$750,000,000
CREDIT AGREEMENT
dated as of
October 20, 1994
among
V.F. Corporation
The Banks Listed Herein
and
Morgan Guaranty Trust Company of New York,
as Agent
TABLE OF CONTENTS*
Page
----
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Accounting Terms and Determinations . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.03 Types of Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE II
THE CREDITS
SECTION 2.01 Commitments to Lend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.02 Notice of Committed Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.03 Money Market Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.04 Notice to Banks; Funding of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.05 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.06 Maturity of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.07 Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.08 Facility Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.09 Optional Termination or
Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.10 Method of Electing Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.11 Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.12 General Provisions as to Payments . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.13 Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.14 Computation of Interest and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE III
CONDITIONS
SECTION 3.01 Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.02 Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
----------------------------------
*The Table of Contents is not a part of this Agreement.
i
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Corporate Existence and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.02 Corporate and Governmental
Authorization; No Contravention . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.03 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.04 Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.05 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.06 Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.07 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
4.08 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
4.09 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.10 Not an Investment Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.11 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE V
COVENANTS
SECTION 5.01 Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.02 Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.03 Minimum Consolidated Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.04 Negative Pledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.05 Consolidations, Mergers and Sales
of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.06 Limitation on Subsidiary Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.07 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.08 Maintenance of Property; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.09 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.10 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE VI
DEFAULTS
SECTION 6.01 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.02 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
ii
Page
----
ARTICLE VII
THE AGENT
SECTION 7.01 Appointment and Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.02 Agent and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.03 Action by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.04 Consultation with Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.05 Liability of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
7.06 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
7.07 Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
7.08 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
7.09 Agent's Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01 Basis for Determining Interest
Rate Inadequate or Unfair . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
8.02 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
8.03 Increased Cost and Reduced Return . . . . . . . . . . . . . . . . . . . . . . . . . 48
8.04 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.05 Base Rate Loans Substituted for
Affected Fixed Rate Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
8.06 Substitution of Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.02 No Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.03 Expenses; Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.04 Sharing of Set-Offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.05 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.06 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.07 Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
9.08 Governing Law; Submission to
Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
9.09 Counterparts; Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
9.10 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
iii
Schedule I - Litigation
Exhibit A - Note
Exhibit B - Money Market Quote Request
Exhibit C - Invitation for Money Market Quotes
Exhibit D - Money Market Quote
Exhibit E - Opinion of Counsel for the Borrower
Exhibit F - Opinion of Special Counsel for the
Agent
Exhibit G - Assignment and Assumption Agreement
iv
CREDIT AGREEMENT
AGREEMENT dated as of October 20, 1994 among V.F. CORPORATION, the
BANKS listed on the signature pages hereof and MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, as Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein,
have the following meanings:
"Absolute Rate Auction" means a solicitation of Money Market
Quotes setting forth Money Market Absolute Rates pursuant to Section 2.03.
"Adjusted CD Rate" has the meaning set forth in Section 2.07(b).
"Adjusted London Interbank Offered Rate" has the meaning set forth
in Section 2.07(c).
"Administrative Questionnaire" means, with respect to each Bank,
an administrative questionnaire in the form prepared by the Agent and submitted
to the Agent (with a copy to the Borrower) duly completed by such Bank.
"Affiliate" means, with reference to any Person, any other Person
that directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with such first Person. As used
herein, the term "control" means possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
"Agent" means Morgan Guaranty Trust Company of New York in its
capacity as agent for the Banks hereunder, and its successors in such capacity.
"Applicable Lending Office" means, with respect to any Bank, (i)
in the case of its Domestic Loans, its Domestic Lending Office, (ii) in the
case of its Euro-Dollar Loans, its Euro-Dollar Lending Office and (iii) in the
case of its Money Market Loans, its Money Market Lending Office.
"Assessment Rate" has the meaning set forth in Section 2.07(b).
"Assignee" has the meaning set forth in Section 9.06(c).
"Bank" means each bank listed on the signature pages hereof, each
Assignee which becomes a Bank pursuant to Section 9.06(c), and their respective
successors.
"Base Rate" means, for any day, a rate per annum equal to the
higher of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus
the Federal Funds Rate for such day.
"Base Rate Loan" means a Committed Loan to be made by a Bank as a
Base Rate Loan in accordance with the applicable Notice of Committed Borrowing
or pursuant to Article VIII.
"Benefit Arrangement" means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"Borrower" means V.F. Corporation, a Pennsylvania corporation, and
its successors.
"Borrower's 1993 Form 10-K" means the Borrower's annual report on
Form 10-K for its fiscal year ended January 1, 1994, as filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended.
"Borrowing" has the meaning set forth in Section 1.03.
"CD Base Rate" has the meaning set forth in Section 2.07(b).
"CD Loan" means (i) a Committed Loan to be made by a Bank as a CD
Loan in accordance with the applicable Notice of Committed Borrowing or Notice
of Interest Rate Election
2
or (ii) an overdue amount which was a CD Loan immediately before it became
overdue.
"CD Margin" has the meaning set forth in Section 2.07(b).
"CD Rate" means a rate of interest determined pursuant to Section
2.07(b) on the basis of an Adjusted CD Rate.
"Commitment" means, with respect to each Bank, the amount set
forth opposite the name of such Bank on the signature pages hereof, as such
amount may be reduced from time to time pursuant to Section 2.09.
"Committed Loan" means a loan made by a Bank pursuant to Section
2.01; provided that if any such Loan or Loans are combined or subdivided
pursuant to a Notice of Interest Rate Election, the term "Committed Loan" shall
refer to the combined principal amount resulting from such combination or to
each of the separate principal amounts resulting from such subdivision, as the
case may be.
"Consolidated Debt" means at any date the sum of (i) the Debt of
the Borrower and its Subsidiaries, determined on a consolidated basis as of
such date, plus (ii) the product obtained by multiplying five times the
aggregate minimum rental commitments of the Borrower and its Subsidiaries under
leases of real and personal property (other than (A) capital leases and (B)
leases with remaining terms (assuming exercise by the lessee of any
cancellation option) of less than one year) in effect on such date for the
period from such date to and including the first anniversary of such date.
"Consolidated Net Income" means for any period the amount of
consolidated net income (or loss) of the Borrower and its Subsidiaries for such
period.
"Consolidated Net Worth" means at any date the consolidated
stockholders' equity of the Borrower and its Subsidiaries, determined as of
such date.
"Debt" of any Person means at any date, without duplication, (i)
all obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business, (iv) all obligations of such Person as lessee which are
required to
3
be capitalized in accordance with generally accepted accounting principles, (v)
all Debt secured by a Lien on any asset of such Person, whether or not such
Debt is otherwise an obligation of such Person, and (vi) all Debt of others
Guaranteed by such Person.
"Default" means any condition or event which constitutes an Event
of Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Domestic Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City are authorized by law to
close.
"Domestic Lending Office" means, as to each Bank, its office
located at its address set forth in its Administrative Questionnaire (or
identified in its Administrative Questionnaire as its Domestic Lending Office)
or such other office as such Bank may hereafter designate as its Domestic
Lending Office by notice to the Borrower and the Agent; provided that any Bank
may so designate separate Domestic Lending Offices for its Base Rate Loans, on
the one hand, and its CD Loans, on the other hand, in which case all references
herein to the Domestic Lending Office of such Bank shall be deemed to refer to
either or both of such offices, as the context may require.
"Domestic Loans" means CD Loans or Base Rate Loans or both.
"Domestic Reserve Percentage" has the meaning set forth in Section
2.07(b).
"Effective Date" means the date this Agreement becomes effective
in accordance with Section 3.01.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
other governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes into
the environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products,
4
chemicals or industrial, toxic or hazardous substances or wastes or the
clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary and all members
of a controlled group of corporations and all trades or businesses (whether or
not incorporated) under common control which, together with the Borrower or any
Subsidiary, are treated as a single employer under Section 414 of the Internal
Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business Day on
which commercial banks are open for international business (including dealings
in dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office,
branch or Affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or Affiliate of such
Bank as it may hereafter designate as its Euro-Dollar Lending Office by notice
to the Borrower and the Agent.
"Euro-Dollar Loan" means (i) a Committed Loan to be made by a Bank
as a Euro-Dollar Loan in accordance with the applicable Notice of Committed
Borrowing or Notice of Interest Rate Election or (ii) an overdue amount which
was a Euro-Dollar Loan before it became overdue.
"Euro-Dollar Margin" has the meaning set forth in Section 2.07(c).
"Euro-Dollar Rate" means a rate of interest determined pursuant to
Section 2.07(c) on the basis of an Adjusted London Interbank Offered Rate.
"Euro-Dollar Reserve Percentage" has the meaning set forth in
Section 2.07(c).
"Event of Default" has the meaning set forth in Section 6.01.
"Existing Credit Agreements" means the respective $250,000,000 and
$500,000,000 Credit Agreements, each dated as of October 21, 1993, among the
Borrower, the banks parties thereto and Morgan Guaranty Trust Company of New
York, as agent, as amended to the Effective Date.
5
"Facility Fee Rate" means a rate per annum of (i) .10% for any
day on which Level I Status exists, (ii) .12% for any day on which Level II
Status exists, (iii) .14% for any day on which Level III Status exists, (iv)
.175% for any day on which Level IV Status exists and (v) .25% for any day on
which Level V Status exists.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if such day is not a
Domestic Business Day, the Federal Funds Rate for such day shall be such rate
on such transactions on the next preceding Domestic Business Day as so
published on the next succeeding Domestic Business Day, and (ii) if no such
rate is so published on such next succeeding Domestic Business Day, the Federal
Funds Rate for such day shall be the average rate quoted to Morgan Guaranty
Trust Company of New York on such day on such transactions as determined by the
Agent.
"Fixed Rate Loans" means CD Loans or Euro-Dollar Loans or Money
Market Loans (excluding Money Market LIBOR Loans bearing interest at the Base
Rate pursuant to Section 8.01(a)) or any combination of the foregoing.
"Group of Loans" means at any time a group of Loans consisting of
(i) all Committed Loans which are Base Rate Loans at such time or (ii) all
Committed Loans which are Fixed Rate Loans of the same type having the same
Interest Period at such time; provided that, if a Committed Loan of any
particular Bank is converted to or made as a Base Rate Loan pursuant to Section
8.02 or 8.04, such Loan shall be included in the same Group or Groups of Loans
from time to time as it would have been in if it had not been so converted or
made.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt of any
other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of)
such Debt (whether arising by virtue of partnership arrangements, by agreement
to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or
(ii) entered into for the
6
purpose of assuring in any other manner the holder of such Debt of the payment
thereof or to protect such holder against loss in respect thereof (in whole or
in part), provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Indemnitee" has the meaning set forth in Section 9.03(b).
"Interest Period" means: (1) with respect to each Euro-Dollar
Loan, the period commencing on the date of borrowing specified in the
applicable Notice of Borrowing or the date specified in the applicable Notice
of Interest Rate Election and ending one, two, three, six or (subject to
Section 2.07(d)) nine or twelve months thereafter, as the Borrower may elect in
the applicable notice; provided that:
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
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 (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(2) with respect to each CD Loan, the period commencing on the date of such
borrowing specified in the applicable Notice of Borrowing or the date specified
in the applicable Notice of Interest Rate Election and ending 30, 60, 90 or 180
days thereafter, as the Borrower may elect in the applicable notice; provided
that:
(a) any Interest Period (other than an Interest Period determined
pursuant to clause (b) below) which would otherwise end on a day which is
not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day; and
7
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(3) with respect to each Money Market LIBOR Loan, the period commencing on the
date of borrowing specified in the applicable Notice of Borrowing and ending
such whole number of months thereafter as the Borrower may elect in accordance
with Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
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 (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(4) with respect to each Money Market Absolute Rate Loan, the period
commencing on the date of borrowing specified in the applicable Notice of
Borrowing and ending such number of days thereafter (but not less than seven
days) as the Borrower may elect in accordance with Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall be extended to the next succeeding
Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended, or any successor statute.
"Level I Status" exists at any date if, at such date, all of the
Borrower's outstanding senior unsecured debt securities rated by S&P or Moody's
are rated A or
8
higher by S&P or A2 or higher by Moody's, as the case may be.
"Level II Status" exists at any date if, at such date, (i) Level I
Status does not exist and (ii) all of the Borrower's outstanding senior
unsecured debt securities rated by S&P or Moody's are rated A- or higher by S&P
or A3 or higher by Moody's, as the case may be.
"Level III Status" exists at any date if, at such date, (i) Level
I Status and Level II Status do not exist and (ii) all of the Borrower's
outstanding senior unsecured debt securities rated by S&P or Moody's are rated
BBB+ or higher by S&P or Baa1 or higher by Moody's, as the case may be.
"Level IV Status" exists at any date if, at such date, (i) Level I
Status, Level II Status and Level III Status do not exist and (ii) all of the
Borrower's outstanding senior unsecured debt securities rated by S&P or Moody's
are rated BBB or higher by S&P or Baa2 or higher by Moody's, as the case may
be.
"Level V Status" exists at any date if, at such date, all of the
Borrower's outstanding senior unsecured debt securities rated by S&P or Moody's
are rated below BBB by S&P and below Baa2 by Moody's or are not rated by S&P or
Moody's, as the case may be.
"LIBOR Auction" means a solicitation of Money Market Quotes
setting forth Money Market Margins based on the London Interbank Offered Rate
pursuant to Section 2.03.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind, or any other type
of preferential arrangement that has the practical effect of creating a
security interest, in respect of such asset. For the purposes of this
Agreement, the Borrower or any Subsidiary shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement relating to such asset.
"Loan" means a Domestic Loan or a Euro-Dollar Loan or a Money
Market Loan and "Loans" means Domestic Loans or Euro-Dollar Loans or Money
Market Loans or any combination of the foregoing.
"London Interbank Offered Rate" has the meaning set forth in
Section 2.07(c).
9
"Material Debt" means Debt of the Borrower and/or one or more of
its Subsidiaries (other than the Notes), arising in one or more related or
unrelated transactions, in an aggregate principal amount exceeding $50,000,000.
"Material Plan" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $10,000,000.
"Material Subsidiary" means at any time a Subsidiary which as of
such time meets the definition of a "significant subsidiary" contained as of
the date hereof in Regulation S-X of the Securities and Exchange Commission.
"Money Market Absolute Rate" has the meaning set forth in Section
2.03(d).
"Money Market Absolute Rate Loan" means a loan to be made by a
Bank pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each Bank, its Domestic
Lending Office or such other office, branch or Affiliate of such Bank as it may
hereafter designate as its Money Market Lending Office by notice to the
Borrower and the Agent; provided that any Bank may from time to time by notice
to the Borrower and the Agent designate separate Money Market Lending Offices
for its Money Market LIBOR Loans, on the one hand, and its Money Market
Absolute Rate Loans, on the other hand, in which case all references herein to
the Money Market Lending Office of such Bank shall be deemed to refer to either
or both of such offices, as the context may require.
"Money Market LIBOR Loan" means a loan to be made by a Bank
pursuant to a LIBOR Auction (including such a loan bearing interest at the Base
Rate pursuant to Section 8.01(a)).
"Money Market Loan" means a Money Market LIBOR Loan or a Money
Market Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in Section 2.03(d).
"Money Market Quote" means an offer by a Bank to make a Money
Market Loan in accordance with Section 2.03.
"Moody's" means Moody's Investors Service, Inc., a Delaware
corporation, and its successors or, if such corporation shall be dissolved or
liquidated or shall no longer perform the functions of a securities rating
agency,
10
"Moody's" shall be deemed to refer to any other nationally recognized
securities rating agency designated by the Required Banks, with the approval of
the Borrower, by notice to the Agent and the Borrower.
"Multiemployer Plan" means at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which any member of
the ERISA Group is then making or accruing an obligation to make contributions
or has within the preceding five plan years made contributions, including for
these purposes any Person which ceased to be a member of the ERISA Group during
such five year period.
"Notes" means promissory notes of the Borrower, substantially in
the form of Exhibit A hereto, as the same may be amended, replaced,
supplemented or modified, evidencing the obligation of the Borrower to repay
the Loans, and "Note" means any one of such promissory notes issued hereunder.
"Notice of Borrowing" means a Notice of Committed Borrowing (as
defined in Section 2.02) or a Notice of Money Market Borrowing (as defined in
Section 2.03(f)).
"Notice of Interest Rate Election" has the meaning set forth in
Section 2.10.
"Parent" means, with respect to any Bank, any Person controlling
such Bank.
"Participant" has the meaning set forth in Section 9.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan (other
than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to
the minimum funding standards under Section 412 of the Internal Revenue Code
and either (i) is maintained, or contributed to, by any member of the ERISA
Group for employees of any member of the ERISA Group or (ii) has at any time
within the preceding five years been maintained, or contributed to, by any
Person
11
which was at such time a member of the ERISA Group for employees of any Person
which was at such time a member of the ERISA Group.
"Prime Rate" means the rate of interest publicly announced by
Morgan Guaranty Trust Company of New York in New York City from time to time as
its Prime Rate.
"Reference Banks" means PNC Bank, N.A., Credit Suisse and Morgan
Guaranty Trust Company of New York.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Required Banks" means at any time Banks having at least 66 2/3%
of the aggregate amount of the Commitments or, if the Commitments shall have
been terminated, holding Notes evidencing at least 66 2/3% of the aggregate
unpaid principal amount of the Loans.
"Revolving Credit Period" means the period from and including the
Effective Date to but excluding the Termination Date.
"S&P" means Standard & Poor's Corporation, a New York corporation,
and its successors or, if such corporation shall be dissolved or liquidated or
shall no longer perform the functions of a securities rating agency, "S&P"
shall be deemed to refer to any other nationally recognized securities rating
agency designated by the Required Banks, with the approval of the Borrower, by
notice to the Agent and the Borrower.
"Significant Assets" means any assets (including, without
limitation, capital stock issued by a Subsidiary or other Person) sold, leased
or otherwise transferred by the Borrower or any Subsidiary other than (i)
inventory and used, surplus or worn-out equipment sold in the ordinary course
of business, (ii) accounts receivable having an aggregate unpaid balance at no
time exceeding $250,000,000 sold pursuant to arrangements whereby recourse to
the Borrower or a Subsidiary for uncollectibility thereof is limited to an
amount not exceeding 10% of the face amount of any sale and (iii) other assets
having an aggregate book value during the term of this Agreement not exceeding
$500,000,000, provided that at no time shall the aggregate unpaid balance at
the time of accounts receivable sold pursuant to clause (ii) plus the aggregate
net book value of assets sold pursuant to clause (iii) exceed $500,000,000.
12
"Significant Subsidiary" means at any time any Subsidiary, except
Subsidiaries which at such time have been designated by the Borrower (by notice
to the Agent, which may be amended from time to time) as nonmaterial and which,
if aggregated and considered as a single subsidiary, would not meet the
definition of a "significant subsidiary" contained as of the date hereof in
Regulation S-X of the Securities and Exchange Commission.
"Subsidiary" means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by the Borrower;
provided that for the purpose of determining compliance with Section 4.02,
4.05, 4.07, 4.08, 5.04, 5.06, 5.08, 5.09, 5.10, 6.01(e), 6.01(f), 6.01(g),
6.01(h) or 6.01(j), none of Central Corsetera S.A. (Belcor), Blue Bell Italiana
s.r.l., Blue Bell S.A., Blue Bell Espana S.A. or Blue Bell Cote d'Ivoire shall
be considered to be a Subsidiary.
"Termination Date" means October 20, 1999, or, if such day is not
a Euro-Dollar Business Day, the next succeeding Euro-Dollar Business Day unless
such Euro-Dollar Business Day falls in another calendar month, in which case
the Termination Date shall be the next preceding Euro-Dollar Business Day.
"Trust" means the respective trusts established under those
certain deeds of trust dated August 21, 1951 made by John E. Barbey and under
the will of John E. Barbey, deceased.
"Unfunded Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the value of all benefit liabilities
under such Plan, determined on a plan termination basis using the assumptions
prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the
fair market value of all Plan assets allocable to such liabilities under Title
IV of ERISA (excluding any accrued but unpaid contributions), all determined as
of the then most recent valuation date for such Plan, but only to the extent
that such excess represents a potential liability of a member of the ERISA
Group to the PBGC or any other Person under Title IV of ERISA.
"Wholly-Owned Subsidiary" means any Subsidiary all of the shares
of capital stock or other ownership interests of which (except directors'
qualifying shares and, in the case of any Subsidiary organized in a
jurisdiction outside the United States, shares not exceeding 5% of total
shares)
13
are at the time directly or indirectly owned by the Borrower.
SECTION 1.02. Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as in effect from time
to time, applied on a basis consistent (except for changes concurred in by the
Borrower's independent public accountants) with the most recent audited
consolidated financial statements of the Borrower and its Subsidiaries
delivered to the Banks; provided that, if the Borrower notifies the Agent that
the Borrower wishes to amend any covenant in Article V to eliminate the effect
of any change in generally accepted accounting principles on the operation of
such covenant (or if the Agent notifies the Borrower that the Required Banks
wish to amend Article V for such purpose), then the Borrower's compliance with
such covenant shall be determined on the basis of generally accepted accounting
principles in effect immediately before the relevant change in generally
accepted accounting principles became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Borrower
and the Required Banks.
SECTION 1.03. Types of Borrowings. The term "Borrowing" denotes
the aggregation of Loans of one or more Banks to be made to the Borrower
pursuant to Article II on a single date, all of which Loans are of the same
type (subject to Article VIII) and, except in the case of Base Rate Loans, have
the same Interest Period or initial Interest Period. Borrowings are classified
for purposes of this Agreement either by reference to the pricing of Loans
comprising such Borrowing (e.g., a "Euro-Dollar Borrowing" is a Borrowing
comprised of Euro-Dollar Loans) or by reference to the provisions of Article II
under which participation therein is determined (i.e., a "Committed Borrowing"
is a Borrowing under Section 2.01 in which all Banks participate in proportion
to their Commitments, while a "Money Market Borrowing" is a Borrowing under
Section 2.03 in which the Bank participants are determined on the basis of
their bids in accordance therewith).
14
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend. During the Revolving Credit
Period each Bank severally agrees, on the terms and conditions set forth in
this Agreement, to make loans to the Borrower pursuant to this Section from
time to time in amounts such that the aggregate principal amount of Committed
Loans by such Bank at any one time outstanding shall not exceed the amount of
its Commitment. Each Borrowing under this Section shall be in an aggregate
principal amount of $15,000,000 or any larger multiple of $1,000,000 (except
that any such Borrowing may be in the aggregate amount available in accordance
with Section 3.02(b)) and shall be made from the several Banks ratably in
proportion to their respective Commitments. Within the foregoing limits, the
Borrower may borrow under this Section, repay, or to the extent permitted by
Section 2.11, prepay Loans and reborrow at any time during the Revolving Credit
Period under this Section.
SECTION 2.02. Notice of Committed Borrowing. The Borrower shall
give the Agent notice (a "Notice of Committed Borrowing") not later than (x)
12:00 Noon (New York City time) on the date of each Base Rate Borrowing, (y)
1:00 P.M. (New York City time) on the second Domestic Business Day before each
CD Borrowing and (z) 1:00 P.M. (New York City time) on the third Euro-Dollar
Business Day before each Euro-Dollar Borrowing, specifying:
(a) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Domestic Borrowing or a Euro-Dollar Business
Day in the case of a Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing,
(c) whether the Loans comprising such Borrowing are to bear
interest initially at the Base Rate or at a CD Rate or a Euro-Dollar Rate,
and
(d) in the case of a Fixed Rate Borrowing, the duration of the
initial Interest Period applicable thereto, subject to the provisions of
the definition of Interest Period.
15
SECTION 2.03. Money Market Borrowings.
(a) The Money Market Option. In addition to Committed Borrowings
pursuant to Section 2.01, the Borrower may, as set forth in this Section,
request the Banks during the Revolving Credit Period to make offers to make
Money Market Loans to the Borrower. The Banks may, but shall have no
obligation to, make such offers and the Borrower may, but shall have no
obligation to, accept any such offers in the manner set forth in this Section.
(b) Money Market Quote Request. When the Borrower wishes to
request offers to make Money Market Loans under this Section, it shall transmit
to the Agent by telex or facsimile transmission a Money Market Quote Request
substantially in the form of Exhibit B hereto so as to be received no later
than 1:00 P.M. (New York City time) on (x) the fourth Euro-Dollar Business Day
prior to the date of Borrowing proposed therein, in the case of a LIBOR Auction
or (y) the Domestic Business Day next preceding the date of Borrowing proposed
therein, in the case of an Absolute Rate Auction (or, in either case, such
other time or date as the Borrower and the Agent shall have mutually agreed and
shall have notified to the Banks not later than the date of the Money Market
Quote Request for the first LIBOR Auction or Absolute Rate Auction for which
such change is to be effective) specifying:
(i) the proposed date of Borrowing, which shall be a Euro-Dollar
Business Day in the case of a LIBOR Auction or a Domestic Business Day in
the case of an Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which shall be
$15,000,000 or a larger multiple of $1,000,000,
(iii) the duration of the Interest Period applicable thereto,
subject to the provisions of the definition of Interest Period, and
(iv) whether the Money Market Quotes requested are to set forth a
Money Market Margin or a Money Market Absolute Rate.
The Borrower may request offers to make Money Market Loans for more than one
Interest Period in a single Money Market Quote Request. No Money Market Quote
Request shall be given within five Euro-Dollar Business Days (or such other
number of days as the Borrower and the Agent may agree) of any other Money
Market Quote Request.
16
(c) Invitation for Money Market Quotes. Promptly upon receipt of
a Money Market Quote Request, the Agent shall send to the Banks by telex or
facsimile transmission an Invitation for Money Market Quotes substantially in
the form of Exhibit C hereto, which shall constitute an invitation by the
Borrower to each Bank to submit Money Market Quotes offering to make the Money
Market Loans to which such Money Market Quote Request relates in accordance
with this Section.
(d) Submission and Contents of Money Market Quotes. (i) Each
Bank may submit a Money Market Quote containing an offer or offers to make
Money Market Loans in response to any Invitation for Money Market Quotes. Each
Money Market Quote must comply with the requirements of this subsection (d) and
must be submitted to the Agent by telex or facsimile transmission at its
offices specified in or pursuant to Section 9.01 not later than 9:00 A.M. (New
York City time) on (x) the third Euro-Dollar Business Day prior to the proposed
date of Borrowing, in the case of a LIBOR Auction, or (y) the proposed date of
Borrowing, in the case of an Absolute Rate Auction (or, in either case, such
other time or date as the Borrower and the Agent shall have mutually agreed and
shall have notified to the Banks not later than the date of the Money Market
Quote Request for the first LIBOR Auction or Absolute Rate Auction for which
such change is to be effective); provided that Money Market Quotes submitted by
the Agent (or any Affiliate of the Agent) in the capacity of a Bank may be
submitted, and may only be submitted, if the Agent or such Affiliate notifies
the Borrower of the terms of the offer or offers contained therein not later
than 15 minutes prior to the deadline for the other Banks. Subject to Articles
III and VI, any Money Market Quote so made shall be irrevocable except with the
written consent of the Agent given on the instructions of the Borrower.
(ii) Each Money Market Quote shall be in substantially the form
of Exhibit D hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan for which each
such offer is being made, which principal amount (w) may be greater than or
less than the Commitment of the quoting Bank, (x) must be $5,000,000 or a
larger multiple of $1,000,000, (y) may not exceed the principal amount of
Money Market Loans for which offers were requested and (z) may be subject
to an aggregate limitation as to the principal amount
17
of Money Market Loans for which offers being made by such quoting Bank may
be accepted,
(C) in the case of a LIBOR Auction, the margin above or below the
applicable London Interbank Offered Rate (the "Money Market Margin")
offered for each such Money Market Loan, expressed as a percentage
(specified to the nearest 1/10,000th of 1%) to be added to or subtracted
from such base rate,
(D) in the case of an Absolute Rate Auction, the rate of interest
per annum (specified to the nearest 1/10,000th of 1%) (the "Money Market
Absolute Rate") offered for each such Money Market Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the quoting
Bank with respect to each Interest Period specified in the related Invitation
for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(A) is not substantially in conformity with Exhibit D hereto or
does not specify all of the information required by subsection (d)(ii);
(B) contains qualifying, conditional or similar language;
(C) proposes terms other than or in addition to those set forth
in the applicable Invitation for Money Market Quotes; or
(D) arrives after the time set forth in subsection (d)(i).
(e) Notice to Borrower. Not later than 9:30 A.M. (New York City
time) on the date received in accordance with subsection (d), the Agent shall
notify the Borrower of the terms (x) of any Money Market Quote submitted by a
Bank that is in accordance with subsection (d) and (y) of any Money Market
Quote that amends, modifies or is otherwise inconsistent with a previous Money
Market Quote submitted by such Bank with respect to the same Money Market Quote
Request. Any such subsequent Money Market Quote shall be disregarded by the
Agent unless such subsequent Money Market Quote is submitted solely to correct
a manifest error in such former Money Market Quote. The Agent's notice to the
18
Borrower shall specify (A) the aggregate principal amount of Money Market Loans
for which offers have been received for each Interest Period specified in the
related Money Market Quote Request, (B) the respective principal amounts and
Money Market Margins or Money Market Absolute Rates, as the case may be, so
offered and (C) if applicable, limitations on the aggregate principal amount of
Money Market Loans for which offers in any single Money Market Quote may be
accepted.
(f) Acceptance and Notice by Borrower. Not later than 10:00 A.M.
(New York City time) on (x) the third Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction or (y) the proposed
date of Borrowing, in the case of an Absolute Rate Auction (or, in either case,
such other time or date as the Borrower and the Agent shall have mutually
agreed and shall have notified to the Banks not later than the date of the
Money Market Quote Request for the first LIBOR Auction or Absolute Rate Auction
for which such change is to be effective), the Borrower shall notify the Agent
of its acceptance or non-acceptance of the offers so notified to it pursuant to
subsection (e). In the case of acceptance, such notice (a "Notice of Money
Market Borrowing") shall specify the aggregate principal amount of offers for
each Interest Period that are accepted. The Borrower may accept any Money
Market Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Money Market Borrowing
may not exceed the applicable amount set forth in the related Money Market
Quote Request,
(ii) the principal amount of each Money Market Borrowing must be
$15,000,000 or a larger multiple of $1,000,000,
(iii) acceptance of offers may only be made on the basis of
ascending Money Market Margins or Money Market Absolute Rates, as the case
may be, provided that the Borrower may reject any offer made by a Bank
which has been paid or has made demand for payment of any Taxes or Other
Taxes pursuant to Section 8.04, and
(iv) the Borrower may not accept any offer that is described in
subsection (d)(iii) or that otherwise fails to comply with the requirements
of this Agreement.
(g) Allocation by Agent. If offers are made by two or more Banks
with the same Money Market Margins or Money Market Absolute Rates, as the case
may be, for a
19
greater aggregate principal amount than the amount in respect of which such
offers are accepted for the related Interest Period, the principal amount of
Money Market Loans in respect of which such offers are accepted shall be
allocated by the Agent among such Banks as nearly as possible (in multiples of
$1,000,000, as the Agent may deem appropriate) in proportion to the aggregate
principal amounts of such offers. Determinations by the Agent of the amounts
of Money Market Loans shall be conclusive in the absence of manifest error.
SECTION 2.04. Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Borrowing, the Agent shall
promptly notify each Bank of the contents thereof and of such Bank's share (if
any) of such Borrowing and such Notice of Borrowing shall not thereafter be
revocable by the Borrower.
(b) Not later than 12:00 Noon (New York City time) on the date of
each Borrowing other than a Base Rate Borrowing, and 2:00 P.M. (New York City
time) on the date of each Base Rate Borrowing, each Bank participating therein
shall (except as provided in subsection (c) of this Section) make available its
share of such Borrowing, in Federal or other funds immediately available in New
York City, to the Agent at its address referred to in Section 9.01. Unless the
Agent determines that any applicable condition specified in Article III has not
been satisfied, the Agent will make the funds so received from the Banks
available to the Borrower at the Agent's aforesaid address.
(c) If any Bank makes a new Loan hereunder on a day on which the
Borrower is to repay all or any part of an outstanding Loan from such Bank,
such Bank shall apply the proceeds of its new Loan to make such repayment and
only an amount equal to the difference (if any) between the amount being
borrowed and the amount being repaid shall be made available by such Bank to
the Agent as provided in subsection (b), or remitted by the Borrower to the
Agent as provided in Section 2.12, as the case may be.
(d) Unless the Agent shall have received notice from a Bank prior
to the date of any Borrowing that such Bank will not make available to the
Agent such Bank's share of such Borrowing, the Agent may assume that such Bank
has made such share available to the Agent on the date of such Borrowing in
accordance with subsections (b) and (c) of this Section 2.04 and the Agent may,
in reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank
20
shall not have so made such share available to the Agent, such Bank and the
Borrower severally agree to repay to the Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Agent, at (i) in the case of the Borrower, a rate per annum equal
to the higher of the Federal Funds Rate and the interest rate applicable
thereto pursuant to Section 2.07 and (ii) in the case of such Bank, the Federal
Funds Rate; provided that the Borrower may exercise any other legal rights
against such Bank. If such Bank shall repay to the Agent such corresponding
amount, such amount so repaid shall constitute such Bank's Loan included in
such Borrowing for purposes of this Agreement.
SECTION 2.05. Notes. (a) The Loans of each Bank shall be
evidenced by a single Note payable to the order of such Bank for the account of
its Applicable Lending Office in an amount equal to the aggregate unpaid
principal amount of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the Agent,
request that its Loans of a particular type be evidenced by a separate Note in
an amount equal to the aggregate unpaid principal amount of such Loans. Each
such Note shall be in substantially the form of Exhibit A hereto with
appropriate modifications to reflect the fact that it evidences solely Loans of
the relevant type. Each reference in this Agreement to the "Note" of such Bank
shall be deemed to refer to and include any or all of such Notes, as the
context may require.
(c) Upon receipt of each Bank's Note pursuant to Section 3.01(b),
the Agent shall forward such Note to such Bank. Each Bank shall record the
date, amount and type of each Loan made by it and the date and amount of each
payment of principal made by the Borrower with respect thereto, and may, if
such Bank so elects in connection with any transfer or enforcement of its Note,
endorse on the schedule forming a part thereof appropriate notations to
evidence the foregoing information with respect to each such Loan then
outstanding; provided that the failure of any Bank to make any such recordation
or endorsement shall not affect the obligations of the Borrower hereunder or
under the Notes. Each Bank is hereby irrevocably authorized by the Borrower so
to endorse its Note and to attach to and make a part of its Note a continuation
of any such schedule as and when required.
SECTION 2.06. Maturity of Loans. Each Loan included in any
Borrowing made pursuant to Section 2.01
21
shall mature, and the principal amount thereof shall be due and payable,
together with accrued interest thereon, on the Termination Date. Each Loan
included in any Borrowing made pursuant to Section 2.03 shall mature, and the
principal amount thereof shall be due and payable, together with accrued
interest thereon, on the last day of the Interest Period applicable thereto.
SECTION 2.07. Interest Rates. (a) Each Base Rate Loan shall
bear interest on the outstanding principal amount thereof, for each day from
the date such Loan is made until it becomes due, at a rate per annum equal to
the Base Rate for such day. Such interest shall be payable quarterly in
arrears on the last day of each calendar quarter and, with respect to the
principal amount of any Base Rate Loan converted to a CD Loan or a Euro-Dollar
Loan, on each date a Base Rate Loan is so converted. Any overdue principal of
or interest on any Base Rate Loan shall bear interest, payable on demand, for
each day until paid at a rate per annum equal to the sum of 1% plus the rate
otherwise applicable to Base Rate Loans for such day.
(b) Each CD Loan shall bear interest on the outstanding principal
amount thereof, for each day during the Interest Period applicable thereto, at
a rate per annum equal to the sum of the CD Margin for such day plus the
Adjusted CD Rate applicable to such Interest Period; provided that if any CD
Loan shall, as a result of clause (2)(b) of the definition of Interest Period,
have an Interest Period of less than 30 days, such CD Loan shall bear interest
during such Interest Period at the rate applicable to Base Rate Loans during
such period. Such interest shall be payable for each Interest Period on the
last day thereof and, if such Interest Period is longer than 90 days, at
intervals of 90 days after the first day thereof. Any overdue principal of or
interest on any CD Loan shall bear interest, payable on demand, for each day
until paid at a rate per annum equal to the sum of 1% plus the higher of (i)
the sum of the CD Margin plus the Adjusted CD Rate applicable to such Loan at
the date such payment was due and (ii) the rate applicable to Base Rate Loans
for such day.
"CD Margin" means for each day on which (i) Level I Status exists,
.275%, (ii) Level II Status exists, .325%, (iii) Level III Status exists,
.385%, (iv) Level IV Status exists, .45% or (v) Level V Status exists, .50%.
The "Adjusted CD Rate" applicable to any Interest Period means a
rate per annum determined pursuant to the following formula:
22
[ CDBR ]*
ACDR = [ ---------- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
----------
* The amount in brackets being rounded upwards, if
necessary, to the next higher 1/100 of 1%
The "CD Base Rate" applicable to any Interest Period is the rate
of interest determined by the Agent to be the average (rounded upward, if
necessary, to the next higher 1/100 of 1%) of the prevailing rates per annum
bid at 10:00 A.M. (New York City time) (or as soon thereafter as practicable)
on the first day of such Interest Period by two or more New York certificate of
deposit dealers of recognized standing for the purchase at face value from each
Reference Bank of its certificates of deposit in an amount comparable to the
principal amount of the CD Loan of such Reference Bank to which such Interest
Period applies and having a maturity comparable to such Interest Period.
"Domestic Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including without limitation any
basic, supplemental or emergency reserves) for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of new non-personal time deposits in dollars in New York City having a
maturity comparable to the related Interest Period and in an amount of $100,000
or more. The Adjusted CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Domestic Reserve Percentage.
"Assessment Rate" means for any day the annual assessment rate in
effect on such day which is payable by a member of the Bank Insurance Fund
classified as adequately capitalized and within supervisory subgroup "A" (or a
comparable successor assessment risk classification) within the meaning of 12
C.F.R. Section 327.3(e) (or any successor provision) to the Federal Deposit
Insurance Corporation (or any successor) for such Corporation's (or such
successor's) insuring time deposits at offices of such institution in the
23
United States. The Adjusted CD Rate shall be adjusted automatically on and as
of the effective date of any change in the Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during the Interest Period applicable
thereto, at a rate per annum equal to the sum of the Euro-Dollar Margin for
such day plus the Adjusted London Interbank Offered Rate applicable to such
Interest Period. Such interest shall be payable for each Interest Period on
the last day thereof and, if such Interest Period is longer than three months,
at intervals of three months after the first day thereof.
"Euro-Dollar Margin" means for each day on which (i) Level I
Status exists, .15%, (ii) Level II Status exists, .20%, (iii) Level III Status
exists, .26%, (iv) Level IV Status exists, .325% or (v) Level V Status exists,
.375%.
The "Adjusted London Interbank Offered Rate" applicable to any
Interest Period means a rate per annum equal to the quotient obtained (rounded
upwards, if necessary, to the next higher 1/100 of 1%) by dividing (i) the
applicable London Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar
Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Interest
Period is the rate of interest determined by the Agent to be the average
(rounded upward, if necessary, to the next higher 1/16 of 1%) of the respective
rates per annum at which deposits in dollars are offered to each of the
Reference Banks in the London interbank market at approximately 11:00 A.M.
(London time) two Euro-Dollar Business Days before the first day of such
Interest Period in an amount approximately equal to the principal amount of the
Euro-Dollar Loan of such Reference Bank to which such Interest Period is to
apply and for a period of time comparable to such Interest Period.
"Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or
other assets which
24
includes loans by a non-United States office of any Bank to United States
residents). The Adjusted London Interbank Offered Rate shall be adjusted
automatically on and as of the effective date of any change in the Euro-Dollar
Reserve Percentage.
(d) If requested to do so by the Borrower, through the Agent, at
least four Euro-Dollar Business Days before the beginning of any Interest
Period applicable to a Euro-Dollar Borrowing, each Bank will advise the
Borrower, through the Agent, before 1:00 P.M. (New York City time) three
Euro-Dollar Business Days preceding the beginning of such Interest Period as to
(i) whether, if the Borrower selects a duration of nine or twelve months for
such Interest Period, such Bank expects that deposits in dollars with a term
corresponding to such Interest Period will be available to it in the London
interbank market two Euro-Dollar Business Days preceding such Interest Period
in the amount required to fund its Euro-Dollar Loan to which such Interest
Period would apply and, if so, (ii) the interest rate which such Bank would
have been required to pay as of 11:00 A.M. (London time) on such third
Euro-Dollar Business Day to obtain such deposits. If, but only if, all of the
Banks confirm that they expect such deposits to be available to them, the
Borrower shall be entitled to select a duration of nine or twelve months for
such Interest Period pursuant to Section 2.02(a), in which event (i) each Bank
shall advise the Agent as to the interest rate per annum at which such deposits
were offered to it as approximately 11:00 A.M. (London time) in the London
interbank market two Euro-Dollar Business Days preceding such Interest Period
and (ii) the London Interbank Offered Rate applicable to such Interest Period
shall be the highest of the rates so quoted; provided that, as an alternative
to the foregoing procedure, the London Interbank Offered Rate applicable to any
nine or twelve month Interest Period may be established by agreement among the
Borrower and all the Banks.
(e) Any overdue principal of or interest on any Euro-Dollar Loan
shall bear interest, payable on demand, for each day from and including the
date payment thereof was due to but excluding the date of actual payment, at a
rate per annum equal to the sum of 1% plus the higher of (i) the sum of the
Euro-Dollar Margin plus the Adjusted London Interbank Offered Rate applicable
to such Loan at the date such payment was due and (ii) the Euro-Dollar Margin
plus the quotient obtained (rounded upwards, if necessary, to the next higher
1/100 of 1%) by dividing (x) the average (rounded upward, if necessary, to the
next higher 1/16 of 1%) of the respective rates per annum at which one day (or,
if such amount due remains unpaid more than three
25
Euro-Dollar Business Days, then for such other period of time not longer than
six months as the Agent may select) deposits in dollars in an amount
approximately equal to such overdue payment due to each of the Reference Banks
are offered to such Reference Bank in the London interbank market for the
applicable period determined as provided above by (y) 1.00 minus the
Euro-Dollar Reserve Percentage (or, if the circumstances described in clause
(a) or (b) of Section 8.01 shall exist, at a rate per annum equal to the sum of
1% plus the rate applicable to Base Rate Loans for such day).
(f) Subject to Section 8.01(a), each Money Market LIBOR Loan
shall bear interest on the outstanding principal amount thereof, for the
Interest Period applicable thereto, at a rate per annum equal to the sum of the
London Interbank Offered Rate for such Interest Period (determined in
accordance with Section 2.07(c) as if the related Money Market LIBOR Borrowing
were a Committed Euro-Dollar Borrowing) plus (or minus) the Money Market Margin
quoted by the Bank making such Loan in accordance with Section 2.03. Each
Money Market Absolute Rate Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a rate
per annum equal to the Money Market Absolute Rate quoted by the Bank making
such Loan in accordance with Section 2.03. Such interest shall be payable for
each Interest Period on the last day thereof and, if such Interest Period is
longer than three months, at intervals of three months after the first day
thereof. Any overdue principal of or interest on any Money Market Loan shall
bear interest, payable on demand, for each day until paid at a rate per annum
equal to the sum of 1% plus the Base Rate for such day.
(g) The Agent shall determine each interest rate applicable to
the Loans hereunder. The Agent shall give prompt notice to the Borrower and
the participating Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.
(h) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Agent as contemplated by this Section. If any Reference Bank
does not furnish a timely quotation, the Agent shall determine the relevant
interest rate on the basis of the quotation or quotations furnished by the
remaining Reference Bank or Banks or, if none of such quotations is available
on a timely basis, the provisions of Section 8.01 shall apply.
26
SECTION 2.08. Facility Fee. The Borrower shall pay to the Agent
for the account of the Banks ratably a facility fee at the Facility Fee Rate.
Such facility fee shall accrue (i) from and including the Effective Date to but
excluding the Termination Date (or earlier date of termination of the
Commitments in their entirety), on the daily aggregate amount of the
Commitments (whether used or unused) and (ii) from and including the
Termination Date or such earlier date of termination to but excluding the date
the Loans shall be repaid in their entirety, on the daily aggregate outstanding
principal amount of the Loans. Accrued facility fees shall be payable
quarterly on each March 31, June 30, September 30 and December 31 and upon the
date of termination of the Commitments in their entirety (and, if later, the
date the Loans shall be repaid in their entirety).
SECTION 2.09. Optional Termination or Reduction of Commitments.
During the Revolving Credit Period, the Borrower may, upon three Domestic
Business Days' notice to the Agent (or such shorter period as the Agent may
accept), (i) terminate the Commitments at any time, if no Loans (other than
Money Market Loans which will mature within three months of the date of such
termination) are outstanding at such time, or (ii) ratably reduce from time to
time by an aggregate amount of $15,000,000 or any larger multiple of
$1,000,000, the aggregate amount of the Commitments in excess of the aggregate
outstanding principal amount of the Loans.
SECTION 2.10. Method of Electing Interest Rates. (a) The Loans
included in each Committed Borrowing shall bear interest initially at the type
of rate specified by the Borrower in the applicable Notice of Committed
Borrowing. Thereafter, the Borrower may from time to time elect to change or
continue the type of interest rate borne by each Group of Loans (subject in
each case to the provisions of Article VIII), as follows:
(i) if such Loans are Base Rate Loans, the Borrower may elect to
convert such Loans to CD Loans as of any Domestic Business Day or to
Euro-Dollar Loans as of any Euro-Dollar Business Day;
(ii) if such Loans are CD Loans, the Borrower may elect to convert
such Loans to Base Rate Loans or Euro-Dollar Loans or elect to continue
such Loans as CD Loans for an additional Interest Period, in each case
effective on the last day of the then current Interest Period applicable to
such Loans;
27
(iii) if such Loans are Euro-Dollar Loans, the Borrower may elect
to convert such Loans to Base Rate Loans or CD Loans or elect to continue
such Loans as Euro-Dollar Loans for an additional Interest Period, in each
case effective on the last day of the then current Interest Period
applicable to such Loans.
Each such election shall be made by delivering a notice (a "Notice of Interest
Rate Election") to the Agent at least three Euro-Dollar Business Days before
the conversion or continuation selected in such notice is to be effective
(unless the relevant Loans are to be converted from Domestic Loans to Domestic
Loans of the other type or continued as Domestic Loans of the same type for an
additional Interest Period, in which case such notice shall be delivered to the
Agent at least three Domestic Business Days before such conversion or
continuation is to be effective). A Notice of Interest Rate Election may, if
it so specifies, apply to only a portion of the aggregate principal amount of
the relevant Group of Loans; provided that (i) such portion is allocated
ratably among the Loans comprising such Group and (ii) the portion to which
such Notice applies, and the remaining portion to which it does not apply, are
each $15,000,000 or any larger multiple of $1,000,000.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such notice
applies;
(ii) the date on which the conversion or continuation selected in
such notice is to be effective, which shall comply with the applicable
clause of subsection (a) above;
(iii) if the Loans comprising such Group are to be converted, the
new type of Loans and, if such new Loans are Fixed Rate Loans, the duration
of the initial Interest Period applicable thereto; and
(iv) if such Loans are to be continued as CD Loans or Euro-Dollar
Loans for an additional Interest Period, the duration of such additional
Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period.
(c) Upon receipt of a Notice of Interest Rate Election from the
Borrower pursuant to subsection (a) above,
28
the Agent shall promptly notify each Bank of the contents thereof and such
notice shall not thereafter be revocable by the Borrower. If the Borrower
fails to deliver a timely Notice of Interest Rate Election to the Agent for any
Group of Fixed Rate Loans, such Loans shall be converted into Base Rate Loans
on the last day of the then current Interest Period applicable thereto.
SECTION 2.11. Optional Prepayments. (a) The Borrower may, upon
at least one Domestic Business Day's notice to the Agent, prepay the Group of
Base Rate Loans (or any Money Market Borrowing bearing interest at the Base
Rate pursuant to Section 8.01(a)) in whole at any time, or from time to time in
part in amounts aggregating $15,000,000 or any larger multiple of $1,000,000,
by paying the principal amount to be prepaid together with accrued interest
thereon to the date of prepayment.
(b) The Borrower may, upon at least three Domestic Business Days'
notice to the Agent, in the case of a Group of CD Loans, or upon at least three
Euro-Dollar Business Days' notice to the Agent, in the case of a Group of
Euro-Dollar Loans, prepay the Loans comprising such a Group on the last day of
any Interest Period applicable to such Group, in whole at any time, or from
time to time in part in amounts aggregating $15,000,000 or any larger multiple
of $1,000,000, by paying the principal amount to be prepaid together with
accrued interest thereon to the date of prepayment.
(c) Except as provided in subsection (a) above, the Borrower may
not prepay all or any portion of the principal amount of any Money Market Loan
prior to the maturity thereof.
(d) Upon receipt of a notice of prepayment pursuant to this
Section, the Agent shall promptly notify each Bank of the contents thereof and
of such Bank's ratable share (if any) of such prepayment and such notice shall
not thereafter be revocable by the Borrower. Each such optional prepayment
shall be applied to prepay ratably the Loans of the several Banks included in
the relevant Group or Borrowing.
SECTION 2.12. General Provisions as to Payments. (a) The
Borrower shall make each payment of principal of, and interest on, the Loans
and of fees hereunder, not later than 12:00 Noon (New York City time) on the
date when due, in Federal or other funds immediately available in New York
City, to the Agent at its address referred to in Section 9.01. The Agent will
promptly distribute to each Bank its
29
ratable share of each such payment received by the Agent for the account of the
Banks. Whenever any payment of principal of, or interest on, the Domestic
Loans or of fees shall be due on a day which is not a Domestic Business Day,
the date for payment thereof shall be extended to the next succeeding Domestic
Business Day. Whenever any payment of principal of, or interest on, the
Euro-Dollar Loans shall be due on a day which is not a Euro-Dollar Business
Day, the date for payment thereof shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another
calendar month, in which case the date for payment thereof shall be the next
preceding Euro-Dollar Business Day. Whenever any payment of principal of, or
interest on, the Money Market Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be extended to the
next succeeding Euro-Dollar Business Day. If the date for any payment of
principal is extended by operation of law or otherwise, interest thereon shall
be payable for such extended time.
(b) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Banks hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each Bank on
such due date an amount equal to the amount then due such Bank. If and to the
extent that the Borrower shall not have so made such payment, each Bank shall
repay to the Agent forthwith on demand such amount distributed to such Bank
together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Agent, at the Federal Funds Rate.
SECTION 2.13. Funding Losses. If the Borrower makes or causes to
be made any payment of principal with respect to any Fixed Rate Loan or any
Fixed Rate Loan is converted to a Base Rate Loan (pursuant to Article VI or
VIII or otherwise) on any day other than the last day of an Interest Period
applicable thereto, or the last day of an applicable period fixed pursuant to
Section 2.07(e), or if the Borrower fails to borrow or prepay any Fixed Rate
Loans after notice has been given to any Bank in accordance with Section
2.04(a) or 2.11(d), the Borrower shall reimburse each Bank within 15 days after
demand for any resulting loss or expense incurred by it (or by an existing or
prospective Participant in the related Loan), including (without limitation)
any loss incurred in obtaining, liquidating or employing deposits from third
parties, but excluding loss of margin for the period after any such payment or
conversion
30
or failure to borrow or prepay, provided that such Bank shall have delivered to
the Borrower a certificate as to the amount of such loss or expense, which
certificate shall be conclusive in the absence of manifest error.
SECTION 2.14. Computation of Interest and Fees. Interest based
on the Prime Rate hereunder shall be computed on the basis of a year of 365
days (or 366 days in a leap year) and paid for the actual number of days
elapsed (including the first day but excluding the last day). All other
interest and fees shall be computed on the basis of a year of 360 days and paid
for the actual number of days elapsed (including the first day but excluding
the last day).
ARTICLE III
CONDITIONS
SECTION 3.01. Effectiveness. This Agreement shall become
effective on the date that each of the following conditions shall have been
satisfied (or waived in accordance with Section 9.05):
(a) receipt by the Agent of counterparts hereof signed by each of
the parties hereto (or, in the case of any party as to which an executed
counterpart shall not have been received, receipt by the Agent in form
satisfactory to it of facsimile transmission, telegraphic, telex or other
written confirmation from such party of execution of a counterpart hereof
by such party);
(b) receipt by the Agent for the account of each Bank of a duly
executed Note dated on or before the Effective Date complying with the
provisions of Section 2.05;
(c) receipt by the Agent of an opinion of Clark, Ladner,
Fortenbaugh & Young, counsel for the Borrower, substantially in the form of
Exhibit E hereto and covering such additional matters relating to the
transactions contemplated hereby as the Required Banks may reasonably
request;
(d) receipt by the Agent of an opinion of Davis Polk & Wardwell,
special counsel for the Agent, substantially in the form of Exhibit F
hereto and covering such additional matters relating to the
31
transactions contemplated hereby as the Required Banks may reasonably
request;
(e) receipt by the Agent of a certificate signed by the chief
financial officer, chief accounting officer or the treasurer of the
Borrower, dated the Effective Date, to the effect set forth in clause (f)
of this Section 3.01 and clauses (c) and (d) of Section 3.02;
(f) the fact that all principal of and interest on any loans
outstanding under, and all accrued fees payable under, the Existing Credit
Agreements shall have been paid in full on or prior to the Effective Date;
and
(g) receipt by the Agent of all documents it may reasonably
request relating to the existence of the Borrower, the corporate authority
for and the validity of this Agreement and the Notes, and any other matters
relevant hereto, all in form and substance satisfactory to the Agent;
provided that this Agreement shall not become effective or be binding on any
party hereto unless all of the foregoing conditions are satisfied not later
than October 31, 1994. The Agent shall promptly notify the Borrower and the
Banks of the Effective Date, and such notice shall be conclusive and binding on
all parties hereto. The Banks that are parties to the Existing Credit
Agreements, comprising the "Required Banks" as defined therein, and the
Borrower agree that the commitments under the Existing Credit Agreements shall
terminate in their entirety simultaneously with and subject to the
effectiveness of this Agreement and that the Borrower shall be obligated to pay
the accrued facility fees thereunder to but excluding the date of such
effectiveness.
SECTION 3.02. Borrowings. The obligation of any Bank to make a
Loan on the occasion of any Borrowing is subject to the satisfaction of the
following conditions:
(a) receipt by the Agent of a Notice of Borrowing as required by
Section 2.02 or 2.03, as the case may be;
(b) the fact that, immediately before and after such Borrowing,
the aggregate outstanding principal amount of the Loans will not exceed the
aggregate amount of the Commitments;
32
(c) the fact that, immediately after such Borrowing, no Default
shall have occurred and be continuing; and
(d) the fact that the representations and warranties of the
Borrower contained in this Agreement shall be true on and as of the date of
such Borrowing.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the facts specified in clauses
(b), (c) and (d) of this Section.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The Borrower is a
corporation duly incorporated, validly existing and in good standing under the
laws of Pennsylvania, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted.
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower of this
Agreement and the Notes are within the Borrower's corporate powers, have been
duly authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or official and do
not contravene, or constitute a default under, any provision of applicable law
or regulation or of the certificate of incorporation or by-laws of the Borrower
or of any agreement, judgment, injunction, order, decree or other instrument
binding upon the Borrower or any of its Subsidiaries or result in the creation
or imposition of any Lien on any asset of the Borrower or any of its
Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement constitutes a valid
and binding agreement of the Borrower and each Note, when executed and
delivered in accordance with this Agreement, will constitute a valid and
binding obligation of the Borrower, in each case enforceable in accordance with
its terms.
33
SECTION 4.04. Financial Information.
(a) The consolidated balance sheet of the Borrower and its
Subsidiaries as of January 1, 1994 and the related consolidated statements of
earnings, retained earnings and cash flow for the fiscal year then ended,
reported on by Ernst & Young and set forth in the Borrower's 1993 Form 10-K, a
copy of which has been delivered to each of the Banks, fairly present, in
conformity with generally accepted accounting principles, the consolidated
financial position of the Borrower and its Subsidiaries as of such date and
their consolidated results of operations and cash flows for such fiscal year.
(b) The unaudited consolidated balance sheet of the Borrower and
its Subsidiaries as of July 2, 1994 and the related unaudited consolidated
statements of earnings, retained earnings and cash flow for the six months then
ended, set forth in the Borrower's quarterly report for the fiscal quarter
ended July 2, 1994 as filed with the Securities and Exchange Commission on Form
10-Q, a copy of which has been delivered to each of the Banks, fairly present,
in conformity with generally accepted accounting principles applied on a basis
consistent with the financial statements referred to in subsection (a) of this
Section, the consolidated financial position of the Borrower and its
Subsidiaries as of such date and their consolidated results of operations and
cash flows for such six-month period (subject to normal year-end adjustments).
(c) Since July 2, 1994 there has been no material adverse change
in the business, financial position, results of operations or prospects of the
Borrower and its Subsidiaries, considered as a whole.
SECTION 4.05. Litigation. Except as specified in Schedule I
hereto, there is no action, suit or proceeding pending against, or to the
knowledge of the Borrower threatened against or affecting, the Borrower or any
of its Subsidiaries before any court or arbitrator or any governmental body,
agency or official in which there is a reasonable possibility of an adverse
decision which could materially adversely affect the business, consolidated
financial position or consolidated results of operations of the Borrower and
its Subsidiaries, considered as a whole, or which in any manner draws into
question the validity of this Agreement or the Notes.
SECTION 4.06. Compliance with ERISA. Each member of the ERISA
Group has fulfilled its obligations under the minimum funding standards of
ERISA and the Internal Revenue
34
Code with respect to each Plan and is in compliance in all material respects
with the presently applicable provisions of ERISA and the Internal Revenue Code
with respect to each Plan. No member of the ERISA Group has (i) sought a
waiver of the minimum funding standard under Section 412 of the Internal
Revenue Code in respect of any Plan, (ii) failed to make any contribution or
payment to any Plan or Multiemployer Plan or in respect of any Benefit
Arrangement, or made any amendment to any Plan or Benefit Arrangement, which
has resulted or could result in the imposition of a Lien or the posting of a
bond or other security under ERISA or the Internal Revenue Code or (iii)
incurred any liability under Title IV of ERISA other than a liability to the
PBGC for premiums under Section 4007 of ERISA.
SECTION 4.07. Environmental Matters. In the ordinary course of
its business, the Borrower conducts periodic reviews, which it considers
prudent and reasonable in light of the nature of the business, of the effect of
Environmental Laws on the business, operations and properties of the Borrower
and its Subsidiaries, in the course of which it identifies and evaluates
associated liabilities and costs (including, without limitation, any capital or
operating expenditures required for clean-up or closure of properties presently
or previously owned, any capital or operating expenditures required to achieve
or maintain compliance with environmental protection standards imposed by law
or as a condition of any license, permit or contract, any related constraints
on operating activities, including any periodic or permanent shutdown of any
facility or reduction in the level of or change in the nature of operations
conducted thereat and any actual or potential liabilities to third parties,
including employees, and any related costs and expenses). On the basis of this
review, the Borrower has reasonably concluded that Environmental Laws are
unlikely to have a material adverse effect on the business, financial
condition, results of operations or prospects of the Borrower and its
Subsidiaries, considered as a whole.
SECTION 4.08. Taxes. The Borrower and its Significant
Subsidiaries have filed all United States Federal income tax returns and all
other material tax returns which are required to be filed by them and have paid
all taxes due pursuant to such returns or pursuant to any assessment received
by the Borrower or any Significant Subsidiary, except for such amounts as may
be contested in good faith by appropriate proceedings, so long as collection
thereof is effectively stayed. The charges, accruals and reserves on the books
of the Borrower and its Subsidiaries
35
in respect of taxes or other governmental charges are, in the reasonable
opinion of the Borrower, adequate.
SECTION 4.09. Subsidiaries. Each of the Borrower's Material
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
SECTION 4.10. Not an Investment Company. The Borrower is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 4.11. Full Disclosure. All information heretofore
furnished by the Borrower to the Agent or any Bank for purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all such information hereafter furnished by the Borrower to the Agent or any
Bank will be, true and accurate in every material respect or based on
reasonable estimates on the date as of which such information is stated or
certified. The Borrower has disclosed to the Banks in writing any and all
facts which materially and adversely affect or may affect (to the extent the
Borrower can now reasonably foresee), the business, operations, prospects or
condition, financial or otherwise, of the Borrower and its Subsidiaries,
considered as a whole, or the ability of the Borrower to perform its
obligations under this Agreement.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment hereunder or
any amount payable under any Note remains unpaid:
SECTION 5.01. Information. The Borrower will deliver to each of
the Banks:
(a) as soon as available and in any event within 90 days after
the end of each fiscal year of the Borrower, a consolidated balance sheet
of the Borrower and its Subsidiaries as of the end of such fiscal year and
the related consolidated statements of earnings, retained earnings and cash
flows for such fiscal year, setting forth in each case in comparative form
the
36
figures for the previous fiscal year, all certified as to fairness of
presentation, generally accepted accounting principles and consistency by
Ernst & Young or other independent public accountants of nationally
recognized standing;
(b) as soon as available and in any event within 45 days after
the end of each of the first three quarters of each fiscal year of the
Borrower, a consolidated balance sheet of the Borrower and its Subsidiaries
as of the end of such quarter and the related consolidated statements of
earnings, retained earnings and cash flows for such quarter and for the
portion of the Borrower's fiscal year ended at the end of such quarter,
setting forth in each case in comparative form the figures for the
corresponding quarter and the corresponding portion of the Borrower's
previous fiscal year, all certified (subject to normal year-end
adjustments) as to fairness of presentation, generally accepted accounting
principles and consistency by the chief financial officer or the chief
accounting officer or the treasurer of the Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the
chief financial officer, the chief accounting officer or the treasurer of
the Borrower (i) setting forth in reasonable detail the calculations
required to establish whether the Borrower was in compliance with the
requirements of Sections 5.02 to 5.06, inclusive, on the date of such
financial statements and (ii) stating whether there exists on the date of
such certificate any Default and, if any Default then exists, setting forth
the details thereof and the action which the Borrower is taking or proposes
to take with respect thereto;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements (i)
whether anything has come to their attention to cause them to believe that
there existed on the date of such statements any Default and (ii)
confirming the calculations set forth in the officer's certificate
delivered simultaneously therewith pursuant to clause (c) above;
(e) forthwith upon the occurrence of any Default, a certificate
of the chief financial officer, the chief accounting officer or the
treasurer of the Borrower
37
setting forth the details thereof and the action which the Borrower is
taking or proposes to take with respect thereto;
(f) promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
(g) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements
on Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or
their equivalents) which the Borrower shall have filed with the Securities
and Exchange Commission;
(h) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined
in Section 4043 of ERISA) with respect to any Plan which might constitute
grounds for a termination of such Plan under Title IV of ERISA, or knows
that the plan administrator of any Plan has given or is required to give
notice of any such reportable event, a copy of the notice of such
reportable event given or required to be given to the PBGC; (ii) receives
notice of complete or partial withdrawal liability under Title IV of ERISA
or notice that any Multiemployer Plan is in reorganization, is insolvent or
has been terminated, a copy of such notice; (iii) receives notice from the
PBGC under Title IV of ERISA of an intent to terminate, impose liability
(other than for premiums under Section 4007 of ERISA) in respect of, or
appoint a trustee to administer, any Plan, a copy of such notice; (iv)
applies for a waiver of the minimum funding standard under Section 412 of
the Internal Revenue Code, a copy of such application; (v) gives notice of
intent to terminate any Plan under Section 4041(c) of ERISA, a copy of such
notice and other information filed with the PBGC; (vi) gives notice of
withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of such
notice; or (vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which has resulted or could
result in the imposition of a Lien or the posting of a bond or other
security, a certificate of the chief financial officer, treasurer or the
chief accounting officer of the Borrower setting forth details as to such
occurrence and action, if any, which the Borrower or
38
applicable member of the ERISA Group is required or proposes to take; and
(i) from time to time such additional information regarding the
financial position or business of the Borrower and its Subsidiaries as the
Agent, at the request of any Bank, may reasonably request.
SECTION 5.02. Debt. At no time will the ratio of Consolidated
Debt to Consolidated Net Worth exceed 2:1.
SECTION 5.03. Minimum Consolidated Net Worth. Consolidated Net
Worth will not at any time be less than the "Minimum Compliance Level." The
Minimum Compliance Level shall be $875,000,000, adjusted at the end of each
fiscal quarter of the Borrower, beginning with and including the Borrower's
fiscal quarter ending October 1, 1993, upward by an amount equal to 40% of the
Consolidated Net Income (if positive) for such fiscal quarter. The foregoing
increases in the Minimum Compliance Level shall be fully cumulative, and no
reduction shall be made on account of any negative Consolidated Net Income for
any fiscal quarter.
SECTION 5.04. Negative Pledge. Neither the Borrower nor any
Subsidiary will create, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement securing Debt
outstanding on the date of this Agreement in an aggregate principal amount
not exceeding $25,000,000;
(b) any Lien existing on any asset of any corporation at the time
such corporation becomes a Subsidiary and not created in contemplation of
such event;
(c) any Lien on any asset securing Debt incurred or assumed for
the purpose of financing all or any part of the cost of acquiring such
asset, provided that such Lien attaches to such asset concurrently with or
within 90 days after the acquisition thereof;
(d) any Lien on any asset of any corporation existing at the time
such corporation is merged or consolidated with or into the Borrower or a
Subsidiary and not created in contemplation of such event;
39
(e) any Lien existing on any asset prior to the acquisition
thereof by the Borrower or a Subsidiary and not created in contemplation of
such acquisition;
(f) any Lien arising out of the refinancing, extension, renewal
or refunding of any Debt secured by any Lien permitted by any of the
foregoing clauses of this Section, provided that such Debt is not increased
and is not secured by any additional assets;
(g) Liens arising in the ordinary course of its business which
(i) do not secure Debt, (ii) do not secure any obligation in an amount
exceeding $50,000,000 and (iii) do not in the aggregate materially detract
from the value of its assets or materially impair the use thereof in the
operation of its business;
(h) any Lien on any asset of a Subsidiary securing Debt owed to
the Borrower or a Wholly-Owned Subsidiary; and
(i) Liens not otherwise permitted by the foregoing clauses of
this Section securing Debt in an aggregate principal amount at any time
outstanding not to exceed 5% of Consolidated Net Worth.
SECTION 5.05. Consolidations, Mergers and Sales of Assets. The
Borrower will not (i) consolidate or merge with or into any other Person;
provided that the Borrower may merge with another Person if (A) the Borrower is
the corporation surviving such merger and is not a subsidiary of another person
and (B) immediately after giving effect to such merger, no Default shall have
occurred and be continuing; or (ii) sell, lease or otherwise transfer, directly
or indirectly, Significant Assets to any other Person, except for sales, leases
and other transfers to a Wholly-Owned Subsidiary.
SECTION 5.06. Limitation on Subsidiary Debt. The Borrower will
not permit any Subsidiary to become or be liable in respect of any Debt except:
(a) Debt of any corporation outstanding at the time such
corporation becomes a Subsidiary and not created in contemplation of such
event;
(b) Debt of any corporation outstanding at the time such
corporation is merged or consolidated with or into a Subsidiary and not
created in contemplation of such event;
40
(c) Debt secured by a Lien permitted by Section 5.04;
(d) Debt owing to the Borrower or a Wholly-Owned Subsidiary; and
(e) Debt not otherwise permitted by the foregoing clauses of this
Section in an aggregate outstanding principal amount for all Subsidiaries
at no time exceeding $150,000,000.
The foregoing is subject to the further limitations that (i) for purposes of
this Section, any preferred stock of a Subsidiary held by a Person other than
the Borrower or a Wholly-Owned Subsidiary shall be included, at the higher of
its voluntary or involuntary liquidation value, in the Debt of such Subsidiary;
and (ii) Debt permitted by this Section does not include a refunding, renewal
or extension of such Debt (so that any such new Debt must fall independently
within one of the above exceptions).
SECTION 5.07. Use of Proceeds. The proceeds of the Loans made
under this Agreement will be used by the Borrower for general corporate
purposes, including, without limitation, acquisitions and repurchases of
outstanding shares of its common stock. None of such proceeds will be used in
violation of applicable law.
SECTION 5.08. Maintenance of Property; Insurance. The Borrower
will keep, and will cause each Subsidiary to keep, all property useful and
necessary in its business in good working order and condition, ordinary wear
and tear excepted; will maintain, and will cause each Subsidiary to maintain
(either in the name of the Borrower or in such Subsidiary's own name) with
financially sound and reputable insurance companies, insurance on all their
property in at least such amounts and against at least such risks as are
usually insured against in the same general area by companies of established
repute engaged in the same or a similar business; provided that the Borrower
shall have the right to self-insure or use a captive insurer in order to meet
such insurance requirements so long as the Borrower or such captive insurer
provides the Banks with reasonable proof of financial responsibility. The
Borrower will furnish to the Banks, upon written request from the Agent, full
information as to the insurance carried.
SECTION 5.09. Payment of Taxes. The Borrower will pay, and
will cause each Significant Subsidiary to pay, all their respective tax
liabilities, except where the same may be contested in good faith by
appropriate proceedings,
41
and will maintain, and will cause each Significant Subsidiary to maintain, in
accordance with generally accepted accounting principles, appropriate reserves
for the accrual of the same.
SECTION 5.10. Compliance with Laws. The Borrower will comply,
and cause each Subsidiary to comply, in all material respects with all
applicable laws, ordinances, rules, regulations, and requirements of
governmental authorities (including, without limitation, Environmental Laws and
ERISA and the rules and regulations thereunder) except where (i) the necessity
of compliance therewith is contested in good faith by appropriate proceedings
or (ii) appropriate steps are being taken to correct any failure to comply
therewith and such failure does not have a material adverse effect on the
business, consolidated financial position or consolidated results of operations
of the Borrower and its Subsidiaries.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following
events ("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay any principal of any Loan when
due, or interest on any Loan, any fees or any other amount payable
hereunder within five days of the due date thereof;
(b) the Borrower shall fail to observe or perform any covenant
contained in Sections 5.02 to 5.07, inclusive;
(c) the Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by clause
(a) or (b) above) for 20 days after notice thereof has been given to the
Borrower by the Agent at the request of any Bank;
(d) any representation, warranty, certification or statement made
by the Borrower in this Agreement or in any certificate, financial
statement or other document delivered pursuant to this Agreement shall
prove to have been incorrect in any material respect when made (or deemed
made);
42
(e) the Borrower or any Subsidiary shall fail to make any payment
in respect of any Material Debt when due or within any applicable grace
period;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Debt or enables the holder of
such Debt or any Person acting on such holder's behalf to accelerate the
maturity thereof;
(g) the Borrower or any Significant Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, or shall consent to
any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it,
or shall make a general assignment for the benefit of creditors, or shall
fail generally or admits in writing its inability to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing;
(h) an involuntary case or other proceeding shall be commenced
against the Borrower or any Significant Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed and
unstayed for a period of 60 days; or an order for relief shall be entered
against the Borrower or any Significant Subsidiary under the federal
bankruptcy laws as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $10,000,000 which it shall have
become liable to pay under Title IV of ERISA; or notice of intent to
terminate a Material Plan shall be filed under Title IV of ERISA by any
member of the ERISA Group, any plan administrator or any combination of the
foregoing; or the PBGC shall institute proceedings under Title IV of ERISA
to terminate, to impose liability (other than for
43
premiums under Section 4007 of ERISA) in respect of, or to cause a trustee
to be appointed to administer any Material Plan; or a condition shall exist
by reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated; or there shall
occur a complete or partial withdrawal from, or a default, within the
meaning of Section 4219(c)(5) of ERISA, with respect to, one or more
Multiemployer Plans which could cause one or more members of the ERISA
Group to incur a current payment obligation in excess of $10,000,000;
(j) a judgment or order for the payment of money in excess of
$10,000,000 shall be rendered against the Borrower or any Subsidiary and
such judgment or order shall continue unsatisfied and the execution or
enforcement thereof shall no longer be effectively stayed for a period of
10 days (or such other period of time as may be provided under applicable
state law for obtaining a stay of judgment); or
(k) (i) any person or group of persons (within the meaning of
Section 13 or 14 of the Securities Exchange Act of 1934, as amended, and
the regulations thereunder), other than the Trust, shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under said Act) of 35% or more of the
outstanding shares of voting stock of the Borrower; or (ii) as of any date
a majority of the Board of Directors of the Borrower consists of
individuals who were not either (A) directors of the Borrower as of the
corresponding date of the previous year, (B) selected or nominated to
become directors by the Board of Directors of the Borrower of which a
majority consisted of individuals described in clause (A), or (C) selected
or nominated to become directors by the Board of Directors of the Borrower
of which a majority consisted of individuals described in clauses (A) and
(B);
then and in every such event, the Agent shall (i) if requested by Banks having
more than 50% in aggregate amount of the Commitments, by notice to the Borrower
terminate the Commitments and they shall thereupon terminate, and (ii) if
requested by Banks holding Notes evidencing more than 50% in aggregate
principal amount of the Loans, by notice to the Borrower declare the Notes
(together with accrued interest thereon) to be, and the Notes shall thereupon
become, immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower;
provided that in the case of any of
44
the Events of Default specified in clause (g) or (h) above with respect to the
Borrower, without any notice to the Borrower or any other act by the Agent or
the Banks, the Commitments shall thereupon terminate and the Notes (together
with accrued interest thereon) shall become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.
SECTION 6.02. Notice of Default. The Agent shall give notice to
the Borrower under Section 6.01(c) promptly upon being requested to do so by
any Bank and shall thereupon notify all the Banks thereof.
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization. Each Bank
irrevocably appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement and the Notes as
are delegated to the Agent by the terms hereof or thereof, together with all
such powers as are reasonably incidental thereto.
SECTION 7.02. Agent and Affiliates. Morgan Guaranty Trust
Company of New York shall have the same rights and powers under this Agreement
as any other Bank and may exercise or refrain from exercising the same as
though it were not the Agent, and Morgan Guaranty Trust Company of New York and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of business with the Borrower or any Subsidiary or Affiliate of the
Borrower as if it were not the Agent hereunder.
SECTION 7.03. Action by Agent. The obligations of the Agent
hereunder are only those expressly set forth herein. Without limiting the
generality of the foregoing, the Agent shall not be required to take any action
with respect to any Default, except as expressly provided in Article VI.
SECTION 7.04. Consultation with Experts. The Agent may consult
with legal counsel (who may be counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
45
SECTION 7.05. Liability of Agent. Neither the Agent nor any of
its Affiliates nor any of their respective directors, officers, agents or
employees shall be liable for any action taken or not taken by it in connection
herewith (i) with the consent or at the request of the Required Banks or (ii)
in the absence of its own gross negligence or willful misconduct. Neither the
Agent nor any of its Affiliates nor any of their respective directors,
officers, 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 Article III,
except receipt of items required to be delivered to the Agent; or (iv) the
validity, effectiveness or genuineness of this Agreement, the Notes or any
other instrument or writing furnished in connection herewith. The 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.
SECTION 7.06. Indemnification. Each Bank shall, ratably in
accordance with its Commitment, indemnify the Agent, its Affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrower) against any cost, expense (including counsel fees
and disbursements), claim, demand, action, loss or liability (except such as
result from such indemnitees' gross negligence or willful misconduct) that such
indemnitees may suffer or incur in connection with this Agreement or any action
taken or omitted by such indemnitees hereunder.
SECTION 7.07. Credit Decision. Each Bank acknowledges that it
has, independently and without reliance upon the Agent or any other Bank, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking any action under this Agreement.
SECTION 7.08. Successor Agent. The Agent may resign at any time
by giving notice thereof to the Banks and the Borrower. Upon any such
resignation, the Required Banks
46
shall have the right with the consent of the Borrower to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Required
Banks with the consent of the Borrower and shall have accepted such
appointment, within 30 days after the retiring Agent's giving of notice of
resignation, then the retiring Agent may, on behalf of the Banks and in
consultation with the Borrower, appoint a successor Agent, which shall be a
commercial bank organized or licensed under the laws of the United States of
America or of any State thereof and having a combined capital and surplus of at
least $50,000,000. Upon the acceptance of its appointment as Agent hereunder
by a successor Agent, such successor Agent shall thereupon succeed to and
become vested with all the rights and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Article shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent.
SECTION 7.09. Agent's Fee. The Borrower shall pay to the Agent
for its own account fees in the amounts and at the times previously agreed upon
between the Borrower and the Agent.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period for any Fixed
Rate Loan:
(a) the Agent is advised by the Reference Banks that deposits in
dollars (in the applicable amounts) are not being offered to the Reference
Banks in the relevant market for such Interest Period, or
(b) in the case of CD Loans or Euro-Dollar Loans, Banks having
50% or more of the aggregate amount of the affected Loans advise the Agent
that the Adjusted CD Rate or the Adjusted London Interbank Offered Rate, as
the case may be, as determined by the Agent will not adequately and fairly
reflect the cost to such Banks of funding their CD Loans or Euro-Dollar
Loans, as the case may be, for such Interest Period,
the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies
47
the Borrower that the circumstances giving rise to such suspension no longer
exist, (i) the obligations of the Banks to make CD Loans or Euro-Dollar Loans,
as the case may be, or to convert outstanding Loans into CD Loans or
Euro-Dollar Loans, as the case may be, shall be suspended and (ii) each
outstanding Euro-Dollar Loan shall be converted into a Base Rate Loan on the
last day of the then current Interest Period applicable thereto. Unless the
Borrower notifies the Agent at least two Domestic Business Days before the date
of any Fixed Rate Borrowing for which a Notice of Borrowing has previously been
given that it elects not to borrow on such date, (x) if such Fixed Rate
Borrowing is a Committed Borrowing, such Borrowing shall instead be made as a
Base Rate Borrowing and (y) if such Fixed Rate Borrowing is a Money Market
LIBOR Borrowing, the Money Market LIBOR Loans comprising such Borrowing shall
bear interest for each day from and including the first day to but excluding
the last day of the Interest Period applicable thereto at the Base Rate for
such day.
SECTION 8.02. Illegality. If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or its Euro-Dollar Lending Office) with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency shall make it unlawful or
impossible for any Bank (or its Euro-Dollar Lending Office) to make, maintain
or fund its Euro-Dollar Loans and such Bank shall so notify the Agent, the
Agent shall forthwith give notice thereof to the other Banks and the Borrower,
whereupon until such Bank notifies the Borrower and the Agent that the
circumstances giving rise to such suspension no longer exist, the obligation of
such Bank to make Euro-Dollar Loans, or to convert outstanding Loans into
Euro-Dollar Loans, shall be suspended. Before giving any notice to the Agent
pursuant to this Section, such Bank shall designate a different Euro-Dollar
Lending Office if such designation will avoid the need for giving such notice
and will not, in the judgment of such Bank, be otherwise disadvantageous to
such Bank. If such notice is given, each Euro-Dollar Loan of such Bank then
outstanding shall be converted to a Base Rate Loan either (a) on the last day
of the then current Interest Period applicable to such Euro-Dollar Loan if such
Bank may lawfully continue to maintain and fund such Loan to such day or (b)
immediately if such Bank shall determine that it may
48
not lawfully continue to maintain and fund such Loan to such day.
SECTION 8.03. Increased Cost and Reduced Return. (a) If on or
after (x) the date hereof, in the case of any Committed Loan or any obligation
to make Committed Loans or (y) the date of the related Money Market Quote, in
the case of any Money Market Loan, the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall impose, modify
or deem applicable any reserve (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve System,
but excluding (i) with respect to any CD Loan any such requirement included in
an applicable Domestic Reserve Percentage and (ii) with respect to any
Euro-Dollar Loan any such requirement included in an applicable Euro-Dollar
Reserve Percentage), special deposit, insurance assessment (excluding, with
respect to any CD Loan, any such requirement reflected in an applicable
Assessment Rate) or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Bank (or its Applicable Lending
Office) or shall impose on any Bank (or its Applicable Lending Office) or on
the United States market for certificates of deposit or the London interbank
market any other condition affecting its Fixed Rate Loans, its Note or its
obligation to make Fixed Rate Loans, and the result of any of the foregoing is
to increase the cost to such Bank (or its Applicable Lending Office) of making
or maintaining any Fixed Rate Loan, or to reduce the amount of any sum received
or receivable by such Bank (or its Applicable Lending Office) under this
Agreement or under its Note with respect thereto, by an amount deemed by such
Bank to be material, then, within 15 days after demand by such Bank (with a
copy to the Agent), the Borrower shall pay to such Bank such additional amount
or amounts as will compensate such Bank for such increased cost or reduction.
(b) If any Bank shall have determined that, after the date
hereof, the adoption of any applicable law, rule or regulation of general
applicability regarding capital adequacy, or any change in any such law, rule
or regulation, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or
49
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on capital of such Bank (or its Parent) as a consequence of such Bank's
obligations hereunder to a level below that which such Bank (or its Parent)
could have achieved but for such adoption, change, request or directive (taking
into consideration its policies with respect to capital adequacy) by an amount
deemed by such Bank to be material, then from time to time, within 15 days
after demand by such Bank (with a copy to the Agent), the Borrower shall pay to
such Bank such additional amount or amounts as will compensate such Bank (or
its Parent) for such reduction.
(c) Each Bank will promptly notify the Borrower and the Agent of
any event of which it has knowledge, occurring after the date hereof, which
will entitle such Bank to compensation pursuant to this Section and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. A
certificate of any Bank claiming compensation under this Section and setting
forth the additional amount or amounts to be paid to it hereunder shall be
conclusive in the absence of manifest error. In determining such amount, such
Bank may use any reasonable averaging and attribution methods.
SECTION 8.04. Taxes. (a) Any and all payments by the Borrower to
or for the account of any Bank or the Agent hereunder or under any Note shall
be made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges or withholdings
imposed by any governmental or taxing authority and all liabilities with
respect thereto, excluding, in the case of each Bank and the Agent, taxes
imposed on its income, and franchise taxes imposed on it, by the jurisdiction
under the laws of which such Bank or the Agent (as the case may be) is
organized or any political subdivision thereof and, in the case of each Bank,
taxes imposed on its income, and franchise or similar taxes imposed on it, by
the jurisdiction of such Bank's Applicable Lending Office or any political
subdivision thereof (all such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under any Note to any Bank or
50
the Agent, (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 8.04) such Bank or the Agent (as the case may
be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law and (iv) the Borrower
shall furnish to the Agent, at its address referred to in Section 9.01, the
original or a certified copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, or charges
or similar levies which arise from any payment made hereunder or under any Note
or from the execution or delivery of, or otherwise with respect to, this
Agreement or any Note (hereinafter referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Bank and the Agent for
the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable
under this Section 8.04) paid by such Bank or the Agent (as the case may be)
and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto. This indemnification shall be made within
15 days from the date such Bank or the Agent (as the case may be) makes demand
therefor.
(d) Each Bank organized under the laws of a jurisdiction outside
the United States, on or prior to the date of its execution and delivery of
this Agreement in the case of each Bank listed on the signature pages hereof
and on or prior to the date on which it becomes a Bank in the case of each
other Bank, and from time to time thereafter if requested in writing by the
Borrower (but only so long as such Bank remains lawfully able to do so), shall
provide the Borrower with Internal Revenue Service form 1001 or 4224, as
appropriate, or any successor form prescribed by the Internal Revenue Service,
certifying that such Bank is entitled to benefits under an income tax treaty to
which the United States is a party which reduces the rate of withholding tax on
payments of interest or certifying that the income receivable pursuant to this
Agreement is effectively connected with the conduct of a trade or business in
the United States. If the form provided by a Bank at the time such Bank first
becomes a party to this Agreement indicates a United States interest
withholding tax
51
rate in excess of zero, withholding tax at such rate shall be considered
excluded from "Taxes" as defined in Section 8.04(a).
(e) For any period with respect to which a Bank has failed to
provide the Borrower with the appropriate form pursuant to Section 8.04(d)
(unless such failure is due to a change in treaty, law or regulation occurring
subsequent to the date on which a form originally was required to be provided),
such Bank shall not be entitled to indemnification under Section 8.04(a) or
8.04(c) with respect to Taxes imposed by the United States; provided, however,
that should a Bank, which is otherwise exempt from or subject to a reduced rate
of withholding tax, become subject to Taxes because of its failure to deliver a
form required hereunder, the Borrower shall take such steps as such Bank shall
reasonably request to assist such Bank to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to or
for the account of any Bank pursuant to this Section 8.04, then such Bank will
change the jurisdiction of its Applicable Lending Office so as to eliminate or
reduce any such additional payment which may thereafter accrue if such change,
in the judgment of such Bank, is not otherwise disadvantageous to such Bank.
SECTION 8.05. Base Rate Loans Substituted for Affected Fixed Rate
Loans. If (i) the obligation of any Bank to make Euro-Dollar Loans has been
suspended pursuant to Section 8.02 or (ii) any Bank has demanded compensation
under Section 8.03 or 8.04 with respect to its CD Loans or Euro-Dollar Loans
and the Borrower shall, by at least four Euro-Dollar Business Days' prior
notice to such Bank through the Agent, have elected that the provisions of this
Section shall apply to such Bank, then, unless and until such Bank notifies the
Borrower that the circumstances giving rise to such suspension or demand for
compensation no longer exist:
(a) all Loans which would otherwise be made by such Bank as (or
continued as or converted into) CD Loans or Euro-Dollar Loans, as the case may
be, shall be made instead as Base Rate Loans (on which interest and principal
shall be payable contemporaneously with the related Fixed Rate Loans of the
other Banks), and
(b) after each of its CD Loans or Euro-Dollar Loans, as the case
may be, has been repaid (or converted to a Base Rate Loan), all payments of
principal which would otherwise be applied to repay such Fixed Rate Loans shall
be applied to repay its Base Rate Loans instead.
52
If such Bank notifies the Borrower that the circumstances giving rise to such
notice no longer apply, the principal amount of each such Base Rate Loan shall
be converted into a CD Loan or Euro-Dollar Loan, as the case may be, on the
first day of the next succeeding Interest Period applicable to the related CD
Loans or Euro-Dollar Loans of the other Banks.
SECTION 8.06. Substitution of Bank. If (i) the obligation of any
Bank to make Euro-Dollar Loans has been suspended pursuant to Section 8.02,
(ii) any Bank has demanded compensation under Section 8.03 or 8.04 or (iii) any
Bank shall not have made available its share of any Borrowing within two
Domestic Business Days after the date of such Borrowing, the Borrower shall
have the right, with the assistance of the Agent, to appoint a substitute bank
or banks mutually satisfactory to the Borrower and the Agent (which may be one
or more of the Banks) to purchase the Note and assume the Commitment of such
Bank.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
telex, facsimile transmission or similar writing) and shall be given to such
party: (x) in the case of the Borrower or the Agent, at its address, facsimile
number or telex number set forth on the signature pages hereof, (y) in the case
of any Bank, at its address, facsimile number or telex number set forth in its
Administrative Questionnaire or (z) in the case of any party, such other
address, facsimile number or telex number as such party may hereafter specify
for the purpose by notice to the Agent and the Borrower. Each such notice,
request or other communication shall be effective (i) if given by telex, when
such telex is transmitted to the telex number specified in this Section and the
appropriate answerback is received, (ii) if given by facsimile transmission,
when transmitted to the facsimile number specified in this Section and
confirmation of receipt is received, (iii) if given by mail, 72 hours after
such communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (iv) if given by any other means, when delivered at
the address specified in this Section; provided that notices to the Agent under
Article II or Article VIII shall not be effective until received.
53
SECTION 9.02. No Waivers. No failure or delay by the Agent or
any Bank in exercising any right, power or privilege hereunder or under any
Note 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 provided shall
be cumulative and not exclusive of any rights or remedies provided by law.
SECTION 9.03. Expenses; Indemnification. (a) The Borrower shall
pay (i) all reasonable out-of-pocket expenses of the Agent, including fees and
disbursements of special counsel for the Agent, in connection with the
preparation and administration of this Agreement, any waiver or consent
hereunder or any amendment hereof or any Default or alleged Default hereunder
and (ii) if an Event of Default occurs, all out-of-pocket expenses incurred by
the Agent and each Bank, including fees and disbursements of counsel, in
connection with such Event of Default and collection, bankruptcy, insolvency
and other enforcement proceedings resulting therefrom.
(b) The Borrower agrees to indemnify the Agent and each Bank,
their respective Affiliates and the respective directors, officers, agents and
employees of the foregoing (each an "Indemnitee") and hold each Indemnitee
harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by such Indemnitee in
connection with any investigative, administrative or judicial proceeding
(whether or not such Indemnitee shall be designated a party thereto) brought or
threatened relating to or arising out of this Agreement or any actual or
proposed use of proceeds of Loans hereunder; provided that no Indemnitee shall
have the right to be indemnified hereunder for such Indemnitee's own gross
negligence or willful misconduct as determined by a court of competent
jurisdiction.
SECTION 9.04. Sharing of Set-Offs. Each Bank agrees that if it
shall, by exercising any right of set-off or counterclaim or otherwise, receive
payment of a proportion of the aggregate amount of principal and interest due
with respect to any Note held by it which is greater than the proportion
received by any other Bank in respect of the aggregate amount of principal and
interest due with respect to any Note held by such other Bank, the Bank
receiving such proportionately greater payment shall purchase such
participations in the Notes held by the other Banks, and such other adjustments
shall be made, as may be
54
required so that all such payments of principal and interest with respect to
the Notes held by the Banks shall be shared by the Banks pro rata; provided
that nothing in this Section shall impair the right of any Bank to exercise any
right of set-off or counterclaim it may have and to apply the amount subject to
such exercise to the payment of indebtedness of the Borrower other than its
indebtedness under the Notes. The Borrower agrees, to the fullest extent it
may effectively do so under applicable law, that any holder of a participation
in a Note, whether or not acquired pursuant to the foregoing arrangements, may
exercise rights of set-off or counterclaim and other rights with respect to
such participation as fully as if such holder of a participation were a direct
creditor of the Borrower in the amount of such participation.
SECTION 9.05. Amendments and Waivers. Any provision of this
Agreement or the Notes may be amended or waived if, but only if, such amendment
or waiver is in writing and is signed by the Borrower and the Required Banks
(and, if the rights or duties of the Agent are affected thereby, by the Agent);
provided that no such amendment or waiver shall, unless signed by all the
Banks, (i) increase or decrease the Commitment of any Bank (except for a
ratable decrease in the Commitments of all Banks) or subject any Bank to any
additional obligation, (ii) reduce the principal of or rate of interest on any
Committed Loan or any fees hereunder, (iii) postpone the date fixed for any
payment of principal of or interest on any Committed Loan or any fees hereunder
or for termination of any Commitment or (iv) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Notes, or the
number of Banks, which shall be required for the Banks or any of them to take
any action under this Section or any other provision of this Agreement; and
provided further that any provision of this Agreement or the Notes affecting
any outstanding Money Market Loan may be amended or waived if, but only if,
such amendment or waiver is in writing and is signed by the Borrower and the
Bank making such Loan and, if the rights or duties of the Agent are affected
thereby, by the Agent.
SECTION 9.06. Successors and Assigns. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, except that the Borrower
may not assign or otherwise transfer any of its rights under this Agreement
without the prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment
or any or all of
55
its Loans. In the event of any such grant by a Bank of a participating
interest to a Participant, whether or not upon notice to the Borrower and the
Agent, such Bank shall remain responsible for the performance of its
obligations hereunder, and the Borrower and the Agent shall continue to deal
solely and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement. Any agreement pursuant to which any Bank may
grant such a participating interest shall provide that such Bank shall retain
the sole right and responsibility to enforce the obligations of the Borrower
hereunder including, without limitation, the right to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
participation agreement may provide that such Bank will not agree to any
modification, amendment or waiver of this Agreement described in clause (i),
(ii) or (iii) of Section 9.05 without the consent of the Participant. The
Borrower agrees that each Participant shall, to the extent provided in its
participation agreement, be entitled to the benefits of Article VIII with
respect to its participating interest. An assignment or other transfer which
is not permitted by subsection (c) or (d) below shall be given effect for
purposes of this Agreement only to the extent of a participating interest
granted in accordance with this subsection (b). Any Bank which grants a
participating interest in accordance with this subsection (b) shall notify the
Borrower of the amount thereof and the Participant; provided that the failure
of a Bank to give such notice shall not affect the validity of its grant or the
rights of the Participant with respect to such participating interest.
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part of all (such
proportionate part to include a Commitment of not less than $10,000,000), of
its rights and obligations under this Agreement and the Notes, and such
Assignee shall assume such rights and obligations, pursuant to an Assignment
and Assumption Agreement in substantially the form of Exhibit G hereto executed
by such Assignee and such transferor Bank, with (and subject to) the subscribed
consent of the Borrower and the Agent; provided that if an Assignee is an
Affiliate of such transferor Bank, no such consent shall be required; and
provided further that such assignment may, but need not, include rights of the
transferor Bank in respect of outstanding Money Market Loans. Upon execution
and delivery of such instrument and payment by such Assignee to such transferor
Bank of an amount equal to the purchase price agreed between such transferor
Bank and such Assignee, such Assignee shall be a Bank party to this Agreement
and shall have all the rights and obligations of a Bank with a Commitment as
set forth in
56
such instrument of assumption, and the transferor Bank shall be released from
its obligations hereunder to a corresponding extent, and no further consent or
action by any party shall be required. Upon the consummation of any assignment
pursuant to this subsection (c), the transferor Bank, the Agent and the
Borrower shall make appropriate arrangements so that, if required, a new Note
is issued to the Assignee. In connection with any such assignment, the
transferor Bank shall pay to the Agent an administrative fee for processing
such assignment in the amount of $2,500. If the Assignee is not incorporated
under the laws of the United States of America or a state thereof, it shall,
prior to the first date on which interest or fees are payable hereunder for its
account, deliver to the Borrower and the Agent certification as to exemption
from deduction or withholding of any United States federal income taxes in
accordance with Section 8.04.
(d) Any Bank may at any time assign all or any portion of its
rights under this Agreement and its Note to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's
rights shall be entitled to receive any greater payment under Section 8.03 or
8.04 than such Bank 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 by reason of the provisions of Section 8.02, 8.03 or 8.04
requiring such Bank to designate a different Applicable Lending Office under
certain circumstances or at a time when the circumstances giving rise to such
greater payment did not exist.
SECTION 9.07. Collateral. Each of the Banks represents to the
Agent and each of the other Banks that it in good faith is not relying upon any
"margin stock" (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 9.08. Governing Law; Submission to Jurisdiction. This
Agreement and each Note shall be governed by and construed in accordance with
the laws of the STATE OF NEW YORK. The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York State court sitting in New York City
for purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. The Borrower irrevocably
waives, to the fullest extent permitted by law, any objection which it may now
or hereafter have to
57
the laying of the venue of any such proceeding brought in such a court and any
claim that any such proceeding brought in such a court has been brought in an
inconvenient forum.
SECTION 9.09. Counterparts; Integration. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
58
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day and
year first above written.
V.F. CORPORATION
By /s/ L. R. Pugh
--------------------------------
Title: Chairman and C.E.O.
By /s/ F.C. Pickard III
--------------------------------
Title: Vice President and
Treasurer
1047 North Park Road
P.O. Box 1022
Wyomissing, Pennsylvania 19610
Rapifax number: (610) 378-0984
59
Commitments
$100,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Stephen J. Kenneally
--------------------------------
Title: Vice President
$30,000,000 ABN AMRO BANK, N.V.
By /s/ John W. Deegan
--------------------------------
Title: Vice President
By /s/ David W. Stack
--------------------------------
Title: Corporate Banking
Officer
$20,000,000 AMSOUTH BANK, N.A.
By /s/ R. Mark Graf
--------------------------------
Title: Vice President
$30,000,000 BANK BRUSSELS LAMBERT,
NEW YORK BRANCH
By /s/ Eric Hollanders
--------------------------------
Title: Senior Vice President
By /s/ Eileen J. Stekeur
--------------------------------
Title: Assistant Vice President
$20,000,000 CORESTATES BANK, N.A.
By /s/ James P. Richards
--------------------------------
Title: Vice President
60
Commitments
$50,000,000 CREDIT LYONNAIS CAYMAN ISLAND BRANCH
By /s/ Mary E. Collier
--------------------------------
Title: Vice President and
Manager
and
CREDIT LYONNAIS NEW YORK BRANCH
By /s/ Mary E. Collier
--------------------------------
Title: Vice President
$50,000,000 CREDIT SUISSE
By /s/ Eileen O'Connell Fox
--------------------------------
Title: Member of Senior
Management
By /s/ Jay Chall
--------------------------------
Title: Member of Senior
Management
$20,000,000 CRESTAR BANK
By /s/ Julian N. Holland, Jr.
-------------------------------
Title: Vice President
$30,000,000 DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES
By /s/ Robert Grella
--------------------------------
Title: Vice President
By /s/ Deborah Slusarczyk
--------------------------------
Title: Vice President
61
Commitments
-----------
$30,000,000 THE FIRST NATIONAL BANK
OF CHICAGO
By /s/ Cathy Frank
--------------------------------
Title: Corporate Banking
Officer
$20,000,000 FIRST UNION NATIONAL BANK
OF NORTH CAROLINA
By /s/ Laurie C. Hart
--------------------------------
Title: Vice President
$50,000,000 THE FUJI BANK, LIMITED
By /s/ Takashi Nagao
--------------------------------
Title: Vice President and
Manager
$30,000,000 ISTITUTO BANCARIO SAN PAOLO
DI TORINO SPA
By /s/ Gerard M. Mckenna
--------------------------------
Title: Vice President
$40,000,000 MERIDIAN BANK
By /s/ Barbara H. Pattison
--------------------------------
Title: Vice President
62
Commitments
-----------
$50,000,000 NATIONSBANK OF NORTH CAROLINA, N.A.
By /s/ J. Timothy Martin
--------------------------------
Title: Senior Vice President
$70,000,000 PNC BANK, NATIONAL ASSOCIATION
By /s/ Robert Q. Reilly
--------------------------------
Title: Vice President
$30,000,000 SOCIETE GENERALE
By /s/ Robert L. Petersen
--------------------------------
Title: Vice President and
Relationship Manager
$30,000,000 UNITED MISSOURI BANK, N.A.
By /s/ Joseph W. "Whit" McCoskrie
--------------------------------
Title: Executive Vice President
$50,000,000 WACHOVIA BANK OF NORTH CAROLINA
By /s/ Robert G. Brookby
--------------------------------
Title: Executive Vice President
63
Commitments
-----------
-----------------
Total Commitments
$750,000,000
=================
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By /s/ Stephen J. Kenneally
--------------------------------
Title: Vice President
60 Wall Street
New York, New York 10260
Attention:
Telex number: 177615 MGT UT
64
SCHEDULE I
1. Golden Trade S.R.L. and Breaker Texas Finishing Corporation v. Lee Apparel
Company and Blue Bell, No. 90 CIV 6291 (JMC), filed on October 1, 1990 in
the United States District Court for the Southern District of New York.
2. Warnaco Inc. and Warnaco International Inc. v. VF Corporation and Vives
Vidal, S.A. a/k/a Vivesa, No. 93 CIV 4605 filed on July 8, 1993 in the
United States District Court for the Southern District of New York.
EXHIBIT A
NOTE
New York, New York
, 19__
For value received, V.F. CORPORATION, a Pennsylvania corporation
(the "Borrower"), promises to pay to the order of
(the "Bank"), for the account of its Applicable Lending Office, the unpaid
principal amount of each Loan made by the Bank to the Borrower pursuant to the
Credit Agreement referred to below on the maturity date therefor specified in
the Credit Agreement. The Borrower promises to pay interest on the unpaid
principal amount of each such Loan on the dates and at the rate or rates
provided for in the Credit Agreement. All such payments of principal and
interest shall be made in lawful money of the United States in Federal or other
immediately available funds at the office of Morgan Guaranty Trust Company of
New York, 60 Wall Street, New York, New York.
All Loans made by the Bank, the respective types and maturities
thereof and all repayments of the principal thereof shall be recorded by the
Bank and, if the Bank so elects in connection with any transfer or enforcement
hereof, appropriate notations to evidence the foregoing information with
respect to each such Loan then outstanding may be endorsed by the Bank on the
schedule attached hereto, or on a continuation of such schedule attached to and
made a part hereof; provided that the failure of the Bank to make any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.
This note is one of the Notes referred to in the Credit Agreement
dated as of October 20, 1994 among the Borrower, the banks listed on the
signature pages thereof and Morgan Guaranty Trust Company of New York, as Agent
(as the same may be amended from time to time, the "Credit Agreement"). Terms
defined in the Credit Agreement are used herein with the same meanings.
Reference is made to the
Credit Agreement for provisions for the prepayment hereof and the acceleration
of the maturity hereof.
V.F. CORPORATION
By
------------------------
Title:
2
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
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Amount of
Amount of Type of Principal Notation
Date Loan Loan Repaid Made By
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3
EXHIBIT B
Form of Money Market Quote Request
[Date]
To: Morgan Guaranty Trust Company of New York
(the "Agent")
From: V.F. Corporation
Re: Credit Agreement (the "Credit Agreement") dated as of October 20,
1994 among the Borrower, the Banks listed on the signature pages
thereof and the Agent
We hereby give notice pursuant to Section 2.03 of the Credit
Agreement that we request Money Market Quotes for the following proposed Money
Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount* Interest Period**
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
Terms used herein have the meanings assigned to them in the
Credit Agreement.
V.F. CORPORATION
By
------------------------
Title:
---------------
*Amount must be $15,000,000 or a larger multiple of $1,000,000.
**Not less than one month (LIBOR Auction) or not less than 7 days
(Absolute Rate Auction), subject to the provisions of the definition of
Interest Period.
EXHIBIT C
Form of Invitation for Money Market Quotes
To: [Name of Bank]
Re: Invitation for Money Market Quotes
to V.F. Corporation (the
"Borrower")
Pursuant to Section 2.03 of the Credit Agreement dated as of
October 20, 1994 among the Borrower, the Banks parties thereto and the
undersigned, as Agent, we are pleased on behalf of the Borrower to invite you
to submit Money Market Quotes to the Borrower for the following proposed Money
Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount Interest Period
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
Please respond to this invitation by no later than 9:00 A.M. (New
York City time) on [date].
Terms used herein have the meanings assigned to them in the
Credit Agreement.
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By
----------------------
Authorized Officer
EXHIBIT D
Form of Money Market Quote
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
60 Wall Street
New York, New York 10260
Attention:
Re: Money Market Quote to
V.F. Corporation (the "Borrower")
In response to your invitation on behalf of the Borrower dated
_____________, 19__, we hereby make the following Money Market 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 Money Market Loan(s) in the following principal
amounts, for the following Interest Periods and at the following rates:
Principal Interest Money Market
Amount** Period*** [Margin****] [Absolute Rate*****]
$
$
Provided, that the aggregate principal amount of Money Market Loans for
which the above offers may be accepted shall not exceed $____________.]**
----------------
* As specified in the related Invitation.
** Principal amount bid for each Interest Period may not exceed principal
amount requested. Specify aggregate limitation if the sum of the individual
offers exceeds the
amount the Bank is willing to lend. Bids must be made for $5,000,000 or a
larger multiple of $1,000,000.
(notes continued on following page)
We understand and agree that the offer(s) set forth above,
subject to the satisfaction of the applicable conditions set forth in the
Credit Agreement dated as of October 20, 1994 among the Borrower, the Banks
listed on the signature pages thereof and yourselves, as Agent, irrevocably
obligates us to make the Money Market Loan(s) for which any offer(s) are
accepted, in whole or in part.
Terms used herein have the meanings assigned to them in the Credit
Agreement.
Very truly yours,
[NAME OF BANK]
Dated: By:
--------------- --------------------------
Authorized Officer
---------------
*** Not less than one month or not less than 7 days, as specified in the
related Invitation. No more than five bids are permitted for each Interest
Period.
**** Margin over or under the London Interbank Offered Rate determined for the
applicable Interest Period. Specify percentage (to the nearest 1/10,000 of 1%)
and specify whether "PLUS" or "MINUS".
***** Specify rate of interest per annum (to the nearest 1/10,000th of 1%).
2
EXHIBIT E
OPINION OF
COUNSEL FOR THE BORROWER
[Effective Date]
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
We have acted as counsel for V.F. Corporation (the "Borrower") in
connection with the Credit Agreement (the "Credit Agreement") dated as of
October 20, 1994 among the Borrower, the banks listed on the signature pages
thereof and Morgan Guaranty Trust Company of New York, as Agent. Terms defined
in the Credit Agreement are used herein as therein defined. This opinion is
being rendered to you at the request of our client pursuant to Section 3.01(c)
of the Credit Agreement.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that:
1. The Borrower is a corporation duly incorporated, validly
existing and in good standing under the laws of Pennsylvania, and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
2. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes are within the Borrower's corporate powers, have
been duly authorized by all necessary corporate action, require no action by or
in respect of, or filing with, any governmental body, agency or official and do
not contravene, or constitute a default under, any provision of applicable law
or regulation or of the certificate of incorporation or by-laws of the Borrower
or, to the best of our knowledge, of any agreement, judgment, injunction,
order, decree or other instrument binding upon the Borrower, or result in the
creation or imposition of any Lien on any asset of the Borrower or any of its
Subsidiaries.
3. The Credit Agreement constitutes a valid and binding agreement
of the Borrower and each Note constitutes a valid and binding obligation of the
Borrower, in each case enforceable in accordance with its terms, except as the
same may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and by general principles of equity.
4. Except as set forth in Schedule I to the Credit Agreement, to
the best of our knowledge, there is no action, suit or proceeding pending
against, or to the best of our knowledge threatened against or affecting, the
Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official, in which there is a reasonable
possibility of an adverse decision which could materially adversely affect the
business, consolidated financial position or consolidated results of operations
of the Borrower and its Subsidiaries, considered as a whole, or which in any
manner draws into question the validity of the Credit Agreement or the Notes.
5. Each of the Borrower's Material Subsidiaries is a corporation
validly existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.
Very truly yours,
2
EXHIBIT F
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL COUNSEL
FOR THE AGENT
[Effective Date]
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
We have participated in the preparation of the Credit Agreement
(the "Credit Agreement") dated as of October 20, 1994 among V.F. Corporation, a
Pennsylvania corporation (the "Borrower"), the banks listed on the signature
pages thereof (the "Banks") and Morgan Guaranty Trust Company of New York, as
Agent (the "Agent"), and have acted as special counsel for the Agent for the
purpose of rendering this opinion pursuant to Section 3.01(d) of the Credit
Agreement. Terms defined in the Credit Agreement are used herein as therein
defined.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that the
Credit Agreement constitutes a valid and binding agreement of the Borrower and
each Note constitutes a valid and binding obligation of the Borrower, in each
case enforceable in accordance with its terms, except as the same may be
limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and by general principles of equity.
We are members of the Bar of the State of New York and the
foregoing opinion is limited to the laws of the
State of New York and the federal laws of the United States of America. In
giving the foregoing opinion, (i) we express no opinion as to the effect (if
any) of any law of any jurisdiction (except the State of New York) in which any
Bank is located which limits the rate of interest that such Bank may charge or
collect and (ii) we have relied, without independent investigation, as to all
matters governed by the laws of Pennsylvania, upon the opinion of Clark,
Ladner, Fortenbaugh & Young, dated the date hereof, a copy of which has been
delivered to you.
This opinion is rendered solely to you in connection with the
above matter. This opinion may not be relied upon by you for any other purpose
or relied upon by any other person without our prior written consent.
Very truly yours,
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EXHIBIT G
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 19__ among [ASSIGNOR] (the
"Assignor"), [ASSIGNEE] (the "Assignee"), V.F. CORPORATION (the "Borrower") and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the "Agreement") relates to
the Credit Agreement dated as of October 20, 1994 among the Borrower, the
Assignor and the other Banks party thereto, as Banks, and the Agent (the
"Credit Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor has
a Commitment to make Loans to the Borrower in an aggregate principal amount at
any time outstanding not to exceed $__________;
WHEREAS, Committed Loans made to the Borrower by the Assignor
under the Credit Agreement in the aggregate principal amount of $__________ are
outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all of
the rights of the Assignor under the Credit Agreement in respect of a portion
of its Commitment thereunder in an amount equal to $__________ (the "Assigned
Amount"), together with a corresponding portion of its outstanding Committed
Loans, and the Assignee proposes to accept assignment of such rights and assume
the corresponding obligations from the Assignor on the terms hereof;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise
defined herein shall have the respective meanings set forth in the Credit
Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to
the Assignee all of the rights of the
Assignor under the Credit Agreement to the extent of the Assigned Amount, and
the Assignee hereby accepts such assignment from the Assignor and assumes all
of the obligations of the Assignor under the Credit Agreement to the extent of
the Assigned Amount, including the purchase from the Assignor of the
corresponding portion of the principal amount of the Committed Loans made by
the Assignor outstanding at the date hereof. Upon the execution and delivery
hereof by the Assignor, the Assignee, the Borrower and the Agent and the
payment of the amounts specified in Section 3 required to be paid on the date
hereof (i) the Assignee shall, as of the date hereof, succeed to the rights and
be obligated to perform the obligations of a Bank under the Credit Agreement
with a Commitment in an amount equal to the Assigned Amount, and (ii) the
Commitment of the Assignor shall, as of the date hereof, be reduced by a like
amount and the Assignor released from its obligations under the Credit
Agreement to the extent such obligations have been assumed by the Assignee.
The assignment provided for herein shall be without recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and
sale contemplated in Section 2 hereof, the Assignee shall pay to the Assignor
on the date hereof in Federal funds the amount heretofore agreed between them.
It is understood that commitment and/or facility fees accrued to the date
hereof with respect to the Assigned Amount are for the account of the Assignor
and such fees accruing from and including the date hereof are for the account
of the Assignee. Each of the Assignor and the Assignee hereby agrees that if
it receives any amount under the Credit Agreement which is for the account of
the other party hereto, it shall receive the same for the account of such other
party to the extent of such other party's interest therein and shall promptly
pay the same to such other party.
[SECTION 4. Consent of the Borrower and the Agent. This
Agreement is conditioned upon the consent of the Borrower and the Agent
pursuant to Section 9.06(c) of the Credit Agreement. The execution of this
Agreement by the Borrower and the Agent is evidence of this consent. Pursuant
to Section 9.06(c) the Borrower agrees to execute and deliver a Note payable to
the order of the Assignee to evidence the assignment and assumption provided
for herein.]
SECTION 5. Non-Reliance on Assignor. The Assignor makes no
representation or warranty in connection with, and shall have no responsibility
with respect to, the solvency, financial condition, or statements of the
Borrower, or the validity and enforceability of the obligations of the Borrower
in respect of the Credit
2
Agreement or any Note. The Assignee acknowledges that it has, independently
and without reliance on the Assignor, the Agent or any other Bank, and based on
such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and will continue to
be responsible for making its own independent appraisal of the business,
affairs and financial condition of the Borrower.
SECTION 6. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
SECTION 7. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
[ASSIGNOR]
By
-------------------------
Title:
[ASSIGNEE]
By
-------------------------
Title:
[V.F. CORPORATION]
By
-------------------------
Title:
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[MORGAN GUARANTY TRUST COMPANY
OF NEW YORK]
By
-------------------------
Title:
4