its affiliates
and its and its affiliates' officers, directors, employees and agents): (a)
shall have no duties or responsibilities except those expressly set forth in
this Agreement and the Notes, and shall not by reason of this Agreement or any
Note be a trustee for any Lender; (b) shall not be responsible to the Lenders
for any recitals, statements, representations or warranties contained in this
Agreement or the Notes, or in any certificate or other document referred to or
provided for in, or received by any of them under, this Agreement or any the
Notes, or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any Note or any other document referred to or
provided for herein or therein or for any failure by the Company or any of its
Subsidiaries or any other Person to perform any of its obligations hereunder or
thereunder; (c) shall not be required to initiate or conduct any litigation or
collection proceedings hereunder or under any Note except to the extent
requested by the Majority Lenders, and (d) shall not be responsible for any
action taken or omitted to be taken by it hereunder or under any Note or any
other document or instrument referred to or provided for herein or therein or in
connection herewith or therewith, except for its own gross negligence or willful
misconduct. The Administrative Agent may employ agents and attorneys-in-fact and
shall not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care.
11.02 Reliance by Administrative Agent. The Administrative Agent shall
be entitled to rely upon any certification, notice or other communication
(including any thereof by telephone, telex, telegram or cable) believed by it to
be genuine and correct and to have been signed or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by the Administrative Agent.
As to any matters not expressly provided for by this Agreement or the Notes, the
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder and thereunder in accordance with instructions
signed by the Majority Lenders and
48
54
such instructions of the Majority Lenders and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders.
11.03 Defaults. The Administrative Agent shall not be deemed to have
knowledge of the occurrence of a Default (other than the non-payment of
principal of or interest on Loans or facility fees) unless the Administrative
Agent has received notice from a Lender or the Company specifying such Default
and stating that such notice is a "Notice of Default". In the event that the
Administrative Agent receives such a notice of the occurrence of a Default, the
Administrative Agent shall give prompt notice thereof to the Lenders (and shall
give each Lender prompt notice of each such non-payment). The Administrative
Agent shall (subject to Section 11.07 hereof) take such action with respect to
such Default as shall be directed by the Majority Lenders, provided that, unless
and until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default as it shall deem
advisable in the best interests of the Lenders.
11.04 Rights as a Lender. With respect to its Commitment and the Loans
made by it, Chase in its capacity as a Lender hereunder shall have the same
rights and powers hereunder as any other Lender and may exercise the same as
though it were not acting as the Administrative Agent, and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include the
Administrative Agent in its individual capacity. The Administrative Agent may
(without having to account therefor to any Lender) accept deposits from, lend
money to and generally engage in any kind of banking, trust or other business
with the Company (and any of its Affiliates) as if it were not acting as the
Administrative Agent and the Administrative Agent may accept fees and other
consideration from the Company (in addition to the agency fees and arrangement
fees heretofore agreed to between the Company, the Administrative Agent) for
services in connection with this Agreement or otherwise without having to
account for the same to the Lenders.
11.05 Indemnification. The Lenders agree to indemnify the
Administrative Agent (to the extent not reimbursed under Section 12.03 or 12.04
hereof, but without limiting the obligations of the Company under said Sections
12.03 and 12.04), ratably in accordance with their respective Commitments, for
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of this Agreement or
any other Basic Document or any other documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby (including,
without limitation, the costs and expenses which the Company is obligated to pay
under Sections 12.03
49
55
and 12.04 hereof but excluding, unless a Default has occurred and is continuing,
normal administrative costs and expenses incident to the performance of its
agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents, provided that no Lender shall be liable
for any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the party to be indemnified.
11.06 Non-Reliance on Administrative Agent and Other Lenders. Each
Lender agrees that it has, independently and without reliance on the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Company and decision to enter into this Agreement and that it will,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own analysis and decisions in taking or not
taking action under this Agreement or its Note or Notes. The Administrative
Agent shall not be required to keep itself informed as to the performance or
observance by the Company or any other Person of this Agreement or any of the
other Basic Documents or any other document referred to or provided for herein
or therein or to inspect the properties or books of the Company or any other
Person. Except for notices, reports and other documents and information
expressly required to be furnished to the Lenders by the Administrative Agent
hereunder or under the Notes, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the Company or any
other Person (or any of their affiliates) which may come into the possession of
the Administrative Agent.
11.07 Failure to Act. Except for action expressly required of the
Administrative Agent hereunder and under any Note, the Administrative Agent
shall in all cases be fully justified in failing or refusing to act hereunder
and thereunder unless it shall receive further assurances to its satisfaction by
the Lenders of their indemnification obligations under Section 11.05 hereof
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action.
11.08 Resignation or Removal of Administrative Agent. Subject to the
appointment and acceptance of a successor Administrative Agent as provided
below, the Administrative Agent may resign at any time by giving notice thereof
to the Lenders and the Company and the Administrative Agent may be removed at
any time with or without cause by the Majority Lenders. Upon any such
resignation or removal, the Majority Lenders shall have the right to appoint a
successor Administrative Agent reasonably acceptable to the Company. If no
successor Administrative Agent shall have been so appointed by the Majority
50
56
Lenders and shall have accepted such appointment within 30 days after the
retiring Administrative Agent's giving of notice of resignation or the Majority
Lenders' removal of the retiring Administrative Agent (the "NOTICE DATE"), then
the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent reasonably acceptable to the Company. Any
successor Administrative Agent shall be (i) a Lender or (ii) if no Lender has
accepted such appointment within 40 days after the Notice Date, a bank which has
an office in New York, New York with a combined capital and surplus of at least
$250,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. After any retiring Administrative Agent's resignation or removal
hereunder as Administrative Agent, the provisions of this Section 11 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 the Administrative Agent.
11.09 Documentation Agent. National City Bank shall not have any
responsibility, obligation or liability under this Agreement in its capacity as
Documentation Agent.
SECTION 12. Miscellaneous.
12.01 Waiver. No failure on the part of the Administrative Agent or any
Lender to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power or privilege under this Agreement or the Notes
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege thereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The remedies
provided in this Agreement and the Notes are cumulative and not exclusive of any
remedies provided by law.
12.02 Notices. All notices and other communications provided for herein
(including, without limitation, any modifications of, or waivers or consents
under, this Agreement) shall be given or made by telex, telegraph, telecopy,
cable or other writing and telexed, telecopied, telegraphed, cabled, mailed or
delivered to the intended recipient at the "Address for Notices" specified below
its name on the signature pages hereof; or, as to any party, at such other
address as shall be designated by such party in a notice to the Company and the
Administrative Agent given in accordance with this Section 12.02. Except as
otherwise provided in this Agreement, all such communications shall be deemed to
have been duly given when transmitted by telex or telecopier, delivered to the
telegraph or cable office
51
57
or personally delivered or, in the case of a mailed notice, upon receipt, in
each case given or addressed as aforesaid.
12.03 Expenses, Etc. If an Event of Default occurs, the Company agrees
to pay or reimburse each of the Lenders and the Administrative Agent for paying
all costs and expenses of each of the Lenders and the Administrative Agent
(including counsels' fees) incurred as a result of such Event of Default and
collection, enforcement, bankruptcy, insolvency and other proceedings resulting
therefrom.
12.04 Indemnification. The Company shall indemnify the Administrative
Agent, the Lenders and each affiliate thereof and their respective directors,
officers, employees, attorneys and agents from, and hold each of them harmless
against, any and all losses, liabilities, claims or damages to which any of them
may become subject, insofar as such losses, liabilities, claims or damages arise
out of or result from (i) any actual or proposed use by the Company of the
proceeds of any extension of credit by any Lender hereunder or breach by the
Company of this Agreement or any other Basic Document, (ii) any Environmental
Liabilities or (iii) any investigation, litigation or other proceeding
(including any threatened investigation or proceeding) relating to the
foregoing, whether or not the indemnified Person is a party thereto, and the
Company shall reimburse the Administrative Agent and each Lender, and each
affiliate thereof and their respective directors, officers, employees and
agents, upon demand for any expenses (including legal fees and fees of
engineers, environmental consultants and similar technical personnel) incurred
in connection with any such investigation or proceeding; but excluding any such
losses, liabilities, claims, damages or expenses incurred by reason of the gross
negligence or willful misconduct of the Person to be indemnified.
12.05 Amendments, Etc. No amendment or waiver of any provision of this
Agreement or the Notes, nor any consent to any departure by the Company
therefrom, shall in any event be effective unless the same shall be agreed or
consented to by the Majority Lenders and the Company, and each such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, that no amendment, waiver or consent shall
(i) increase any Commitment of any Lender or subject any Lender to any
additional obligations, without the written consent of such Lender; (ii) reduce
the principal of, or interest on, any Loan, or any fees hereunder, without the
written consent of each Lender affected thereby; (iii) postpone any date fixed
for any payment of principal of, or interest on, any Loan, or any fee hereunder
pursuant to Sections 2.03, 4.01 or 4.02 hereof, without the written consent of
each Lender affected thereby; (iv) change the percentage of any of the
Commitments or of the aggregate unpaid principal amount of any of the Loans, or
the number of Lenders, which
52
58
shall be required for the Lenders or any of them to take any action under this
Agreement, without the written consent of each Lender; or (v) change any
provision contained in Sections 2.07, 6, 12.03 or 12.04 hereof or this Section
12.05 or Section 12.08 hereof. Notwithstanding anything in this Section 12.05 to
the contrary, no amendment, waiver or consent shall be made with respect to
Section 11 without the consent of the Administrative Agent.
12.06 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns except that the Company may not assign its rights or obligations
hereunder or under the Notes without the prior written consent of all of the
Lenders. Each Lender may assign any Loan or Loans or all or any part of its
Commitment (i) to any affiliate thereof, (ii) to any other Lender, or (iii) with
the consent of the Company and the Administrative Agent, which consents shall
not be unreasonably withheld, to any other bank or financial institution or
fund; provided that (x) any assignment shall not be less than $10,000,000 or, if
less, shall constitute an assignment of all of such Lender's Commitment and
Loans and (y) the Company shall be deemed to be reasonable in withholding
consent if the assignee is not exempt from United States withholding taxes. Upon
execution by the assignor and the assignee of an instrument pursuant to which
the assignee assumes such rights and obligations, payment by such assignee to
such assignor of an amount equal to the purchase price agreed between such
assignor and such assignee and delivery to the Administrative Agent and the
Company of an executed copy of such instrument together with payment by such
assignee to the Administrative Agent of a processing fee of $2,500, such
assignee shall have, to the extent of such assignment (unless otherwise provided
therein), the same rights and benefits as it would have if it were a Lender
hereunder and the assignor shall be, to the extent of such assignment (unless
otherwise provided therein) released from its obligations under this Agreement.
Upon the consummation of such assignment, the Company shall make appropriate
arrangements so that, if required, new Notes are issued to the assignor and the
assignee. If such assignee is not incorporated under the laws of the United
States of America or a state thereof, it shall, prior to the effectiveness of
the applicable instrument of assumption, deliver to the Company and the
Administrative Agent certification as to exemption from deduction or withholding
of any United States federal income taxes in accordance with Section 5.08(f).
Each Lender may (without the consent of any other party to this Agreement) sell
participations in all or any part of any Loan or Loans made by it to another
bank or other entity, in which event the participant shall not have any rights
under this Agreement (except as provided in the next succeeding sentence
hereof), or in the case of a Loan, such Lender's Note (the participant's rights
against such Lender in respect of such participation to be those set forth in
the agreement executed by such Lender in favor of the participant relating
thereto, which agreement shall not give the participant the right to consent to
any
53
59
modification, amendment or waiver other than one described in clause (i), (ii)
or (iii) of Section 12.05 hereof). The Company agrees that each participant
shall be entitled to the benefits of Sections 5.07 and 6 with respect to its
participation; provided that no participant shall be entitled to receive any
greater amount pursuant to such Sections than the transferor Lender would have
been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such participant had no such transfer
occurred. Each Lender may furnish any information concerning the Company and its
Subsidiaries in the possession of such Lender from time to time to assignees and
participants (including prospective assignees and participants) which have
agreed in writing to be bound by the provisions of Section 12.07 hereof. The
Administrative Agent and the Company may, for all purposes of this Agreement,
treat any Lender as the holder of any Note drawn to its order (and owner of the
Loans evidenced thereby) until written notice of assignment or other transfer
shall have been received by them from such Lender. Notwithstanding anything to
the contrary, any Lender may at any time assign all or any portion of its rights
under this Agreement and its Notes to a Federal Reserve Bank. No such assignment
shall release the transferor Lender from its obligations hereunder.
12.07 Confidentiality. Each Lender agrees to keep confidential any
information delivered or made available by the Company to it prior to the end of
the term of this Agreement which is clearly indicated to be confidential
information; provided that nothing herein shall prevent any Lender from
disclosing such information (i) to any other Lender, (ii) to its officers,
directors, employees, affiliates, agents, attorneys and accountants who have a
need to know such information in accordance with customary banking practices and
who receive such information having been made aware of the restrictions set
forth in this Section, (iii) upon the order of any court or administrative
agency, (iv) upon the request or demand of any regulatory agency or authority
having jurisdiction over such Lender, (v) which has been publicly disclosed,
(vi) to the extent reasonably required in connection with any litigation to
which the Administrative Agent, any Lender, the Company or their respective
affiliates may be a party, (vii) to the extent reasonably required in connection
with the exercise of any remedy hereunder, (viii) to such Lender's legal counsel
and independent auditors, and (ix) to any actual or proposed participant or
assignee of all or part of its rights hereunder which has agreed in writing to
be bound by the provisions of this Section 12.07.
12.08 Survival. The obligations of the Company under Sections 5.08,
6.01, 6.05, 12.03 and 12.04 hereof and the obligations of the Lenders under
Sections 11.05 and 12.07 shall survive the repayment of the Loans and the
termination of the Commitments.
54
60
12.09 Captions. The table of contents and the captions and section
headings appearing herein are included solely for convenience of reference and
are not intended to affect the interpretation of any provision of this
Agreement.
12.10 Counterparts; Integration. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any of the parties hereto may execute this Agreement by
signing any such counterpart. This Agreement constitutes the entire agreement
and understanding among the parties hereto and supersedes any and all prior
agreements and understandings, oral and written, relating to the subject matter
hereof (except to the extent specific reference is made to any such agreement in
Section 2.03 hereof).
12.11 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.
THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK. THE COMPANY HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY
FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE COMPANY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN
SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH OF THE COMPANY, THE ADMINISTRATIVE
AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
55
61
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
RPM, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Title: Executive Vice President -
Chief Financial Officer
Address for Notices:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Executive Vice President -
Chief Financial Officer
Telephone Number: ▇▇▇-▇▇▇-▇▇▇▇ or
▇▇▇-▇▇▇-▇▇▇▇
Telecopy Number: ▇▇▇-▇▇▇-▇▇▇▇
56
62
Commitment: THE CHASE MANHATTAN BANK
$70,000,000.00
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------
Title: Vice President
Address for Notices:
The Chase Manhattan Bank
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Offices for
all Loans:
The Chase Manhattan Bank
1 Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Loan and Agency Services
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
57
63
Commitment: NATIONAL CITY BANK
$60,000,000.00
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
Title: Vice President
Address for Notices:
National City Bank
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
LOC #2104
Attention: ▇▇▇▇▇ ▇. Cable
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Offices for all Loans:
National City Bank
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
LOC #2104
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
58
64
Commitment: CREDIT LYONNAIS CHICAGO
BRANCH
$55,000,000.00
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Title: Senior Vice President
Branch Manager
Address for Notices:
Credit Lyonnais Chicago Branch
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇/
▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Office for all Loans
Credit Lyonnais Chicago Branch
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
59
65
Commitment: THE FIRST NATIONAL BANK
OF CHICAGO
$55,000,000.00
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Title: First Vice President
Address for Notices:
First Chicago Capital Markets
Corporate Banking-Midwest
Attn: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Office for all Loans:
The First National Bank of Chicago
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇/▇-▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
60
66
Commitment: KEYBANK NATIONAL ASSOCATION
$55,000,000.00
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
---------------------------
Title: Vice President
Address for Notices:
KeyBank National Association
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ France
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Office for all Loans:
KeyBank National Association
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ France
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
61
67
Commitment: PNC BANK, NATIONAL ASSOCIATION
$55,000,000.00
By /s/ ▇.▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------
Title: Vice President
Address for Notices:
PNC Bank, National Association
1 PNC Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇.▇. ▇▇▇▇▇▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Office for all Loans:
PNC Bank, National Association
1 PNC Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
62
68
Commitment: NATIONSBANK, N.A.
$40,000,000.00
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------
Title: Vice President
Address for Notices:
NationsBank, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Office for all Loans:
NationsBank, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
63
69
Commitment: ▇▇▇▇▇▇ TRUST AND SAVINGS BANK
$40,000,000.00
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------
Title: Vice President
Address for Notices:
▇▇▇▇▇▇ Trust and Savings Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Office for all Loans:
▇▇▇▇▇▇ Trust and Savings Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
64
70
Commitment: WACHOVIA BANK OF GEORGIA, N.A.
$40,000,000.00
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------
Title: Vice President
Address for Notices:
Wachovia Bank of Georgia, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Office for all Loans:
Wachovia Bank of Georgia, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
65
71
Commitment: MELLON BANK
$30,000,000.00
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Title: Vice President
Address for Notices:
Mellon Bank
One Mellon Bank Center
Room 151-4401
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Office for all Loans:
Mellon Bank
One Mellon Bank Center
Room 151-4401
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
TOTAL COMMITMENTS
$500,000,000.00
66
72
THE CHASE MANHATTAN BANK,
as Administrative Agent
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------
Title: Vice President
Address for Notices:
The Chase Manhattan Bank
1 Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Loan and Agency Services
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Copy to:
The Chase Manhattan Bank
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Telecopy Number:(▇▇▇) ▇▇▇-▇▇▇▇
67
73
PRICING SCHEDULE
The facility fee rate and "Applicable Margin" for each Type of
Revolving Loan for any day are the respective percentages set forth below in the
applicable row under the column corresponding to the Status that exists on such
day:
===================================================================================================================
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ I II III IV V VI
-------------------------------------------------------------------------------------------------------------------
Facility Fee Rate .075% .10% .125% .175% .225% .35%
-------------------------------------------------------------------------------------------------------------------
Euro-Dollar Revolving Loans .175% .20% .25% .275% .375% .525%
-------------------------------------------------------------------------------------------------------------------
CD Loans .30% .325% .375% .40% .50% .65%
-------------------------------------------------------------------------------------------------------------------
Base Rate Loans 0% 0% 0% 0% 0% 0%
===================================================================================================================
For purposes of this Schedule, the following terms have the following
meanings:
"Applicable Indebtedness" means senior unsecured long-term debt of the
Company.
"Level I Status" exists at any date if, at such date, the Applicable
Indebtedness is rated A- or higher by S&P and A3 or higher by Moody's.
"Level II Status" exists at any date if, at such date, (i) the
Applicable Indebtedness is rated BBB+ or higher by S&P and Baa1 or higher by
Moody's and (ii) Level I Status does not exist.
"Level III Status" exists at any date if, at such date, (i) the
Applicable Indebtedness is rated BBB or higher by S&P and Baa2 or higher by
Moody's and (ii) neither Level I Status nor Level II Status exists.
"Level IV Status" exists at any date if, at such date, (i) the
Applicable Indebtedness is rated BBB- or higher by S&P and Baa3 or higher by
Moody's and (ii) none of Level I Status, Level II Status or Level III Status
exists.
74
"Level V Status" exists at any date if, at such date, (i) the
Applicable Indebtedness is rated BB+ or higher by S&P and Ba1 or higher by
Moody's and (ii) none of Level I Status, Level II Status, Level III Status or
Level IV Status exists.
"Level VI Status" exists at any date if, at such date, no other Status
exists.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"S&P" means Standard & Poor's Ratings Services, a division of the
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Status" refers to the determination of which of Level I Status, Level
II Status, Level III Status, Level IV Status, Level V Status or Level VI Status
exists at any date.
The credit ratings to be utilized for purposes of this Schedule are
those assigned to senior unsecured long-term debt securities without third-party
credit enhancement, and any rating assigned to any other debt security shall be
disregarded. The rating in effect at any date is that in effect at the close of
business on such date.
2
75
SCHEDULE I
The following is a list of the direct and indirect operating subsidiaries of and
joint ventures and similar persons invested in by RPM, Inc. as of February 1,
1997.
SUBSIDIARIES
Percentage of
Securities
Jurisdiction of Owned
NAME Incorporation BY RPM, INC.(1, 2, 3, 22, 23)
---- ------------- -----------
Bondex International, Inc. Ohio 100%
Consolidated Coatings Corporation Ohio 100%(4)
Day-Glo Color Corp. Ohio 100%
Kop-Coat, Inc. Ohio 100%(5)
Mameco International, Inc. Ohio 100%(6)
Republic Powdered Metals, Inc. Ohio 100%(7)
RPM of North Carolina, Inc. Ohio 100%(7)
Bondo/Mar-Hyde Corporation Ohio 100%
Euchem, Inc. Ohio 100%(8)
Westgate Advertising, Inc. Ohio 100%
BSP Systems, Inc. Delaware 100%(7)
Carboline Company Delaware 100%(9)
Carboline International Corporation Delaware 100%(9)
RPM World Trade, Ltd. Virgin Islands 100%(10)
Stonhard, Inc. Delaware 100%(11)
Wisconsin Protective Coatings Corp. Delaware 100%(12)
American Emulsions Co., Inc. Georgia 100%(14)
Lubraspin Corporation Georgia 100%(14)
Select Dye & Chemical, Inc. Georgia 100%(14)
76
Design/Craft Fabric Corporation Illinois 100%
Chemical Specialties Maryland 100%
Manufacturing Corporation
RPM of Mass, Inc. Massachusetts 100%(15)
▇▇▇▇▇▇-▇▇▇▇▇, Inc. Massachusetts 100%(15)
Westfield Coatings Corporation Massachusetts 100%(15)
Craft House Corporation Michigan 100%(16)
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., New Jersey 100%(13)
Incorporated
Alox Corporation New York 100%(5)
Floquil-▇▇▇▇▇ S Color Corp. New York 100%
Mohawk Finishing Products, Inc. New York 100%(17)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Inc. New York 100%(13)
Chemical Coatings, Inc. North Carolina 100%
Paramount Technical Products, Inc. South Dakota 100%(6)
▇▇▇▇▇▇ Paint Mfg. Co. Texas 100%(12)
Sentry Polymers, Inc. Texas 100%
First Colonial Insurance Company Vermont 100%
Bondex International (Canada) Ltd. Canada 100%
Stonhard (Canada) Ltd. Canada 100%(11)
Stonhard France SARL France 100%(22)
Stonhard GbmH Germany 100%(11)
Stonhard S.A. de C.V. Mexico Mexico 100%(11)
Composite Structures International, Inc. Delaware 100%(18)
Dryvit Systems, Inc. Rhode Island 100%(19)
First Colonial Insurance Company Vermont 100%
Rust-Oleum Corporation Illinois 100%(20)
Simian Company, Inc. Delaware 100%
Star Finishing Products, Inc. Illinois 100%
2
77
TCI, Inc. Georgia 100%
The Testor Corporation Ohio 100%(21)
RPM/Europe B.V. Netherlands 100%(22)
RPM/Belgium N.V. Belgium 96%(23)
RPM/Luxembourg S.A. Luxembourg 88%(23)
Espan Corporation Pte Ltd. Singapore 100%(24)
RPM Asia Pte Ltd. Singapore 100%(24)
-------------------------------------------------------------------------------------------------------------------
(1) The ownership of Directors' qualifying shares by persons other than
RPM, Inc. is not reflected in the stated percentage ownership.
(2) Included in the Company's consolidated financial statements.
(3) In addition, RPM, Inc. owns 100% of the outstanding shares of
Cal-O-Cam, Inc., a Michigan corporation, FOPECO, Inc., a New York
corporation, and RPM France N.V., a Netherlands Antilles corporation,
all of which are non-operating subsidiaries. The outstanding shares of
Alox International Sales Corp., a New York corporation which is a
non-operating subsidiary, are owned by Alox Corporation, a wholly-owned
subsidiary of Kop-Coat, Inc. a wholly owned subsidiary of RPM, Inc.
(4) Consolidated Coatings Corporation owns 100% of the outstanding shares
of Consolidated Inter-Continental Corporation, an Ohio corporation as
well s 100% of the outstanding shares of Consolidated Protective
Coatings, Ltd., a Canadian corporation.
(5) Kop-Coat, Inc. owns 100% of the outstanding shares of Alox Corporation,
a New York corporation.
(6) Mameco International, Inc. owns 100% of the outstanding shares of
Paramount Technical Products, Inc., a South Dakota corporation, and of
▇.▇. Wracm, Inc., an Ohio corporation.
(7) Republic Powdered Metals, Inc. owns 100% of the outstanding shares of
BSP Systems, Inc., a Delaware corporation. BSP Systems, Inc. and RPM of
North Carolina, Inc. each own 50% of AGR Company, an Ohio general
partnership.
(8) Euchem, Inc. owns 50% of The Euclid Chemical Company, an Ohio general
partnership, which, in turn, owns 100% of the outstanding shares of
Euclid Chemical Canada, Ltd. and
3
78
two Ohio corporations, Redwood Transport, Inc. and Euclid Chemical
International Sales Corporation, a non-operating subsidiary.
(9) Carboline Company owns 100% of the outstanding shares of Map II, Inc.,
and Carboline International Corporation. Through Carboline
International Corporation. Carboline owns 100% of Carboline Dubai
Corporation, a Missouri corporation, and 100% of Carboline Marine,
Ltd., a Delaware corporation. Carboline International Corporation also
owns 54% of Chemrite Coatings, Limited, a South African corporation,
and less than 50% interests in corporations in Korea, Norway, Japan,
India and Australia.
(10) FSC Corporation.
(11) Stonhard, Inc. owns 100% of the outstanding shares of Stonhard Canada
Limited, a Canadian federal corporation. Stonhard GmbH, a German
corporation, Stonhard Luxembourg, S.A., and Stonhard S.A. de C.V.
Mexico, a Mexican corporation.
(12) Wisconsin Protective Coatings, Corp. owns 100% of the outstanding
shares of ▇▇▇▇▇▇ Paint Mfg. Co., a Texas corporation
(13) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated owns 100% of the outstanding shares
of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Inc., a New York corporation, and
Mantrose-▇▇▇▇▇▇▇ Co., Inc., a Massachusetts corporation.
(14) American Emulsions Co., Inc. owns 100% of the outstanding shares of
each of the following Georgia corporations: Lubraspin Corporation and
Select Dye & Chemicals, Inc.
(15) RPM of Mass, Inc. owns 100% of the outstanding shares of each of the
following Massachusetts corporations: ▇▇▇▇▇▇-▇▇▇▇▇, Inc. and Westfield
Coatings Corporation.
(16) Craft-House Corporation owns 75% of DXIM GmbH, a German corporation.
(17) Mohawk Finishing Products, Inc. owns 100% of the outstanding shares of
▇. ▇▇▇▇▇▇ & Bro., Inc., a New York corporation.
(18) Composite Structures International, Inc. owns 100% of the outstanding
shares of Fibergrate Corporation, a Texas corporation; Chemgrate
Corporation, a Washington corporation; Chem-Grate Corporation, a
Tennessee corporation; Chemgrate (Asia) Inc., a Washington corporation;
and Chemgrate (PRC), Inc., a Washington corporation.
(19) Dryvit Systems, Inc. owns 100% of the outstanding shares of Dryvit
Systems, Canada, Ltd. and Tech 21 Panel Systems, Inc., a Rhode Island
corporation.
4
79
(20) Rust-Oleum Corporation owns 100% of the outstanding shares of
Rust-Oleum Concrete Protection Systems, Inc., an Oklahoma corporation;
Rust-Oleum Sales Company, Inc., an Ohio corporation, ROC Sales, Inc. an
Illinois corporation; and Rust-Oleum International Corporation, a
Delaware corporation.
(21) The Testor Corporation owns 100% of the outstanding shares of Testor
Australia Pty, Ltd. an Australia corporation.
(22) RPM, Inc. owns 100% of the outstanding shares of RPM/Europe B.V., a
Netherlands holding company which owns 100% of the outstanding shares
of the following companies; Rust-Oleum/Netherlands, B.V., a Netherlands
corporation; Radiant Color N.V., a Belgian corporation (which owns 100%
of the outstanding shares of ▇▇▇▇▇▇ ▇▇▇▇▇▇, N.V., a Belgian
corporation); and RPM/Praha spol.n.r.o., a Czech Republic corporation.
RPM/Europe B.V. also owns 100% of the outstanding shares of RPOW UK
Limited, a U.K. holding company which owns 100% of the outstanding
shares of the following U.K. companies; Chemspec Europe Limited;
Rust-Oleum U.K. Limited; Stonhard U.K. Limited; and Mantrose UK Limited
(which owns 100% of the outstanding shares of Agricoat Industries,
Limited, also a U.K. corporation).
RPM/Europe B.V. also owns 100% of the outstanding shares of RPOW
(France) S.A., a French holding company which owns 100% of the
outstanding shares of Rust-Oleum (France) S.A. and Stonhard S.A.R.L., a
French corporation.
(23) RPM, Inc. also owns 96% of the outstanding shares of RPM (Belgium)
N.V., a Belgian corporation (which owns 100% of the outstanding shares
of Monile France S.A., a French corporation); and 88% of the
outstanding shares of RPM (Luxembourg) S.A., a Luxembourg corporation.
RPM, Inc. also owns 100% of the outstanding shares of RPM Asia Pte Ltd.
a Singapore corporation which owns 100% of the outstanding shares of
RPM China Pte Ltd. and Espan Corporation Pte Ltd (which owns 100% of
the outstanding shares of Espan Building Industries Pte Ltd.), all
Singapore corporations.
JOINT VENTURES AND OTHER SIMILAR PERSONS
----------------------------------------
RPM China Pte Ltd., a wholly-owned subsidiary of RPM Asia Pte Ltd., is
a 30% joint venture partner in Managro Industries Pte Ltd., a Singapore
company.
RPM/Europe B.V. and Dryvit Systems, Inc. are 51% joint venture partners
in Midwest Traders International, a Polish company.
5
80
EXHIBIT A
[Form of Note]
PROMISSORY NOTE
____________, 199_
New York, New York
FOR VALUE RECEIVED, RPM, Inc., an Ohio corporation (the "COMPANY"),
hereby promises to pay to ___________________ (the "LENDER"), or order, at the
principal office of The Chase Manhattan Bank at ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, the aggregate unpaid principal amount of the Loans made by
the Lender to the Company under the Credit Agreement referred to below, in
lawful money of the United States of America and in immediately available funds,
on the dates and in the principal amounts provided in the Credit Agreement, and
to pay interest on the unpaid principal amount of each such Loan, at such
office, in like money and funds, for the period commencing on the date of such
Loan until such Loan shall be paid in full, at the rates per annum and on the
dates provided in the Credit Agreement.
The Lender is hereby authorized by the Company to endorse on the
schedule (or a continuation thereof) attached to this Note, the date, amount,
Class and Type of and Interest Period (if any) for each Loan made by the Lender
to the Company under the Credit Agreement, and the date and amount of each
payment or prepayment of principal of such Loan received by the Lender, provided
that any failure by the Lender to make any such endorsement shall not affect the
obligations of the Company under the Credit Agreement or under this Note in
respect of such Loans.
This Note is one of the Notes referred to in the Credit Agreement (as
modified and supplemented and in effect from time to time, the "CREDIT
AGREEMENT") dated as of February __, 1997 among the Company, the lenders named
therein (including the Lender), and The Chase Manhattan Bank, as Administrative
Agent, and evidences Loans made by the Lender thereunder. Capitalized terms used
in this Note have the respective meanings assigned to them in the Credit
Agreement.
81
The Credit Agreement provides for the acceleration of the maturity of
this Note upon the occurrence of certain events and for prepayments of Loans
upon the terms and conditions specified therein.
This Note shall be governed by and construed in accordance with the
laws of the State of New York.
RPM, INC.
By
---------------------------
Title:
2
82
SCHEDULE
This Note evidences Loans made under the within-described Credit
Agreement to the Company, on the dates, in the principal amounts, of the classes
and types and maturing on the dates set forth below, subject to the payments and
prepayments of principal set forth below:
------------------------------------------------------------------------------------------------------------------------------
Principal Date of Amount
Amount of Class of Type of Interest Payment or Paid or Balance
Date Made Loan Loan Loan Period Prepayment Prepaid Outstanding
------------------------------------------------------------------------------------------------------------------------------
83
EXHIBIT B-1
OPINION OF
COUNSEL FOR THE COMPANY
[Letterhead of ▇▇▇▇▇▇, HALTER & ▇▇▇▇▇▇▇▇ LLP]
February __, 1997
To the Lenders and the Administrative
Agent referred to below
▇/▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
as Administrative Agent
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have acted as counsel to RPM, Inc., an Ohio corporation (the
"Company"), in connection with the Credit Agreement, dated as of February __,
1997 (the "Credit Agreement"), among the Company, the financial institutions
referred to therein (the "Lenders") and The Chase Manhattan Bank, as
administrative agent (in such capacity, the "Administrative Agent"). Capitalized
terms used but not defined herein shall have the meanings assigned to such terms
in the Credit Agreement. This opinion letter is being furnished to you at the
request of the Company pursuant to Section 7.01(f) of the Credit Agreement.
In rendering this opinion, we have examined executed originals or
counterparts of the Credit Agreement and the Notes. We have also examined
originals, or copies certified or otherwise authenticated to our satisfaction,
of the following documents and corporate records:
(a) A copy of Resolutions adopted by the Board of Directors of
the Company on October 18, 1996 and the Executive Committee of the
Board of Directors of the Company by unanimous written consent, dated
January __, 1997, authorizing, inter alia, the execution and delivery
of the Credit Agreement and the Notes, certified as true and correct as
of the date hereof by an officer of the Company;
84
(b) A certificate from the Secretary of State of Ohio, dated
January __, 1997, with respect to the status of Company as a
corporation in good standing under the laws of the State of Ohio as of
such date;
(c) A certificate from the Secretary of State of each of the
states set forth on Schedule I, dated as of the dates set forth on
Schedule I, with respect to the status of each of Carboline Company, a
Delaware corporation, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Incorporated, a New Jersey
corporation, Stonhard, Inc., a Delaware corporation, Dryvit Systems,
Inc., a Rhode Island corporation, and Rust-Oleum Corporation, an
Illinois corporation (hereinafter collectively, the "Significant
Subsidiaries") as a corporation in good standing under the laws of such
states as of such dates;
(d) A certificate from the Secretary of State of Ohio, dated
January __, 1997, with respect to the Articles of Incorporation of the
Company, and all amendments thereto, as of such date;
(e) A certificate from the Secretary of State of each of the
states set forth on Schedule I, dated as of the dates set forth on
Schedule I, with respect to the existing Articles of Incorporation or
Certificates of Incorporation, as the case may be, and all amendments
thereto, of each of the Significant Subsidiaries as of such dates;
(f) A copy of the Articles of Incorporation and Code of
Regulations of Company certified as true, correct and complete as of
the date hereof by an officer of the Company;
(g) A copy of the Articles of Incorporation or Certificate of
Incorporation and the By-Laws or Code of Regulations of each of the
Significant Subsidiaries, each certified as true, correct and complete
by an officer of each of the Subsidiaries as of the date hereof,
respectively;
(h) A certificate of an officer of the Company, a copy of
which certificate is attached hereto as Exhibit A-1 (the "Company
Officer's Certificate");
(i) A certificate of certain officers of each of the
Significant Subsidiaries, a copy of which certificate is attached
hereto as Exhibit A-2 (the "Subsidiary Officers' Certificate" and,
together with the Company Officer's Certificate, the "Officers
Certificates"), and
(j) Such other corporate documents and records of the Company
and the Significant Subsidiaries, such other certifications or
2
85
representations as to factual matters of public officials and officers
of the Company and the Significant Subsidiaries, and such other
documents as we have deemed necessary or appropriate for the purpose of
rendering this opinion.
In rendering our opinion, we have relied upon the
above-referenced certificates of good standing, certified Certificates
of Incorporation and certified Articles of Incorporation, as the case
may be, from the Secretaries of State of Delaware, Rhode Island, Ohio
and New Jersey. Any opinion hereinafter set forth relative to valid
existence or good standing of the Company under the laws of the State
of Ohio is based solely upon the above-referenced certificate of good
standing. Any opinion hereinafter set forth relative to the
incorporation, valid existence or good standing of the Significant
Subsidiaries under the laws of the applicable states is based solely
upon the above-referenced certificates of good standing and certified
Articles of Incorporation or Certificates of Incorporation with respect
to such Significant Subsidiaries. We have not conducted an independent
review or investigation of the matters set forth in any such
certificate of good standing or certified Articles of Incorporation or
Certificates of Incorporation.
In rendering our opinion we have not conducted any detailed
investigation into the types of businesses and activities in which the Company
engages or the manner in which the Company engages in such businesses and
activities. Accordingly, our opinions with respect to the laws of the State of
Ohio and the federal laws of the United States are expressly limited to laws or
governmental regulations of general applicability to business corporations and
we are not expressing any opinion concerning laws of particular applicability,
including, without limitation, statutes, administrative decisions, rules or
regulations of any county, municipality or special political subdivision thereof
or applicable municipal or quasi-municipal licenses, permits or approvals.
Our review as to the contractual obligations to which the Company and
the Significant Subsidiaries are bound was limited to a review of those
contractual obligations ("Material Agreements") identified to us on the
Officer's Certificates as being Material Agreements (as defined in the Officer's
Certificate).
In rendering our opinions, we have assumed, without independent
investigation, that:
(i) all records and documents examined by us in connection with the
preparation of this opinion letter are authentic and, to the extent material to
any
3
86
opinion hereinafter expressed, accurate and complete, and, to the extent
represented by photostatic or certified copies, conform to the respective
originals;
(ii) all signatures contained in such records and documents (other than
signatures of officers of the Company executing the Credit Agreement and the
Notes on behalf of the Company) are genuine signatures of the parties purporting
to have signed the same;
(iii) all natural persons signing said documents and records (other
than the natural persons signing the Credit Agreement and the Notes on behalf of
the Company) had, at the time of such signing, full legal capacity to sign and
deliver said documents and records;
(iv) the Credit Agreement and the Notes are the legal, valid and
binding obligations of all parties thereto other than the Company, enforceable
against such parties in accordance with their terms;
(v) no action has been taken which amends or revokes or terminates any
of the documents and records which we have reviewed; and
(vi) each of the Administrative Agent and the Lenders has complied with
all legal requirements pertaining to its status as such status relates to its
rights to enforce the Credit Agreement and the Notes against the Company.
Although we have not conducted an independent investigation of the
accuracy or reasonableness of any of these assumptions, nothing has come to our
attention leading us to question the accuracy of said assumptions.
Based upon and subject to the foregoing, and upon such further
investigation of law as we have deemed necessary, and subject to the
qualifications, exceptions and further assumptions set forth below, we are of
the opinion that:
1. The Company is duly incorporated, validly existing and in good
standing under the laws of the State of Ohio, and has all requisite corporate
power and authority to conduct its business in the manner now conducted.
2. The Company has all requisite corporate power and authority to
execute, deliver and perform the Credit Agreement and the Notes. The Company has
taken all necessary corporate action to authorize the execution, delivery and
performance of the Credit Agreement and the Notes.
4
87
3. Assuming that the Credit Agreement and the Notes were to be governed
by the laws of the State of Ohio, each of the Credit Agreement and the Notes
constitutes a valid and binding obligation of the Company enforceable against
the Company in accordance with its terms.
4. The execution, delivery and performance by the Company of the Credit
Agreement and the Notes do not: (i) contravene or constitute a default under any
provision of law applicable to the Company or any provision of the Articles of
Incorporation of the Company or the Code of Regulations of the Company or (ii)
require any action by or in respect of, or filing with, any governmental body,
agency or official.
5. The execution, delivery and performance by the Company of the Credit
Agreement and the Notes do not contravene or constitute a default under any
provision of any Material Agreement binding upon the Company or its Significant
Subsidiaries or result in the creation or imposition of any Lien on any asset of
the Company pursuant to the terms of any Material Agreement.
6. Each of the Significant Subsidiaries is incorporated, validly
existing and in good standing under the laws of its state of incorporation. Each
of the Significant Subsidiaries has all requisite corporate power and authority
to own and operate its properties and to conduct its business in the manner now
conducted.
7. To our knowledge, after due inquiry, neither the Company nor any of
its Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, 15 U.S.C. sec. 80a-1 et seq.
8. To our knowledge, after due inquiry, neither the Company nor any of
its Subsidiaries is a "holding company" or an "affiliate" of a "holding company"
or a "subsidiary company" of a "holding company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended, 15 U.S.C.
sec. 79 et seq.
9. Assuming that the proceeds of the Loans are used for the purposes
set forth in the Credit Agreement, the making of the Loans will not violate
Regulation G, T, U or X of the Board of Governors of the Federal Reserve System
of the United States.
The foregoing opinions are subject to the following additional
assumptions, limitations and qualifications:
(a) Our opinions are subject to and affected by applicable bankruptcy,
insolvency, avoidance, reorganization, moratorium or similar laws affecting the
5
88
rights of creditors generally including, without limitation, statutory and other
laws regarding fraudulent transfers. Our opinion as to the enforceability of the
Credit Agreement and the Notes is also subject to and affected by general
principles of equity (regardless of whether considered in a proceeding in equity
or at law). Moreover, the exercise of the rights and remedies under the Credit
Agreement and the Notes could be subject to limitation if (A) the enforcement of
such rights and remedies by any of the Lenders or the Administrative Agent is
found not to be commercially reasonable, (B) the enforcement of the rights and
remedies violates the obligations of any of the Lenders or the Administrative
Agent to act in good faith or (C) the defaults or events of default under the
Credit Agreement or the Notes are deemed by a court not to be material.
Furthermore, no opinion is expressed as to whether any provisions in the Credit
Agreement or the Notes are enforceable by means of specific enforcement.
(b) We express no opinion as to (i) the enforceability of any provision
contained in the Credit Agreement and the Notes that purports to establish (or
may be construed to establish) evidentiary standards, (ii) the enforceability of
any provision contained in the Credit Agreement or the Notes that constitutes a
waiver that is prohibited or otherwise unenforceable under applicable Ohio law
and (iii) the enforceability of any forum selection clause. We also express no
opinion as to the enforceability of any provision contained in the Credit
Agreement or the Notes which (A) purports to obligate the Company to pay for any
documentary, stamp or other taxes unless at the time such charges are required
to be paid it is lawful for such party to pay the same, (B) provides that a
waiver must be in writing or (C) purports to exculpate the Administrative Agent
or any of the Lenders from their own negligent acts and otherwise limit such
parties from certain liabilities.
(c) Our opinion in Paragraph 4(ii) relating to action by or in respect
of, or filing with, any governmental body, agency or official relates only to
actions by or in respect of, or filing with, any governmental body, agency or
official that, in our experience, without our having made any special
investigation with respect thereto, are generally applicable to business
corporations entering into commercial financing transactions of the type
contemplated by the Credit Agreement.
(d) Any provision in the Credit Agreement or the Notes purporting to
allow the collection of attorneys' fees incurred in connection with any
collection or enforcement action by any of the Lenders or the Administrative
Agent may not be valid, binding or enforceable under the laws of the State of
Ohio.
(e) We have made no investigation into the activities or nature of the
Administrative Agent or any of the Lenders. Accordingly, our opinion set forth
in paragraph 3 relating to the enforceability of the Credit Agreement and the
Notes is qualified to the extent that, in order to exercise rights and remedies
under the
6
89
Credit Agreement and the Notes in courts of the State of Ohio, the
Administrative Agent or a Lender, as the case may be, may have to qualify to
transact business as a foreign corporation in the State of Ohio unless the
Administrative Agent or such Lender constitutes a "bank" under Section 1703.02
of the Ohio Revised Code, which excepts "banks" from the requirement of being
licensed to transact business as a foreign corporation in the State of Ohio.
(f) In addition, our opinion set forth in paragraph 4(ii) concerning
actions by or in respect of, or filing with, any governmental body, agency or
official expresses no opinion as to, and our opinions are qualified by and
subject to the effect of (i) any taxation to which the Lenders may be subject
under the laws of the State of Ohio or United States federal law or (ii)
compliance or noncompliance by the Company, the Administrative Agent or any of
the Lenders with any actions by or in respect of, or filing with, any
governmental body, agency or official which may be applicable to the
Administrative Agent or any of the Lenders in connection with such state or
federal taxation.
(g) Section 1343.01 of the Ohio Revised Code permits interest not
exceeding eight percent (8%) per annum "except as authorized in ... this
section". The authorized exceptions include, inter alia, indebtedness exceeding
one hundred thousand dollars and business loans to business associations or
partnerships (Sections 1341.01(B)(1)and (B)(6)(a)). We call to your attention to
the criminal statutes of the State of Ohio as set forth in Section 2905.21(H)
and Section 2905.22 of the Ohio Revised Code relating to criminal usury which
prohibit, inter alia, knowingly charging interest "at a rate exceeding
twenty-five percent per annum or the equivalent rate for a longer or shorter
period, unless ... the rate of interest is otherwise authorized by law". To date
there have not been any Ohio judicial decisions holding that the provisions of
said Section 2905.21(H) or 2905.22 are in any way applicable to a commercial
financing transaction with a corporation, a commercial finance transaction
similar to those contemplated by the Credit Agreement and the Notes, or a
transaction governed by the laws of a state other than the State of Ohio.
(h) Our opinion in paragraph 4 that the performance by the Company of
the Credit Agreement and the Notes will not violate laws applicable to the
Company assumes, with your consent, that the course of any discretionary conduct
of the Company in connection with such performance does not itself, due to the
manner in which such performance is carried out, violate any such laws.
Except as hereinafter specified, the opinions expressed herein are
limited to the laws of the State of Ohio and to United States federal law.
Except to the extent hereinafter specified, we express no opinion as to the
effect or applicability of the laws of any other jurisdiction. We note that the
Credit Agreement and the
7
90
Notes are stated to be governed by the laws of the State of New York. We express
no opinion as to the enforceability of any provision which purports to subject
the Credit Agreement or the Notes to, and make the Credit Agreement or the Notes
governed by, the law of any state other than the State of Ohio except to the
extent hereinafter addressed. For purposes of rendering our opinions set forth
in paragraph 6, we have examined to the extent relevant the laws and reported
decisions of the State of Delaware and the Delaware General Corporation Law, the
New Jersey Business Corporation Act, Rhode Island Business Corporation Act and
the Illinois Business Corporation Act.
You have asked whether a court of the State of Ohio or a federal court
applying the law of the State of Ohio would apply the conflict of law principles
adopted under the law of the State of Ohio so as to give effect to the choice of
law provision set forth in the Credit Agreement and the Notes. After a review of
reported and published decisions applying the law of the State of Ohio, we are
unaware of any reported and published decision by any court of the State of Ohio
or federal court applying the law of the State of Ohio which gives effect to a
choice of law provision set forth in commercial loan documentation such as a
loan agreement, a security or guarantee agreement or a note (other than
decisions concerning notes which relate to usury issues and were rendered prior
to the adoption by the State of Ohio of the Uniform Commercial Code (hereafter,
as so adopted, the "Ohio UCC") and a recent district court decision concerning a
security agreement provision providing for the collection of attorneys' fees).
Accordingly, the opinion hereinafter set forth is based fundamentally on a
review of analogous case law.
Section 1301.05 of the Ohio Revised Code provides, in relevant part,
that parties to a transaction which bears a reasonable relation to the State of
Ohio and to another state may agree that the laws of the State of Ohio or the
laws of such other state shall govern the rights and duties of said parties.
This provision of the law of the State of Ohio has not yet been applied to a
credit agreement, a note or a guarantee agreement. However, courts of other
states and federal courts interpreting state law of other states have applied
Section 1-105 of the Uniform Commercial Code to uphold a choice of law provision
set forth in notes or loan agreements in cases involving conflicting state usury
laws. See, e.g., ▇▇▇▇▇ - ▇▇▇▇▇▇ Leasing Corp. of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇
Development Co., 642 F.2d 744 (5th Cir. 1981), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Financing
Corp., 113 Wis.2d 73, 334 N.W.2d 913 (Wis. Ct. App. 1983). Ohio courts generally
defer to decisions by other state courts regarding the interpretation of
identical UCC provisions. ▇▇▇▇ Financial Corporation v. Kenworth of Cincinnati,
Inc., No. C-790740, slip op. at 3 (Ohio Ct., App. June 3, 1981). Since the
adoption of the Ohio UCC, the only reported and published Ohio decision
addressing a choice of law provision in commercial loan documents concerns a
provision for the collection of attorneys'
8
91
fees contained in a security agreement. In Clarklift of Northwest Ohio, Inc. ▇.
▇▇▇▇▇ Equipment Company, 869 F.Supp. 533 (N.D. Ohio 1994), the court refused to
honor the parties' choice of Michigan law to govern the enforceability of a
provision providing for the recovery of attorneys' fees. Each of the two
security agreements between the parties stated that the agreements were to be
"construed in accordance with and governed by the laws of the State of
Michigan." The court cited ▇▇▇▇▇▇▇ Radio Prod. v. Midwestern Broadcast, 6 Ohio
St.3d 436, 453 N.E.2d 683 (Ohio 1983), for the proposition that under Ohio law
the laws of the state chosen by the parties to a security agreement would be
applied unless: (i) the chosen state has no substantial relationship to the
parties or the transaction and there is no other reasonable basis for the
parties' choice or (ii) application of the law of the chosen state would be
contrary to a fundamental policy of a state having a materially greater interest
in the issue than the chosen state and such state would be the state of the
applicable law in the absence of a choice by the parties.
In Clarklift, the court concluded that the choice of Michigan law
should not be upheld because: (i) the secured party, in relying entirely upon
Ohio law in its foreclosure proceedings, effectively waived its contractual
right to have Michigan law applied and (ii) the recovery of attorney fees is
repugnant to Ohio public policy and, under the facts of Clarklift, the State of
Ohio had a greater material interest in the choice of law issue than the State
of Michigan. The court's rationale for finding the State of Ohio to have a
materially greater interest in Clarklift appears to have been premised upon: (a)
the borrower's only place of business being in the State of Ohio; (b) all of the
assets of the borrower being located in the State of Ohio; (c) the secured
party's filing documents in the State of Ohio to record its security interest in
the borrower's assets and (d) the secured party's doing business in the State of
Ohio. The court's determination was not altered by the fact that one of the
parties was incorporated in the State of Michigan or that the security
agreements were deemed to be entered into in the State of Michigan.
Other than Clarklift, the only reported and published Ohio decisions
addressing choice of law provisions in commercial loan documents concern choice
of law issues relating to usury issues in connection with promissory notes and
were decided prior to the adoption of the Ohio UCC. Although ultimately
upholding the choice of law provisions of each subject note, such decisions did
not establish a clearly defined rationale or precedent for doing so. In ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, 25 Ohio St. 610 (Ohio 1874), the Supreme Court of Ohio upheld a
choice of Ohio law as to the interest rate of a note payable by a maker who was
a resident of the State of Ohio although the interest rate set forth in such
note would have been usurious under Pennsylvania law. The holder of the note was
a resident of Pennsylvania and the note was to be paid in Pennsylvania. The
Court held that the parties to the note had a legal right to contract "in good
faith" with reference to
9
92
the laws of either the State of Ohio or Commonwealth of Pennsylvania. In ▇▇▇▇▇
▇.▇▇▇▇▇▇, 39 Ohio St. 63 (Ohio 1883), the Supreme Court of Ohio upheld a choice
of Illinois law as to the interest rate of a note payable by a maker who was an
Illinois resident to a holder who was a resident of the State of Ohio although
the interest rate would have been usurious under the law of the State of Ohio.
The Court stated that:
... it is undoubtedly the law of this state, and indeed it is
now well established almost universally, that where a contract
is entered into in one state, to be performed in another,
between citizens of each, and the rate of interest is
different in the two, the parties may, IN GOOD FAITH,
stipulate for the rate of either, and thus expressly determine
with reference to the law of which place that part of the
contract shall be decided. [emphasis added]
Based on our review, we are unaware of any controlling and published
authority under the laws of the State of Ohio applying Section 187(2) of the
Restatement (Second) of Conflict of Laws (1971) to the enforceability of a
choice of law provision in a credit agreement, note or guarantee agreement.
Further, Clarklift is the only published authority under the laws of the State
of Ohio applying Section 187(2) to the enforceability of a choice of law
provision in a security agreement. Although of limited value as a precedent by
reason of its unpublished nature, we have found one relevant unpublished
decision, Michigan Bank - Midsouth v. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, 1986 WL 11425 (Ohio
App.). Therein, in upholding the parties' choice of Michigan law, the court
applied Section 187(2) of the Restatement (Second) of Conflict of Laws (1971) to
a promissory note. The case is unclear concerning whether the note contained an
express choice of Michigan law. In discussing Section 187(2), however, the court
states that a reasonable basis for the parties' choice of law exists where a
borrower chooses the law of the state where the bank advancing the funds is
located. Despite the absence of controlling precedent, we note that in cases
relating to commercial contracts other than commercial loan documents and notes,
the Supreme Court of Ohio has adopted the tests set forth in Section 187(2) of
the Restatement (Second) of Conflict of Laws (1971).
Although the matter is not free from doubt by reason of the absence of
direct and published precedent, if a case were properly presented and argued, we
believe that a court of the State of Ohio or a federal court applying the law of
the State of Ohio would adopt the tests set forth in Section 187(2) of the
Restatement (Second) of Conflict of Laws (1971), under which the law of a state
chosen by the parties in a credit agreement or note (such as the Credit
Agreement and the Notes) would be applied unless:
10
93
(a) the chosen state has no substantial relationship to the parties or
the transaction and there is no other reasonable basis for the parties' choice
of governing law, or
(b) application of the law of the chosen state would be contrary to a
fundamental policy of a state which has a materially greater interest than the
chosen state in the determination of the particular issue and which would be the
state of the applicable law in the absence of an effective choice of law by the
parties.
See Clarklift of Northwest Ohio, Inc. ▇. ▇▇▇▇▇ Equipment Company; ▇▇▇▇▇▇▇
Radio Prod. v. Midwestern Broadcast, 6 Ohio St. 3d 436, 453 N.E.2d 683 (Ohio
1983), and ▇▇▇▇▇▇ ▇. Ashland Oil, Inc., 17 Ohio St. 3d 189, 478 N.E.2d 786 (Ohio
1985).
In applying such Restatement tests, the Supreme Court of Ohio in ▇▇▇▇▇▇
▇. Ashland Oil, Inc. stated that, even where the law of the chosen state is
concededly repugnant to and in violation of the public policy of the State of
Ohio, the law of the State of Ohio will "only be applied when it can be shown
that the state has a materially greater interest than the chosen state".
In ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, 31 Ohio St. 3d 24, 508 N.E.2d 941 (Ohio 1987),
the Supreme Court of Ohio upheld an award of attorneys' fees based on a
provision in a commodity futures trading agreement providing that New York law
would govern the agreement. As a result of its finding that the State of Ohio
did not have a materially greater interest than New York, the Court found it
unnecessary to decide whether the contract's provision for the collection of
attorneys' fees would violate Ohio public policy. Determining that the State of
Ohio did not have a materially greater interest, the Court noted that: (i) the
performance of the contract was not located principally in either New York or
the State of Ohio, (ii) the transaction was approved in New York and one of the
parties was incorporated in New York, and (iii) neither the Ohio residence of
the other party to the contract nor the execution of the contract in Ohio was
determinative.
Other than Clarklift, there is no reported decision applying the law of
the State of Ohio which suggests in respect of commercial loan documentation (i)
whether the tests of Section 1301.05 of the Ohio Revised Code or Section 187(2)
of the Restatement as adopted by the Supreme Court of Ohio would supersede or
otherwise alter the earlier Ohio cases referenced above regarding "good faith"
enforceability of choice of law provisions in notes as related to usury or any
other particular issue or (ii) whether a choice of law provision as it relates
to usury, attorney's fees in connection with collections, or waivers of
equitable or legal
11
94
defenses are matters of fundamental public policy of the State of Ohio or are
otherwise concededly repugnant to and in violation of the public policy of the
State of Ohio.
In the present transaction, it is our understanding that (i)
negotiations of the Credit Agreement and the Notes have occurred in New York and
telephonically between representatives located in New York and the State of
Ohio, (ii) the Company is an Ohio corporation with its principal place of
business and chief executive office in the State of Ohio, (iii) each of the
Administrative Agent and The Chase Manhattan Bank has its principal place of
business in New York, (iv) the initial funding of Loans, the funding of all
subsequent Loans, and the payment of the Administrative Agent and The Chase
Manhattan Bank will each occur in New York, (vi) the counterparts of the Credit
Agreement and the Notes executed by the Company will be delivered in New York,
(vii) the Notes will be delivered to the Administrative Agent on behalf of the
Lenders in New York, (viii) the Credit Agreement permits each Lender, in certain
circumstances, to enforce severally its remedies for nonpayment and (ix) two (2)
of the Lenders have principal offices located in the State of Ohio and two (2)
of the other Lenders have permanent offices in the State of Ohio.
In rendering this opinion, we have made no independent investigation of
the foregoing factual understandings and, with respect to such facts, we have:
(i) relied, for the purpose of rendering our opinions, exclusively upon the
facts provided to us by the parties and representatives of the Lenders and the
Administrative Agent and upon the facts evidenced by the Credit Documents and
(ii) assumed that the facts referred to in this opinion letter are now and will
at all times be correct.
Although the matter is not free from doubt because (i) there is no
controlling published authority in the State of Ohio with regard to a credit
agreement or a note (other than in connection with the collection of attorneys'
fees), (ii) other than Clarklift, there is no controlling published authority in
the State of Ohio with regard to the effect of the adoption of either Section
1301.05 of the Ohio Revised Code or Section 187(2) of the Restatement with
regard to a credit agreement or a note, (iii) the application of facts to
controlling legal principles will be determined ultimately by a trier-of-fact
based on its view of the facts, and (iv) the split decision in ▇▇▇▇▇▇▇ and the
decision in Clarklift demonstrate the potential for contradictory analysis and
emphasis of facts related to choice of law issues, we are of the opinion, based
on the understood facts set forth above and a reasoned analysis of analogous
case law, that if the case were properly presented and argued, a court of the
State of Ohio or a federal court applying the law of the State of Ohio should
give effect to the choice of New York law as the governing law of the Credit
Agreement and the Notes.
12
95
The foregoing reasoned opinion is premised on the assumption that a
court would in respect of the Credit Agreement and the Notes view the location
of the principal office of the Administrative Agent and several of the Lenders
in New York, and the Administrative Agent's acceptance and receipt of the Credit
Agreement and the Notes as determinative of (x) the location of the
Administrative Agent and the Lenders and (y) the place of the making of the
Credit Agreement and the Notes in spite of the actual location of the individual
Lenders or their funding offices and the actual place of execution of the Credit
Agreement and the Notes by such Lenders. The foregoing reasoned opinion does not
express any opinion (i) with respect to the enforceability of the choice of law
provision in the context of any particular Lender's exercise of its several
right to exercise individual remedies and (ii) whether under Clarklift, the
State of Ohio could be found to have a "materially greater interest" whenever
application of the law of another jurisdiction would be "contrary to a
fundamental policy" of the State of Ohio..
This opinion is limited to the matters expressly stated herein. No
implied opinion may be inferred to extend this opinion beyond the matters
expressly stated herein. The opinions expressed herein are expressed solely to
you and, without the express written consent of the undersigned, may not be
filed publicly or relied upon by any other persons (except assignees,
transferees or participants of the Lenders to the extent comprised of financial
institutions) for any reason. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, a partner of this firm, is
a member of the Board of Directors and an Assistant Secretary of the Company.
Very truly yours,
▇▇▇▇▇▇, HALTER & ▇▇▇▇▇▇▇▇ LLP
13
96
SCHEDULE I
TO
OPINION LETTER
----------------------------------------------------------------------------------------------------
DATE OF GOOD
SIGNIFICANT STATE OF STANDING DATE OF CERTIFIED
SUBSIDIARY INCORPORATION CERTIFICATE ARTICLES/CERTIFICATE
----------------------------------------------------------------------------------------------------
Stonhard, Inc. Delaware January 14, 1997 January 14, 1997
----------------------------------------------------------------------------------------------------
Carboline Company Delaware January 13, 1997 January 13, 1997
----------------------------------------------------------------------------------------------------
Dryvit Systems, Inc. Rhode Island January 14, 1997 January 15, 1997
----------------------------------------------------------------------------------------------------
Rust-Oleum Illinois January 13, 1997 January 13, 1997
Corporation
----------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., New Jersey January 14, 1997 January 17, 1997
Incorporated
----------------------------------------------------------------------------------------------------
97
EXHIBIT A-1
TO
OPINION LETTER
COMPANY OFFICER'S CERTIFICATE
To: ▇▇▇▇▇▇, Halter & ▇▇▇▇▇▇▇▇ LLP
The undersigned being the duly elected and acting Vice President,
Secretary and General Counsel of RPM, Inc. (the "Company") does hereby certify
as of the date hereof, in his capacity as an officer of the Company and on
behalf of the Company, that:
1. Set forth on Schedule I hereto is a true, correct and complete list
of each agreement or other instrument to which the Company is a party which, in
the event of a default by the Company thereunder, could reasonably be expected
to result in a material adverse effect on the condition (financial or
otherwise), business, or operations, of the Company (all of such agreements and
instruments being collectively referred to herein as the "Material Agreements").
2. Attached hereto as Exhibit 1 are true, complete and correct copies
of the Code of Regulations and Articles of Incorporation of the Company. Such
Code of Regulations and Articles of Incorporation are still in full force and
effect and have not in any manner whatsoever been amended or modified.
3. Attached hereto as Exhibit 2 is a true, complete and correct copy of
resolutions duly adopted by the Executive Committee of the Board of Directors of
the Company by unanimous written consent dated January 27, 1997.
Such resolutions are still in full force and effect and have not in any
manner whatsoever been amended or modified.
All capitalized terms not otherwise defined or referenced in this
certificate are used herein as defined in the Opinion of ▇▇▇▇▇▇, Halter &
▇▇▇▇▇▇▇▇ LLP to which this certificate is attached.
The undersigned acknowledges and agrees that ▇▇▇▇▇▇, Halter & ▇▇▇▇▇▇▇▇
LLP intends to, and may, rely on this Certificate and the matters contained
herein, in rendering opinions in connection with the transactions contemplated
by the Credit Agreement, dated as of February __, 1997 among The Chase Manhattan
Bank, as Administrative Agent, the Lenders named therein and the Company.
98
IN WITNESS WHEREOF, I have executed this Certificate as of this _____
day of February, 1997.
RPM, INC.
-----------------------
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President, Secretary and
General Counsel
2
99
SCHEDULE I
TO
COMPANY OFFICER'S CERTIFICATE
MATERIAL AGREEMENTS
1. Liquid Yield Option (TM) Notes Due 2012, $400,000,000 Principal Amount
(Zero Coupon subordinated), and the Indenture, dated as of September
15, 1992, between RPM, Inc. and The First National Bank of Chicago, as
Trustee, with respect thereto (TM)Trademark of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.,
Inc.
2. Multicurrency Credit Agreement, dated as of December 14, 1993, among
RPM, Inc., RPOW (France) S.A., RPM Europe B.V., Radiant Color, N.V.,
Credit Lyonnais Chicago Branch, Credit Lyonnais Cayman Island Branch
and Credit Lyonnais Belgium
3. Stock Purchase Agreement, dated October 21, 1996, as amended by
Amendment No.1 thereto, dated as of February 1,1997, between the
Company and The ▇.▇.▇▇▇▇▇▇▇▇ Company
4. Indenture, dated as of June 1, 1995, between RPM, Inc. and The First
National Bank of Chicago, as Trustee, with respect to 7.0% Senior Notes
due 2005
100
EXHIBIT A-2
TO
OPINION LETTER
SUBSIDIARY OFFICER'S CERTIFICATE
To: ▇▇▇▇▇▇, Halter & ▇▇▇▇▇▇▇▇ LLP
The undersigned, being the duly elected and acting SECRETARY of each of
(i) Stonhard, Inc., a Delaware corporation ("Stonhard"), (ii) Carboline Company,
a Delaware corporation ("Carboline"), (iii) Dryvit Systems, Inc., a Rhode Island
corporation ("Dryvit"), (iv) Rust-Oleum Corporation, an Illinois corporation
("Rust-Oleum") and (vii) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Incorporated, a New Jersey
corporation ("Zinsser", and, together with Stonhard, Carboline, Dryvit and
Rust-Oleum, the "Significant Subsidiaries"), does hereby certify as of the date
hereof, in his capacity as an officer of each of the Significant Subsidiaries
and on behalf of such Significant Subsidiaries, that:
1. Set forth on Schedule I hereto is a true, correct and complete list
of each agreement or other instrument to which a Significant Subsidiary is a
party which, in the event of a default by such Significant Subsidiary
thereunder, could reasonably be expected to result in a material adverse effect
on the condition (financial or otherwise), business, or operations, of such
Significant Subsidiary (all of such agreements and instruments being
collectively referred to herein as the "Material Agreements").
2. Attached hereto as Exhibits 1-A through 1-E hereto are true,
complete and correct copies of the Code of Regulations or By-Laws, as the case
may be, of the Significant Subsidiaries. Each such Code of Regulations or
By-Laws is still in full force and effect and has not in any manner whatsoever
been amended or modified.
3. Attached hereto as Exhibits 2-A through 2-E hereto are true,
complete and correct copies of the Articles of Incorporation or Certificate of
Incorporation, as the case may be, of each of the Significant Subsidiaries. Each
such Articles of Incorporation or Certificate of Incorporation is still in full
force and effect and has not in any manner whatsoever been amended or modified.
101
All capitalized terms not otherwise defined or referenced in this
certificate are used herein as defined in the Opinion of ▇▇▇▇▇▇, Halter &
▇▇▇▇▇▇▇▇ LLP to which this certificate is attached.
The undersigned acknowledges and agrees that ▇▇▇▇▇▇, Halter & ▇▇▇▇▇▇▇▇
to which this Certificate and the matters contained herein, in rendering
opinions in connection with the transactions contemplated by the Credit
Agreement, dated as of February __, 1997 among The Chase Manhattan Bank, as
Administrative Agent, the Lenders named therein and the Company.
IN WITNESS WHEREOF, I have executed this Certificate as of this ___ day
of February, 1997.
STONHARD, INC. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO.,
INCORPORATED
----------------------- ------------------------
By: By:
-------------------- ---------------------
Title: Title:
----------------- -----------------
CARBOLINE COMPANY RUST-OLEUM CORPORATION
----------------------- ------------------------
By: By:
-------------------- ---------------------
Title: Title:
----------------- -----------------
DRYVIT SYSTEMS, INC.
-----------------------
By:
--------------------
Title:
-----------------
2
102
SCHEDULE I
TO
SUBSIDIARY OFFICER'S CERTIFICATE
MATERIAL AGREEMENTS
-------------------
As to Stonhard: none
As to Carboline: none
As to Dryvit: none
As to Rust-Oleum: none
As to Zinsser: none
103
EXHIBIT B-2
OPINION OF
GENERAL COUNSEL OF THE COMPANY
[Dated the Closing Date]
To the Lenders and the Administrative
Agent referred to below
▇/▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Bank (National
Association), as Administrative Agent
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
I am the Vice President and General Counsel of RPM, Inc., an Ohio
corporation (the "Company"), and have acted in the capacity of General Counsel
in connection with the Credit Agreement, dated as of February __, 1997 (the
"Credit Agreement"), among the Company, the financial institutions referred to
therein (the "Lenders") and The Chase Manhattan Bank, as administrative agent
(in such capacity, the "Administrative Agent"). Capitalized terms used but not
defined herein shall have the meanings assigned to such terms in the Credit
Agreement. This opinion letter is being furnished to you at the request of the
Company pursuant to Section 7.01(f) of the Credit Agreement.
In connection with this opinion, I have examined originals or copies,
certified or otherwise identified to my satisfaction, of the Credit Agreement
and the Notes.
Based upon the foregoing, and subject to the assumptions, limitations
and qualifications set forth herein, I am of the opinion that:
1. The execution, delivery and performance by the Company of the Credit
Agreement and the Notes do not contravene, or constitute a default under, any
provision of any judgment, injunction, order or decree binding upon the Company
or any of its Significant Subsidiaries (as defined in the opinion letter of
104
▇▇▇▇▇▇, Halter & ▇▇▇▇▇▇▇▇ LLP of even date herewith addressed to the
Administrative Agent and the Lenders).
2. Except as set forth in Section 8.03 of the Credit Agreement, there
is no action, suit or proceeding against, or to the best of my knowledge
threatened against or affecting, the Company or any of its Significant
Subsidiaries before any court or arbitrator or any governmental body, agency or
official, in which there is a reasonable possibility of an adverse decision
which could have a Material Adverse Effect or which in any manner draws into
question the validity of the Credit Agreement or the Notes.
This opinion is limited to the matters expressly stated herein. No
implied opinion may be inferred to extend this opinion beyond the matters
expressly stated herein. The opinions expressed herein are expressed solely to
you and, without the express written consent of the undersigned, may not be
filed publicly or relied upon by any other persons (except assignees,
transferees or participants of the Lenders to the extent comprised of financial
institutions) for any reason.
Very truly yours,
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President and General Counsel
2
105
EXHIBIT C
FORM OF OPINION OF SPECIAL NEW YORK
COUNSEL TO THE ADMINISTRATIVE AGENT
[Dated the Closing Date]
To the Lenders
and the Administrative Agent
Referred to Below
c/o The Chase Manhattan Bank
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
We have participated in the preparation of the Credit Agreement (the
"Credit Agreement") dated as of February __, 1997 among RPM, Inc., an Ohio
corporation (the "Company"), the Lenders referred to therein (the "Lenders") and
The Chase Manhattan Bank, as Administrative Agent (the "Administrative Agent"),
and have acted as special counsel for the Administrative Agent for the purpose
of rendering this opinion pursuant to Section 7.01(g) of the Credit Agreement.
Terms defined in the Credit Agreement are used herein as therein defined.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments and have conducted such other
investigations of fact and law as we have deemed necessary or advisable for
purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that, assuming
that the execution, delivery and performance by the Company of the Credit
Agreement and the Notes delivered on the date hereof are within the Company's
corporate powers and have been duly authorized by all necessary corporate
action, the Credit Agreement constitutes a valid and binding agreement of the
Company and such Notes constitute valid and binding obligations of the Company.
In giving the foregoing opinion, we express no opinion as to (1) the
effect (if any) of any law of any jurisdiction (except the State of New York) in
which any
106
Lender is located which limits the rate of interest that such Lender may charge
or collect; or (2) whether a holder of any Note may, under certain
circumstances, be called upon to prove the outstanding amount of the Loans
evidenced thereby.
We are members of the bar of the State of New York and we do not herein
express any opinion as to any matters governed by any laws other than the laws
of the State of New York.
This opinion is rendered to you solely in connection with the above
matter, and may not be relied upon by you for any other purpose or relied upon
or furnished to any other person without our written consent.
Very truly yours,
2