1
$262,500,000
CREDIT
AGREEMENT
among
UST INC.
The Several Lenders from Time to Time
Parties Hereto,
BANK OF BOSTON CONNECTICUT,
as Administrative Agent,
and
THE BANK OF NOVA SCOTIA,
FLEET NATIONAL BANK
and
WACHOVIA BANK OF GEORGIA, N.A.,
as Co-Agents
Dated as of November 8, 1996
2
TABLE OF CONTENTS
Title
Section Page
------- ----
SECTION I. - DEFINITIONS
1.1. Definitions ........................................................... 1
1.2. Accounting Terms ...................................................... 11
SECTION II. - DESCRIPTION OF CREDIT
2.1. The Revolving Credit Loans ............................................ 12
2.2. Notice and Manner of Borrowing or Conversion of Base Rate and
Eurodollar Loans ...................................................... 13
2.3. Facility Fee .......................................................... 14
2.4. Reduction of Commitment Amount ........................................ 14
2.5. The Revolving Credit Notes ............................................ 14
2.6. Duration of Eurodollar Interest Periods ............................... 15
2.7. Interest Rates and Payments of Interest ............................... 15
2.8. Competitive Bid Loans ................................................. 17
2.9. Changed Circumstances ................................................. 21
2.10. Capital Requirements .................................................. 23
2.11. Payments and Prepayments of the Loans ................................. 23
2.12. Method of Payment for Revolving Credit Loans .......................... 24
2.13. Overdue Payments ...................................................... 24
2.14. Payments Not at End of Interest Period ................................ 25
2.15. Computation of Interest and Fees ...................................... 25
SECTION III. - CONDITIONS OF LOANS
3.1. Conditions Precedent to Initial Loan .................................. 26
3.2. Conditions Precedent to All Loans ..................................... 26
SECTION IV. - REPRESENTATIONS AND WARRANTIES
4.1. Organization and Qualification ........................................ 27
4.2. Corporate Authority ................................................... 27
4.3. Valid Obligations ..................................................... 28
4.4. Consents or Approvals ................................................. 28
4.5. Title to Properties; Absence of Encumbrances .......................... 28
3
4.6. Financial Statements .................................................. 28
4.7. Changes ............................................................... 29
4.8. Defaults .............................................................. 29
4.9. Taxes ................................................................. 29
4.10. Litigation ............................................................ 29
4.11. Subsidiaries .......................................................... 29
4.12. Compliance with ERISA ................................................. 29
4.13. Environmental Matters ................................................. 30
SECTION V. - AFFIRMATIVE COVENANTS
5.1. Financial Statements and other Reporting Requirements ................. 31
5.2. Conduct of Business ................................................... 33
5.3. Maintenance and Insurance ............................................. 34
5.4. Taxes ................................................................. 34
5.5. Inspection by the Administrative Agent ................................ 35
5.6. Maintenance of Books and Records ...................................... 35
5.7. Consolidated Total Funded Debt to EBITDA Ratio ........................ 35
5.8. Consolidated Operating Cash Flow to Consolidated Total Debt Service and
Dividends Ratio ....................................................... 35
5.9. Environmental Laws .................................................... 36
5.10. Further Assurances .................................................... 36
SECTION VI. - NEGATIVE COVENANTS
6.1. Encumbrances .......................................................... 36
6.2. Merger; Consolidation; Sale or Lease of Assets ........................ 38
6.3. Indebtedness of Subsidiaries .......................................... 39
6.4. ERISA ................................................................. 39
6.5. Use of Proceeds ....................................................... 40
6.6. Transactions with Affiliates .......................................... 40
SECTION VII. - DEFAULTS
7.1. Events of Default ..................................................... 40
7.2. Remedies .............................................................. 42
4
SECTION VIII. - CONCERNING THE ADMINISTRATIVE AGENT AND THE LENDERS
8.1. Appointment and Authorization ...................................... 43
8.2. Administrative Agent and Affiliates ................................ 43
8.3. Future Advances .................................................... 43
8.4. Delinquent Lender .................................................. 44
8.5. Payments ........................................................... 45
8.6. Action by Administrative Agent ..................................... 45
8.7. Notification of Defaults and Events of Default ..................... 46
8.8. Consultation with Experts .......................................... 46
8.9. Liability of Administrative Agent .................................. 46
8.10. Indemnification .................................................... 47
8.11. Independent Credit Decision ........................................ 47
8.12. Successor Administrative Agent ..................................... 47
8.13 Duties of the Co-Agents ............................................
SECTION IX. - MISCELLANEOUS
9.1. Notices ............................................................ 48
9.2 Indemnity ..........................................................
9.3. Expenses ........................................................... 51
9.4. Set-Off ............................................................ 51
9.5. Term of Agreement .................................................. 51
9.6. No Waivers ......................................................... 51
9.7. Governing Law ...................................................... 51
9.8. Amendments; Waivers; etc ........................................... 52
9.9. Binding Effect of Agreement ........................................ 52
9.10. Assignment and Participation ....................................... 52
9.11. Counterparts ....................................................... 54
9.12. Confidentiality .................................................... 54
9.13. Partial Invalidity ................................................. 54
9.14. Captions ........................................................... 54
9.15. Waiver of Jury Trial ............................................... 54
9.16. Submission to Jurisdiction/Service of Process ......................
9.17. Entire Agreement ................................................... 54
5
EXHIBITS
EXHIBIT A-1 - Form of Revolving Credit Note
EXHIBIT A-2 - Form of Competitive Bid Note
EXHIBIT B - Form of Notice of Borrowing or Conversion
EXHIBIT C - Indebtedness; Encumbrances
EXHIBIT D - Litigation
EXHIBIT E - Significant Subsidiaries
EXHIBIT F - Form of Report of Chief Financial Officer
EXHIBIT G - Form of Opinion of Counsel to the Borrower
EXHIBIT H - Form of Competitive Bid Quote Request
EXHIBIT I - Form of Invitation for Competitive Bid Quotes
EXHIBIT J - Form of Competitive Bid Quote
EXHIBIT K - Form of Notice of Competitive Bid Borrowing
EXHIBIT L - Form of Notice of Competitive Bid Loans
EXHIBIT M - Form of Assignment and Joinder Agreement
SCHEDULES
SCHEDULE 1 - Commitments of the Lenders
SCHEDULE 4.13 - List of Sites at which Potentially
Responsible Party; Hazardous Materials
Disclosure; Other Disclosure Under Section 4.13
6
$262,500,000
CREDIT AGREEMENT
THIS $262,500,000 CREDIT AGREEMENT is made as of November 8, 1996,
among (i) UST INC., a Delaware corporation (the "Borrower"), (ii) the several
banks and other financial institutions from time to time parties to this
Agreement (the "Lenders"), (iii) BANK OF BOSTON CONNECTICUT, a Connecticut
banking corporation, as administrative agent for the Lenders hereunder (in such
capacity, the "Administrative Agent") and (iv) The Bank of Nova Scotia, Fleet
National Bank and Wachovia Bank of Georgia, N.A., as Co-Agents.
BACKGROUND
A. The Borrower has requested that the Lenders provide the Loans to
the Borrower.
B. The Lenders have agreed to extend the Loans to the Borrower on the
terms and conditions hereinafter set forth.
AGREEMENT
In consideration of the Background which is incorporated by reference,
the parties hereto, intending to be bound legally, agree as follows:
SECTION I.
DEFINITIONS
1.1 Definitions.
All capitalized terms used in this Agreement or in the Notes or in any
certificate, report or other document made or delivered pursuant to this
Agreement (unless otherwise defined therein) shall have the meanings assigned to
them below:
Adjusted Eurodollar Rate. Applicable to any Interest Period, shall mean
a rate per annum determined pursuant to the following formula:
AER = [ IOR ]*
-------------
[ 1.00 - RP ]
AER = Adjusted Eurodollar Rate
IOR = Interbank Offered Rate
7
RP = Reserve Percentage
*The amount in brackets shall be rounded upwards, if necessary, to the
next higher 1/100 of 1%.
Where:
"Interbank Offered Rate" applicable to any Eurodollar Loan for any
Interest Period means the rate of interest determined by the
Administrative Agent to be the prevailing rate per annum at which
deposits in U.S. dollars are offered to the Administrative Agent by
first-class banks in the interbank Eurodollar market in which it
regularly participates on or about 10:00 a.m. (Boston time) two
Business Days before the first day of such Interest Period in an amount
approximately equal to the principal amount of the Eurodollar Loan to
which such Interest Period is to apply for a period of time
approximately equal to such Interest Period.
"Reserve Percentage" applicable to any Interest Period means the rate
(expressed as a decimal) applicable to the Administrative Agent during
such Interest Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System for determining the
maximum reserve requirement (including, without limitation, any basic,
supplemental, emergency or marginal reserve requirement) of the
Administrative Agent with respect to "Eurocurrency liabilities" as that
term is defined under such regulations.
The Adjusted Eurodollar Rate shall be adjusted automatically as of the effective
date of any change in the Reserve Percentage.
Affected Loans. See Section 2.9(a).
Affiliate. With reference to any person (which term does not include,
for purposes of this definition, any governmental agency or instrumentality),
(i) any director, officer or employee of that person, (ii) any other person
controlling, controlled by or under direct or indirect common control of that
person, (iii) any other person directly or indirectly holding 10% or more of any
class of the capital stock or other equity interests (including options,
warrants, convertible securities and similar rights) of that person and (iv) any
other person 10% or more of any class of whose capital stock or other equity
interests (including options, warrants, convertible securities and similar
rights) is held directly or indirectly by that person.
Administrative Agent. Bank of Boston Connecticut in its capacity as
Administrative Agent for the Lenders under this Agreement, and includes (where
the
2
8
context so permits) any other person or persons succeeding to the functions of
the Administrative Agent under this Agreement.
Agreement. This $262,500,000 Credit Agreement, as the same may be
modified, supplemented or amended from time to time.
Base Rate. The greater of (i) the rate of interest announced from time
to time by The First National Bank of Boston at its head office as its Base
Rate, or (ii) the Federal Funds Effective Rate plus 1/2 of 1% per annum (rounded
upwards, if necessary, to the next higher 1/16 of 1%).
Base Rate Loan. Any Revolving Credit Loan bearing interest determined
with reference to the Base Rate.
Borrower. As defined in the introductory paragraph hereto.
Borrower's Accountants. Independent certified public accountants
acceptable to the Administrative Agent and the Majority Lenders. The
Administrative Agent and each Lender hereby acknowledge that the Borrower's
Accountants may include Ernst & Young LLP.
Business Day. (i) For all purposes other than as covered by clause (ii)
below, any day other than a Saturday, Sunday or legal holiday on which banks in
Boston, Massachusetts are open for the conduct of a substantial part of their
commercial banking business, and (ii) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
Eurodollar Loans, any day that is a Business Day described in clause (i) and
that is also a day for trading between banks in U.S. Dollar deposits in the
interbank Eurodollar market.
Capital Expenditures. Any expenditure for fixed assets, leasehold
improvements, capital leases under GAAP, installment purchases of machinery and
equipment, acquisitions of real estate and other similar expenditures including
(i) in the case of a purchase, the entire purchase price, whether or not paid
during the fiscal period in question, (ii) in the case of a capital lease, the
entire rental amount for the lease term (excluding the interest component
thereof), and (iii) expenditures in any construction-in-process account of the
Borrower.
Closing Date. The first date on which the conditions set forth in
Section III hereof have been satisfied.
Code. The Internal Revenue Code of 1986 and the rules and regulations
thereunder, collectively, as the same may from time to time be supplemented or
amended and remain in effect.
3
9
Commercial Paper Rating. The rating given by each of Moody's and
Standard & Poor's to the commercial paper issued by the Borrower.
Commitment. With respect to each Lender, the amount set forth on
Schedule 1 hereto, as such Lender's Commitment may be modified pursuant hereto
and in effect from time to time.
Commitment Amount. Two Hundred Sixty-Two Million Five Hundred Thousand
Dollars ($262,500,000) or any lesser amount, including zero, resulting from a
termination or reduction of such amount in accordance with Section 2.4 or
Section 7.2.
Commitment Percentage. With respect to each Lender, the percentage set
forth on Schedule 1 hereto as such Lender's percentage of the aggregate
Commitments of all the Lenders. Schedule 1 shall be amended from time to time to
reflect any changes to the Commitment Percentages.
Competitive Bid Auction. A solicitation by the Administrative Agent of
Competitive Bid Quotes pursuant to Section 2.8.
Competitive Bid Loans. Any Loans bearing interest at a rate determined
with reference to the Competitive Bid Rate, which Loans shall be made solely at
the discretion of each Lender pursuant to a Competitive Bid Auction, as set
forth in Section 2.8.
Competitive Bid Notes. The promissory notes of the Borrower,
substantially in the form of Exhibit A-2 hereto, evidencing the obligation of
the Borrower to each Lender to repay the Competitive Bid Loans made by such
Lender.
Competitive Bid Quote. An offer by a Lender to make a Competitive Bid
Loan in accordance with Section 2.8.
Competitive Bid Rate. The rate of interest quoted by a Lender, at such
Lender's sole discretion, in any Competitive Bid Quote.
Consolidated Net Income. For any period for which the amount thereof
shall be determined, the sum of the net income of the Borrower and its
Subsidiaries determined on a consolidated basis in accordance with GAAP.
Consolidated Operating Cash Flow. For any period for which the amount
thereof shall be determined, as consolidated in accordance with GAAP, (i) an
amount equal to EBIT of the Borrower and its Subsidiaries for such period,
(ii) plus all depreciation, amortization and other non-cash charges taken in
accordance with GAAP by the Borrower and its Subsidiaries for such period, (iii)
minus all income taxes paid in cash by the
4
10
Borrower and its Subsidiaries during such period, and (iv) minus all Capital
Expenditures paid in cash by the Borrower and its Subsidiaries during such
period.
Consolidated Subsidiary. Any Subsidiary of the Borrower the assets and
liabilities of which are required to be consolidated with those of the Borrower
in its consolidated financial statements in accordance with GAAP.
Consolidated Total Debt Service. For any period for which the amount
thereof shall be determined, as consolidated in accordance with GAAP, the sum of
(i) the aggregate cash interest expense of the Borrower and its Subsidiaries for
the applicable period (including, without limitation, the interest component of
all capital leases), and (ii) the aggregate amount of scheduled principal
payments required to be made by the Borrower and its Subsidiaries for the
applicable period.
Consolidated Total Funded Debt. For any period for which the amount
thereof shall be determined, as consolidated in accordance with GAAP, all of the
Funded Debt of the Borrower and its Subsidiaries.
Controlled Group. All trades or businesses (whether or not
incorporated) under common control that, together with the Borrower, are treated
as a single employer under Section 414(b) or 414(c) of the Code or Section
4001(b) of ERISA.
Default. An event or condition that, but for the requirement that time
elapse or notice be given, or both, would constitute an Event of Default.
Dividends. (i) The declaration or payment of any cash or property
dividend on or in respect of shares of any class of capital stock of the
Borrower, except dividends payable solely in shares of the Borrower's capital
stock, and (ii) any other distribution paid on or in respect of shares of any
class of capital stock of the Borrower, but does not include redemptions or
repurchases by the Borrower of any shares of its capital stock.
Dollars and $. Dollars in lawful currency of the United States of
America.
EBIT. For any period for which the amount thereof shall be determined,
the consolidated earnings of the Borrower and its Subsidiaries before deducting
income taxes and interest expense as each such term is computed in accordance
with GAAP.
EBITDA. For any period for which the amount thereof shall be
determined, EBIT plus the consolidated depreciation, depletion and amortization
of the Borrower and its Subsidiaries as each such term is computed in accordance
with GAAP.
Encumbrances. As defined in Section 6.1.
5
11
Environmental Laws. Any and all applicable foreign, federal, state and
local environmental, health or safety statutes, laws, regulations, or ordinances
(whether now existing or hereafter enacted or promulgated), of all governmental
agencies, bureaus or departments which may now or hereafter have jurisdiction
over the Borrower or any of its Subsidiaries and all applicable judicial and
administrative and regulatory decrees, judgments and orders, including common
law rulings and determinations, relating to injury to, or the protection of,
real or personal property or human health or the environment, including, without
limitation, all requirements pertaining to reporting, licensing, permitting,
investigation, remediation and removal of emissions, discharges, releases or
threatened releases of Hazardous Materials, chemical substances, pollutants or
contaminants whether solid, liquid or gaseous in nature, into the environment or
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of such Hazardous Materials, chemical
substances, pollutants or contaminants.
ERISA. The Employee Retirement Income Security Act of 1974 and the
rules and regulations thereunder, collectively, as the same may from time to
time be supplemented or amended and remain in effect.
Eurodollar Loan. Any Revolving Credit Loan bearing interest at a rate
determined with reference to the Adjusted Eurodollar Rate.
Event of Default. Any event described in Section 7.1.
Existing Credit Agreement. The Amended and Restated Revolving Credit
and Term Loan Agreement dated as of August 15, 1994, among UST Inc., the several
banks parties thereto and Bank of Boston Connecticut, as agent.
Federal Funds Effective Rate. For any day, a fluctuating interest rate
per annum 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, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day that is a Business Day, the
average of the quotations for such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by the Administrative Agent.
Funded Debt. At any date as of which the amount thereof shall be
determined, as applied to the Borrower and its Subsidiaries, all Indebtedness of
the Borrower or such Subsidiary which by its terms is payable more than one year
from such date or which may be extended at the option of the Borrower or such
Subsidiary under a revolving credit facility or similar agreement to a date more
than one year from such date of determination, provided that all Indebtedness
hereunder shall at all times constitute Funded Debt.
6
12
GAAP. Generally accepted accounting principles consistently applied.
Guarantees. As applied to the Borrower and its Subsidiaries, all
guarantees, endorsements or other contingent or surety obligations with respect
to obligations of others whether or not reflected on the consolidated balance
sheet of the Borrower and its Subsidiaries, including, without limitation, any
obligation to furnish funds, directly or indirectly (whether by virtue of
partnership arrangements, by agreement to keep-well or otherwise), through the
purchase of goods, supplies or services, or by way of stock purchase, capital
contribution, advance or loan, or to enter into a contract for any of the
foregoing, for the purpose of payment of obligations of any other person.
Hazardous Material. Any substance (i) the presence of which requires or
may hereafter require notification, investigation or remediation under any
Environmental Law, (ii) which is or becomes defined as a "hazardous waste",
"hazardous material" or "hazardous substance" or "controlled industrial waste"
or "pollutant" or "contaminant" under any present or future Environmental Law or
amendments thereto including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9601
et seq.) and any applicable local statutes and the regulations promulgated
thereunder, (iii) which is toxic, explosive, corrosive, flammable, infectious,
radioactive, mutagenic or otherwise hazardous and is or becomes regulated by any
governmental authority, agency, department, commission, board, agency or
instrumentality of any foreign country, the United States, any state of the
United States, or any political subdivision thereof to the extent any of the
foregoing has or had jurisdiction over the Borrower, or (iv) without limitation,
which contains gasoline, diesel fuel or other petroleum products, asbestos or
polychlorinated biphenyls ("PCB's").
Indebtedness. As applied to the Borrower and its Subsidiaries and
determined on a consolidated basis, (i) all obligations for borrowed money or
other extensions of credit whether or not secured or unsecured, absolute or
contingent, including, without limitation, unmatured reimbursement obligations
with respect to letters of credit or guarantees issued for the account of or on
behalf of the Borrower and its Subsidiaries and all obligations representing the
deferred purchase price of property, other than accounts payable arising in the
ordinary course of business, (ii) all obligations evidenced by bonds, notes,
debentures or other similar instruments, (iii) all obligations secured by any
mortgage, pledge, security interest or other lien on property owned or acquired
by the Borrower or any of its Subsidiaries whether or not the obligations
secured thereby shall have been assumed, (iv) that portion of all obligations
arising under capital leases that is required to be capitalized on the
consolidated balance sheet of the Borrower and its Subsidiaries, and (v) all
Guarantees.
7
13
Interest Period.
(a) With respect to each Eurodollar Loan, the period commencing on the
date of the making or continuation of, or conversion to, such Eurodollar Loan
and ending not later than one, two, three or six months thereafter, as the
Borrower may elect in the applicable Notice of Borrowing or Conversion; and
(b) With respect to each Competitive Bid Loan, the period commencing
on the date of the making or continuation of such Competitive Bid Loan and
ending not later than 90 days thereafter, as the Borrower may elect in
accordance with Section 2.8 hereof; provided that:
(i) any Interest Period (other than an Interest Period
determined pursuant to clause (iii) below) that would otherwise end on a day
that is not a Business Day shall be extended to the next succeeding Business Day
unless, in the case of Eurodollar Loans, such Business Day falls in the next
calendar month, in which case such Interest Period shall end on the immediately
preceding Business Day;
(ii) any Interest Period applicable to a Eurodollar Loan that
begins on the last Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (iii) below, end on the last Business
Day of a calendar month that is one, two, three or six months after the first
day of such Interest Period;
(iii) any Interest Period during the Revolving Credit Period that
would otherwise end after the Revolving Credit Termination Date shall end on the
Revolving Credit Termination Date;
(iv) notwithstanding clause (iii) above, no Interest Period
applicable to a Eurodollar Loan shall have a duration of less than one month,
and if any Interest Period applicable to such Loan would be for a shorter
period, such Interest Period shall not be available hereunder; and
(v) no Interest Period may be selected in respect to all or any
portion of any Revolving Credit Loan or Competitive Bid Loan which would expire
after the Revolving Credit Termination Date.
Lenders. As defined in the introductory paragraph hereto.
Liabilities. As applied to the Borrower and its Subsidiaries, at any
date as of which the amount thereof shall be determined, all obligations that
should, in accordance
8
14
with GAAP, be classified as liabilities on the balance sheet of the Borrower or
such Subsidiary, including, in any event, all Indebtedness of the Borrower or
such Subsidiary.
Loan. A loan made to the Borrower by any Lender pursuant to Section II
of this Agreement, and "Loans" means all of such loans, collectively.
Majority Lenders. Those Lenders, no fewer than two, whose aggregate
Commitments constitute at least fifty-one percent (51%) of the total Commitments
of the Lenders.
Material Adverse Effect. A material adverse change in or effect on the
financial condition or business of the Borrower and its Subsidiaries taken as a
whole.
Notes. Collectively, the Revolving Credit Notes and the Competitive Bid
Notes, as each may be renewed, reissued, exchanged, consolidated, amended,
modified or supplemented from time to time.
Notice of Borrowing or Conversion. As defined in Section 2.2.
Obligations. Any and all obligations of the Borrower to the
Administrative Agent or any Lender hereunder or under the Notes of every kind
and description, direct or indirect, absolute or contingent, primary or
secondary, due or to become due, now existing or hereafter arising, regardless
of how they arise or by what agreement or instrument, if any, and including
obligations to perform acts and refrain from taking action as well as
obligations to pay money.
Patents. Any patent, patent rights or licenses, trademarks, trademark
rights, trade names, trade name rights, copyrights, and any other right with
respect to the foregoing.
PBGC. The Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.
Permitted Encumbrances. As defined in Section 6.1.
Person or person. Any individual, corporation, partnership, trust,
governmental agency or instrumentality.
Plan. At any time, an employee pension or other benefit plan that is
subject to Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group or (ii) if such Plan is established, maintained pursuant to
a collective bargaining agreement or any other arrangement under which more than
one employer makes contributions and to which
9
15
the Borrower 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.
Revolving Credit Notes. The revolving credit notes of the Borrower,
substantially in the form of Exhibit A-1 hereto, evidencing the obligation of
the Borrower to each Lender to repay the Revolving Credit Loans made by such
Lender.
Revolving Credit Period. The period beginning on the date of this
Agreement and extending through and including the Revolving Credit Termination
Date or such earlier date on which the obligation of the Lenders to make
Revolving Credit Loans is terminated or the Commitment Amount is reduced to zero
in accordance with the terms hereof.
Revolving Credit Termination Date. November 8, 2001.
Revolving Credit Loans. The Loans made to the Borrower pursuant to
Section 2.1(a) of this Agreement.
Significant Subsidiary. Any Subsidiary of the Borrower that, at the
time of determination, constitutes a "Significant Subsidiary" as such term is
defined in Regulation S-X of the Securities and Exchange Commission, but shall,
in any case, include, without limitation, all of the Subsidiaries listed on the
attached Exhibit E and any Affiliate of the Borrower which may, in the future,
operate or own the principal business or assets currently operated and owned by
any of such Subsidiaries listed on Exhibit E.
Subsidiary. Any corporation, association, joint stock company, business
trust or other similar organization of which 50% or more of the ordinary voting
power for the election of a majority of the members of the board of directors or
other governing body of such entity is held or controlled by the Borrower or a
Subsidiary of the Borrower, or any other such organization the management of
which is directly or indirectly controlled by the Borrower or a Subsidiary of
the Borrower through the exercise of voting power or otherwise, or any joint
venture, whether incorporated or not, in which the Borrower has a 50% ownership
interest.
1.2. Accounting Terms. All terms of an accounting character shall have
the meanings assigned thereto by GAAP applied on a basis consistent with the
financial statements referred to in Section 4.6 of this Agreement, modified to
the extent, but only to the extent, that such meanings are specifically modified
herein. In the event that any change in GAAP after the date hereof would change
the principles underlying the determination of any financial covenant in any
material respect, the Borrower, the
10
16
Administrative Agent and the Lenders shall endeavor in good faith to agree upon
a mutually acceptable amendment to such covenant; provided, however, that such
covenant as in effect at the time of such change shall continue to be in full
force and effect unless and until such an amendment becomes effective.
SECTION II.
DESCRIPTION OF CREDIT
2.1 The Revolving Credit Loans.
(a) Subject to the terms and conditions hereof, each Lender severally
agrees to make Revolving Credit Loans to the Borrower, from time to time until
the close of business on the Revolving Credit Termination Date, in such sums as
the Borrower may request up to an amount equal to such Lender's Commitment,
provided that the aggregate principal amount of all Loans at any one time
outstanding hereunder shall not exceed the Commitment Amount, and provided
further that the Revolving Credit Loans shall be made pro rata in accordance
with each Lender's Commitment Percentage at the time each such Loan is made. The
Borrower may borrow, prepay pursuant to Section 2.10 and reborrow, from the date
of this Agreement until the Revolving Credit Termination Date, the full amount
of the Commitment Amount or any lesser sum that is at least $1,000,000 or an
integral multiple thereof. Any Revolving Loan not repaid by the Revolving Credit
Termination Date shall be due and payable on the Revolving Credit Termination
Date.
(b) Provided that no Default shall have occurred and be continuing,
the Borrower may elect to convert all or any part (in integral multiples of
$1,000,000) of any outstanding Base Rate Loan or Eurodollar Loan into a Loan of
any other type provided for in this Agreement (other than a Competitive Bid
Loan) in the same aggregate principal amount, on any Business Day. The Borrower
shall give the Administrative Agent prior notice of each such conversion (which
notice shall be effective upon receipt in accordance with Section 2.2). All such
conversions shall be made pro rata in accordance with each Lender's Commitment
Percentage.
2.2 Notice and Manner of Borrowing or Conversion of Base Rate and
Eurodollar Loans.
(a) Whenever the Borrower desires to obtain or continue Base Rate
Loans or Eurodollar Loans hereunder, or convert outstanding Base Rate Loans into
Eurodollar Loans or Eurodollar Loans into Base Rate Loans, the Borrower shall
notify the Administrative Agent (which notice shall be irrevocable) by telecopy,
telegraph or telephone received no later than 10:00 a.m. (Boston time) on the
day on which the requested Loans are to be made or continued as or converted to
Base Rate Loans, and received no later than 10:00 a.m. (Boston time) on the date
four Business Days before the
11
17
day on which the requested Loans are to be made or continued as or converted to
Eurodollar Loans. Promptly upon receipt of any such notice, the Administrative
Agent shall notify each of the Lenders thereof. Such notice shall specify (i)
the effective date and amount of each Loan or portion thereof to be continued or
converted, subject to the limitations set forth in Section 2.l, (ii) the
interest rate option to be applicable thereto, and (iii) the duration of the
applicable Interest Period, if any (subject to the provisions of the definition
of Interest Period and Section 2.6). Each such notification (a "Notice of
Borrowing or Conversion") shall be immediately followed by a written
confirmation thereof by the Borrower in substantially the form of Exhibit B
hereto, provided that if such written confirmation differs in any material
respect from the action taken by the Administrative Agent, the records of the
Administrative Agent shall control absent manifest error.
(b) Subject to the terms and conditions hereof, each Lender shall make
available to the Administrative Agent, in immediately available funds, no later
than 1:00 p.m. (Boston time) on the date upon which any Base Rate Loan or
Eurodollar Loan is to be made such Lender's Commitment Percentage of the
requested Loan. Upon receipt of such funds, the Administrative Agent shall, in
turn, make each such Loan available to the Borrower on the effective date
specified therefor by crediting the amount of such Loan to the Borrower's demand
deposit account with the Administrative Agent or as otherwise specified by the
Borrower in writing. In no event shall the Administrative Agent (in its capacity
as Administrative Agent) have any obligation to make any funding unless it shall
have received funds therefor from the Lenders.
(c) Subject to the terms and conditions hereof, each Lender which is
making a Competitive Bid Loan pursuant to Section 2.8 hereof shall make
available to Administrative Agent, in immediately available funds, no later than
1:00 p.m. (Boston time) on the date on which such Competitive Bid Loan is to be
made, the principal amount thereof (or so much thereof as shall have been
allocated to such Lender pursuant to Section 2.8(h) hereof). Upon receipt of
such funds, the Administrative Agent shall make such Competitive Bid Loan
available to the Borrower on the effective date specified therefor by crediting
the amount of such Competitive Bid Loan to the Borrower's demand deposit account
with the Administrative Agent or as otherwise specified by the Borrower in
writing. In no event shall the Administrative Agent (in its capacity as
Administrative Agent) have any obligation to fund any Competitive Bid Loan
unless it shall have received funds therefor from the Lender or Lenders making
such Loan.
2.3. Facility Fee. The Borrower shall pay a facility fee to the
Administrative Agent for the respective accounts of the Lenders, to be allocated
among the Lenders in accordance with their respective Commitment Percentages,
for each day during the Revolving Credit Period at the rate per annum set forth
in Table 2.3 below corresponding to the Commercial Paper Rating applicable to
the Borrower for such day, multiplied by the Commitment Amount in effect for
such day, or if the Borrower is not
12
18
rated by either Moody's or Standard & Poor's at any time, the facility fee rate
shall be the highest rate per annum set forth below. Facility fees shall be
payable quarterly in arrears, on the last day of March, June, September and
December of each year beginning December, 1996, and on the last day of the
Revolving Credit Period. If, at any time, the Commercial Paper Rating assigned
to the Borrower by ▇▇▇▇▇'▇ is at a different level from the Commercial Paper
Rating assigned to the Borrower by Standard & Poor's (e.g., a ▇▇▇▇▇'▇ rating of
P1 and a Standard & Poor's rating of A3), the Commercial Paper Rating which
results in a lower facility fee rate shall apply (e.g., the ▇▇▇▇▇'▇ rating of
P1, in the example above).
TABLE 2.3
COMMERCIAL PAPER RATING
-----------------------
FACILITY FEE RATE
-----------------
MOODY'S S&P
------- ---
at least: P1 or A1 0.075%
P2 or A2 0.100%
P3 or A3 0.150%
below: P3 or A3 0.250%
2.4. Reduction of Commitment Amount. The Borrower may from time to time
by written notice delivered to the Administrative Agent at least two Business
Days prior to the date of the requested reduction, reduce ratably among the
Lenders by integral multiples of $1,000,000 any unborrowed portion of the
Commitment Amount. No reduction of the Commitment Amount shall be subject to
reinstatement.
2.5. The Revolving Credit Notes.
(a) The Revolving Credit Loans shall be evidenced by a separate
promissory note substantially in the form of Exhibit A-l attached hereto,
payable to the order of each Lender and having a final maturity date no later
than the Revolving Credit Termination Date. Each such Note shall be dated on or
before the date of the first Loans and shall have the blanks therein
appropriately completed.
(b) Each Lender shall, and is hereby irrevocably authorized by the
Borrower to, enter on the schedule forming a part of such Lender's Revolving
Credit Note or otherwise in its records appropriate notations evidencing the
date and the amount of each Loan, the interest rate applicable thereto and the
date and amount of each payment of principal made by the Borrower with respect
thereto, and such notations shall constitute prima facie evidence thereof. Each
Lender is hereby irrevocably authorized by the Borrower to attach to and make a
part of such Lender's Revolving Credit Note a
13
19
continuation of any such schedule as and when required. No failure on the part
of any Lender to make any notation as provided in this subsection (b) shall in
any way affect any Loan or the rights or obligations of such Lender or the
Borrower with respect thereto.
2.6. Duration of Eurodollar Interest Periods.
(a) Subject to the provisions of the definition of the term "Interest
Period", the duration of each Interest Period applicable to a Eurodollar Loan
shall be as specified in the applicable Notice of Borrowing or Conversion. The
Borrower shall have the option to elect a subsequent Interest Period to be
applicable to such Eurodollar Loan by giving notice of such election to the
Administrative Agent received no later than 10:00 a.m. (Boston time) three
Business Days before the end of the then applicable Interest Period if such Loan
is to be continued as or converted to a Eurodollar Loan.
(b) If the Administrative Agent does not receive a notice of election
of duration of an Interest Period for a Eurodollar Loan pursuant to subsection
(a) above within the applicable time limits specified therein, or if, when such
notice must be given, an Event of Default exists, the Borrower shall be deemed
to have elected to convert all Eurodollar Loans in whole into Base Rate Loans on
the last day of the then current Interest Period with respect thereto.
(c) Notwithstanding the foregoing, the Borrower may not select an
Interest Period for any Eurodollar Loan that would end, but for the provisions
of the definition of Interest Period, after the Revolving Credit Termination
Date.
2.7. Interest Rates and Payments of Interest.
(a) Each Base Rate Loan shall bear interest on the outstanding
principal amount thereof at a rate per annum equal to the Base Rate, which rate
shall change contemporaneously with any change in the Base Rate. Such interest
shall be payable on the last day of each month in which a Base Rate Loan is
outstanding hereunder, and when such Base Rate Loan is due (whether at maturity,
by reason of acceleration or otherwise).
(b) Each Eurodollar Loan shall bear interest on the outstanding
principal amount thereof, for each Interest Period applicable thereto, at a rate
per annum equal to the Adjusted Eurodollar Rate plus the percentage set forth in
Table 2.7 below corresponding to the Commercial Paper Rating applicable to the
Borrower from time to time (and such interest rate shall change on the date of a
change in such Commercial Paper Rating), or if the Borrower is not rated by
either Moody's or Standard & Poor's at any time, the Eurodollar Margin shall be
the highest rate per annum set forth below. Such interest shall be payable for
such Interest Period on the last day thereof and when such Eurodollar Loan is
due (whether at maturity, by reason of acceleration or otherwise) and, if such
Interest Period is longer than three months, at intervals of three months after
the first day of such
14
20
Interest Period. If, at any time, the Commercial Paper Rating assigned to the
Borrower by ▇▇▇▇▇'▇ is at a different level from the Commercial Paper Rating
assigned to the Borrower by Standard & Poor's (e.g., a ▇▇▇▇▇'▇ rating of P1 and
a Standard & Poor's rating of A3), the Commercial Paper Rating which results in
a lower Eurodollar Margin shall apply (e.g., the ▇▇▇▇▇'▇ rating of P1, in the
example above).
TABLE 2.7
COMMERCIAL PAPER RATING
-----------------------
EURODOLLAR MARGIN
-----------------
MOODY'S S&P
------- ---
at least: P1 or A1 0.17%
P2 or A2 0.20%
P3 or A3 0.25%
below: P3 or A3 0.40%
2.8. Competitive Bid Loans.
(a) Competitive Bid Loan Option. In addition to Revolving Credit
Loans, the Borrower may, pursuant to the terms of this Section 2.8, cause the
Administrative Agent to request that the Lenders submit offers to make
Competitive Bid Loans to the Borrower from time to time prior to the Revolving
Credit Termination Date. The Lenders may, but shall have no obligation to, make
such offers and the Borrower may, but shall have no obligation to, accept such
offers in the manner set forth in this Section 2.8; provided that at no time
shall the sum of the aggregate principal amount of Competitive Bid Loans
outstanding plus the aggregate principal amount of all other Loans outstanding
exceed the Commitment Amount.
(b) Competitive Bid Request. When the Borrower wishes to request
offers to make Competitive Bid Loans under this Section 2.8, it shall transmit
to the Administrative Agent by telecopy or telex a bid request substantially in
the form of Exhibit H hereto to be received no later than 10:00 a.m. (Boston
time) on the Business Day preceding the day on which the requested Competitive
Bid Loan is to be made specifying (i) the date such Competitive Bid Loan is
requested to be made (which must be a Business Day), (ii) the amount of such
Competitive Bid Loan, which must be a minimum of $1,000,000 or an integral
multiple thereof, and (iii) the duration of the requested Interest Period
applicable thereto (subject to the provisions of the definition of the term
Interest Period). The Borrower may request offers to make Competitive Bid Loans
for more than one Interest Period in a single bid request.
(c) Invitation for Competitive Bids. Not later than 2:00 p.m. (Boston
time) on the Business Day on which the Administrative Agent receives a bid
request from
15
21
the Borrower in compliance with Section 2.8(b), the Administrative Agent shall
send to the Lenders by telecopy or telex an invitation for Competitive Bid
Quotes, substantially in the form of Exhibit I hereto, which shall constitute an
invitation by the Borrower to each Lender to submit bids offering to make
Competitive Bid Loans in accordance with this Section 2.8 (each an "Invitation
for Competitive Bids"). If, after receipt by the Administrative Agent of a bid
request from the Borrower in accordance with subsection (b) of this Section 2.8,
the Administrative Agent or any Lender shall be unable to complete any procedure
of the auction process described in subsections (c) through (f) (inclusive) of
the Section 2.8 due to the inability of such Person to transmit or receive
communications through the means specified therein, such Person may rely on
telephonic notice for the transmission or receipt of such communications. In any
case where such Person shall rely on telephone transmission or receipt, any
communication made by telephone shall, as soon as possible thereafter, be
followed by written confirmation thereof.
(d) Submission and Contents of Competitive Bids.
(i) In response to any Invitation for Competitive Bids, each
Lender may (but shall not be required to) submit to the Administrative Agent a
Competitive Bid Quote containing an offer or offers to make Competitive Bid
Loans. Each Competitive Bid Quote must comply with the requirements of this
Section 2.8(d) and must be submitted to the Administrative Agent by telecopy or
telex not later than 9:30 a.m. (Boston time) on the requested effective date of
the Competitive Bid Loan, as set forth in the Invitation for Competitive Bids,
provided that Competitive Bid Quotes submitted by the Administrative Agent (or
any Affiliate of the Administrative Agent) in its capacity as a Lender may be
submitted, and may only be submitted, if the Administrative Agent or such
Affiliate notifies the Borrower of the offer or offers contained therein not
later than 9:15 a.m. (Boston time) on the requested effective date of the
Competitive Bid Loan. Any Competitive Bid Quote so made shall be irrevocable
except with the written consent of the Administrative Agent given on the
instructions of the Borrower.
(ii) Each Competitive Bid Quote shall be substantially in the form
of Exhibit J hereto and shall in any case specify:
(A) the proposed effective date of the proposed Competitive
Bid Loan;
(B) the principal amount of the proposed Competitive Bid
Loan for which each offer is made, which principal amount (x) may be
greater than the quoting Lender's Commitment at the time but may not
exceed the Commitment Amount, (y) must be $1,000,000 or an integral
multiple of $1,000,000 and (z) may not exceed the principal amount of
the Competitive Bid Loan for which offers were requested;
16
22
(C) the rate of interest per annum (rounded to the nearest
1/10,000th of 1%) (the "Competitive Bid Rate") offered for each such
Competitive Bid Loan;
(D) the proposed Interest Period for the proposed Competitive
Bid Loan; and
(E) the identity of the quoting Lender.
(iii) Any Competitive Bid Quote shall be disregarded if it:
(A) is not substantially in the form of Exhibit J hereto or
does not specify all of the information required by Section 2.8(d)(ii);
(B) contains qualifying, conditional or similar language
(except that it may, in the case of a quote relating to more than one
Interest Period, contain the condition that the Lender will fund any
one, but not more, of the Competitive Bid Loans offered in such
Competitive Bid Quote);
(C) proposes terms (including, without limitation, an
Interest Period) other than or in addition to those set forth in the
applicable Invitation for Competitive Bids; or
(D) arrives after the time set forth in Section 2.8(d)(i).
(e) Notice to Borrower. Not later than 10:00 a.m. (Boston time) on
the effective date of the requested borrowing, the Administrative Agent shall
notify the Borrower of the terms of each Competitive Bid Quote submitted by a
Lender that is in accordance with Section 2.8(d). The Administrative Agent's
notice to the Borrower shall specify (i) the aggregate principal amount of
Competitive Bid Loans for which offers have been received for each Interest
Period specified in the related Competitive Bid Request and (ii) the
respective principal amounts and Competitive Bid Rates, as the case may be,
so offered.
(f) Acceptance and Notice By Borrower. Not later than 10:30 a.m.
(Boston time) on the date of the requested borrowing, the Borrower shall notify,
by telephone, confirmed by telecopy substantially in the form of Exhibit K
hereto, the Administrative Agent of its acceptance or non-acceptance of the
offers so notified to it pursuant to Section 2.8(e). In the case of an
acceptance, such notice (a "Notice of Competitive Bid Borrowing") shall specify
the aggregate principal amount of offers for each Interest Period that are
accepted. The Borrower may accept any Competitive Bid Quote in whole or in part,
provided that:
17
23
(i) the aggregate principal amount of each borrowing may not
exceed the applicable amount set forth in the related Competitive Bid Request;
(ii) subject to the provisions of Section 2.8(h) hereof, the
principal amount of each Loan must be $1,000,000 or an integral multiple of
$1,000,000;
(iii) offers quoting lower Competitive Bid Rates must be accepted
prior to offers quoting higher Competitive Bid Rates; and
(iv) the Borrower shall not accept any offer that is described
in Section 2.8(d)(iii) or that otherwise fails to comply with the requirements
of this Agreement.
(g) Notice by the Administrative Agent to the Lenders. Not later than
11:00 a.m. (Boston time) on the date of the requested borrowing, the
Administrative Agent shall notify, by telephone, confirmed by telecopy
substantially in the form of Exhibit L hereto, such Lenders that made such
Competitive Bid Quotes of the Borrower's acceptance or non-acceptance of such
Competitive Bid Quotes.
(h) Allocation by Administrative Agent. If Competitive Bid Quotes are
made by two or more Lenders with the same Competitive Bid Rates for a greater
aggregate principal amount than the amount in respect of which offers are
accepted by the Borrower for the related Interest Period, the principal amount
of Competitive Bid Loans in respect of which such offers are accepted by the
Borrower shall be allocated by the Administrative Agent among such Lenders as
nearly as possible (in such multiples, not smaller than $500,000, as the
Administrative Agent may deem appropriate) in proportion to the aggregate
principal amount of such offers. If any such Lender has indicated a minimum
acceptable Competitive Bid Loan in its Competitive Bid Quote, and under the
procedures of this subsection (h), the Administrative Agent would have allocated
to it an amount less than such minimum, such Competitive Bid Quote will instead
be deemed to have been withdrawn. Determinations by the Administrative Agent of
the amounts of Competitive Bid Loans to be made by each Lender shall be
conclusive in the absence of manifest error.
(i) Interest on Competitive Bid Loans. Each Competitive Bid Loan shall
bear interest on the outstanding principal amount thereof, for the Interest
Period applicable thereto, at a rate per annum equal to the Competitive Bid Rate
quoted by the Lender making such Loan in its Competitive Bid Quote. Such
interest shall be payable on the last day of each month during the Interest
Period applicable thereto and when such Competitive Bid Loan is due (whether at
maturity, by reason of acceleration or otherwise).
(j) Competitive Bid Notes. The Competitive Bid Loans shall be
evidenced by separate promissory notes substantially in the form of Exhibit A-2
attached hereto, payable to the order of each Lender in a principal amount equal
to the Commitment
18
24
Amount. Each such Note shall be dated on or before the date of the first Loans
and shall have the blanks therein appropriately completed. Each Lender shall,
and is hereby irrevocably authorized by the Borrower to, enter on the schedule
forming a part of such Lender's Competitive Bid Notes or otherwise in its
records appropriate notations evidencing the date and the amount of each
Competitive Bid Loan made by such Lender, the interest rate applicable thereto
and the date and amount of each payment of principal made by the Borrower with
respect thereto; and such notations shall constitute prima facie evidence
thereof. Each Lender is hereby irrevocably authorized by the Borrower to attach
to and make a part of such Lender's Competitive Bid Notes a continuation of any
such schedule as and when required. No failure on the part of any Lender to make
any notation as provided in this subsection (j) shall in any way affect any
Competitive Bid Loan or the rights or obligations of such Lender or the Borrower
with respect thereto.
(k) Payment of Competitive Bid Loans. Each Competitive Bid Loan shall
be due and payable, and the Borrower hereby absolutely and unconditionally
promises to pay such Competitive Bid Loans, on the earlier of (i) the expiration
of the Interest Period thereof and (ii) the Revolving Credit Termination Date.
All payments of principal and interest and other amounts payable in respect of a
Competitive Bid Loan shall be made by the Borrower to the Administrative Agent
for the account of the Lender or Lenders making such Competitive Bid Loan in
immediately available funds, on or before 11:00 a.m. (Boston time) on the due
date thereof, free and clear of, and without any deduction or withholding for,
any taxes or other payments.
(l) Maximum Competitive Bid Loans; Funding Losses.
(i) Notwithstanding any other provision herein to the contrary,
at no time shall the aggregate principal amount of Competitive Bid Loans
outstanding at any time, after giving effect to the use of the proceeds of any
such Competitive Bid Loan, exceed the Commitment Amount minus the aggregate
principal amount of Revolving Credit Loans outstanding at such time.
(ii) If after acceptance of any Competitive Bid Quote pursuant to
Section 2.8, the Borrower fails to borrow any Competitive Bid Loan so accepted
on the date specified therefor, the Borrower shall indemnify the Lender funding
such Loan against any loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund or
maintain such unborrowed Loans.
2.9. Changed Circumstances.
(a) In the event that:
(i) on any date on which the Adjusted Eurodollar Rate would
otherwise be set the Administrative Agent shall have determined in good faith
(which
19
25
determination shall be final and conclusive) that adequate and fair means do not
exist for ascertaining the Interbank Offered Rate; or
(ii) at any time the Administrative Agent or any Lender shall have
determined in good faith (which determination shall be final and conclusive)
that:
(A) the making or continuation of or conversion of any Loan
to a Eurodollar Loan has been made impracticable or unlawful by (1) the
occurrence of a contingency that materially and adversely affects the interbank
Eurodollar market maintained by dealers in New York City of recognized standing
or (2) compliance by the Administrative Agent or any Lender in good faith with
any applicable law or governmental regulation, guideline or order or
interpretation or change thereof by any governmental authority charged with the
interpretation or administration thereof or with any request or directive of any
such governmental authority (whether or not having the force of law); or
(B) as the case may be, the Adjusted Eurodollar Rate shall no
longer represent the effective cost to any Lender for Dollar deposits in the
interbank Eurodollar market for deposits in which it regularly participates;
then, and in any such event, the Administrative Agent shall forthwith so notify
the Borrower thereof. Until the Administrative Agent notifies the Borrower that
the circumstances giving rise to such notice no longer apply, the obligation of
each Lender to allow selection by the Borrower of the type of Loan affected by
the contingencies described in this Section 2.9(a) (herein called "Affected
Loans") shall be suspended. If at the time the Administrative Agent so notifies
the Borrower, the Borrower has previously given the Administrative Agent or the
Lenders a Notice of Borrowing or Conversion with respect to Affected Loans but
such Loans have not yet gone into effect, such notification shall be deemed to
be void and the Borrower may borrow Loans of another type by giving a substitute
Notice of Borrowing or Conversion pursuant to Section 2.2 hereof.
In the case of an event specified in clause (ii)(A)(2) above, upon such
date as shall be specified in such notice (which shall not be earlier than the
date such notice is given) the Borrower shall, with respect to all of the
outstanding Affected Loans, prepay the same, together with interest thereon and
any amounts required to be paid pursuant to Section 2.14, and may borrow a Loan
of another type in replacement thereof in accordance with Section 2.1 hereof by
giving a Notice of Borrowing or Conversion pursuant to Section 2.2 hereof.
(b) In case any law, regulation, treaty or official directive or the
interpretation or application thereof by any court or by any governmental
authority charged with the administration thereof or the compliance with any
guideline or request of any central bank or other governmental authority
(whether or not having the force of law):
20
26
(i) subjects the Administrative Agent or any Lender to any tax
with respect to payments of principal or interest or any other amounts payable
hereunder by the Borrower or otherwise with respect to the transactions
contemplated hereby (except for franchise taxes and taxes on the overall net
income of the Administrative Agent or such Lender imposed by the United States
of America or any political subdivision thereof); or
(ii) imposes, modifies or deems applicable any deposit
insurance, reserve, special deposit or similar requirement against assets held
by, or deposits in or for the account of, or loans by, the Administrative Agent
or any Lender (other than such requirements as are already included in the
determination of the Adjusted Eurodollar Rate); or
(iii) imposes upon the Administrative Agent or any Lender any
other condition with respect to its performance under this Agreement,
and the result of any of the foregoing is to increase the cost to the
Administrative Agent or such Lender, reduce the income receivable by the
Administrative Agent or such Lender or impose any expense upon the
Administrative Agent or such Lender with respect to any Loans, the
Administrative Agent shall notify the Borrower thereof. The Borrower agrees to
pay to the Administrative Agent or such Lender the amount of such increase in
cost, reduction in income or additional expense as and when such cost, reduction
or expense is incurred or determined, upon presentation by the Administrative
Agent or such Lender of a statement in the amount and setting forth the
Administrative Agent or such Lender's calculation thereof, which statement shall
constitute prima facie evidence of the subject matter thereof.
(c) The Administrative Agent and each Lender agrees that as promptly as
practicable after it becomes aware of the occurrence of any event or the
existence of a condition that (i) would cause it to incur any increased cost
under this Section 2.9 or (ii) would require the Borrower to pay an increased
amount under this Section 2.9, (a) it will notify the Borrower and the
Administrative Agent of such event or condition and, (b) it will use its
reasonable efforts to make, fund or maintain the affected Loans through another
lending office or take such other reasonable steps so as to avoid the
consequences of such event or condition, provided that the Administrative Agent
or such Lender determines, in its sole discretion, that it may do so consistent
with the Administrative Agent's or such Lender's internal policies and without
being detrimental to the Administrative Agent or such Lender.
2.10. Capital Requirements. If, after the date hereof, the
Administrative Agent or any Lender determines that (i) the adoption of or change
in any law, rule, regulation or guideline regarding capital requirements for
banks or bank holding companies, or any change in the interpretation or
application thereof by any governmental authority charged with the
administration thereof, or (ii) compliance by the Administrative
21
27
Agent or any Lender or its parent bank holding company with any guideline,
request or directive of any such entity regarding capital adequacy (whether or
not having the force of law) or the interpretation thereof by a court or
governmental authority with appropriate jurisdiction, has the effect of reducing
the return on the Administrative Agent's or such Lender's or such holding
company's capital as a consequence of the Administrative Agent's or such
Lender's Loans or commitment to make Loans hereunder to a level below that which
the Administrative Agent or such Lender or such holding company could have
achieved but for such adoption, change or compliance ( assuming the full
utilization of such entity's capital) by any amount deemed by the Administrative
Agent or such Lender to be material, then the Administrative Agent or such
Lender shall notify the Borrower thereof. The Borrower agrees to pay to the
Administrative Agent or such Lender the amount of such reduction of return on
capital as and when such reduction is determined, upon presentation by the
Administrative Agent or such Lender of a statement stating the amount and
setting forth the Administrative Agent's or Lender's calculation thereof, which
statement shall constitute prima facie evidence of the subject matter thereof.
In determining such amount, the Administrative Agent or such Lender may use any
reasonable averaging and attribution methods.
2.11. Payments and Prepayments of the Loans.
(a) Base Rate Loans may be prepaid, in whole or in part, at any time,
without premium or penalty upon one Business Days' notice. Eurodollar Loans may
be prepaid, in whole or in part, at any time, without premium or penalty (but
subject to the provisions of Section 2.14) upon three business days notice to
the Administrative Agent. Any interest accrued on the amounts so prepaid to the
date of such payment must be paid at the time of any such payment. No prepayment
of Base Rate Loans or Eurodollar Loans during the Revolving Credit Period shall
affect the Commitment Amount or impair the Borrower's right to borrow Base Rate
Loans or Eurodollar Loans as set forth in Section 2.1.
(b) With respect to Eurodollar Loans, in the event that the
Administrative Agent or any Lender seeks reimbursement from the Borrower
pursuant to the terms of Section 2.9(b) or Section 2.10, the Borrower may
(subject to the provisions of Section 2.14) elect, rather than paying to the
Administrative Agent or such Lender the amount of such reimbursement, to prepay
the Loans in full, together with any and all other Obligations owing by the
Borrower to the Administrative Agent and each Lender. Any amounts so prepaid may
not be reborrowed and, upon such prepayment, each Lender's obligation to make
Loans hereunder shall terminate.
(c) Competitive Bid Loans may not be prepaid without the prior written
consent of the Lender which made such Competitive Bid Loan.
22
28
2.12. Method of Payment for Revolving Credit Loans. All payments and
prepayments of principal and all payments of interest, fees and other amounts
payable hereunder shall be made by the Borrower to the Administrative Agent, for
the respective accounts of the Lenders or (as the case may be) the
Administrative Agent, Bank of Boston Connecticut, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attention: Ms. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇; in immediately
available funds in lawful United States currency, on or before 11:00 a.m.
(Boston time) on the due date thereof, free and clear of, and without any
deduction or withholding for, any taxes or other payments. The Administrative
Agent and any Lender may, and the Borrower hereby authorizes the Administrative
Agent or any Lender to, debit the amount of any payment not made by such time to
the demand deposit account of the Borrower with the Administrative Agent or such
Lender.
2.13 Overdue Payments. Overdue principal (whether at maturity, by
reason of acceleration or otherwise) and, to the extent permitted by applicable
law, overdue interest and fees or any other amounts payable hereunder or under
each Note shall bear interest from and including the due date thereof until
paid, and payable on demand, at a rate per annum equal to (i) if such due date
occurs prior to the end of an Interest Period, 1% above the interest rate
applicable to such Loan for such Interest Period until the expiration of such
Interest Period, and thereafter, 1% above the Base Rate, and (ii) in all other
cases, 1% above the rate then applicable to Base Rate Loans, all of which
interest shall be payable on demand.
2.14 Payments Not at End of Interest Period. If the Borrower for any
reason makes any payment of principal with respect to any Eurodollar Loan on any
day other than the last day of an Interest Period applicable to such Eurodollar
Loan or fails to borrow or continue or convert to a Eurodollar Loan after giving
a Notice of Borrowing or Conversion pursuant to Section 2.2, the Borrower shall
pay to the Administrative Agent for the respective accounts of the Lenders an
amount computed pursuant to the following formula:
L = (R - T) x P x D
---------------
360
L = amount payable to Administrative Agent for the pro rata account of
the Lenders
R = the applicable Adjusted Eurodollar Rate for such Loan
T = effective interest rate per annum at which any readily marketable
bond or other obligation of the United States, selected at the
Administrative Agent's sole discretion, maturing on or near the
last day of the then applicable Interest Period of such Loan and
in approximately the same amount as such Loan can be purchased by
23
29
the Administrative Agent on the day of such payment of principal
or failure to borrow or continue or convert
P = the amount of principal prepaid or the amount of the requested
Loan
D = the number of days remaining in the Interest Period as of the date
of such payment or the number of days of the requested Interest
Period
The Borrower shall pay such amount upon presentation by the Administrative Agent
of a statement setting forth the amount and the Administrative Agent's
calculation thereof pursuant hereto, which statement shall constitute prima
facie evidence of the subject matter thereof.
2.15 Computation of Interest and Fees. Interest and all fees payable
hereunder shall be computed daily on the basis of a year of 360 days and paid
for the actual number of days for which due. If the due date for any payment of
principal is extended by operation of law, interest shall be payable for such
extended time. If any payment required by this Agreement becomes due on a day
that is not a Business Day such payment may be made on the next succeeding
Business Day (subject to clause (i) of the definition of Interest Period), and
such extension shall be included in computing interest in connection with such
payment.
SECTION III.
CONDITIONS OF LOANS
3.1 Conditions Precedent to Initial Loan. The obligation of each
Lender to make its initial Loan is subject to the condition precedent that the
Administrative Agent shall have received, on or before the Closing Date, in form
and substance satisfactory to the Administrative Agent and counsel to the
Lenders, the following:
(a) this Agreement, each Revolving Credit Note and each Competitive
Bid Note, duly executed by the Borrower;
(b) a certificate of the Secretary or an Assistant Secretary of the
Borrower (i) with respect to resolutions of the Board of Directors authorizing
the execution and delivery of this Agreement and the Notes and identifying the
officer(s) authorized to execute, deliver and take all other actions required
under this Agreement, and providing specimen signatures of such officers, (ii)
the articles of incorporation and bylaws in effect on the Closing Date, and
(iii) stating that all insurance that is required by this Agreement to be in
effect is in effect on the Closing Date;
(c) a certificate of the Secretary of State of the State of Delaware,
as to legal existence and good standing (including tax good standing) of the
Borrower in such state and listing all documents on file in the office of said
Secretary of State;
24
30
(d) a favorable legal opinion addressed to the Administrative Agent
and each Lender from ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esquire, assistant general counsel to
the Borrower, substantially in the form of Exhibit G hereto;
(e) such other documents, and completion of such other matters, as the
Administrative Agent or counsel for any Lender may reasonably deem necessary or
appropriate; and
(f) evidence of satisfaction of all outstanding Loans (as that term is
defined in the Existing Credit Agreement) under the Existing Credit Agreement.
3.2 Conditions Precedent to All Loans. The obligation of each Lender
to make each Loan, including its initial Loan, or continue or convert Loans to
Loans of another type, is further subject to the following conditions:
(a) timely receipt by the Administrative Agent of the Notice of
Borrowing or Conversion as provided in Section 2.2;
(b) the representations and warranties contained in Section IV shall
be true and accurate in all material respects on and as of the date of such
Notice of Borrowing or Conversion and on the effective date of the making,
continuation or conversion of each Loan as though made at and as of each such
date (except to the extent that such representations and warranties expressly
relate to an earlier date), and no Default or Event of Default shall have
occurred and be continuing, or would result from such Loan;
(c) the resolutions referred to in Section 3.1(b) shall remain in full
force and effect; and
(d) no change shall have occurred in any law or regulation or
interpretation thereof that, in the opinion of counsel for any Lender, would
make it illegal or against the policy of any governmental agency or authority
for any Lender to make Loans hereunder.
The making of each Loan shall be deemed to be a representation and
warranty by the Borrower on the date of the making, continuation or conversion
of such Loan as to the accuracy of the facts referred to in subsection (b) of
this Section 3.2.
25
31
SECTION IV.
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and to make
Loans hereunder, the Borrower represents and warrants to the Administrative
Agent and each Lender that:
4.1. Organization and Qualification. Each of the Borrower and its
Significant Subsidiaries (a) is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation, (b)
has all requisite corporate power to own its property and conduct its business
as now conducted and as presently contemplated and (c) is duly qualified and in
good standing as a foreign corporation and is duly authorized to do business in
each jurisdiction where the nature of its properties or business requires such
qualification, except where the failure to be so qualified would not have a
Material Adverse Effect.
4.2. Corporate Authority. The execution, delivery and performance of
this Agreement and each Note and the transactions contemplated hereby are within
the corporate power and authority of the Borrower and have been authorized by
all necessary corporate proceedings, and do not and will not (a) require any
consent or approval of the stockholders of the Borrower, (b) contravene any
provision of the charter documents or by-laws of the Borrower or any law, rule
or regulation applicable to the Borrower, (c) contravene any provision of, or
constitute an event of default or event that, but for the requirement that time
elapse or notice be given, or both, would constitute an event of default under,
any other agreement, instrument, order or undertaking binding on the Borrower,
or (d) result in or require the imposition of any Encumbrance on any of the
properties, assets or rights of the Borrower.
4.3. Valid Obligations. This Agreement and each Note and all of their
respective terms and provisions are the legal, valid and binding obligations of
the Borrower, enforceable in accordance with their respective terms except as
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
affecting the enforcement of creditors' rights generally, and except as the
remedy of specific performance or of injunctive relief is subject to the
discretion of the court before which any proceeding therefor may be brought.
4.4. Consents or Approvals. The execution, delivery and performance of
this Agreement and each Note and the transactions contemplated herein do not
require any approval or consent of, or filing or registration with, any
governmental or other agency or authority, or any other party.
26
32
4.5. Title to Properties; Absence of Encumbrances. Each of the Borrower
and its Significant Subsidiaries has good and marketable title to all of its
material properties, assets and rights of every name and nature now purported to
be owned by it, including, without limitation, such properties, assets and
rights as are reflected in the financial statements referred to in Section 4.6
(except such properties, assets or rights as have been disposed of in the
ordinary course of business since the date thereof), free from all Encumbrances
except Permitted Encumbrances or those Encumbrances disclosed in Exhibit C
hereto, and, except as so disclosed, free from all defects of title that could
reasonably be expected to materially adversely affect such properties, assets or
rights, taken as a whole.
4.6. Financial Statements. The Borrower has furnished the
Administrative Agent and each Lender its consolidated balance sheet as of
December 31, 1995 and its consolidated statements of income, changes in
stockholders' equity and cash flow for the fiscal year then ended, and related
footnotes, audited and certified by the Borrower's Accountants. The Borrower has
also furnished the Administrative Agent and each Lender its consolidated balance
sheet as of June 30, 1996 and its consolidated statements of income and cash
flow for the fiscal quarter then ended, certified by the principal financial
officer of the Borrower but subject, however, to normal, recurring year-end
adjustments that shall not in the aggregate be material in amount. All such
financial statements were prepared in accordance with GAAP applied on a
consistent basis throughout the periods specified and present fairly the
financial position of the Borrower and its Consolidated Subsidiaries as of such
dates and the results of the operations of the Borrower and its Consolidated
Subsidiaries for such periods. There are no liabilities, contingent or
otherwise, required to be disclosed in accordance with GAAP and not disclosed in
such financial statements that involve a material amount.
4.7. Changes. From December 31, 1995, through the Closing Date, there
has been no Material Adverse Effect.
4.8. Defaults. No Default or Event of Default exists.
4.9. Taxes. The Borrower and each Significant Subsidiary has filed all
material federal, state and other tax returns required to be filed, and all
material taxes, assessments and other governmental charges due from the Borrower
and each Significant Subsidiary have been fully paid except where (i) such
payment is being contested in good faith by appropriate proceedings and adequate
reserves have been established and are being maintained in accordance with GAAP,
or (ii) where the failure to so file or pay could not reasonably be expected to
have a Material Adverse Effect. The Borrower and each Significant Subsidiary has
established on its books reserves adequate for the payment of all federal, state
and other tax liabilities.
27
33
4.10. Litigation. Except as set forth on Exhibit D hereto, there is no
litigation, arbitration, proceeding or investigation pending, or, to the
knowledge of the Borrower's or any Subsidiary's officers, threatened, against
the Borrower or any Subsidiary the outcome of which could reasonably be expected
to result in a forfeiture of all or any substantial part of the property of the
Borrower or its Significant Subsidiaries.
4.11. Subsidiaries. As of the date of this Agreement, Exhibit E lists
all of the Borrower's Significant Subsidiaries. Such Significant Subsidiaries
have, in the aggregate, assets, sales and earnings totaling not less than 90% of
the total assets, sales and earnings of the Borrower and its Consolidated
Subsidiaries. The Borrower or a Significant Subsidiary of the Borrower is the
owner, free and clear of all liens and Encumbrances, of all of the issued and
outstanding stock of such Significant Subsidiaries. All shares of the stock of
the Borrower and each Significant Subsidiary have been validly issued and are
fully paid and nonassessable, and no rights to subscribe to any additional
shares have been granted, and no options, warrants or similar rights are
outstanding with respect to the outstanding stock of Significant Subsidiaries.
4.12. Compliance with ERISA. The Borrower 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 applicable provisions of ERISA and the Code,
and have not incurred any liability to the PBGC or a Plan under Title IV of
ERISA; and, to the best knowledge of the Borrower, no "prohibited transaction"
or "reportable event" (as such terms are defined in ERISA) has occurred with
respect to any Plan.
4.13. Environmental Matters.
(a) Except as set forth on Schedule 4.13, (i) the Borrower and each
of its Significant Subsidiaries have obtained all permits, licenses and other
authorizations which are required under all applicable Environmental Laws,
except to the extent failure to have any such permit, license or authorization
would not have a Material Adverse Effect, and (ii) the Borrower and each of its
Subsidiaries are in compliance with the terms and conditions of all such
permits, licenses 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 regulation, code, plan, order, decree, judgment, injunction,
entered, promulgated or approved thereunder, except to the extent failure to
comply would not have a Material Adverse Effect.
(b) Except as set forth in Schedule 4.13, no written notice,
notification, demand, request for information, citation, summons or order has
been issued, no complaint has been filed, no penalty has been assessed and, to
the best knowledge of the Borrower, no investigation is pending or threatened
(in writing) by any governmental or other entity
28
34
with respect to any alleged failure by the Borrower or any of its Significant
Subsidiaries to have any permit, license or authorization required in connection
with the conduct of its business or with respect to any applicable Environmental
Laws, including, without limitation, Environmental Laws relating to the
generation, treatment, storage, recycling, transportation, disposal or release
of any Hazardous Materials, except to the extent that such notice, complaint,
penalty or investigation did not or could not reasonably be expected to result
in a Material Adverse Effect. As of the date hereof, the Borrower or any
Subsidiary of the Borrower has been identified in writing as a potentially
responsible party (as that term has been construed pursuant to the Federal
Comprehensive Environmental Response, Compensation and Liability Act and similar
state and local laws) at the sites listed and described on the attached Schedule
4.13 and at no other sites.
(c) Except as disclosed on Schedule 4.13 attached hereto, to the best
of the Borrower's knowledge no material written notification of a release of a
Hazardous Material has been filed by or on behalf of the Borrower or any of its
Significant Subsidiaries and no property now or previously owned, leased or used
by the Borrower or any of its Significant Subsidiaries is listed or proposed for
listing on the National Priorities List under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, or on any similar
state list of sites requiring investigation or clean-up, except to the extent
such notification, listing or proposed listing could not reasonably be expected
to result in a Material Adverse Effect.
(d) There are no liens or encumbrances arising under or pursuant to
any applicable Environmental Laws on any of the real property or properties
currently owned, leased or used by the Borrower or any of its Significant
Subsidiaries, and no notice of any governmental action has been received by the
Borrower or any Significant Subsidiary, and to the best knowledge of the
Borrower, no governmental actions have been taken or are in process, which could
subject any of such properties to such liens or encumbrances, except to the
extent that such liens or encumbrances could not reasonably be expected to
result in a Material Adverse Effect.
(e) Except as set forth on Schedule 4.13, (i) neither the Borrower
nor any of its Significant Subsidiaries nor, to the best knowledge of the
Borrower, any previous owner, tenant, occupant or user of any property currently
owned, leased or used by the Borrower or any of its Significant Subsidiaries,
has stored, deposited, disposed of, or located on any property currently owned,
leased, or used by the Borrower or any of its Significant Subsidiaries, any
Hazardous Materials, except (a) to the extent commonly used in day-to-day
operations of such property and, in such case, in substantial compliance with
all applicable Environmental Laws, or (b) where such storage, deposition,
disposal or location would not have a Material Adverse Effect, and (ii) no
Hazardous Materials are stored, deposited, disposed of, or located on any
property currently owned, leased, or used by the Borrower or any of its
Significant Subsidiaries, except (a) to the extent commonly used in day-to-day
operations of such property and, in such case, in substantial compliance
29
35
with all applicable Environmental Laws, or (b) where such storage, deposition,
disposal or location would not have a Material Adverse Effect.
SECTION V.
AFFIRMATIVE COVENANTS
So long as any Lender has any commitment to lend hereunder or any Loan or other
Obligation hereunder remains outstanding, the Borrower covenants as follows:
5.1. Financial Statements and Other Reporting Requirements. The
Borrower shall furnish to the Administrative Agent and the Lenders :
(a) as soon as available to the Borrower, but in any event within 90
days after the end of each of its fiscal years, a consolidated balance sheet as
of the end of, and a related consolidated statement of income, changes in
stockholders' equity and cash flow for, such year, audited and certified by the
Borrower's Accountants (or other independent certified public accountants
acceptable to the Administrative Agent and each Lender) in the case of such
consolidated statements, and certified by the principal financial officer in the
case of such consolidated statements; and, concurrently with such financial
statements, a written statement by such accountants that, in the making of the
audit necessary for their report and opinion upon such financial statements they
have obtained no knowledge of any Default or, if in the opinion of such
accountants any such Default exists, they shall disclose in such written
statement the nature and status thereof;
(b) as soon as available to the Borrower, but in any event within 45
days after the end of each of its fiscal quarters, a consolidated balance sheet
as of the end of, and a related consolidated statement of income for, the period
then ended, certified by the principal financial officer of the Borrower but
subject, however, to normal, recurring year-end adjustments that shall not in
the aggregate be material in amount;
(c) concurrently with the delivery of each financial statement
pursuant to subsections (a) and (b) of this Section 5.1, a report in
substantially the form of Exhibit F hereto signed on behalf of the Borrower by
its chief financial officer, its treasurer or its controller;
(d) promptly, as and when any Subsidiary qualifies or ceases to
qualify as a Significant Subsidiary hereunder, a revised Exhibit E reflecting
the current list of Significant Subsidiaries;
(e) promptly after the same are available, copies of all proxy
statements, financial statements and reports as the Borrower shall send to its
stockholders or as the
30
36
Borrower may file with the Securities and Exchange Commission or any
governmental authority at any time having jurisdiction over the Borrower or its
Significant Subsidiaries;
(f) (i) if and when the Borrower 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 that might constitute grounds for a termination of such Plan
under Title IV of ERISA, or knows that any member of the Controlled Group or 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) a copy of any request for a waiver of the
funding standards or an extension of the amortization periods required under
Section 412 of the Code or Section 302 of ERISA, (iii) a copy of any notice of
intent to terminate any Plan, (iv) notice that the Borrower or any member of the
Controlled Group will or may incur any material liability to or on account of a
Plan under Section 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA, (v) promptly
upon the request of the Administrative Agent or any Lender, a copy of the annual
report of each Plan (Form 5500 or comparable form) required to be filed with the
IRS and/or the Department of Labor; and (vi) promptly upon the request of the
Administrative Agent or any Lender, notice of the adoption of any Plan subject
to ERISA, along with the vesting and funding schedules and other principal
provisions thereof;
(g) immediately upon becoming aware of the existence of any condition
or event that constitutes a Default or Event of Default, written notice thereof
specifying the nature and duration thereof and the action being or proposed to
be taken with respect thereto;
(h) promptly upon becoming aware of any litigation or of any
investigative proceedings by a governmental agency or authority commenced or
threatened against the Borrower or any of its Subsidiaries of which it has
notice, the outcome of which could reasonably be expected to have a Material
Adverse Effect, written notice thereof and the action being or proposed to be
taken with respect thereto;
(i) within 30 days of receipt of written notice from any governmental
agency or authority, or promptly upon the Borrower's reasonable belief (i) that
a violation of any Environmental Law has been committed by the Borrower, (ii)
that there are any investigative proceedings by a governmental agency or
authority commenced or threatened against the Borrower or any of its
Subsidiaries regarding any actual or potential violation of Environmental Laws
or any spill, release, discharge or disposal of any Hazardous Material in
violation of any Environmental Law, (iii) that any governmental agency or
private party is alleging that the Borrower may be liable or responsible for any
costs associated with a response to or cleanup of a release of a Hazardous
Material into the environment or any damages caused thereby, or (iv) that any
administrative or judicial complaint or order has been filed against the
Borrower alleging a violation of any Environmental Law or requiring the Borrower
to take any action in connection with the
31
37
release of Hazardous Material into the environment, which, in any such case
described in items (i) through (iv) above, could reasonably be expected to have
a Material Adverse Effect, written notice thereof and the action being or
proposed to be taken with respect thereto; and
(j) from time to time, such other financial data and information
about the Borrower or its Subsidiaries as the Administrative Agent or any Lender
may reasonably request.
5.2. Conduct of Business. The Borrower shall, and shall cause its
Significant Subsidiaries to:
(a) duly observe and comply in all material respects with all
applicable laws and valid requirements of any governmental authorities relative
to its corporate existence, rights and franchises, to the conduct of its
business and to its property and assets (including without limitation all
Environmental Laws and ERISA), and shall maintain and keep in full force and
effect all licenses and permits necessary in any material respect to the proper
conduct of its business;
(b) except as provided in Section 6.2, maintain its corporate
existence; and
(c) remain engaged substantially in the same fields of business as
that in which it is now engaged, except that nothing in this Section shall
prevent the Borrower or any Significant Subsidiary from engaging in any new
business and the Borrower or any Significant Subsidiary may withdraw from any
business activity which its Board of Directors reasonably deems unprofitable or
unsound, provided that promptly after such withdrawal, the Borrower provide the
Administrative Agent with written notice thereof.
5.3. Maintenance and Insurance. The Borrower shall, and shall cause its
Significant Subsidiaries to, protect and preserve all of its properties,
including, without limitation, all of its Patents, shall obtain all new Patents
as are necessary or advisable for the conduct o its business, and shall maintain
all of its tangible properties in good repair, working order and condition and
from time to time make all necessary and proper repairs, renewals, replacements,
additions and improvements thereto as the Borrower or such Significant
Subsidiary, in the exercise of its reasonable judgment, deems necessary or
advisable, as required for the normal conduct of its business, and shall comply
with the provisions of all material leases to which it is a party or under which
it occupies property so as to prevent any material loss or forfeiture thereof or
thereunder if, in any such case, the failure to do so would have a Material
Adverse Effect. Each of the Borrower and its Significant Subsidiaries shall at
all times, to the extent available, in the Borrower's reasonable discretion, on
reasonable economic terms, maintain liability and casualty insurance with
financially sound and reputable insurers or self-insure in such amounts as
32
38
the officers of the Borrower in the exercise of their reasonable judgment deem
to be adequate or as required by any applicable law. The Borrower shall furnish
to the Administrative Agent certificates or other evidence satisfactory to the
Administrative Agent of compliance with the foregoing insurance provisions. The
Administrative Agent shall not, by the fact of approving, disapproving or
accepting any such insurance, incur any liability for the form or legal
sufficiency of insurance contracts, solvency of insurance companies or payment
of lawsuits, and the Borrower hereby expressly assumes full responsibility
therefor and liability, if any, thereunder.
5.4. Taxes. The Borrower shall pay, or cause to be paid, all taxes,
assessments or governmental charges on or against it or any of its Significant
Subsidiaries or its or their properties on or prior to the time when they become
due; provided that this covenant shall not apply to any tax, assessment or
charge that (i) is being contested in good faith by appropriate proceedings and
with respect to which adequate reserves have been established and are being
maintained in accordance with GAAP, or (ii) singly or in the aggregate would not
have a Material Adverse Effect.
5.5. Inspection by the Administrative Agent. The Borrower shall permit
the Lenders, through the Administrative Agent or its designees, at any
reasonable time and upon reasonable notice, to (i) visit and inspect the
properties of the Borrower and its Significant Subsidiaries (ii) examine and
make copies of and take abstracts from the books and records of the Borrower and
its Significant Subsidiaries, and (iii) discuss the affairs, finances and
accounts of the Borrower and its Significant Subsidiaries with their appropriate
officers, employees and accountants.
5.6. Maintenance of Books and Records. The Borrower shall, and shall
cause its Significant Subsidiaries to, keep adequate books and records of
account (and the Borrower, in addition, shall keep such books and records on a
consolidated basis), in which true and complete entries will be made reflecting
all of its business and financial transactions, and such entries will be made in
accordance with GAAP and applicable law.
5.7. Consolidated Total Funded Debt to EBITDA Ratio. The Borrower shall
at all times maintain a ratio of Consolidated Total Funded Debt to EBITDA of not
greater than 0.7 to 1.0 as determined at the end of each fiscal quarter for the
four consecutive fiscal quarters then ending.
5.8. Consolidated Operating Cash Flow to Consolidated Total Debt
Service and Dividends Ratio. The Borrower shall at all times maintain a ratio of
(i) Consolidated Operating Cash Flow to (ii) Consolidated Total Debt Service
plus Dividends in excess of 1.25 to 1.0, as determined at the end of each fiscal
quarter for the four consecutive fiscal quarters then ending.
33
39
5.9. Environmental Laws. The Borrower shall comply, and shall make all
reasonable efforts to cause its Significant Subsidiaries to comply, with all
applicable Environmental Laws in all jurisdictions in which any of them operates
now or in the future; provided, however, that the Borrower shall not be
obligated by this Section to take any action that would result in its being
designated an operator (as that term has been construed pursuant to the federal
Comprehensive Environmental Response, Compensation and Liability act and similar
state and local laws) of any Significant Subsidiary or an owner or operator of
property owned, used, or leased by such Significant Subsidiary.
5.10. Further Assurances. At any time and from time to time the
Borrower shall, and shall cause each of its Subsidiaries to, execute and deliver
such further instruments and take such further action as may reasonably be
requested by the Administrative Agent or any Lender effect the purposes of this
Agreement and the Notes.
SECTION VI.
NEGATIVE COVENANTS
So long as any Lender has any commitment to lend hereunder or
any Loan or other Obligation hereunder remains outstanding, the Borrower
covenants as follows:
6.1. Encumbrances. The Borrower shall not, and shall not allow, any of
its Significant Subsidiaries to, create, incur, assume or suffer to exist any
mortgage, pledge, security interest, lien or other charge or encumbrance,
including the lien or retained security title of conditional vendor upon or with
respect to any of its property or assets ("Encumbrances"), or assign or
otherwise convey any right to receive income, including the sale or discount of
accounts receivable with or without recourse, except the following ("Permitted
Encumbrances"):
(a) Encumbrances in favor of the Administrative Agent for the benefit
of the Lenders;
(b) Encumbrances existing as of the date of this Agreement and
disclosed in Exhibit C hereto;
(c) liens for taxes, fees, assessments and other governmental charges
to the extent that payment of the same may be postponed or is not required in
accordance with the provisions of Section 5.4;
(d) landlords' and lessors' liens in respect of rent not in default;
liens incurred or deposits made in the ordinary course of business in connection
with workmen's compensation, unemployment insurance, social security and other
like laws; mechanics',
34
40
laborers' and materialmen's and similar liens, if the obligations secured by
such liens are not then delinquent; liens securing the performance of bids,
tenders, contracts (other than for the payment of money); and statutory
obligations incidental to the conduct of its business and that do not in the
aggregate materially detract from the value of its property or materially impair
the use thereof in the operation of its business;
(e) liens existing on property of any Person at the time such Person
becomes a Significant Subsidiary, but only so long as the obligation secured by
any such lien is not in default and such lien is and will remain confined to the
property subject to it at the time such Person becomes a Significant Subsidiary
and to fixed improvements thereafter erected on such property;
(f) liens existing on any property prior to the acquisition thereof by
the Borrower or any Significant Subsidiary and not created in contemplation of
such acquisition, provided that any such lien does not extend to any other
property of the Borrower or any Significant Subsidiary;
(g) judgment liens that shall not have been in existence for a period
longer than 30 days after the creation thereof or, if a stay of execution shall
have been obtained, for a period longer than 30 days after the expiration of
such stay;
(h) rights of lessors under capital leases;
(i) Encumbrances in respect of any purchase money obligations for
tangible property used in its business, provided that any such Encumbrances
shall not extend to property and assets of the Borrower or any such Significant
Subsidiary not financed by such a purchase money obligation;
(j) easements, rights of way, restrictions and other similar charges or
Encumbrances relating to real property and not interfering in a material way
with the ordinary conduct of its business;
(k) Encumbrances on the common stock of the Borrower purchased with any
of the proceeds of the Loans;
(l) Encumbrances in favor of the United States of America or any State
thereof or any political subdivision, agency or instrumentality of any thereof
(each hereinafter called a "Government") on any property or assets hereafter
acquired, constructed, installed or purchased by the Borrower or a Significant
Subsidiary primarily for the purpose of manufacturing or producing any product,
or performing any research or development work, directly or indirectly, for such
Government;
(m) Encumbrances on its property or assets created in connection with
the refinancing of Indebtedness secured by Permitted Encumbrances on such
property,
35
41
provided that the amount of Indebtedness secured by any such Encumbrance shall
not be increased as a result of such refinancing and no such Encumbrance shall
extend to property and assets of the Borrower or any such Significant Subsidiary
not encumbered prior to any such refinancing; and
(n) Encumbrances securing Indebtedness of the kind described in
Section 6.3 to the extent (but only to the extent) permitted by Section 6.3.
6.2. Merger; Consolidation; Sale or Lease of Assets. The Borrower
shall not, and shall not allow any of its Significant Subsidiaries to, (a) sell,
lease or otherwise dispose of assets or properties (valued at the lower of cost
or market), other than (i) sales of assets in the ordinary course of business,
(ii) sales of assets or property not in the ordinary course of business,
provided that the assets or properties so sold during any fiscal year generated,
produced, contributed to or accounted for, directly or indirectly, in the
aggregate, no more than ten percent (10%) of Consolidated Net Income for the
immediately preceding fiscal year, as shown in the financial statements for such
prior year delivered to the Administrative Agent by the Borrower pursuant to
Section 5.1(a), and provided, further, that (x) whenever the Borrower or any
Significant Subsidiary sells any assets or properties pursuant to this clause
(ii), the Borrower shall provide the Administrative Agent with such statements
of income and other information as the Administrative Agent or any Lender
reasonably requests in order to determine compliance with this clause (ii), all
of which statements have been prepared in accordance with GAAP in a manner
consistent with the financial statements provided to the Administrative Agent by
the Borrower pursuant to Section 5.1(a), and (y) at the time of any such
proposed sale, no Event of Default has occurred and is continuing and no Default
or Event of Default would result therefrom, and (iii) the sale or disposition of
any of the common stock of the Borrower purchased with any of the proceeds of
the Loans, or (b) liquidate, merge or consolidate into or with any other person,
provided that any Significant Subsidiary of the Borrower may merge or
consolidate into or with (i) the Borrower if no Default or Event of Default has
occurred and is continuing or would result from such merger and if the Borrower
is the surviving company, or (ii) any other wholly-owned Significant Subsidiary
of the Borrower.
6.3. Indebtedness of Subsidiaries. The Borrower shall not cause or
permit any of its Significant Subsidiaries to create, incur, assume, guarantee
or be or remain liable with respect to any Indebtedness other than (a)
Indebtedness existing as of the date of this Agreement and disclosed in Exhibit
C hereto, (b) Indebtedness owing to the Borrower or any other Subsidiary, and
(c) other Indebtedness, not to exceed $50,000,000 in the aggregate at any time
outstanding, provided that such other Indebtedness is not secured by any
security interests, liens, charges or encumbrances on the property of any
Significant Subsidiary other than the Significant Subsidiary for whose benefit
such Indebtedness was incurred, or as otherwise permitted in Section 6.1.
36
42
6.4. ERISA. Neither the Borrower nor any member of the Controlled
Group shall permit any Plan maintained by it to (a) engage in any "prohibited
transaction" (as defined in Section 4975 of the Code or Section 406 of ERISA
that would have a Material Adverse Effect, (b) incur any "accumulated funding
deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA)
whether or not waived, that would have a Material Adverse Effect, (c) fail to
satisfy any additional funding requirements set forth in Section 412 of the Code
and Section 302 of ERISA, (d) adopt a Plan amendment which would require
security pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA, or
(e) terminate any Plan in a manner that could result in the imposition of a lien
or encumbrance on the assets of the Borrower or any of its Significant
Subsidiaries pursuant to Section 4068 of ERISA that would have a Material
Adverse Effect. Each Plan shall comply in all material respects with ERISA.
6.5. Use of Proceeds. The Borrower shall use the proceeds of the
Revolving Credit Loans and the Competitive Bid Loans in support of its
commercial paper program and for general corporate purposes, including, without
limitation, to purchase common stock of the Company and for the payment of costs
and expenses incurred or sustained by the Company in connection with the
consummation of the transactions referred to herein or contemplated hereby. No
proceeds of any Loans will be used for a purpose which violates Regulations U
and X of the Board of Governors of the Federal Reserve System, 12 C.F.R. 221 and
224, as amended, and following the application of the proceeds of each Loan, the
value of all "margin stock" (as such term is used in such Regulations) of the
Borrower will not exceed 25% of the value of the total assets of the Borrower
that are subject to the restrictions set forth in Section 6.1 and 6.2.
6.6. Transactions with Affiliates. The Borrower shall not, and shall
not permit any of its Significant Subsidiaries to, directly or indirectly enter
into any purchase, sale, lease or other transaction with any Affiliate (other
than any other Subsidiary) except in the ordinary course of business on terms
that are no less favorable to the Borrower or such Significant Subsidiary than
those which might be obtained at the time in a comparable arm's length
transaction with any person who is not an Affiliate.
SECTION VII.
DEFAULTS
7.1. Events of Default. There shall be an Event of Default hereunder if
any of the following events occurs:
(a) the Borrower shall fail to pay (i) any amount of principal of any
Loans when due or (ii) within five (5) Business Days after the due date, any
amount of interest thereon or any fees, expenses or other amounts payable
hereunder or under any Note on the due date therefor; or
37
43
(b) the Borrower shall fail to perform, comply with or observe or shall
otherwise breach any one or more of the terms, covenants, obligations or
agreements contained in Section 5.1(g), 5.2(b), 5.5, 5.7, 5.8, 6.1 through 6.6,
inclusive; or
(c) the Borrower shall fail to perform, comply with or observe or shall
otherwise breach any one or more of the terms, covenants, obligations or
agreements (other than in respect of subsections 7.1(a) and 7.1(b) hereof)
contained in this Agreement and such default shall continue for 15 days after
notice thereof has been sent to the Borrower by the Administrative Agent,
provided, however, that in the event of a failure by the Borrower to comply with
the covenants contained in Sections 5.2(a) or 5.9, no Default, default or an
Event of Default shall be deemed to occur on account of any such failure unless
such failure(s) (individually or in the aggregate) has a Material Adverse
Effect; or
(d) any representation or warranty of the Borrower made in this
Agreement or in any Note or any other documents or agreements executed in
connection with the transactions contemplated by this Agreement or in any
certificate delivered hereunder shall prove to have been false in any material
respect upon the date when made or deemed to have been made; or
(e) the Borrower or any of its Significant Subsidiaries shall fail to
pay when due, or within any applicable period of grace, any obligations in
excess of $25,000,000 in the aggregate for borrowed monies or advances, or fail
to observe or perform any term, covenant or agreement evidencing or securing
such obligations for borrowed monies or advances, the result of which failure is
to permit the holder or holders of such Indebtedness to cause such Indebtedness
to become due prior to its stated maturity upon delivery of required notice, if
any; or
(f) the Borrower 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, liquidator or similar official of itself or of all
or a substantial part of its property, (ii) be generally not paying its debts as
such debts become due, (iii) make a general assignment for the benefit of its
creditors, (iv) commence a voluntary case under the Federal Bankruptcy Code (as
now or hereafter in effect), (v) take any action or commence any case or
proceeding under any law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or adjustment of debts, or any other law providing for
the relief of debtors, (vi) fail to contest in a timely or appropriate manner,
or acquiesce in writing to, any petition filed against it in an involuntary case
under the Federal Bankruptcy Code or other law, (vii) take any action under the
laws of its jurisdiction of incorporation or organization similar to any of the
foregoing, (viii) be insolvent within the meaning of the United States
Bankruptcy Code or other applicable statute, or (ix) take any corporate action
for the purpose of effecting any of the foregoing; or
38
44
(g) a proceeding or case shall be commenced, without the application or
consent of the Borrower or any of its Significant Subsidiaries in any court of
competent jurisdiction, seeking (i) the liquidation, reorganization,
dissolution, winding up, or composition or readjustment of its debts, (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like of it or
of all or any substantial part of its assets, or (iii) similar relief in respect
of it, under any law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or adjustment of debts or any other law providing for
the relief of debtors, and such proceeding or case shall continue undismissed,
or unstayed and in effect, for a period of 60 days, or an order for relief shall
be entered in an involuntary case under the Federal Bankruptcy Code, against the
Borrower or such Subsidiary, or action under the laws of the jurisdiction of
incorporation or organization of the Borrower or any of its Significant
Subsidiaries similar to any of the foregoing shall be taken with respect to the
Borrower or such Significant Subsidiary and shall continue unstayed and in
effect for any period of 60 days; or
(h) (A) the Borrower shall fail to own, both legally and beneficially,
100% of the capital stock of United States Tobacco Company, a Delaware
corporation, or (B) United States Tobacco Company shall cease to operate the
principal business currently operated by it or to own the principal assets
necessary to operate such business, or (C) United States Tobacco Company shall
cease to own, both legally and beneficially, 100% of the capital stock of each
of United States Tobacco Manufacturing, Inc. and United States Tobacco Sales &
Marketing, Inc. or (D) either of United States Tobacco Manufacturing, Inc. or
United States Tobacco Sales & Marketing, Inc. shall cease to operate the
principal business currently operated by it or to own the principal assets
necessary to operate such business, provided that if any of the foregoing events
result from a merger permitted by Section 6.2, the occurrence of such event
shall not be an Event of Default hereunder; or
(i) judgments or orders for the payment of money shall be entered
against the Borrower or any of its Significant Subsidiaries by any court, or
warrants of attachment or execution or injunctions or any similar processes
shall be issued or levied against property of the Borrower or such Significant
Subsidiary, that in the aggregate exceed $25,000,000 in value and such
judgments, orders, warrants, injunctions or processes shall continue
undischarged or unstayed for 30 days; or
(j) the Borrower or any member of the Controlled Group shall fail to
pay any amount or amounts that it shall have become liable to pay to the PBGC or
to a Plan under Title IV of ERISA; or notice of intent to terminate a Plan or
Plans shall be filed under Title IV of ERISA by the Borrower, 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 or to
cause a trustee to be appointed to administer any such Plan or Plans or a
proceeding shall be instituted by a fiduciary of any such Plan or Plans against
the Borrower and such proceedings shall not have been dismissed within 30 days
thereafter; or a condition shall exist by reason of which the PBGC would be
entitled
39
45
to obtain a decree adjudicating that any such Plan or Plans must be terminated,
if the result of any of the foregoing events described in this clause (j) would
constitute a Material Adverse Effect.
7.2. Remedies. Upon the occurrence of an Event of Default described in
subsections 7.1(f) and (g), with respect to the Borrower, immediately and
automatically, and upon the occurrence of any other Event of Default, at any
time thereafter while such Event of Default is continuing, at the option of the
Majority Lenders and upon the Administrative Agent's declaration:
(a) each Lender's commitment to make any further Loans hereunder
shall terminate;
(b) the unpaid principal amount of the Loans together with accrued
interest, all other Obligations, and all other obligations of the Borrower to
the Administrative Agent and each Lender of any kind shall become immediately
due and payable without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived; and
(c) the Administrative Agent may, with the consent of the Majority
Lenders, and shall, upon the request of the Majority Lenders exercise (on behalf
of itself and the Lenders) any and all rights the Administrative Agent and the
Lenders have under this Agreement, the Notes or any other documents or
agreements executed in connection herewith, or at law or in equity, and proceed
to protect and enforce the Administrative Agent's and each Lender's rights by
any action at law, in equity or other appropriate proceeding; provided however,
that each Lender shall have the right to collect and otherwise enforce the Notes
issued to such Lender, subject to Section 8.5 hereof.
SECTION VIII.
CONCERNING THE ADMINISTRATIVE AGENT AND THE LENDERS
8.1 Appointment and Authorization. Each of the Lenders hereby appoints
Bank of Boston Connecticut to serve as Administrative Agent under this Agreement
and irrevocably authorizes the Administrative Agent to take such action on such
Lender's behalf under this Agreement and to exercise such powers and to perform
such duties under this Agreement and the other documents and instruments
executed and delivered in connection with the consummation of the transactions
contemplated hereby as are delegated to the Administrative Agent by the terms
hereof or thereof, together with all such powers as are reasonably incidental
thereto.
8.2. Administrative Agent and Affiliates. Bank of Boston Connecticut
shall also have the same rights and powers under this Agreement of a Lender and,
in such
40
46
capacity as Lender, may exercise or refrain from exercising the same as though
it were not the Administrative Agent, and Bank of Boston Connecticut and its
Affiliates may accept deposits from, lend money to, and generally engage in any
kind of business with the Borrower or any Affiliate of the Borrower as if it
were not the Administrative Agent hereunder. Except as otherwise provided by the
terms of this Agreement, nothing herein shall prohibit any Lender from accepting
deposits from, lending money to or generally engaging in any kind of business
with the Borrower or any Affiliate of the Borrower.
8.3. Future Advances.
(a) In order more conveniently to administer the Loans, the
Administrative Agent may, unless notified to the contrary by any Lender prior to
the date upon which any Revolving Credit Loan is to be made, assume that such
Lender has made available to the Administrative Agent on such date the amount of
such Lender's share of such Revolving Credit Loan to be made on such date as
provided in this Agreement, and the Administrative Agent may (but it shall not
be required to), in reliance upon such assumption, make available to the
Borrower a corresponding amount. If any Lender makes available to the
Administrative Agent such amount on a date after the date upon which the
Revolving Credit Loan is made, such Lender shall pay to the Administrative Agent
on demand an amount equal to the product of (i) the average computed for the
period referred to in clause (iii) below, of the Federal Funds Effective Rate
during each day included in such period, multiplied by (ii) the amount of such
Lender's share of such Revolving Credit Loan, multiplied by (iii) a fraction,
the numerator of which is the number of days that elapsed from and including
such date to the date on which the amount of such Lender's share of such
Revolving Credit Loan shall become immediately available to the Administrative
Agent, and the denominator of which is 365. A statement of the Administrative
Agent submitted to such Lender with respect to any amounts owing under this
paragraph shall be prima facie evidence of the amount due and owing to the
Administrative Agent by such Lender.
(b) The Administrative Agent may at any time, in its sole discretion,
upon notice to any Lender, refuse to make any Revolving Credit Loan to the
Borrower on behalf of such Lender unless such Lender shall have provided to the
Administrative Agent immediately available federal funds equal to such Lender's
share of such Loan in accordance with this Agreement.
(c) Anything in this Agreement to the contrary notwithstanding, the
obligations to make Loans under the terms of this Agreement shall be the several
and not joint obligations of each of the Lenders and any advances made by the
Administrative Agent on behalf of any Lender are strictly for the administrative
convenience of the parties and shall in no way diminish any Lender's liability
to the Administrative Agent and Bank of Boston Connecticut to repay the
Administrative Agent for such Loans and advances. If the amount of any Bank's
share of any Revolving Credit Loan which the Administrative
41
47
Agent has advanced to the Borrower is not made available to the Administrative
Agent by such Lender within three (3) Business Days following the date upon
which such Revolving Credit Loan is made, the Administrative Agent shall be
entitled to recover such amount from the Borrower on demand, with interest
thereon at the rate per annum applicable to the Revolving Credit Loans made on
such date.
8.4. Delinquent Lender. Notwithstanding anything to the contrary
contained in this Agreement, any Lender that fails to make available to the
Administrative Agent its share of any Revolving Credit Loan when and to the full
extent required by the provisions of this Agreement shall be deemed delinquent
(a "Delinquent Lender") and shall be deemed a Delinquent Lender until such time
as such delinquency is satisfied. A Delinquent Lender shall be deemed to have
assigned any and all payments due to it from the Borrower, whether on account of
outstanding Loans, interest, fees or otherwise, to the remaining non-delinquent
Lenders for application to, and reduction of, their respective pro rata shares
of all outstanding Revolving Credit Loans. The Delinquent Lender hereby
authorizes the Administrative Agent to distribute such payments to the
non-delinquent Lenders in proportion to their respective pro rata shares of all
outstanding Revolving Credit Loans. A Delinquent Lender shall be deemed to have
satisfied in full a delinquency when and if, as a result of application of the
assigned payments to all outstanding Revolving Credit Loans of the
non-delinquent Lenders, the Lenders' respective pro rata shares of all
outstanding Loans have returned to those in effect immediately prior to such
delinquency and without giving effect to the nonpayment causing such
delinquency.
8.5. Payments.
(a) All payments of principal of and interest on Revolving Credit
Loans received by the Administrative Agent shall be paid to each of the Lenders
pro rata in accordance with their respective interests in such Loans; all
payments in respect of each Competitive Bid Loan received by the Administrative
Agent shall be paid to the Lender or Lenders making such Competitive Bid Loan
pro rata in accordance with their interests in such Loan; and any other payments
received by the Administrative Agent hereunder shall be paid to the Lenders or
the Administrative Agent or both pro rata as their respective interests appear.
The Administrative Agent shall use its best efforts to provide each Lender with
its ratable share of such payments on the same day on which such payments are
received by the Administrative Agent; provided that if the Administrative Agent
does not make any such payment to any Lender on such date, the Administrative
Agent shall pay to such Lender interest on the unpaid amount at the overnight
cost of funds to the Administrative Agent for each day until payment of such
amount is made by the Administrative Agent.
(b) Each of the Lenders and the Administrative Agent hereby agrees
that if it should receive any amount (whether by voluntary payment, by the
exercise of the right of set-off or banker's lien, by counterclaim or cross
action, by the enforcement of any right
42
48
hereunder under or otherwise) in respect of principal of, or interest on, the
Loans or any fees which are to be shared among the Lenders, which, as compared
to the amounts theretofore received by the other Lenders with respect to such
principal, interest or fees, is in excess of such Lender's pro rata share of
such principal, interest or fees as provided in this Agreement, such Lender
shall share such excess, less the costs and expenses (including, reasonable
attorneys' fees and disbursements) incurred by such Lender in connection with
such realization, exercise, claim or action, pro rata with all other Lenders in
proportion to their respective interests therein, and such sharing shall be
deemed a purchase (without recourse) by such sharing party of participation
interests in the Loans or such fees, as the case may be, owed to the recipients
of such shared payments to the extent of such shared payments; provided,
however, that if all or any portion of such excess amount is thereafter
recovered from such Lender, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.
8.6. Action by Administrative Agent.
(a) The obligations of the Administrative Agent hereunder are only
those expressly set forth herein. The Administrative Agent shall have no duty to
exercise any right or power or remedy hereunder or under any other document or
instrument executed and delivered in connection with or as contemplated by this
Agreement or to take any affirmative action hereunder or thereunder.
(b) The Administrative Agent shall keep all records of the Loans and
payments hereunder, and shall give and receive notices and other communications
to be given or received by the Administrative Agent hereunder on behalf of the
Lenders.
(c) Upon the occurrence of an Event of Default, and upon the direction
of the Majority Lenders pursuant to Section 7.2, the Administrative Agent shall
exercise the option of the Lenders pursuant to Section 7.2 to declare all Loans
and other Obligations immediately due and payable and shall, at the direction of
the Majority Lenders take such action as may appear necessary or desirable to
collect the Obligations and enforce the rights and remedies of the
Administrative Agent or the Lenders.
8.7. Notification of Defaults and Events of Default. Each Lender hereby
agrees that, upon learning of the existence of a Default or an Event of Default,
pursuant to Section 5.1(g) or otherwise, it shall promptly notify the
Administrative Agent thereof. The Administrative
Agent hereby agrees that upon receipt of any notice under this Section 8.7, it
shall promptly notify the other Lenders of the existence of such Default or
Event of Default.
8.8. Consultation with Experts. The Administrative Agent shall be
entitled to retain and consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable to the
Lenders for any action taken, omitted to
43
49
be taken or suffered in good faith by it in accordance with the advice of such
counsel, accountants or experts. The Administrative Agent may employ
Administrative Agents and attorneys-in-fact and shall not be liable to the
Lenders for the default or misconduct of any such Administrative Agents or
attorneys.
8.9. Liability of Administrative Agent. The Administrative Agent shall
exercise the same care to protect the interests of each Lender as it does to
protect its own interests, so that so long as the Administrative Agent exercises
such care it shall not be under any liability to any of the Lenders, except for
the Administrative Agent's gross negligence or willful misconduct with respect
to anything it may do or refrain from doing. Subject to the immediately
preceding sentence, neither the Administrative Agent nor any of its directors,
officers, Administrative Agents or employees shall be liable for any action
taken or not taken by it in connection herewith in its capacity as
Administrative Agent. Without limiting the generality of the foregoing, neither
the Administrative Agent nor any of its directors, officers, Administrative
Agents or employees shall be responsible for or have any duty to ascertain,
inquire into or verify: (i) any statement, warranty or representation made in
connection with this Agreement or any borrowing hereunder; (ii) the performance
or observance of any of the covenants or agreements of the Borrower; (iii) the
satisfaction of any condition specified in Sections 3.1 or 3.2, except receipt
of items required to be delivered to the Administrative Agent; or (iv) the
validity, effectiveness, enforceability or genuineness of this Agreement, the
Notes or any other document or instrument executed and delivered in connection
with or as contemplated by this Agreement. The Administrative Agent shall not
incur any liability by acting in reliance upon any notice, consent, certificate,
statement or other writing (which may be a bank wire, telex or similar writing)
believed by it to be genuine or to be signed by the proper party or parties.
8.10. Indemnification. Each Lender agrees to indemnify the
Administrative Agent (to the extent the Administrative Agent is not reimbursed
by the Borrower), ratably in accordance with its Commitment Percentage from and
against any cost, expense (including attorneys' fees and disbursements), claim,
demand, action, loss or liability which the Administrative Agent may suffer or
incur in connection with this Agreement, or any action taken or omitted by the
Administrative Agent hereunder, or the Administrative Agent's relationship with
the Borrower hereunder, including, without limitation, the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers and duties hereunder and of taking or
refraining from taking any action hereunder, but excluding any costs, expenses
or losses directly arising from the Administrative Agent's gross negligence or
willful misconduct. No payment by any Lender under this Section shall in any way
relieve the Borrower of its obligations under this Agreement with respect to the
amounts so paid by any Lender, and the Lenders shall be subrogated to the rights
of the Administrative Agent, if any, in respect thereto.
44
50
8.11. Independent Credit Decision. Each of the Lenders represents and
warrants to the Administrative Agent that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on the
financial statements referred to in Section 4.6 and such other documents and
information as it has deemed appropriate, made its own independent credit
analysis and decision to enter into this Agreement. Each of the Lenders
acknowledges that it has not relied upon any representation by the
Administrative Agent and that the Administrative Agent shall not be responsible
for any statements in or omissions from any documents or information concerning
the Borrower, this Agreement, the Notes or any other document or instrument
executed and delivered in connection with or as contemplated by this Agreement.
Each of the Lenders acknowledges that it will, independently and without
reliance upon the Administrative Agent or other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement.
8.12. Successor Administrative Agent. Bank of Boston Connecticut, or
any successor Administrative Agent, may resign as Administrative Agent at any
time by giving written notice thereof to the Lenders and to the Borrower. Upon
any such resignation, the Lenders shall have the right to appoint a successor
Administrative Agent, which successor Administrative Agent shall be reasonably
acceptable to the Borrower. If no successor Administrative Agent shall have been
so appointed by the Lenders, and shall have accepted such appointment, within 30
days after the retiring Administrative Agent's giving of notice of resignation,
then the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent, which shall be a commercial bank (or Affiliate
thereof) or savings and loan association organized under the laws of the United
States of America or any State thereof or under the laws of another country
which is doing business in the United States of America or any State thereof and
having a combined capital, surplus and undivided profits of at least
$100,000,000 and shall be reasonably acceptable to the Borrower. 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 all further duties and obligations under this
Agreement. After any retiring Administrative Agent's resignation or removal
hereunder as Administrative Agent, the provisions of this Section 8 shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
8.13. Duties of the Co-Agents. Each of the Co-Agents, in its capacity
as such, shall have no duties or responsibilities hereunder or under any other
loan document nor any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against any of the Co-Agents, in
its capacity as such.
45
51
SECTION IX.
MISCELLANEOUS
9.1. Notices. Unless otherwise specified herein, all notices hereunder
to any party hereto shall be in writing and shall be deemed to have been given
when delivered by hand, when properly deposited in the mails postage prepaid,
when sent by telex, answerback received, or electronic facsimile transmission,
or when delivered to the telegraph company or overnight courier, addressed to
such party at its address indicated below:
If to the Borrower, at:
UST Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ and ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Administrative Agent, at
Bank of Boston Connecticut
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Bank of Boston Connecticut
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Ms. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
46
52
and:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or at any other address specified by such party in writing.
9.2. Indemnity. The Borrower agrees to indemnify and hold each Lender
and its officers, directors, employees, attorneys and agents, harmless from and
against any and all suits, actions, costs, fines, deficiencies, penalties,
proceedings, claims, damages, losses, liabilities and expenses (including
reasonable attorneys' fees, disbursements and court costs and other costs of
investigations or defense, including those incurred upon any appeal) which may
be instituted or asserted against or incurred by such Lender as the result of
credit having been extended under this Agreement or any other Loan Document or
in connection with or arising out of the transactions contemplated hereunder and
thereunder, but excluding any costs, expenses or losses directly arising from
such Lender's gross negligence or willful misconduct.
9.3. Expenses. The Borrower will pay on demand all reasonable expenses
of the Administrative Agent in connection with the preparation, waiver or
amendment of this Agreement, the Notes or other documents executed in connection
herewith or therewith, or the administration, default or collection of the Loans
or other Obligations or administration, default, collection in connection with
the Administrative Agent's or any Lender's exercise, preservation, forbearance
or enforcement of any of its rights, remedies or options hereunder or
thereunder, including, without limitation, reasonable fees of outside legal
counsel or the allocated costs of in-house legal counsel, accounting,
consulting, brokerage or other similar professional fees or expenses, and any
fees or expenses associated with any travel or other costs relating to any
appraisals or examinations conducted in connection with the Obligations or any
collateral therefor, and the amount of all such expenses shall, until paid, bear
interest at the rate applicable to principal hereunder (including any default
rate).
9.4. Set-Off. Regardless of the adequacy of any collateral or other
means of obtaining repayment of the Obligations, any deposits, balances or other
sums credited by or due from any Lender or any of its branch or affiliate
offices to the Borrower may, at any time and from time to time after the
occurrence and continuance of an Event of Default hereunder, without notice to
the Borrower or compliance with any other condition precedent now or hereafter
imposed by statute, rule of law, or otherwise (all of which are,
47
53
to the extent permitted by law, hereby expressly waived) be set off,
appropriated, and applied by any Lender against any and all obligations of the
Borrower to such Lender or any of its affiliates in such manner as the head
office of such Lender or any of its branch offices in their sole discretion may
determine.
9.5. Term of Agreement. This Agreement shall continue in full force and
effect so long as any Lender has any commitment to make Loans hereunder or any
Loan or any Obligation hereunder shall be outstanding.
9.6. No Waivers. No failure or delay by the Administrative Agent or any
Lender in exercising any right, power or privilege hereunder or under the Note
or under any other documents or agreements executed in connection herewith shall
operate as a waiver thereof; nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein and in each Note
provided are cumulative and not exclusive of any rights or remedies otherwise
provided by agreement or law.
9.7. Governing Law. This Agreement and each Note shall be deemed to be
contracts made under seal and shall be construed in accordance with and governed
by the laws of the State of Connecticut (without giving effect to any conflicts
of laws provisions contained therein).
9.8. Amendments; Waivers; etc. Neither this Agreement nor any Note nor
any provision hereof or thereof may be amended, waived, discharged or terminated
except by a written instrument signed by the Majority Lenders, and, in the case
of amendments, by the Borrower; provided, however, that the following changes
shall require the written consent, agreement or approval of all of the Lenders:
(a) any change in the amount or the due date of any Obligation; (b) any change
in the interest rates prescribed in any of the Notes or this Agreement; (c) any
change in the Commitment Amount or any Commitment or Commitment Percentage of
any of the Lenders, except as permitted by Section 9.10; (d) any change in the
definition of Majority Lenders; (e) any change in the facility fee provisions as
set forth in Section 2.3; (f) any change in the terms of Section 3.2; (g) any
change in the terms of Section 8.5; and (h) any change in the terms of this
Section 9.8. Any change to Section 8 or any other provision of this Agreement
affecting the rights or obligations of the Administrative Agent shall not be
amended or modified without the prior written consent of the Administrative
Agent.
9.9. Binding Effect of Agreement. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns; provided that (a) the Borrower may not assign or transfer its
rights or obligations hereunder, and (b) no Lender may assign or transfer its
rights or obligations hereunder to any person except in accordance with the
provisions of Section 9.10.
48
54
9.10. Assignment and Participation.
(a) Assignments by the Lenders. From and after the date hereof, any
Lender may at any time assign all, or a proportionate part of all, of its
rights, interests and duties with respect to its Loans and its Notes to one or
more banks or other financial institutions (each, an "Assignee") on such terms,
as between such Lender and each of its Assignees, as such Lender may think fit
(provided, however, that if any Lender assigns less than all of its rights and
interests, any such assignment must be in a minimum aggregate principal amount
of at least $5,000,000, provided that each Lender's and each Assignee's
Commitment must be at least $10,000,000, except that if the Commitment of a
Lender on the Closing Date is less than $10,000,000, then such Lender shall be
entitled to assign all, but not less than all, of its Commitment to an
Assignee), and such Assignee shall assume such rights, interests and duties
pursuant to an instrument executed by such Assignee and such Lender, and for
this purpose such Lender may make available to each of its potential Assignees
such information relating to the Borrower, this Agreement and the transactions
contemplated hereby as such Lender may think necessary or desirable, which
information shall be held by each potential Assignee strictly in confidence;
provided, however, that prior to assigning any interest to any Assignee
hereunder, such Lender shall (x) notify the Borrower and the Administrative
Agent in writing identifying the proposed Assignee and stating the aggregate
principal amount of the proposed interest to be assigned, (y) to the extent made
available to such Lender by the proposed Assignee, furnish the Borrower with
such material information relating to such proposed Assignee as the Borrower may
reasonably request in order to enable the Borrower to make its decision (which
information shall be held by the Borrower strictly in confidence), except that
such Lender shall not be bound to ascertain whether any such information
delivered to it by such proposed Assignee is true, accurate and complete, and
(z) receive the prior written consent of the Borrower and the Administrative
Agent, which consent may not be unreasonably withheld or delayed by the Borrower
and the Administrative Agent. It is understood and agreed that the proviso
contained in the immediately preceding sentence shall not be applicable in the
case of, and this subsection (a) shall not restrict, (i) an assignment or other
transfer by any Lender to an Affiliate of such Lender or (ii) a collateral
assignment or other similar transfer to any of the twelve Federal Reserve
Lenders organized under Section 4 of the Federal Reserve Act, 12 U.S.C. Section
341. Each Assignee shall execute and deliver to the Administrative Agent and the
Borrower a counterpart joinder in the form of Exhibit M hereto and Assignor
shall pay or caused to be paid to the Administrative Agent, solely for the
account of the Administrative Agent, an assignment fee of $3,000. Upon the
execution and delivery of such counterpart joinder, (A) such Assignee shall, on
the date and to the extent provided in such counterpart joinder, become a
"Lender" party to this Agreement for all purposes of this Agreement and shall
have all the rights and obligations of a Lender with a Commitment as set forth
in such counterpart joinder, and the transferor Lender shall, on the date and to
the extent provided in such counterpart joinder, be released from its
obligations hereunder to a corresponding extent (and, in the case of an
assignment
49
55
covering all of the remaining portion of an assigning Lender's rights and
obligations under this Agreement, such transferor shall cease to be a party
hereto but shall continue to be entitled to any fees accrued for its account
hereunder and not yet paid), (B) the Borrower shall issue to such Assignee a
Revolving Credit Note in the amount of such Assignee's Commitment and a
Competitive Bid Note in the amount equal to the Commitment Amount, each dated
the Closing Date or such other date as may be specified by such Assignee and
otherwise completed in substantially the form of Exhibit A-1 and Exhibit A-2,
respectively; (C) the Administrative Agent shall distribute to the Borrower, the
Lenders and such Assignee an amended Schedule 1 hereto reflecting such changes,
and (D) this Agreement shall be deemed appropriately amended to reflect (i) the
status of such Assignee as a party hereto and (ii) the status and rights of the
Lenders and Administrative Agent hereunder.
(b) Participations by the Lenders. From and after the date hereof,
each Lender shall be at liberty to offer participations in the Loans and the
Notes to one or more banks or other financial institutions (each, a
"Participant") on such terms as such Lender may think fit, and for this purpose
such Lender may make available to each of its potential Participants such
information relating to the Borrower, this Agreement and the transactions
contemplated hereby as such Lender may think necessary or desirable, which
information shall be held by each potential Participant strictly in confidence;
provided, however, that such Lender shall retain the sole right to consent to
amendments to, or waivers of, the provisions of this Agreement and the Notes,
except with respect to those amendments requiring the approval of all of the
Lenders pursuant to Section 9.8 of this Agreement, and the sole right and
responsibility to enforce the obligations of the Borrower hereunder and under
the Notes; provided that such Lender may agree with each of its Participants
that such Lender will not agree, without the consent of the Participant, to any
amendment or waiver of any provision of this Agreement which would increase or
otherwise change its Commitment Amount or reduce the principal of or rate of
interest on the Loans subject to such participation, or postpone the date fixed
for any payment of principal or of interest on any Loans.
(c) No Assignee, Participant or other transferee of any Lender's
rights shall be entitled to receive any greater payment under Sections 2.9 or
2.10 hereof than such Lender would have been entitled to receive with respect to
the rights transferred, unless such transfer is made with the Borrower's prior
written consent or at a time when the circumstances giving rise to such greater
payment did not exist.
9.11. Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures hereto and thereto were
upon the same instrument.
9.12. Confidentiality. In handling all information furnished to, or
obtained by, the Administrative Agent and the Lenders pursuant to this
Agreement,
50
56
including, without limitation, the certificates referred to in
Section 5.3 and the information reviewed pursuant to Section
5.5, the Administrative Agent and each Lender shall exercise the same degree of
care that it exercises with respect to its own proprietary information of the
same types to maintain the confidentiality of any non-public information
received hereunder except that disclosure of such information may be made (i) to
the subsidiaries or Affiliates of the Administrative Agent in connection with
their present or prospective business relations with the Borrower, (ii) to
prospective transferees, assignees or purchasers of an interest in the Loans who
have agreed in writing to be bound by the confidentiality provisions hereof,
(iii) as required by law, regulation, rule or order, subpoena, judicial order or
similar order, provided that the Administrative Agent and each Lender shall, to
the extent it would not be unlawful, use reasonable efforts to afford the
Borrower the opportunity to contest any such rule, order or subpoena, and (iv)
as may be required in connection with the examination, audit or similar
investigation of the Administrative Agent or any Lender.
9.13. Partial Invalidity. The invalidity or unenforceability of any one
or more phrases, clauses or sections of this Agreement shall not affect the
validity or enforceability of the remaining portions of it.
9.14. Captions. The captions and headings of the various sections and
subsections of this Agreement are provided for convenience only and shall not be
construed to modify the meaning of such sections or subsections.
9.15. WAIVER OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT AND
THE LENDERS AGREE THAT NEITHER THEY NOR ANY OF THEIR ASSIGNEES OR SUCCESSORS
SHALL (A) SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY
OTHER ACTION BASED UPON, OR ARISING OUT OF, THIS AGREEMENT, ANY RELATED
INSTRUMENTS OR THE DEALINGS OR THE RELATIONSHIP BETWEEN THE BORROWER AND ITS
ASSIGNS AND SUCCESSORS AND THE ADMINISTRATIVE AGENT AND/OR ANY LENDER, OR (B)
SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL
CANNOT BE OR HAS NOT BEEN WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN
FULLY DISCUSSED BY THE BORROWER, AND THESE PROVISIONS SHALL BE SUBJECT TO NO
EXCEPTIONS. THE BORROWER ACKNOWLEDGES THAT NEITHER THE ADMINISTRATIVE AGENT NOR
ANY LENDER HAS AGREED WITH OR REPRESENTED TO IT THAT THE PROVISIONS OF THIS
PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
9.16. SUBMISSION TO JURISDICTION/SERVICE OF PROCESS. THE BORROWER
HEREBY IRREVOCABLY AND UNCONDITIONALLY:
51
57
(a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH IT
IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT
THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF
CONNECTICUT, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF CONNECTICUT, AND APPELLATE COURTS FROM ANY THEREOF;
(b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR
PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM
THE SAME;
(c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR
ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE BORROWER AT ITS
ADDRESS SET FORTH IN SECTION 9.1 OR AT SUCH OTHER ADDRESS OF WHICH THE
ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO;
(d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO ▇▇▇ IN ANY OTHER JURISDICTION.
9.17. Entire Agreement. This Agreement, the Notes and the documents and
agreements executed in connection herewith constitute the final agreement of the
parties hereto and supersede any prior agreement or understanding, written or
oral, with respect to the matters contained herein and therein.
52
58
The parties have caused this Agreement to be executed by their duly
authorized officers as of the day and year first above written.
UST INC.
By s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
By s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Treasurer
BANK OF BOSTON CONNECTICUT, as
Administrative Agent and Lender
By s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
THE BANK OF NOVA SCOTIA, as Co-
Agent and Lender
By s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Signatory
FLEET NATIONAL BANK, as Co-Agent
and Lender
By s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
53
59
WACHOVIA BANK OF GEORGIA, N.A.,
as Co-Agent and Lender
By s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
FUJI BANK, LIMITED
By s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President and Manager
PNC BANK, NATIONAL ASSOCIATION
By s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
THE SANWA BANK, LIMITED
NEW YORK BRANCH
By s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
UNITED STATES NATIONAL BANK OF
OREGON
By s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
54
60
YASUDA TRUST AND BANKING CO., LTD.
By s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
STATE STREET BANK AND TRUST COMPANY
By s/ F. ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Name: F. ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
55
61
SCHEDULE 1
COMMITMENTS OF THE BANKS
UST INC.
COMMITMENT COMMITMENT
PERCENTAGE
Bank of Boston Connecticut 20.000000% $ 52,500,000
The Bank of Nova Scotia 14.▇▇▇▇▇▇% $ 37,500,000
Fleet National Bank 14.285714% $ 37,500,000
Wachovia Bank of Georgia, N.A. 14.285714% $ 37,500,000
Fuji Bank Limited 7.142857% $ 18,750,000
PNC Bank, National Association 7.142857% $ 18,750,000
United States National Bank of Oregon 7.142857% $ 18,750,000
Yasuda Trust and Banking Co., Ltd. 7.142857% $ 18,750,000
The Sanwa Bank, Limited 4.285714% $ 11,250,000
State Street Bank and Trust Company 4.285714% $ 11,250,000
TOTAL $262,500,000
62
SCHEDULE 4.13
ENVIRONMENTAL MATTERS
UST INC.
On October 15, 1996, ▇▇. ▇▇▇▇▇▇ Pipe Co. (a predecessor of Sparta
Industries, Inc.) received a letter from a third party defendant in a lawsuit
captioned Wautauga County ▇. ▇▇▇▇▇ of Boone, Case No. 5:96CV33-V, filed in the
United States District Court for the Western District of North Carolina.
According to this letter, Wautauga County (the "County") brought suit under
unspecified federal environmental laws (presumably the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601
et seq., and perhaps other statutes) to recover the approximatEly $2,000,000 in
costs it incurred in closing its landfill. The third party defendant alleged in
its letter that records produced by the County indicated that ▇▇. ▇▇▇▇▇▇ sent
waste to the landfill and therefore may be joined as a party to this suit with
other users of the landfill. Sparta Industries does not have sufficient
information at this time to evaluate the extent, if any, of its potential
liability in connection with this matter.
63
EXHIBIT A-1
UST INC.
REVOLVING CREDIT NOTE
As of November 8, 1996
$____________ Greenwich, Connecticut
For value received, the undersigned, UST Inc., a Delaware corporation
(the "Borrower") hereby unconditionally promises to pay to the order of _______
(the "Lender") at the office of BANK OF BOSTON CONNECTICUT (the "Administrative
Agent"), ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in lawful money of
the United States of America and in immediately available funds, the principal
amount of (a)_________________ Dollars ($________), or, if less, (b) the
aggregate unpaid principal amount of all Revolving Credit Loans (as defined in
the Credit Agreement) made by the Lender to the Borrower pursuant to Section
2.1(a) of the Credit Agreement (as defined below). The Borrower further agrees
to pay interest on the unpaid principal balance hereof from time to time
outstanding, at said office and in like money and funds, for the period
commencing on the date hereof until paid in full, at the rates per annum and on
the dates provided in Section 2.7 of the Credit Agreement. All principal
remaining unpaid and any accrued but unpaid interest shall in any event be due
and payable on the Revolving Credit Termination Date.
This Note is issued pursuant to, and entitled to the benefits of, and
is subject to, the provisions of the $262,500,000 Credit Agreement dated as of
the date hereof among the Borrower, the several Lenders from time to time
parties thereto, the Administrative Agent and The Bank of Nova Scotia, Fleet
National Bank and Wachovia Bank of Georgia, N.A., as Co-Agents (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement") ,
but neither this reference to the Credit Agreement nor any provision thereof
shall affect or impair the absolute and unconditional obligation of the Borrower
to pay the principal of, and interest on, this Note as herein provided.
If an Event of Default shall occur, the aggregate unpaid principal of,
and accrued interest on, this Note shall become or may be declared to be due and
payable in the manner and with the effect provided in the Credit Agreement.
The Borrower may at its option prepay all or any part of the principal
of this Note before maturity upon the terms provided in the Credit Agreement.
A-1-1
64
The Borrower waives presentment, demand, notice of dishonor, protest
and all other demands and notices in connection with the delivery, acceptance,
performance and enforcement of this Note.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
This Note shall have the effect of an instrument executed under seal
and shall be governed by, and construed in accordance with, the laws of the
State of Connecticut (without giving effect to any conflicts of laws provisions
contained therein).
UST INC.
By____________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Executive Vice President and Chief
Financial Officer
By____________________________________________
▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President and
Controller
A-1-2
65
SCHEDULE I TO REVOLVING CREDIT NOTE
DATE AMOUNT TYPE OF LOAN INTEREST INTEREST AMOUNT NOTATION
OF LOAN (EURODOLLAR OR RATE* PERIOD** PAID MADE BY
BASE RATE)
---- ------- ---------- -------- -------- ------ --------
---------------
* For Base Rate Loans, insert "Base Rate"
** For Eurodollar Loans only
A-1-3
66
EXHIBIT A-2
UST INC.
COMPETITIVE BID NOTE
$___________ As of November 8, ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
FOR VALUE RECEIVED, the undersigned, UST Inc., a Delaware corporation
(the "Borrower") hereby unconditionally promises to pay to the order of ________
(the "Lender"), at the office of the BANK OF BOSTON CONNECTICUT (the
"Administrative Agent"), ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ in
lawful money of the United States of America and in immediately available funds,
the principal amount of (a)_________________ Dollars ($________), or, if less,
(b) the aggregate unpaid principal amount of all Competitive Bid Loans (as
defined in the Credit Agreement) made by the Lender to the Borrower pursuant to
Section 2.8(a) of the Credit Agreement (as defined below). The Borrower further
agrees to pay interest on the unpaid principal balance hereof from time to time
outstanding, at said office and in like money and funds, for the period
commencing on the date hereof until paid in full, at the rates per annum and on
the dates provided in Section 2.8(i) of the Credit Agreement. All principal
remaining unpaid and any accrued but unpaid interest shall in any event be due
and payable on the Revolving Credit Termination Date (as defined in the Credit
Agreement).
This Note is issued pursuant to the $262,500,000 Credit Agreement dated
as of the date hereof among the Borrower, the several Lenders from time to time
parties thereto, the Administrative Agent and The Bank of Nova Scotia, Fleet
National Bank and Wachovia Bank of Georgia, N.A., as Co-Agents (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
but neither this reference to the Credit Agreement nor any provision thereof
shall affect or impair the absolute and unconditional obligation of the Borrower
to pay the principal of, and interest on, this Note as herein provided.
If an Event of Default shall occur, the aggregate unpaid principal of,
and accrued on, this Note, shall become due and payable in the manner and with
the effect provided in the Credit Agreement.
The Borrower waives presentment, demand, notice of dishonor, protest
and all other demands and notices in connection with the delivery, acceptance,
performance, and enforcement of this Note. Unless otherwise defined below, terms
defined in the
A-2-1
67
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.
This Note shall have the effect of an instrument under seal and
shall be governed by, and construed in accordance with, the laws of the State of
Connecticut (without giving effect to any conflicts of laws provisions contained
therein).
UST INC.
By:_________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Executive Vice President and Chief
Financial Officer
By:_________________________________________
▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President and
Controller
A-2-2
68
SCHEDULE I TO COMPETITIVE BID NOTE
DATE AMOUNT TYPE OF LOAN INTEREST INTEREST AMOUNT NOTATION
OF LOAN RATE PERIOD(S) PAID MADE BY
---- ------- ------------ -------- --------- ------ --------
▇-▇-▇
▇▇
▇▇▇▇▇▇▇ ▇
[FORM OF NOTICE OF BORROWING OR CONVERSION]
UST INC.
Bank of Boston Connecticut, as Administrative Agent
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Pursuant to Section 2.2 of the $262,500,000 Credit Agreement dated as
of November 8, 1996, among UST Inc., the several Lenders from time to time
parties thereto, Bank of Boston Connecticut, as Administrative Agent and The
Bank of Nova Scotia, Fleet National Bank and Wachovia Bank of Georgia, N.A., as
Co-Agents (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement") the Borrower hereby confirms its request made on __________,
19 for a [Base Rate] [Eurodollar] Loan in the amount of $_______ on,________ ,
19__. Unless otherwise defined herein, capitalized terms shall have the meanings
ascribed to them in the Credit Agreement.
[The Interest Period applicable to said Loan will be [one] [two]
[three] [six] months [____] days.]*
[Said Loan represents a conversion of the [Base Rate] [Eurodollar] Loan
in the same amount made on .]**
The representations and warranties contained or referred to in Section
IV of the Credit Agreement are true and accurate in all material respects on and
as of the effective date of the Loan as though made at and as of such date
(except to the extent that such representations and warranties expressly relate
to an earlier date), and no Default has occurred and is continuing or will
result from the Loan.
-----------------
* To be inserted in any request for a Eurodollar Loan.
** To be inserted in any request for a conversion.
B-1
70
UST INC.
By_______________________________________
Name:
Title:
__________________________________
Date
B-2
71
EXHIBIT C
ENCUMBRANCES (SECTION 6.1)
--------------------------
Amount
Security Deposits (000's)
----------------- -------
United States Tobacco Sales and Marketing Company
Inc. security deposits for Regional Sales offices 36
----
Total $ 36
====
INDEBTEDNESS OF SUBSIDIARIES (SECTION 6.3)
------------------------------------------
Amount
Guarantees (000's)
---------- -------
United States Tobacco Company's guarantee to Barclay's
Bank of London Payment of duty and VAT Deferment
Schemes by United States Tobacco International, Inc.
(continuing). 47
United States Tobacco Company guarantee of the lease
obligation covering Region III Sales Office of United
States Tobacco Sales and Marketing Company Inc. to
▇▇▇▇▇▇▇ Partners, Inc., the lessor. Lease was entered
into 10/1/94 and expires on 9/31/99 at an annual rate
of $57,787 plus an allowance of 10% for escalations
($317,825 for the five-year period). 219
----
Total $266
====
▇-▇
▇▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇
▇-▇
▇▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ Tobacco Company
2. United States Tobacco Manufacturing Company Inc.
3. United States Tobacco Sales and Marketing Company Inc.
4. International Wine & Spirits Ltd.
5. ▇▇▇▇▇▇▇ ▇▇▇▇ Ltd.
6. UST Enterprises Inc.
7. UST International Inc.
▇-▇
▇▇
▇▇▇▇▇▇▇ ▇
[FORM OF REPORT OF CHIEF FINANCIAL OFFICER,
TREASURER OR CONTROLLER]
UST INC.
UST INC. HEREBY CERTIFIES that:
This Report is furnished pursuant to Section 5.1(c) of the $262,500,000
Credit Agreement dated as of November 8, 1996 among UST Inc., the several
Lenders from time to time parties thereto, Bank of Boston Connecticut, as
Administrative Agent and The Bank of Nova Scotia, Fleet National Bank and
Wachovia Bank of Georgia, N.A., as Co-Agents (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"). Unless otherwise
defined herein, capitalized terms used herein have the meanings ascribed to them
in the Credit Agreement.
As required by Section 5.1(a) and (b) of the Credit Agreement,
consolidated financial statements of the Borrower and its Subsidiaries for the
[year/month/quarter] ended 19 __ (the "Financial Statements") prepared in
accordance with GAAP applicable to such Financial Statements consistently
applied accompany this Report. The Financial Statements present fairly the
consolidated financial position of the Borrower and its Subsidiaries as at the
date thereof and the consolidated results of operations of the Borrower and its
Subsidiaries for the period covered thereby (subject only to normal recurring
year-end adjustments).
The figures set forth in Schedule A for determining compliance by the
Borrower with the financial covenants contained in the Credit Agreement are true
and complete as of the date hereof.
The activities of the Borrower and its Subsidiaries during the period
covered by the Financial Statements have been reviewed by the Chief Financial
Officer or by employees or agents under his immediate supervision. Based on such
review, to the best knowledge and belief of the Chief Financial Officer,
Treasurer or Controller, as applicable, and as of the date of this Report, no
Default or Event of Default has occurred.*
---------------
* If a Default or Event of Default has occurred, this paragraph is to be
modified with an appropriate statement as to the nature thereof, the
period of existence thereof and what action the Borrower has taken, is
taking, or proposes to take with respect thereto.
F-1
75
WITNESS my hand this ________ day of ____________, 19___.
UST INC.
By_______________________________________
Name:
Title:
F-2
76
SCHEDULE A
to
EXHIBIT F
FINANCIAL COVENANTS
Ratio of Consolidated Total Funded Debt to EBITDA (Section 5.7)
REQUIRED: less than-equal to sign 0.70 : 1.00
===== =====
ACTUAL:
(i) Consolidated Total Funded Debt $
(ii) EBITDA $
(iii) Line (i) divided by line (ii) : 1.00
===== =====
Ratio of Consolidated Operating Cash Flow to Consolidated Total
Debt Service and Dividends (Section 5.8)
REQUIRED: greater than sign 1.25 : 1.00
===== =====
ACTUAL:
(i) Consolidated Operating Cash Flow $
(ii) Consolidated Total Debt Service $
(iii) Dividends $
(iv) Sum of line (ii) and line (iii) $
(v) Line (i) divided by line (iv) : :
===== =====
UST INC.
By_______________________________________
Name:
Title:
Dated:________________________
F-3
77
EXHIBIT G
[FORM OF LEGAL OPINION FOR UST INC.]
See Tab 8
78
EXHIBIT H
[FORM OF COMPETITIVE BID QUOTE REQUEST]
UST INC.
[Date]
To: Bank of Boston Connecticut, as Administrative Agent
From: UST Inc.
Re: $262,500,000 Credit Agreement dated as of November 8, 1996 among UST Inc.,
the several Lenders from time to time parties thereto, Bank of Boston
Connecticut, as Administrative Agent and The Bank of Nova Scotia, Fleet National
Bank and Wachovia Bank of Georgia, N.A., as Co-Agents (as amended, supplemented
or otherwise modified from time to time, the "Credit Agreement").
We hereby give notice pursuant to Section 2.8 of the Credit Agreement
that we request Competitive Bid Quotes for the following proposed Competitive
Bid Borrowing(s):
Date of Borrowing:
---------------------
Principal Amount* Interest Period** Maturity Date
---------------- --------------- -------------
$
Such Competitive Bid Quotes should offer a Competitive Bid Rate.
Unless otherwise defined herein, capitalized terms used herein have the
meanings ascribed to them in the Credit Agreement.
UST INC.
By
---------------------------------------
Name:
Title:
---------------
* Amount must be a minimum of $1,000,000 or any larger multiple of $1,000,000.
** 7 to 90 days, subject to the provisions of the definition of "Interest
Period".
H-1
79
EXHIBIT I
[FORM OF INVITATION FOR COMPETITIVE BID QUOTES]
UST INC.
To: [Name of Lender]
Re: Invitation for Competitive Bid Quotes to UST Inc.
Pursuant to Section 2.8 of the $262,500,000 Credit Agreement
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement") dated as of November 8, 1996 among UST Inc., the several Lenders
from time to time parties thereto, Bank of Boston Connecticut, as Administrative
Agent and The Bank of Nova Scotia, Fleet National Bank and Wachovia Bank of
Georgia, N.A., as Co-Agents, we are pleased on behalf of the Borrower to invite
you to submit Competitive Bid Quotes to the Borrower for the following proposed
Competitive Bid Borrowing(s):
Date of Borrowing:
Principal Amount Interest Period Maturity Date
---------------- --------------- -------------
$
Such Competitive Bid Quotes should offer a Competitive Bid Rate.
Unless otherwise defined herein, capitalized terms used herein shall
have the meanings ascribed to them in the Credit Agreement.
Please respond to this invitation by no later than * a.m.
(Boston time) on [date].
BANK OF BOSTON
CONNECTICUT, as Administrative Agent
By
---------------------------------------
Authorized Officer
---------------
* The time specified in Section 2.8 of the Credit Agreement.
I-1
80
EXHIBIT J
[FORM OF COMPETITIVE BID QUOTE]
UST INC.
BANK OF BOSTON CONNECTICUT, as Administrative Agent
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Re: Competitive Bid Quote to UST Inc.
In response to your invitation on behalf of the Borrower dated
, 19 , we hereby make the following Competitive Bid Quote on
the following terms:
1. Quoting Bank:
2. Person to contact at Quoting Bank:
3. Date of Borrowing: *
4. We hereby offer to make Competitive Bid Loan(s) in the following
principal amounts, for the following Interest Periods and at the
following rates:
Principal Interest Competitive Maturity
Amount** Period*** Bid Rate**** Date
------- ------ -------- ------
$
---------------
* As specified in the related Invitation for Competitive Bid Quotes.
** Principal amount bid for each Interest Period may not exceed principal
amount requested. Bids must be made for $1,000,000 or any larger multiple
of $1,000,000.
*** 7 to 90 days, as specified in the related Invitation for Competitive Bid
Quotes.
**** Specify rate of interest per annum (each rounded to the nearest 1/10,000th
of 1%).
J-1
81
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in the $262,500,000
Credit Agreement dated as of November 8, 1996 among UST Inc., the several
Lenders from time to time parties thereto, Bank of Boston Connecticut, as
Administrative Agent and The Bank of Nova Scotia, Fleet National Bank and
Wachovia Bank of Georgia, N.A., as Co-Agents (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), irrevocably
obligates us to make the Competitive Bid Loan(s) for which any offer(s) are
accepted in whole or in part by the Borrower.
Unless otherwise defined herein, capitalized terms used herein shall
have the meanings ascribed to them in the Credit Agreement.
[NAME OF LENDER]
Dated:____________________________ By:_______________________________
Authorized Officer
J-2
82
EXHIBIT K
[FORM OF NOTICE OF COMPETITIVE BID BORROWING]
UST INC.
Re: $262,500,000 Credit Agreement dated as of November 8, 1996,
among UST Inc., the several Lenders from time to time parties thereto, Bank of
Boston Connecticut, as Administrative Agent and The Bank of Nova Scotia, Fleet
National Bank and Wachovia Bank of Georgia, N.A., as Co- Agents (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement").
We hereby give notice pursuant to Section 2.8(f) of the Credit
Agreement of our acceptance of the following Competitive Bid Quote(s):
1. Lender:
2. Drawdown Date *
3. In the following principal amounts, for the following Interest Periods
and at the following rates:
Principal Interest Competitive Bid
Amount Period(s) Rate(s)**
--------- --------- ---------------
$
$
[Repeat for each Lender as necessary]
---------------
* As specified in the related Invitation for Competitive Bid Quotes.
** Specify rate of interest per annum (each rounded to the nearest 1/l,000th
of 1%) for each applicable Interest Period.
K-1
83
4. The aggregate principal amount for each Interest Period is:
Interest Aggregate
Period Principal Amount
-------- ----------------
$
$
We hereby certify (a) that we will use the proceeds of the
requested Competitive Bid Loan in accordance with the provisions of the Credit
Agreement, (b) that each of the representations and warranties contained in the
Credit Agreement or in any document or instrument delivered pursuant to or in
connection with the Credit Agreement was true as of the date as of which it was
made and is true at and as of the date hereof (except to the extent of changes
occurring in the ordinary course of business that singly or in the aggregate are
not materially adverse, and to the extent that such representations and
warranties related expressly to an earlier date) and (c) that no Default or
Event of Default has occurred and is continuing.
Unless otherwise defined herein, capitalized terms used herein
shall have the meanings ascribed to them in the Credit Agreement.
UST INC.
Dated:_____________________________ By__________________________________
Name:
Title:
K-2
84
EXHIBIT L
[FORM OF NOTICE OF COMPETITIVE BID LOANS]
UST INC.
_______________, 199_
To: Each of the Lenders referred to below
From: Bank of Boston Connecticut, as Administrative Agent
Reference is hereby made to the $262,500,000 Credit Agreement
dated as of November 8, 1996, among UST Inc., the several Lenders from time to
time parties thereto, Bank of Boston Connecticut, as Administrative Agent and
The Bank of Nova Scotia, Fleet National Bank and Wachovia Bank of Georgia, N.A.,
as Co-Agents (as amended, supplemented or otherwise modified from time to time,
, the "Credit Agreement"). Unless otherwise defined herein, capitalized terms
used herein shall have the meanings ascribed to them in the Credit Agreement.
Under Section 2.8 of the Credit Agreement, the Borrower borrowed
[insert amount] in Competitive Bid Loans on [insert date] with an Interest
Period of [insert Interest Period]. The Competitive Bid Rate for the period is
%.
A range of Competitive Bid Quotes were submitted. The bids ranged
from [insert highest bid] to [insert lowest bid].
BANK OF BOSTON CONNECTICUT,
as Administrative Agent
By__________________________________
Name:
Title:
▇-▇
▇▇
▇▇▇▇▇▇▇ M
[FORM OF ASSIGNMENT AND JOINDER AGREEMENT]
UST INC.
Dated: _________________
Reference is made to the $262,500,000 Credit Agreement dated as
of November 8, 1996 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement") among UST Inc., the several Lenders from time to
time parties thereto, Bank of Boston Connecticut, as Administrative Agent and
The Bank of Nova Scotia, Fleet National Bank and Wachovia Bank of Georgia, N.A.,
as Co-Agents. Unless otherwise defined herein, capitalized terms used herein
shall have the meanings ascribed to them in the Credit Agreement.
________________________________________________________(the
"Assignor") and __________________________________________(the "Assignee") agree
as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, a ___% interest in and
to all of the Assignor's rights and obligations under the Credit Agreement as of
the Effective Date (as defined below), including, without limitation, a ___%
interest (which on the Effective Date is $_____) in the Assignor's share of
Loans outstanding. As a result of such assignment, the Commitment and the
Commitment Percentage of the Assignor shall be $_____ and ____%, respectively,
and the Commitment and the Commitment Percentage of the Assignee shall be $____
and ____%, respectively. Concurrently herewith, the Assignee is remitting to the
Assignor, in federal funds, the amount of its interest in each such outstanding
loan.
2. The Assignor (i) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant thereto, other
than that the Assignor is the legal and beneficial owner of the interest being
assigned by it hereunder and that such interest is free and clear of any adverse
claim, and (ii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
M-1
86
performance or observation by the Borrower of any of its obligations under the
Credit Agreement or any other instrument or document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of such financial statements and other documents
and information as it has deemed necessary to make its own credit analysis and
decision to enter into this Agreement, (ii) agrees that it will, independently
and without reliance upon the Administrative Agent, the Assignor or any other
person and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement, (iii) appoints and authorizes the
Administrative Agent to take such action as the Administrative Agent on its
behalf and to exercise such powers under the Credit Agreement as are delegated
to the Administrative Agent by the terms thereof, together with such powers as
are reasonably incidental thereto, and (iv) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it.
4. The Effective Date of this Agreement shall be _________________
(the "Effective Date").
5. From and after the Effective Date, (i) the Assignee shall be a party
to the Credit Agreement and, to the extent rights and obligations have been
transferred to it by this Agreement, shall have the rights and obligations of a
Lender thereunder and (ii) the Assignor shall, to the extent its rights and
obligations have been transferred to the Assignee by this Agreement, relinquish
its rights and be released from its obligations under the Credit Agreement. If
the Assignor is holding any Notes, the Assignor promptly after the Effective
Date, shall surrender such Notes to the Administrative Agent and the
Administrative Agent shall cause the Borrower to issue new Notes in accordance
with Section 9.9(a) of the Credit Agreement.
6. From and after the Effective Date, the Administrative Agent shall
hold in trust all payments it receives in respect of the interest assigned
hereby and shall promptly remit such payments to the Assignee.
7. This Assignment and Joinder Agreement shall be governed by, and
construed in accordance with, the laws of the State of Connecticut (without
regard to conflicts of laws or rules).
M-2
87
[NAME OF ASSIGNOR]
By_______________________________________
Name:
Title:
[NAME OF ASSIGNEE]
By_______________________________________
Name:
Title:
M-3
88
$87,500,000
CREDIT
AGREEMENT
among
UST INC.
The Several Lenders from Time to Time
Parties Hereto,
BANK OF BOSTON CONNECTICUT,
as Administrative Agent,
and
THE BANK OF NOVA SCOTIA,
FLEET NATIONAL BANK
and
WACHOVIA BANK OF GEORGIA, N.A.,
as Co-Agents
Dated as of November 8, 1996
89
TABLE OF CONTENTS
Title
Section Page
------- ----
SECTION I. - DEFINITIONS
1.1. Definitions ....................................................... 1
1.2. Accounting Terms .................................................. 11
SECTION II. - DESCRIPTION OF CREDIT
2.1. The Revolving Credit Loans ........................................ 12
2.2. Notice and Manner of Borrowing or Conversion of Base Rate and
Eurodollar Loans .................................................. 13
2.3. Facility Fee ...................................................... 14
2.4. Reduction of Commitment Amount .................................... 14
2.5. The Revolving Credit Notes ........................................ 14
2.6. Duration of Eurodollar Interest Periods ........................... 15
2.7. Interest Rates and Payments of Interest ........................... 15
2.8. Competitive Bid Loans ............................................. 17
2.9. Changed Circumstances ............................................. 21
▇.▇▇.▇▇▇▇▇▇▇ Requirements .............................................. 23
2.11.Payments and Prepayments of the Loans ............................. 23
2.12.Method of Payment for Revolving Credit Loans ...................... 24
2.13.Overdue Payments .................................................. 24
2.14.Payments Not at End of Interest Period ............................ 25
2.15.Computation of Interest and Fees .................................. 25
SECTION III. - CONDITIONS OF LOANS
3.1. Conditions Precedent to Initial Loan .............................. 26
3.2. Conditions Precedent to All Loans ................................. 26
SECTION IV. - REPRESENTATIONS AND WARRANTIES
4.1. Organization and Qualification .................................... 27
4.2. Corporate Authority ............................................... 27
4.3. Valid Obligations ................................................. 28
4.4. Consents or Approvals ............................................. 28
4.5. Title to Properties; Absence of Encumbrances ...................... 28
90
4.6. Financial Statements .............................................. 28
4.7. Changes ........................................................... 29
4.8. Defaults .......................................................... 29
4.9. Taxes ............................................................. 29
4.10.Litigation ........................................................ 29
4.11.Subsidiaries ...................................................... 29
4.12.Compliance with ERISA ............................................. 29
4.13.Environmental Matters ............................................. 30
SECTION V. - AFFIRMATIVE COVENANTS
5.1. Financial Statements and other Reporting Requirements ............. 31
5.2. Conduct of Business ............................................... 33
5.3. Maintenance and Insurance ......................................... 34
5.4. Taxes ............................................................. 34
5.5. Inspection by the Administrative Agent ............................ 35
5.6. Maintenance of Books and Records .................................. 35
5.7. Consolidated Total Funded Debt to EBITDA Ratio .................... 35
5.8. Consolidated Operating Cash Flow to Consolidated Total
Debt Service and Dividends Ratio .................................. 35
5.9. Environmental Laws ................................................ 36
5.10.Further Assurances ................................................ 36
SECTION VI. - NEGATIVE COVENANTS
6.1. Encumbrances ...................................................... 36
6.2. Merger; Consolidation; Sale or Lease of Assets .................... 38
6.3. Indebtedness of Subsidiaries ...................................... 39
6.4. ERISA ............................................................. 39
6.5. Use of Proceeds ................................................... 40
6.6. Transactions with Affiliates ...................................... 40
SECTION VII. - DEFAULTS
7.1. Events of Default ................................................. 40
7.2. Remedies .......................................................... 42
91
SECTION VIII. - CONCERNING THE ADMINISTRATIVE AGENT AND THE LENDERS
8.1. Appointment and Authorization ..................................... 43
8.2. Administrative Agent and Affiliates ............................... 43
8.3. Future Advances ................................................... 43
8.4. Delinquent Lender ................................................. 44
8.5. Payments .......................................................... 45
8.6. Action by Administrative Agent .................................... 45
8.7. Notification of Defaults and Events of Default .................... 46
8.8. Consultation with Experts ......................................... 46
8.9. Liability of Administrative Agent ................................. 46
8.10.Indemnification ................................................... 47
8.11.Independent Credit Decision ....................................... 47
8.12.Successor Administrative Agent .................................... 47
8.13.Duties of the Co-Agents
SECTION IX. - MISCELLANEOUS
9.1. Notices ........................................................... 48
9.2 Indemnity .........................................................
9.3. Expenses .......................................................... 51
9.4. Set-Off ........................................................... 51
9.5. Term of Agreement ................................................. 51
9.6. No Waivers ........................................................ 51
9.7. Governing Law ..................................................... 51
9.8. Amendments; Waivers; etc .......................................... 52
9.9. Binding Effect of Agreement ....................................... 52
9.10.Assignment and Participation ...................................... 52
9.11.Counterparts ...................................................... 54
9.12.Confidentiality ................................................... 54
9.13.Partial Invalidity ................................................ 54
9.14.Captions .......................................................... 54
9.15.Waiver of Jury Trial .............................................. 54
9.16.Submission to Jurisdiction/Service of Process .....................
9.17.Entire Agreement .................................................. 54
92
EXHIBITS
EXHIBIT A-1 - Form of Revolving Credit Note
EXHIBIT A-2 - Form of Competitive Bid Note
EXHIBIT B - Form of Notice of Borrowing or Conversion
EXHIBIT C - Indebtedness; Encumbrances
EXHIBIT D - Litigation
EXHIBIT E - Significant Subsidiaries
EXHIBIT F - Form of Report of Chief Financial Officer
EXHIBIT G - Form of Opinion of Counsel to the Borrower
EXHIBIT H - Form of Competitive Bid Quote Request
EXHIBIT I - Form of Invitation for Competitive Bid Quotes
EXHIBIT J - Form of Competitive Bid Quote
EXHIBIT K - Form of Notice of Competitive Bid Borrowing
EXHIBIT L - Form of Notice of Competitive Bid Loans
EXHIBIT M - Form of Assignment and Joinder Agreement
EXHIBIT N - Form of Extension Agreement
SCHEDULES
SCHEDULE 1 - Commitments of the Lenders
SCHEDULE 4.13 - List of Sites at which Potentially
Responsible Party; Hazardous Materials
Disclosure; Other Disclosure Under Section 4.13
93
$87,500,000
CREDIT AGREEMENT
THIS $87,500,000 CREDIT AGREEMENT is made as of November 8, 1996, among
(i) UST INC., a Delaware corporation (the "Borrower"), (ii) the several banks
and other financial institutions from time to time parties to this Agreement
(the "Lenders"), (iii) BANK OF BOSTON CONNECTICUT, a Connecticut banking
corporation, as administrative agent for the Lenders hereunder (in such
capacity, the "Administrative Agent") and (iv) The Bank of Nova Scotia, Fleet
National Bank and Wachovia Bank of Georgia, N.A., as Co-Agents.
BACKGROUND
A. The Borrower has requested that the Lenders provide the Loans
to the Borrower.
B. The Lenders have agreed to extend the Loans to the Borrower on
the terms and conditions hereinafter set forth.
AGREEMENT
In consideration of the Background which is incorporated by reference,
the parties hereto, intending to be bound legally, agree as follows:
SECTION I.
DEFINITIONS
1.1. Definitions.
All capitalized terms used in this Agreement or in the Notes or in any
certificate, report or other document made or delivered pursuant to this
Agreement (unless otherwise defined therein) shall have the meanings assigned to
them below:
Adjusted Eurodollar Rate. Applicable to any Interest Period, shall mean
a rate per annum determined pursuant to the following formula:
AER = [ IOR ]*
-------------
[ 1.00 - RP ]
AER = Adjusted Eurodollar Rate
IOR = Interbank Offered Rate
94
RP = Reserve Percentage
*The amount in brackets shall be rounded upwards, if necessary, to the
next higher 1/100 of 1%.
Where:
"Interbank Offered Rate" applicable to any Eurodollar Loan for any
Interest Period means the rate of interest determined by the
Administrative Agent to be the prevailing rate per annum at which
deposits in U.S. dollars are offered to the Administrative Agent by
first-class banks in the interbank Eurodollar market in which it
regularly participates on or about 10:00 a.m. (Boston time) two
Business Days before the first day of such Interest Period in an amount
approximately equal to the principal amount of the Eurodollar Loan to
which such Interest Period is to apply for a period of time
approximately equal to such Interest Period.
"Reserve Percentage" applicable to any Interest Period means the rate
(expressed as a decimal) applicable to the Administrative Agent during
such Interest Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System for determining the
maximum reserve requirement (including, without limitation, any basic,
supplemental, emergency or marginal reserve requirement) of the
Administrative Agent with respect to "Eurocurrency liabilities" as that
term is defined under such regulations.
The Adjusted Eurodollar Rate shall be adjusted automatically as of the effective
date of any change in the Reserve Percentage.
Affected Loans. See Section 2.9(a).
Affiliate. With reference to any person (which term does not include,
for purposes of this definition, any governmental agency or instrumentality),
(i) any director, officer or employee of that person, (ii) any other person
controlling, controlled by or under direct or indirect common control of that
person, (iii) any other person directly or indirectly holding 10% or more of any
class of the capital stock or other equity interests (including options,
warrants, convertible securities and similar rights) of that person and (iv) any
other person 10% or more of any class of whose capital stock or other equity
interests (including options, warrants, convertible securities and similar
rights) is held directly or indirectly by that person.
Administrative Agent. Bank of Boston Connecticut in its capacity as
Administrative Agent for the Lenders under this Agreement, and includes (where
the
2
95
context so permits) any other person or persons succeeding to the functions of
the Administrative Agent under this Agreement.
Agreement. This $87,500,000 Credit Agreement, as the same may be
modified, supplemented or amended from time to time.
Base Rate. The greater of (i) the rate of interest announced from time
to time by The First National Bank of Boston at its head office as its Base
Rate, or (ii) the Federal Funds Effective Rate plus 1/2 of 1% per annum (rounded
upwards, if necessary, to the next higher 1/16 of 1%).
Base Rate Loan. Any Revolving Credit Loan bearing interest determined
with reference to the Base Rate.
Borrower. As defined in the introductory paragraph hereto.
Borrower's Accountants. Independent certified public accountants
acceptable to the Administrative Agent and the Majority Lenders. The
Administrative Agent and each Lender hereby acknowledge that the Borrower's
Accountants may include Ernst & Young LLP.
Business Day. (i) For all purposes other than as covered by clause (ii)
below, any day other than a Saturday, Sunday or legal holiday on which banks in
Boston, Massachusetts are open for the conduct of a substantial part of their
commercial banking business, and (ii) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
Eurodollar Loans, any day that is a Business Day described in clause (i) and
that is also a day for trading between banks in U.S. Dollar deposits in the
interbank Eurodollar market.
Capital Expenditures. Any expenditure for fixed assets, leasehold
improvements, capital leases under GAAP, installment purchases of machinery and
equipment, acquisitions of real estate and other similar expenditures including
(i) in the case of a purchase, the entire purchase price, whether or not paid
during the fiscal period in question, (ii) in the case of a capital lease, the
entire rental amount for the lease term (excluding the interest component
thereof), and (iii) expenditures in any construction-in-process account of the
Borrower.
Closing Date. The first date on which the conditions set forth in
Section III hereof have been satisfied.
Code. The Internal Revenue Code of 1986 and the rules and regulations
thereunder, collectively, as the same may from time to time be supplemented or
amended and remain in effect.
3
96
Commercial Paper Rating. The rating given by each of Moody's and
Standard & Poor's to the commercial paper issued by the Borrower.
Commitment. With respect to each Lender, the amount set forth on
Schedule 1 hereto, as such Lender's Commitment may be modified pursuant hereto
and in effect from time to time.
Commitment Amount. Eighty-Seven Million Five Hundred Thousand Dollars
($87,500,000) or any lesser amount, including zero, resulting from a termination
or reduction of such amount in accordance with Section 2.4 or Section 7.2.
Commitment Percentage. With respect to each Lender, the percentage set
forth on Schedule 1 hereto as such Lender's percentage of the aggregate
Commitments of all the Lenders. Schedule 1 shall be amended from time to time to
reflect any changes to the Commitment Percentages.
Competitive Bid Auction. A solicitation by the Administrative Agent of
Competitive Bid Quotes pursuant to Section 2.8.
Competitive Bid Loans. Any Loans bearing interest at a rate determined
with reference to the Competitive Bid Rate, which Loans shall be made solely at
the discretion of each Lender pursuant to a Competitive Bid Auction, as set
forth in Section 2.8.
Competitive Bid Notes. The promissory notes of the Borrower,
substantially in the form of Exhibit A-2 hereto, evidencing the obligation of
the Borrower to each Lender to repay the Competitive Bid Loans made by such
Lender.
Competitive Bid Quote. An offer by a Lender to make a Competitive Bid
Loan in accordance with Section 2.8.
Competitive Bid Rate. The rate of interest quoted by a Lender, at such
Lender's sole discretion, in any Competitive Bid Quote.
Consolidated Net Income. For any period for which the amount thereof
shall be determined, the sum of the net income of the Borrower and its
Subsidiaries determined on a consolidated basis in accordance with GAAP.
Consolidated Operating Cash Flow. For any period for which the amount
thereof shall be determined, as consolidated in accordance with GAAP, (i) an
amount equal to EBIT of the Borrower and its Subsidiaries for such period, (ii)
plus all depreciation, amortization and other non-cash charges taken in
accordance with GAAP by the Borrower and its Subsidiaries for such period, (iii)
minus all income taxes paid in cash by the
4
97
Borrower and its Subsidiaries during such period, and (iv) minus all Capital
Expenditures paid in cash by the Borrower and its Subsidiaries during such
period.
Consolidated Subsidiary. Any Subsidiary of the Borrower the assets and
liabilities of which are required to be consolidated with those of the Borrower
in its consolidated financial statements in accordance with GAAP.
Consolidated Total Debt Service. For any period for which the amount
thereof shall be determined, as consolidated in accordance with GAAP, the sum of
(i) the aggregate cash interest expense of the Borrower and its Subsidiaries for
the applicable period (including, without limitation, the interest component of
all capital leases), and (ii) the aggregate amount of scheduled principal
payments required to be made by the Borrower and its Subsidiaries for the
applicable period.
Consolidated Total Funded Debt. For any period for which the amount
thereof shall be determined, as consolidated in accordance with GAAP, all of the
Funded Debt of the Borrower and its Subsidiaries.
Controlled Group. All trades or businesses (whether or not
incorporated) under common control that, together with the Borrower, are treated
as a single employer under Section 414(b) or 414(c) of the Code or Section
4001(b) of ERISA.
Default. An event or condition that, but for the requirement that time
elapse or notice be given, or both, would constitute an Event of Default.
Dividends. (i) The declaration or payment of any cash or property
dividend on or in respect of shares of any class of capital stock of the
Borrower, except dividends payable solely in shares of the Borrower's capital
stock, and (ii) any other distribution paid on or in respect of shares of any
class of capital stock of the Borrower, but does not include redemptions or
repurchases by the Borrower of any shares of its capital stock.
Dollars and $. Dollars in lawful currency of the United States of
America.
EBIT. For any period for which the amount thereof shall be determined,
the consolidated earnings of the Borrower and its Subsidiaries before deducting
income taxes and interest expense as each such term is computed in accordance
with GAAP.
EBITDA. For any period for which the amount thereof shall be
determined, EBIT plus the consolidated depreciation, depletion and amortization
of the Borrower and its Subsidiaries as each such term is computed in accordance
with GAAP.
Encumbrances. As defined in Section 6.1.
5
98
Environmental Laws. Any and all applicable foreign, federal, state and
local environmental, health or safety statutes, laws, regulations, or ordinances
(whether now existing or hereafter enacted or promulgated), of all governmental
agencies, bureaus or departments which may now or hereafter have jurisdiction
over the Borrower or any of its Subsidiaries and all applicable judicial and
administrative and regulatory decrees, judgments and orders, including common
law rulings and determinations, relating to injury to, or the protection of,
real or personal property or human health or the environment, including, without
limitation, all requirements pertaining to reporting, licensing, permitting,
investigation, remediation and removal of emissions, discharges, releases or
threatened releases of Hazardous Materials, chemical substances, pollutants or
contaminants whether solid, liquid or gaseous in nature, into the environment or
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of such Hazardous Materials, chemical
substances, pollutants or contaminants.
ERISA. The Employee Retirement Income Security Act of 1974 and the
rules and regulations thereunder, collectively, as the same may from time to
time be supplemented or amended and remain in effect.
Eurodollar Loan. Any Revolving Credit Loan bearing interest at a rate
determined with reference to the Adjusted Eurodollar Rate.
Event of Default. Any event described in Section 7.1.
Existing Credit Agreement. The Amended and Restated Revolving Credit
and Term Loan Agreement dated as of August 15, 1994, among UST Inc., the several
banks parties thereto and Bank of Boston Connecticut, as agent.
Federal Funds Effective Rate. For any day, a fluctuating interest rate
per annum 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, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day that is a Business Day, the
average of the quotations for such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by the Administrative Agent.
Funded Debt. At any date as of which the amount thereof shall be
determined, as applied to the Borrower and its Subsidiaries, all Indebtedness of
the Borrower or such Subsidiary which by its terms is payable more than one year
from such date or which may be extended at the option of the Borrower or such
Subsidiary under a revolving credit facility or similar agreement to a date more
than one year from such date of determination, provided that all Indebtedness
hereunder shall at all times constitute Funded Debt.
6
99
GAAP. Generally accepted accounting principles consistently applied.
Guarantees. As applied to the Borrower and its Subsidiaries, all
guarantees, endorsements or other contingent or surety obligations with respect
to obligations of others whether or not reflected on the consolidated balance
sheet of the Borrower and its Subsidiaries, including, without limitation, any
obligation to furnish funds, directly or indirectly (whether by virtue of
partnership arrangements, by agreement to keep-well or otherwise), through the
purchase of goods, supplies or services, or by way of stock purchase, capital
contribution, advance or loan, or to enter into a contract for any of the
foregoing, for the purpose of payment of obligations of any other person.
Hazardous Material. Any substance (i) the presence of which requires or
may hereafter require notification, investigation or remediation under any
Environmental Law, (ii) which is or becomes defined as a "hazardous waste",
"hazardous material" or "hazardous substance" or "controlled industrial waste"
or "pollutant" or "contaminant" under any present or future Environmental Law or
amendments thereto including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9601
et seq.) and any applicable local statutes and the regulations promulgated
thereunder, (iii) which is toxic, explosive, corrosive, flammable, infectious,
radioactive, mutagenic or otherwise hazardous and is or becomes regulated by any
governmental authority, agency, department, commission, board, agency or
instrumentality of any foreign country, the United States, any state of the
United States, or any political subdivision thereof to the extent any of the
foregoing has or had jurisdiction over the Borrower, or (iv) without limitation,
which contains gasoline, diesel fuel or other petroleum products, asbestos or
polychlorinated biphenyls ("PCB's").
Indebtedness. As applied to the Borrower and its Subsidiaries and
determined on a consolidated basis, (i) all obligations for borrowed money or
other extensions of credit whether or not secured or unsecured, absolute or
contingent, including, without limitation, unmatured reimbursement obligations
with respect to letters of credit or guarantees issued for the account of or on
behalf of the Borrower and its Subsidiaries and all obligations representing the
deferred purchase price of property, other than accounts payable arising in the
ordinary course of business, (ii) all obligations evidenced by bonds, notes,
debentures or other similar instruments, (iii) all obligations secured by any
mortgage, pledge, security interest or other lien on property owned or acquired
by the Borrower or any of its Subsidiaries whether or not the obligations
secured thereby shall have been assumed, (iv) that portion of all obligations
arising under capital leases that is required to be capitalized on the
consolidated balance sheet of the Borrower and its Subsidiaries, and (v) all
Guarantees.
7
100
Interest Period.
(a) With respect to each Eurodollar Loan, the period commencing on the
date of the making or continuation of, or conversion to, such Eurodollar Loan
and ending not later than one, two, three or six months thereafter, as the
Borrower may elect in the applicable Notice of Borrowing or Conversion; and
(b) With respect to each Competitive Bid Loan, the period commencing on
the date of the making or continuation of such Competitive Bid Loan and ending
not later than 90 days thereafter, as the Borrower may elect in accordance with
Section 2.8 hereof; provided that:
(i) any Interest Period (other than an Interest Period
determined pursuant to clause (iii) below) that would otherwise end on a day
that is not a Business Day shall be extended to the next succeeding Business Day
unless, in the case of Eurodollar Loans, such Business Day falls in the next
calendar month, in which case such Interest Period shall end on the immediately
preceding Business Day;
(ii) any Interest Period applicable to a Eurodollar Loan that
begins on the last Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (iii) below, end on the last Business
Day of a calendar month that is one, two, three or six months after the first
day of such Interest Period;
(iii) any Interest Period during the Revolving Credit Period
that would otherwise end after the Revolving Credit Termination Date shall end
on the Revolving Credit Termination Date;
(iv) notwithstanding clause (iii) above, no Interest Period
applicable to a Eurodollar Loan shall have a duration of less than one month,
and if any Interest Period applicable to such Loan would be for a shorter
period, such Interest Period shall not be available hereunder; and
(v) no Interest Period may be selected in respect to all or
any portion of any Revolving Credit Loan or Competitive Bid Loan which would
expire after the Revolving Credit Termination Date.
Lenders. As defined in the introductory paragraph hereto.
Liabilities. As applied to the Borrower and its Subsidiaries, at any
date as of which the amount thereof shall be determined, all obligations that
should, in accordance
8
101
with GAAP, be classified as liabilities on the balance sheet of the Borrower or
such Subsidiary, including, in any event, all Indebtedness of the Borrower or
such Subsidiary.
Loan. A loan made to the Borrower by any Lender pursuant to Section II
of this Agreement, and "Loans" means all of such loans, collectively.
Majority Lenders. Those Lenders, no fewer than two, whose aggregate
Commitments constitute at least fifty-one percent (51%) of the total Commitments
of the Lenders.
Material Adverse Effect. A material adverse change in or effect on the
financial condition or business of the Borrower and its Subsidiaries taken as a
whole.
Notes. Collectively, the Revolving Credit Notes and the Competitive Bid
Notes, as each may be renewed, reissued, exchanged, consolidated, amended,
modified or supplemented from time to time.
Notice of Borrowing or Conversion. As defined in Section 2.2.
Obligations. Any and all obligations of the Borrower to the
Administrative Agent or any Lender hereunder or under the Notes of every kind
and description, direct or indirect, absolute or contingent, primary or
secondary, due or to become due, now existing or hereafter arising, regardless
of how they arise or by what agreement or instrument, if any, and including
obligations to perform acts and refrain from taking action as well as
obligations to pay money.
Patents. Any patent, patent rights or licenses, trademarks, trademark
rights, trade names, trade name rights, copyrights, and any other right with
respect to the foregoing.
PBGC. The Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.
Permitted Encumbrances. As defined in Section 6.1.
Person or person. Any individual, corporation, partnership, trust,
governmental agency or instrumentality.
Plan. At any time, an employee pension or other benefit plan that is
subject to Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group or (ii) if such Plan is established, maintained pursuant to
a collective bargaining agreement or any other arrangement under which more than
one employer makes contributions and to which
9
102
the Borrower 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.
Revolving Credit Notes. The revolving credit notes of the Borrower,
substantially in the form of Exhibit A-1 hereto, evidencing the obligation of
the Borrower to each Lender to repay the Revolving Credit Loans made by such
Lender.
Revolving Credit Period. The period beginning on the date of this
Agreement and extending through and including the Revolving Credit Termination
Date or such earlier date on which the obligation of the Lenders to make
Revolving Credit Loans is terminated or the Commitment Amount is reduced to zero
in accordance with the terms hereof.
Revolving Credit Termination Date. November 7, 1997 or such later date
pursuant to Section 2.1(c) hereof.
Revolving Credit Loans. The Loans made to the Borrower pursuant to
Section 2.1(a) of this Agreement.
Significant Subsidiary. Any Subsidiary of the Borrower that, at the
time of determination, constitutes a "Significant Subsidiary" as such term is
defined in Regulation S-X of the Securities and Exchange Commission, but shall,
in any case, include, without limitation, all of the Subsidiaries listed on the
attached Exhibit E and any Affiliate of the Borrower which may, in the future,
operate or own the principal business or assets currently operated and owned by
any of such Subsidiaries listed on Exhibit E.
Subsidiary. Any corporation, association, joint stock company, business
trust or other similar organization of which 50% or more of the ordinary voting
power for the election of a majority of the members of the board of directors or
other governing body of such entity is held or controlled by the Borrower or a
Subsidiary of the Borrower, or any other such organization the management of
which is directly or indirectly controlled by the Borrower or a Subsidiary of
the Borrower through the exercise of voting power or otherwise, or any joint
venture, whether incorporated or not, in which the Borrower has a 50% ownership
interest.
1.2. Accounting Terms. All terms of an accounting character shall have
the meanings assigned thereto by GAAP applied on a basis consistent with the
financial statements referred to in Section 4.6 of this Agreement, modified to
the extent, but only to the extent, that such meanings are specifically modified
herein. In the event that any change in GAAP after the date hereof would change
the principles underlying the
10
103
determination of any financial covenant in any material respect, the Borrower,
the Administrative Agent and the Lenders shall endeavor in good faith to agree
upon a mutually acceptable amendment to such covenant; provided, however, that
such covenant as in effect at the time of such change shall continue to be in
full force and effect unless and until such an amendment becomes effective.
SECTION II.
DESCRIPTION OF CREDIT
2.1. The Revolving Credit Loans.
(a) Subject to the terms and conditions hereof, each Lender severally
agrees to make Revolving Credit Loans to the Borrower, from time to time until
the close of business on the Revolving Credit Termination Date, in such sums as
the Borrower may request up to an amount equal to such Lender's Commitment,
provided that the aggregate principal amount of all Loans at any one time
outstanding hereunder shall not exceed the Commitment Amount, and provided
further that the Revolving Credit Loans shall be made pro rata in accordance
with each Lender's Commitment Percentage at the time each such Loan is made. The
Borrower may borrow, prepay pursuant to Section 2.10 and reborrow, from the date
of this Agreement until the Revolving Credit Termination Date, the full amount
of the Commitment Amount or any lesser sum that is at least $1,000,000 or an
integral multiple thereof. Any Revolving Loan not repaid by the Revolving Credit
Termination Date shall be due and payable on the Revolving Credit Termination
Date.
(b) Provided that no Default shall have occurred and be continuing, the
Borrower may elect to convert all or any part (in integral multiples of
$1,000,000) of any outstanding Base Rate Loan or Eurodollar Loan into a Loan of
any other type provided for in this Agreement (other than a Competitive Bid
Loan) in the same aggregate principal amount, on any Business Day. The Borrower
shall give the Administrative Agent prior notice of each such conversion (which
notice shall be effective upon receipt in accordance with Section 2.2). All such
conversions shall be made pro rata in accordance with each Lender's Commitment
Percentage.
(c) The Commitments may be extended in the manner set forth in, and
subject to the conditions contained in, this subsection (c). If the Borrower
wishes to request an extension of the Commitments, it shall give notice to that
effect to the Administrative Agent not less than 30 or more than 60 days prior
to the Revolving Credit Termination Date then in effect, whereupon the
Administrative Agent shall promptly notify each of the Lenders of such request.
Each such extension of Commitments shall be effective only with respect to each
Lender which, by written notice (a "Continuation Notice") to the Borrower and
the Administrative Agent given no earlier than 30 days prior to the Revolving
Credit Termination Date then in effect, consents to such extension (each
11
104
Lender which has given a Continuation Notice being a "Continuing Lender", and
each Lender other than a Continuing Lender being a "Non-Continuing Lender");
provided that, the Borrower shall not be entitled to an extension of the
Commitments hereunder unless Lenders (including (x) any existing Lenders or (y)
any Assignees, in either case which have acquired Commitments of any
NonContinuing Lenders in accordance with Section 9.10(a)) having at least 75% of
the aggregate amount of the outstanding Commitments agree to be Continuing
Lenders. The Commitment of each Continuing Lender shall be extended for a period
of 364 days from the effective date set forth in an Extension Agreement,
substantially in the form of Exhibit N hereto which has been duly completed and
signed by the Borrower, the Administrative Agent and the Continuing Lenders
parties thereto. Such Extension Agreement shall be executed and then delivered
no earlier than 30 days prior to the Revolving Credit Termination Date then in
effect and the effective date set forth therein shall be no earlier than 29 days
prior to the Revolving Credit Termination Date then in effect. No extension of
the commitments pursuant to this subsection (c) shall be legally binding on any
party hereto unless and until such party executes and delivers a counterpart of
such Extension Agreement. The Commitment of each Non-Continuing Lender (to the
extent such Lender has not assigned its Commitment to a Continuing Lender) shall
terminate on the Revolving Credit Termination Date in effect prior to giving
effect to the Borrower's extension hereunder; and the Borrower shall pay, for
the account of each such Non-Continuing Lender on such Revolving Credit
Termination Date, the amounts then due and payable to such Non-Continuing Lender
pursuant to this Agreement.
2.2. Notice and Manner of Borrowing or Conversion of Base Rate and
Eurodollar Loans.
(a) Whenever the Borrower desires to obtain or continue Base Rate Loans
or Eurodollar Loans hereunder, or convert outstanding Base Rate Loans into
Eurodollar Loans or Eurodollar Loans into Base Rate Loans, the Borrower shall
notify the Administrative Agent (which notice shall be irrevocable) by telecopy,
telegraph or telephone received no later than 10:00 a.m. (Boston time) on the
day on which the requested Loans are to be made or continued as or converted to
Base Rate Loans, and received no later than 10:00 a.m. (Boston time) on the date
four Business Days before the day on which the requested Loans are to be made or
continued as or converted to Eurodollar Loans. Promptly upon receipt of any such
notice, the Administrative Agent shall notify each of the Lenders thereof. Such
notice shall specify (i) the effective date and amount of each Loan or portion
thereof to be continued or converted, subject to the limitations set forth in
Section 2.l, (ii) the interest rate option to be applicable thereto, and (iii)
the duration of the applicable Interest Period, if any (subject to the
provisions of the definition of Interest Period and Section 2.6). Each such
notification (a "Notice of Borrowing or Conversion") shall be immediately
followed by a written confirmation thereof by the Borrower in substantially the
form of Exhibit B hereto, provided that if such written confirmation differs in
any material respect from the action taken by the
12
105
Administrative Agent, the records of the Administrative Agent shall control
absent manifest error.
(b) Subject to the terms and conditions hereof, each Lender shall make
available to the Administrative Agent, in immediately available funds, no later
than 1:00 p.m. (Boston time) on the date upon which any Base Rate Loan or
Eurodollar Loan is to be made such Lender's Commitment Percentage of the
requested Loan. Upon receipt of such funds, the Administrative Agent shall, in
turn, make each such Loan available to the Borrower on the effective date
specified therefor by crediting the amount of such Loan to the Borrower's demand
deposit account with the Administrative Agent or as otherwise specified by the
Borrower in writing. In no event shall the Administrative Agent (in its capacity
as Administrative Agent) have any obligation to make any funding unless it shall
have received funds therefor from the Lenders.
(c) Subject to the terms and conditions hereof, each Lender which is
making a Competitive Bid Loan pursuant to Section 2.8 hereof shall make
available to Administrative Agent, in immediately available funds, no later than
1:00 p.m. (Boston time) on the date on which such Competitive Bid Loan is to be
made, the principal amount thereof (or so much thereof as shall have been
allocated to such Lender pursuant to Section 2.8(h) hereof). Upon receipt of
such funds, the Administrative Agent shall make such Competitive Bid Loan
available to the Borrower on the effective date specified therefor by crediting
the amount of such Competitive Bid Loan to the Borrower's demand deposit account
with the Administrative Agent or as otherwise specified by the Borrower in
writing. In no event shall the Administrative Agent (in its capacity as
Administrative Agent) have any obligation to fund any Competitive Bid Loan
unless it shall have received funds therefor from the Lender or Lenders making
such Loan.
2.3. Facility Fee. The Borrower shall pay a facility fee to the
Administrative Agent for the respective accounts of the Lenders, to be allocated
among the Lenders in accordance with their respective Commitment Percentages,
for each day during the Revolving Credit Period at the rate per annum set forth
in Table 2.3 below corresponding to the Commercial Paper Rating applicable to
the Borrower for such day, multiplied by the Commitment Amount in effect for
such day, or if the Borrower is not rated by either Moody's or Standard & Poor's
at any time, the facility fee rate shall be the highest rate per annum set forth
below. Facility fees shall be payable quarterly in arrears, on the last day of
March, June, September and December of each year beginning December, 1996, and
on the last day of the Revolving Credit Period. If, at any time, the Commercial
Paper Rating assigned to the Borrower by ▇▇▇▇▇'▇ is at a different level from
the Commercial Paper Rating assigned to the Borrower by Standard & Poor's (e.g.,
a ▇▇▇▇▇'▇ rating of P1 and a Standard & Poor's rating of A3), the Commercial
Paper Rating which results in a lower facility fee rate shall apply (e.g., the
▇▇▇▇▇'▇ rating of P1, in the example above).
13
106
TABLE 2.3
COMMERCIAL PAPER RATING
-----------------------
FACILITY FEE RATE
-----------------
MOODY'S S&P
------- ---
at least: P1 or A1 0.06%
P2 or A2 0.08%
P3 or A3 0.10%
below: P3 or A3 0.20%
2.4. Reduction of Commitment Amount. The Borrower may from time to time
by written notice delivered to the Administrative Agent at least two Business
Days prior to the date of the requested reduction, reduce ratably among the
Lenders by integral multiples of $1,000,000 any unborrowed portion of the
Commitment Amount. No reduction of the Commitment Amount shall be subject to
reinstatement.
2.5. The Revolving Credit Notes.
(a) The Revolving Credit Loans shall be evidenced by a separate
promissory note substantially in the form of Exhibit A-l attached hereto,
payable to the order of each Lender and having a final maturity date no later
than the Revolving Credit Termination Date. Each such Note shall be dated on or
before the date of the first Loans and shall have the blanks therein
appropriately completed.
(b) Each Lender shall, and is hereby irrevocably authorized by the
Borrower to, enter on the schedule forming a part of such Lender's Revolving
Credit Note or otherwise in its records appropriate notations evidencing the
date and the amount of each Loan, the interest rate applicable thereto and the
date and amount of each payment of principal made by the Borrower with respect
thereto, and such notations shall constitute prima facie evidence thereof. Each
Lender is hereby irrevocably authorized by the Borrower to attach to and make a
part of such Lender's Revolving Credit Note a continuation of any such schedule
as and when required. No failure on the part of any Lender to make any notation
as provided in this subsection (b) shall in any way affect any Loan or the
rights or obligations of such Lender or the Borrower with respect thereto.
2.6. Duration of Eurodollar Interest Periods.
(a) Subject to the provisions of the definition of the term "Interest
Period", the duration of each Interest Period applicable to a Eurodollar Loan
shall be as specified in the applicable Notice of Borrowing or Conversion. The
Borrower shall have the option to elect a subsequent Interest Period to be
applicable to such Eurodollar Loan by giving notice of such election to the
Administrative Agent received no later than 10:00
14
107
a.m. (Boston time) three Business Days before the end of the then applicable
Interest Period if such Loan is to be continued as or converted to a Eurodollar
Loan.
(b) If the Administrative Agent does not receive a notice of election
of duration of an Interest Period for a Eurodollar Loan pursuant to subsection
(a) above within the applicable time limits specified therein, or if, when such
notice must be given, an Event of Default exists, the Borrower shall be deemed
to have elected to convert all Eurodollar Loans in whole into Base Rate Loans on
the last day of the then current Interest Period with respect thereto.
(c) Notwithstanding the foregoing, the Borrower may not select an
Interest Period for any Eurodollar Loan that would end, but for the provisions
of the definition of Interest Period, after the Revolving Credit Termination
Date .
2.7. Interest Rates and Payments of Interest.
(a) Each Base Rate Loan shall bear interest on the outstanding
principal amount thereof at a rate per annum equal to the Base Rate, which rate
shall change contemporaneously with any change in the Base Rate. Such interest
shall be payable on the last day of each month in which a Base Rate Loan is
outstanding hereunder, and when such Base Rate Loan is due (whether at maturity,
by reason of acceleration or otherwise).
(b) Each Eurodollar Loan shall bear interest on the outstanding
principal amount thereof, for each Interest Period applicable thereto, at a rate
per annum equal to the Adjusted Eurodollar Rate plus the percentage set forth in
Table 2.7 below corresponding to the Commercial Paper Rating applicable to the
Borrower from time to time (and such interest rate shall change on the date of a
change in such Commercial Paper Rating), or if the Borrower is not rated by
either Moody's or Standard & Poor's at any time, the Eurodollar Margin shall be
the highest rate per annum set forth below. Such interest shall be payable for
such Interest Period on the last day thereof and when such Eurodollar Loan is
due (whether at maturity, by reason of acceleration or otherwise) and, if such
Interest Period is longer than three months, at intervals of three months after
the first day of such Interest Period. If, at any time, the Commercial Paper
Rating assigned to the Borrower by ▇▇▇▇▇'▇ is at a different level from the
Commercial Paper Rating assigned to the Borrower by Standard & Poor's (e.g., a
▇▇▇▇▇'▇ rating of P1 and a Standard & Poor's rating of A3), the Commercial Paper
Rating which results in a lower Eurodollar Margin shall apply (e.g., the ▇▇▇▇▇'▇
rating of P1, in the example above).
15
108
TABLE 2.7
COMMERCIAL PAPER RATING
-----------------------
EURODOLLAR MARGIN
-----------------
MOODY'S S&P
------- ---
at least: P1 or A1 0.185%
P2 or A2 0.220%
P3 or A3 0.300%
below: P3 or A3 0.450%
2.8. Competitive Bid Loans.
(a) Competitive Bid Loan Option. In addition to Revolving Credit Loans,
the Borrower may, pursuant to the terms of this Section 2.8, cause the
Administrative Agent to request that the Lenders submit offers to make
Competitive Bid Loans to the Borrower from time to time prior to the Revolving
Credit Termination Date. The Lenders may, but shall have no obligation to, make
such offers and the Borrower may, but shall have no obligation to, accept such
offers in the manner set forth in this Section 2.8; provided that at no time
shall the sum of the aggregate principal amount of Competitive Bid Loans
outstanding plus the aggregate principal amount of all other Loans outstanding
exceed the Commitment Amount.
(b) Competitive Bid Request. When the Borrower wishes to request offers
to make Competitive Bid Loans under this Section 2.8, it shall transmit to the
Administrative Agent by telecopy or telex a bid request substantially in the
form of Exhibit H hereto to be received no later than 10:00 a.m. (Boston time)
on the Business Day preceding the day on which the requested Competitive Bid
Loan is to be made specifying (i) the date such Competitive Bid Loan is
requested to be made (which must be a Business Day), (ii) the amount of such
Competitive Bid Loan, which must be a minimum of $1,000,000 or an integral
multiple thereof, and (iii) the duration of the requested Interest Period
applicable thereto (subject to the provisions of the definition of the term
Interest Period). The Borrower may request offers to make Competitive Bid Loans
for more than one Interest Period in a single bid request.
(c) Invitation for Competitive Bids. Not later than 2:00 p.m. (Boston
time) on the Business Day on which the Administrative Agent receives a bid
request from the Borrower in compliance with Section 2.8(b), the Administrative
Agent shall send to the Lenders by telecopy or telex an invitation for
Competitive Bid Quotes, substantially in the form of Exhibit I hereto, which
shall constitute an invitation by the Borrower to each Lender to submit bids
offering to make Competitive Bid Loans in accordance with this Section 2.8 (each
an "Invitation for Competitive Bids"). If, after receipt by the Administrative
Agent of a bid request from the Borrower in accordance with subsection (b)
16
109
of this Section 2.8, the Administrative Agent or any Lender shall be unable to
complete any procedure of the auction process described in subsections (c)
through (f) (inclusive) of the Section 2.8 due to the inability of such Person
to transmit or receive communications through the means specified therein, such
Person may rely on telephonic notice for the transmission or receipt of such
communications. In any case where such Person shall rely on telephone
transmission or receipt, any communication made by telephone shall, as soon as
possible thereafter, be followed by written confirmation thereof.
(d) Submission and Contents of Competitive Bids.
(i) In response to any Invitation for Competitive Bids, each
Lender may (but shall not be required to) submit to the Administrative Agent a
Competitive Bid Quote containing an offer or offers to make Competitive Bid
Loans. Each Competitive B Quote must comply with the requirements of this
Section 2.8(d) and must be submitted to the Administrative Agent by telecopy or
telex not later than 9:30 a.m. (Boston time) on the requested effective date of
the Competitive Bid Loan, as set forth in the Invitation for Competitive Bids,
provided that Competitive Bid Quotes submitted by the Administrative Agent (or
any Affiliate of the Administrative Agent) in its capacity as a Lender may be
submitted, and may only be submitted, if the Administrative Agent or such
Affiliate notifies the Borrower of the offer or offers contained therein not
later than 9:15 a.m. (Boston time) on the requested effective date of the
Competitive Bid Loan. Any Competitive Bid Quote so made shall be irrevocable
except with the written consent of the Administrative Agent given on the
instructions of the Borrower.
(ii) Each Competitive Bid Quote shall be substantially in the
form of Exhibit J hereto and shall in any case specify:
(A) the proposed effective date of the proposed
Competitive Bid Loan;
(B) the principal amount of the proposed Competitive
Bid Loan for which each offer is made, which principal amount (x) may be greater
than the quoting Lender's Commitment at the time but may not exceed the
Commitment Amount, (y) must be $1,000,000 or an integral multiple of $1,000,000
and (z) may not exceed the principal amount of the Competitive Bid Loan for
which offers were requested;
(C) the rate of interest per annum (rounded to the
nearest 1/10,000th of 1%) (the "Competitive Bid Rate") offered for each such
Competitive Bid Loan;
(D) the proposed Interest Period for the proposed
Competitive Bid Loan; and
17
110
(E) the identity of the quoting Lender.
(iii) Any Competitive Bid Quote shall be disregarded if it:
(A) is not substantially in the form of Exhibit J
hereto or does not specify all of the information required by Section
2.8(d)(ii);
(B) contains qualifying, conditional or similar
language (except that it may, in the case of a quote relating to more than one
Interest Period, contain the condition that the Lender will fund any one, but
not more, of the Competitive Bid Loans offered in such Competitive Bid Quote);
(C) proposes terms (including, without limitation, an
Interest Period) other than or in addition to those set forth in the applicable
Invitation for Competitive Bids; or
(D) arrives after the time set forth in Section
2.8(d)(i).
(e) Notice to Borrower. Not later than 10:00 a.m. (Boston time) on the
effective date of the requested borrowing, the Administrative Agent shall notify
the Borrower of the terms of each Competitive Bid Quote submitted by a Lender
that is in accordance with Section 2.8(d). The Administrative Agent's notice to
the Borrower shall specify (i) the aggregate principal amount of Competitive Bid
Loans for which offers have been received for each Interest Period specified in
the related Competitive Bid Request and (ii) the respective principal amounts
and Competitive Bid Rates, as the case may be, so offered.
(f) Acceptance and Notice By Borrower. Not later than 10:30 a.m.
(Boston time) on the date of the requested borrowing, the Borrower shall notify,
by telephone, confirmed by telecopy substantially in the form of Exhibit K
hereto, the Administrative Agent of its acceptance or non-acceptance of the
offers so notified to it pursuant to Section 2.8(e). In the case of an
acceptance, such notice (a "Notice of Competitive Bid Borrowing") shall specify
the aggregate principal amount of offers for each Interest Period that are
accepted. The Borrower may accept any Competitive Bid Quote in whole or in part,
provided that:
(i) the aggregate principal amount of each borrowing may not
exceed the applicable amount set forth in the related Competitive Bid Request;
(ii) subject to the provisions of Section 2.8(h) hereof, the
principal amount of each Loan must be $1,000,000 or an integral multiple of
$1,000,000;
(iii) offers quoting lower Competitive Bid Rates must be
accepted prior to offers quoting higher Competitive Bid Rates; and
18
111
(iv) the Borrower shall not accept any offer that is described
in Section 2.8(d)(iii) or that otherwise fails to comply with the requirements
of this Agreement.
(g) Notice by the Administrative Agent to the Lenders. Not later than
11:00 a.m. (Boston time) on the date of the requested borrowing, the
Administrative Agent shall notify, by telephone, confirmed by telecopy
substantially in the form of Exhibit L hereto, such Lenders that made such
Competitive Bid Quotes of the Borrower's acceptance or non-acceptance of such
Competitive Bid Quotes.
(h) Allocation by Administrative Agent. If Competitive Bid Quotes are
made by two or more Lenders with the same Competitive Bid Rates for a greater
aggregate principal amount than the amount in respect of which offers are
accepted by the Borrower for the related Interest Period, the principal amount
of Competitive Bid Loans in respect of which such offers are accepted by the
Borrower shall be allocated by the Administrative Agent among such Lenders as
nearly as possible (in such multiples, not smaller than $500,000, as the
Administrative Agent may deem appropriate) in proportion to the aggregate
principal amount of such offers. If any such Lender has indicated a minimum
acceptable Competitive Bid Loan in its Competitive Bid Quote, and under the
procedures of this subsection (h), the Administrative Agent would have allocated
to it an amount less than such minimum, such Competitive Bid Quote will instead
be deemed to have been withdrawn. Determinations by the Administrative Agent of
the amounts of Competitive Bid Loans to be made by each Lender shall be
conclusive in the absence of manifest error.
(i) Interest on Competitive Bid Loans. Each Competitive Bid Loan shall
bear interest on the outstanding principal amount thereof, for the Interest
Period applicable thereto, at a rate per annum equal to the Competitive Bid Rate
quoted by the Lender making such Loan in its Competitive Bid Quote. Such
interest shall be payable on the last day of each month during the Interest
Period applicable thereto and when such Competitive Bid Loan is due (whether at
maturity, by reason of acceleration or otherwise).
(j) Competitive Bid Notes. The Competitive Bid Loans shall be evidenced
by separate promissory notes substantially in the form of Exhibit A-2 attached
hereto, payable to the order of each Lender in a principal amount equal to the
Commitment Amount. Each such Note shall be dated on or before the date of the
first Loans and shall have the blanks therein appropriately completed. Each
Lender shall, and is hereby irrevocably authorized by the Borrower to, enter on
the schedule forming a part of such Lender's Competitive Bid Notes or otherwise
in its records appropriate notations evidencing the date and the amount of each
Competitive Bid Loan made by such Lender, the interest rate applicable thereto
and the date and amount of each payment of principal made by the Borrower with
respect thereto; and such notations shall constitute prima facie evidence
thereof. Each Lender is hereby irrevocably authorized by the Borrower to attach
to and make a part of such Lender's Competitive Bid Notes a continuation of any
such
19
112
schedule as and when required. No failure on the part of any Lender to make any
notation as provided in this subsection (j) shall in any way affect any
Competitive Bid Loan or the rights or obligations of such Lender or the Borrower
with respect thereto.
(k) Payment of Competitive Bid Loans. Each Competitive Bid Loan shall
be due and payable, and the Borrower hereby absolutely and unconditionally
promises to pay such Competitive Bid Loans, on the earlier of (i) the expiration
of the Interest Period thereof and (ii) the Revolving Credit Termination Date.
All payments of principal and interest and other amounts payable in respect of a
Competitive Bid Loan shall be made by the Borrower to the Administrative Agent
for the account of the Lender or Lenders making such Competitive Bid Loan in
immediately available funds, on or before 11:00 a.m. (Boston time) on the due
date thereof, free and clear of, and without any deduction or withholding for,
any taxes or other payments.
(l) Maximum Competitive Bid Loans; Funding Losses.
(i) Notwithstanding any other provision herein to the
contrary, at no time shall the aggregate principal amount of Competitive Bid
Loans outstanding at any time, after giving effect to the use of the proceeds of
any such Competitive Bid Loan, exceed the Commitment Amount minus the aggregate
principal amount of Revolving Credit Loans outstanding at such time.
(ii) If after acceptance of any Competitive Bid Quote pursuant
to Section 2.8, the Borrower fails to borrow any Competitive Bid Loan so
accepted on the date specified therefor, the Borrower shall indemnify the Lender
funding such Loan against any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to fund or maintain such unborrowed Loans.
2.9. Changed Circumstances.
(a) In the event that:
(i) on any date on which the Adjusted Eurodollar Rate would
otherwise be set the Administrative Agent shall have determined in good faith
(which determination shall be final and conclusive) that adequate and fair means
do not exist for ascertaining the Interbank Offered Rate; or
(ii) at any time the Administrative Agent or any Lender shall
have determined in good faith (which determination shall be final and
conclusive) that:
(A) the making or continuation of or conversion of
any Loan to a Eurodollar Loan has been made impracticable or unlawful by (1) the
occurrence of a contingency that materially and adversely affects the interbank
Eurodollar market maintained by dealers in New York City of recognized standing
or (2) compliance by the
20
113
Administrative Agent or any Lender in good faith with any applicable law or
governmental regulation, guideline or order or interpretation or change thereof
by any governmental authority charged with the interpretation or administration
thereof or with any request or directive of any such governmental authority
(whether or not having the force of law); or
(B) as the case may be, the Adjusted Eurodollar Rate
shall no longer represent the effective cost to any Lender for Dollar deposits
in the interbank Eurodollar market for deposits in which it regularly
participates;
then, and in any such event, the Administrative Agent shall forthwith so notify
the Borrower thereof. Until the Administrative Agent notifies the Borrower that
the circumstances giving rise to such notice no longer apply, the obligation of
each Lender to allow selection by the Borrower of the type of Loan affected by
the contingencies described in this Section 2.9(a) (herein called "Affected
Loans") shall be suspended. If at the time the Administrative Agent so notifies
the Borrower, the Borrower has previously given the Administrative Agent or the
Lenders a Notice of Borrowing or Conversion with respect to Affected Loans but
such Loans have not yet gone into effect, such notification shall be deemed to
be void and the Borrower may borrow Loans of another type by giving a substitute
Notice of Borrowing or Conversion pursuant to Section 2.2 hereof.
In the case of an event specified in clause (ii)(A)(2) above, upon such
date as shall be specified in such notice (which shall not be earlier than the
date such notice is given) the Borrower shall, with respect to all of the
outstanding Affected Loans, prepay the same, together with interest thereon and
any amounts required to be paid pursuant to Section 2.14, and may borrow a Loan
of another type in replacement thereof in accordance with Section 2.1 hereof by
giving a Notice of Borrowing or Conversion pursuant to Section 2.2 hereof.
(b) In case any law, regulation, treaty or official directive or the
interpretation or application thereof by any court or by any governmental
authority charged with the administration thereof or the compliance with any
guideline or request of any central bank or other governmental authority
(whether or not having the force of law):
(i) subjects the Administrative Agent or any Lender to any tax
with respect to payments of principal or interest or any other amounts payable
hereunder by the Borrower or otherwise with respect to the transactions
contemplated hereby (except for franchise taxes and taxes on the overall net
income of the Administrative Agent or such Lender imposed by the United States
of America or any political subdivision thereof); or
(ii) imposes, modifies or deems applicable any deposit
insurance, reserve, special deposit or similar requirement against assets held
by, or deposits in or for the account of, or loans by, the Administrative Agent
or any Lender (other than
21
114
such requirements as are already included in the determination of the Adjusted
Eurodollar Rate); or
(iii) imposes upon the Administrative Agent or any Lender any
other condition with respect to its performance under this Agreement,
and the result of any of the foregoing is to increase the cost to the
Administrative Agent or such Lender, reduce the income receivable by the
Administrative Agent or such Lender or impose any expense upon the
Administrative Agent or such Lender with respect to any Loans, the
Administrative Agent shall notify the Borrower thereof. The Borrower agrees to
pay to the Administrative Agent or such Lender the amount of such increase in
cost, reduction in income or additional expense as and when such cost, reduction
or expense is incurred or determined, upon presentation by the Administrative
Agent or such Lender of a statement in the amount and setting forth the
Administrative Agent or such Lender's calculation thereof, which statement shall
constitute prima facie evidence of the subject matter thereof.
(c) The Administrative Agent and each Lender agrees that as promptly as
practicable after it becomes aware of the occurrence of any event or the
existence of a condition that (i) would cause it to incur any increased cost
under this Section 2.9 or (ii) would require the Borrower to pay an increased
amount under this Section 2.9, (a) it will notify the Borrower and the
Administrative Agent of such event or condition and, (b) it will use its
reasonable efforts to make, fund or maintain the affected Loans through another
lending office or take such other reasonable steps so as to avoid the
consequences of such event or condition, provided that the Administrative Agent
or such Lender determines, in its sole discretion, that it may do so consistent
with the Administrative Agent's or such Lender's internal policies and without
being detrimental to the Administrative Agent or such Lender.
2.10. Capital Requirements. If, after the date hereof, the
Administrative Agent or any Lender determines that (i) the adoption of or change
in any law, rule, regulation or guideline regarding capital requirements for
banks or bank holding companies, or an change in the interpretation or
application thereof by any governmental authority charged with the
administration thereof, or (ii) compliance by the Administrative Agent or any
Lender or its parent bank holding company with any guideline, request or
directive of any such entity regarding capital adequacy (whether or not having
the force of law) or the interpretation thereof by a court or governmental
authority with appropriate jurisdiction, has the effect of reducing the return
on the Administrative Agent's or such Lender's or such holding company's capital
as a consequence of the Administrative Agent's or such Lender's Loans or
commitment to make Loans hereunder to a level below that which the
Administrative Agent or such Lender or such holding company could have achieved
but for such adoption, change or compliance ( assuming the full utilization of
such entity's capital) by any amount deemed by the Administrative Agent or such
Lender
22
115
to be material, then the Administrative Agent or such Lender shall notify the
Borrower thereof. The Borrower agrees to pay to the Administrative Agent or such
Lender the amount of such reduction of return on capital as and when such
reduction is determined, upon presentation by the Administrative Agent or such
Lender of a statement stating the amount and setting forth the Administrative
Agent's or Lender's calculation thereof, which statement shall constitute prima
facie evidence of the subject matter thereof. In determining such amount, the
Administrative Agent or such Lender may use any reasonable averaging and
attribution methods.
2.11. Payments and Prepayments of the Loans.
(a) Base Rate Loans may be prepaid, in whole or in part, at any time,
without premium or penalty upon one Business Days' notice. Eurodollar Loans may
be prepaid, in whole or in part, at any time, without premium or penalty (but
subject to the provisions of Section 2.14) upon three business days notice to
the Administrative Agent. Any interest accrued on the amounts so prepaid to the
date of such payment must be paid at the time of any such payment. No prepayment
of Base Rate Loans or Eurodollar Loans during the Revolving Credit Period shall
affect the Commitment Amount or impair the Borrower's right to borrow Base Rate
Loans or Eurodollar Loans as set forth in Section 2.1.
(b) With respect to Eurodollar Loans, in the event that the
Administrative Agent or any Lender seeks reimbursement from the Borrower
pursuant to the terms of Section 2.9(b) or Section 2.10, the Borrower may
(subject to the provisions of Section 2.14) elect, rather than paying to the
Administrative Agent or such Lender the amount of such reimbursement, to prepay
the Loans in full, together with any and all other Obligations owing by the
Borrower to the Administrative Agent and each Lender. Any amounts so prepaid may
not be reborrowed and, upon such prepayment, each Lender's obligation to make
Loans hereunder shall terminate.
(c) Competitive Bid Loans may not be prepaid without the prior written
consent of the Lender which made such Competitive Bid Loan.
2.12. Method of Payment for Revolving Credit Loans. All payments and
prepayments of principal and all payments of interest, fees and other amounts
payable hereunder shall be made by the Borrower to the Administrative Agent, for
the respective accounts of Lenders or (as the case may be) the Administrative
Agent, Bank of Boston Connecticut, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ Attention: Ms. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇; in immediately available funds in lawful
United States currency, on or before 11:00 a.m. (Boston time) on the due date
thereof, free and clear of, and without any deduction or withholding for, any
taxes or other payments. The Administrative Agent and any Lender may, and the
Borrower hereby authorizes the Administrative Agent or any
23
116
Lender to, debit the amount of any payment not made by such time to the demand
deposit account of the Borrower with the Administrative Agent or such Lender.
2.13. Overdue Payments. Overdue principal (whether at maturity, by
reason of acceleration or otherwise) and, to the extent permitted by applicable
law, overdue interest and fees or any other amounts payable hereunder or under
each Note shall bear interest from and including the due date thereof until
paid, and payable on demand, at a rate per annum equal to (i) if such due date
occurs prior to the end of an Interest Period, 1% above the interest rate
applicable to such Loan for such Interest Period until the expiration of such
Interest Period, and thereafter, 1% above the Base Rate, and (ii) in all other
cases, 1% above the rate then applicable to Base Rate Loans, all of which
interest shall be payable on demand.
2.14. Payments Not at End of Interest Period. If the Borrower for any
reason makes any payment of principal with respect to any Eurodollar Loan on any
day other than the last day of an Interest Period applicable to such Eurodollar
Loan or fails to borrow continue or convert to a Eurodollar Loan after giving a
Notice of Borrowing or Conversion pursuant to Section 2.2, the Borrower shall
pay to the Administrative Agent for the respective accounts of the Lenders an
amount computed pursuant to the following formula:
L = (R - T) x P x D
---------------
360
L = amount payable to Administrative Agent for the pro rata
account of the Lenders
R = the applicable Adjusted Eurodollar Rate for such Loan
T = effective interest rate per annum at which any readily
marketable bond or other obligation of the United States,
selected at the Administrative Agent's sole discretion,
maturing on or near the last day of the then applicable
Interest Period of such Loan and in approximately the same
amount as such Loan can be purchased by the Administrative
Agent on the day of such payment of principal or failure to
borrow or continue or convert
P = the amount of principal prepaid or the amount of the requested
Loan
D = the number of days remaining in the Interest Period as of the
date of such payment or the number of days of the requested
Interest Period
The Borrower shall pay such amount upon presentation by the Administrative Agent
of a statement setting forth the amount and the Administrative Agent's
calculation thereof
24
117
pursuant hereto, which statement shall constitute prima facie evidence of the
subject matter thereof.
2.15. Computation of Interest and Fees. Interest and all fees payable
hereunder shall be computed daily on the basis of a year of 360 days and paid
for the actual number of days for which due. If the due date for any payment of
principal is extended by operation of law, interest shall be payable for such
extended time. If any payment required by this Agreement becomes due on a day
that is not a Business Day such payment may be made on the next succeeding
Business Day (subject to clause (i) of the definition of Interest Period), and
such extension shall be included in computing interest in connection with such
payment.
SECTION III.
CONDITIONS OF LOANS
3.1. Conditions Precedent to Initial Loan. The obligation of each
Lender to make its initial Loan is subject to the condition precedent that the
Administrative Agent shall have received, on or before the Closing Date, in form
and substance satisfactory to the Administrative Agent and counsel to the
Lenders, the following:
(a) this Agreement, each Revolving Credit Note and each Competitive Bid
Note, duly executed by the Borrower;
(b) a certificate of the Secretary or an Assistant Secretary of the
Borrower (i) with respect to resolutions of the Board of Directors authorizing
the execution and delivery of this Agreement and the Notes and identifying the
officer(s) authorized to execute, deliver and take all other actions required
under this Agreement, and providing specimen signatures of such officers, (ii)
the articles of incorporation and bylaws in effect on the Closing Date, and
(iii) stating that all insurance that is required by this Agreement to be in
effect is in effect on the Closing Date;
(c) a certificate of the Secretary of State of the State of Delaware,
as to legal existence and good standing (including tax good standing) of the
Borrower in such state and listing all documents on file in the office of said
Secretary of State;
(d) a favorable legal opinion addressed to the Administrative Agent and
each Lender from ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esquire,assistant general counsel to the
Borrower, substantially in the form of Exhibit G hereto;
(e) such other documents, and completion of such other matters, as the
Administrative Agent or counsel for any Lender may reasonably deem necessary or
appropriate; and
25
118
(f) evidence of satisfaction of all outstanding Loans (as that term is
defined in the Existing Credit Agreement) under the Existing Credit Agreement.
3.2. Conditions Precedent to All Loans. The obligation of each Lender
to make each Loan, including its initial Loan, or continue or convert Loans to
Loans of another type, is further subject to the following conditions:
(a) timely receipt by the Administrative Agent of the Notice of
Borrowing or Conversion as provided in Section 2.2;
(b) the representations and warranties contained in Section IV shall be
true and accurate in all material respects on and as of the date of such Notice
of Borrowing or Conversion and on the effective date of the making, continuation
or conversion of each Loan as though made at and as of each such date (except to
the extent that such representations and warranties expressly relate to an
earlier date), and no Default or Event of Default shall have occurred and be
continuing, or would result from such Loan;
(c) the resolutions referred to in Section 3.1(b) shall remain in full
force and effect; and
(d) no change shall have occurred in any law or regulation or
interpretation thereof that, in the opinion of counsel for any Lender, would
make it illegal or against the policy of any governmental agency or authority
for any Lender to make Loans hereunder.
The making of each Loan shall be deemed to be a representation and
warranty by the Borrower on the date of the making, continuation or conversion
of such Loan as to the accuracy of the facts referred to in subsection (b) of
this Section 3.2.
SECTION IV.
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and to make
Loans hereunder, the Borrower represents and warrants to the Administrative
Agent and each Lender that:
4.1. Organization and Qualification. Each of the Borrower and its
Significant Subsidiaries (a) is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation, (b)
has all requisite corporate power to own its property and conduct its business
as now conducted and as presently contemplated and (c) is duly qualified and in
good standing as a foreign corporation and is duly authorized to do business in
each jurisdiction where the nature of its properties or
26
119
business requires such qualification, except where the failure to be so
qualified would not have a Material Adverse Effect.
4.2. Corporate Authority. The execution, delivery and performance of
this Agreement and each Note and the transactions contemplated hereby are within
the corporate power and authority of the Borrower and have been authorized by
all necessary corporate proceedings, and do not and will not (a) require any
consent or approval of the stockholders of the Borrower, (b) contravene any
provision of the charter documents or by-laws of the Borrower or any law, rule
or regulation applicable to the Borrower, (c) contravene any provision of, or
constitute an event of default or event that, but for the requirement that time
elapse or notice be given, or both, would constitute an event of default under,
any other agreement, instrument, order or undertaking binding on the Borrower,
or (d) result in or require the imposition of any Encumbrance on any of the
properties, assets or rights of the Borrower.
4.3. Valid Obligations. This Agreement and each Note and all of their
respective terms and provisions are the legal, valid and binding obligations of
the Borrower, enforceable in accordance with their respective terms except as
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
affecting the enforcement of creditors' rights generally, and except as the
remedy of specific performance or of injunctive relief is subject to the
discretion of the court before which any proceeding therefor may be brought.
4.4. Consents or Approvals. The execution, delivery and performance of
this Agreement and each Note and the transactions contemplated herein do not
require any approval or consent of, or filing or registration with, any
governmental or other agency or authority, or any other party.
4.5. Title to Properties; Absence of Encumbrances. Each of the Borrower
and its Significant Subsidiaries has good and marketable title to all of its
material properties, assets and rights of every name and nature now purported to
be owned by it, including without limitation, such properties, assets and rights
as are reflected in the financial statements referred to in Section 4.6 (except
such properties, assets or rights as have been disposed of in the ordinary
course of business since the date thereof), free from all Encumbrances except
Permitted Encumbrances or those Encumbrances disclosed in Exhibit C hereto, and,
except as so disclosed, free from all defects of title that could reasonably be
expected to materially adversely affect such properties, assets or rights, taken
as a whole.
4.6. Financial Statements. The Borrower has furnished the
Administrative Agent and each Lender its consolidated balance sheet as of
December 31, 1995 and its consolidated statements of income, changes in
stockholders' equity and cash flow for the fiscal year then ended, and related
footnotes, audited and certified by the
27
120
Borrower's Accountants. The Borrower has also furnished the Administrative Agent
and each Lender its consolidated balance sheet as of June 30, 1996 and its
consolidated statements of income and cash flow for the fiscal quarter then
ended, certified by the principal financial officer of the Borrower but subject,
however, to normal, recurring year-end adjustments that shall not in the
aggregate be material in amount. All such financial statements were prepared in
accordance with GAAP applied on a consistent basis throughout the periods
specified and present fairly the financial position of the Borrower and its
Consolidated Subsidiaries as of such dates and the results of the operations of
the Borrower and its Consolidated Subsidiaries for such periods. There are no
liabilities, contingent or otherwise, required to be disclosed in accordance
with GAAP and not disclosed in such financial statements that involve a material
amount.
4.7. Changes. From December 31, 1995, through the Closing Date, there
has been no Material Adverse Effect.
4.8. Defaults. No Default or Event of Default exists.
4.9. Taxes. The Borrower and each Significant Subsidiary has filed all
material federal, state and other tax returns required to be filed, and all
material taxes, assessments and other governmental charges due from the Borrower
and each Significant Subsidiaries have been fully paid except where (i) such
payment is being contested in good faith by appropriate proceedings and adequate
reserves have been established and are being maintained in accordance with GAAP,
or (ii) where the failure to so file or pay could not reasonably be expected to
have a Material Adverse Effect. The Borrower and each Significant Subsidiary has
established on its books reserves adequate for the payment of all federal, state
and other tax liabilities.
4.10. Litigation. Except as set forth on Exhibit D hereto, there is no
litigation, arbitration, proceeding or investigation pending, or, to the
knowledge of the Borrower's or any Subsidiary's officers, threatened, against
the Borrower or any Subsidiary the outcome of which could reasonably be expected
to result in a forfeiture of all or any substantial part of the property of the
Borrower or its Significant Subsidiaries.
4.11. Subsidiaries. As of the date of this Agreement, Exhibit E lists
all of the Borrower's Significant Subsidiaries. Such Significant Subsidiaries
have, in the aggregate, assets, sales and earnings totaling not less than 90% of
the total assets, sales a earnings of the Borrower and its Consolidated
Subsidiaries. The Borrower or a Significant Subsidiary of the Borrower is the
owner, free and clear of all liens and Encumbrances, of all of the issued and
outstanding stock of such Significant Subsidiaries. All shares of the stock of
the Borrower and each Significant Subsidiary have been validly issued and are
fully paid and nonassessable, and no rights to subscribe to any additional
shares have been granted, and no options, warrants or similar rights are
outstanding with respect to the outstanding stock of Significant Subsidiaries.
28
121
4.12. Compliance with ERISA. The Borrower 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 applicable provisions of ERISA and the Code,
and have not incurred any liability to the PBGC or a Plan under Title IV of
ERISA; and, to the best knowledge of the Borrower, no "prohibited transaction"
or "reportable event" (as such terms are defined in ERISA) has occurred with
respect to any Plan.
4.13. Environmental Matters.
(a) Except as set forth on Schedule 4.13, (i) the Borrower and each of
its Significant Subsidiaries have obtained all permits, licenses and other
authorizations which are required under all applicable Environmental Laws,
except to the extent failure to have any such permit, license or authorization
would not have a Material Adverse Effect, and (ii) the Borrower and each of its
Subsidiaries are in compliance with the terms and conditions of all such
permits, licenses 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 regulation, code, plan, order, decree, judgment, injunction,
entered, promulgated or approved thereunder, except to the extent failure to
comply would not have a Material Adverse Effect.
(b) Except as set forth in Schedule 4.13, no written notice,
notification, demand, request for information, citation, summons or order has
been issued, no complaint has been filed, no penalty has been assessed and, to
the best knowledge of the Borrower, no investigation is pending or threatened
(in writing) by any governmental or other entity with respect to any alleged
failure by the Borrower or any of its Significant Subsidiaries to have any
permit, license or authorization required in connection with the conduct of its
business or with respect to any applicable Environmental Laws, including,
without limitation, Environmental Laws relating to the generation, treatment,
storage, recycling, transportation, disposal or release of any Hazardous
Materials, except to the extent that such notice, complaint, penalty or
investigation did not or could not reasonably be expected to result in a
Material Adverse Effect. As of the date hereof, the Borrower or any Subsidiary
of the Borrower has been identified in writing as a potentially responsible
party (as that term has been construed pursuant to the Federal Comprehensive
Environmental Response, Compensation and Liability Act and similar state and
local laws) at the sites listed and described on the attached Schedule 4.13 and
at no other sites.
(c) Except as disclosed on Schedule 4.13 attached hereto, to the best
of the Borrower's knowledge no material written notification of a release of a
Hazardous Material has been filed by or on behalf of the Borrower or any of its
Significant Subsidiaries and no property now or previously owned, leased or used
by the Borrower or any of its Significant Subsidiaries is listed or proposed for
listing on the National Priorities
29
122
List under the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, or on any similar state list of sites requiring
investigation or clean-up, except to the extent such notification, listing or
proposed listing could not reasonably be expected to result in a Material
Adverse Effect.
(d) There are no liens or encumbrances arising under or pursuant to any
applicable Environmental Laws on any of the real property or properties
currently owned, leased or used by the Borrower or any of its Significant
Subsidiaries, and no notice of any governmental action has been received by the
Borrower or any Significant Subsidiary, and to the best knowledge of the
Borrower, no governmental actions have been taken or are in process, which could
subject any of such properties to such liens or encumbrances, except to the
extent that such liens or encumbrances could not reasonably be expected to
result in a Material Adverse Effect.
(e) Except as set forth on Schedule 4.13, (i) neither the Borrower nor
any of its Significant Subsidiaries nor, to the best knowledge of the Borrower,
any previous owner, tenant, occupant or user of any property currently owned,
leased or used by the Borrower or any of its Significant Subsidiaries, has
stored, deposited, disposed of, or located on any property currently owned,
leased, or used by the Borrower or any of its Significant Subsidiaries, any
Hazardous Materials, except (a) to the extent commonly used in day-to-day
operations of such property and, in such case, in substantial compliance with
all applicable Environmental Laws, or (b) where such storage, deposition,
disposal or location would not have a Material Adverse Effect, and (ii) no
Hazardous Materials are stored, deposited, disposed of, or located on any
property currently owned, leased, or used by the Borrower or any of its
Significant Subsidiaries, except (a) to the extent commonly used in day-to-day
operations of such property and, in such case, in substantial compliance with
all applicable Environmental Laws, or (b) where such storage, deposition,
disposal or location would not have a Material Adverse Effect.
SECTION V.
AFFIRMATIVE COVENANTS
So long as any Lender has any commitment to lend hereunder or any Loan or other
Obligation hereunder remains outstanding, the Borrower covenants as follows:
5.1. Financial Statements and Other Reporting Requirements. The
Borrower shall furnish to the Administrative Agent and the Lenders :
(a) as soon as available to the Borrower, but in any event within 90
days after the end of each of its fiscal years, a consolidated balance sheet as
of the end of, and a related consolidated statement of income, changes in
stockholders' equity and cash flow for, such year, audited and certified by the
Borrower's Accountants (or other independent
30
123
certified public accountants acceptable to the Administrative Agent and each
Lender) in the case of such consolidated statements, and certified by the
principal financial officer in the case of such consolidated statements; and,
concurrently with such financial statements, a written statement by such
accountants that, in the making of the audit necessary for their report and
opinion upon such financial statements they have obtained no knowledge of any
Default or, if in the opinion of such accountants any such Default exists, they
shall disclose in such written statement the nature and status thereof;
(b) as soon as available to the Borrower, but in any event within 45
days after the end of each of its fiscal quarters, a consolidated balance sheet
as of the end of, and a related consolidated statement of income for, the period
then ended, certified by the principal financial officer of the Borrower but
subject, however, to normal, recurring year-end adjustments that shall not in
the aggregate be material in amount;
(c) concurrently with the delivery of each financial statement pursuant
to subsections (a) and (b) of this Section 5.1, a report in substantially the
form of Exhibit F hereto signed on behalf of the Borrower by its chief financial
officer, its treasurer or its controller;
(d) promptly, as and when any Subsidiary qualifies or ceases to qualify
as a Significant Subsidiary hereunder, a revised Exhibit E reflecting the
current list of Significant Subsidiaries;
(e) promptly after the same are available, copies of all proxy
statements, financial statements and reports as the Borrower shall send to its
stockholders or as the Borrower may file with the Securities and Exchange
Commission or any governmental authority at any time having jurisdiction over
the Borrower or its Significant Subsidiaries;
(f) (i) if and when the Borrower 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 that might constitute grounds for a termination of such Plan
under Title IV of ERISA, or knows that any member of the Controlled Group or 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) a copy of any request for a waiver of the
funding standards or an extension of the amortization periods required under
Section 412 of the Code or Section 302 of ERISA, (iii) a copy of any notice of
intent to terminate any Plan, (iv) notice that the Borrower or any member of the
Controlled Group will or may incur any material liability to or on account of a
Plan under Section 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA, (v) promptly
upon the request of the Administrative Agent or any Lender, a copy of the annual
report of each Plan (Form 5500 or comparable form) required to be filed with the
IRS and/or the Department of Labor; and (vi) promptly upon the request of the
Administrative Agent or
31
124
any Lender, notice of the adoption of any Plan subject to ERISA, along with the
vesting and funding schedules and other principal provisions thereof;
(g) immediately upon becoming aware of the existence of any condition
or event that constitutes a Default or Event of Default, written notice thereof
specifying the nature and duration thereof and the action being or proposed to
be taken with respect thereto;
(h) promptly upon becoming aware of any litigation or of any
investigative proceedings by a governmental agency or authority commenced or
threatened against the Borrower or any of its Subsidiaries of which it has
notice, the outcome of which could reasonably be expected to have a Material
Adverse Effect, written notice thereof and the action being or proposed to be
taken with respect thereto;
(i) within 30 days of receipt of written notice from any governmental
agency or authority, or promptly upon the Borrower's reasonable belief (i) that
a violation of any Environmental Law has been committed by the Borrower, (ii)
that there are any investigative proceedings by a governmental agency or
authority commenced or threatened against the Borrower or any of its
Subsidiaries regarding any actual or potential violation of Environmental Laws
or any spill, release, discharge or disposal of any Hazardous Material in
violation of any Environmental Law, (iii) that any governmental agency or
private party is alleging that the Borrower may be liable or responsible for any
costs associated with a response to or cleanup of a release of a Hazardous
Material into the environment or any damages caused thereby, or (iv) that any
administrative or judicial complaint or order has been filed against the
Borrower alleging a violation of any Environmental Law or requiring the Borrower
to take any action in connection with the release of Hazardous Material into the
environment, which, in any such case described in items (i) through (iv) above,
could reasonably be expected to have a Material Adverse Effect, written notice
thereof and the action being or proposed to be taken with respect thereto; and
(j) from time to time, such other financial data and information about
the Borrower or its Subsidiaries as the Administrative Agent or any Lender may
reasonably request.
5.2. Conduct of Business. The Borrower shall, and shall cause its
Significant Subsidiaries to:
(a) duly observe and comply in all material respects with all
applicable laws and valid requirements of any governmental authorities relative
to its corporate existence, rights and franchises, to the conduct of its
business and to its property and assets (including without limitation all
Environmental Laws and ERISA), and shall maintain and
32
125
keep in full force and effect all licenses and permits necessary in any material
respect to the proper conduct of its business;
(b) except as provided in Section 6.2, maintain its corporate
existence; and
(c) remain engaged substantially in the same fields of business as that
in which it is now engaged, except that nothing in this Section shall prevent
the Borrower or any Significant Subsidiary from engaging in any new business and
the Borrower or any Significant Subsidiary may withdraw from any business
activity which its Board of Directors reasonably deems unprofitable or unsound,
provided that promptly after such withdrawal, the Borrower provide the
Administrative Agent with written notice thereof.
5.3. Maintenance and Insurance. The Borrower shall, and shall cause its
Significant Subsidiaries to, protect and preserve all of its properties,
including, without limitation, all of its Patents, shall obtain all new Patents
as are necessary or advisable the conduct of its business, and shall maintain
all of its tangible properties in good repair, working order and condition and
from time to time make all necessary and proper repairs, renewals, replacements,
additions and improvements thereto as the Borrower or such Significant
Subsidiary, in the exercise of its reasonable judgment, deems necessary or
advisable, as required for the normal conduct of its business, and shall comply
with the provisions of all material leases to which it is a party or under which
it occupies property so as to prevent any material loss or forfeiture thereof or
thereunder if, in any such case, the failure to do so would have a Material
Adverse Effect. Each of the Borrower and its Significant Subsidiaries shall at
all times, to the extent available, in the Borrower's reasonable discretion, on
reasonable economic terms, maintain liability and casualty insurance with
financially sound and reputable insurers or self-insure in such amounts as the
officers of the Borrower in the exercise of their reasonable judgment deem to be
adequate or as required by any applicable law. The Borrower shall furnish to the
Administrative Agent certificates or other evidence satisfactory to the
Administrative Agent of compliance with the foregoing insurance provisions. The
Administrative Agent shall not, by the fact of approving, disapproving or
accepting any such insurance, incur any liability for the form or legal
sufficiency of insurance contracts, solvency of insurance companies or payment
of lawsuits, and the Borrower hereby expressly assumes full responsibility
therefor and liability, if any, thereunder.
5.4. Taxes. The Borrower shall pay, or cause to be paid, all taxes,
assessments or governmental charges on or against it or any of its Significant
Subsidiaries or its or their properties on or prior to the time when they become
due; provided that this covenant shall not apply to any tax, assessment or
charge that (i) is being contested in good faith by appropriate proceedings and
with respect to which adequate reserves have been established and are being
maintained in accordance with GAAP, or (ii) singly or in the aggregate would not
have a Material Adverse Effect.
33
126
5.5. Inspection by the Administrative Agent. The Borrower shall permit
the Lenders, through the Administrative Agent or its designees, at any
reasonable time and upon reasonable notice, to (i) visit and inspect the
properties of the Borrower and its Significant Subsidiaries, (ii) examine and
make copies of and take abstracts from the books and records of the Borrower and
its Significant Subsidiaries, and (iii) discuss the affairs, finances and
accounts of the Borrower and its Significant Subsidiaries with their appropriate
officers, employees and accountants.
5.6. Maintenance of Books and Records. The Borrower shall, and shall
cause its Significant Subsidiaries to, keep adequate books and records of
account (and the Borrower, in addition, shall keep such books and records on a
consolidated basis), in which true and complete entries will be made reflecting
all of its business and financial transactions, and such entries will be made in
accordance with GAAP and applicable law.
5.7. Consolidated Total Funded Debt to EBITDA Ratio. The Borrower shall
at all times maintain a ratio of Consolidated Total Funded Debt to EBITDA of not
greater than 0.7 to 1.0 as determined at the end of each fiscal quarter for the
four consecutive fiscal quarters then ending.
5.8. Consolidated Operating Cash Flow to Consolidated Total Debt
Service and Dividends Ratio. The Borrower shall at all times maintain a ratio of
(i) Consolidated Operating Cash Flow to (ii) Consolidated Total Debt Service
plus Dividends in excess of 1.25 to 1.0, as determined at the end of each fiscal
quarter for the four consecutive fiscal quarters then ending.
5.9. Environmental Laws. The Borrower shall comply, and shall make all
reasonable efforts to cause its Significant Subsidiaries to comply, with all
applicable Environmental Laws in all jurisdictions in which any of them operates
now or in the future; provided, however, that the Borrower shall not be
obligated by this Section to take any action that would result in its being
designated an operator (as that term has been construed pursuant to the federal
Comprehensive Environmental Response, Compensation and Liability act and similar
state and local laws) of any Significant Subsidiary or an owner or operator of
property owned, used, or leased by such Significant Subsidiary.
5.10. Further Assurances. At any time and from time to time the
Borrower shall, and shall cause each of its Subsidiaries to, execute and deliver
such further instruments and take such further action as may reasonably be
requested by the Administrative Age or any Lender to effect the purposes of this
Agreement and the Notes.
34
127
SECTION VI.
NEGATIVE COVENANTS
So long as any Lender has any commitment to lend hereunder or any Loan
or other Obligation hereunder remains outstanding, the Borrower covenants as
follows:
6.1. Encumbrances. The Borrower shall not, and shall not allow, any of
its Significant Subsidiaries to, create, incur, assume or suffer to exist any
mortgage, pledge, security interest, lien or other charge or encumbrance,
including the lien or retained security title of a conditional vendor upon or
with respect to any of its property or assets ("Encumbrances"), or assign or
otherwise convey any right to receive income, including the sale or discount of
accounts receivable with or without recourse, except the following ("Permitted
Encumbrances"):
(a) Encumbrances in favor of the Administrative Agent for the benefit
of the Lenders;
(b) Encumbrances existing as of the date of this Agreement and
disclosed in Exhibit C hereto;
(c) liens for taxes, fees, assessments and other governmental charges
to the extent that payment of the same may be postponed or is not required in
accordance with the provisions of Section 5.4;
(d) landlords' and lessors' liens in respect of rent not in default;
liens incurred or deposits made in the ordinary course of business in connection
with workmen's compensation, unemployment insurance, social security and other
like laws; mechanics', laborers' and materialmen's and similar liens, if the
obligations secured by such liens are not then delinquent; liens securing the
performance of bids, tenders, contracts (other than for the payment of money);
and statutory obligations incidental to the conduct of its business and that do
not in the aggregate materially detract from the value of its property or
materially impair the use thereof in the operation of its business;
(e) liens existing on property of any Person at the time such Person
becomes a Significant Subsidiary, but only so long as the obligation secured by
any such lien is not in default and such lien is and will remain confined to the
property subject to it at the time such Person becomes a Significant Subsidiary
and to fixed improvements thereafter erected on such property;
(f) liens existing on any property prior to the acquisition thereof by
the Borrower or any Significant Subsidiary and not created in contemplation of
such
35
128
acquisition, provided that any such lien does not extend to any other property
of the Borrower or any Significant Subsidiary;
(g) judgment liens that shall not have been in existence for a period
longer than 30 days after the creation thereof or, if a stay of execution shall
have been obtained, for a period longer than 30 days after the expiration of
such stay;
(h) rights of lessors under capital leases;
(i) Encumbrances in respect of any purchase money obligations for
tangible property used in its business, provided that any such Encumbrances
shall not extend to property and assets of the Borrower or any such Significant
Subsidiary not financed by such a purchase money obligation;
(j) easements, rights of way, restrictions and other similar charges or
Encumbrances relating to real property and not interfering in a material way
with the ordinary conduct of its business;
(k) Encumbrances on the common stock of the Borrower purchased with any
of the proceeds of the Loans;
(l) Encumbrances in favor of the United States of America or any State
thereof or any political subdivision, agency or instrumentality of any thereof
(each hereinafter called a "Government") on any property or assets hereafter
acquired, constructed, installed or purchased by the Borrower or a Significant
Subsidiary primarily for the purpose of manufacturing or producing any product,
or performing any research or development work, directly or indirectly, for such
Government;
(m) Encumbrances on its property or assets created in connection with
the refinancing of Indebtedness secured by Permitted Encumbrances on such
property, provided that the amount of Indebtedness secured by any such
Encumbrance shall not be increased as a result of such refinancing and no such
Encumbrance shall extend to property and assets of the Borrower or any such
Significant Subsidiary not encumbered prior to any such refinancing; and
(n) Encumbrances securing Indebtedness of the kind described in
Section 6.3 to the extent (but only to the extent) permitted by Section 6.3.
6.2. Merger; Consolidation; Sale or Lease of Assets. The Borrower shall
not, and shall not allow any of its Significant Subsidiaries to, (a) sell, lease
or otherwise dispose of assets or properties (valued at the lower of cost or
market), other than (i) sales of assets in the ordinary course of business, (ii)
sales of assets or property not in the ordinary course of business, provided
that the assets or properties so sold during any fiscal year generated,
produced, contributed to or accounted for, directly or indirectly, in the
36
129
aggregate, no more than ten percent (10%) of Consolidated Net Income for the
immediately preceding fiscal year, as shown in the financial statements for such
prior year delivered to the Administrative Agent by the Borrower pursuant to
Section 5.1(a), and provided, further, that (x) whenever the Borrower or any
Significant Subsidiary sells any assets or properties pursuant to this clause
(ii), the Borrower shall provide the Administrative Agent with such statements
of income and other information as the Administrative Agent or any Lender
reasonably requests in order to determine compliance with this clause (ii), all
of which statements have been prepared in accordance with GAAP in a manner
consistent with the financial statements provided to the Administrative Agent by
the Borrower pursuant to Section 5.1(a), and (y) at the time of any such
proposed sale, no Event of Default has occurred and is continuing and no Default
or Event of Default would result therefrom, and (iii) the sale or disposition of
any of the common stock of the Borrower purchased with any of the proceeds of
the Loans, or (b) liquidate, merge or consolidate into or with any other person,
provided that any Significant Subsidiary of the Borrower may merge or
consolidate into or with (i) the Borrower if no Default or Event of Default has
occurred and is continuing or would result from such merger and if the Borrower
is the surviving company, or (ii) any other wholly-owned Significant Subsidiary
of the Borrower.
6.3. Indebtedness of Subsidiaries. The Borrower shall not cause or
permit any of its Significant Subsidiaries to create, incur, assume, guarantee
or be or remain liable with respect to any Indebtedness other than (a)
Indebtedness existing as of the date o this Agreement and disclosed in Exhibit C
hereto, (b) Indebtedness owing to the Borrower or any other Subsidiary, and (c)
other Indebtedness, not to exceed $50,000,000 in the aggregate at any time
outstanding, provided that such other Indebtedness is not secured by any
security interests, liens, charges or encumbrances on the property of any
Significant Subsidiary other than the Significant Subsidiary for whose benefit
such Indebtedness was incurred, or as otherwise permitted in Section 6.1.
6.4. ERISA. Neither the Borrower nor any member of the Controlled Group
shall permit any Plan maintained by it to (a) engage in any "prohibited
transaction" (as defined in Section 4975 of the Code or Section 406 of ERISA
that would have a Material Adverse Effect, (b) incur any "accumulated funding
deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA)
whether or not waived, that would have a Material Adverse Effect, (c) fail to
satisfy any additional funding requirements set forth in Section 412 of the Code
and Section 302 of ERISA, (d) adopt a Plan amendment which would require
security pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA, or
(e) terminate any Plan in a manner that could result in the imposition of a lien
or encumbrance on the assets of the Borrower or any of its Significant
Subsidiaries pursuant to Section 4068 of ERISA that would have a Material
Adverse Effect. Each Plan shall comply in all material respects with ERISA.
37
130
6.5. Use of Proceeds. The Borrower shall use the proceeds of the
Revolving Credit Loans and the Competitive Bid Loans in support of its
commercial paper program and for general corporate purposes, including, without
limitation, to purchase common stock of the Company and for the payment of costs
and expenses incurred or sustained by the Company in connection with the
consummation of the transactions referred to herein or contemplated hereby. No
proceeds of any Loans will be used for a purpose which violates Regulations U
and X of the Board of Governors of the Federal Reserve System, 12 C.F.R. 221 and
224, as amended, and following the application of the proceeds of each Loan, the
value of all "margin stock" (as such term is used in such Regulations) of the
Borrower will not exceed 25% of the value of the total assets of the Borrower
that are subject to the restrictions set forth in Section 6.1 and 6.2.
6.6. Transactions with Affiliates. The Borrower shall not, and shall
not permit any of its Significant Subsidiaries to, directly or indirectly enter
into any purchase, sale, lease or other transaction with any Affiliate (other
than any other Subsidiary) except in the ordinary course of business on terms
that are no less favorable to the Borrower or such Significant Subsidiary than
those which might be obtained at the time in a comparable arm's length
transaction with any person who is not an Affiliate.
SECTION VII.
DEFAULTS
7.1. Events of Default. There shall be an Event of Default hereunder if
any of the following events occurs:
(a) the Borrower shall fail to pay (i) any amount of principal of any
Loans when due or (ii) within five (5) Business Days after the due date, any
amount of interest thereon or any fees, expenses or other amounts payable
hereunder or under any Note on the due date therefor; or
(b) the Borrower shall fail to perform, comply with or observe or shall
otherwise breach any one or more of the terms, covenants, obligations or
agreements contained in Section 5.1(g), 5.2(b), 5.5, 5.7, 5.8, 6.1 through 6.6,
inclusive; or
(c) the Borrower shall fail to perform, comply with or observe or shall
otherwise breach any one or more of the terms, covenants, obligations or
agreements (other than in respect of subsections 7.1(a) and 7.1(b) hereof)
contained in this Agreement and such default shall continue for 15 days after
notice thereof has been sent to the Borrower by the Administrative Agent,
provided, however, that in the event of a failure by the Borrower to comply with
the covenants contained in Sections 5.2(a) or 5.9, no Default,
38
131
default or an Event of Default shall be deemed to occur on account of any such
failure unless such failure(s) (individually or in the aggregate) has a Material
Adverse Effect; or
(d) any representation or warranty of the Borrower made in this
Agreement or in any Note or any other documents or agreements executed in
connection with the transactions contemplated by this Agreement or in any
certificate delivered hereunder shall prove to have been false in any material
respect upon the date when made or deemed to have been made; or
(e) the Borrower or any of its Significant Subsidiaries shall fail to
pay when due, or within any applicable period of grace, any obligations in
excess of $25,000,000 in the aggregate for borrowed monies or advances, or fail
to observe or perform any term, covenant or agreement evidencing or securing
such obligations for borrowed monies or advances, the result of which failure is
to permit the holder or holders of such Indebtedness to cause such Indebtedness
to become due prior to its stated maturity upon delivery of required notice, if
any; or
(f) the Borrower 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, liquidator or similar official of itself or of all
or a substantial part of its property, (ii) be generally not paying its debts as
such debts become due, (iii) make a general assignment for the benefit of its
creditors, (iv) commence a voluntary case under the Federal Bankruptcy Code (as
now or hereafter in effect), (v) take any action or commence any case or
proceeding under any law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or adjustment of debts, or any other law providing for
the relief of debtors, (vi) fail to contest in a timely or appropriate manner,
or acquiesce in writing to, any petition filed against it in an involuntary case
under the Federal Bankruptcy Code or other law, (vii) take any action under the
laws of its jurisdiction of incorporation or organization similar to any of the
foregoing, (viii) be insolvent within the meaning of the United States
Bankruptcy Code or other applicable statute, or (ix) take any corporate 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 Borrower or any of its Significant Subsidiaries in any court of
competent jurisdiction, seeking (i) the liquidation, reorganization,
dissolution, winding up, or composition or readjustment of its debts, (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like of it or
of all or any substantial part of its assets, or (iii) similar relief in respect
of it, under any law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or adjustment of debts or any other law providing for
the relief of debtors, and such proceeding or case shall continue undismissed,
or unstayed and in effect, for a period of 60 days, or an order for relief shall
be entered in an involuntary case under the Federal Bankruptcy Code, against the
Borrower or such Subsidiary, or action under the laws of the jurisdiction of
incorporation or organization of
39
132
the Borrower or any of its Significant Subsidiaries similar to any of the
foregoing shall be taken with respect to the Borrower or such Significant
Subsidiary and shall continue unstayed and in effect for any period of 60 days;
or
(h) (A) the Borrower shall fail to own, both legally and beneficially,
100% of the capital stock of United States Tobacco Company, a Delaware
corporation, or (B) United States Tobacco Company shall cease to operate the
principal business currently operated by it or to own the principal assets
necessary to operate such business, or (C) United States Tobacco Company shall
cease to own, both legally and beneficially, 100% of the capital stock of each
of United States Tobacco Manufacturing, Inc. and United States Tobacco Sales &
Marketing, Inc. or (D) either of United States Tobacco Manufacturing, Inc. or
United States Tobacco Sales & Marketing, Inc. shall cease to operate the
principal business currently operated by it or to own the principal assets
necessary to operate such business, provided that if any of the foregoing events
result from a merger permitted by Section 6.2, the occurrence of such event
shall not be an Event of Default hereunder; or
(i) judgments or orders for the payment of money shall be entered
against the Borrower or any of its Significant Subsidiaries by any court, or
warrants of attachment or execution or injunctions or any similar processes
shall be issued or levied against property of the Borrower or such Significant
Subsidiary, that in the aggregate exceed $25,000,000 in value and such
judgments, orders, warrants, injunctions or processes shall continue
undischarged or unstayed for 30 days; or
(j) the Borrower or any member of the Controlled Group shall fail to
pay any amount or amounts that it shall have become liable to pay to the PBGC or
to a Plan under Title IV of ERISA; or notice of intent to terminate a Plan or
Plans shall be filed under Title IV of ERISA by the Borrower, 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 or to
cause a trustee to be appointed to administer any such Plan or Plans or a
proceeding shall be instituted by a fiduciary of any such Plan or Plans against
the Borrower and such proceedings shall not have been dismissed within 30 days
thereafter; or a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any such Plan or Plans must be
terminated, if the result of any of the foregoing events described in this
clause (j) would constitute a Material Adverse Effect.
7.2. Remedies. Upon the occurrence of an Event of Default described in
subsections 7.1(f) and (g), with respect to the Borrower, immediately and
automatically, and upon the occurrence of any other Event of Default, at any
time thereafter while such Event Default is continuing, at the option of the
Majority Lenders and upon the Administrative Agent's declaration:
40
133
(a) each Lender's commitment to make any further Loans hereunder shall
terminate;
(b) the unpaid principal amount of the Loans together with accrued
interest, all other Obligations, and all other obligations of the Borrower to
the Administrative Agent and each Lender of any kind shall become immediately
due and payable without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived; and
(c) the Administrative Agent may, with the consent of the Majority
Lenders, and shall, upon the request of the Majority Lenders exercise (on behalf
of itself and the Lenders) any and all rights the Administrative Agent and the
Lenders have under this Agreement, the Notes or any other documents or
agreements executed in connection herewith, or at law or in equity, and proceed
to protect and enforce the Administrative Agent's and each Lender's rights by
any action at law, in equity or other appropriate proceeding; provided however,
that each Lender shall have the right to collect and otherwise enforce the Notes
issued to such Lender, subject to Section 8.5 hereof.
SECTION VIII.
CONCERNING THE ADMINISTRATIVE AGENT AND THE LENDERS
8.1. Appointment and Authorization. Each of the Lenders hereby appoints
Bank of Boston Connecticut to serve as Administrative Agent under this Agreement
and irrevocably authorizes the Administrative Agent to take such action on such
Lender's behalf under this Agreement and to exercise such powers and to perform
such duties under this Agreement and the other documents and instruments
executed and delivered in connection with the consummation of the transactions
contemplated hereby as are delegated to the Administrative Agent by the terms
hereof or thereof, together with all such powers as are reasonably incidental
thereto.
8.2. Administrative Agent and Affiliates. Bank of Boston Connecticut
shall also have the same rights and powers under this Agreement of a Lender and,
in such capacity as Lender, may exercise or refrain from exercising the same as
though it were not the Administrative Agent, and Bank of Boston Connecticut and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of business with the Borrower or any Affiliate of the Borrower as if it
were not the Administrative Agent hereunder. Except as otherwise provided by the
terms of this Agreement, nothing herein shall prohibit any Lender from accepting
deposits from, lending money to or generally engaging in any kind of business
with the Borrower or any Affiliate of the Borrower.
8.3. Future Advances.
41
134
(a) In order more conveniently to administer the Loans, the
Administrative Agent may, unless notified to the contrary by any Lender prior to
the date upon which any Revolving Credit Loan is to be made, assume that such
Lender has made available to the Administrative Agent on such date the amount of
such Lender's share of such Revolving Credit Loan to be made on such date as
provided in this Agreement, and the Administrative Agent may (but it shall not
be required to), in reliance upon such assumption, make available to the
Borrower a corresponding amount. If any Lender makes available to the
Administrative Agent such amount on a date after the date upon which the
Revolving Credit Loan is made, such Lender shall pay to the Administrative Agent
on demand an amount equal to the product of (i) the average computed for the
period referred to in clause (iii) below, of the Federal Funds Effective Rate
during each day included in such period, multiplied by (ii) the amount of such
Lender's share of such Revolving Credit Loan, multiplied by (iii) a fraction,
the numerator of which is the number of days that elapsed from and including
such date to the date on which the amount of such Lender's share of such
Revolving Credit Loan shall become immediately available to the Administrative
Agent, and the denominator of which is 365. A statement of the Administrative
Agent submitted to such Lender with respect to any amounts owing under this
paragraph shall be prima facie evidence of the amount due and owing to the
Administrative Agent by such Lender.
(b) The Administrative Agent may at any time, in its sole discretion,
upon notice to any Lender, refuse to make any Revolving Credit Loan to the
Borrower on behalf of such Lender unless such Lender shall have provided to the
Administrative Agent immediately available federal funds equal to such Lender's
share of such Loan in accordance with this Agreement.
(c) Anything in this Agreement to the contrary notwithstanding, the
obligations to make Loans under the terms of this Agreement shall be the several
and not joint obligations of each of the Lenders and any advances made by the
Administrative Agent on behalf of any Lender are strictly for the administrative
convenience of the parties and shall in no way diminish any Lender's liability
to the Administrative Agent and Bank of Boston Connecticut to repay the
Administrative Agent for such Loans and advances. If the amount of any Bank's
share of any Revolving Credit Loan which the Administrative Agent has advanced
to the Borrower is not made available to the Administrative Agent by such Lender
within three (3) Business Days following the date upon which such Revolving
Credit Loan is made, the Administrative Agent shall be entitled to recover such
amount from the Borrower on demand, with interest thereon at the rate per annum
applicable to the Revolving Credit Loans made on such date.
8.4. Delinquent Lender. Notwithstanding anything to the contrary
contained in this Agreement, any Lender that fails to make available to the
Administrative Agent its share of any Revolving Credit Loan when and to the full
extent required by the provisions this Agreement shall be deemed delinquent (a
"Delinquent Lender") and shall
42
135
be deemed a Delinquent Lender until such time as such delinquency is satisfied.
A Delinquent Lender shall be deemed to have assigned any and all payments due to
it from the Borrower, whether on account of outstanding Loans, interest, fees or
otherwise, to the remaining non-delinquent Lenders for application to, and
reduction of, their respective pro rata shares of all outstanding Revolving
Credit Loans. The Delinquent Lender hereby authorizes the Administrative Agent
to distribute such payments to the non-delinquent Lenders in proportion to their
respective pro rata shares of all outstanding Revolving Credit Loans. A
Delinquent Lender shall be deemed to have satisfied in full a delinquency when
and if, as a result of application of the assigned payments to all outstanding
Revolving Credit Loans of the non-delinquent Lenders, the Lenders' respective
pro rata shares of all outstanding Loans have returned to those in effect
immediately prior to such delinquency and without giving effect to the
nonpayment causing such delinquency.
8.5. Payments.
(a) All payments of principal of and interest on Revolving Credit Loans
received by the Administrative Agent shall be paid to each of the Lenders pro
rata in accordance with their respective interests in such Loans; all payments
in respect of each Competitive Bid Loan received by the Administrative Agent
shall be paid to the Lender or Lenders making such Competitive Bid Loan pro rata
in accordance with their interests in such Loan; and any other payments received
by the Administrative Agent hereunder shall be paid to the Lenders or the
Administrative Agent or both pro rata as their respective interests appear. The
Administrative Agent shall use its best efforts to provide each Lender with its
ratable share of such payments on the same day on which such payments are
received by the Administrative Agent; provided that if the Administrative Agent
does not make any such payment to any Lender on such date, the Administrative
Agent shall pay to such Lender interest on the unpaid amount at the overnight
cost of funds to the Administrative Agent for each day until payment of such
amount is made by the Administrative Agent.
(b) Each of the Lenders and the Administrative Agent hereby agrees that
if it should receive any amount (whether by voluntary payment, by the exercise
of the right of set-off or banker's lien, by counterclaim or cross action, by
the enforcement of any right hereunder under or otherwise) in respect of
principal of, or interest on, the Loans or any fees which are to be shared among
the Lenders, which, as compared to the amounts theretofore received by the other
Lenders with respect to such principal, interest or fees, is in excess of such
Lender's pro rata share of such principal, interest or fees as provided in this
Agreement, such Lender shall share such excess, less the costs and expenses
(including, reasonable attorneys' fees and disbursements) incurred by such
Lender in connection with such realization, exercise, claim or action, pro rata
with all other Lenders in proportion to their respective interests therein, and
such sharing shall be deemed a purchase (without recourse) by such sharing party
of participation interests in the Loans or such fees, as the case may be, owed
to the recipients of such shared payments to the extent
43
136
of such shared payments; provided, however, that if all or any portion of such
excess amount is thereafter recovered from such Lender, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.
8.6. Action by Administrative Agent.
(a) The obligations of the Administrative Agent hereunder are only
those expressly set forth herein. The Administrative Agent shall have no duty to
exercise any right or power or remedy hereunder or under any other document or
instrument executed and delivered in connection with or as contemplated by this
Agreement or to take any affirmative action hereunder or thereunder.
(b) The Administrative Agent shall keep all records of the Loans and
payments hereunder, and shall give and receive notices and other communications
to be given or received by the Administrative Agent hereunder on behalf of the
Lenders.
(c) Upon the occurrence of an Event of Default, and upon the direction
of the Majority Lenders pursuant to Section 7.2, the Administrative Agent shall
exercise the option of the Lenders pursuant to Section 7.2 to declare all Loans
and other Obligations immediately due and payable and shall, at the direction of
the Majority Lenders take such action as may appear necessary or desirable to
collect the Obligations and enforce the rights and remedies of the
Administrative Agent or the Lenders.
8.7. Notification of Defaults and Events of Default. Each Lender hereby
agrees that, upon learning of the existence of a Default or an Event of Default,
pursuant to Section 5.1(g) or otherwise, it shall promptly notify the
Administrative Agent thereof. The Administrative Agent hereby agrees that upon
receipt of any notice under this Section 8.7, it shall promptly notify the other
Lenders of the existence of such Default or Event of Default.
8.8. Consultation with Experts. The Administrative Agent shall be
entitled to retain and consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable to the
Lenders for any action taken, omitted to be taken or suffered in good faith by
it in accordance with the advice of such counsel, accountants or experts. The
Administrative Agent may employ Administrative Agents and attorneys-in-fact and
shall not be liable to the Lenders for the default or misconduct of any such
Administrative Agents or attorneys.
8.9. Liability of Administrative Agent. The Administrative Agent shall
exercise the same care to protect the interests of each Lender as it does to
protect its own interests, so that so long as the Administrative Agent exercises
such care it shall not be under any liability to any of the Lenders, except for
the Administrative Agent's gross negligence or willful misconduct with respect
to anything it may do or refrain from doing.
44
137
Subject to the immediately preceding sentence, neither the Administrative Agent
nor any of its directors, officers, Administrative Agents or employees shall be
liable for any action taken or not taken by it in connection herewith in its
capacity as Administrative Agent. Without limiting the generality of the
foregoing, neither the Administrative Agent nor any of its directors, officers,
Administrative Agents or employees shall be responsible for or have any duty to
ascertain, inquire into or verify: (i) any statement, warranty or representation
made in connection with this Agreement or any borrowing hereunder; (ii) the
performance or observance of any of the covenants or agreements of the Borrower;
(iii) the satisfaction of any condition specified in Sections 3.1 or 3.2, except
receipt of items required to be delivered to the Administrative Agent; or (iv)
the validity, effectiveness, enforceability or genuineness of this Agreement,
the Notes or any other document or instrument executed and delivered in
connection with or as contemplated by this Agreement. The Administrative Agent
shall not incur any liability by acting in reliance upon any notice, consent,
certificate, statement or other writing (which may be a bank wire, telex or
similar writing) believed by it to be genuine or to be signed by the proper
party or parties.
8.10. Indemnification. Each Lender agrees to indemnify the
Administrative Agent (to the extent the Administrative Agent is not reimbursed
by the Borrower), ratably in accordance with its Commitment Percentage from and
against any cost, expense (including attorneys' fees and disbursements), claim,
demand, action, loss or liability which the Administrative Agent may suffer or
incur in connection with this Agreement, or any action taken or omitted by the
Administrative Agent hereunder, or the Administrative Agent's relationship with
the Borrower hereunder, including, without limitation, the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers and duties hereunder and of taking or
refraining from taking any action hereunder, but excluding any costs, expenses
or losses directly arising from the Administrative Agent's gross negligence or
willful misconduct. No payment by any Lender under this Section shall in any way
relieve the Borrower of its obligations under this Agreement with respect to the
amounts so paid by any Lender, and the Lenders shall be subrogated to the rights
of the Administrative Agent, if any, in respect thereto.
8.11. Independent Credit Decision. Each of the Lenders represents and
warrants to the Administrative Agent that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on the
financial statements referred to in Section 4.6 and such other documents and
information as it has deemed appropriate, made its own independent credit
analysis and decision to enter into this Agreement. Each of the Lenders
acknowledges that it has not relied upon any representation by the
Administrative Agent and that the Administrative Agent shall not be responsible
for any statements in or omissions from any documents or information concerning
the Borrower, this Agreement, the Notes or any other document or instrument
45
138
executed and delivered in connection with or as contemplated by this Agreement.
Each of the Lenders acknowledges that it will, independently and without
reliance upon the Administrative Agent or other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement.
8.12. Successor Administrative Agent. Bank of Boston Connecticut, or
any successor Administrative Agent, may resign as Administrative Agent at any
time by giving written notice thereof to the Lenders and to the Borrower. Upon
any such resignation, the Lenders shall have the right to appoint a successor
Administrative Agent, which successor Administrative Agent shall be reasonably
acceptable to the Borrower. If no successor Administrative Agent shall have been
so appointed by the Lenders, and shall have accepted such appointment, within 30
days after the retiring Administrative Agent's giving of notice of resignation,
then the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent, which shall be a commercial bank (or Affiliate
thereof) or savings and loan association organized under the laws of the United
States of America or any State thereof or under the laws of another country
which is doing business in the United States of America or any State thereof and
having a combined capital, surplus and undivided profits of at least
$100,000,000 and shall be reasonably acceptable to the Borrower. 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 all further duties and obligations under this
Agreement. After any retiring Administrative Agent's resignation or removal
hereunder as Administrative Agent, the provisions of this Section 8 shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
8.13. Duties of the Co-Agents. Each of the Co-Agents, in its capacity
as such, shall have no duties or responsibilities hereunder or under any other
loan document nor any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against any of the Co-Agents, in
its capacity as such.
SECTION IX.
MISCELLANEOUS
9.1. Notices. Unless otherwise specified herein, all notices hereunder
to any party hereto shall be in writing and shall be deemed to have been given
when delivered by hand, when properly deposited in the mails postage prepaid,
when sent by telex, answerback received, or electronic facsimile transmission,
or when delivered to the
46
139
telegraph company or overnight courier, addressed to such party at its address
indicated below:
If to the Borrower, at:
UST Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ and ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Administrative Agent, at
Bank of Boston Connecticut
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Bank of Boston Connecticut
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Ms. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
47
140
or at any other address specified by such party in writing.
9.2. Indemnity. The Borrower agrees to indemnify and hold each Lender
and its officers, directors, employees, attorneys and agents, harmless from and
against any and all suits, actions, costs, fines, deficiencies, penalties,
proceedings, claims, damages, losses, liabilities and expenses (including
reasonable attorneys' fees, disbursements and court costs and other costs of
investigations or defense, including those incurred upon any appeal) which may
be instituted or asserted against or incurred by such Lender as the result of
credit having been extended under this Agreement or any other Loan Document or
in connection with or arising out of the transactions contemplated hereunder and
thereunder, but excluding any costs, expenses or losses directly arising from
such Lender's gross negligence or willful misconduct.
9.3. Expenses. The Borrower will pay on demand all reasonable expenses
of the Administrative Agent in connection with the preparation, waiver or
amendment of this Agreement, the Notes or other documents executed in connection
herewith or therewith, or the administration, default or collection of the Loans
or other Obligations or administration, default, collection in connection with
the Administrative Agent's or any Lender's exercise, preservation, forbearance
or enforcement of any of its rights, remedies or options hereunder or
thereunder, including, without limitation, reasonable fees of outside legal
counsel or the allocated costs of in-house legal counsel, accounting,
consulting, brokerage or other similar professional fees or expenses, and any
fees or expenses associated with any travel or other costs relating to any
appraisals or examinations conducted in connection with the Obligations or any
collateral therefor, and the amount of all such expenses shall, until paid, bear
interest at the rate applicable to principal hereunder (including any default
rate).
9.4. Set-Off. Regardless of the adequacy of any collateral or other
means of obtaining repayment of the Obligations, any deposits, balances or other
sums credited by or due from any Lender or any of its branch or affiliate
offices to the Borrower may, at any time and from time to time after the
occurrence and continuance of an Event of Default hereunder, without notice to
the Borrower or compliance with any other condition precedent now or hereafter
imposed by statute, rule of law, or otherwise (all of which are, to the extent
permitted by law, hereby expressly waived) be set off, appropriated, and applied
by any Lender against any and all obligations of the Borrower to such Lender or
any of its affiliates in such manner as the head office of such Lender or any of
its branch offices in their sole discretion may determine.
48
141
9.5. Term of Agreement. This Agreement shall continue in full force and
effect so long as any Lender has any commitment to make Loans hereunder or any
Loan or any Obligation hereunder shall be outstanding.
9.6. No Waivers. No failure or delay by the Administrative Agent or any
Lender in exercising any right, power or privilege hereunder or under the Note
or under any other documents or agreements executed in connection herewith shall
operate as a waiver thereof; nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein and in each Note
provided are cumulative and not exclusive of any rights or remedies otherwise
provided by agreement or law.
9.7. Governing Law. This Agreement and each Note shall be deemed to be
contracts made under seal and shall be construed in accordance with and governed
by the laws of the State of Connecticut (without giving effect to any conflicts
of laws provisions contained therein).
9.8. Amendments; Waivers; etc. Neither this Agreement nor any Note nor
any provision hereof or thereof may be amended, waived, discharged or terminated
except by a written instrument signed by the Majority Lenders, and, in the case
of amendments, by the Borrower; provided, however, that the following changes
shall require the written consent, agreement or approval of all of the Lenders:
(a) any change in the amount or the due date of any Obligation; (b) any change
in the interest rates prescribed in any of the Notes or this Agreement; (c) any
change in the Commitment Amount or any Commitment or Commitment Percentage of
any of the Lenders, except as permitted by Section 9.10; (d) any change in the
definition of Majority Lenders; (e) any change in the facility fee provisions as
set forth in Section 2.3; (f) any change in the terms of Section 3.2; (g) any
change in the terms of Section 8.5; and (h) any change in the terms of this
Section 9.8. Any change to Section 8 or any other provision of this Agreement
affecting the rights or obligations of the Administrative Agent shall not be
amended or modified without the prior written consent of the Administrative
Agent.
9.9. Binding Effect of Agreement. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns; provided that (a) the Borrower may not assign or transfer its
rights or obligations hereunder, and (b) no Lender may assign or transfer its
rights or obligations hereunder to any person except in accordance with the
provisions of Section 9.10.
9.10. Assignment and Participation.
(a) Assignments by the Lenders. From and after the date hereof, any
Lender may at any time assign all, or a proportionate part of all, of its
rights, interests and duties with respect to its Loans and its Notes to one or
more banks or other financial
49
142
institutions (each, an "Assignee") on such terms, as between such Lender and
each of its Assignees, as such Lender may think fit (provided, however, that if
any Lender assigns less than all of its rights and interests, any such
assignment must be in a minimum aggregate principal amount of at least
$5,000,000, provided that each Lender's and each Assignee's Commitment must be
at least $10,000,000, except that if the Commitment of a Lender on the Closing
Date is less than $10,000,000, then such Lender shall be entitled to assign all,
but not less than all, of its Commitment to an Assignee), and such Assignee
shall assume such rights, interests and duties pursuant to an instrument
executed by such Assignee and such Lender, and for this purpose such Lender may
make available to each of its potential Assignees such information relating to
the Borrower, this Agreement and the transactions contemplated hereby as such
Lender may think necessary or desirable, which information shall be held by each
potential Assignee strictly in confidence; provided, however, that prior to
assigning any interest to any Assignee hereunder, such Lender shall (x) notify
the Borrower and the Administrative Agent in writing identifying the proposed
Assignee and stating the aggregate principal amount of the proposed interest to
be assigned, (y) to the extent made available to such Lender by the proposed
Assignee, furnish the Borrower with such material information relating to such
proposed Assignee as the Borrower may reasonably request in order to enable the
Borrower to make its decision (which information shall be held by the Borrower
strictly in confidence), except that such Lender shall not be bound to ascertain
whether any such information delivered to it by such proposed Assignee is true,
accurate and complete, and (z) receive the prior written consent of the Borrower
and the Administrative Agent, which consent may not be unreasonably withheld or
delayed by the Borrower and the Administrative Agent. It is understood and
agreed that the proviso contained in the immediately preceding sentence shall
not be applicable in the case of, and this subsection (a) shall not restrict,
(i) an assignment or other transfer by any Lender to an Affiliate of such Lender
or (ii) a collateral assignment or other similar transfer to any of the twelve
Federal Reserve Lenders organized under Section 4 of the Federal Reserve Act, 12
U.S.C. Section 341. Each Assignee shall execute and deliver to the
Administrative Agent and the Borrower a counterpart joinder in the form of
Exhibit M hereto and Assignor shall pay or caused to be paid to the
Administrative Agent, solely for the account of the Administrative Agent, an
assignment fee of $3,000. Upon the execution and delivery of such counterpart
joinder, (A) such Assignee shall, on the date and to the extent provided in such
counterpart joinder, become a "Lender" party to this Agreement for all purposes
of this Agreement and shall have all the rights and obligations of a Lender with
a Commitment as set forth in such counterpart joinder, and the transferor Lender
shall, on the date and to the extent provided in such counterpart joinder, be
released from its obligations hereunder to a corresponding extent (and, in the
case of an assignment covering all of the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such transferor shall
cease to be a party hereto but shall continue to be entitled to any fees accrued
for its account hereunder and not yet paid), (B) the Borrower shall issue to
such Assignee a Revolving Credit Note in the amount of such Assignee's
Commitment and a Competitive Bid Note in the amount equal to the Commitment
50
143
Amount, each dated the Closing Date or such other date as may be specified by
such Assignee and otherwise completed in substantially the form of Exhibit A-1
and Exhibit A-2, respectively; (C) the Administrative Agent shall distribute to
the Borrower, the Lenders and such Assignee an amended Schedule 1 hereto
reflecting such changes, and (D) this Agreement shall be deemed appropriately
amended to reflect (i) the status of such Assignee as a party hereto and (ii)
the status and rights of the Lenders and Administrative Agent hereunder.
(b) Participations by the Lenders. From and after the date hereof, each
Lender shall be at liberty to offer participations in the Loans and the Notes to
one or more banks or other financial institutions (each, a "Participant") on
such terms as such Lender may think fit, and for this purpose such Lender may
make available to each of its potential Participants such information relating
to the Borrower, this Agreement and the transactions contemplated hereby as such
Lender may think necessary or desirable, which information shall be held by each
potential Participant strictly in confidence; provided, however, that such
Lender shall retain the sole right to consent to amendments to, or waivers of,
the provisions of this Agreement and the Notes, except with respect to those
amendments requiring the approval of all of the Lenders pursuant to Section 9.8
of this Agreement, and the sole right and responsibility to enforce the
obligations of the Borrower hereunder and under the Notes; provided that such
Lender may agree with each of its Participants that such Lender will not agree,
without the consent of the Participant, to any amendment or waiver of any
provision of this Agreement which would increase or otherwise change its
Commitment Amount or reduce the principal of or rate of interest on the Loans
subject to such participation, or postpone the date fixed for any payment of
principal or of interest on any Loans.
(c) No Assignee, Participant or other transferee of any Lender's rights
shall be entitled to receive any greater payment under Sections 2.9 or 2.10
hereof than such Lender would have been entitled to receive with respect to the
rights transferred, unless such transfer is made with the Borrower's prior
written consent or at a time when the circumstances giving rise to such greater
payment did not exist.
9.11. Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures hereto and thereto were
upon the same instrument.
9.12. Confidentiality. In handling all information furnished to, or
obtained by, the Administrative Agent and the Lenders pursuant to this
Agreement, including, without limitation, the certificates referred to in
Section 5.3 and the information reviewed pursuant to Section 5.5, the
Administrative Agent and each Lender shall exercise the same degree of care that
it exercises with respect to its own proprietary information of the same types
to maintain the confidentiality of any non-public information received hereunder
except that disclosure of such information may be made (i) to the subsidiaries
or
51
144
Affiliates of the Administrative Agent in connection with their present or
prospective business relations with the Borrower, (ii) to prospective
transferees, assignees or purchasers of an interest in the Loans who have agreed
in writing to be bound by the confidentiality provisions hereof, (iii) as
required by law, regulation, rule or order, subpoena, judicial order or similar
order, provided that the Administrative Agent and each Lender shall, to the
extent it would not be unlawful, use reasonable efforts to afford the Borrower
the opportunity to contest any such rule, order or subpoena, and (iv) as may be
required in connection with the examination, audit or similar investigation of
the Administrative Agent or any Lender.
9.13. Partial Invalidity. The invalidity or unenforceability of any one
or more phrases, clauses or sections of this Agreement shall not affect the
validity or enforceability of the remaining portions of it.
9.14. Captions. The captions and headings of the various sections and
subsections of this Agreement are provided for convenience only and shall not
be construed to modify the meaning of such sections or subsections.
9.15. WAIVER OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT AND
THE LENDERS AGREE THAT NEITHER THEY NOR ANY OF THEIR ASSIGNEES OR SUCCESSORS
SHALL (A) SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY
OTHER ACTION BASED UPON, OR ARISING OUT OF, THIS AGREEMENT, ANY RELATED
INSTRUMENTS OR THE DEALINGS OR THE RELATIONSHIP BETWEEN THE BORROWER AND ITS
ASSIGNS AND SUCCESSORS AND THE ADMINISTRATIVE AGENT AND/OR ANY LENDER, OR (B)
SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL
CANNOT BE OR HAS NOT BEEN WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN
FULLY DISCUSSED BY THE BORROWER, AND THESE PROVISIONS SHALL BE SUBJECT TO NO
EXCEPTIONS. THE BORROWER ACKNOWLEDGES THAT NEITHER THE ADMINISTRATIVE AGENT NOR
ANY LENDER HAS AGREED WITH OR REPRESENTED TO IT THAT THE PROVISIONS OF THIS
PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
9.16. SUBMISSION TO JURISDICTION/SERVICE OF PROCESS. THE BORROWER
HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH IT
IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT
THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF
52
145
CONNECTICUT, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF CONNECTICUT, AND APPELLATE COURTS FROM ANY THEREOF;
(b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH
COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE
OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR
PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM
THE SAME;
(c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY
BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY
SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE BORROWER AT ITS
ADDRESS SET FORTH IN SECTION 9.1 OR AT SUCH OTHER ADDRESS OF WHICH THE
ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO;
(d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE
OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO ▇▇▇
IN ANY OTHER JURISDICTION.
9.17. Entire Agreement. This Agreement, the Notes and the documents and
agreements executed in connection herewith constitute the final agreement of the
parties hereto and supersede any prior agreement or understanding, written or
oral, with respect to the matters contained herein and therein.
53
146
The parties have caused this Agreement to be executed by their duly
authorized officers as of the day and year first above written.
UST INC.
By s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
By s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Treasurer
BANK OF BOSTON CONNECTICUT, as
Administrative Agent and Lender
By s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
THE BANK OF NOVA SCOTIA, as Co-
Agent and Lender
By s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Signatory
FLEET NATIONAL BANK, as Co-Agent
and Lender
By s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
54
147
WACHOVIA BANK OF GEORGIA, N.A.,
as Co-Agent and Lender
By s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
FUJI BANK, LIMITED
By s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President and Manager
PNC BANK, NATIONAL ASSOCIATION
By s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
THE SANWA BANK, LIMITED
NEW YORK BRANCH
By s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
UNITED STATES NATIONAL BANK OF
OREGON
By s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
55
148
YASUDA TRUST AND BANKING CO., LTD.
By s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
STATE STREET BANK AND TRUST COMPANY
By s/ F. ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Name: F. ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
56
149
SCHEDULE 1
COMMITMENTS OF THE BANKS
UST INC.
Commitment Commitment
Percentage
Bank of Boston Connecticut 20.000000% $ 17,500,000
The Bank of Nova Scotia 14.▇▇▇▇▇▇% $ 12,500,000
Fleet National Bank 14.285714% $ 12,500,000
Wachovia Bank of Georgia, N.A 14.285714% $ 12,500,000
Fuji Bank Limited 7.142857% $ 6,250,000
PNC Bank, National Association 7.142857% $ 6,250,000
United States National Bank of Oregon 7.142857% $ 6,250,000
Yasuda Trust and Banking Co., Ltd. 7.142857% $ 6,250,000
The Sanwa Bank, Limited 4.285714% $ 3,750,000
State Street Bank and Trust Company 4.285714% $ 3,750,000
TOTAL $ 87,500,000
150
SCHEDULE 4.13
ENVIRONMENTAL MATTERS
UST INC.
On October 15, 1996, ▇▇. ▇▇▇▇▇▇ Pipe Co. (a predecessor of Sparta
Industries, Inc.) received a letter from a third party defendant in a lawsuit
captioned Wautauga County ▇. ▇▇▇▇▇ of Boone, Case No. 5:96CV33-V, filed in the
United States District Court for the Western District of North Carolina.
According to this letter, Wautauga County (the "County") brought suit under
unspecified federal environmental laws (presumably the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601
et seq., and perhaps other statutes) to recover the approximately $2,000,000 in
costs it incurred in closing its landfill. The third party defendant alleged in
its letter that records produced by the County indicated that ▇▇. ▇▇▇▇▇▇ sent
waste to the landfill and therefore may be joined as a party to this suit with
other users of the landfill. Sparta Industries does not have sufficient
information at this time to evaluate the extent, if any, of its potential
liability in connection with this matter.
151
EXHIBIT A-1
UST INC.
REVOLVING CREDIT NOTE
As of November 8, 1996
$_______________ Greenwich, Connecticut
For value received, the undersigned, UST Inc., a Delaware corporation
(the "Borrower") hereby unconditionally promises to pay to the order of ________
(the "Lender") at the office of BANK OF BOSTON CONNECTICUT (the "Administrative
Agent"), ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in lawful money of
the United States of America and in immediately available funds, the principal
amount of (a)_________________ Dollars ($________), or, if less, (b) the
aggregate unpaid principal amount of all Revolving Credit Loans (as defined in
the Credit Agreement) made by the Lender to the Borrower pursuant to Section
2.1(a) of the Credit Agreement (as defined below). The Borrower further agrees
to pay interest on the unpaid principal balance hereof from time to time
outstanding, at said office and in like money and funds, for the period
commencing on the date hereof until paid in full, at the rates per annum and on
the dates provided in Section 2.7 of the Credit Agreement. All principal
remaining unpaid and any accrued but unpaid interest shall in any event be due
and payable on the Revolving Credit Termination Date.
This Note is issued pursuant to, and entitled to the benefits of, and
is subject to, the provisions of the $87,500,000 Credit Agreement dated as of
the date hereof among the Borrower, the several Lenders from time to time
parties thereto, the Administrative Agent and The Bank of Nova Scotia, Fleet
National Bank and Wachovia Bank of Georgia, N.A., as Co-Agents (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement") ,
but neither this reference to the Credit Agreement nor any provision thereof
shall affect or impair the absolute and unconditional obligation of the Borrower
to pay the principal of, and interest on, this Note as herein provided.
If an Event of Default shall occur, the aggregate unpaid principal of,
and accrued interest on, this Note shall become or may be declared to be due and
payable in the manner and with the effect provided in the Credit Agreement.
The Borrower may at its option prepay all or any part of the principal
of this Note before maturity upon the terms provided in the Credit Agreement.
A-1-1
152
The Borrower waives presentment, demand, notice of dishonor, protest
and all other demands and notices in connection with the delivery, acceptance,
performance and enforcement of this Note.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
This Note shall have the effect of an instrument executed under seal
and shall be governed by, and construed in accordance with, the laws of the
State of Connecticut (without giving effect to any conflicts of laws provisions
contained therein).
UST INC.
By______________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Executive Vice President and Chief
Financial Officer
By______________________________________
▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President and
Controller
A-1-2
153
SCHEDULE I TO REVOLVING CREDIT NOTE
DATE AMOUNT TYPE OF LOAN INTEREST INTEREST AMOUNT NOTATION
OF LOAN (EURODOLLAR OR RATE* PERIOD** PAID MADE BY
BASE RATE)
---- ------- ---------- ----- -------- ------ --------
----------------
* For Base Rate Loans, insert "Base Rate"
** For Eurodollar Loans only
A-1-3
154
EXHIBIT A-2
UST INC.
COMPETITIVE BID NOTE
$__________ As of November 8, ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
FOR VALUE RECEIVED, the undersigned, UST Inc., a Delaware corporation
(the "Borrower") hereby unconditionally promises to pay to the order of ________
(the "Lender"), at the office of the BANK OF BOSTON CONNECTICUT (the
"Administrative Agent"), ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ in
lawful money of the United States of America and in immediately available funds,
the principal amount of (a)_________________ Dollars ($________), or, if less,
(b) the aggregate unpaid principal amount of all Competitive Bid Loans (as
defined in the Credit Agreement) made by the Lender to the Borrower pursuant to
Section 2.8(a) of the Credit Agreement (as defined below). The Borrower further
agrees to pay interest on the unpaid principal balance hereof from time to time
outstanding, at said office and in like money and funds, for the period
commencing on the date hereof until paid in full, at the rates per annum and on
the dates provided in Section 2.8(i) of the Credit Agreement. All principal
remaining unpaid and any accrued but unpaid interest shall in any event be due
and payable on the Revolving Credit Termination Date (as defined in the Credit
Agreement).
This Note is issued pursuant to the $87,500,000 Credit Agreement dated
as of the date hereof among the Borrower, the several Lenders from time to time
parties thereto, the Administrative Agent and The Bank of Nova Scotia, Fleet
National Bank and Wachovia Bank of Georgia, N.A., as Co-Agents (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
but neither this reference to the Credit Agreement nor any provision thereof
shall affect or impair the absolute and unconditional obligation of the Borrower
to pay the principal of, and interest on, this Note as herein provided.
If an Event of Default shall occur, the aggregate unpaid principal of,
and accrued on, this Note, shall become due and payable in the manner and with
the effect provided in the Credit Agreement.
The Borrower waives presentment, demand, notice of dishonor, protest
and all other demands and notices in connection with the delivery, acceptance,
performance, and enforcement of this Note. Unless otherwise defined below, terms
defined in the
A-2-1
155
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.
This Note shall have the effect of an instrument under seal and shall
be governed by, and construed in accordance with, the laws of the State of
Connecticut (without giving effect to any conflicts of laws provisions contained
therein).
UST INC.
By______________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Executive Vice President and Chief
Financial Officer
By______________________________________
▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President and
Controller
A-2-2
156
SCHEDULE I TO COMPETITIVE BID NOTE
DATE AMOUNT TYPE OF LOAN INTEREST INTEREST AMOUNT NOTATION
OF LOAN RATE PERIOD(S) PAID MADE BY
---- ------- ---------- ----- --------- ------ --------
A-2-3
157
EXHIBIT B
[FORM OF NOTICE OF BORROWING OR CONVERSION]
UST INC.
Bank of Boston Connecticut, as Administrative Agent
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Pursuant to Section 2.2 of the $87,500,000 Credit Agreement dated as of
November 8, 1996, among UST Inc., the several Lenders from time to time parties
thereto, Bank of Boston Connecticut, as Administrative Agent and The Bank of
Nova Scotia, Fleet National Bank and Wachovia Bank of Georgia, N.A., as
Co-Agents (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement") the Borrower hereby confirms its request made on _____, 19__
for a [Base Rate] [Eurodollar] Loan in the amount of $ _____ on, _____ , 19__.
Unless otherwise defined herein, capitalized terms shall have the meanings
ascribed to them in the Credit Agreement.
[The Interest Period applicable to said Loan will be [one] [two]
[three] [six] months [ __ ] days.]*
[Said Loan represents a conversion of the [Base Rate] [Eurodollar] Loan
in the same amount made on .]**
The representations and warranties contained or referred to in Section
IV of the Credit Agreement are true and accurate in all material respects on and
as of the effective date of the Loan as though made at and as of such date
(except to the extent that such representations and warranties expressly relate
to an earlier date), and no Default has occurred and is continuing or will
result from the Loan.
----------
* To be inserted in any request for a Eurodollar Loan.
** To be inserted in any request for a conversion.
B-1
158
UST INC.
By______________________________
Name:
Title:
______________________________
Date
B-2
159
EXHIBIT C
ENCUMBRANCES (SECTION 6.1)
Amount
Security Deposits (000's)
----------------- -------
United States Tobacco Sales and Marketing Company
Inc. security deposits for Regional Sales offices 36
--
Total $36
INDEBTEDNESS OF SUBSIDIARIES (SECTION 6.3)
Amount
Guarantees (000's)
---------- -------
United States Tobacco Company's guarantee to
Barclay's Bank of London Payment of duty and VAT
Deferment Schemes by United States Tobacco
International, Inc.
(continuing). 47
United States Tobacco Company guarantee of the
lease obligation covering Region III Sales Office
of United States Tobacco Sales and Marketing
Company Inc. to ▇▇▇▇▇▇▇ Partners, Inc., the
lessor. Lease was entered into 10/1/94 and expires
on 9/31/99 at an annual rate of $57,787 plus an
allowance of 10% for escalations
($317,825 for the five-year period). 219
---
Total $266
====
▇-▇
▇▇▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇
▇-▇
▇▇▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ Tobacco Company
2. United States Tobacco Manufacturing Company Inc.
3. United States Tobacco Sales and Marketing Company Inc.
4. International Wine & Spirits Ltd.
5. ▇▇▇▇▇▇▇ ▇▇▇▇ Ltd.
6. UST Enterprises Inc.
7. UST International Inc.
E-1
162
EXHIBIT F
[FORM OF REPORT OF CHIEF FINANCIAL OFFICER,
TREASURER OR CONTROLLER]
UST INC.
UST INC. HEREBY CERTIFIES that:
This Report is furnished pursuant to Section 5.1(c) of the $87,500,000
Credit Agreement dated as of November 8, 1996 among UST Inc., the several
Lenders from time to time parties thereto, Bank of Boston Connecticut, as
Administrative Agent and The Bank of Nova Scotia, Fleet National Bank and
Wachovia Bank of Georgia, N.A., as Co-Agents (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"). Unless otherwise
defined herein, capitalized terms used herein have the meanings ascribed to them
in the Credit Agreement.
As required by Section 5.1(a) and (b) of the Credit Agreement,
consolidated financial statements of the Borrower and its Subsidiaries for the
[year/month/quarter] ended 19 __ (the "Financial Statements") prepared in
accordance with GAAP applicable to such Financial Statements consistently
applied accompany this Report. The Financial Statements present fairly the
consolidated financial position of the Borrower and its Subsidiaries as at the
date thereof and the consolidated results of operations of the Borrower and its
Subsidiaries for the period covered thereby (subject only to normal recurring
year-end adjustments).
The figures set forth in Schedule A for determining compliance by the
Borrower with the financial covenants contained in the Credit Agreement are true
and complete as of the date hereof.
The activities of the Borrower and its Subsidiaries during the period
covered by the Financial Statements have been reviewed by the Chief Financial
Officer or by employees or agents under his immediate supervision. Based on such
review, to the best knowledge and belief of the Chief Financial Officer,
Treasurer or Controller, as applicable, and as of the date of this Report, no
Default or Event of Default has occurred.*
----------
* If a Default or Event of Default has occurred, this paragraph is to be
modified with an appropriate statement as to the nature thereof, the
period of existence thereof and what action the Borrower has taken, is
taking, or proposes to take with respect thereto.
F-1
163
WITNESS my hand this ________ day of ____________, 19___.
UST INC.
By______________________________________
Name:
Title:
F-2
164
SCHEDULE A
to
EXHIBIT F
FINANCIAL COVENANTS
Ratio of Consolidated Total Funded Debt to EBITDA (Section 5.7)
REQUIRED: less than or equal to 0.70 : 1.00
==== ====
ACTUAL:
(i) Consolidated Total Funded Debt $___
(ii) EBITDA $___
(iii) Line (i) divided by line (ii) : 1.00
==== ====
Ratio of Consolidated Operating Cash Flow to Consolidated Total
Debt Service and Dividends (Section 5.8)
REQUIRED: greater than 1.25 : 1.00
==== ====
ACTUAL:
(i) Consolidated Operating Cash Flow $___
(ii) Consolidated Total Debt Service $___
(iii) Dividends $___
(iv) Sum of line (ii) and line (iii) $___
(v) Line (i) divided by line (iv) : :
==== ====
UST INC.
By______________________________
Name:
Title:
______________________________
Date
F-3
165
EXHIBIT G
[FORM OF LEGAL OPINION FOR UST INC.]
See Tab 8
166
EXHIBIT H
[FORM OF COMPETITIVE BID QUOTE REQUEST]
UST INC.
[Date]
To: Bank of Boston Connecticut, as Administrative Agent
From: UST Inc.
Re: $87,500,000 Credit Agreement dated as of November 8, 1996 among UST Inc.,
the several Lenders from time to time parties thereto, Bank of Boston
Connecticut, as Administrative Agent and The Bank of Nova Scotia, Fleet National
Bank and Wachovia Bank of Georgia, N.A., as Co-Agents (as amended, supplemented
or otherwise modified from time to time, the"Credit Agreement").
We hereby give notice pursuant to Section 2.8 of the Credit Agreement
that we request Competitive Bid Quotes for the following proposed Competitive
Bid Borrowing(s):
Date of Borrowing:______________________
Principal Amount* Interest Period** Maturity Date
----------------- ----------------- -------------
$
Such Competitive Bid Quotes should offer a Competitive Bid Rate.
Unless otherwise defined herein, capitalized terms used herein have the
meanings ascribed to them in the Credit Agreement.
UST INC.
By______________________________
Name:
Title:
----------
* Amount must be a minimum of $1,000,000 or any larger multiple of
$1,000,000.
** 7 to 90 days, subject to the provisions of the definition of "Interest
Period".
H-1
167
EXHIBIT I
[FORM OF INVITATION FOR COMPETITIVE BID QUOTES]
UST INC.
To: [Name of Lender]
Re: Invitation for Competitive Bid Quotes to UST Inc.
Pursuant to Section 2.8 of the $87,500,000 Credit Agreement (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement") dated as of November 8, 1996 among UST Inc., the several Lenders
from time to time parties thereto, Bank of Boston Connecticut, as Administrative
Agent and The Bank of Nova Scotia, Fleet National Bank and Wachovia Bank of
Georgia, N.A., as Co-Agents, we are pleased on behalf of the Borrower to invite
you to submit Competitive Bid Quotes to the Borrower for the following proposed
Competitive Bid Borrowing(s):
Date of Borrowing:___________________________
Principal Amount Interest Period Maturity Date
---------------- --------------- -------------
$
Such Competitive Bid Quotes should offer a Competitive Bid Rate.
Unless otherwise defined herein, capitalized terms used herein shall
have the meanings ascribed to them in the Credit Agreement.
Please respond to this invitation by no later than _______* a.m.
(Boston time) on [date].
BANK OF BOSTON
CONNECTICUT, as Administrative Agent
By_________________________________
Authorized Officer
----------
* The time specified in Section 2.8 of the Credit Agreement.
I-1
168
EXHIBIT J
[FORM OF COMPETITIVE BID QUOTE]
UST INC.
BANK OF BOSTON CONNECTICUT, as Administrative Agent
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Re: Competitive Bid Quote to UST Inc.
In response to your invitation on behalf of the Borrower dated
__________, 19__ , we hereby make the following Competitive Bid Quote on the
following terms:
1. Quoting Bank:______________________
2. Person to contact at Quoting Bank:______________________
3. Date of Borrowing:______________________ *
4. We hereby offer to make Competitive Bid Loan(s) in the following
principal amounts, for the following Interest Periods and at the
following rates:
Principal Interest Competitive Maturity
Amount** Period*** Bid Rate**** Date
-------- --------- ------------ ----
$
----------
* As specified in the related Invitation for Competitive Bid Quotes.
** Principal amount bid for each Interest Period may not exceed principal
amount requested. Bids must be made for $1,000,000 or any larger
multiple of $1,000,000.
*** 7 to 90 days, as specified in the related Invitation for Competitive
Bid Quotes.
**** Specify rate of interest per annum (each rounded to the nearest
1/10,000th of 1%).
J-1
169
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in the $87,500,000
Credit Agreement dated as of November 8, 1996 among UST Inc., the several
Lenders from time to time parties thereto, Bank of Boston Connecticut, as
Administrative Agent and The Bank of Nova Scotia, Fleet National Bank and
Wachovia Bank of Georgia, N.A., as Co-Agents (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), irrevocably
obligates us to make the Competitive Bid Loan(s) for which any offer(s) are
accepted in whole or in part by the Borrower.
Unless otherwise defined herein, capitalized terms used herein shall
have the meanings ascribed to them in the Credit Agreement.
[NAME OF LENDER]
Dated:_______________ By:_________________________
Authorized Officer
J-2
170
EXHIBIT K
[FORM OF NOTICE OF COMPETITIVE BID BORROWING]
UST INC.
Re: $87,500,000 Credit Agreement dated as of November 8, 1996, among
UST Inc., the several Lenders from time to time parties thereto, Bank of Boston
Connecticut, as Administrative Agent and The Bank of Nova Scotia, Fleet National
Bank and Wachovia Bank of Georgia, N.A., as Co-Agents (as amended, supplemented
or otherwise modified from time to time, the "Credit Agreement").
We hereby give notice pursuant to Section 2.8(f) of the Credit
Agreement of our acceptance of the following Competitive Bid Quote(s):
1. Lender:____________________________
2. Drawdown Date______________________*
3. In the following principal amounts, for the following Interest
Periods and at the following rates:
Principal Interest Competitive Bid
Amount Period(s) Rate(s)**
------ --------- ---------
$
$
[Repeat for each Lender as necessary]
----------
* As specified in the related Invitation for Competitive Bid Quotes.
** Specify rate of interest per annum (each rounded to the nearest
1/l,000th of 1%) for each applicable Interest Period.
K-1
171
4. The aggregate principal amount for each Interest Period is:
Interest Aggregate
Period Principal Amount
------ ----------------
$
$
We hereby certify (a) that we will use the proceeds of the requested
Competitive Bid Loan in accordance with the provisions of the Credit Agreement,
(b) that each of the representations and warranties contained in the Credit
Agreement or in any document or instrument delivered pursuant to or in
connection with the Credit Agreement was true as of the date as of which it was
made and is true at and as of the date hereof (except to the extent of changes
occurring in the ordinary course of business that singly or in the aggregate are
not materially adverse, and to the extent that such representations and
warranties related expressly to an earlier date) and (c) that no Default or
Event of Default has occurred and is continuing.
Unless otherwise defined herein, capitalized terms used herein shall
have the meanings ascribed to them in the Credit Agreement.
UST INC.
Dated:________________________ By______________________________
Name:
Title:
K-2
172
EXHIBIT L
[FORM OF NOTICE OF COMPETITIVE BID LOANS]
UST INC.
_______________, 199_
To: Each of the Lenders referred to below
From: Bank of Boston Connecticut, as Administrative Agent
Reference is hereby made to the $87,500,000 Credit Agreement dated as
of November 8, 1996, among UST Inc., the several Lenders from time to time
parties thereto, Bank of Boston Connecticut, as Administrative Agent and The
Bank of Nova Scotia, Fleet National Bank and Wachovia Bank of Georgia, N.A., as
Co-Agents (as amended, supplemented or otherwise modified from time to time, ,
the "Credit Agreement"). Unless otherwise defined herein, capitalized terms used
herein shall have the meanings ascribed to them in the Credit Agreement.
Under Section 2.8 of the Credit Agreement, the Borrower borrowed
[insert amount] in Competitive Bid Loans on [insert date] with an Interest
Period of [insert Interest Period]. The Competitive Bid Rate for the period is
_____%.
A range of Competitive Bid Quotes were submitted. The bids ranged from
[insert highest bid] to [insert lowest bid].
BANK OF BOSTON CONNECTICUT,
as Administrative Agent
By_______________________________
Name:
Title:
L-1
173
EXHIBIT M
[FORM OF ASSIGNMENT AND JOINDER AGREEMENT]
UST INC.
Dated: _________________
Reference is made to the $87,500,000 Credit Agreement dated as of
November 8, 1996 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement") among UST Inc., the several Lenders from time to
time parties thereto, Bank of Boston Connecticut, as Administrative Agent and
The Bank of Nova Scotia, Fleet National Bank and Wachovia Bank of Georgia, N.A.,
as Co-Agents. Unless otherwise defined herein, capitalized terms used herein
shall have the meanings ascribed to them in the Credit Agreement.
________________________________________________________(the "Assignor") and
__________________________________________(the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, a __% interest in and
to all of the Assignor's rights and obligations under the Credit Agreement as of
the Effective Date (as defined below), including, without limitation, a __%
interest (which on the Effective Date is $_____ ) in the Assignor's share of
Loans outstanding. As a result of such assignment, the Commitment and the
Commitment Percentage of the Assignor shall be $_____ and __%, respectively, and
the Commitment and the Commitment Percentage of the Assignee shall be $_____ and
__%, respectively. Concurrently herewith, the Assignee is remitting to the
Assignor, in federal funds, the amount of its interest in each such outstanding
loan.
2. The Assignor (i) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant thereto, other
than that the Assignor is the legal and beneficial owner of the interest being
assigned by it hereunder and that such interest is free and clear of any adverse
claim, and (ii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
M-1
174
performance or observation by the Borrower of any of its obligations under the
Credit Agreement or any other instrument or document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of such financial statements and other documents
and information as it has deemed necessary to make its own credit analysis and
decision to enter into this Agreement, (ii) agrees that it will, independently
and without reliance upon the Administrative Agent, the Assignor or any other
person and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement, (iii) appoints and authorizes the
Administrative Agent to take such action as the Administrative Agent on its
behalf and to exercise such powers under the Credit Agreement as are delegated
to the Administrative Agent by the terms thereof, together with such powers as
are reasonably incidental thereto, and (iv) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it.
4. The Effective Date of this Agreement shall be __________ (the
"Effective Date").
5. From and after the Effective Date, (i) the Assignee shall be a party
to the Credit Agreement and, to the extent rights and obligations have been
transferred to it by this Agreement, shall have the rights and obligations of a
Lender thereunder and (ii) the Assignor shall, to the extent its rights and
obligations have been transferred to the Assignee by this Agreement, relinquish
its rights and be released from its obligations under the Credit Agreement. If
the Assignor is holding any Notes, the Assignor promptly after the Effective
Date, shall surrender such Notes to the Administrative Agent and the
Administrative Agent shall cause the Borrower to issue new Notes in accordance
with Section 9.9(a) of the Credit Agreement.
6. From and after the Effective Date, the Administrative Agent shall
hold in trust all payments it receives in respect of the interest assigned
hereby and shall promptly remit such payments to the Assignee.
7. This Assignment and Joinder Agreement shall be governed by, and
construed in accordance with, the laws of the State of Connecticut (without
regard to conflicts of laws or rules).
M-2
175
[NAME OF ASSIGNOR]
By___________________________________
Name:
Title:
[NAME OF ASSIGNEE]
By___________________________________
Name:
Title:
M-3
176
EXHIBIT N
[FORM OF EXTENSION AGREEMENT]
UST INC.
[Date]
UST Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Bank of Boston Connecticut,
as Agent
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
Gentlemen:
Each undersigned Lender hereby agrees to extend, effective on [insert
effective date, which shall be no more than 29 days prior to the existing
Revolving Credit Termination Date] (the "Extension Date"), the Revolving Credit
Termination Date under the $87,500,000 Credit Agreement dated as of November 8,
1996 (as amended, supplemented or otherwise modified and in effect from time to
time the "$87,500,000 Credit Agreement") among UST Inc., the Lenders parties
thereto, and Bank of Boston Connecticut, as Agent to the date that is 364 days
from the Extension Date. Terms defined in the $87,500,000 Credit Agreement are
used herein as therein defined.
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument.
N-1
177
This Extension Agreement shall be governed by, and construed in
accordance with, by the laws of the State of Connecticut.
[NAMES OF LENDERS]
By__________________________________
Name:
Title:
Agreed and accepted:
UST INC.
By_________________________________
Name:
Title:
BANK OF BOSTON CONNECTICUT, as Agent
By_________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
N-2