EXHIBIT 4.1
AMENDED AND RESTATED
$600,000,000
REVOLVING CREDIT AND COMPETITIVE
ADVANCE FACILITY AGREEMENT
dated as of
August 8, 1996
among
AVON PRODUCTS, INC.
AVON CAPITAL CORPORATION
THE OFFSHORE BORROWERS, BANKS AND OTHER LENDERS
FROM TIME TO TIME PARTIES HERETO
BANK OF AMERICA, ILLINOIS
BANKERS TRUST COMPANY,
CITIBANK, N.A.,
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK,
as Co-Agents
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions . . . . . . . . . . . . 7
Section 1.01. Certain Definitions . . . . . . . . . . 7
(a) Terms Generally . . . . . . . . . . 7
(b) Accounting Terms . . . . . . . . . . 7
(c) Certain Other Terms . . . . . . . . 8
ARTICLE II
The Loans . . . . . . . . . . . . . 23
Section 2.01. The Revolving Credit Loans;
Commitments . . . . . . . . . . . . . . 23
Section 2.02. Procedure for Revolving Credit
Loans . . . . . . . . . . . . . . . . . 24
Section 2.03. Evidence for Loans . . . . . . . . . . . 25
Section 2.04. Increase of Commitment . . . . . . . . . 26
Section 2.05. Reduction of Commitments . . . . . . . . 26
Section 2.06. Prepayment of Revolving Credit Loans . . 27
Section 2.07. Competitive Advance Loans . . . . . . . 27
Section 2.08. Purpose of Loans; Sublimits . . . . . . 30
ARTICLE III
Interest, Conversion, Fees, Etc . . . . . . . 31
Section 3.01. Procedure for Interest Rate Determination 31
Section 3.02. Interest on ABR Loans . . . . . . . . . 31
Section 3.03. Interest on Eurocurrency Loans and
Competitive Index Rate Loans . . . . . 31
Section 3.04. Interest on Competitive Absolute Rate
Loans . . . . . . . . . . . . . . . . . 32
Section 3.05. Continuation and Conversion of Revolving
Credit Loans . . . . . . . . . . . . . 32
Section 3.06. Post-Maturity Interest . . . . . . . . . 33
Section 3.07. Maximum Interest Rate . . . . . . . . . 33
3
Section 3.08. Fees . . . . . . . . . . . . . . . . . . 33
ARTICLE IV
Disbursement and Payment . . . . . . . . . 34
Section 4.01. Disbursement of Loans; Pro Rata Treatment
of Banks . . . . . . . . . . . . . . . 34
Section 4.02. Method of Payment . . . . . . . . . . . 34
Section 4.03. Compensation for Losses . . . . . . . . 35
Section 4.04. Withholding, Reserves and Additional
Costs . . . . . . . . . . . . . . . . . 36
Section 4.05. Unavailability and Impracticability . . 39
Section 4.06. Substitution of Banks . . . . . . . . . 40
ARTICLE V
Representations and Warranties . . . . . . . 41
Section 5.01. Representations and Warranties of the
Borrowers . . . . . . . . . . . . . . . 41
ARTICLE VI
Conditions Precedent . . . . . . . . . . 44
Section 6.01. Conditions to Effectiveness . . . . . . 44
Section 6.02. Conditions to Each Loan . . . . . . . . 45
Section 6.03. Satisfaction of Conditions Precedent . . 46
Section 6.04. Offshore Borrowers . . . . . . . . . . . 46
Section 6.05. Sublimit A Loans . . . . . . . . . . . . 46
Section 6.06. Sublimit B Loans . . . . . . . . . . . . 47
ARTICLE VII
Covenants . . . . . . . . . . . . . 47
Section 7.01. Affirmative Covenants . . . . . . . . . 47
Section 7.02. Negative Covenants . . . . . . . . . . . 50
ARTICLE VIII
Events of Default . . . . . . . . . . . 52
Section 8.01. Events of Default . . . . . . . . . . . 52
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Section 8.02. Notice of Default . . . . . . . . . . . 54
ARTICLE IX
The Administrative Agent and the Banks . . . . . 54
Section 9.01. The Agency . . . . . . . . . . . . . . . 54
Section 9.02. The Administrative Agent's Duties . . . 54
Section 9.03. Sharing of Payments and Expenses . . . . 54
Section 9.04. The Administrative Agent's Liabilities . 55
Section 9.05. The Administrative Agent as a Bank . . . 55
Section 9.06. Bank Credit Decision . . . . . . . . . . 55
Section 9.07. Indemnification . . . . . . . . . . . . 56
Section 9.08. Successor Administrative Agent . . . . . 56
ARTICLE X
The Guaranty . . . . . . . . . . . . 57
Section 10.01. The Guaranty . . . . . . . . . . . . . 57
Section 10.02. Absolute Guaranty . . . . . . . . . . . 57
Section 10.03. Consents, Waivers and Renewals . . . . 57
Section 10.04. Subrogation . . . . . . . . . . . . . . 58
Section 10.05. Security . . . . . . . . . . . . . . . 58
Section 10.06. Continuing Guaranty . . . . . . . . . . 58
Section 10.07. Waiver of Notice . . . . . . . . . . . 58
ARTICLE XI
Miscellaneous . . . . . . . . . . . . 58
Section 11.01. APPLICABLE LAW . . . . . . . . . . . . 58
Section 11.02. Set-off. . . . . . . . . . . . . . . 58
Section 11.03. Expenses . . . . . . . . . . . . . . . 59
Section 11.04. Amendments . . . . . . . . . . . . . . 59
Section 11.05. Cumulative Rights and No Waiver . . . . 59
Section 11.06. Notices . . . . . . . . . . . . . . . . 59
Section 11.07. Severability . . . . . . . . . . . . . 60
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Section 11.08. Parties in Interest . . . . . . . . . . 60
Section 11.09. WAIVER OF RIGHT TO JURY . . . . . . . . 63
Section 11.10. Indemnity . . . . . . . . . . . . . . . 63
Section 11.11. Judgment Currency . . . . . . . . . . . 63
Section 11.12. Consent to Jurisdiction . . . . . . . . 64
Section 11.13. Confidentiality . . . . . . . . . . . . 64
Section 11.14. Execution in Counterparts . . . . . . . 64
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SCHEDULES
Schedule 2.01 -- Banks and Commitments
Schedule 5.01(e) -- Certain Litigation
Schedule 6.04 -- Certain Offshore Borrowers
Schedule 7.01(b) -- Certain Insurers
EXHIBITS
Exhibit A -- Form of Revolving Credit Loan Request
Exhibit B-1 -- Form of Revolving Credit Note
Exhibit B-2 -- Form of Competitive Advance Note
Exhibit C-1 -- Competitive Advance Facility Procedures
Exhibit C-2 -- Form of Competitive Advance Loan
Request
Exhibit C-3 -- Form of Competitive Advance Notice
Letter
Exhibit C-4 -- Form of Competitive Advance Bid
Exhibit C-5 -- Form of Competitive Advance Bid
Accept/Reject Letter
Exhibit D -- Form of Continuation/Conversion Request
Exhibit E -- Form of Pledge Agreement
Exhibit F-1 -- Form of Opinion of Counsel to API Relating to
Sublimit A Loans
Exhibit F-2 -- Form of Offshore Borrower Designation
Exhibit F-3 -- Form of Offshore Borrower Confirmation
Exhibit G -- Form of Assignment and Acceptance
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AMENDED AND RESTATED REVOLVING CREDIT AND COMPETITIVE ADVANCE
FACILITY AGREEMENT, dated as of August 8, 1996 (as further amended,
supplemented, modified or extended from time to time, this "Agreement"), among
Avon Products, Inc., a New York corporation ("API"), Avon Capital Corporation,
a Delaware corporation ("ACC"), each of the Offshore Borrowers (as defined
below) from time to time designated as such, each of the banks and other
lenders from time to time parties hereto (each, a "Bank" and, collectively, the
"Banks") and the Administrative Agent (as defined below).
W I T N E S S E T H:
WHEREAS, API, ACC, each of the Offshore Borrowers (as defined
below), the Banks and the Administrative Agent are parties to the Credit
Agreement, dated as of October 5, 1994 (the "Original Credit Agreement");
WHEREAS, API has requested that the Administrative Agent and
the Banks amend and restate the Original Credit Agreement pursuant to this
Agreement to effect certain amendments to the Original Credit Agreement;
WHEREAS, the Administrative Agent and the Banks are willing to
amend and restate the Original Credit Agreement on the terms and subject to the
conditions hereof;
NOW, THEREFORE, the parties hereby agree that on the Effective
Date the Original Credit Agreement shall be amended and restated to read in its
entirety as follows:
ARTICLE I
Definitions
Section 1.01. Certain Definitions.
(a) Terms Generally. The definitions ascribed to terms in
this Section 1.01 and elsewhere in this Agreement shall apply equally to both
the singular and plural forms of the terms defined. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase
"without limitation". The words "hereby", "herein", "hereof", "hereunder" and
words of similar import refer to this Agreement as a whole (including any
exhibits and schedules hereto) and not merely to the specific section,
paragraph or clause in which such word appears. All references herein to
Articles, Sections, Exhibits and Schedules shall be deemed references to
Articles and Sections of, and Exhibits and Schedules to, this Agreement unless
the context shall otherwise require.
(b) Accounting Terms. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided, however, that,
for purposes of determining compliance with the covenant set forth in
Sections 7.02(b) and (d), such terms shall be construed in accordance with GAAP
as in effect on the date of this Agreement applied on a basis consistent with
the construction thereof applied in preparing Parent's audited financial
statements referred to in Section 5.01(d). In the event there shall occur a
change in GAAP which but for the foregoing proviso would affect the computation
used to determine compliance with such covenant, the Borrowers and the Banks
agree to negotiate in good faith in an effort to agree upon an amendment to
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this Agreement that will permit compliance with such covenant to be determined
by reference to GAAP as so changed while affording the Banks the protection
afforded by such covenant prior to such change (it being understood, however,
that such covenant shall remain in full force and effect in accordance with its
existing terms pending the execution by the Borrowers and the Banks of any such
amendment).
(c) Certain Other Terms. The following terms shall have the
meanings ascribed to them below or in the Sections of this Agreement indicated
below:
"ABR Lending Office" shall mean, with respect to each Bank, its
office 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 or ABR lending office by notice to the Borrowers and
the Administrative Agent.
"ABR Loans" shall mean, collectively, Revolving Credit Loans,
or portions thereof, that bear interest by reference to the Base Rate and in
the manner set forth in Section 3.02.
"ACC" shall have the meaning ascribed to such term in the
Preamble to this Agreement.
"Account" shall have the meaning ascribed to such term in the
Pledge Agreement.
"Additional Amounts" shall have the meaning ascribed to such
term in Section 4.04(a).
"Additional Costs" shall have the meaning ascribed to such term
in Section 4.04(b).
"Administrative Agent" shall mean The Chase Manhattan Bank,
together with its affiliates, as the arranger of the Commitments and as the
agent for the Banks under this Agreement and the Credit Documents.
"Administrative Questionnaire" shall mean, with respect to each
Bank, an administrative details reply form in the form prepared by the
Administrative Agent and submitted to the Administrative Agent duly completed
by such Bank.
"Agreement" shall have the meaning ascribed to such term in the
Preamble to this Agreement.
"Alternate Currency" shall mean Australian Dollars, Canadian
Dollars, Deutschemarks, French Francs, Italian Lire, Japanese Yen, Pounds
Sterling or Spanish Pesetas, or any other currency in which all the Banks agree
to make Loans from time to time, as specified in the relevant Borrowing
Request.
"API" shall have the meaning ascribed to such term in the
Preamble to this Agreement.
"Applicable Lending Office" shall mean, with respect to any
Bank, (a) in the case of its ABR Loans, its ABR Lending Office, (b) in the case
of Revolving Eurodollar Loans or Competitive Eurocurrency Loans, its
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Eurocurrency Lending Office and (c) in the case of its Locally Funded
Competitive Alternative Currency Loans, its Local Currency Lending Office.
"Applicable Sublimit Margin" shall mean (a) in the case of a
Sublimit A Loan, 1.0% per annum and (b) in the case of a Sublimit B Loan, (i)
1.0% per annum with respect to any amount thereof held in the Account and (ii)
5.0% per annum with respect to any amount thereof that has been released from
the Account pursuant to Section 14(a) of the Pledge Agreement.
"Applicable Telerate Page" shall mean, with respect to an
Alternate Currency, the display page for interest settlement rates on the
Telerate System Incorporated service (or such other page as may replace such
page on such service) indicated below for the applicable type of Loan:
Interest Settlement Rates
Page Number
-------------------------
Euromarket Locally
Currency Funded Loans Funded Loans
--------- -------------- -------------
Australian Dollars -- --
Canadian Dollars 3740 3197
Deutschemarks 3750 22000
French Francs 3740 20041
Italian Lire 3740 --
Japanese Yen 3750 --
Pounds Sterling 3750 3750
Spanish Pesetas 3740 --;
provided that with respect to any Alternate Currency not listed above, the
"Applicable Telerate Page" (if such exists) shall be determined at the time the
Alternate Currency is designated as such; provided further that with respect to
any Alternate Currency and type of Loan for which an Applicable Telerate Page
is not indicated above, the "Applicable Telerate Page" shall be such display
page for interest settlement rates on the Telerate System Incorporated service
as may in the future be designated for the purpose of displaying the rates at
which deposits in such Alternate Currency are offered by leading banks in the
relevant interbank deposit market.
"Assignee" shall have the meaning ascribed to such term in
Section 11.08(c).
"Assignment and Acceptance" shall have the meaning ascribed to
such term in Section 11.08(c).
"Augmenting Bank" shall have the meaning ascribed to such term
in Section 2.04.
"Available Facility" shall mean (a) on any date prior to the
Termination Date, an amount equal to the remainder of (i) the Total Commitment
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on such date minus (ii) the sum of the aggregate outstanding principal amount
of Loans (or, in the case of Alternate Currency Loans, the Dollar Equivalent
Amount thereof) on such date and (b) on and after the Termination Date, $0.
"Avon Japan" shall mean Avon Products Company Limited, an
indirect Japanese subsidiary of API.
"Avon Japan Credit Agreement" shall mean the Credit Agreement,
dated November 27, 1990, between Avon Japan and Industrial Bank of Japan, as
such agreement may be amended, supplemented, modified or extended from time to
time.
"Bank" shall have the meaning ascribed to such term in the
Preamble to this Agreement. In the circumstances as described in
Section 11.08(c)(iii), an Assignee shall also be deemed a "Bank."
"Base Rate" shall mean, for any day, a fluctuating interest
rate per annum in effect from time to time, which rate per annum shall be equal
to the higher of:
(a) the rate of interest publicly announced by the
Administrative Agent in New York City from time to time as its prime
rate in effect on such day; and
(b) the sum of (i) 1/2 of 1% per annum and (ii) the Federal
Funds Rate in effect on such day.
"Benefit Arrangement" shall mean, 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" shall mean, with respect to any Loan, whichever of
the Borrowers that has borrowed such Loan in accordance with the terms hereof.
"Borrowers" shall mean, collectively, as of any date, the
Domestic Borrowers and the Offshore Borrowers as of such date. Without in any
way limiting API's obligations as guarantor under Article X, all the
obligations of the Borrowers hereunder and in respect of any Loans shall be
several and not joint.
"Borrowing Date" shall mean, with respect to any Loan, the date
set forth in the relevant Borrowing Request as the date upon which such
Borrower desires to borrow such Loan.
"Borrowing Request" shall mean a Competitive Advance Loan
Request or a Revolving Credit Loan Request.
"Capital Lease" shall mean, with respect to any Person, any
obligation of such Person to pay rent or other amounts under a lease with
respect to any property (whether real, personal or mixed) acquired or leased by
such Person that is required to be accounted for as a liability on a balance
sheet of such Person in accordance with GAAP.
"Change of Control" shall mean, with respect to API, (i) any
"person" (as defined in Section 3(a)(9) of the Exchange Act and as used in
Sections 13(d) and 14(d) thereof), excluding API, any Subsidiary and any Plan
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(including any trustee of such plan acting as trustee), but including a "group"
as defined in Section 13(d)(3) of the Exchange Act, becomes the beneficial
owner of shares of API having at least 20% of the total number of votes that
may be cast for the election of directors of API, provided that no Event of
Default will occur as a result of an acquisition of stock by API which
increases, proportionately, the stock representing the voting power of API
owned by such person or group above 20% of the voting power of API and provided
further that if such person or group acquires stock representing more than 20%
of the voting power of API by reason of share purchases by API, and after such
share purchases by API acquires any additional shares representing voting power
of API, then an Event of Default shall occur; or (ii) within any 24-month
period beginning on or after November 30, 1988, the persons who were directors
of API immediately before the beginning of such period (the "Incumbent
Directors") shall cease (for any reason other than death) to constitute at
least a majority of the Board of Directors of API or the board of directors of
any successor to API, provided that any director who was not a director as of
December 1, 1988 shall be deemed to be an Incumbent Director if such director
was elected to the Board of Directors by, or on the recommendation of or with
the approval of, at least two-thirds of the directors who then qualified as
Incumbent Directors either actually or by prior operation of this clause (ii)
and provided further that any director elected to the Board of Directors of API
to avoid or settle a threatened or actual proxy contest shall in no event be
deemed to be an Incumbent Director.
"Change of Control Default" shall mean (a) any event or
condition that constitutes a default under Section 8.01(k), (b) any event or
condition that constitutes both a change of ownership or a change of control of
API and a default under Section 8.01(f) or (c) any event or condition set forth
in clause (a) or (b) of this definition that, with the giving of notice or the
lapse of time or both, would unless cured or waived, become an Event of
Default.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Collateral" shall have the meaning ascribed to such term in
the Pledge Agreement.
"Collateral Agent" shall mean the Collateral Agent referred to
in the Pledge Agreement, which Collateral Agent may be the Administrative
Agent.
"Commitment" shall mean, with respect to any Bank, the amount
of such Bank's commitment to make Loans reflected in the Register. In the case
of Banks parties hereto on the date hereof, such amount is set forth opposite
such Bank's name under the heading "Commitment" on Schedule 2.01, as such
amount may be reduced from time to time pursuant to Section 2.05 or 4.06.
"Competitive Absolute Rate Loans" shall mean, collectively,
Competitive Advance Loans that bear interest at a fixed percentage rate per
annum (expressed in the form of a decimal to no more than four decimal places)
specified by the Bank making such Loan in its Competitive Advance Bid.
"Competitive Advance Accept/Reject Deadline" shall mean, with
respect to any Competitive Advance Loan, the time specified as the Competitive
Advance Deadline for such Loan in Exhibit C-1.
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"Competitive Advance Accept/Reject Notice" shall have the
meaning ascribed to such term in Section 2.07.
"Competitive Advance Bid" shall mean an offer by a Bank to make
a Competitive Advance Loan pursuant to Section 2.07.
"Competitive Advance Bid Deadline" shall mean, with respect to
any Competitive Advance Loan, the time specified as the Competitive Advance Bid
Deadline for such Loan in Exhibit C-1.
"Competitive Advance Bid Rate" shall mean, with respect to any
Competitive Advance Bid, (a) in the case of a Competitive Index Rate Loan, the
Competitive Advance Margin, and (b) in the case of a Competitive Absolute Rate
Loan, the fixed rate of interest, at which the Bank making the Competitive
Advance Bid offers thereby to make a Competitive Advance Loan (in either case,
for purposes of Section 2.07(d), determined after giving effect to any waiver,
pursuant to Section 2.07(c), of compensation under Section 3.03(c), 4.04(a) or
4.04(b)).
"Competitive Advance Loan Request" shall mean a telephonic
request by a Borrower (confirmed in writing countersigned by a Responsible
Officer of API by not later than 4:00 P.M., New York time, on the date of such
telephonic notice) to borrow Competitive Advance Loans, which shall specify,
with respect to such requested Competitive Advance Loans, (a) the proposed
Borrowing Date therefor, (b) the aggregate amount of Competitive Advance Loans
which such Borrower desires to borrow on such Borrowing Date, (c) the Maturity
Date, (d) whether such Competitive Advance Loans are to bear interest as
Competitive Index Rate Loans or Competitive Absolute Rate Loans, (e) if such
Competitive Advance Loans are Competitive Eurocurrency Loans, the Interest
Period therefor (f) whether such Loans are to be Euromarket Funded or Locally
Funded, (g) the Alternate Currency (if any) in which such Loan is to be
denominated, (h) any other terms to be applicable to such proposed Competitive
Advance Loans, and (i) confirming that such request has been approved by API.
"Competitive Advance Loans" shall mean, collectively, Loans, or
portions thereof, made pursuant to Section 2.07.
"Competitive Advance Margin" shall mean, with respect to any
Competitive Index Rate Loan for any Interest Period, the margin (expressed as a
percentage rate per annum in the form of a decimal to no more than four decimal
places) to be added to or subtracted from IBOR, in order to determine the
interest rate applicable to such Loan during such Interest Period, as specified
in the Competitive Advance Bid and the Competitive Advance Accept/Reject Notice
relating to such Loan.
"Competitive Advance Notes" shall mean, collectively, any
promissory notes of the Borrower evidencing Competitive Advance Loans.
"Competitive Advance Notice Time" shall mean, with respect to
any Competitive Advance Loan, the time specified as the Competitive Advance
Notice Time for such Loan in Exhibit C-1.
"Competitive Advance Rate" shall mean, with respect to any
Competitive Absolute Rate Loan, the fixed rate of interest (expressed as a
percentage rate per annum in the form of a decimal to no more than four decimal
places) for such Loan, as specified in the Competitive Advance Bid and
Competitive Advance Accept/Reject Notice relating to such Loan.
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"Competitive Alternate Currency Loans" shall mean,
collectively, Competitive Advance Loans that are denominated in an Alternate
Currency, whether Euromarket Funded or Locally Funded.
"Competitive Eurocurrency Loans" shall mean, collectively,
Competitive Eurodollar Loans and Euromarket Funded Competitive Alternate
Currency Loans.
"Competitive Eurodollar Loans" shall mean, collectively,
Competitive Advance Loans that are denominated in Dollars and bear interest, by
reference to Eurodollar LIBOR (as defined in the definition of "IBOR") and a
Competitive Advance Margin, in the manner set forth in Section 3.03.
"Competitive Index Rate Loans" shall mean, collectively,
Competitive Advance Loans that bear interest by reference to IBOR and a
Competitive Advance Margin, in the manner set forth in Section 3.03.
"Consolidated Subsidiary" shall mean, at any date with respect
to any Person, any Subsidiary or other entity the accounts of which would be
consolidated with those of such Person in the consolidated financial statements
of such Person if such statements were prepared in accordance with GAAP as of
such date.
"Conversion Date" shall mean the date on which a conversion of
interest rates on outstanding Revolving Credit Loans, pursuant to a Conversion
Request, shall take effect.
"Conversion Request" shall mean a telephonic request (confirmed
in writing not later than 4:00 P.M., New York time, on the date of such
telephonic notice) by a Borrower to convert the interest rate on all or
portions of its outstanding Revolving Credit Loans pursuant to the terms
hereof, which shall specify, with respect to such outstanding Revolving Credit
Loans, (i) the requested Conversion Date, which shall be not less than three
Business Days after the date of such Conversion Request, (ii) the aggregate
amount of the Revolving Credit Loans, from and after the Conversion Date, which
are to bear interest as ABR Loans or Revolving Eurodollar Loans, as the case
may be, and (iii) the term of the Interest Periods therefor, if any.
"Credit Documents" shall mean, collectively, this Agreement,
any Notes and the Pledge Agreement.
"Debt" shall mean, with respect to any Person at any date,
without duplication, (a) all obligations of such Person for borrowed money, (b)
all obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (c) 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, (d) all obligations of such Person as
lessee under Capital Leases, (e) all contingent or non-contingent obligations
of such Person to reimburse or prepay any bank or other Person in respect of
amounts paid or payable (currently or in the future, on a contingent or non-
contingent basis) under a letter of credit, bankers' acceptance or similar
instrument, other than (i) contingent obligations relating to letters of credit
issued to support trade payables and (ii) obligations up to $25,000,000 arising
under stand-by letters of credit, (f) all Debt of others secured by a Lien on
any asset of such Person, whether or not such Debt is assumed by such Person
and (g) all Debt of others Guaranteed by such Person; provided, however, that
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Debt shall not include any obligations incurred in connection with the funding
of a trust established under Section 501(c)(9) of the Code.
"Default" shall mean any event or circumstance which, with the
giving of notice or the passage of time, or both, would unless cured or waived
become an Event of Default.
"Dollar Equivalent Amount" shall mean, with respect to a
Competitive Alternate Currency Loan on any date, the product (expressed in
Dollars) of the principal amount of such Loan (expressed in the relevant
Alternate Currency) and the Exchange Rate in effect on such date for such
Alternate Currency.
"Dollars" and the sign "$" shall mean lawful money of the
United States of America.
"Domestic Borrower" shall mean API or ACC.
"Domestic Business Day" shall mean any day except a Saturday,
Sunday or other day on which commercial banks in New York City are authorized
or required by law to close.
"Effective Date" shall have the meaning ascribed to such term
in Section 6.01.
"Environmental Laws" shall mean any and all federal, state,
local and foreign statutes, laws, regulations, ordinances, rules, 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, chemicals or industrial, toxic or hazardous substances or
wastes or clean-up or other remediation thereof.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"ERISA Group" shall mean API and all members of a controlled
group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with API, are treated as a
single employer under Section 414(b), (c), (m) or (o) of the Code.
"Eurocurrency Business Day" shall mean any Domestic Business
Day on which commercial banks are open for international business (including
dealings in Dollar deposits) in London, and, when used in connection with an
Alternate Currency or a Competitive Alternate Currency Loan, on which
commercial banks are open for domestic and international business (including
dealings in deposits in the relevant Alternate Currency) in both London and the
city in which such funds are to be paid or made available.
"Eurocurrency Lending Office" shall mean, with respect to each
Bank, its office, branch or affiliate identified in its Administrative
Questionnaire as its Eurocurrency lending office or such other office, branch
15
or affiliate of such Bank as it may hereafter designate as its Eurocurrency
lending office by notice to the Borrowers and the Administrative Agent.
"Eurocurrency Loans" shall mean, collectively, Competitive
Eurocurrency Loans and Revolving Eurodollar Loans.
"Eurodollar Loans" shall mean, collectively, Competitive
Eurodollar Loans and Revolving Eurodollar Loans.
"Eurodollar Reserve Percentage" shall mean, for any day, the
percentage 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 any marginal, supplemental or emergency reserve
requirements) for a member bank of the Federal Reserve System in New York City
with deposits exceeding one billion dollars in respect of "Eurocurrency
Liabilities" (as defined in Regulation D of the Federal Reserve Board (or any
successor regulation)).
"Euromarket Funded" shall mean, with respect to a Loan, that
such Loan (i) is to bear interest by reference to Eurodollar LIBOR or London
IBOR (as defined in the definition of "IBOR") plus a Competitive Advance
Margin, in the manner set forth in Section 3.03 or (ii) is a Competitive
Absolute Rate Loan the Competitive Advance Rate for which has been established
by reference to prevailing interest rates in the Euromarket for the currency in
which such Loan is denominated, and, in either case, that such Loan shall be
made from the Eurocurrency Lending Office of the Bank making such Loan.
"Event of Default" shall mean any of the events described in
Section 8.01.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Exchange Rate" shall mean, for any Alternate Currency on any
date of determination, the exchange rate for conversion of such Alternate
Currency into Dollars as of approximately 11:00 A.M., London time, two
Eurocurrency Business Days before such date set forth on the relevant page on
the Teleratesystem Incorporated service. However, if the Dollar exchange rate
for such Alternate Currency does not appear on any page of the Teleratesystem
Incorporated service, then the "Exchange Rate" shall be determined by reference
to such other publicly available service for displaying exchange rates as may
be agreed between API and the Administrative Agent, or, in the absence of such
agreement, the "Exchange Rate" shall be the Administrative Agent's spot buying
rate for Dollars against such Alternate Currency in the interbank market where
its foreign currency exchange operations in respect of such Alternate Currency
are then being conducted; provided that if, at the time of determination, no
such spot rate can be determined, then the Administrative Agent may use any
reasonable method available to it to determine the appropriate exchange rate.
"Excluded Taxes" shall mean all present and future taxes
imposed on or measured by the overall net income of any Bank (or any office,
branch or subsidiary of such Bank) or any franchise taxes, taxes on doing
business or taxes measured by capital or net worth imposed on any Bank (or any
office, branch or subsidiary of such Bank), in each case imposed by the United
Sates of America or any political subdivision or taxing authority thereof or
therein, or taxes on or measured by the overall net income of any office,
branch or subsidiary of a Bank or any franchise taxes, taxes imposed on doing
16
business or taxes measured by capital or net worth imposed on any office,
branch or subsidiary of such Bank, in each case imposed by any foreign country
or subdivision thereof in which such office, branch or subsidiary is doing
business.
"Facility Fee" shall have the meaning ascribed to such term in
Section 3.08(a).
"Federal Funds Rate" shall mean, for any day, the rate per
annum (rounded to the nearest 1/16 of 1% or, if there is no nearest 1/16 of 1%,
to the next higher 1/16 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 (a) 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 (b) 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 the Administrative Agent on such day on such transactions as
determined by the Administrative Agent.
"Federal Reserve Board" shall mean the Board of Governors of
the Federal Reserve System or any successor agency.
"Fee Payment Date" shall mean the last day of each calendar
quarter, commencing with the first such day after the date hereof, and the
earlier of (a) any other date on which the Total Commitment is cancelled in
full and (b) the Termination Date.
"GAAP" shall mean generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entities as may be approved by a significant segment
of the accounting profession, which are applicable to the circumstances as of
the date of determination.
"Governmental Authority" shall mean any nation or government,
any state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guaranteed Obligations" shall have the meaning ascribed to
such term in Section 10.01.
"Guaranty" by any Person shall mean any obligation, contingent
or otherwise, of such Person directly or indirectly guaranteeing any Debt or
other obligation of any other Person and, without limiting the generality of
the foregoing, any obligation, direct or indirect, contingent or otherwise, of
such Person (a) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Debt or other obligation (whether arising by virtue of
partnership arrangements, by agreements to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (b) entered into for the purpose of
assuring in any other manner the obligee of such Debt or other obligation of
17
the payment thereof (in whole or in part); provided that the term Guaranty
shall not include endorsements for collection or deposit in the ordinary course
of business. The term "Guarantee" used as a verb has a corresponding meaning.
"IBOR" shall mean, with respect to any Interest Period for a
Eurodollar Loan or Competitive Index Rate Loan, the rate per annum determined
by the Administrative Agent as follows:
(a) in the case of a Eurodollar Loan, the offered rate
("Eurodollar LIBOR") for Dollar deposits with a term comparable to such
Interest Period that appears on the Eurodollar Telerate Page (as
defined below) at approximately 11:00 A.M., London time, on the second
full Eurocurrency Business Day preceding the first day of such Interest
Period. However, if such rate does not appear on the Eurodollar
Telerate Page, "IBOR" shall mean the rate per annum determined by the
Administrative Agent to be the arithmetic mean (rounded to the nearest
1/16 of 1% or, if there is no nearest 1/16 of 1%, to the next higher
1/16 of 1%) of the respective rates of interest communicated by the
Reference Banks to the Administrative Agent as the rate at which Dollar
deposits are offered to the Reference Banks by leading banks in the
London interbank deposit market at approximately 11:00 A.M., London
time, on the second full Eurocurrency Business Day preceding the first
day of such Interest Period in an amount substantially equal to the
principal amount of such Eurodollar Loan (rounded up to the nearest
integral multiple of $1,000,000) for a term equal to such Interest
Period. "Eurodollar Telerate Page" shall mean the display designated
as Page 3750 on the Teleratesystem Incorporated service (or such other
page as may replace such page on such service for the purpose of
displaying the rates at which Dollar deposits are offered by leading
banks in the London interbank deposit market); or
(b) in the case of a Euromarket Funded Competitive Alternate
Currency Loan, the offered rate ("London IBOR") for deposits in the
relevant Alternate Currency with a term comparable to such Interest
Period that appears on the Applicable Telerate Page (as defined below)
at approximately 11:00 A.M., London time, on the second full
Eurocurrency Business day preceding the first day of such Interest
Period. However, if such rate does not appear on the Applicable
Telerate Page (or if no Applicable Telerate Page then exists), "IBOR"
and "London IBOR" shall mean the rate per annum determined by the
Administrative Agent to be the arithmetic mean (rounded to the nearest
1/16 of 1% or, if there is no nearest 1/16 of 1%, to the next higher
1/16 of 1%) of the respective rates of interest communicated by the
Reference Banks to the Administrative Agent as the rate at which
deposits in such Alternate Currency are offered to the Reference Banks
by leading banks in the London interbank deposit market at
approximately 11:00 A.M., London time, on the second full Eurocurrency
Business Day preceding the first day of such Interest Period in an
amount substantially equal to the principal amount of such Eurodollar
Loan (rounded up to the nearest integral multiple of $1,000,000) for a
term equal to such Interest Period.
(c) in the case of a Locally Funded Competitive Alternate
Currency Loan, the offered rate ("Local Market IBOR") for deposits in
the relevant Alternate Currency with a term comparable to such Interest
Period that appears on the Applicable Telerate Page at approximately
11:00 A.M. in the Principal Financial Center for such Alternate
18
Currency on the second full Eurocurrency Business Day preceding the
first day of such Interest Period. However, if such rate does not
appear on the Applicable Telerate Page (or if no Applicable Telerate
Page then exists), "IBOR" and "Local Market IBOR" shall mean the Rate
per annum determined by the Administrative Agent to be the arithmetic
mean (rounded to the nearest 1/16 of 1% or, if there is no nearest 1/16
of 1%, to the next higher 1/16 of 1%) of the respective rates of
interest communicated by the Reference Banks to the Administrative
Agent as the rate at which deposits in such Alternate Currency are
offered to the Reference Banks by leading banks in the interbank
deposit market in the Principal Financial Center for such Alternate
Currency at approximately 11:00 A.M., local time, on the second full
Eurocurrency Business Day preceding the first day of such Interest
Period in an amount substantially equal to the principal amount of such
Loan for a term equal to such Interest Period.
"Indemnified Tax" shall have the meaning ascribed to such term
in Section 4.04(a).
"Initial Loan" shall mean the first Loan which is made pursuant
to the terms hereof.
"Interest Coverage Ratio" shall mean, as of any date of
determination, the ratio of (a) the consolidated pre-tax income of API and its
Consolidated Subsidiaries before the cumulative effect of accounting changes
and before interest expense (other than (i) hyperinflationary interest expense
in Brazil that is offset by corresponding foreign exchange-related gains, (ii)
interest expense attributable to pension accruals in Germany and Italy and
(iii) interest payable to the Internal Revenue Service in respect of taxes), to
(b) consolidated interest expense for API and its Consolidated Subsidiaries
(other than the interest expense described in the parenthetical phrase in
clause (a) above), in each case for the period of four fiscal quarters ending
on such date.
"Interest Period" shall mean (a) with respect to each Revolving
Eurodollar Loan, the period commencing on the Borrowing Date or on the last day
of the preceding Interest Period and ending one, two, three or six months
thereafter, as the Borrower may elect in the applicable Borrowing Request or
pursuant to Section 3.03(b), and (b) with respect to each Competitive Index
Rate Loan, the period commencing on the Borrowing Date and ending on the
Maturity Date; provided that
(i) any Interest Period that would otherwise end on a day that
is not a Eurocurrency Business Day shall be extended to the next
succeeding Eurocurrency Business Day unless such Eurocurrency Business
Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Eurocurrency Business Day,
(ii) any Interest Period that begins on the last Eurocurrency
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (iii) below, end on the last
Eurocurrency Business Day of a calendar month, and
(iii) any Interest Period that begins before the Termination
Date and would otherwise end after the Termination Date shall end on
the Termination Date.
19
"Lien" shall mean, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, encumbrance, charge or security interest in or on
such asset, (b) the interest of a vendor or lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset,
and (c) in the case of securities, any purchase option, call or similar right
of a third party with respect to such securities.
"Loans" shall mean, collectively, Revolving Credit Loans and
Competitive Advance Loans.
"Local Currency Lending Office" shall mean, with respect to
each Bank and each Alternate Currency, the office, branch or affiliate of such
Bank located in the country of the Principal Financial Center for such
Alternate Currency identified in its Administrative Questionnaire as its Local
Currency Lending Office for such Alternate Currency or such other office,
branch or affiliate of such Bank as it may hereafter designate as its Local
Currency Lending Office for such Alternate Currency by notice to the Borrowers
and the Administrative Agent.
"Locally Funded" shall mean, with respect to a Competitive
Alternate Currency Loan, that such Loan (i) is to bear interest by reference to
Local Market IBOR (as defined in the definition of "IBOR") for the relevant
Alternate Currency plus a Competitive Advance Margin, in the manner set forth
in Section 3.03 or (ii) is a Competitive Absolute Rate Loan the Competitive
Advance Rate for which has been established by reference to prevailing interest
rates in the Principal Financial Center for the currency in which such Loan is
denominated, and, in either case, that such Loan shall be made from the
relevant Local Currency Lending Office of the Bank making such Loan.
"Material Plan" shall mean a Plan or Plans having aggregate
Unfunded Liabilities in excess of $25,000,000.
"Material Subsidiary" shall mean, as of any date, a Subsidiary
having assets of at least $50,000,000, as reflected in the most recent
quarterly or annual balance sheet of such Subsidiary dated on or prior to such
date.
"Maturity Date" shall mean, with respect to a Competitive
Advance Loan, the date for repayment of such Competitive Advance Loan, which
date shall be at least 10 days and (a) not more than 180 days after the
Borrowing Date, in the case of a Competitive Absolute Rate Loan, or (b) not
more than six months after the Borrowing Date, in the case of a Competitive
Index Rate Loan, and in any event shall not be later than the Termination Date.
"Moody's" shall mean Xxxxx'x Investors Service and any
successor thereto that is a nationally recognized rating agency.
"Multiemployer Plan" shall mean an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which any member of
the ERISA Group is 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) and under which liability may be imposed on any member
of the ERISA Group.
20
"1970 Stock Plan" shall mean the Avon Products, Inc. 1970 Stock
Incentive Plan, as such plan may be amended, supplemented, modified or extended
from time to time.
"1993 Stock Plan" shall mean the Avon Products, Inc. 1993 Stock
Incentive Plan, as such plan may be amended, supplemented, modified or extended
from time to time.
"Notes" shall mean, collectively, Revolving Credit Notes and
Competitive Advance Notes, if any.
"Offshore Borrower" shall mean, as of any date, a Subsidiary of
API that has on or before such date been designated by API as an Offshore
Borrower in accordance with the terms of this Agreement; provided that such
Subsidiary shall be organized under the laws of any country except the United
States of America or any political subdivision thereof, or shall conduct the
major portion of its business outside the United States of America.
"Participant" shall have the meaning ascribed to such term in
Section 11.08(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any successor thereto.
"Person" shall mean any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization, association,
corporation, institution, public benefit corporation, entity or government
(whether Federal, state, county, city, municipal or otherwise, including any
instrumentality, division, agency, body or department thereof).
"Plan" shall mean an employee pension benefit plan as defined
in Section 3(2) of ERISA which is covered by Title IV of ERISA or subject to
the minimum funding standards under Section 412 of the Code and is maintained
for employees of API or any other member of the ERISA Group.
"Pledge Agreement" shall mean the Amended and Restated Pledge
Agreement to be entered into between API and the Collateral Agent in connection
with the Sublimit B Loans in substantially the form of Exhibit E attached
hereto.
"Prescribed Forms" shall mean such duly executed form(s) or
statement(s), and in such number of copies, which may, from time to time, be
prescribed by law and which, pursuant to applicable provisions of (a) an income
tax treaty between the United States and the country of residence of the Bank
providing the form(s) or statement(s), (b) the Code, or (c) any applicable rule
or regulation under the Code, permit the Borrowers to make payments hereunder
for the account of such Bank free of deduction or withholding for income or
similar taxes.
"Principal Financial Center" shall mean, with respect to an
Alternate Currency, the city specified below:
21
Alternate Currency Principal Financial Center
Australian Dollars Sydney, Australia
Canadian Dollars Toronto, Canada
Deutschemarks Frankfurt, Germany
French Francs Paris, France
Italian Lire Milan, Italy
Japanese Yen Tokyo, Japan
Pounds, Sterling London, England
Spanish Pesetas Madrid, Spain;
provided that with respect to any currency not listed above, the "Principal
Financial Center" shall be determined by agreement between API and the
Administrative Agent at the time such currency is designated as an Alternate
Currency.
"Pro Rata Share" shall mean, in the case of each Bank, the
proportion of such Bank's Commitment to the Total Commitment of all the Banks
or, if the Total Commitment shall have been cancelled or reduced to $0 or
expired, the proportion of the aggregate amount of such Bank's Revolving Credit
Loans then outstanding to the aggregate amount of Revolving Credit Loans then
outstanding.
"Reference Bank" shall mean each of The Chase Manhattan Bank,
Citibank, N.A., Bank of America Illinois, Bankers Trust Company and Xxxxxx
Guaranty Trust Company of New York.
"Register" shall have the meaning ascribed to such term in
Section 2.03.
"Required Banks" shall mean, at any date, Banks having at least
a majority of the Total Commitment or, if the Total Commitment has been
cancelled or terminated, holding at least a majority of the aggregate
outstanding principal amount of the Loans.
"Responsible Officer" shall mean, with respect to a Person, the
chief executive officer, president, chief financial officer, chief accounting
officer, treasurer, deputy treasurer or assistant treasurer, secretary or
assistant secretary or any vice president of such Person.
"Revolving Credit Loan Request" shall mean a telephonic request
(confirmed in writing by not later than 4:00 P.M., New York time, on the date
of such telephonic request) by a Borrower to borrow Revolving Credit Loans,
which shall specify (a) the requested Borrowing Date, (b) the aggregate amount
of Revolving Credit Loans that such Borrower desires to borrow on such date,
(c) whether such requested Revolving Credit Loans are to bear interest as ABR
Loans or Revolving Eurodollar Loans, (d) if the requested Revolving Credit
Loans are to bear interest as Revolving Eurodollar Loans, the Interest Period
therefor, and (e) whether such Loans are to be sublimit A Loans or Sublimit B
Loans.
22
"Revolving Credit Loans" shall mean, collectively, ABR Loans
and Revolving Eurodollar Loans, in any case denominated in Dollars.
"Revolving Credit Notes" shall mean, collectively, the
promissory notes of the Borrowers evidencing Revolving Credit Loans, if any.
"Revolving Eurodollar Loans" shall mean, collectively,
Revolving Credit Loans, or portions thereof, that bear interest at the rate and
in the manner set forth in Section 3.03.
"Revolving Eurodollar Margin" shall mean, at any date and with
respect to each Revolving Eurodollar Loan, the applicable margin set forth
below based upon the ratings applicable on such date to API's senior unsecured
long-term debt:
Revolving
Eurodollar
Margin
----------
Level 1
-------
Moody's: A1 or above 0.1550%
S&P: A+ or above
Level II
--------
Moody's: A2 0.1750%
S&P: A
Level III
---------
Moody's: A3 0.1750%
S&P: A-
Level IV
--------
Moody's: Baa1/Baa2 0.2250%
S&P: BBB+/BBB
Level V
-------
Moody's: Baa3 or lower 0.3000%
S&P: BBB- or lower
For purposes of the foregoing, (a) if no rating for API's senior unsecured
long-term debt shall be available from either rating agency, such rating agency
shall be deemed to have established a Level V rating, (b) if the ratings
established or deemed established by Moody's and S&P shall fall within
different Levels, the Revolving Eurodollar Margin shall be based upon the
Level corresponding to the more favorable of such ratings and (c) if any rating
established or deemed established by Moody's or S&P shall be changed (other
than as a result of a change in the rating system of either Moody's or S&P),
such change shall be given effect on and as of the opening of business on the
date when such change is first announced by the rating agency making such
change. Each such change shall apply to all Revolving Eurodollar Loans
outstanding at any time during the period commencing on the effective date of
such change and ending on the date immediately preceding the effective date of
the next such change. If the rating system of either Moody's or S&P shall
change prior to the Termination Date, API and the Banks shall negotiate in good
23
faith to amend the references to specific ratings in this definition to reflect
such changed rating system.
"S&P" shall mean Standard & Poor's Ratings Group and any
successor thereto that is a nationally recognized rating agency.
"SEC" shall mean the Securities and Exchange Commission or any
successor agency.
"Sublimit A Loans" shall mean, collectively, Loans, or portions
thereof, described in Section 2.08(b).
"Sublimit B Loans" shall mean, collectively, Loans, or portions
thereof, described in Section 2.08(c).
"Subsidiary" shall mean any corporation or other entity of
which a majority of the securities or other ownership interests having ordinary
voting power to elect directors or other persons performing similar functions
are at the time directly or indirectly owned by API.
"Taxes" shall have the meaning ascribed to such term in Section
4.04(a).
"Termination Date" shall mean the fifth anniversary of the
Effective Date or, if earlier, the date on which all Loans shall have been
fully repaid and all Commitments entirely cancelled.
"Total Commitment" shall mean the aggregate Commitments of all
the Banks, being initially $600,000,000 (subject to cancellation, increase or
reduction pursuant to Section 2.04 or 2.05).
"Unfunded Liabilities" means, with respect to any Plan, any
amount by which (a) the present value of all benefit liabilities under such
Plan exceeds (b) the fair market value of all Plan assets allocable to such
benefits (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" shall mean any Subsidiary all the
shares of stock of all classes of which (other than directors' qualifying
shares) at the time are owned directly or indirectly by the Borrower and/or one
or more Wholly owned Subsidiaries of API.
ARTICLE II
The Loans
Section 2.01. The Revolving Credit Loans; Commitments. (a)
Prior to the Termination Date and subject to the terms and conditions of this
Agreement, each of the Banks, severally and not jointly with the other Banks,
agrees to make one or more Revolving Credit Loans denominated in Dollars to the
Domestic Borrowers from time to time in an aggregate principal amount at any
one time outstanding not to exceed its Commitment; provided, however, that the
amount of Revolving Credit Loans which may be borrowed on any Borrowing Date
may not exceed the Available Facility (after giving effect to any Loans being
24
repaid or prepaid on such Borrowing Date and any other Loans to be made on such
Borrowing Date).
(b) Each Bank's Commitment, as of the date of this Agreement,
is set forth opposite its name in Schedule 2.01, and, after such date, each
Bank's Commitment shall be recorded in the Register as provided in
Section 2.03.
Section 2.02. Procedure for Revolving Credit Loans. (a) A
Domestic Borrower may borrow Revolving Credit Loans by giving a Revolving
Credit Loan Request telephonically, to the Administrative Agent not later than
10:30 A.M., New York time (to be confirmed in writing in substantially the form
of Exhibit A not later than 4:00 P.M. on the same day), (i) on the Borrowing
Date therefor with respect to any ABR Loan and (ii) at least three Eurocurrency
Business Days before the Borrowing Date with respect to any Revolving
Eurodollar Loan. Revolving Credit Loans shall be in an amount equal to
$10,000,000 or an integral multiple of $1,000,000 in excess thereof (except
that such borrowing of ABR Loans may be in the aggregate amount of the unused
portion of the Total Commitment).
(b) Upon receipt of any Revolving Credit Loan Request from a
Domestic Borrower, the Administrative Agent shall forthwith give notice to each
Bank of the substance thereof. Not later than 2:00 P.M., New York time, on the
Borrowing Date specified in such Revolving Credit Loan Request, each Bank shall
make available to the Administrative Agent in immediately available funds at
the Applicable Lending Office of the Administrative Agent (or, if the
Administrative Agent has specified a different address in the notice referred
to above, at such address), such Bank's Pro Rata Share of the Revolving Credit
Loans requested.
(c) Upon receipt by the Administrative Agent of all such
funds, the Administrative Agent shall disburse to the relevant Domestic
Borrower on the requested Borrowing Date the Revolving Credit Loans requested
in such Revolving Credit Loan Request. The Administrative Agent may, but shall
not be required to, advance on behalf of any Bank such Bank's Pro Rata Share of
such Revolving Credit Loans on a Borrowing Date unless such Bank shall have
notified the Administrative Agent prior to such Borrowing Date that it does not
intend to make available its Pro Rata Share of such Revolving Credit Loans on
such date. If the Administrative Agent makes such an advance, the
Administrative Agent shall be entitled to recover such amount on demand from
the Bank on whose behalf such advance was made, and if such Bank does not pay
the Administrative Agent the amount of such advance upon demand, such Domestic
Borrower shall promptly repay such amount to the Administrative Agent, acting
for the Banks. Until such amount is repaid to the Administrative Agent by such
Bank or the relevant Domestic Borrower, such advance shall be deemed for all
purposes to be a Revolving Credit Loan made by the Administrative Agent. The
Administrative Agent shall be entitled to recover from the Bank or such
Domestic Borrower, as the case may be, interest on the amount advanced by it
for each day from the Borrowing Date therefor until repaid to the
Administrative Agent at a rate per annum equal to (i) in the case of an amount
recovered from any Bank, the Federal Funds Rate or (ii) in the case of an
amount recovered from a Borrower, the higher of the Federal Funds Rate and the
interest rate applicable thereto pursuant to Section 3.01. The failure of any
Bank to make any Loan to be made by it on any Borrowing Date shall not relieve
any other Bank of its obligation, if any, hereunder to make its Loan on such
Borrowing Date, and neither the Administrative Agent nor any other Bank shall
25
be responsible for the failure by such Bank to make the Loan to be made by such
Bank on such Borrowing Date.
Section 2.03. Evidence for Loans. (a) Each Bank shall
maintain, in accordance with its customary and usual practice, accounts
evidencing the indebtedness of each Borrower to such Bank resulting from each
Loan made by such Bank from time to time, including an indication of the
Applicable Lending Office and the amounts of principal and interest payable and
paid to such Bank in respect of Loans.
(b) The Administrative Agent shall maintain, in accordance
with its customary and usual practice, at its address referred to in
Section 11.06, a copy of each Assignment and Acceptance delivered to it and a
register (the "Register") for the recordation of (i) the names of the
Borrowers, (ii) the amount and currency of each Loan, whether such Loan is a
Revolving Credit Loan or a Competitive Advance Loan, the interest rate options,
the Interest Period or Maturity Date (if any) applicable thereto and the
Borrower thereof, (iii) the amount of any principal or interest due and payable
or to become due and payable from each Borrower to each Bank hereunder,
(iv) the amount of any payments received by the Administrative Agent hereunder
from each Borrower and each Bank's share thereof and (v) with respect to each
Assignment and Acceptance delivered to the Administrative Agent, the name and
address of the Assignee and the principal amount of each Loan owing to such
Assignee. The Register shall be available for inspection during ordinary
business hours by the Borrowers or any Bank or Assignee from time to time upon
reasonable prior notice to the Administrative Agent.
(c) The entries made in the Register and the foregoing
accounts shall, to the extent permitted by applicable law, be prima facie
evidence of the existence and amounts of the indebtedness of each Borrower
therein recorded; provided, however, that the failure of any Bank or the
Administrative Agent to maintain the Register or any such account, as
applicable, or any error therein, shall not in any manner affect the validity
or enforceability of any obligation of a Borrower to repay any Loan actually
made to such Borrower by such Bank in accordance with the terms of this
Agreement. The entries in the Register relating to assignments shall be
conclusive, in the absence of clearly demonstrable error, and the Borrowers,
the Administrative Agent and the Banks may treat each Person whose name is
recorded in the Register as the owner of the Loan recorded therein for all
purposes of this Agreement.
(d) A Borrower's obligation to repay any Revolving Credit Loan
or Competitive Advance Loan that shall be assigned to a Federal Reserve Bank by
a Bank shall, to the extent requested by such Bank in order to effect such
assignment, be evidenced by one or more Notes, in substantially the form of
Exhibit B-1 (a "Revolving Credit Note") or Exhibit B-2 (a "Competitive Advance
Note"), as appropriate. A Revolving Credit Note shall be (i) in the principal
amount and currency of the Loan or Loans so assigned and (ii) stated to mature
on the Termination Date and bear interest from its date until paid in full on
the principal balance (from time to time outstanding thereunder) payable at the
rates and in the manner provided herein. A Competitive Advance Note shall be
(i) in the principal amount and currency of the Competitive Advance Loan made
by such Bank and so assigned, (ii) stated to mature on the Maturity Date for
such Competitive Advance Loan and bear interest from its date until paid in
full on the principal balance (from time to time outstanding thereunder)
payable at the rates and in the manner provided herein and (iii) not prepayable
by the Borrower.
26
Section 2.04. Increase of Commitment. API may from time to
time, by notice to the Administrative Agent (which shall promptly deliver a
copy to each of the Banks), request that the Total Commitment to be increased
by an amount that is not less than $150,000,000 and will not result in the
Total Commitment exceeding $750,000,000. Each such notice shall set forth the
requested amount of the increase in the Total Commitment and the date on which
such increase is to become effective (which shall be not fewer than twenty days
after the date of such notice), and shall offer each Bank the opportunity to
increase its Commitment by its ratable share, based on the amounts of the
Banks' Commitments on the date of such notice, of the requested increase in the
Total Commitment. Each Bank shall, by notice to API and the Administrative
Agent given not more than ten Business Days after the date of API's notice,
either agree to increase its Commitment by all or a portion of the offered
amount or decline to increase its Commitment (and any Bank that does not
deliver such a notice within such period of ten Business Days shall be deemed
to have declined to increase its Commitment). In the event that, on the tenth
Business Day after API shall have delivered a notice pursuant to the first
sentence of this paragraph, the Banks shall have agreed pursuant to the
preceding sentence to increase their Commitments by an aggregate amount less
than the increase in the Total Commitment requested by API, API shall have the
right to arrange for one or more banks or other financial institutions (any
such bank or other financial institution being called an "Augmenting Bank"),
which may include any Bank, to extend Commitments or increase their existing
Commitments in an aggregate amount equal to the unsubscribed amount, provided
that each Augmenting Bank, if not already a Bank hereunder, shall be subject to
the approval of the Administrative Agent (which approval shall not be
unreasonably withheld or delayed) and shall execute all such documentation as
the Administrative Agent shall specify to evidence its status as a Bank
hereunder. If (and only if) Banks (including Augmenting Banks) shall have
agreed to increase their Commitments or to extend new Commitments in an
aggregate amount not less than $150,000,000, such increases and such new
Commitments shall become effective on the date specified in the notice
delivered by API pursuant to the first sentence of this Section.
Notwithstanding the foregoing, no increase in the Total Commitment (or in the
Commitment of any Bank) shall become effective under this paragraph unless, on
the date of such increase, (i) the conditions set forth in paragraphs (a), (b)
and (c) of Section 6.02 (including the condition set forth in Section 6.02(c)
insofar as it relates to representations and warranties contained in Sections
5.01(d)(iii) and 5.01(e) which are otherwise excluded in Section 6.02) shall be
satisfied and the Administrative Agent shall have received a certificate to
that effect dated such date and executed by a Responsible Officer of API or
(ii) the Banks shall have waived the requirements set forth in clause (i) of
this sentence.
Section 2.05. Reduction of Commitments. The Domestic
Borrowers shall have the right, upon not less than three Domestic Business
Days' telephonic notice (promptly confirmed in writing) from API to the
Administrative Agent and upon payment of the Facility Fee accrued to (but
excluding) the date of such reduction, to reduce the Total Commitment in full
or in part; provided, however, that the amount of any reduction in the Total
Commitment may not exceed the Available Facility. Partial reductions of the
Total Commitment shall be in the amount of $10,000,000 or in integral multiples
of $1,000,000 in excess thereof (or, if the Available Facility is less than
$10,000,000, then all of such lesser amount). Subject to Section 2.04, all
reductions of the Total Commitment shall be permanent.
27
Section 2.06. Prepayment of Revolving Credit Loans. (a) A
Domestic Borrower shall have the right, by giving telephonic notice (promptly
confirmed in writing) to the Administrative Agent by not later than 10:30 A.M.,
New York time, (i) on the day of prepayment in the case of ABR Loans and
(ii) on the third Eurocurrency Business Day prior to the day of prepayment in
the case of Revolving Eurodollar Loans, to prepay Revolving Credit Loans of
such Domestic Borrower bearing interest on the same basis and having the same
Interest Period, if any, in whole or in part, without premium or penalty, in
the aggregate principal amount of $10,000,000 or integral multiples of
$1,000,000 in excess thereof (or, if the outstanding aggregate principal amount
of such Revolving Credit Loan is less than $10,000,000, then all of such lesser
amount), together with accrued interest (except for ABR Loans, as to which such
interest shall be paid on the next date when it otherwise would be payable
under 3.02) on the principal being prepaid to (but excluding) the date of
prepayment and, in the case of Revolving Eurodollar Loans, the amounts required
by Section 4.03. Subject to the terms and conditions hereof, Revolving Credit
Loans so prepaid may be reborrowed by any Domestic Borrower.
(b) Prepayments shall first be applied to any outstanding
Sublimit B Loans, then to any outstanding Sublimit A Loans, and then to any
other outstanding Loans.
Section 2.07. Competitive Advance Loans. (a) Prior to the
Termination Date, a Borrower may request that the Banks make offers to make
Competitive Advance Loans on the terms and conditions hereinafter set forth;
provided, however, that (i) the amount of Competitive Advance Loans that may be
borrowed on any Borrowing Date (including the Dollar Equivalent Amount of any
Competitive Advance Currency Loans included in such request based on the
Exchange Rate in effect on the date of the Competitive Advance Loan Request)
may not exceed the Available Facility (after giving effect to any Loans to be
repaid or prepaid on such Borrowing Date and any other Loans to be made on such
Borrowing Date), (ii) the aggregate amount of Competitive Advance Loans which
may be outstanding (including the Dollar Equivalent Amount of outstanding
Competitive Advance Currency Loans based upon the Exchange Rate in effect on
the Borrowing date therefor) on any day may not exceed the Total Commitment
(after giving effect, with respect to any day, to any Loans being repaid or
prepaid on such day and any other Loans to be made on such day), and (iii) such
Borrower may not request Competitive Advance Loans before the fifth Domestic
Business Day after the Effective Date. Each Bank may, but shall have no
obligation to, make such offers and a Borrower may, but shall have no
obligation to, accept any such offers, in the manner set forth in this
Section 2.07. Competitive Advance Loans may be requested (i) to be denominated
in Dollars (including as Competitive Eurodollar Loans) by any Borrower or
(ii) to be denominated in an Alternate Currency (as Competitive Alternate
Currency Loans), either Euromarket Funded or Locally Funded, by the applicable
Offshore Borrower, subject to the condition that
such Offshore Borrower, in a Competitive Advance Loan Request, shall have
requested that such Competitive Advance Loans be denominated in the applicable
Alternate Currency relating to such Offshore Borrower specified in such
Competitive Advance Loan Request and shall have specified whether such
Competitive Advance Loans are to be Euromarket Funded or Locally Funded.
(b) A Borrower may request Competitive Advance Loans under
this Section 2.07 by a Competitive Advance Loan Request, in substantially the
form of Exhibit C-2, given to the Administrative Agent not later than the
Competitive Advance Notice Time therefor. The Competitive Advance Loan Request
shall indicate whether the solicitation of Competitive Advance Bids shall be
28
conducted by the Administrative Agent in New York or in London. The
Administrative Agent shall promptly notify each Bank, by a letter in
substantially the form of Exhibit C-3, of each Competitive Advance Loan Request
received by it from a Borrower and of the terms contained therein.
(c) Each Bank may, if it elects so to do, irrevocably offer to
make a Competitive Advance Loan of the requested type to the requesting
Borrower at a Competitive Advance Bid Rate or Rates, as specified by such Bank
in accordance with the related Competitive Advance Loan Request, by submitting
to the Administrative Agent (which shall give prompt notice thereof to such
Borrower) a Competitive Advance Bid, in substantially the form of Exhibit C-4,
before the Competitive Advance Bid Deadline, of the maximum and minimum
principal amounts of the Competitive Advance Loan which such Bank would be
willing to make (which amount may, subject to the proviso to the first sentence
of Section 2.07(a), exceed such Bank's Commitment, but shall be in a principal
amount equal to $5,000,000 or an integral multiple of $1,000,000 in excess
thereof (or, in the case of a Competitive Alternate Currency Loan, in a Dollar
Equivalent Amount, equal to at least $5,000,000 (calculated on the basis of the
Exchange Rate in effect on the date of the Competitive Advance Loan Request)),
the rate or rates of interest therefor or the applicable margin over IBOR for
the relevant Interest Period, as the case may be, and any other terms and
conditions required by such Bank. If any Bank shall fail to submit a
Competitive Advance Bid to the Administrative Agent before the Competitive
Advance Bid Deadline, then such Bank shall be deemed to have elected not to
make an offer to make a Competitive Advance Loan. If a Bank submits a
Competitive Advance Bid pursuant to this Section 2.07 specifying that such Bank
is waiving the right to claim compensation under Section 3.03(c), 4.04(a) or
4.04(b), such Bank shall be deemed to have waived the right to claim such
compensation under such Section 3.03(c), 4.04(a) or 4.04(b) in connection with
any Competitive Advance Loan or Loans thereafter made by such Bank pursuant to
such Competitive Advance Bid; and the Borrower shall be entitled to make a
reasonable determination that a Competitive Advance Bid in which a Bank has
waived the right to any such compensation is made at a Competitive Advance Bid
Rate lower than an otherwise identical Competitive Advance Bid including no
such waiver. The Administrative Agent shall (i) disclose the Competitive
Advance Bids received to the relevant Borrower as promptly as reasonably
practicable after the Bid Deadline, (ii) maintain all Competitive Advance Bids
in confidence until each of them has been disclosed to such Borrower and
(iii) provide copies of all Competitive Advance Bids to the relevant Borrower
as soon as practicable after completion of the bidding process set forth in
this Section 2.07.
(d) A Borrower that made a Competitive Advance Loan Request
shall, before the Competitive Advance Accept/ Reject Deadline, either
(i) cancel the Competitive Advance Loan Request by giving the
Administrative Agent notice to that effect, or
(ii) accept one or more Competitive Advance Bids, in its sole
discretion, by giving notice to the Administrative Agent of the
principal amount of each Competitive Advance Loan (which principal
amount shall be equal to or greater than the minimum amount offered by
such Bank and equal to or less than the maximum amount offered by such
Bank for such Competitive Advance Loan pursuant to Section 2.07(c)), to
be made by each Bank, and reject any remaining Competitive Advance
Bids, by giving the Administrative Agent notice to that effect;
provided that the aggregate principal amount of such offers accepted by
29
the Borrower shall be in a principal amount equal to $5,000,000 or an
integral multiple of $1,000,000 in excess thereof (or, in the case of a
Competitive Alternate Currency Loan, a Dollar Equivalent Amount equal
to at least $5,000,000 (calculated on the basis of the Exchange Rate in
effect on the date of the Competitive Advance Loan Request)), each such
notice to be in substantially the form of Exhibit C-5 (a "Competitive
Advance Accept/Reject Notice"); provided that (A) the failure by such
Borrower to give such notice in a timely fashion shall be deemed to be
a rejection of all Competitive Advance Bids, (B) the Borrower shall not
accept a Competitive Advance Bid made at a Competitive Advance Bid Rate
if such Borrower has rejected a Competitive Advance Bid made at a lower
Competitive Advance Bid Rate, (C) the aggregate principal amount of the
Competitive Advance Bids accepted by the Borrower shall not exceed the
principal amount specified in the Competitive Advance Loan Request,
(D) if the Borrower shall accept a Competitive Advance Bid made at a
particular Competitive Advance Bid Rate but the amount of such
Competitive Advance Bid shall cause the total amount of Competitive
Advance Bids accepted by the Borrower to exceed the amount specified in
the Competitive Advance Loan Request, then such Borrower shall
(notwithstanding the minimum bid acceptance amount required by
clause (F) below) accept a portion of such Competitive Advance Bid in
an amount equal to the amount specified in the Competitive Advance Loan
Request less the amount of all other Competitive Advance Bids accepted
with respect to such Competitive Advance Loan Request, (E) if the
Borrower shall accept Competitive Advance Bids made at a particular
Competitive Advance Bid Rate but shall be restricted by other
conditions hereof from borrowing the principal amount of Competitive
Advance Loans specified in such Competitive Advance Loan Request in
respect of which Competitive Advance Bids at such Competitive Advance
Bid Rate have been made or if the Borrower shall accept Competitive
Advance Bids made at a particular Competitive Advance Bid Rate but the
aggregate amount of Competitive Advance Bids made at such Competitive
Advance Bid Rate shall exceed the amount specified in the Competitive
Advance Loan Request, then the Borrower shall accept a pro rata portion
of each Competitive Advance Bid made at such Competitive Advance Bid
Rate aggregating the portion of Competitive Advance Loans with respect
to which Competitive Advance Bids at such Competitive Advance Bid Rate
have been received (provided further that if the principal amount of
Competitive Advance Loans to be so allocated is not sufficient to
enable Competitive Advance Loans to be so allocated to each such Bank
in a principal amount equal to $5,000,000 or an integral multiple of
$1,000,000 in excess thereof (or, in the case of a Competitive
Alternate Currency Loan, a Dollar Equivalent Amount equal to at least
$5,000,000 (calculated on the basis of the Exchange Rate in effect on
the date of the Competitive Advance Loan Request)), the Borrower shall
select the Banks to be allocated such Competitive Advance Loans in a
principal amount (or, in the case of a Competitive Alternate Currency
Loan, a Dollar Equivalent Amount (calculated on the basis of the
Exchange Rate in effect on the date of the Competitive Advance Loan
Request)) equal to not less than $5,000,000 but may round up
allocations to the next higher integral multiple of $1,000,000 if
necessary) and (F) except as provided in clauses (D) and (E) above, no
Competitive Advance Bid shall be accepted for a Competitive Advance
Loan unless such Competitive Advance Loan is in a principal amount
equal to $5,000,000 or an integral multiple of $1,000,000 in excess
thereof (or, in the case of a Competitive Alternate Currency Loan, a
Dollar Equivalent Amount equal to at least $5,000,000 (calculated on
30
the basis of the Exchange Rate in effect on the date of the Competitive
Advance Loan Request)).
(e) If the Borrower that made a Competitive Advance Loan
Request notifies the Administrative Agent that such Competitive Advance Loan
Request is cancelled in accordance with Section 2.07(d)(i), the Administrative
Agent shall give prompt notice thereof to the Banks.
(f) If the Borrower that made a Competitive Advance Loan
Request accepts one or more Competitive Advance Bids, the Administrative Agent
shall promptly give notice (i) to each Bank that submitted a Competitive
Advance Bid of the date and aggregate amount of such Competitive Advance
Loan(s), the Competitive Advance Bid Rate thereon and whether or not any
Competitive Advance Bid made by such Bank has been accepted by the Borrower,
(ii) to each Bank whose Competitive Advance Bid, or any portion thereof, has
been accepted by the Borrower, of the amount of the Competitive Advance Loan to
be made by such Bank and the date for repayment thereof, together with the
Competitive Advance Rate or Competitive Advance Margin, as applicable, and any
other terms applicable to such Competitive Advance Loan and (iii) to each Bank
of the principal amounts and Competitive Advance Bid Rates specified in each of
the Competitive Advance Bids submitted in response to the related Competitive
Advance Loan Request.
(g) Following any acceptance by the Borrower and notification
by the Administrative Agent pursuant to clause (f) above, and upon satisfaction
or waiver of the conditions precedent contained in Article VI applicable
thereto, each such Bank, through its Eurocurrency Lending Office or relevant
Local Currency Lending Office, as applicable, shall disburse to such Borrower
on the specified Borrowing Date, Competitive Advance Loans in the aggregate
amount (and the applicable currency) accepted by such Borrower, in the manner
and subject to the same terms and conditions set forth in Section 2.02(c) with
respect to ABR Loans, mutatis mutandis.
(h) Nothing in this Section 2.07 shall be construed as a right
of first offer in favor of the Banks or to otherwise limit the ability of a
Borrower to request and accept credit facilities from any Person (including any
Bank).
Section 2.08. Purpose of Loans; Sublimits. (a) Except as set
forth in Sections 2.08(b) and 2.08(c), the proceeds of the Revolving Credit
Loans will be used for general corporate purposes, which shall include the use
thereof, directly or indirectly, for the purpose, whether immediate, incidental
or ultimate, of funding or making payments on account of the purchase,
redemption and retirement by API of any shares of capital stock of API or any
related option, warrant or similar right.
(b) Subject to the satisfaction or waiver of the condition set
forth in Section 6.05, the proceeds of ABR Loans made to API, or portions
thereof, in an aggregate principal amount not exceeding $60,000,000 at any one
time outstanding ("Sublimit A Loans"), may be applied, directly or indirectly,
toward payments to employees of API or its Subsidiaries under severance
arrangements or may be paid to a trust or otherwise set aside to assure the
ability of API or any such Subsidiary to make such payments.
(c) Subject to the satisfaction or waiver of the condition set
forth in Section 6.06, the proceeds of ABR Loans made to API, or portions
thereof, in an aggregate principal amount not exceeding $150,000,000 at any one
31
time outstanding ("Sublimit B Loans") shall be placed into the Account and, in
accordance with the terms and conditions set forth in the Pledge Agreement such
proceeds shall be applied, directly or indirectly, toward payments required
pursuant to Section 13(a)(iii) of the 1970 Stock Plan or Section 3.1(d) of the
1993 Stock Plan or pursuant to any provision of a Stock Incentive Agreement or
Stock Incentive Program thereunder, including payments for the repurchase of
certain stock, stock options or rights or performance units held by employees
upon a change in control.
ARTICLE III
Interest, Conversion, Fees, Etc.
Section 3.01. Procedure for Interest Rate Determination. (a)
Unless a Domestic Borrower shall request in a Revolving Credit Loan Request or
in a Conversion Request that its Revolving Credit Loans, or portions thereof,
bear interest as Revolving Eurodollar Loans, such Borrower's Revolving Credit
Loans shall bear interest as ABR Loans.
(b) Each Competitive Advance Loan shall bear interest on the
basis, or at the rate per annum, determined pursuant to Section 2.07 and
Section 3.03 or 3.04, as appropriate.
(c) Sublimit A Loans and Sublimit B Loans may only be ABR
Loans.
Section 3.02. Interest on ABR Loans. Each ABR Loan shall bear
interest from the date of such ABR Loan until paid in full, or (if converted
into a Revolving Eurodollar Loan) to (but excluding) the first day of the
relevant Interest Period, payable in arrears on the last day of each calendar
quarter, commencing with the first such date after the date hereof, and on the
date such Loan is repaid, at a rate per annum (on the basis of (i) a 365-day
year (366 days in the case of a leap year) if the Base Rate is calculated based
on the prime rate and (ii) a 360-day year if the Base Rate is calculated based
on the Federal Funds Rate, for the actual number of days involved) equal to the
sum of (x) the Base Rate in effect from time to time, which rate shall change
as and when said Base Rate shall change and (y) in the case of a Sublimit A
Loan or a Sublimit B Loan, the Applicable Sublimit Margin.
Section 3.03. Interest on Eurocurrency Loans and Competitive
Index Rate Loans. (a) Each Eurocurrency Loan and each Competitive Index Rate
Loan shall bear interest from the date of such Loan to (but excluding) the last
day of the relevant Interest Period, or (if earlier) to (but excluding) the
Termination Date (in the case of a Revolving Eurodollar Loan) or the Maturity
Date (in the case of a Competitive Index Rate Loan), payable in arrears
(A) with respect to Interest Periods of three months or less, on the last day
of such Interest Period, and (B) with respect to Interest Periods longer than
three months, on the date which occurs three months after the first day of such
Interest Period and on the last day of such Interest Period, at a rate per
annum (on the basis of a 360-day year for the actual number of days involved
(or, in the case of a Locally Funded Competitive Alternate Currency Loan, on
the basis of the standard day count used for loans in the relevant Alternate
Currency in the Principal Financial Center therefor)), with respect to each
Interest Period, equal to the sum of (i) the Revolving Eurodollar Margin, in
the case of a Revolving Eurodollar Loan, or the Competitive Advance Margin, in
the case of a Competitive Index Rate Loan, and (ii) IBOR.
32
(b) The Interest Period for each Revolving Eurodollar Loan
shall be selected by the relevant Borrower at least three Eurocurrency Business
Days prior to the beginning of such Interest Period. If such Borrower fails to
notify the Administrative Agent of the Interest Period for a subsequent
Revolving Eurodollar Loan at least three Eurocurrency Business Days prior to
the last day of the then current Interest Period of an outstanding Revolving
Eurodollar Loan, then such outstanding Revolving Eurodollar Loan shall become
an ABR Loan at the end of such current Interest Period.
(c) For so long as any Bank maintains reserves against
"Eurocurrency Liabilities" pursuant to Regulation D of the Federal Reserve
Board (or any successor regulation), each Borrower shall, subject to the two
next succeeding sentences, contemporaneously with the related interest
payments, pay additional interest on each Eurocurrency Loan of such Bank at a
rate per annum up to but not exceeding the excess of (i) (A) IBOR divided by
(B) one minus the Eurodollar Reserve Percentage over (ii) IBOR. Each Bank
shall promptly notify API, with a copy to the Administrative Agent, upon
becoming aware that any Borrower may be required to make a payment pursuant to
this Section 3.03(c). When requesting payment pursuant to this Section
3.03(c), each Bank shall provide to API, with a copy to the Administrative
Agent, a certificate, signed by an officer of such Bank setting forth, in
reasonable detail, the basis of such claim, the amount required to be paid by
the Borrower to such Bank and the computations made by such Bank to determine
such amount. Absent demonstrable error, such certificate shall be binding as
to the amounts of additional interest owing in respect of such Bank's
Eurocurrency Loans.
Section 3.04. Interest on Competitive Absolute Rate Loans.
Each Competitive Absolute Rate Loan shall bear interest from the date of such
Competitive Absolute Rate Loan to (but excluding) its Maturity Date, payable in
arrears on the date such Loan is repaid, at a rate per annum (on the basis of a
360-day year for the actual number of days involved) equal to the Competitive
Advance Rate.
Section 3.05. Continuation and Conversion of Revolving Credit
Loans. (a) A Domestic Borrower may request, by telephonic notice to the
Administrative Agent of a Conversion Request, confirmed in writing in
substantially the form of Exhibit D by no later than 4:00 P.M., New York time,
on the same day, in advance of the requested Conversion Date as provided in the
definition of "Conversion Request", that:
(i) all the outstanding ABR Loans of such Borrower, or a
portion thereof in an aggregate amount equal to $10,000,000 or an
integral multiple of $1,000,000 in excess thereof, be converted into a
Revolving Eurodollar Loan on the requested Conversion Date; or
(ii) all the Revolving Eurodollar Loans of such Borrower having
the same Interest Period, or a portion thereof in an aggregate amount
equal to $10,000,000 or an integral multiple of $1,000,000 in excess
thereof, be converted into ABR Loans on the requested Conversion Date.
(b) Upon receipt of any such Conversion Request from a
Domestic Borrower, the Administrative Agent shall forthwith give notice to each
Bank of the substance thereof. Effective on such Conversion Date and upon
payment by such Borrower of the amounts, if any, required by Section 4.03, the
Revolving Credit Loans or portions thereof as to which the Conversion Request
33
was made shall commence to accrue interest as set forth in this Article III for
the interest rate selected by such Borrower.
Section 3.06. Post-Maturity Interest. After maturity (whether
by acceleration or otherwise) of any Loan, such Loan shall bear interest,
payable on demand, at a rate per annum equal to the sum of (i) 2%, (ii) the
Base Rate in effect from time to time, and (iii) the Applicable Sublimit
Margin, if any.
Section 3.07. Maximum Interest Rate. (a) Nothing in this
Agreement or any other Credit Document shall require a Borrower to pay interest
at a rate exceeding the maximum rate permitted by applicable law. Neither this
Section nor Section 11.01 is intended to limit the rate of interest payable for
the account of any Bank to the maximum rate permitted by the laws of the State
of New York (or any other applicable law) if a higher rate is permitted with
respect to such Bank by supervening provisions of U.S. federal law.
(b) If the amount of interest payable by a Borrower for the
account of any Bank on any interest payment date in respect of the immediately
preceding interest computation period, computed pursuant to this Article III,
would exceed the maximum amount permitted by applicable law to be charged by
such Bank, the amount of interest payable for its account on such interest
payment date shall automatically be reduced to such maximum permissible amount.
Section 3.08. Fees. (a) The Borrowers, jointly and
severally, agree to pay, in arrears on each Fee Payment Date, to the
Administrative Agent for the account of the Banks, a fee (the "Facility Fee")
computed by applying the applicable percentages per annum set forth below based
on the ratings on each day of API's senior unsecured long-term debt (each range
of ratings listed under any Level being inclusive of the ratings so listed) to
the average daily amount of the Total Commitment during the quarterly period
(or shorter period commencing with the Effective Date) ending on the Business
Day immediately preceding such Fee Payment Date:
Facility Fee
Percentage Per
Annum
---------------
Level 1
-------
Xxxxx'x: A1 or above 0.0700%
S&P: A+ or above
Level II
--------
Xxxxx'x: A2 0.0750%
S&P: A
Level III
---------
Xxxxx'x: A3 0.0800%
S&P: A-
Level IV
--------
Xxxxx'x: Baa1/Baa2 0.1250%
S&P: BBB+/BBB
34
Level V
-------
Xxxxx'x: Baa3 or below 0.1750%
S&P: BBB- or below
For purposes of the foregoing, (a) if no rating for API's senior unsecured
long-term debt shall be available from either rating agency, such rating agency
shall be deemed to have established a Level V rating, (b) if the ratings
established or deemed established by Xxxxx'x and S&P shall fall within
different Levels, the Facility Fee shall be based upon the Level corresponding
to the more favorable of such ratings and (c) if any rating established or
deemed established by Xxxxx'x or S&P shall be changed (other than as a result
of a change in the rating system of either Xxxxx'x or S&P), such change shall
be given effect on and as of the opening of business on the date when such
change is first announced by the rating agency making such change. If the
rating system of either Xxxxx'x or S&P shall change prior to the Termination
Date, API and the Banks shall negotiate in good faith to amend the references
to specific ratings in this definition to reflect such changed rating system.
(b) The Facility Fee shall be computed based on a 365-day year
(366 days in the case of a leap year), for the actual number of days involved.
ARTICLE IV
Disbursement and Payment
Section 4.01. Disbursement of Loans; Pro Rata Treatment of
Banks. (a) ABR Loans shall be made by each Bank from its ABR Lending Office.
(b) Eurodollar Loans and other Euromarket Funded Loans shall be
made by each Bank from its Eurocurrency Lending Office.
(c) Locally Funded Loans shall be made by each Bank from its
Local Currency Lending Office for the relevant Alternate Currency.
(d) Each payment of a Facility Fee, each reduction of the Total
Commitment and, except as expressly provided otherwise in this Agreement, each
payment of principal of or interest on Revolving Credit Loans shall be
apportioned among the Banks in proportion to each Bank's Pro Rata Share.
Section 4.02. Method of Payment. (a) All payments of
principal of or interest on Revolving Credit Loans or Competitive Advance Loans
(other than Competitive Alternate Currency Loans) shall be payable in Dollars.
The Facility Fee also shall be payable in Dollars. All payments of principal
of or interest on a Competitive Alternate Currency Loan shall be payable in the
relevant Alternate Currency.
(b) All payments to be made by the Borrowers hereunder in
Dollars shall be made not later than 2:00 P.M., New York time, on the date when
due, in Federal or other funds immediately available in New York City, (i) in
the case of payments of principal of, and interest on, Revolving Credit Loans
and payments of a Facility Fee, to the Administrative Agent at its ABR Lending
Office, (ii) in the case of payments of principal and interest on Competitive
Advance Loans, to the Eurocurrency Lending Office or relevant Local Currency
Lending Office for such Loan, as applicable.
35
(c) All payments to be made by a Borrower hereunder in an
Alternate Currency shall be made not later than 2:00 P.M., local time in the
relevant city, on the date when due, in such Alternate Currency in such funds
as may then be customary for the settlement of international transactions in
such Alternate Currency in London (in respect of Euromarket Funded Loans) or
the Principal Financial Center for such Alternate Currency (in respect of
Locally Funded Loans).
(d) Whenever any payment of principal of, or interest on, ABR
Loans or Competitive Advance Loans denominated in Dollars 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, Eurocurrency Loans or Competitive Index Rate
Loans shall be due on a day which is not a Eurocurrency Business Day, the date
for payment thereof shall be extended to the next succeeding Eurocurrency
Business Day unless such Eurocurrency Business Day falls in another calendar
month, in which case the date for payment thereof shall be the next preceding
Eurocurrency 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.
(e) Unless the Administrative Agent shall have received notice
from the relevant Borrower prior to the date on which any payment is due to the
Banks hereunder that such Borrower will not make such payment in full, the
Administrative Agent may assume that such Borrower has made such payment in
full to the Administrative Agent on such date and the Administrative Agent may,
in reliance upon such assumption, but shall not be obligated to, 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 such Borrower shall not have so made
such payment, each Bank shall repay to the Administrative 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 Administrative Agent, at the Federal Funds
Rate.
(f) Any and all payments made by a Borrower to the
Administrative Agent or the Banks hereunder shall be made without right of set-
off, counterclaim or other defenses.
(g) The Administrative Agent will promptly cause any payments
received by it to be distributed to each Bank for whose account payment has
been made in like funds.
Section 4.03. Compensation for Losses. (a) Compensation. If
(i) a Domestic Borrower makes a prepayment of a Revolving Eurodollar Loan under
Section 2.06 (other than a prepayment to a Bank to which Additional Costs or
Additional Amounts may be due that has not complied with its obligations under
Section 4.04(c)), or a Conversion Date selected by a Domestic Borrower pursuant
to Section 3.05 falls on a day other than the last day of the Interest Period
for the amount so converted or as to which a conversion of Eurocurrency Loans,
or portions thereof, is made, (ii) a Borrower revokes any Borrowing Request for
a Eurocurrency Loan (other than in accordance with Section 4.05(b)) or any
Eurocurrency Loan or Competitive Advance Loan requested is not made because of
the failure of the applicable conditions precedent specified in Section 6.02 to
be satisfied, (iii) an outstanding Eurocurrency Loan, or any portion thereof,
is converted into an ABR Loan pursuant to Section 4.05(a) or (iv) a
Eurocurrency Loan or Competitive Advance Loan shall be declared to be due and
36
payable prior to the scheduled maturity thereof pursuant to Section 8.01, then,
subject to Section 4.03(b) and without duplication of any amounts described in
Section 3.03(d) or 4.04, the relevant Borrower shall be obligated to pay to the
relevant Bank an amount that will compensate such Bank for any loss or premium,
penalty or expense incurred by such Bank as a result of such prepayment,
conversion, failure to borrow, declaration or revocation of notice in respect
of funds obtained for the purpose of making or maintaining such Eurocurrency
Loan or Competitive Advance Loan, or any portion thereof. Such compensation
may include an amount equal to the excess, if any, of (i) the amount of
interest which would have accrued on the amount so paid or prepaid, or not
borrowed or converted, for the period from the date of such payment or
prepayment or conversion or failure to borrow to the last day of such Interest
Period (or, in the case of a failure to borrow, the Interest Period that would
have commenced on the date of such failure to borrow) in each case at the
applicable rate of interest for such Loan provided for herein (excluding,
however, any margin included therein) over (ii) the amount of interest (as
determined in good faith by such Bank) that would have accrued to such Bank on
such amount by placing such amount (in the relevant currency) on deposit for a
comparable period with leading banks in the relevant interbank market.
(b) Certificate, Etc. Each Bank shall promptly notify API,
with a copy to the Administrative Agent, upon becoming aware that the Borrowers
may be required to make any payment pursuant to this Section 4.03. When
requesting payment pursuant to this Section 4.03, such Bank shall provide to
API, with a copy to the Administrative Agent, a certificate, signed by an
officer of such Bank, setting forth in reasonable detail the amount required to
be paid by the Borrowers to such Bank and the computations made by such Bank to
determine such amount. Such Borrower shall have a 30-day period following the
receipt of such certificate (if such Borrower in good faith disagrees with the
assertion that any payment under this Section 4.03 is due or with the amount
shown as due on such certificate and so notifies such Bank of such disagreement
within five Business Days following receipt of such certificate) to negotiate
with such Bank, which negotiations shall be conducted by the respective parties
in good faith, and to agree upon another amount that will adequately compensate
such Bank, it being expressly understood that if such Borrower does not provide
the required notice of its disagreement as provided above, then such Borrower
shall pay the amount shown as due on the certificate on the tenth Business Day
following receipt thereof and further if such Borrower does provide such
required notice, and negotiations are entered into in good faith but do not
result in agreement by such Borrower and such Bank within the 30-day period,
then such Borrower shall pay the amount shown as due on the certificate on the
last day of such period.
Section 4.04. Withholding, Reserves and Additional Costs.
(a) Withholding. (i) All payments payable under this Agreement to a Bank
(including payments of principal and interest on Loans) shall be made to such
Bank free and clear of any and all present and future taxes, levies, imposts,
duties, deductions, withholdings, fees, liabilities and similar charges other
than Excluded Taxes ("Taxes"). If any Taxes are required to be withheld or
deducted from any amount payable by a Borrower under this Agreement, then the
amount so payable under this Agreement shall be increased to the amount which,
after deduction from such increased amount of all Taxes required to be withheld
or deducted therefrom (the amount of such increase, an "Additional Amount"),
will yield to such Bank the amount stated to be payable under this Agreement.
The relevant Borrower shall execute and deliver to any Bank upon its request
such further instruments as may be necessary or desirable to give full force
and effect to any such increase. The relevant Borrower shall also hold each
37
Bank harmless and indemnify it for any stamp or other taxes with respect to the
preparation, execution, delivery, recording, performance or enforcement of the
Credit Documents (all of which shall be included within "Taxes"). If any of
the Taxes specified in this Section 4.04(a) are paid by a Bank, the relevant
Borrower shall, upon demand of such Bank, promptly reimburse such Bank for such
payments, together with any interest, penalties and expenses incurred in
connection herewith. Each Borrower shall deliver to the Administrative Agent
certificates or other valid vouchers for all Taxes or other charges deducted
from or paid with respect to payments made by such Borrower hereunder.
Notwithstanding the foregoing, the Borrowers shall be entitled, to the extent
required to do so by law, to deduct or withhold (and shall not be required to
make payments as otherwise required by this Section 4.04 on account of such
deductions or withholdings) income or other similar taxes imposed by the United
States of America from interest, fees or other amounts payable hereunder for
the account of any Bank other than a Bank (i) that is a U.S. Person for U.S.
federal income tax purposes or (ii) that has the Prescribed Forms on file with
the Borrowers for the applicable year to the extent deduction or withholding of
such taxes is not required as a result of such filing of such Prescribed Forms
(unless the failure to leave such forms on file results from a change in law or
regulation or in the interpretation thereof by any court or administrative or
Governmental Authority charged with the administration thereof subsequent to
the date hereof); provided that if the Borrowers shall so deduct or withhold
any such taxes, the relevant Borrower shall provide a statement to the
Administrative Agent and such Bank, setting forth the amount of such taxes so
deducted or withheld, the applicable rate and any other information or
documentation which such Bank may reasonably request for assisting such Bank to
obtain any allowable credits or deductions for the taxes so deducted or
withheld in the jurisdiction or jurisdictions in which such Bank is subject to
tax.
(ii) If any Bank has received or been granted a credit against
or relief or remission for, or refund or repayment of, any Tax paid or payable
by it in respect of or which takes account of any Tax with respect to which an
Additional Amount was paid by a Borrower (an "Indemnified Tax") or other matter
giving rise to such payment, such Bank shall, to the extent it determines in
good faith that it can do so without prejudice to the retention of the amount
of such credit, relief, remission, refund or repayment, pay to such Borrower
such amount as such Bank shall determine in good faith to be attributable to
such Indemnified Tax or other matter and which will leave such Bank (after such
payment to the Borrower) in a position no better or worse than it would have
been in had such Borrower not been required to deduct or withhold such
Indemnified Tax or such other matter had not arisen; provided that such
Borrower upon the written request of such Bank, shall return to such Bank the
amount of any such refund, repayment or benefit of credit in the event that
such Bank is required to repay such amount to the relevant Governmental
Authority.
(b) Additional Costs. (i) Without duplication of any
amounts payable described in Section 3.03(c), 4.04(a) or 4.04(b)(ii), if after
the date hereof there shall have occurred any change in any law or regulation
or in the interpretation thereof by any court or administrative or Governmental
Authority charged with the administration thereof or the enactment of any law
or regulation shall either (A) impose, modify or deem applicable any reserve,
special deposit or similar requirement with respect to any Bank's Commitment or
its Eurocurrency Loans or (subject to Section 2.07(c)) Competitive Advance
Loans or (B), subject such Bank to any tax, duty or other charge with respect
to any of its Eurocurrency Loans or (subject to Section 2.07(c)) Competitive
38
Advance Loans or its obligations to make Eurocurrency Loans or shall change the
basis of taxation of payments to such Bank of the principal of or interest on
any of its Eurocurrency Loans (except for any increase or other change in or
with respect to Excluded Taxes), or (C) impose on such Bank any other condition
regarding this Agreement, its Commitment or the Loans and the result of any
event referred to in clause (A), (B) or (C) shall be to increase the cost
("Additional Costs") to such Bank of maintaining its Commitment or making or
maintaining its Eurocurrency Loans or (subject to Section 2.07(c)) Competitive
Advance Loans or shall reduce the amounts received or receivable hereunder
(which Additional Costs shall be calculated by such Bank in good faith in
accordance with each Bank's internal policies, including any reasonable
averaging and attribution methods) by an amount which such Bank in good faith
shall determine to be material, then, subject to Sections 4.04(c) and (d), the
relevant Borrower shall pay to such Bank an amount equal to such Additional
Costs.
(ii) Without duplication of any amounts described in
Section 3.03(c), 4.04(a) or 4.04(b)(i), if after the date hereof the adoption
of any applicable law, rule, regulation or guideline regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or
comparable agency or instrumentality charged with the interpretation or
administration thereof, or compliance by such Bank with any request or
directive regarding capital adequacy (whether or not having the force of law)
of any such Governmental Authority, central bank or comparable agency or
instrumentality, has or would have the effect of reducing the rate of return on
capital for such Bank or any corporation controlling such Bank as a consequence
of its obligations under this Agreement to a level below that which such Bank
shall determine in good faith that reasonably could have been achieved but for
such adoption, change or compliance (taking into consideration such Bank's or
such corporation's policies with respect to capital adequacy), then from time
to time, subject to Sections 4.04(c) and (d), the relevant Borrower shall pay
to such Bank such additional amount or amounts as will compensate such Bank for
such reduction.
(c) Mitigation. If, with respect to a Bank, a condition
arises or an event occurs after the date hereof that would, or would upon the
giving of notice, result in the payment of any Additional Costs or Additional
Amounts pursuant to this Section 4.04 or the delivery by such Bank of any
notice described in the first sentence of Section 4.05, then such Bank,
promptly upon becoming aware of the same, shall notify API (with a copy to the
Administrative Agent) thereof and at API's request shall take such steps as may
be available to it and acceptable to the Borrowers to mitigate the effects of
such condition or event (which shall include efforts to book the Loans held by
such Bank hereunder at another lending office of such Bank); provided that such
Bank shall be under no obligation to take any step that, in its good faith
judgment, would result in its incurring any Additional Costs, additional Taxes
or other additional costs in performing its obligations hereunder (unless the
Borrower has agreed to reimburse it for the same) or would, in the good faith
judgment of such Bank, be materially disadvantageous to such Bank.
(d) Certificate, Etc. Each Bank shall promptly notify API,
with a copy to the Administrative Agent, upon becoming aware that the Borrowers
may be required to make any payment pursuant to this Section 4.04. When
requesting payment pursuant to this Section 4.04, such Bank shall provide to
API, with a copy to the Administrative Agent, a certificate, signed by an
officer of such Bank specifying the event giving rise to such claim and setting
39
forth, in reasonable detail, the basis of such claim, the amount required to be
paid by the Borrowers to such Bank and the computations made by such Bank to
determine such amount. Anything herein notwithstanding, no Bank shall have the
right to demand payment of Additional Amounts or compensation for Additional
Costs or a reduced rate of return under this Section 4.04 (i) with respect to
any period more than 180 days prior to the date it has made a demand pursuant
to this Section 4.04, (ii) to the extent that such Bank determines in good
faith that the interest rate or margin on the relevant Loans appropriately
accounts for any Additional Costs, (iii) pursuant to Section 4.04(b), unless
demand thereunder is made in accordance with a policy of the Bank being applied
in good faith to all borrowers similarly situated and (iv) pursuant to
Section 4.04(b) with respect to any Competitive Eurocurrency Loan if it shall
have obtained actual knowledge of the change giving rise to such request at the
time of submission of such Bank's Competitive Advance Bid pursuant to which
such Competitive Eurocurrency Loan shall have been made, unless notice of such
Bank's entitlement to such compensation shall have been furnished to the
relevant Borrower at or prior to such time.
(e) Prescribed Forms. Each Bank that is not incorporated
under the laws of the United States of America or a state thereof agrees that
it will, to the extent it has not previously done so, deliver to API or the
Administrative Agent (and if to the latter, the Administrative Agent agrees
that it will deliver to API) two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224 or successor applicable form, as the
case may be, certifying that such Bank or Administrative Agent is entitled to
receive payments under this Agreement and under the Notes without deduction or
withholding of any United States federal income taxes. Each Bank further
undertakes to deliver to API or the Administrative Agent (and if to the latter,
the Administrative Agent agrees that it will deliver to API) (i) two further
duly completed copies of the said Form 1001 or 4224, or successor applicable
forms, as the case may be, on or before the date that any such form expires or
becomes obsolete or after the occurrence of any event requiring a change in the
most recent form previously delivered by it, and such extensions or renewals
thereof as may reasonably be requested by a Borrower, certifying that such Bank
or Administrative Agent is entitled to receive payments under this Agreement
and under any Notes without deduction or withholding of any United States
federal income taxes, unless in any such cases an event (including without
limitation any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent a Bank from duly completing and
delivering any such form with respect to it and such Bank advises API or the
Administrative Agent (and the Administrative Agent agrees that it will advise
API) that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax and (ii) two duly completed
copies of any other form or certification that may become applicable to such
Bank certifying that such Bank or Administrative Agent is entitled to receive
payments under this Agreement and under any Notes without deduction or
withholding of any United States federal income taxes.
Section 4.05. Unavailability and Impracticability. (a) If,
after the date hereof, a Bank shall have determined in good faith that the
making or maintenance of all or any part of such Bank's Eurodollar Loans or
Competitive Alternate Currency Loans (in any such case the currency in which
any such Loan is denominated is herein referred to as, an "Affected Currency")
(i) has been made unlawful because of compliance by such Bank with any law or
guideline or interpretation or administration thereof by any official body
charged with the interpretation or administration thereof or with any request
40
or directive of such body (whether or not having the effect of law) or
(ii) impracticable because deposits in the Affected Currency in the amounts and
requested maturities of such Loans are not available to the Bank in the
applicable interbank market, then the Administrative Agent, upon receipt of
written notice of such determination by such Bank, shall forthwith advise the
other Banks and API thereof. After the date specified in such notice and until
such time as the Administrative Agent, upon receipt of written notice to it by
such Bank, shall notify API and the other Banks that the circumstances
specified by it in such notice no longer apply, then notwithstanding any other
provision of this Agreement:
(i) the foregoing Loans of such Bank denominated in the
Affected Currency shall automatically be converted to ABR Loans without
any requirement of compliance by the Borrowers with Section 3.05, 4.03
or 4.04;
(ii) the obligation of such Bank to allow borrowing,
conversion and renewals of such Loans denominated in the Affected
Currency shall be suspended, and, if the Borrower shall request in a
Revolving Credit Loan Request or Conversion Request that such Bank make
such a Loan denominated in the Affected Currency, the Loan requested to
be made by such Bank shall instead be made as an ABR Loan; and
(iii) such Bank shall not submit any Competitive Advance Bid
with respect to Competitive Advance Loans denominated in the Affected
Currency.
Such Bank shall promptly notify the Administrative Agent, which thereupon shall
promptly notify API, when such specified circumstances no longer apply.
(b) With respect to any Competitive Alternate Currency Loan,
if there shall occur after the Effective Date and on or prior to the Borrowing
Date any change in national or international financial, political or economic
conditions or currency exchange rates or exchange controls which the
Administrative Agent shall have determined in good faith would make it
impracticable for such Loan to be denominated in the Alternate Currency
requested by the Borrower, the Administrative Agent shall forthwith (but not
later than two Domestic Business Days before the date of such Loan if such
change occurred at least three Domestic Business Days before the date of such
Loan) give notice thereof to such Borrower and the Bank, and such Loans shall
not be denominated in such Alternate Currency but shall be made on the
Borrowing Date as ABR Loans unless the Borrower shall notify the Administrative
Agent at least two Domestic Business Days before the Borrowing Date that it
elects not to borrow on such date.
Section 4.06. Substitution of Banks. If any Bank (a) shall
request any compensation or indemnity under Section 4.03 or 4.04 or (b) shall
give any notice described in the first sentence of Section 4.05, the Borrowers
shall have the right to require such Bank to assign all its interests, rights
and obligations under this Agreement to another Bank or financial institution
identified by the Borrowers with the assistance of the Administrative Agent
(and the Administrative Agent agrees to use its reasonable efforts so to assist
the Borrowers); provided, however, that (i) such assignment shall not conflict
with any applicable statute, law, rule, regulation, order or decree of any
Governmental Authority and (ii) the assigning Bank shall have received from the
Borrowers and/or such assignee full payment of the principal of all then-
outstanding Loans made by such Bank hereunder, together with accrued and unpaid
41
interest thereon, and (provided that such Bank has complied with its
obligations under Section 4.04(c)) all other amounts owed to it hereunder.
ARTICLE V
Representations and Warranties
Section 5.01. Representations and Warranties of the Borrowers.
The Borrowers severally represent and warrant that:
(a) Corporate Existence and Power. Each Borrower has been
duly organized and is validly existing and in good standing under the
laws of its jurisdiction of organization, and has all corporate powers
and all material governmental licenses, authorizations, consents and
approvals required to carry on its business as presently conducted.
(b) Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by each
Borrower of each of the Credit Documents to which such Borrower is a
party are within the corporate powers of such Borrower and have been
duly authorized by all necessary corporate action of such Borrower,
require no action by or in respect of, or filing with, any governmental
body, agency or official and do not contravene in any material respect,
or constitute a material default under, any provision of applicable law
or regulation or of the certificate of incorporation or by-laws (or
similar constitutive instruments) of such Borrower or of any agreement,
judgment, injunction, order, decree or other instrument binding upon
such Borrower or result in the creation or imposition of any material
Lien on any asset of any Borrower or any Material Subsidiary.
(c) Binding Effect. Each of the Credit Documents constitutes
a valid and binding agreement of each Borrower party thereto,
respectively, and any Notes will constitute valid and binding
agreements of the Borrower party thereto when executed and delivered in
accordance with this Agreement, in each case enforceable in accordance
with their respective terms, subject to bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or other similar laws
relating to or affecting creditors' rights generally, and to general
equity principles, regardless of whether considered in a proceeding in
equity or at law.
(d) Financial Information. (i) The consolidated balance
sheet of API and its Consolidated Subsidiaries as of December 31, 1995
and the related consolidated statements of operations and cash flows
for the fiscal year then ended, reported on by Coopers & Xxxxxxx and
filed with the SEC in API's Annual Report on Form 10-K for the fiscal
year ended December 31, 1995, copies of which have been delivered to
each of the Banks, fairly present, in conformity with GAAP, the
consolidated financial position of API and its Consolidated
Subsidiaries as of such date and its consolidated results of operations
and cash flows for such fiscal year.
(ii) The unaudited balance sheet of API and its Consolidated
Subsidiaries as of March 31, 1996 and the related unaudited
consolidated statements of income and cash flows for the three-month
period then ended, as filed with the SEC in API's Quarterly Report on
42
Form 10-Q for the quarter ended March 31, 1996, copies of which have
been delivered to each of the Banks, fairly present, in conformity with
GAAP applied on a basis consistent with the financial statements of API
referred to in Section 5.01(d)(i), the consolidated financial position
of API and its Consolidated Subsidiaries as of such date and its
consolidated results of operations and cash flows for such three-month
period (subject to normal year-end adjustments).
(iii) As of the date hereof, there has been no material
adverse change since December 31, 1995 in the business, consolidated
financial position or consolidated results of operations of API and its
Consolidated Subsidiaries, considered as a whole.
(e) Litigation. Except as disclosed in the reports or
financial statements referred to in Section 5.01(d), or in Schedule
5.01(e), as of the date hereof, there is no action, suit or proceeding
pending, or to the knowledge of API or ACC threatened, against API or
any Subsidiary in which there is a reasonable possibility of an adverse
decision which would be reasonably likely to materially and adversely
affect the business, consolidated financial position or consolidated
results of operations of API and its Consolidated Subsidiaries,
considered as a whole, or in any manner seeks to avoid the obligations
of any Borrower to repay Loans or of API under the guaranty set forth
in Article X.
(f) Compliance with ERISA. Each member of the ERISA Group has
fulfilled its obligations under the minimum funding standards of ERISA
and the Code with respect to each Plan and is in compliance with the
presently applicable provisions of ERISA and the Code with respect to
each Plan, except to the extent that any failure so to be in compliance
would not, individually or in the aggregate, materially and adversely
affect the business, consolidated financial position or consolidated
results of operations of API and its Consolidated Subsidiaries,
considered as a whole. As of the date hereof, no member of the ERISA
Group has (i) sought a waiver of the minimum funding standard under
Section 412 of the Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan or 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 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.
(g) Taxes. United States federal income tax returns of API
and its domestic Subsidiaries have been examined and closed through the
fiscal year ended December 31, 1984. API and its Subsidiaries have
filed all United States Federal income tax returns and all other
material tax returns which are required to be filed by them and have
paid all material taxes due pursuant to such returns or pursuant to any
assessment received by API or any Subsidiary, except for assessments
being contested in good faith by appropriate proceedings and as to
which API or such Subsidiary has set aside adequate reserves on its
books. The charges, accruals and reserves on the books of API and its
Consolidated Subsidiaries in respect of taxes or other governmental
charges are, in the opinion of API, adequate in all material respects.
43
(h) Material Subsidiaries. Each Material Subsidiary has been
duly organized and is validly existing and in good standing under the
laws of its jurisdiction of organization, and has all corporate powers
and all governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted, except to the
extent that the failure of any of the foregoing would not, individually
or in the aggregate, materially and adversely affect the business,
consolidated financial position or consolidated results of operations
of API and its Consolidated Subsidiaries, considered as a whole.
(i) Investment Company Act. No Borrower is an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended.
(j) Disclosure. All information heretofore furnished by the
Borrowers to the Administrative Agent or any Bank in writing for
purposes of or in connection with this Agreement or any transaction
contemplated hereby was true and accurate in all material respects or
based on reasonable estimates on the date as of which such information
is stated or certified. API has disclosed to the Banks in writing any
and all facts known to API which it reasonably believes materially and
adversely affect or may materially and adversely affect (to the extent
API can now reasonably foresee) the business, consolidated financial
position or consolidated results of operations of API and its
Consolidated Subsidiaries, considered as a whole.
(k) Environmental Matters. In the ordinary course of its
business, API conducts an ongoing review of the effect of Environmental
Laws on the business, operations and properties of API 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, API has reasonably concluded
that, as of the date hereof, Environmental Laws are unlikely to have a
material adverse effect on the business, consolidated financial
condition, or consolidated results of operations of API and its
Consolidated Subsidiaries, considered as a whole.
(l) Federal Reserve Regulations. After giving effect to the
application of the proceeds of each Loan, not more than 25% of the
value of the consolidated assets of API (based on book value or another
reasonable measure) will consist of or be represented by "margin stock"
within the meaning of Regulation U of the Federal Reserve Board.
44
ARTICLE VI
Conditions Precedent
Section 6.01. Conditions to Effectiveness. This Agreement
shall not become effective until the earliest date (the "Effective Date") on
which each of the following conditions precedent shall have been satisfied, or
waived in writing by the Banks:
(a) Agreements. The Administrative Agent shall have received
(i) this Agreement, duly executed and delivered by each of the Banks
and the Borrowers and (ii) the Pledge Agreement, in substantially the
form of Exhibit E, duly executed and delivered by API and (if the
Collateral Agent is a Person other than the Administrative Agent) the
Collateral Agent.
(b) Evidence of Corporate Action. The Administrative Agent
shall have received the following:
(i) API. (A) a copy of the Restated Certificate of
Incorporation, as amended, of API, certified as of a recent
date not later than the Effective Date by the Secretary of
State of the State of New York, and a certificate as to the
good standing of API as of a date not earlier than four
Business Days prior to the Effective Date, from such Secretary
of State;
(B) a certificate of the Secretary or Assistant
Secretary of API, dated the Effective Date, and certifying (1)
that attached thereto is a true and complete copy of the by-
laws of API as in effect on such date and at all times since
the date of the resolutions described in clause (2) below, (2)
that attached thereto is a true and complete copy of
resolutions duly adopted by the Board of Directors of API
authorizing the execution, delivery and performance of this
Agreement, and that such resolutions have not been modified,
rescinded or amended and are in full force and effect, (3) that
the certificate of incorporation of API has not been amended
since the date of the last amendment thereto shown on the
certificate of good standing furnished pursuant to
clause (i)(A) above, and (4) as to the incumbency and signature
of each officer executing this Agreement or any document
delivered in connection herewith on behalf of the API;
(C) a certificate of a Responsible Officer of API as to
the incumbency and specimen signature of the Secretary or
Assistant Secretary of API executing the certificate described
in clause (i)(B) above;
(ii) ACC. (A) a copy of the Certificate of
Incorporation, as amended, of ACC, certified as of a recent
date not later than the Effective Date by the Secretary of
State of the State of Delaware, and a certificate as to the
good standing of ACC as of a date not earlier than four
Business Days prior to the Effective Date, from such Secretary
of State;
45
(B) a certificate of the Secretary or Assistant
Secretary of ACC, dated the Effective Date, and certifying (1)
that attached thereto is a true and complete copy of the by-
laws of ACC as in effect on such date and at all times since
the date of the resolutions described in clause (2) below, (2)
that attached thereto is a true and complete copy of
resolutions duly adopted by the Board of Directors of ACC
authorizing the execution, delivery and performance of this
Agreement, and that such resolutions have not been modified,
rescinded or amended and are in full force and effect, (3) that
the certificate of incorporation of ACC has not been amended
since the date of the last amendment thereto shown on the
certificate of good standing furnished pursuant to clause
(ii)(A) above, and (4) as to the incumbency and signature of
each officer executing this Agreement or any document delivered
in connection herewith on behalf of ACC; and
(C) a certificate or certificates of a Responsible
Officer of ACC as to the incumbency and specimen signature of
the Secretary or Assistant Secretary of ACC executing the
certificate described in clause (ii)(B) above.
(d) Repayment of Outstanding Loans. The Administrative Agent
shall have received evidence, in form and substance satisfactory to it,
that all Loans outstanding under the Original Credit Agreement, and all
interest and fees that are payable thereunder, shall have been paid in
full.
Section 6.02. Conditions to Each Loan. The obligations of
each Bank to make any Loan (including the initial Loans) are subject to the
conditions that the Effective Date shall have occurred and that, on the
Borrowing Date of each such Loan and after giving effect thereto, each of the
following conditions precedent shall have been satisfied, or waived in writing
by the Required Banks, and upon such satisfaction or waiver each such Bank will
give a written confirmation of the same to the relevant Borrower upon request:
(a) Borrowing Request. The Administrative Agent shall have
received from such Borrower a Borrowing Request, in the appropriate
form and in the manner contemplated hereby.
(b) Absence of Defaults. No Default or Event of Default
shall have occurred and be continuing; provided, however, that in the
case of (i) a Sublimit A Loan the proceeds of which are to be used to
make payments to employees under severance arrangements or to be paid
to a trust or otherwise set aside to assure the ability of API or a
Subsidiary to make such payments or (ii) a Sublimit B Loan, a Change of
Control Default shall not constitute a Default or an Event of Default
for purposes of this Section 6.02(b).
(c) Representations and Warranties. The representations and
warranties contained in Section 5.01 shall have been true when made and
(other than the representations and warranties contained in
Sections 5.01(d)(iii) and 5.01(e) or any other representations or
warranties that expressly relate to a date certain) shall be true and
correct with the same effect as though such representations and
warranties had been made at the time of such Loan; and each Borrower
shall have complied with all of its respective covenants and agreements
46
contained in this Agreement; provided that, in the case of a Sublimit A
Loan or a Sublimit B Loan, any event or condition arising directly as a
result of a Change of Control Default shall be disregarded for purposes
of determining the truth or correctness of representations and
warranties and compliance with covenants and agreements solely for
purposes of this Section 6.02(c).
Section 6.03. Satisfaction of Conditions Precedent.
Acceptance by a Borrower of the proceeds of any Loan shall be deemed to
constitute a certification of such Borrower that, as of the relevant Borrowing
Date, each of the applicable conditions precedent in Section 6.02 has been
satisfied or waived in writing.
Section 6.04. Offshore Borrowers. In the case of the first
Loans to be made to an Offshore Borrower, in addition to the conditions set
forth in Section 6.02, the obligations of each Bank to make such Loans are
subject to the condition that, on the Borrowing Date of each such Loan, each of
the following conditions precedent shall have been satisfied, or waived in
writing by the Required Banks, and upon such satisfaction or waiver each Bank
will give written confirmation of the same to the relevant Offshore Borrower:
(a) Designation and Confirmation. The Administrative Agent
shall have received an Offshore Borrower Designation and an Offshore
Borrower Confirmation, in substantially the forms of Exhibits F-2 and
F-3, respectively, duly executed and delivered by API and such Offshore
Borrower, respectively;
(b) Bank Consent. In the case of an Offshore Borrower not
listed on Schedule 6.04, all the Banks shall have consented to the
designation of that Offshore Borrower as such; and
(c) Evidence of Corporate Action. The Administrative Agent
shall have received:
(i) a certificate of the Secretary or Assistant Secretary
(or similar official) of such Offshore Borrower, dated the
Borrowing Date, and certifying (A) that attached thereto is a
true and complete copy of the constitutive instruments of such
Offshore Borrower as in effect on such date and at all times
since the date of the resolutions described in clause (B)
below, (B) that attached thereto is a true and complete copy of
resolutions duly adopted by the Board of Directors of such
Offshore Borrower authorizing the execution, delivery and
performance of this Agreement, and that such resolutions have
not been modified, rescinded or amended and are in full force
and effect, and (C) as to the incumbency and signature of each
officer executing this Agreement or any document delivered in
connection herewith on behalf of such Offshore Borrower; and
(ii) a certificate or certificates of a Responsible
Officer of such Offshore Borrower as to the incumbency and
specimen signature of the Secretary of Assistant Secretary (or
similar official) of such Offshore Borrower executing the
certificate described in clause (i) above.
Section 6.05. Sublimit A Loans. With respect to any
Sublimit A Loan the proceeds of which are to be used to make payments to
47
employees of API or its Subsidiaries under severance arrangements or to be paid
to a trust or otherwise set aside to assure the ability of API or any such
Subsidiary to make such payments, the obligation of each Bank to make such Loan
is subject (in addition to the conditions in Section 6.02) to the condition
that prior to such application of proceeds there shall have been delivered to
the Banks an opinion of counsel for API (which counsel shall be reasonably
acceptable to the Administrative Agent) substantially to the effect set forth
in Exhibit F-1 with respect to such severance arrangements.
Section 6.06. Sublimit B Loans. With respect to any
Sublimit B Loan, the obligation of each Bank to make such Loan is subject (in
addition to the conditions in Section 6.02) to the condition that a Person or
group of Persons (other than a group including the senior management of API)
shall have (a) commenced a tender or exchange offer after which such person or
group would, if successful, have beneficial ownership of at least 20% of the
voting stock of API, (b) commenced a proxy solicitation for the election of
directors, or a proxy solicitation for the approval of any transaction that, if
approved by the shareholders of API, would result in API's being obligated to
make payments pursuant to Section 13(a)(iii) of the 1970 Stock Plan or
Section 3.1(d) of the 1993 Stock Plan or pursuant to any provision of a Stock
Incentive Agreement or Stock Incentive Program thereunder, including payments
for the repurchase of certain stock, stock options or rights or performance
units held by employees, or (c) made a publicly announced offer to acquire API
at a specified price, in cash or otherwise, whether or not such offer is
binding.
ARTICLE VII
Covenants
Section 7.01. Affirmative Covenants. API (and, in the case of
Section 7.01(f), each Borrower (on and after the date on which it shall become
a Borrower)) agrees that, so long as any Bank has in effect any Commitment
hereunder or any amount payable on any Loan remains unpaid:
(a) Financial Information. API will deliver to each of the
Banks:
(i) as soon as available and in any event within 95
days after the end of each fiscal year of API, a consolidated
balance sheet of API and its Consolidated Subsidiaries as of
the end of such fiscal year and the related consolidated
statements of income and cash flows for such fiscal year,
setting forth in each case in comparative form the figures for
the previous fiscal year, all reported on in a manner
acceptable to the SEC by Coopers & Xxxxxxx or other independent
public accountants of nationally recognized standing;
(ii) as soon as available and in any event within 50
days after the end of each of the first three quarters of each
fiscal year of API, a consolidated balance sheet of API and its
Consolidated Subsidiaries as of the end of such quarter and the
related consolidated statements of income and cash flows for
such quarter all reported in a manner acceptable to the SEC and
all certified (subject to normal year-end adjustments) as to
48
fairness of presentation, GAAP and consistency by a Responsible
Officer of API;
(iii) simultaneously with the delivery of each set of
financial statements referred to in clauses (i) and (ii) above,
a certificate of a Responsible Officer of API (A) setting forth
in reasonable detail the calculations required to establish
whether API was in compliance with the requirements of Section
7.02(d), on the date of such financial statements and
(B) stating whether any Default or Event of Default exists on
the date of such certificate and, if any Default or Event of
Default then exists, setting forth the details thereof and the
action which API is taking or proposes to take with respect
thereto;
(iv) 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 (A) whether anything has come to
their attention to cause them to believe that any Default or
Event of Default existed on the date of such statements and
(B) confirming the calculations set forth in the officer's
certificate delivered simultaneously therewith pursuant to
clause (iii) above;
(v) within five days of any Responsible Officer of the
Borrower or API obtaining knowledge of any Default or Event of
Default, if such Default or Event of Default is then
continuing, a certificate of a Responsible Officer of API
stating that such certificate is a "Notice of Default" and
setting forth the details thereof and the action which API is
taking or proposes to take with respect thereto;
(vi) promptly upon the mailing thereof to the
shareholders of API generally, copies of all financial
statements, reports and proxy statements so mailed;
(vii) 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 API or the Borrower shall have filed with the SEC;
(viii) if and when any member of the ERISA Group (A)
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, (B) 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, (C) receives notice
from the PBGC under Title IV of ERISA of an intent to
terminate, impose liability (other than for premiums under
49
Section 4007 of ERISA) in respect of, or appoint a trustee to
administer any Plan, a copy of such notice, (D) applies for a
waiver of the minimum funding standard under Section 412 of the
Code, a copy of such application, (E) 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, (F)
gives notice of withdrawal from any Plan pursuant to Section
4063 of ERISA, a copy of such notice, or (G) 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 Treasurer or chief
financial officer of API setting forth details as to such
occurrence and action, if any, which API or applicable member
of the ERISA Group is required or proposes to take; and
(ix) from time to time, such additional information
regarding the financial position or business of the Borrowers
(including notification of any change in the ratings assigned
to API by S&P or Xxxxx'x) as the Administrative Agent, at the
request of any Bank, may reasonably request.
(b) Maintenance of Property; Insurance. (i) API will keep,
and will cause each Material Subsidiary to keep, all property useful
and necessary in its business in good working order and condition,
ordinary wear and tear excepted.
(ii) API will maintain, and will cause each Subsidiary to
maintain, (A) physical damage insurance on all real and personal
property on an all risks basis (including the perils of flood and
quake), covering the repair and replacement cost of all such property
and consequential loss coverage for business interruption and extra
expense, (B) public liability insurance (including products/completed
operations liability coverage) in an amount not less than $100,000,000
and (C) such other insurance coverage in such amounts and with respect
to such risks (including without limitation risks relating to assets or
businesses sold by API and its Subsidiaries) as the Required Banks may
reasonably request. All such insurance shall be provided by insurers
having an A.M. Best policyholders rating of not less than B+ or
insurers listed in Schedule 7.01(b) or otherwise approved in writing by
the Required Banks. API will deliver to the Administrative Agent (A)
upon request of any Bank through the Administrative Agent from time to
time full information as to the insurance carried, (B) within five days
of receipt of notice by API (but not later than 15 days after receipt
by any Subsidiary of any such notice) from any insurer a copy of any
notice of cancellation or material change in coverage from that
existing on the date of this Agreement and (C) forthwith, notice of any
cancellation or nonrenewal of coverage by API.
(c) Continuation of Business. API and its Subsidiaries will
continue to engage in business of the same general type as conducted by
API and its Subsidiaries on the date hereof, considered as a whole.
Except as permitted in Section 7.02(a), API will preserve, renew and
keep in full force and effect, and will cause each Material Subsidiary
to preserve, renew and keep in full force and effect their respective
50
corporate existence and their respective rights, privileges and
franchises necessary or desirable in the normal conduct of business.
(d) Compliance with Law. API will comply, and cause each
Subsidiary to comply, with all applicable laws, ordinances, rules,
regulations, and requirements of governmental authorities (including,
without limitation, Environmental Laws, ERISA and the rules and
regulations thereunder) except where the necessity of compliance
therewith is contested in good faith by appropriate proceedings or
where failure so to comply would not have a material adverse effect on
the business, consolidated financial position or consolidated results
of operations of API and its Consolidated Subsidiaries, considered as a
whole.
(e) Books, Records and Inspection. API will keep, and will
cause each Subsidiary to keep, proper books of record and account in
which full, true and correct entries in conformity with GAAP shall be
made of all dealings and transactions in relation to its business and
activities; and will permit, and will cause each Subsidiary to permit,
representatives of any Bank at such Bank's expense to visit and inspect
any of its properties, to examine and make abstracts from any of its
books and records and to discuss its affairs, finances and accounts
with its officers, employees and independent public accountants, all at
such reasonable times and as often as may reasonably be desired.
(f) Use of Proceeds. The proceeds of each Loan (i) will be
used by the relevant Borrower for the purposes described in
Section 2.08 and (ii) will not be used by such Borrower in violation of
any applicable law or regulation, including Regulation U and Regulation
X of the Federal Reserve Board.
Section 7.02. Negative Covenants. API agrees that, so long as
any Bank has any Commitment hereunder or any Loan remains unpaid:
(a) Mergers, Consolidations and Sales of Assets. API will
not, and will not permit ACC to, consolidate with or merge with or into
any other person or sell, convey or otherwise transfer its properties
or assets substantially as an entirety to any Person or Persons, except
that (i) API may merge with a person that is a U.S. corporation, so
long as API is the corporation surviving such merger and no Default or
Event of Default shall have occurred or be continuing immediately after
such merger, and (ii) ACC may consolidate with or merge with or into
API or any Wholly owned Subsidiary.
(b) Negative Pledge. API will not and will not permit any
Subsidiary to create, assume or suffer to exist any Lien on any asset
(including, without limitation, any stock of any Material Subsidiary)
now owned or hereafter acquired by it, except:
(i) Liens existing on the date hereof securing
obligations not exceeding $26,000,000 in aggregate amount;
(ii) Liens arising in the ordinary course of its
business which (A) do not secure Debt and (B) 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;
51
(iii) any Lien on any assets 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;
(iv) 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 7.02(b),
provided that such Debt is not increased and is not secured by
any additional assets;
(v) any Lien existing on any asset prior to the
acquisition thereof by API or a Consolidated Subsidiary and not
created in contemplation of such acquisition;
(vi) Liens for taxes or assessments and similar charges
either (A) not delinquent or (B) being contested in good faith
by appropriate proceedings and as to which adequate reserves
have been set aside on the books of API and its Subsidiaries;
(vii) Liens arising out of judgments or awards against
API or any Consolidated Subsidiary with respect to which API or
such Consolidated Subsidiary shall in good faith be prosecuting
an appeal or proceedings for review, provided that (A) API or
such Consolidated Subsidiary, as the case may be, shall have
secured, within 60 days after the creation thereof, an
effective stay of execution pending such appeal or review, and
(B) the aggregate amount of such judgments and awards shall not
exceed $200,000,000;
(viii) Liens for minor survey exceptions, or minor
encumbrances, easements or reservations of, or rights of others
for, rights of way, sewers, electric lines, telegraph and
telephone lines and other similar purposes, or zoning or other
restrictions as to the use of real properties, which
encumbrances, easements, reservations, rights and restrictions
do not in the aggregate materially detract from the value of
the real properties of API and the Consolidated Subsidiaries,
considered as a whole, or materially impair their use in the
operation of the business of API or the Consolidated Subsidiary
owning the same;
(ix) Liens of Consolidated Subsidiaries securing Debt of
such Consolidated Subsidiaries to API;
(x) Liens securing Debt of up to an aggregate principal
amount of (Yen)12,500,000,000 owing by Avon Japan, without
recourse to API or any Subsidiary (other than Avon Japan),
pursuant to the Avon Japan Credit Agreement, provided, that the
tenor of such Debt and the security, if any, provided therefor
shall be as set forth in such Credit Agreement as in effect on
the date hereof;
(xi) Liens in favor of the Administrative Agent, the
Collateral Agent or any Bank and any Liens arising under the
Pledge Agreement; and
52
(xii) any other Liens incurred in the ordinary course of
business, provided that the aggregate amount of all such other
Liens incurred in the ordinary course of business shall not
exceed $30,000,000 at any time outstanding.
(c) Ownership of ACC. API will at no time own less than 100%
of each outstanding class of capital stock of ACC.
(d) Interest Coverage Ratio. As of the last day of each
fiscal quarter of API, the Interest Coverage Ratio will not be less
than 4:1.
ARTICLE VIII
Events of Default
Section 8.01. Events of Default. If one or more of the
following events (each, an "Event of Default") shall have occurred and be
continuing:
(a) A Borrower shall fail to pay when due any principal of any
Loan or shall fail to pay within five Business Days after the date when
due any interest, Facility Fee or other amount payable hereunder;
(b) API shall fail to observe or perform any of its covenants
contained in Section 7.02;
(c) A Borrower shall fail to observe or perform any of its
covenants or agreements contained in this Agreement (other than those
covered by clause (a) or (b) above) for 30 days after written notice
thereof has been given to API by the Administrative Agent at the
request of any Bank;
(d) Any representation, warranty, certification or statement
made by a Borrower in this Agreement, the Pledge Agreement or in any
certificate, financial statement or other document delivered pursuant
hereto shall prove to have been incorrect in any material respect when
made or deemed made (it being understood that good faith projections
that are reasonable when made shall not be considered representations,
warranties, certifications or statements for purposes of this
Section 8.01(d));
(e) API, ACC, or any Material Subsidiary shall fail to make
any payment in respect of Debt, other than Debt under this Agreement or
any Notes, having an aggregate principal or face amount of $25,000,000
or more when due or within any applicable grace period;
(f) Any event or condition (other than those covered by
clause (e) above) shall occur which (i) results in the acceleration of
the maturity of Debt (other than Debt under any Credit Document) of API
or any Material Subsidiary having an aggregate principal amount of
$25,000,000 or more or (ii) would presently cause or allow the maturity
of any Debt (other than Debt under any Credit Document) of API or any
Material Subsidiary having an aggregate principal amount of $25,000,000
or more to be accelerated;
53
(g) API, ACC, or any Material 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 to pay
its debts as they become due (or admit such failure in writing), or
shall take any corporate action to authorize any of the foregoing;
(h) An involuntary case or other proceeding shall be commenced
against API or any Material 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 API or any Material 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 $25,000,000 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 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
specified in Section 4042(a)(1) of ERISA, 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 $25,000,000;
(j) Judgments or orders for the payment of money in excess of
$25,000,000 in the aggregate shall be rendered against API or any
Material Subsidiary and such judgments or orders shall continue
unsatisfied and unstayed for a period of more than 30 days; or
(k) A Change of Control of API;
then, and in every such event, the Administrative Agent shall (i) if requested
by the Required Banks, by notice to the Borrowers, terminate the Commitments
and they shall thereupon terminate, and (ii) if requested by the Required
Banks, by notice to the Borrowers, declare the Loans and any Notes (together
with accrued interest thereon) to be, and such 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 Borrowers; provided
that in the case of any of the Events of Default specified in clause (g) or (h)
above, without any notice to the Borrowers or any other act by the
54
Administrative Agent or the Banks, the Commitments shall thereupon terminate
and the Loans and any 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 Borrowers.
Section 8.02. Notice of Default. The Administrative Agent
shall give written notice to the Borrowers of the occurrence of any Event of
Default under Section 8.01(c) promptly upon being requested to do so by any
Bank and shall thereupon notify all the Banks thereof.
ARTICLE IX
The Administrative Agent and the Banks
Section 9.01. The Agency. Each Bank appoints The Chase
Manhattan Bank as its Administrative Agent hereunder and irrevocably authorizes
The Chase Manhattan Bank to take such action on its behalf and to exercise such
powers hereunder and thereunder as are specifically delegated to the
Administrative Agent by the terms hereof and thereof, together with such powers
as are reasonably incidental hereto and thereto, including the exercise by the
Administrative Agent of powers delegated to the Administrative Agent and the
Banks thereby, and The Chase Manhattan Bank hereby accepts such appointment
subject to the terms hereof. The relationship between the Administrative Agent
and the Banks shall be that of agent and principal only and nothing herein or
therein shall be construed to constitute the Administrative Agent a trustee for
any Bank nor to impose on the Administrative Agent duties or obligations other
than those expressly provided for herein.
Section 9.02. The Administrative Agent's Duties. The
Administrative Agent shall promptly forward to each Bank copies, or notify each
Bank as to the contents, of all notices and other communications received from
a Borrower pursuant to the Credit Documents. As to any other matter not
expressly provided for herein or therein, the Administrative Agent shall have
no duty to act or refrain from acting with respect to a Borrower, except upon
the written instructions of the Required Banks. The Administrative Agent may
deem and treat the payee of any Note as the owner thereof for all purposes
hereof until it shall have received from the payee of such Note written notice
of the transfer of the transfer thereof. The Administrative Agent shall in all
cases be fully protected in acting, or refraining from acting, in accordance
with written instructions signed by the Required Banks and, except as otherwise
specifically provided for herein, such instructions and any action or inaction
pursuant thereto shall be binding upon all the Banks and each subsequent holder
of any Loan. The Administrative Agent shall not be bound by any waiver,
amendment, supplement, or modification of any Credit Document which affects its
duties as Administrative Agent, unless it shall have given its prior written
consent thereto. The Administrative Agent shall have no duty to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
covenants or agreements binding upon a Borrower pursuant to any Credit Document
nor shall it be deemed to have knowledge of the occurrence of any Default or
Event of Default, unless it shall have received written notice from a Borrower
or a Bank specifying such Default or Event of Default and stating that such
notice is a "Notice of Default".
Section 9.03. Sharing of Payments and Expenses. All funds for
the account of the Banks received by the Administrative Agent in respect of
payments made by a Borrower pursuant to, or from any Person on account of, any
55
Credit Document shall be distributed forthwith by the Administrative Agent
among the Banks, in like currency and funds as received, ratably in proportion
to their respective interests therein. In the event that any Bank shall
receive from a Borrower or any other source any payment of, on account of, or
for or under any Credit Document (whether received pursuant to the exercise of
any right of set-off, banker's lien, realization upon any security held for or
appropriated to such obligation or otherwise as permitted by law) other than in
proportion to its Pro Rata Share, then such Bank shall purchase at par from
each other Bank so much of its interest in obligations of the Borrowers as
shall be necessary in order that each Bank shall share such payment with each
of the other Banks in proportion to each Bank's Pro Rata Share. In the event
that any purchasing Bank shall be required to return any excess payment
received by it, the purchase shall be rescinded and the purchase price restored
to the extent of such return, but without interest.
Section 9.04. The Administrative Agent's Liabilities. Each of
the Banks and the Borrowers agrees that (a) neither the Administrative Agent in
such capacity nor any of its officers or employees shall be liable for any
action taken or omitted to be taken by any of them hereunder except for its or
their own gross negligence or wilful misconduct, (b) neither the Administrative
Agent in such capacity nor any of its officers or employees shall be liable for
any action taken or omitted to be taken by any of them in good faith in
reliance upon the advice of counsel, independent public accountants or other
experts selected by the Administrative Agent and (c) the Administrative Agent
in such capacity shall be entitled to rely upon any notice (telephonic or
written), consent, certificate, statement or other document (including any
telegram, cable, telex, facsimile or telephone transmission) believed by it to
be genuine and correct and to have been given, signed and/or sent by the proper
Persons.
Section 9.05. The Administrative Agent as a Bank. The
Administrative Agent shall have the same rights and powers hereunder as any
other Bank and may exercise the same as though it were not an Administrative
Agent, and the terms "Bank" or "Banks", unless the context otherwise indicated,
include the Administrative Agent in its individual capacity. The
Administrative Agent may maintain deposits or credit balances for, invest in,
lend money to and generally engage in any kind of banking business with API or
any Subsidiary or affiliate of API as if it were any other Bank and without any
duty to account therefor to the other Banks.
Section 9.06. Bank Credit Decision. Neither the
Administrative Agent nor any of its officers or employees has any
responsibility for, gives any guaranty in respect of, nor makes any
representation to the Banks as to, (a) the condition, financial or otherwise,
of API or any Subsidiary thereof or the truth of any representation or warranty
given or made in, or in connection with, any Credit Document or (b) the
validity, execution, sufficiency, effectiveness, construction, adequacy,
enforceability or value of any Credit Document or any related document or
instrument. Except as specifically provided herein and in the other Credit
Documents to which the Administrative Agent is a party, the Administrative
Agent shall have no duty or responsibility, either initially or on a continuing
basis, to provide any Bank with any credit or other information with respect to
the operations, business, property, condition or creditworthiness of the
Borrowers, whether such information comes into the Administrative Agent's
possession on or before the date hereof or at any time thereafter. Each Bank
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Bank, and based upon such documents and
56
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and any other Credit Documents to which
it may become a party. Each Bank also acknowledges that it will, independently
and without reliance upon the Administrative Agent or any other Bank, and based
upon such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
any Credit Document.
Section 9.07. Indemnification. Each Bank agrees (which
agreement shall survive repayment of the Loans) to indemnify the Administrative
Agent, to the extent not reimbursed by the Borrowers, ratably in accordance
with its respective Commitment in effect on the date on which indemnification
is sought (or, if indemnification is sought after the date upon which the
Commitment shall have terminated and the Loans shall have been paid in full,
ratably in accordance with its respective Commitment immediately prior to such
date), from and against any and all liabilities, obligations, losses, claims,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against the Administrative Agent in any way relating to or arising out
of any Credit Document, or any action taken or omitted to be taken by the
Administrative Agent under any Credit Document; provided that no Bank shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the gross negligence or wilful misconduct of the Administrative
Agent or any of its officers or employees. Without limiting the foregoing,
each Bank agrees to reimburse the Administrative Agent promptly upon demand for
its Pro Rata Share of any out-of-pocket expenses (including counsel fees)
incurred by the Administrative Agent in such capacity in connection with the
enforcement of, or legal advice in respect of rights or responsibilities under,
any Credit Document or any amendments or supplements hereto or thereto, to the
extent that the Administrative Agent is not reimbursed for such expenses by the
Borrowers.
Section 9.08. Successor Administrative Agent. The
Administrative Agent may resign at any time by giving written notice thereof to
the Banks and API, and the Administrative Agent may be removed at any time by
the Required Banks by giving written notice thereof to the Administrative
Agent, the other Banks and API at least 10 Business Days prior to the effective
date of such removal. Upon any such resignation or removal, the Required
Banks, with the prior written consent of API (which consent shall not be
unreasonably withheld), shall have the right to appoint a successor
Administrative Agent which shall be a commercial bank organized under the laws
of the United States of America or any State thereof and having a capital and
surplus of at least $250,000,000 (a "Qualified Administrative Agent"). If no
such successor Administrative Agent shall have been so appointed and shall have
accepted such appointment within 30 days after the resigning Administrative
Agent's giving of notice of resignation, or the Required Banks' giving notice
of removal, as the case may be, the resigning or removed Administrative Agent
may, on behalf of the Banks, appoint a successor Administrative Agent, which
shall be a Qualified Administrative Agent as set forth in this Section 9.08.
Upon the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the resigned or removed Administrative Agent, and the resigned or
removed Administrative Agent shall be discharged from its duties and
obligations in such capacity under this Agreement and any other Credit
Documents. After any Administrative Agent's resignation or removal hereunder
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as Administrative Agent, the provisions of this Article IX shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
ARTICLE X
The Guaranty
Section 10.01. The Guaranty. API unconditionally and
irrevocably guarantees the prompt payment when due of all present and future
obligations and liabilities of all kinds (including post-petition interest,
whether or not such interest constitutes an allowed claim in the related
bankruptcy or insolvency proceeding) of each other Borrower to the Banks under
any Credit Document, whether incurred by such Borrower as maker, endorser,
drawer, acceptor, guarantor, accommodation party or otherwise, and whether due
or to become due, secured or unsecured, absolute or contingent, joint or
several, and howsoever or whenever incurred by such Borrower (the "Guaranteed
Obligations").
Section 10.02. Absolute Guaranty. API's obligations hereunder
shall not be affected by the genuineness, validity, regularity or
enforceability of the Guaranteed Obligations or any instrument evidencing the
Guaranteed Obligations or by the existence, legality, validity, enforceability
(including as a result of a bankruptcy, reorganization or similar proceeding),
perfection, or extent of any collateral therefor or by any other circumstance
relating to the Guaranteed Obligations or the Borrowers (other than API) which
might otherwise constitute a defense available to any surety or guarantor or to
this Guaranty. The Banks make no representation or warranty in respect of any
such circumstance and have no duty or responsibility whatsoever to API with
respect to the management or maintenance of the Guaranteed Obligations or any
collateral therefor. The Banks shall not be obligated to file any claim
relating to the Guaranteed Obligations in the event that a Borrower becomes
subject to a bankruptcy, reorganization or similar proceeding, and the failure
of the Banks so to file shall not affect API's obligations hereunder. In the
event that any payment to the Banks in respect of any Guaranteed Obligation is
rescinded or must otherwise be returned for any reason whatsoever, API shall
remain liable hereunder in respect of such Guaranteed Obligation as if such
payment had not been made.
Section 10.03. Consents, Waivers and Renewals. API agrees
that the Banks may at any time and from time to time, either before or after
the maturity thereof, without notice to or further consent of API, extend the
time of payment of, exchange or surrender any collateral for, or renew any
Guaranteed Obligations, and may also make any agreement with ACC, an Offshore
Borrower or with any other party to or person liable on any Guaranteed
Obligations, or interested therein, for the extension, renewal, payment,
compromise, discharge or release thereof, in whole or in part, or for any
modification of the terms thereof or of any agreement between the Banks, ACC,
an Offshore Borrower or any such other party or person, without in any way
impairing or affecting this Guaranty. API agrees that the Banks may resort to
API for payment of any Guaranteed Obligations, whether or not the Banks shall
have resorted to any collateral security, or shall have proceeded against any
Borrower or other obligor principally or secondarily obligated with respect to
any of the Guaranteed Obligations.
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Section 10.04. Subrogation. API will not exercise any rights
which it may acquire by way of subrogation or by any indemnity, reimbursement
or other agreement, and shall not exercise any right of recourse to any assets
or property of any other Borrower held for the payment and performance of the
Guaranteed Obligations. If any amount shall be paid to API in violation of the
preceding sentence, such amount shall be held in trust for the benefit of the
Banks and shall forthwith be paid to the Administrative Agent to be credited
and applied to the Guaranteed Obligations, whether matured or unmatured.
Section 10.05. Security. Without limiting any other right of
each Bank, upon the occurrence of an Event of Default that is continuing, to
the fullest extent permitted by law, whenever any of the Guaranteed Obligations
shall become due (whether by acceleration or otherwise), such Bank at its sole
election may set off against the Guaranteed Obligations owing to such Bank all
moneys then standing to the credit of API on the books of such Bank. Any Bank
exercising its rights under this Section 10.05 shall give notice thereof to
API, the relevant Borrower and the Administrative Agent concurrently with or
prior to the exercise of such rights, provided that the failure to give such
notice shall not affect the validity of such set-off and application.
Section 10.06. Continuing Guaranty. API's obligations
hereunder shall remain in full force and effect until the principal of and
interest on the Loans and all other amounts payable by any other Borrower under
this Agreement shall have been paid in full. If at any time any payment of the
principal of or interest on the Loans or any other amount payable by any such
Borrower under this Agreement is rescinded or must otherwise be restored or
returned upon the insolvency, bankruptcy or reorganization of such Borrower or
otherwise, API's obligations hereunder with respect to such payment shall be
reinstated as though such payment had been due but not made at such time.
Section 10.07. Waiver of Notice. API waives notice of the
acceptance of this Guaranty and of the making of any loans or extensions of
credit to any other Borrower, presentment to or demand or payment from anyone
whomsoever liable upon any of the Guaranteed Obligations, presentment, demand,
notice of dishonor, protest, notice of any sale of collateral security and all
other notices whatsoever.
ARTICLE XI
Miscellaneous
Section 11.01. APPLICABLE LAW. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 11.02. Set-off. Each Bank is hereby authorized at any
time and from time to time upon the occurrence of an Event of Default that is
continuing, to the fullest extent permitted by law, to set-off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other Debt at any time owing by such Bank (other than the
Account and any obligations in respect of Collateral) to or for the credit or
the account of a Borrower against any and all payment obligations of such
Borrower under this Agreement then owing to such Bank, irrespective of whether
such Bank shall have made any demand under this Agreement. The rights of each
Bank under this Section 11.02 are in addition to any other rights and remedies
(including other rights of set-off) which such Bank may have. Any Bank
exercising its rights under this Section 11.02 shall give notice thereof to
59
API, the relevant Borrower and the Administrative Agent concurrently with or
prior to the exercise of such rights provided that the failure to give such
notice shall not affect the validity of such set-off and application.
Section 11.03. Expenses. API agrees to pay all reasonable
out-of-pocket expenses incurred by the Administrative Agent and any Banks,
including the reasonable fees and disbursements of one firm of counsel (plus
one firm of local counsel in any relevant jurisdiction to the extent necessary
or appropriate in connection with any proceeding relating to enforcement)
chosen from time to time to represent the Banks as a group in connection with
the negotiation and execution of the Credit Documents and, if necessary, in
connection with the administration and enforcement of any provisions of the
Credit Documents.
Section 11.04. Amendments. Any provision of this Agreement
may be amended, modified, supplemented or waived if, but only if, such
amendment, modification, supplement or waiver is in writing and is signed by
each of the Borrowers and the Required Banks (and, if the rights or duties of
the Administrative Agent are affected thereby, by the Administrative Agent);
provided that no such amendment, modification, supplement or waiver shall,
unless signed by all the Banks, (i) subject to Section 2.04, increase or
decrease the Commitment of any Bank or subject any Bank to any additional
obligation, (ii) reduce the principal of or rate of interest on any Loan or any
fees hereunder, (iii) postpone the date fixed for any payment of principal of
or interest on any Loan or any fees hereunder or for any reduction or
termination of any Commitment, (iv) release API from any obligations under
Article X or (v) amend or waive the provisions of this Section 11.04 or the
definition of "Required Banks".
Section 11.05. Cumulative Rights and No Waiver. Each and
every right granted to the Administrative Agent and the Banks under any Credit
Document, or allowed them by law or equity, shall be cumulative and may be
exercised from time to time. No failure on the part of the Administrative
Agent or any Bank to exercise, and no delay in exercising, any right will
operate as a waiver thereof, nor will any single or partial exercise by the
Administrative Agent or any Bank of any right preclude any other or future
exercise thereof or the exercise of any other right.
Section 11.06. Notices. Except as specified in Articles I, II
or III, any communication, demand or notice to be given hereunder will be duly
given when delivered in writing or by telecopy to a party at its address as
indicated below.
A communication, demand or notice given pursuant to this
Section 11.06 shall be addressed:
If to any Borrower, to such Borrower at (or in care of):
Avon Products, Inc.
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telex: 423899 or 23560
Answerback: AVON UR
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xx. Xxxxxx Xxxx
Vice President - Treasurer
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If to the Administrative Agent, to it at:
The Chase Manhattan Bank
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxx
provided, that notices to be given pursuant to Articles II, III
or IV (other than notices pursuant to Section 2.07, which shall
be directed as set forth in Exhibit C-1) hereunder shall be
given to the Administrative Agent at;
The Chase Manhattan Bank Agency Services
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxx Xxxxxx
If to any Bank, to it at the address designated as its address
for notices on Schedule 2.01.
Unless otherwise provided herein, any notice which is required
to be given in writing or by telephone pursuant to the terms of this Agreement
may be given by telex, telecopy or facsimile transmission. Any party from time
to time may change its address for notices by notice to the other Banks, the
Agent and the Borrower in the manner provided in this subsection.
Each notice delivered in writing to API hereunder shall be
deemed delivered to all the Borrowers.
Section 11.07. Severability. If any one or more of the
provisions contained in this Agreement shall be invalid, illegal or
unenforceable in any respect under any law, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any
way be affected or impaired thereby.
Section 11.08. Parties in Interest. (a) Successors and
Assigns. This Agreement shall be binding upon and inure to the benefit of each
of the Borrowers and the Banks and their respective successors. Except as
permitted in Section 11.08(c), no interest in the Commitment of any Bank or any
Loan, nor any right of a Bank under the Credit Documents, may be assigned to
any Person that was not, prior to such assignment, a Bank hereunder. No
Borrower shall assign or delegate any of its respective rights or obligations
hereunder, without the prior written consent of all the Banks. Any purported
assignment in contravention of this Section 11.08 shall be null and void.
(b) Participations. Any Bank, in the ordinary course of its
business and in accordance with applicable law, may at any time grant to one or
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more banks or other financial institutions (each, a "Participant")
participating interests in its Commitment or any or all of its Revolving Credit
Loans; provided that such Bank gives written notice of the granting of such
participation to API. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to either
Borrower and the Administrative Agent, such Bank shall remain responsible for
the performance of its obligations hereunder, the Borrowers and the
Administrative 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 Borrowers under the Credit
Documents including the right to approve any amendment, modification,
supplement 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 Sections 11.04
(i) through (v), inclusive, without the consent of the Participant. Each
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 4.03 and 4.04 with respect to its participating interest; provided
that (i) all amounts payable to a Bank for the account of a Participant under
Sections 4.03 and 4.04 shall be determined as if such Bank had not granted such
participation to the Participant and (ii) no Participant shall be entitled to
receive any greater payment under Section 4.03 or 4.04 than such Bank would
have been entitled to receive with respect to the rights participated, unless
such transfer is made with API's prior written consent or by reason of the
provisions of Section 4.04 requiring such Bank to designate a different lending
office under certain circumstances or at a time when the circumstances giving
rise to such payment did not exist.
(c) Assignments. (i) Any Bank, in accordance with
applicable law, may assign all or a portion of its interests, rights and
obligations under this Agreement (including a portion or all of its Commitment
or of the Loans at the time owing to it) to one or more banks or other
financial institutions (each, an "Assignee"); provided, however, that (A) each
of API and the Administrative Agent must give its prior written consent (which
consent shall not be unreasonably withheld) to any such assignment (other than
an assignment by a Bank to an affiliate of such Bank or to a Federal Reserve
Bank), (B) the amount of the Commitment of the assigning Bank (determined as of
the date of such assignment) subject to such assignment (other than in the case
of an assignment to an Affiliate of the Bank or a Federal Reserve Bank) shall
not be less than $10,000,000, unless API otherwise consents (which consent
shall not be unreasonably withheld), (C) the parties to each such assignment
(other than an assignment to a Federal Reserve Bank) shall execute and deliver
to the Administrative Agent for recording in the Register an instrument
evidencing such assignment, in substantially the form of Exhibit G (an
"Assignment and Acceptance"), and the assigning Bank or the Assignee shall pay
to the Administrative Agent an assignment fee in cash equal to $1,000 (if the
Assignee is already a Bank) or $3,500 (otherwise), and (D) as of the date of
such assignment, except with the prior written consent of API and the
Administrative Agent, (1) the Assignee shall not have any right, and shall have
no knowledge that such assignment would result in its having the right, to
request compensation pursuant to Section 4.04 after giving effect to such
assignment and (2) the parties to such assignment shall have no knowledge that
such assignment (a) would cause it to be unlawful for any party thereto to make
or maintain any Eurocurrency Loan or to give effect to its obligations as
contemplated hereby with respect to any Eurocurrency Loan or (b) would cause
any Borrower to incur any liability under Section 4.03 or 4.04. Upon
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acceptance and recording in the Register, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be at
least two Domestic Business Days after the execution thereof, (A) the Assignee
thereunder shall be a party hereto and, to the extent of the Commitment
assigned by such Assignment and Acceptance, shall have the rights and
obligations of, and shall for all purposes be, a Bank under this Agreement and
(B) the assigning Bank thereunder shall, to the extent of the Commitment
assigned by such Assignment and Acceptance, be released from such Commitment
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Bank's Commitment under this Agreement and in the case
of an assignment pursuant to Section 4.06, such Bank shall cease to be a party
hereto). Notwithstanding the foregoing, (A) any Bank assigning any portion of
its rights and obligations under this Agreement may retain any Competitive
Advance Loans made by it outstanding at such time and, in such case, shall
retain its rights hereunder in respect of any Loans so retained until such
Loans have been repaid and (B) any Bank may at any time assign or grant a
security interest in its Loans and its rights (but not its obligations) under
this Agreement to a Federal Reserve Bank; provided that no such assignment or
grant pursuant to this clause (B) shall release a Bank from any of its
obligations hereunder.
(ii) By executing and delivering an Assignment and Acceptance,
the Assignee thereunder shall be deemed to confirm to and agree with the other
parties hereto as follows: (A) such Assignee confirms that it has received a
copy of this Agreement, together with copies of the most recent financial
statements delivered pursuant to Section 7.01 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (B) such Assignee will
independently and without reliance upon the Administrative Agent, the assigning
Bank or any other Bank and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (C) such Assignee appoints
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof; and (D) such Assignee agrees that it
will perform in accordance with their terms all the obligations which by the
terms of this Agreement are required to be performed by it as a Bank with the
Loans and Commitment assigned to it.
(iii) Notwithstanding the foregoing, an Assignee shall not, by
virtue of an Assignment and Acceptance, become a party to this Agreement or a
"Bank", or have any rights to consent to or refrain from consenting to any
amendment, waiver or other modification of any provision of any Credit Document
unless such Assignee shall thereby have accepted a Commitment hereunder;
provided that no such amendment, waiver or modification may reduce or postpone
any payment of principal or interest in respect of any Loan assigned to such
Assignee thereby without the written consent of such Assignee.
(d) Federal Reserve Regulations. Notwithstanding any
other provision of any Credit Document, no Bank may sell, assign or participate
all or any portion of its Commitment or Loans hereunder to any "broker" or
"dealer" (as defined in Sections 3(a)(4) and 3(a)(5) of the Securities Exchange
Act of 1934) or any other Person that is a "creditor" (as defined in Regulation
T of the Federal Reserve Board). By executing and delivering this Agreement,
each Bank hereby confirms that it is not such a "broker", "dealer" or
"creditor".
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Section 11.09. WAIVER OF RIGHT TO JURY. EACH OF THE
BORROWERS, THE ADMINISTRATIVE AGENT AND EACH OF THE BANKS WAIVES TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THE CREDIT DOCUMENTS OR THE RELATIONSHIPS
ESTABLISHED UNDER THE CREDIT DOCUMENTS.
Section 11.10. Indemnity. The Borrowers, jointly and
severally, agree to indemnify the Administrative Agent and each of the Banks
and their respective directors, officers, employees, agents and controlling
persons (each such Person, an "Indemnitee") against, and to hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including reasonable counsel fees and expenses, incurred by
or asserted against any Indemnitee arising out of, in any way connected with,
or as a result of (i) the execution or delivery of this Agreement or any
agreement or instrument contemplated hereby, the performance by the parties
thereto of their respective obligations hereunder or the consummation of the
transactions contemplated hereby, (ii) the use of the proceeds of the Loans or
(iii) any claim, litigation, investigation or proceeding relating to any of the
foregoing, whether or not any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or wilful misconduct of any Indemnitee.
The provisions of this Section 11.10 shall remain operative and
in full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Revolving Credit Loans or the Competitive Advance
Loans, the reduction or cancellation of the Total Commitment, the invalidity or
unenforceability of any term or provision of this Agreement or any Note, or any
investigation made by or on behalf of the Banks. All amounts due under this
Section 11.10 shall be payable in immediately available funds upon written
demand therefor.
Section 11.11. Judgment Currency. (a) If for purposes of
obtaining judgment in any court in any country it becomes necessary to convert
into a currency (the "judgment currency") an amount due under or in respect of
any Credit Document in any other currency (the "primary currency"), then the
conversion shall be made at the rate of exchange prevailing at the close of
business on the Domestic Business Day or Eurocurrency Business Day, as
appropriate, before the day on which the judgment is given. The Borrowers
agree that for purposes of this Section 11.11, to the fullest extent permitted
by law, that the term "rate of exchange" shall mean the spot rate at which the
Administrative Agent in accordance with its normal practice is able on the
relevant date to purchase the primary currency with the judgment currency, in
the interbank market in which its lending and foreign exchange and currency
operations with respect to the primary currency are then conducted, and
includes any premium and costs of exchange payable.
(b) If there is a change in the rate of exchange
prevailing between the Domestic Business Day or Eurocurrency Business Day, as
the case may be, before the day on which the judgment is given and the date of
payment of the amount due, then the relevant Borrower shall pay any additional
amounts as may be necessary to ensure that the amount paid in the judgment
currency when converted at the rate of exchange prevailing on the date of
64
payment will produce the amount then due under the Credit Documents in the
primary currency.
(c) Any amount due from a Borrower under this
Section 11.11 shall be due as a separate debt and shall not be affected by
judgment being obtained for any other sums due under or in respect of the
Credit Documents.
Section 11.12. Consent to Jurisdiction. Any judicial
proceeding brought against any Borrower with respect to any Credit Document may
be brought in any court of competent jurisdiction in the City of New York, and,
by its execution and delivery of this Agreement or an Offshore Borrower
Confirmation pursuant to Section 6.04, each Borrower shall be deemed, to the
fullest extent permitted by law, to (a) accept, generally and unconditionally,
the jurisdiction of such courts, (b) irrevocably waive any objection they may
now or hereafter have as to the venue of any suit, action or proceeding brought
in such a court or that such court is an inconvenient forum and (c) consent
that service of process upon any of them may be made by certified or registered
mail, return receipt requested, at their address specified or determined in
accordance with the provisions of Section 11.06 and service so made shall be
deemed completed when received. Nothing herein shall affect the right to serve
process in any other manner permitted by law or shall limit the right of the
Bank to bring proceedings against any Borrower in the courts of any other
jurisdiction.
Section 11.13. Confidentiality. Except as may be required to
enforce the rights and duties established hereunder (including establishing and
maintaining the Collateral Agent's perfected security interest in the
Collateral), the parties hereto shall preserve in a confidential manner all
information received from any other party pursuant to this Agreement, any Notes
and the transactions contemplated hereunder and thereunder, and shall not
disclose such information except (i) to employees of such Bank or its
Affiliates involved in the administration of this Agreement (including
assignments and participations) and their respective directors, attorneys and
accountants (each of which shall be acting in a capacity with respect to which
a confidential relationship is established and recognized), (ii) to any
Participant or Assignee or any potential Participant or Assignee (provided,
that such Person shall agree to keep confidential all information provided
thereto, in accordance with this Section 11.13) and (iii) as required by
applicable law, including responses to requests for information by appropriate
bank regulatory agencies.
Section 11.14. Execution in Counterparts. This Agreement may
be executed in any number of counterparts and by the different parties hereto
on separate counterparts, each of which when so executed and delivered shall be
an original, but all the counterparts shall together constitute one and the
same instrument. Delivery of an executed counterpart of a signature page to
this Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
65
AVON PRODUCTS, INC.
By: /s/: Xxxxxx Xxxx
Name: Xxxxxx Xxxx
Title: Vice President - Treasurer
AVON CAPITAL CORPORATION
By: /s/: Xxxxxx Xxxx
Name: Xxxxxx Xxxx
Title: Vice President - Treasurer
THE CHASE MANHATTAN BANK, as Administrative
Agent
By: /s/: Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Vice President
BANKERS TRUST COMPANY
By: /s/: Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: Vice President
BANK OF AMERICA ILLINOIS
By: /s/: Xxxxx Xxxx
Name: Xxxxx Xxxx
Title: Authorized Officer
BANCO SANTANDER, NEW YORK BRANCH
By: /s/: Xxxxx X. Xxxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxxx
Title: Senior Vice President and
Manager Corporate Finance
By: /s/: Dom X. Xxxxxxxxx
Name: Dom X. Xxxxxxxxx
Title: Vice President
00
XXXXXX XXXXXXXXX XX XXXXX - XXX XXXX BRANCH
By: /s/: Sophie Revillard Xxxxxxx
Name: Sophie Revillard Xxxxxxx
Title: Vice President
By: /s/: Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Assistant Vice President
THE BANK OF NOVA SCOTIA
By: /s/: J. Xxxxx Xxxxxxx
Name: J. Xxxxx Xxxxxxx
Title: Authorized Signatory
BANK OF TOKYO - MITSUBISHI TRUST
By: /s/: Xxxxxx X. Xxxx
Name: Xxxxxx X. Xxxx
Title: Vice President
THE CHASE MANHATTAN BANK, as a Bank
By: /s/: Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Vice President
CITIBANK, N.A.
By: /s/: Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/: Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: Senior Vice President
67
DEUTSCHE BANK AG - NEW YORK AND/OR CAYMAN
ISLANDS BRANCHES
By: /s/: Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Assistant Vice President
By: /s/: Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: Assistant Vice President
THE FIRST NATIONAL BANK OF BOSTON
By: /s/: Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
MARINE MIDLAND BANK
By: /s/: Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK
By: /s/: Xxxxxx X.X. Xxxxx
Name: Xxxxxx X.X. Xxxxx
Title: Associate
NATIONSBANK, N.A.
By: /s/: Xxxxxxxx X. XxXxxxxxx
Name: Xxxxxxxx X. XxXxxxxxx
Title: Senior Vice President
THE NORTHERN TRUST COMPANY
By: /s/: Xxxx Xxxxxxxxxx
Name: Xxxx Xxxxxxxxxx
Title: Commercial Banking Officer
68
THE SUMITOMO BANK, LIMITED - NEW YORK BRANCH
By: /s/: C. Xxxxxxx Xxxxxxx
Name: C. Xxxxxxx Xxxxxxx
Title: Senior Vice President
SWISS BANK CORPORATION - NEW YORK BRANCH
By: /s/: Xxxxxx Xx
Name: Xxxxxx Xx
Title: Director, Credit Risk Management
By: /s/: Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Associate Director-Banking
Finance Support, N.A.
TORONTO DOMINION (NEW YORK), INC.
By: /s/: Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Vice President
