1
EXHIBIT 4.G
Dated 9th July, 1997
MASCO GMBH
as Borrower
and
MASCO CORPORATION
as Guarantor
and
COMMERZBANK AKTIENGESELLSCHAFT
as Arranger
and
COMMERZBANK INTERNATIONAL S.A.
as Agent
and
OTHERS
_________________________________
DM 400,000,000 TERM LOAN FACILITY
_________________________________
HENGELER XXXXXXX XXXXXXX XXXXX
Frankfurt am Main
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CONTENTS
PAGE
SECTION 1 Interpretation 3
SECTION 2 The Facility 3
SECTION 3 The Lenders 3
SECTION 4 Fees and Expenses 4
SECTION 5 Advance of Funds 4
SECTION 6 Interest 6
SECTION 7 Repayment 7
SECTION 8 Prepayment 7
SECTION 9 Guarantee 7
SECTION 10 Changes of Circumstances 9
SECTION 11 Payments 13
SECTION 12 Late Payment 15
SECTION 13 Sharing among Lenders 16
SECTION 14 Representations and Warranties 17
SECTION 15 Delivery of Information 21
SECTION 16 General Covenants 24
SECTION 17 Early Termination 28
SECTION 18 The Agent and the Arranger 31
SECTION 19 Evidence and Certificates 35
SECTION 20 Notices 35
SECTION 21 Transfers and Substitution 36
SECTION 22 Waivers and Amendments 38
SECTION 23 Miscellaneous 38
SECTION 24 Law and Jurisdiction 39
SECTION 25 Confidentiality 40
Annex: Definitions, References and Construction 43
SCHEDULES
Schedule 1: Lenders and Commitments; Address Details 52
Schedule 2: Conditions Precedent 54
Schedule 3: Form of Substitution Certificate 55
Schedule 4: Form of Borrowing Notice 57
Schedule 5: Form of Tax Confirmation 58
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CREDIT AGREEMENT dated 9th July, 1997 between:
(1) MASCO GMBH, as borrower (the "Borrower"),
(2) MASCO CORPORATION, as guarantor (the "Guarantor"),
(3) COMMERZBANK AKTIENGESELLSCHAFT, as arranger (the "Arranger"),
(4) COMMERZBANK INTERNATIONAL S.A., as agent, and
(5) THE FINANCIAL INSTITUTIONS listed in Schedule 1, as lenders.
THE PARTIES agree as follows:
SECTION 1 INTERPRETATION
The defined expressions used in this Agreement are set out in the Annex.
SECTION 2 THE FACILITY
(1) Amount and Nature. The Facility is a five-year DM 400,000,000 term
loan facility.
(2) Purpose. The Borrower agrees to use the proceeds of the Facility to retire
debt of the Borrower outstanding at the date of this Agreement, but no
Syndicate Party needs to concern itself with the application of amounts
taken up by the Borrower under the Facility.
(3) Availability. The Borrower may borrow under the Facility after the
Agent has received all the items listed in Schedule 2 in a form
satisfactory to the Agent.
(4) Expiry of Availability. The Borrower may not borrow under the Facility
after the Commitment Expiry Date.
SECTION 3 THE LENDERS
(1) Rights and Obligations. The rights and obligations of each Lender
under this Agreement are separate and independent from the rights and
obligations of each other Lender. A Lender may take proceedings against any
Obligor on its own without involving any other Lender in those proceedings.
(2) Failure to Perform. If a Lender fails to perform its obligations the
Borrower will have rights solely against that Lender. The obligations of
any Obligor to the Agent, the Arranger and the other Lenders will not be
affected by this failure.
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SECTION 4 FEES AND EXPENSES
(1) Management Fee. The Borrower will pay to the Agent for the account of
the Arranger a management fee. The amount of this fee and the timing of
payment are described in a letter from the Arranger to the Borrower dated
the same date as this Agreement.
(2) Agency Fee. The Borrower agrees to pay to the Agent an agency fee. The
amount of this fee and the timing of payment are described in a letter from
the Agent to the Borrower dated the same date as this Agreement.
(3) Reimbursement of Initial Expenses. The Borrower agrees to reimburse
the Arranger for all reasonable out-of-pocket expenses incurred in
connection with the negotiation, preparation and signing (including, but
not limited to, legal expenses, travelling expenses and communication
charges) of this Agreement and the syndication of the Facility. In
addition, the Borrower agrees to bear and pay all expenses related to the
publication of any advertisements in connection with the Facility made with
the approval of the Borrower.
(4) Protection of Rights. A Syndicate Party may incur expenses in protecting,
preserving or enforcing its rights under this Agreement. The Borrower
agrees to reimburse that Syndicate Party for the reasonable amount of
expenses reasonably incurred.
(5) Documentary Taxes. The Borrower agrees to bear and pay any duty, fee
or other similar charge required to be paid on this Agreement, any document
referred to in or contemplated by this Agreement or any judgment obtained
in connection with this Agreement or payable in order for this Agreement or
any of these documents to be valid, binding and enforceable or for any of
them to be admitted as evidence in court. Alternatively, a Syndicate Party
may make the payment; if it does so, the Borrower agrees to reimburse that
Syndicate Party for the amount paid.
SECTION 5 ADVANCE OF FUNDS
(1) Notice of Borrower. When the Borrower wishes to borrow under the
Facility, it will deliver a notice to the Agent substantially in the form
attached hereto as Schedule 4. The notice shall specify the amount of the
Advance, the length of the Interest Period applicable to the Advance and
the Advance Date. The Advance Date must be no sooner than five Business
Days after the date the Agent receives the notice. For this purpose, if the
Agent receives the notice on a day which is not a Business Day or after
3.00 p.m. on a Business Day, it will be treated as having received the
notice on the following Business Day.
(2) Limitations on Advances. The following limitations apply to Advances:
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(a) No Advance may exceed the uncancelled and undrawn amount of the
Facility.
(b) An Advance must be a minimum of DM 50,000,000 or, if higher, an integral
multiple of DM 10,000,000, or be the uncancelled and undrawn
amount of the Facility.
(c) No more than three Advances may be made.
(d) Amounts undrawn on the Commitment Expiring Date are automatically
cancelled.
(3) Amount of the Lenders' Participation in the Advance. The amount of a
Lender's participation in an Advance shall be that proportion of the
Advance which its Commitment bears to the Total Commitments on the date of
receipt by the Agent of the relevant notice of borrowing.
(4) Notice to the Lenders. The Agent agrees to provide details of the
notice of borrowing to each Lender not later than close of business on the
fourth Business Day preceding the Advance Date. These details will also
include the amount of the Lender's participation in the Advance.
(5) Conditions to Borrowing. The Lenders will only be obliged to make an
Advance to the Borrower if:
(a) the Facility is available in accordance with SECTION 2;
(b) a properly completed and signed notice of borrowing has been received
by the Agent;
(c) the representations and warranties in SECTION 14 are true on the date of
delivery of the notice of borrowing and on the Advance Date; and
(d) no Termination Event or Potential Termination Event exists on the
Advance Date.
(6) Obligation to make an Advance. If the requirements of this Section 5 are
satisfied, each Lender agrees to make the amount of its participation in
the Advance available to the Agent for the Borrower on the Advance Date.
(7) Consequences of an Advance not being made. If a notice of borrowing is
delivered but no Advance is made due to any of the Conditions in SECTION 5(5)
not being satisfied, the Borrower agrees to reimburse each Lender for the
losses and expenses incurred by such Lender as a result of liquidating or
otherwise utilising amounts taken up by it to fund its participation in the
Advance or terminating commitments relating to the funding or hedging open
positions resulting from the Advance not being made.
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SECTION 6 INTEREST
(1) Interest Periods. Interest will accrue on each Advance by reference to
successive periods of time. These periods may be of one, two, three or six
months' duration as selected by the Borrower or any longer period on which
all Lenders may have agreed with the Borrower, and notified by the
Borrower, in the case of the first period applicable to an Advance, in the
relevant notice of borrowing, and in the case of any subsequent period, not
later than on the fourth Business Day before the commencement of such
period, subject to the following:
(a) First Period. The first of these periods will commence on the Advance
Date and will end on the date the selected number of months after that
date.
(b) No Selection by the Borrower. Where the Borrower fails to timely
select a certain period, the next period applicable to the Advance
will be of three months' duration.
(c) Subsequent Periods. Subsequent periods will commence on the last day
of the previous period and will end on the date the selected number of
months after that date. A period that would otherwise include the Repayment
Date will end on the Repayment Date and may be less than a
full Interest Period.
(d) Adjustments. Where a period starts on a date for which there is no
numerical equivalent in the month the selected number of months later,
it will end on the last day of that month. If any date on which a
period would otherwise end is not a Business Day, that period will be
extended to the next Business Day unless such Business Day would fall
into the next calendar month, in which case that period will end on
the immediate preceding Business Day.
(2) Rate of Interest. The rate of interest applicable during an Interest
Period will be a rate per annum equal to FIBOR for that Interest Period
plus the applicable Margin.
(3) Accrual and Payment. Interest on the Loan shall:
(a) accrue from day to day and be calculated for the actual number of days
elapsed and on the basis of a year of 360 days and
(b) be payable in arrears on the last day of each Interest Period and, in
the case of Interest Periods which are longer than six months, also on
the day falling six months after the first day of the Interest Period
as regards the interest accrued for the initial six months.
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(4) The Agent agrees to notify the Borrower and each Lender of any rate of
interest determined under this Agreement.
SECTION 7 REPAYMENT
The Borrower agrees to repay the Loan on the Repayment Date.
SECTION 8 PREPAYMENT
(1) Optional Prepayment. The Borrower may give notice that it will prepay
the whole or part of the Loan on the last day of an Interest Period. This
notice must state:
(a) the amount to be prepaid which, in the case of partial prepayment,
must be a minimum of DM 10,000,000 or, if higher, a multiple of
DM 5,000,000; and
(b) the date of prepayment which will be at least 15 days after the notice
is received by the Agent.
The Borrower agrees to prepay the Loan in accordance with its notice.
(2) No other Prepayment. The Borrower may not prepay the Loan except in
the manner permitted by this Agreement.
(3) No Re-borrowing. No amount prepaid may be re-borrowed.
SECTION 9 GUARANTEE
(1) Guarantee. The Guarantor unconditionally and irrevocably guarantees to
each Syndicate Party the performance of any and all obligations of the
Borrower under this Agreement and the payment of each amount expressed herein
to be payable by the Borrower as and when such amount becomes due and in
the same currency as the amount due. Payment shall be made forthwith upon
the written demand of the Agent.
(2) Nature of Guarantee Obligation. This Guarantee constitutes a
"Garantie" and not a "Burgschaft". Accordingly the obligations of the
Guarantor under this Guarantee (i) are separate and independent from the
obligations of the Borrower under this Agreement, (ii) exist irrespective
of the legality, validity, binding effect or enforceability of the
obligations of the Borrower under this Agreement, and (iii) are not
affected by any event, condition or circumstance of whatever nature,
whether factual or legal, save the full, definitive and irrevocable
satisfaction of any and all payment obligations expressed herein to be payable
by the Borrower.
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(3) Preservation of Rights. Any obligations of the Guarantor under this
Guarantee will not be affected by:
(a) Any change, waiver or release of the Borrower's obligations.
(b) Any concession or time being given to the Borrower.
(c) The winding-up or re-organisation of the Borrower.
(d) Any change in the condition, nature or status of the Borrower.
(e) Any of the above events occurring in relation to another guarantor or
provider of security of its obligations.
(f) Any failure of any Syndicate Party to take, retain or enforce any
other guarantee or security.
(g) Any circumstances affecting or preventing recovery of amounts due by
the Borrower.
(h) Any other matter which might discharge the Guarantor (other than full
and unconditional payment under the Guarantee).
(4) Covenants of the Guarantor. The Guarantor agrees as follows:
(a) Security. The Guarantor will not have the benefit of any Security
provided by the Borrower in respect of this Guarantee.
(b) Exercise of Rights. The Guarantor will not:
(i) take the benefit of any rights against the Borrower or any other
person in respect of amounts paid under this Guarantee; or
(ii) claim or exercise against the Borrower any right to any payment
(whether or not in connection with this Agreement).
(c) Competing Claim. An Instructing Group may request the Guarantor to
submit a claim in insolvency proceedings for amounts due to it by the
Borrower or any other guarantor. The Guarantor agrees to submit such
claim promptly in accordance with this request. The Guarantor hereby
assigns to the Agent (for the benefit of the Syndicate Parties) for
security purposes all its rights in respect of that claim.
The obligations in this SECTION 9(4) will cease to have effect when the
Facility has ceased to be available and there are no amounts
outstanding under the Facility. Paragraphs (a) and (b) only apply for
so long as there is a current Termination Event.
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(5) Discharge Conditional. Any settlement with, or discharge of, the
Guarantor will be subject to the condition that the settlement or discharge
will be set aside if any prior payment, or any other guarantee or security
relating to any amount due under this Agreement, is set aside, invalidated
or reduced. In this event the Guarantor agrees to reimburse each Syndicate
Party for the value of the payment, guarantee or security which is set
aside, invalidated or reduced.
(6) Additional Security. This Guarantee is in addition to and is not in
any way prejudiced by any other security now or hereafter held by any
Syndicate Party.
SECTION 10 CHANGES OF CIRCUMSTANCES
(1) Illegality.
(a) Notice of Illegality. Each Lender may notify the Borrower if it
determines that it is or will be acting illegally (rechtswidrig) in
relation to the Facility. The illegality may relate to the performance
of the Lender's obligations, the maintenance of the Facility or the
Lender's funding arrangements.
(b) Cancellation and Prepayment. If a Lender delivers a notice of
illegality any outstanding Commitment of that Lender will be cancelled
on the date of that notice. The Borrower agrees to prepay the
participation of that Lender in the Loan on the last day of the
Interest Period during which the notice is received, unless the Lender
certifies that, because of a legal requirement (law, regulation or any
action by a court or administrative authority) applicable to the
Lender, it must be repaid earlier. In this event the Borrower agrees
to prepay the participation on the date specified by the Lender.
SECTION 10(5) applies to any cancellation or prepayment under this
paragraph.
(2) Increased Costs.
(a) Notice of Increased Costs. A Lender may give notice of increased costs
to the Borrower if:
(i) either:
(aa) there is a change in a legal or other requirement applicable to
the Lender (or its holding company) (including any change
relating to taxation or reserve asset, special deposit, cash
ratio, liquidity or capital adequacy requirements or any other
form of banking or monetary control) or a change in its
interpretation or application; or
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(bb) the Lender (or its holding company) complies with a direction or
request (whether or not having the force of law) of any central
bank or other fiscal, monetary or other authority; and
(ii) as a result, any of the following occurs:
(aa) the Lender (or its holding company) incurs an expense;
(bb) the Lender's (or its holding company's) effective return from the
Facility or on its overall capital is reduced;
(cc) any amount payable to the Lender (or its holding company) is
reduced; or
(dd) the Lender (or its holding company) does not recover an amount
which would otherwise have been paid to it.
No account will be taken of tax on the overall net income of a Lender
in the country in which it has its principal office or the office
through which it is acting for the purposes of this Agreement; and
(iii) the losses, reductions and expenses arising as a result are
wholly or partly attributable to the Facility or the arrangements made
by a Lender in connection with the Facility.
(b) Payment of Additional Amounts. The Borrower agrees to reimburse each
Lender for the losses, reductions and expenses described in paragraph
(a)(ii) which are attributable to the Facility (as certified by the
Lender, which certification shall include a calculation of the amount
to be reimbursed). No reimbursement will be made for losses,
reductions or expenses attributable to the period prior to 30 days
prior to the receipt of the notice described in paragraph (a).
(c) Prepayment. If a Lender delivers a notice of increased costs the
Borrower may, on giving not less than 5 Business Days prior notice to
that Lender, prepay the participation of that Lender in the Loan,
together with compensation for such increased costs on the last day of
the Interest Period during which the notice is received, and any
outstanding Commitment of the Lender will be cancelled on the date of
that notice.
(3) Market Disruption.
(a) Notice of Market Disruption. The Agent agrees to give notice of market
disruption if:
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(i) the Agent determines, upon consultation with the Reference Banks, that
there are no reasonable means to ascertain FIBOR because of circumstances
affecting the Frankfurt Interbank Market generally;
(ii) Lenders with Commitments exceeding 35% of the Total Commitments, or
with participations exceeding 35% of the Loan, notify the Agent that
they determine that FIBOR would not reflect fairly the cost to them of
funding an amount outstanding under this Agreement;
(iii) FIBOR cannot be determined because less than two Reference Banks
provide quotations; or
(iv) Lenders with Commitments exceeding 35% of the Total Commitments, or
with participations exceeding 35% of the Loan, notify the Agent that
funds necessary to fund their participation in the Loan are not
readily available in the Frankfurt Interbank Market.
(b) Alternative Interest Rate Arrangements. If the Agent gives a notice of
market disruption, the following applies:
(i) The means of determining the rates of interest applicable under this
Agreement will be suspended. Instead the Borrower agrees to pay
interest to the Lenders in the manner requested by the Agent. A request by
the Agent may specify periods to be used for the computation of
interest. It must also specify the rate of interest to apply for a
period. This rate will be the rate determined by the Agent to reflect
the cost to each Lender of funding for the period plus the applicable
Margin. In order to assist the Agent in this determination each Lender
agrees to provide to the Agent any information which the Agent may
reasonably request. If this information is received by the Agent
within any time period specified by the Agent it will be taken into
account by the Agent in making its determination.
(ii) The Borrower and the Agent will negotiate the terms of an alternative
arrangement for determining a rate of interest. The negotiations will
be carried on in good faith. Neither party is bound to continue the
negotiations after the date 30 days after the Borrower receives the
Agent's notice. If agreement is reached and if it is approved by an
Instructing Group, the rate of interest will be determined in
accordance with the agreement. Sub-paragraph (i) will not apply to the
extent that it is expressly excluded by such agreement.
(iii) If the circumstances described in paragraph (a) cease to apply,
the Agent will notify the Borrower and the Lenders. The Borrower
agrees to pay interest to the Lenders in the manner described in
sub-paragraph (i) or (ii) for the remainder of the period for which an
alternative interest rate arrangement has been made in respect of each
affected Advance unless
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a different arrangement is agreed by the Agent
and the Borrower and approved by an Instructing Group. In this case
the Borrower agrees to pay interest to the Lenders in the manner
agreed.
(c) Prepayment. If paragraph (b) applies, the Borrower may, on giving not
less than 2 Business Days' prior notice to the Agent, and unless there
is an agreement under subparagraph (ii), prepay the Loan on the last
day of the Interest Period during which the notice is received, and
any outstanding Commitments of the Lenders will be cancelled on the
date of such notice.
(4) Withholdings.
(a) Notice of Withholding. The Borrower agrees to give notice of
withholding or deduction on account of any taxes, duties or charges
("taxes") to the Agent if it is required by law to make a payment
under this Agreement net of a withholding or deduction on account of
taxes.
(b) Grossing Up. If the Borrower is so required, the Borrower agrees to in
crease the amount of any payment which is subject to a withholding or
deduction on account of taxes. As a result of this increase the person
entitled to the payment will be entitled to receive the same amount it
would have received if there had been no withholding or deduction on
account of taxes.
(c) Payment of Tax. The Borrower will pay to the appropriate authority all
amounts withheld or deducted. If a receipt or other evidence of
payment can be issued, the Borrower agrees to deliver this to the
Agent as soon as practicable.
(d) Prepayment. If the Borrower gives a notice of withholding, the
Borrower may, on giving not less than 5 Business Days' prior notice to
the Agent, subject to sub-paragraph 4(b) prepay that part of the Loan
which is subject (or the interest on which is subject) to the
withholding or deduction on account of taxes on the last day of the
Interest Period during which the notice is received.
(e) Refund of Tax Credits. If the Borrower makes a payment under this
SECTION 10(4) (a "Tax Payment"), the relevant Lender agrees to notify the
Borrower if it has obtained a refund of tax or obtained and used a
credit against tax on its overall net income (a "Tax Credit") which
that Lender is able to identify as directly attributable to that Tax
Payment. To the extent that it can in its opinion do so without
prejudicing its ability to retain such Tax Credit, the Lender shall
reimburse the Borrower such amount as that Lender shall have
determined to be the proportion of that Tax Credit as will leave the
Lender (after that reimbursement) in no better or worse position in
respect of its worldwide tax liabilities than it would have been
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in had no Tax Payment been required. Nothing in this paragraph affects
the right of any Syndicate Party to arrange its tax affairs as it
thinks fit or gives the Borrower or the Guarantor the right to inquire
into those tax affairs.
(f) SECTION 10(4) applies, mutatis mutandis, to payments to be made by the
Guarantor in respect of the Guarantee.
(5) Prepayment. If the Borrower is obliged to prepay the Loan or any part
of it under this SECTION 10 or SECTION 17(2), the Borrower agrees to pay on
the date on which payment is due interest accrued on the Loan (or the amount
to be repaid) up to that date. If the date on which repayment is due is not the
last day of an Interest Period, the Borrower will reimburse each affected
Lender for the losses and expenses which that Lender has incurred, or will
incur, in liquidating or otherwise utilising amounts taken up by the Lender
to fund the Loan or in hedging open positions resulting from the payment
(excluding loss of margin for the period after any such repayment).
SECTION 11 PAYMENTS
(1) Method, Timing and Currency of Payments. All payments under the
Facility must be made in immediately available and freely transferable funds.
Each payment must be received by 10 a.m. on the due date. Payments in
respect of principal, interest and fees will be made in Deutsche Xxxx,
payments in respect of costs, expenses and indemnities in the currency in
which the claim in respect thereof arises.
(2) Payments through the Agent
(a) Normal Arrangements. All payments under this Agreement will be made
through the Agent. Each payment, if in Deutsche Xxxx, will be made to
the account of the Agent, as notified by the Agent to the Borrower, if
in other currency to such account as the Agent may designate. The
Agent will pay on to the Lenders an amount received as soon as the
Agent has ascertained that it has been received.
(b) Alternative Arrangements. If the Agent determines that it is, or will
be, illegal or impossible for it to pay on to a Lender in accordance
with paragraph (a), it agrees to notify the Borrower and that Lender.
In this case the Borrower and that Lender may agree on alternative
arrangements for payments to be made to that Lender. Paragraph (a)
will not apply to the extent excluded by those alternative
arrangements. The Lender agrees to provide notice of the arrangements
to the Agent and will notify the Agent of payments in accordance with
SECTION 13(1).
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(3) Payments to the Borrower. Each payment by the Agent to the Borrower
will be made to the account of the Borrower specified by it in the request
for borrowing.
(4) Payments to Lenders. Each payment by the Agent to a Lender will be
made to the account of that Lender notified to the Agent for this purpose.
(5) Change of Account. The Borrower or a Lender may change its receiving
account by not less than five Business Days' notice to the Agent. The Agent
may change its receiving account by not less than five Business Days'
notice to each Obligor and the Lenders.
(6) Refunding of Payments by the Agent. If the Agent makes a payment out
in the mistaken belief that it has received or will receive an incoming
payment on a particular day, the person which received the payment from the
Agent agrees to return it. It will also reimburse the Agent for all losses
and expenses incurred by the Agent as a result of the payment. This
SECTION 11(6) does not affect the rights of the person which received the
payment against the person which failed to make the payment to the Agent.
(7) Non-Business Days. If a payment would be due on a non-Business Day the
payment obligation will be deferred until the next Business Day. Interest
will be adjusted accordingly.
(8) Payment in Full. All payments by any Obligor will be made in full and
without set-off, counterclaim, or retention. No payment by any Obligor will
be made net of a withholding or deduction, unless this is required by law.
In this event SECTION 10(4) applies.
(9) Set-off. After a Termination Event or Potential Termination Event has
occurred, any Syndicate Party may set off any obligation which it owes to
any Obligor against any obligation which that Obligor owes to that
Syndicate Party under this Agreement. The obligation of the Syndicate Party
may be in different currency, arise on a separate transaction, provide for
a different place of payment, or involve another branch. If its obligation
is in different currency, the Syndicate Party may convert the amount owed
into the same currency as the obligation of that Obligor using the then
current exchange rate. If a Lender so sets off an obligation, that Lender
agrees to notify the Agent thereof. The notice will provide details of the
amount set off.
(10) Application of Partial Payments. If the Agent receives a payment
insufficient to discharge all the amounts then due and payable by the
Borrower under this Agreement, the Agent shall apply that payment towards
the obligations of the Borrower under this Agreement in the following
order:
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(a) first, in or towards payment pro rata of any unpaid costs or expenses
due to the Agent in its capacity as such under or in connection with
this Agreement;
(b) secondly, in or towards payment pro rata of any agency fee due but
unpaid under SECTION 4;
(c) thirdly, in or towards payment pro rata of any other accrued fees due
but unpaid under SECTION 4;
(d) fourthly, in or towards payment pro rata of any accrued interest due
but unpaid under this Agreement;
(e) fifthly, in or towards payment pro rata of any principal due but
unpaid under this Agreement;
(f) sixthly, in or towards payment pro rata of any other sums due but
unpaid under this Agreement.
The Agent will vary the order set out in paragraphs (d) to (f) inclusive
above if requested by all the Lenders. The provisions of this SECTION 11(10)
will override any appropriation made by the Borrower.
(11) Currency Indemnity. Where a payment due by any Obligor under or in
connection with this Agreement is made in a currency other than the
currency owed, to the extent that the amount received, when converted into
the currency owed, is less than the amount due that Obligor agrees to
reimburse the person entitled to the payment for the difference. For the
purposes of the computation of this amount that person will apply to the
amount received a rate of exchange prevailing on an established currency
market on the date of receipt. If, however, that person is unable to use
the amount received to buy the currency owed on the date of receipt, the
rate of exchange prevailing on the first date on which that person could
buy the currency owed will be used instead. The obligation in this
SECTION 11(11) is a separate and independent obligation.
SECTION 12 LATE PAYMENT
(1) Default interest. If any Obligor fails to make a payment other than
interest on the due date, that Obligor agrees to pay interest on the amount
unpaid from its due date for payment. This interest will be computed by
reference to successive periods not exceeding six months selected by the
Agent. The first of these periods will start on the due date for payment of
the unpaid amount. The rate of interest applicable during each of these
periods will be a rate per annum equal to 1% plus FIBOR for that period
plus the applicable Margin. This interest will be paid in arrear on the
last day of each of these periods and on the date of payment of the unpaid
amount.
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(2) Indemnity. If the Borrower fails to make a payment other than interest
on the due date the Borrower agrees to reimburse the person entitled to the
payment for the losses and expenses (including loss of profit) that person
incurs, or will incur, as a result. The computation of these losses and
expenses will take into account any amount received under SECTION 12(1).
(3) Late Interest Payment. If the Borrower fails to pay an amount of
interest on the due date the Borrower agrees to pay to the Agent by way of
indemnification and in addition to such amount, a lump sum computed on that
amount due from the due date up to the date of payment by reference to the
sum of (i) 1.6 per cent. per annum and (ii) FIBOR for the period selected
by the Agent if SECTION 12(1) were to apply.
SECTION 13 SHARING AMONG LENDERS
(1) Notice. If an amount due to a Lender (the "Recipient") under this
Agreement is discharged other than by payment through the Agent the Lender
agrees to notify the Agent. This may occur because of the exercise of a
right of set-off, by virtue of a combination of accounts, because of a
voluntary or involuntary payment by the Borrower direct to the Lender or
otherwise. The notification will provide details of the amount discharged
and will be delivered no later than ten Business Days after the discharge.
(2) Determination by the Agent. Where a Lender has issued a notice under
SECTION 13(1) the Agent will determine what payments, if any, are due under
SECTION 13(4). This determination will be made on the basis of the information
contained in all the notices delivered to the Agent under SECTION 13(1). The
determination will be notified to the Borrower and the Lenders.
(3) Litigation. In determining the amount due under SECTION 13(4) no account
will be taken of an amount due to a Lender which has declined to
participate in legal proceedings which resulted in the payment described in
SECTION 13(1). This only applies if that Lender could have joined in the
proceedings or could have instituted its own proceedings, but failed to do
so.
(4) Payment to the Agent. The Recipient agrees to pay to the Agent an
amount equal to the amount discharged, less the amount to be received by
the Recipient if the discharge had been made by payment to the Agent. This
amount will be paid no later than five Business Days after receipt of a
notice from the Agent under SECTION 13(2).
(5) Obligations of the Borrower. Any amount due to the Recipient which
would otherwise have been discharged as described in SECTION 13(1) will be
treated as not having been discharged to the extent of an amount which is
or will be payable under SECTION 13(4) as a result. Accordingly the Borrower
agrees to pay this amount to the Recipient as if it had not been
discharged. This payment is re-
17
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quired to be made whether or not the Agent has issued a determination under
SECTION 13(2).
(6) Distribution. The Agent agrees to distribute to the Lenders the amount
received by it under SECTION 13(4) as if that amount had been received from the
Borrower in discharge of amounts due under the Agreement.
(7) Recovery. If an amount discharged as described in SECTION 13(1) is
recovered or is required to be repaid, each Lender which received the benefit
of a payment made under SECTION 13(4) agrees to repay to the Recipient the
amount it received. Each of these Lenders will also reimburse the Recipient
for any interest or other losses or expenses which the Recipient has incurred in
connection with the discharged amount or its recovery or repayment. The
rights and obligations of the parties shall be restored to the position
before any payment became due under SECTION 13(4).
SECTION 14 REPRESENTATIONS AND WARRANTIES
(1) By the Borrower. The Borrower represents and warrants that:
(a) Corporate Existence and Power. The Borrower is a corporation duly
incorporated and validly existing, and the Borrower and its
Subsidiaries have the power and all material governmental licenses,
authorizations, consents and approvals required to own their assets
and conduct their businesses, considered as a whole, substantially as
now being conducted.
(b) Binding Obligations. This Agreement has been duly authorized, signed
and delivered by the Borrower and the obligations of the Borrower
under this Agreement are valid and binding obligations of the Borrower
in accordance with their terms.
(c) Legality and Contraventions. Its signing and delivery of this
Agreement and its exercise of rights and performance of obligations
under this Agreement:
(i) do not require any approval, filing, registration or exemption (except
for filings under the Securities Exchange Act of 1934);
(ii) do not contravene any provision of its Articles of Association or any
law, regulation or order;
(iii) are not prohibited by, and do not constitute a default under, and
do not result in an obligation to create Security under, any document
or arrangement to which it is a party.
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(d) No Termination Event. No Termination Event or Potential Termination
Event has occurred and is continuing and none will occur as a result
of the exercise of the Borrower's rights or the performance of its
obligations under this Agreement.
(e) Accuracy of Information. All information supplied, and to be supplied,
on behalf of the Borrower to any Syndicate Party is, and will be,
accurate and not misleading in any material respects.
(f) No Breach. Neither the Borrower nor any of its Subsidiaries is in
breach of any agreement to which it is a party or which is binding on
it or any of its assets which breach has a material adverse effect on
the ability of the Borrower to perform any of its obligations under
this Agreement.
(g) Financial Statements. Its audited financial statements for the year
ended December 31, 1996 give a true and fair view of the results of
its operations and financial position. They were prepared in
accordance with German law and generally accepted accounting
principles consistently applied except to the extent otherwise
described in the accompanying notes.
(2) By the Guarantor. The Guarantor represents and warrants that:
(a) Corporate Existence and Power. The Guarantor and its United States
Subsidiaries are corporations duly incorporated, validly existing and
in good standing under the laws of their respective states of
incorporation, and have all corporate powers and all material
governmental licenses, authorizations, consents and approvals required
to carry on their businesses, considered as a whole, substantially as
now conducted.
(b) Corporate and Governmental Authorization; No Contravention. The
execution, delivery and performance by the Guarantor of this Agreement
are within the Guarantor's corporate powers, have been duly authorized
by all necessary corporate action, require no action by or in respect
of, or filing with, any governmental body, agency or official (except
filings under the Securities Exchange Act of 1934) and do not
contravene, or constitute a default under, any provision of applicable
law or regulation or of the certificate of incorporation or by-laws of
the Guarantor or of any agreement, judgement, injunction, order,
decree or other instrument binding upon the Guarantor or result in the
creation or imposition of any Lien on any asset of the Guarantor or
any of its Subsidiaries.
(c) Binding Effect. This Agreement constitutes a valid and binding
agreement of the Guarantor.
(d) Financial statements.
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(i) The consolidated balance sheet of the Guarantor and its Consolidated
Subsidiaries as of December 31, 1996 and the related consolidated
statements of income and cash flows for the fiscal year then ended, re
ported on by Coopers & Xxxxxxx L.L.P. and set forth in the Guarantor's
1996 Form 10-K, a copy of which has been delivered to each of the Lenders,
fairly present, in conformity with generally accepted accounting
principles, the consolidated financial position of the Guarantor and its
Consolidated Subsidiaries as of such date and the consolidated results of
their operations and their cash flows for such fiscal year.
(ii) The unaudited condensed consolidated balance sheet of the Guarantor and
its Consolidated Subsidiaries as of March 31, 1997 and the related
unaudited condensed statements of consolidated income and consolidated
cash flows for the three months then ended, set forth in the Guarantor's
quarterly report for the Fiscal Quarter ended March 31, 1997 as filed with
the Securities and Exchange Commission on Form 10-Q, a copy of which has
been delivered to each of the Lenders, fairly present, on a basis
consistent with the financial statements referred to in SECTION
14(2)(d)(i), the consolidated financial position of the Guarantor and its
Consolidated Subsidiaries as of such date and their consolidated results
of operations and cash flows for such three- months period (subject to
normal year-end adjustments).
(iii) There has been no material adverse change since December 31, 1996
in the business or financial position of the Guarantor and its
Consolidated Subsidiaries, considered as a whole, as reflected in the
financial statements referred to in SECTION 14(2)(d)(i).
(e) Litigation. There is no action, suit or proceeding pending against, or
to the knowledge of the Borrower threatened against or affecting, the
Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official which, in the reasonable opinion of
the Guarantor, is likely to have a material adverse effect on the business
or financial position of the Guarantor and its Consolidated Subsidiaries,
considered as a whole, or which in any manner draws into question the
validity of this Agreement.
(f) Compliance with ERISA. Each member of the ERISA Group (i) has
fulfilled its obligations under the minimum funding standards of ERISA and
the Internal Revenue Code with respect to each Plan and (ii) is in
compliance in all material respects with the presently applicable
provisions of ERISA and the Internal Revenue Code with respect to each
Plan. No member of the ERISA Group has (x) sought a waiver of the minimum
funding standard under Section 412 of the Internal Revenue Code in respect
of any Plan, (y) 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
20
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resulted or could result in the imposition of a Lien or the
posting of a bond or other security under ERISA or the Internal
Revenue Code, in each case securing an amount greater than
US $ 10,000,000 or (z) incurred any liability under Title IV of ERISA
other than a liability to the PBGC for premiums under Section 4007 of
ERISA which could materially adversely affect the business,
consolidated financial position or consolidated results of operations
of the Guarantor and its Consolidated Subsidiaries.
(g) Environmental Matters. In the ordinary course of its business, the
Guarantor conducts appropriate reviews of the effect of Environmental
Laws on the business, operations and properties of the Guarantor and
its Subsidiaries, in the course of which it identifies and evaluates
pertinent liabilities and costs (including, without limitation,
capital or operating expenditures required for clean-up or closure of
properties presently or previously owned or for the lawful operation
of its current facilities, required constraints or changes in
operating activities, and evaluation of liabilities to third parties,
including employees, together with pertinent costs and expenses). On
the basis of this review, the Guarantor has reasonably concluded that
Environmental Laws are not likely to have a material adverse effect on
the business, financial position or results of operations of the
Guarantor and its Consolidated Subsidiaries, considered as a whole.
(h) Taxes. United States Federal income tax returns of the Guarantor and
its Subsidiaries have been examined and closed through the Fiscal Year
ended December 31, 1993. The Guarantor 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
taxes shown as due pursuant to such returns or pursuant to any
assessment received by the Guarantor or any Subsidiary, except such
taxes, if any, as are being contested in good faith and as to which,
in the opinion of the Guarantor, adequate reserves have been provided.
The charges, accruals and reserves on the books of the Guarantor and
its Subsidiaries in respect of taxes or other governmental charges are
in the opinion of the Guarantor adequate.
(i) Not an Investment Company. The Guarantor is not an "investment company"
within the meaning of the Investment Company Act of 1940, as
amended,
(j) Compliance with Laws. The Guarantor complies, and has caused each
Subsidiary to comply, in all material respects with all applicable
laws, ordinances, rules, regulations, and requirements of governmental
authorities (including, without limitation, Environmental Laws and
ERISA and the rules and regulations thereunder), except where (i) the
necessity of compliance therewith is contested in good faith by
appropriate pro-
21
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ceedings, (ii) no officer of the Guarantor is aware that the Guarantor or
the relevant Subsidiary has failed to comply therewith or (iii) the
Guarantor has reasonably concluded that failure to comply is not likely to
have a material adverse effect on the business, financial position or
results of operations of the Guarantor and its Consolidated Subsidiaries,
taken as a whole.
(3) Repetition. The representations in SECTION 14(1)and SECTION 14(2)(except the
representations set forth in SECTION 14(2)(d)(iii), (e), (f) (other than
clause (i) thereof), (g) and (j)) will be deemed repeated by the
Borrower and the Guarantor, respectively, on the first day of each
Interest Period. This repetition will be by reference to the facts on
that day. If on that day audited accounts for a period subsequent to
December 31,1996 have been finalised SECTION 14(1)(g)and SECTION 14(2)(d)(i)
will be treated as referring to the audited profit and loss accounts
and audited balance sheets contained in the then latest audited
financial statements of the Borrower or the Guarantor, respectively.
If on that day unaudited, condensed quarterly accounts of the
Guarantor for a period subsequent to March 31, 1997 have been
finalised, SECTION 14(2)(d)(ii) will be treated as referring to the then
latest quarterly accounts of the Guarantor.
(4) Survival of representations. Each of the representations made under
this Agreement shall survive the making of the Advances.
SECTION 15 DELIVERY OF INFORMATION
(1) By the Borrower.
(a) Periodic Reports. The Borrower agrees to deliver each of the following
to the Agent as soon as they become available and, in any event, by
the latest date indicated:
Document/Information Latest date
Consolidated audited annual 90 days after the end of the
financial statements of the Borrower's financial year
Borrower
Half-year consolidated 60 days after the end of the
financial statements of the first half of the Borrower's
Borrower financial year (except for
the first half of 1997 for
which the consolidated
financial statements shall
be delivered within 90 days
after the end of such half
year)
22
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(b) Other information. The Borrower agrees to deliver to the Agent from
time to time such additional information regarding the financial
position or business of the Borrower as the Agent may reasonably
request.
(c) Termination Events. The Borrower agrees to deliver to the Agent within
15 days after any officer of the Borrower becomes aware of the
existence of any Termination Event or Potential Termination Event
unless such Termination Event or Potential Termination Event shall
have been cured before the end of such 15 day period, a certificate of
the chief financial officer or the chief accounting officer of the
Borrower setting forth the details of such Termination Event or
Potential Termination Event and the action which the Borrower is
taking or proposes to take with respect thereto;
(2) By the Guarantor.
(a) Reports, Documents and Certificates. The Guarantor agrees to deliver
to the Agent:
(i) as soon as available and in any event within 90 days after the
end of each fiscal year, a consolidated balance sheet of the
Guarantor 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 corresponding figures for the previous
fiscal year, all reported on by Coopers & Xxxxxxx L.L.P. or other
independent public accountants of nationally recognized standing,
whose report shall be without material qualification;
(ii) as soon as available and in any event within 45 days after the
end of each of the first three quarters of each fiscal year, a
condensed consolidated balance sheet of the Guarantor and its
Consolidated Subsidiaries as of the end of such quarter, the
related condensed consolidated statement of income for such
quarter and the related condensed consolidated statements of
income and cash flows for the portion of such fiscal year ended
at the end of such quarter, setting forth in each case in
comparative form the corresponding figures to the corresponding
periods of the previous fiscal year, all in reasonable detail and
certified, to the best of its knowledge (subject to normal year-
end adjustments), as to fairness of presentation, and consistency
with generally accepted accounting principles (except for changes
concurred in by the Guarantor's independent public accountants)
by the chief financial officer or the chief accounting officer of
the Guarantor.
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(iii) simultaneously with the delivery of each set of financial
statements referred to in sub-paragraphs (i) and (ii), a certificate
of the chief financial officer or the chief accounting officer of the
Guarantor (x) setting forth in reasonable detail the calculations
required to establish whether the Guarantor was in compliance with
the requirements of SECTION 16(2)(a) to (c), inclusive, on the date
of such financial statements, (y) stating, to the best of its
knowledge, whether any Termination Event or Potential Termination
Event exists on the date of such certificate and (z) if any
Termination Event or Potential Termination Event then exists, setting
forth the details thereof and the action which the Guarantor is
taking or proposes to take with respect thereto;
(iv) within 15 days after any officer of the Guarantor becomes aware
of the existence of any Termination Event or Potential Termination
Event unless such Termination Event or Potential Termination Event
shall have been cured before the end of such 15 day period, a
certificate of the chief financial officer or the chief accounting
officer of the Guarantor setting forth the details of such
Termination Event or Potential Termination Event and the action which
the Guarantor is taking or proposes to take with respect thereto;
(v) promptly upon the mailing thereof to the shareholders of the
Guarantor generally, copies of all financial statements, reports
and proxy statements so mailed;
(vi) promptly upon the filing thereof, copies of all reports on Forms
10-K, 10-Q and 8-K and similar regular and periodic reports which
the Guarantor shall have filed with the Securities and Exchange
Commission;
(vii) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as
defined in Section 4043 of ERISA) with respect to any Plan which
might constitute grounds for a termination of such Plan under Title
IV of ERISA, or knows that the plan administrator of any Plan has
given or is required to give notice of any such reportable event, a
copy of the notice of such reportable event given or required to be
given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that any
Multiemployer Plan is in reorganization, is insolvent or has been
terminated, a copy of such notice; (iii) receives notice from the
PBGC under Title IV of ERISA of an intent to terminate, impose
liability (other than for premiums under Section 4007 of ERISA) in
respect of, or appoint a trustee to administer any Plan, a copy of
such notice; (iv) applies for a waiver of the minimum funding
standard under Section 412 of the Internal Revenue Code, a copy of
24
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such application; (v) gives notice of intent to terminate any Plan
under Section 4041(c) of ERISA, a copy of such notice and other
information filed with the PBGC, (vi) gives notice of withdrawal from
any Plan pursuant to Section 4063 of ERISA, a copy of such notice; or
(vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes
any amendment to any Plan or Benefit Arrangement which has resulted
or could result in the imposition of a Lien or the posting of a bond
or other security, a certificate of the chief financial officer or
the chief accounting officer of the Guarantor setting forth details
as to such occurrence and action, if any, which the Guarantor or
applicable member of the ERISA Group is required or proposes to take;
provided that no such certificate shall be required unless the
aggregate unpaid actual or potential liability of members of the
ERISA Group involved in all events referred to in (i) through (vii)
above of which officers of the Guarantor have obtained knowledge and
have not previously reported under this sub-paragraph (vii) exceeds
US $ 25,000,000;
(viii) immediately after any officer of the Guarantor obtains
knowledge of a change or a proposed change in the rating of the
Guarantor's outstanding senior unsecured long-term debt securities by
Xxxxx'x Investor Service, Inc. or Standard & Poor's Rating Group, a
certificate of the chief financial officer or chief accounting
officer of the Guarantor setting forth the details thereof; and
(b) Other Information. The Guarantor agrees to deliver to the Agent from
time to time such additional information regarding the financial
position or business of the Guarantor as the Agent may reasonably
request.
SECTION 16 GENERAL COVENANTS
(1) By the Borrower. The Borrower agrees as follows:
(a) Disposal of Assets. The Borrower and its Subsidiaries, considered as a
whole, will not, without the prior approval of an Instructing Group,
dispose of the whole or the substantial part of their assets. This
does not apply to disposals on commercial terms for full market value
and on an arms-length basis.
(b) Maintenance of Representations. It will take all steps necessary to
ensure that the representations and warranties in SECTION 14(1) remain true
and correct.
(c) Insurance. The Borrower and its Subsidiaries, considered as a whole,
will maintain insurances on and in relation to their businesses,
assets and operations with reputable insurance companies which are, in
the
25
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reasonable opinion of the Borrower, appropriate to insure the
Borrower and its Subsidiaries against risks involved in carrying on
their businesses, including, in particular, product liability and
environmental liability.
(2) By the Guarantor. The Guarantor agrees as follows:
(a) Minimum Consolidated Tangible Net Worth. At no time will Consolidated
Tangible Net Worth be less than Minimum Consolidated Tangible Net
Worth. "Minimum Consolidated Tangible Net Worth" means
US $ 800,000,000; provided that such amount shall be adjusted at the
end of each Fiscal Quarter ending after June 30, 1996 as follows:
(i) increased by 50% of Consolidated Net Income for such Fiscal
Quarter; provided that, if Consolidated Net Income for such
Fiscal Quarter is a negative number (a "Consolidated Net Loss"),
an amount up to 50% of such Consolidated Net Loss shall be
applied first to reduce Minimum Consolidated Tangible Net Worth
to the extent of offsetting prior increases (if any) in Minimum
Consolidated Tangible Net Worth made pursuant to this sub-
paragraph (i) during the same fiscal year and second to reduce
(but not below zero) any future increase in Minimum Consolidated
Tangible Net Worth that would otherwise be made pursuant to this
sub-paragraph (i) during the same fiscal year; and
(ii) increased by an amount equal to 50% of all increases in Consolidated
Tangible Net Worth during such Fiscal Quarter attributable
to sales or issuances of the Guarantor's Equity Securities; provided
that an amount up to 50% of all decreases in Consolidated
Tangible Net Worth during such Fiscal Quarter attributable to
purchases or other retirements of the Guarantor's Equity
Securities shall be applied first to offset any increase in
Minimum Consolidated Tangible Net Worth that would otherwise be
made pursuant to this sub-paragraph (ii) at the end of such
Fiscal Quarter, second to reduce Minimum Consolidated Tangible
Net Worth to the extent of offsetting prior increases (if any) in
Minimum Consolidated Tangible Net Worth made pursuant to this sub-
paragraph (ii) and third to reduce (but not below zero) any
future increase in Minimum Consolidated Tangible Net Worth that
would otherwise be made pursuant to this sub-paragraph (ii).
(b) Limitations on Debt.
(i) It will not at any time, and will not suffer or permit any
Consolidated Subsidiary at any time to, create, incur, issue,
guarantee or assume any Debt if, immediately after giving effect
thereto, the
26
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ratio of (y) Consolidated Debt to (z) the sum of Consolidated Debt
and Consolidated Adjusted Net Worth would exceed 57%.
(ii) It will not at any time suffer or permit any Consolidated
Subsidiary to create, incur, issue, guarantee or assume any Debt if,
immediately after giving effect thereto, the aggregate outstanding
amount (determined at that time) of Debt of all Consolidated
Subsidiaries (other than Debt owed to the Borrower or one or more
other Consolidated Subsidiaries) would exceed 30% of Shareholders'
Equity.
(iii) Sub-paragraphs (i) and (ii) shall not prevent (i) the
Guarantor from creating, incurring, issuing, guaranteeing or assuming
Debt for the purpose of extending, renewing or Refunding (as such
term is defined in this subsection) an equal or greater principal
amount of Debt then outstanding of the Guarantor or of Debt then
outstanding of a Consolidated Subsidiary or (ii) a Consolidated
Subsidiary from creating, incurring, issuing, guaranteeing or
assuming Debt for the purpose of extending, renewing or Refunding an
equal or greater principal amount of Debt then outstanding of such
Consolidated Subsidiary, or (iii) the creation, incurrence, issuance,
guarantee or assumption of Debt owed to or owned by the Guarantor or
a Consolidated Subsidiary. For purposes of this sub-paragraph (iii),
Debt is deemed to be for the purpose of "Refunding" other Debt if and
to the extent that (x) no later than 5 Domestic Business Days after
the refunding Debt is incurred, the Guarantor delivers to the Agent
written notice stating that the purpose of such Debt is to refund
outstanding Debt and specifying the Debt to be refunded, (y) the
proceeds of such refunding Debt are held in the form of cash or High
Quality Investments (free of any Lien except a Lien securing the
specified Debt to be refunded) until such specified Debt is repaid
and (z) such specified Debt to be refunded is repaid within 45 days
after the refunding Debt is incurred.
(iv) For purposes of the limitations provided in, and computations under,
this SECTION 16(2)(b), (x) when a corporation becomes a Consolidated
Subsidiary it shall be deemed to create at such time all the Debt it
has outstanding immediately after such time (provided that, if after
giving effect to this clause (x), the aggregate outstanding amount of
Debt of all Consolidated Subsidiaries (other than Debt owed to the
Guarantor or one or more other Consolidated Subsidiaries) would be
greater than 30% but less than 60% of Shareholders' Equity, this
clause (x) shall not apply at the time such corporation becomes a
Consolidated Subsidiary, but such corporation shall be deemed to
create on the 15th day after it becomes a Consolidated Subsidiary all
the Debt it has
27
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outstanding on such 15th day), (y) the disposition (other than to a
Consolidated Subsidiary or the Guarantor) by the Guarantor or a
Subsidiary of capital stock of any Consolidated Subsidiary which
holds Debt of the Guarantor or any other Consolidated Subsidiary so
that the Consolidated Subsidiary ceases to be a Consolidated
Subsidiary after such disposition) shall be deemed the creation of
such Debt, and (z) the disposition (other than to a Consolidated
Subsidiary or the Guarantor) of Debt of the Guarantor or any
Consolidated Subsidiary by any Consolidated Subsidiary or the
Guarantor shall be deemed the creation of such Debt.
(c) Negative Pledge. Neither the Guarantor nor any Consolidated Subsidiary
will create, assume or suffer to exist any Lien on any asset now owned
or hereafter acquired by it, except:
(i) Liens existing on March 31, 1997 securing Debt outstanding on
March 31, 1997 in an aggregate principal amount not exceeding US $
30,000,000;
(ii) any Lien existing on any asset of any corporation at the time
such corporation becomes a Consolidated Subsidiary and not
created in contemplation of such event;
(iii) any Lien on any asset securing Debt incurred or assumed
solely for the purpose of financing all or any part of the cost
of acquiring such asset (or acquiring a corporation or other
entity which owned such asset); provided that such Lien attaches
to such asset concurrently with or within 90 days after such
acquisition;
(iv) any Lien on any asset of any corporation existing at the time
such corporation is merged or consolidated with or into the Guarantor
or a Consolidated Subsidiary and not created in contemplation of such
event;
(v) any Lien existing on any asset prior to the acquisition thereof
by the Guarantor or a Consolidated Subsidiary and not created in
contemplation of such acquisition;
(vi) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the
foregoing clauses of this Section; provided that such Debt is not
increased and is not secured by any additional assets;
(vii) any Lien in favour of the holder of Debt (or any person or
entity acting for or on behalf of such holder) arising pursuant to
any order of attachment, distraint or similar legal process arising
in connection with court proceedings so long as the execution or
other
28
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enforcement thereof is effectively stayed and the claims secured
thereby are being contested in good faith by appropriate proceedings;
(viii) Liens incidental to the normal conduct of its business or
the ownership of its assets which (x) do not secure Debt, (y) do not
secure any obligation in an amount exceeding US $ 100,000,000 and (z)
do not in the aggregate materially detract from the value of the
assets of the Guarantor and its Consolidated Subsidiaries taken as a
whole or in the aggregate materially impair the use thereof in the
operation of the business of the Guarantor and its Consolidated
Subsidiaries taken as a whole; and
(ix) Liens securing Debt which are not otherwise permitted by the
foregoing clauses of this subparagraph (c); provided that (y) the
aggregate outstanding principal amount of Debt secured by all such
Liens on current assets shall not at any time exceed 20% of
Consolidated Current Assets and (z) the aggregate outstanding
principal amount of Debt secured by all such Liens (including Liens
referred to in clause (y) of this proviso) shall not at any time
exceed the sum of (A) 20% of Consolidated Current Assets plus (B) 5%
of Consolidated Tangible Net Worth.
(d) Consolidations, Mergers and Sale of Assets.
(i) The Guarantor will not directly or indirectly sell, lease,
transfer or otherwise dispose of all or substantially all of its
assets, or merge or consolidate with any other Person, or acquire any
other Person through purchase of assets or capital stock, unless
either (y) the Guarantor shall be the continuing or surviving
corporation or (z) the successor or acquiring corporation (if other
than the Guarantor) shall be a corporation organized under the laws
of one of the States of the United States of America and shall
assume, by a writing satisfactory in form and substance to the
Instructing Group, all of the obligations of the Guarantor under this
Agreement, including all covenants herein and therein contained, in
which case such successor or acquiring corporation shall succeed to
and be substituted for the Guarantor with the same effect as if it
had been named herein as a party hereto.
(ii) No disposition of assets, merger, consolidation or acquisition
referred to in sub-paragraph (i) shall be permitted if, immediately
after giving effect thereto, the Guarantor would be in default under
any of the terms or provisions of this Agreement.
(e) Compliance with Laws. The Guarantor will comply, and cause each Subsidiary
to comply, in all material respects with all applicable laws, ordi-
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nances, rules, regulations, and requirements of governmental
authorities (including, without limitation, Environmental Laws and
ERISA and the rules and regulations thereunder) except where (x) the
necessity of compliance therewith is contested in good faith by
appropriate proceedings, (y) no officer of the Guarantor is aware
that the Guarantor or the relevant Subsidiary has failed to comply
therewith or (z) the Guarantor has reasonably concluded that failure
to comply is not likely to have a material adverse effect on the
business, financial position or results of operations of the
Guarantor and its Consolidated Subsidiaries, taken as a whole.
(2) Duration of covenants. The obligations of the Borrower and the Guarantor
under this SECTION 16 and SECTION 15 will cease to have effect when the
Facility has ceased to be available and there are no amounts outstanding
under the Facility.
SECTION 17 EARLY TERMINATION
(1) Termination Events. Each of the following is a Termination Event:
(a) Non-payment. The Borrower fails to pay when due any principal, or
fails to pay within five days of the due date thereof, any other sum
payable under this Agreement.
(b) Certain Covenants. The Borrower fails to observe or perform any
covenant contained in SECTION 16(1)(a) to (c) or the Guarantor fails
to observe or perform any covenant contained in SECTION 16(2)(a) to
(d).
(c) Other Covenants. Any of the Obligors fails to observe or perform any
other covenant or agreement contained in this Agreement for 30 days
after written notice thereof has been given to the Borrower and the
Guarantor by the Agent;
(d) Incorrect Statements. Any statement made by any of the Obligors in
SECTION 14 or in any document delivered pursuant to this Agreement is
incorrect in any material respect when made or deemed to have been
repeated; provided that, if any statement deemed to have been made by
the Obligor pursuant to SECTION 14(3) shall have been incorrect
solely by reason of the existence of a Termination Event or Potential
Termination Event of which the Obligor was not aware when such
statement was deemed to have been made and which was cured before or
promptly after the Obligor became aware thereof, then such statement
shall be deemed not to have been incorrect in any material respect.
(e) Cross Default. The Guarantor or any Subsidiary fails to make one or
more payments in respect of Material Debt (other than Acquired Debt
in an aggregate outstanding principal amount not exceeding
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US $ 50,000,000) when due or within any applicable grace period, and
such failure has not been waived.
(f) Default on Other Obligations. The Guarantor or any Consolidated
Subsidiary fails to observe or perform any term, covenant or agreement
contained in any instrument or agreement (other than this Agreement)
by which it is bound relating to Material Debt (other than Acquired
Debt in an aggregate outstanding principal amount not exceeding
US $ 50,000,000), or any other event or condition referred to therein
shall occur, and the effect of all such failures, events and
conditions (each a "default") is to cause the maturity of Material
Debt to be accelerated or to permit (any applicable period of grace
having expired) the holder or holders of Material Debt (or any Person
acting on their behalf) to accelerate the maturity thereof.
(g) Voluntary Insolvency. The Borrower, the Guarantor or any Significant
Subsidiary commences 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 or
seeking the appointment of a trustee, receiver, liquidator, custodian
or other similar official of it or any substantial part of its
property under any such law, or consents 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 under any
such law, or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they become
due, or a resolution shall be adopted by either the shareholders or
the board of directors of such corporation to authorize any of the
foregoing.
(h) Involuntary Insolvency. An involuntary case or other proceeding is commenced
against the Borrower, the Guarantor or any Significant Subsidiary in
any court of competent jurisdiction seeking in each case liquidation,
reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law or seeking the
appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property under
any such law, and in each case such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of 60
days; or an order for relief shall be entered against the Guarantor or
any Significant Subsidiary as debtors under the federal bankruptcy
laws of the United States as now or hereafter in effect.
(i) ERISA. Any member of the ERISA Group fails to pay when due an amount
or amounts aggregating in excess of US $ 1,000,000 which it shall have
become liable to pay to the PBGC or to a Plan under Title IV of ERISA;
or notice of intent to terminate a Plan or Plans having aggregate
Unfunded Liabilities in excess of US $ 50,000,000
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(collectively, a "Material Plan") is 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 institutes 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 exists by
reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated; or there
occurs 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
US $ 50,000,000; provided that no Termination Event shall exist under
this sub-clause (j) with respect to any Prior Plan unless it is reason
ably likely that one or more members of the ERISA Group is liable with
respect to the relevant Unfunded Liabilities or current payment obligation,
as the case may be.
(j) Judgement Unsatisfied. A judgement or order for the payment of money
in excess of US $ 10,000,000 shall be rendered against any of the
Obligors or any of their respective Subsidiaries and such judgment or
order shall continue unsatisfied and unstayed for a period of 45 days.
(k) Change of Ownership of Guarantor. Any person or group of persons
(within the meaning of Section 13 or 14 of the Securities Exchange Act
of 1934, as amended) shall have acquired beneficial ownership (within
the meaning of Rule 13d-3 promulgated by the Securities and Exchange
Commission under said Act) of 30 % or more of the outstanding shares
of common stock of the Guarantor; or Continuing Directors shall cease
to constitute a majority of the board of directors of the Guarantor.
(l) Change of Ownership of Borrower. The Guarantor ceases to hold, directly
or indirectly, the entire voting share capital of the Borrower.
(m) Unlawfulness or Repudiation. It is unlawful for any of the Obligors to
comply with, or any of the Obligors repudiates, any of its material
obligations under this Agreement.
(n) Change of Business. The Guarantor ceases, or threatens to cease, to
conduct, as a major portion of its business, the sale of building
products.
(o) Material Adverse Change. There is a change in the financial condition
or business of the Guarantor and its Subsidiaries, considered as a
whole, which will in any material respect affect the ability of the
Guarantor to perform its material obligations under this Agreement.
(2) Consequences of a Termination Event. If a Termination Event occurs the
Agent may by notice to the Borrower:
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(a) cancel the undrawn Facility; or
(b) demand immediate repayment of the Loan,
or both. The Agent agrees to deliver a notice under this SECTION 17(2) if an
Instructing Group instructs the Agent to do so. In the case of cancellation
the Lenders will be under no further obligation to make an Advance. In the
case of a demand for repayment the Borrower agrees to pay the Lenders in
accordance with the notice.
(3) Indemnity. If there is a Termination Event the Borrower agrees to reimburse
the Agent and each Lender for the losses and expenses the Agent or
that Lender incurs, or will incur, as a result.
SECTION 18 THE AGENT AND THE ARRANGER
(1) Appointment. The Agent is appointed as an agent by each Lender. The
Agent is not acting as agent of the Borrower or the Guarantor under this
Agreement.
(2) Authority. The Agent is authorised to exercise the rights, powers,
discretions and duties which are specified by this Agreement. The Agent may
also act in a manner reasonably incidental to these matters. The Agent
shall be freed from the restrictions of SECTION 181 of the Civil Code
(Burgerliches Gesetzbuch).
(3) Duties. In addition to the obligations of the Agent set out elsewhere
in this Agreement the Agent agrees as follows:
(a) Notices. The Agent will notify each Lender of the contents of each
notice received from the Borrower or the Guarantor under the terms of
this Agreement. If the notice only affects particular Lenders, the
Agent may elect to notify only those Lenders.
(b) Other Documents. When the Borrower or the Guarantor delivers to the
Agent any other document required to be delivered under this Agreement
the Agent will provide a copy to each Lender.
(c) Termination Events. The Agent will notify each Lender of any Termination
Event or Potential Termination Event. This obligation will not
arise, however, until there is a payment default of which the Agent is
aware or until the Agent receives express notice with reasonable
supporting evidence of the Termination Event or Potential Termination
Event. Until this time the Agent is entitled to assume that there is
no Termination Event or Potential Termination Event. The Agent is not
required to make inquiries. Information referred to in SECTION 18(11) does
not have to be disclosed under this paragraph.
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(d) Other Information. The Agent will request the Borrower or the
Guarantor, as the case may be, to deliver to the Agent any information
reasonably requested by a Lender.
(4) Powers. In addition to the powers of the Agent set out elsewhere in
this Agreement the Agent has the following powers:
(a) Professional Advisers. The Agent may instruct professional advisers to
provide advice in connection with the Facility.
(b) Authority from Instructing Group. The Agent may take any action which
is not inconsistent with this Agreement and which is authorised by an
Instructing Group.
(c) Views of Instructing Group. In exercising any of its rights, powers or
discretions the Agent may have regard to the views of an Instructing
Group. If it exercises those rights, powers or discretions in
accordance with those views the Agent will incur no liability.
(d) Proceedings. The Agent may institute legal proceedings against the Obligors
or any of them in the name of the Lenders if these proceedings
are authorised by an Instructing Group.
(e) Compliance with Law. The Agent may take any action necessary for it to
comply with applicable laws.
The Agent is not required to exercise any of these powers and will incur no
liability if it fails to do so. In the context of legal proceedings the
Agent may decline to take any step until it has received indemnities or
security satisfactory to it.
(5) Reliance. The Agent is entitled to rely upon each of the following:
(a) Advice received from professional advisers.
(b) A certificate of fact received from the Borrower or the Guarantor and
signed by an Authorised Person.
(c) Any communication or document believed by the Agent to be genuine.
The Agent will not be liable for any of the consequences of relying on
these items.
(6) Extent of Agent's Duties.
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(a) No Other Duties. The Agent has no obligations or duties other than
those expressly set out in this Agreement.
(b) Illegality and Liability. The Agent is not obliged to do anything
which is illegal or which may expose it to liability to any person.
(c) Not a Fiduciary. The Agent is not acting as a fiduciary for any
purpose in connection with this Agreement.
(7) Responsibility of the Lenders. Each Lender is responsible for its own
decision to become involved in the Facility and its decision to take or not
take action under the Facility. It shall make its own credit appraisal of
the Obligors and the terms of the Facility. Neither the Agent nor the
Arranger makes any representation that any information provided to a Lender
before or after the date of this Agreement is true. Accordingly each Lender
should take whatever action it believes is necessary to verify that
information. In addition neither the Agent nor the Arranger is responsible
for the legality, validity or adequacy of this Agreement. Each Lender will
satisfy itself on these issues.
(8) Limitation of Liability.
(a) Agent. The Agent will not be liable for any action or non-action under
or in connection with the Facility unless caused by its gross
negligence or wilful misconduct.
(b) Directors, Employees and Agents. No director, employee or agent of the
Agent will be liable to a Lender, the Borrower or the Guarantor in
relation to the Facility. Each Lender, the Borrower and the Guarantor
agree not to seek to impose this liability upon them.
(9) Business of the Agent. Despite its role as agent of the Lenders the
Agent may:
(a) participate as a Lender in the Facility,
(b) carry on all types of business with the Borrower and the Guarantor,
and
(c) act as agent for other groups of lenders to the Borrower, the
Guarantor or other borrowers.
(10) Indemnity. Each Lender agrees to reimburse the Agent for all losses
and expenses incurred by the Agent as a result of its appointment as Agent
or arising from its activities as Agent. These losses and expenses will
take into account amounts reimbursed to the Agent by any Obligor. The
liability of each Lender under this SECTION 18(10) will be limited to the share
of the total losses and expenses which corresponds to that Lender's share
of the Total Commitments or, if an Advance has been made, the Loan. If the
losses or expenses are at-
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tributable to an activity of the Agent which relates to only some of the
Lenders, the Agent may instead notify the Lenders of a different sharing
arrangement. In this case the limit of liability of a Lender under this
sub-clause will be determined by the Agent. The Lenders are not liable
for losses and expenses arising from the gross negligence or wilful
misconduct of the Agent.
(11) Information. The Agent is not required to disclose to the Lenders any
information which is not received by it in its capacity as Agent.
(12) Resignation. The Agent may resign by giving notice to the Borrower,
the Guarantor and the Lenders. The Agent may be removed by notice given by
the Instructing Group to the Agent, the Guarantor and the Lenders. In
either event the following apply:
(a) Appointment by Instructing Group. An Instructing Group may appoint a
new Agent.
(b) Appointment by the Resigning Agent. If an Instructing Group has not
appointed a new Agent within 30 days after the resigning Agent's notice,
the resigning Agent may appoint a new Agent.
(c) Mode of Appointment. A new Agent will be appointed in consultation
with the Borrower, by notice to the Borrower, the Guarantor and the
Lenders. A new Agent cannot be appointed without its consent.
(d) Timing of Appointment. If the Agent has resigned, the new Agent will
become Agent at a time agreed between the new Agent and the resigning
Agent. If no time is agreed, the new Agent will become Agent ten
Business Days after the notice referred to in paragraph (c). Any removal
or resignation of the Agent will not be effective until a new Agent
has been appointed and accepted its appointment.
(e) Effect of Appointment. Upon a new Agent becoming Agent the resigning
or removed Agent will cease to be Agent. Accordingly it will be
discharged from its obligations and duties as Agent. It will, however,
continue to be able to rely on the terms of this SECTION 18 in respect of
all matters relating to the period of its appointment. The new Agent
will assume the role of Agent. It will have all the rights, powers,
discretions and duties of the Agent provided for in this Agreement.
(f) Transition. The resigning or removed Agent and the new Agent agree to
co-operate to ensure an orderly transition. The resigning or removed
Agent agrees to deliver or make available to the new Agent all
records, files and information held by it as Agent. This obligation
will not require the resigning or removed Agent to disclose any
confidential information.
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(13) Arranger. The Arranger has no continuing role in connection with the
Facility and is not liable in respect of any matter concerning the
Facility.
SECTION 19 EVIDENCE AND CERTIFICATES
(1) Evidence of Debt. The Agent will maintain in its books an account showing
all liabilities accrued and payments made in relation to the Facility.
Details of amounts outstanding recorded in this account will be prima facie
evidence of the Borrower's or Guarantor's obligations.
(2) Certificates. Each certificate delivered under this Agreement must contain
reasonable detail of the matters being certified. A certificate delivered by
the Agent or a Lender will be conclusive unless there is an obvious error.
SECTION 20 NOTICES
(1) Nature of Notices. No notice given by any of the Obligors under this
Agreement may be withdrawn or revoked. Each notice delivered by any of the
Obligors must be unconditional. It must also be signed by an Authorised
Person.
(2) Delivery of Notices. A notice under this Agreement will only be
effective if it is in writing and is received. Notices may be given by
post, telex, fax or (in the case of notices among the Lenders and the
Agent) SWIFT. If a notice under SECTION 5(1) is given by fax, a hard copy must
also be delivered.
(3) Notices through the Agent. Each notice from any of the Obligors or a
Lender will be delivered to the Agent. The Agent agrees to pass on the
details of notices received by it to the appropriate recipient as soon as
practicable.
(4) Language.
(a) All notices given under this Agreement must be in English.
(b) All other documents delivered under this Agreement may be in English
or German.
(5) Address Details. Notices will be delivered to the address of the
intended recipient as set out in Schedule 1. The Borrower, the Guarantor or
a Lender may change its address details by not less than 5 Business Days'
notice to the Agent. The Agent may change its address details by notice to
the Borrower, the Guarantor and the Lenders.
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SECTION 21 TRANSFERS AND SUBSTITUTION
(1) Transfers by the Obligors. No Obligor may transfer or otherwise
dispose of any of its rights or obligations under this Agreement.
(2) Substitution of Lender. If a Lender fails to perform its obligations,
or the obligations of a Lender have been suspended or any Lender has
demanded compensation under SECTION 10, the Borrower shall have the right, with
the consent of the Agent (such consent not to be unreasonably withheld) to
substitute such Lender, to assume such Lender's Commitment or, as the case
may be, participations in the Advances.
(3) Transfers by Lenders.
(a) General Right. A Lender (the "Existing Lender") may at any time
transfer any of its rights and/or obligations under this Agreement to:
(i) any other Lender,
(ii) any affiliate of the Lender or any other Lender being a bank
or other financial institution or,
(iii) with the prior consent of the Borrower (such consent not to
be unreasonably withheld) to another bank or other financial
institution,
(in each case the "New Lender"),
provided that the New Lender shall not be entitled to receive
additional amounts pursuant to SECTION 10(2)(b) or SECTION 10(4)(b) if
at the time of transfer the Existing Lender had not been entitled to
receive such additional amounts.
(b) Effectiveness. Any transfer to a New Lender other than a Lender will
be effective only if either:
(i) the obligations are transferred in accordance with SECTION 21(4); or
(ii) the New Lender in form and substance satisfactory to the Agent
confirms to the Agent, the Borrower and the Guarantor that it
undertakes to be bound by the terms of this Agreement as a Lender.
On the transfer becoming effective in this manner the Existing
Lender shall be released from its obligations under this Agreement
to the extent that they are transferred to the New Lender.
(c) Sub-participation. Nothing in this Agreement restricts the ability of
a Lender to sub-participate in its rights and obligations under this
Agree-
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ment another person if that Lender remains liable under this
Agreement for its obligations.
(d) Agent's Fee. On each occasion an Existing Lender transfers any of its
rights and/or obligations under this Agreement, the New Lender shall,
on the date the transfer takes effect, pay to the Agent for its own
account a fee of DM 2,000.
(e) Disclosure. A Lender may disclose to a proposed transferee or
sub-participant details of this Agreement and any information received by
the Lender under or in connection with this Agreement.
(4) Substitution.
(a) Procedure. A substitution of a Lender is effected if:
(i) the Existing Lender and the New Lender deliver to the Agent a
duly completed certificate, substantially in the form of
Schedule 3 (a "Substitution Certificate"); and
(ii) the Agent executes it.
(b) Authority of Agent. Each Party (other than the Existing Lender and the
New Lender) irrevocably authorises the Agent to execute any duly completed
Substitution Certificate on its behalf.
(c) Effects of Substitution. To the extent that they are expressed to be
the subject of the substitution in the Substitution Certificate:
(i) the Existing Lender and the other Parties (the "existing
Parties") will be released from their obligations to each other
(the "discharged obligations");
(ii) the New Lender and the existing Parties will assume obligations
towards each other which differ from the discharged obligations
insofar as they are owed to or assumed by the New Lender instead
of the Existing Lender;
(iii) the rights of the Existing Lender against the existing
Parties and vice versa (the "discharged rights") will be
cancelled; and
(iv) the New Lender and the existing Parties will acquire rights
against each other which differ from the discharged rights only
insofar as they are exercisable by or against the New Lender
instead of the Existing Lender,
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all on the date of signing of the Substitution Certificate by the
Agent or, if later, the date specified in the Substitution
Certificate.
SECTION 22 WAIVERS AND AMENDMENTS
(1) Authority of the Agent. If authorised by an Instructing Group the
Agent may grant waivers and agree amendments with the Obligors. These
waivers and amendments will be made on behalf of and be binding on all the
Lenders, including those which were not part of the Instructing Group. The
Agent is not authorized to grant any waiver or agree any amendment
affecting any of the following:
(a) The amount or method of calculation of interest;
(b) An alteration of the date for the payment of any sum;
(c) The definitions of "Commitment Expiry Date" or "Instructing Group";
(d) SECTIONS 3(1), 5(5)(c) and (d), 9, 11(8) and (9), 13, 18(4)(c), 18(10) and
this SECTION 22(1);
(e) The obligations of the Lenders;
(f) Any requirement (including the one in this sub-clause) that all the
Lenders or a certain proportion of them consent to a matter or deliver
a notice.
Waivers or amendments affecting these matters require the consent of all
Lenders.
(2) Expenses. The Borrower agrees to reimburse the Agent and each Lender
for the expenses they incur as a result of any proposal made by the
Borrower to waive or amend a term of this Agreement.
SECTION 23 MISCELLANEOUS
(1) Exercise of Rights. If the Agent or a Lender does not exercise a right
or power when it is able to do so this will not prevent it exercising that
right or power. When it does exercise a right or power it may do so again
in the same or a different manner. The Agent's and the Lenders' rights and
remedies under this Agreement are in addition to any other rights and
remedies they may have. Those other rights and remedies are not affected by
this Agreement.
(2) Counterparts. There may be several signed copies of this Agreement.
There is intended to be a single Agreement and each signed copy is a
counterpart of that Agreement.
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(3) Entire Agreement. This Agreement constitutes the whole and only
agreement between the parties relating to the Facility.
(4) SECTION 0x XXxX Xxxxxxxxxxxx. Each Lender undertakes to the Borrower to
confirm in writing substantially in the form as attached in Schedule 5
within the first quarter of a calendar year (commencing in 1998) that any
interest paid to such Lender under this Agreement is subject to taxation in
Germany (after deduction of related expenses) and that the respective
Lender has not made any payment (directly or indirectly) to any entity
belonging to the Masco Group (as notified by the Guarantor to the Agent)
that would be treated as a "related payment" as such term is construed by
the German tax Authorities for the purpose of XXXXXXX 0x XXxX.
(5) Introduction of EURO.
(a) In the event that the EURO is introduced as the lawful currency of the
Federal Republic of Germany, except as provided in the following
sentences, at any time after the official substitution date all
payments by an Obligor in respect of the Loan or, as the case may be,
the Guarantee will be made in EUROs. If upon the introduction of the
EURO an Obligor has the option whether to make payments in respect of
the Loan or, as the case may be, the Guarantee in EUROs or in Deutsche
Xxxx, the Obligor will make payments in Deutsche Xxxx until it has
notified the Agent that forthwith payments will be made in EURO.
(b) The parties agree to make such operational and administrative changes
as are necessary and appropriate in the circumstances of the above,
having regard to market practice existing at the time of the
introduction of the EURO as the lawful currency of the Federal
Republic of Germany.
(c) The introduction of the EURO as currency and any amendments of this
Agreement resulting therefrom will not entitle any party to this
Agreement to any legal remedy, including, without limitation, any
right of rescission or claim for damages.
SECTION 24 LAW AND JURISDICTION
(1) Law. This Agreement is governed by the law of the Federal Republic of
Germany.
(2) Submission. The courts of Frankfurt am Main shall have non-exclusive
jurisdiction for any proceedings arising under or in connection with this
Agreement. This submission to the jurisdiction of the courts in Frankfurt
am Main shall not limit the right of any Syndicate Party to take
proceedings against any of the Obligors in any other court of competent
jurisdiction.
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(3) Service of Process. Without prejudice to any other mode of service
Masco Corporation irrevocably appoints Masco GmbH, Xxxxxxx Xxxx 00, 00000
Xxxxxxxxxx as its agent for service of process relating to any proceedings
before the German courts arising under or in connection with this
Agreement.
SECTION 25 CONFIDENTIALITY
Each Lender agrees that all documentation and other information made
available by any of the Obligors to such Lender, whether under the terms of
this Agreement or any other loan agreement, shall (except to the extent
required by legal or governmental process or otherwise by law, or if such
documentation and other information is publicly available or thereafter
becomes publicly available other than by action of any Lender, or was
theretofore known to such Lender independent of any disclosure thereto by
the Obligors) be held in the strictest confidence by such Lender and used
solely in connection with the administration of loans from time to time
outstanding from such Lender to any of the Obligors; provided that (i) such
Lender may disclose such documentation and other information to any other
bank to which such Lender sells or proposes to sell its Commitment or
participation in the Advances, if such other bank, prior to such
disclosure, agrees for the benefit of the Obligors to comply with the
provisions of this SECTION 25, (ii) such Lender may disclose the provisions of
this Agreement and the amounts, maturities and interest rates of the
Advances to any purchaser or potential purchaser of such Lender's
Commitment or participation in any Advances and (iii) such Lender may
disclose such documentation and other information to the extent required,
in such Lender's good faith judgement, to enforce its rights under this
Agreement.
Frankfurt am Main, 9th July, 1997
MASCO GMBH
By: /s/ Boch
MASCO CORPORATION
By: /s/ Xxxxxxxx
COMMERZBANK AKTIENGESELLSCHAFT
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(in its capacity as Arranger)
By: /s/ Xxxxxxxxxxx Xxxxx
COMMERZBANK INTERNATIONAL S.A.
(in its capacity as Agent)
By: /s/ Xxxxx
COMMERZBANK AKTIENGESELLSCHAFT,
FILIALE HEIDELBERG
By: /s/ Kern Mantel
BAYERISCHE VEREINSBANK AG
FILIALE HEIDELBERG
By: /s/ Xxxxx
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK
ZWEIGNIEDERLASSUNG FRANKFURT AM MAIN
By: /s/ Xxxxx
ROYAL BANK OF CANADA EUROPE LIMITED
ZWEIGNIEDERLASSUNG FRANKFURT AM MAIN
By: /s/ Xxxxx
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THE BANK OF TOKYO - MITSUBISHI, LTD.
DUSSELDORF BRANCH
By: /s/ Xxxxxxxxxxx
THE DAI-ICHI KANGYO BANK, LTD.
FILIALE DUSSELDORF
By: /s/ Xxxxxxxxxxx
THE FIRST NATIONAL BANK OF CHICAGO
FRANKFURT AM MAIN BRANCH
By: /s/ Xxxxxxxxxxx
Without prejudice to the foregoing execution of the Agreement by the
parties hereto, COMMERZBANK INTERNATIONAL S.A. hereby expressly and
specifically confirms its agreement with the provisions of SECTION 24(2) hereof
for the purposes of Article 1 of the Protocol annexed to the Convention on
Jurisdiction and the Enforcement of Judgements in Civil and Commercial
Matters signed at Brussels on September 27, 1968.
COMMERZBANK INTERNATIONAL S.A.
/s/Xxxxx
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ANNEX
INTERPRETATION
DEFINITIONS, REFERENCES AND CONSTRUCTION
1. DEFINITIONS
In this Agreement:
"ACQUIRED DEBT" means with respect to any person which becomes a Subsidiary
after the date of this Agreement. Debt of such person which was outstanding
before such person became a Subsidiary and which was not created in
contemplation of such person becoming a Subsidiary, provided that such Debt
shall no longer constitute "ACQUIRED DEBT" at any time that is more than
six months after such person becomes a Subsidiary
"ADVANCE" means an advance made, or to be made, under SECTION 5.
"ADVANCE DATE" means the date, or proposed date, of an Advance.
"AFFILIATE" means at any date a person (other than a Consolidated Subsidiary)
whose earnings or losses (or the appropriate proportionate share
thereof) would be included in determining the Consolidated Net Income of
the Guarantor and its Consolidated Subsidiaries for a period ending on such
date under the equity method of accounting for investments in common stock
(and certain other investments).
"AGENT" means Commerzbank International S.A. in its capacity as agent for
the Lenders, acting through its office at Luxembourg or any other office
which it may notify to the Borrower, the Guarantor and the Lenders. If
there is a change of agent in accordance with SECTION 19(12), "Agent" will
instead mean the new agent appointed under SECTION 18(12).
"AUTHORISED PERSON" means a person authorised to sign notices on behalf of
the Borrower or the Guarantor under this Agreement. In the case of the
Borrower, the authorisation is evidenced by a list of "Authorised Persons"
duly signed on behalf of the Borrower by one or more Geschaftsfuhrer (as
appropriate), which list has been delivered to the Agent. In the case of
the Guarantor, the authorisation is constituted by a resolution of the
directors of the Guarantor, a certified copy of which has been delivered to
the Agent. A person will cease to be an "Authorised Person" upon notice by
the Borrower or the Guarantor, as the case may be, to the Agent.
"BENEFIT ARRANGEMENT" means at any time an employee benefit plan within the
meaning of Section 3(3) of ERISA which is not a Plan or Multiemployer Plan
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and which is maintained or otherwise contributed to by any member of the
ERISA Group.
"BUSINESS DAY" means a day on which banks are open for inter-bank payments
in Frankfurt am Main and Luxembourg.
"COMMITMENT" means the amount of principal which a Lender has committed to
the Facility. Each Lender's initial "Commitment" is set out next to its
name in Schedule 1. This may be reduced or cancelled in accordance with
this Agreement.
"COMMITMENT EXPIRY DATE" means the date which falls 30 days after the date
of this Agreement.
"CONSOLIDATED ADJUSTED NET WORTH" means at any date (i) Shareholders'
Equity at such date less (ii) the amount (if any) by which the aggregate
amount of all equity and other investments in Affiliates of the Guarantor
reflected in such Shareholders' Equity exceeds US $ 250,000,000.
"CONSOLIDATED CURRENT ASSETS" means at any date the consolidated current as
sets of the Guarantor and its Consolidated Subsidiaries determined as of
such date.
"CONSOLIDATED DEBT" means at any date the Debt of the Guarantor and its
Consolidated Subsidiaries, determined on a consolidated basis as of such date.
"CONSOLIDATED NET INCOME" means, for any period, the consolidated net income of
the Guarantor and its Consolidated Subsidiaries for such period (considered as a
single accounting period), but excluding the net income or deficit of any person
(other than the equity in earnings or losses of an Affiliate previously included
in such consolidated net income determined under the equity method of accounting
for investments) prior to the effective date on which it becomes a Consolidated
Subsidiary or is merged into or consolidated with the Guarantor or a
Consolidated Subsidiary.
"CONSOLIDATED SUBSIDIARY" means at any date any Subsidiary the accounts of
which would be consolidated with those of the Guarantor in its consolidated
financial statements as of such date.
"CONSOLIDATED TANGIBLE NET WORTH" means at any date the aggregate of all as
sets (excluding treasury stock) which would be shown on a consolidated balance
sheet of the Guarantor and its Consolidated Subsidiaries as of such
date; provided that there shall be deducted from the amount of such assets,
to the extent otherwise included therein, (i) any reserves on assets of the
Guarantor and its Consolidated Subsidiaries where a reserve is proper in
accordance with generally accepted accounting principles, including,
without limitation, reserves for depreciation, amortization or
obsolescence, loss on receivables or inventory
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valuations, (ii) any unamortized goodwill, patents, trademarks, trade names
or other like in tangible assets of the Guarantor and its Consolidated
Subsidiaries, (iii) unamortized debt discount or expense of the Guarantor and
its Consolidated Subsidiaries and (iv) any deferred charges or prepaid expenses
of the Guarantor and its Consolidated Subsidiaries which are not Consolidated
Current Assets; and provided further that there shall also be deducted from
such amount (v) Consolidated Total Liabilities at such date.
"CONSOLIDATED TOTAL LIABILITIES" means at any date the aggregate of all
liabilities or other items which would appear on the liability side of a
consolidated balance sheet of the Guarantor and its Consolidated
Subsidiaries as of such date, except the amount so appearing which
constitutes Shareholders' Equity.
"CONTINUING DIRECTOR" means any member of the Guarantor's board of directors
who either (i) is a member of such board as of 1st July 1997 or
(ii) is thereafter elected to such board, or nominated for election by
stockholders, by a vote of at least two-thirds of the directors who are
Continuing Directors at the time of such vote; provided that an individual
who is so elected or nominated in connection with a merger, consolidation,
acquisition or similar transaction shall not be a Continuing Director
unless such individual was a Continuing Director prior thereto.
"DEBT" of any person means at any date, without duplication, (i) all
obligations of such person for borrowed money, (ii) all obligations of such
person evidenced by debentures, notes or other similar instruments, (iii) all
obligations of such person to pay the deferred purchase price of property,
except trade accounts payable, (iv) all obligations of such person as lessee
which are capitalized in accordance with generally accepted accounting
principles, (v) 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 (iv) all Debt
of others for which such person is contingently liable. In calculating the
amount of any Debt at any date for purposes of this Agreement, accrued interest
shall be excluded to the extent that it would be properly classified as a
current liability for interest under the heading "Accrued liabilities" (and not
under the heading "Notes payable") in a balance sheet prepared as of such date
in accordance with the accounting principles and practices used in preparing
the balance sheet referred to in SECTION 14(2)(d)(i) and the related footnotes
thereto.
"DOMESTIC BUSINESS DAY" means each day other than a Saturday, Sunday or
public holiday in New York City.
"ENVIRONMENTAL LAWS" means any and all United States federal, state and
local statutes, laws, judicial decisions, regulations, ordinances, rules,
judgements, orders, decrees, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions
relating to the environment, the effect of the environment on human health
or to emissions, discharges or releases of pollutants, contaminants,
petroleum or
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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 the clean-up or other remediation
thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Group" means the Guarantor, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Guarantor or
any Subsidiary, are treated as a single employer under Section 414 of the
Internal Revenue Code.
"FACILITY" means the loan facility provided by this Agreement.
"FIBOR", in relation to any Interest Period or other period in respect of
which an interest rate is to be determined pursuant to this Agreement,
means:
(a) the interest rate per annum appearing on Telerate Screen page 22000 or
any equivalent successor to such page (as determined by the Agent)
(the "Telerate Screen") at or about 11:00 a.m. Luxembourg time on the
applicable Rate Fixing Day, as being the interest rate offered in the
Frankfurt Interbank Market for deposits in Deutsche Xxxx for delivery
on the first day of such Interest Period or such other period and for
a period equal to such Interest Period or such other period; and
(b) if such interest rate per does not appear on the Telerate Screen or
the Agent determines that no rate for a period of the duration of the
relevant Interest Period (or other period selected by the Agent
pursuant to the provisions of this Agreement) appears on the Telerate
Screen, the arithmetic mean (rounded upwards, if necessary, to four
decimal places) of the respective rates of interest per annum, as
supplied to the Agent at its request, quoted by the Reference Banks to
leading banks in the Frankfurt Interbank Market at or about 11:00 a.m.
Luxembourg time on the applicable Rate Fixing Date for the offering of
deposits in Deutsche Xxxx during such Interest Period (or such other
period) in an amount comparable to the amount of the Advance to which
such Interest Period relates or, upon all Advances having been made,
the Loan (or, if in relation to such other period, in an amount
comparable to the unpaid sum); provided that:
(i) if any Reference Bank does not supply such quotation by 12 noon
on the applicable Rate Fixing Day, the relevant arithmetic mean
48
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shall be determined on the basis of the quotations supplied by
the remaining Reference Banks; and
(ii) if fewer than two Reference Banks supply a quotation, SECTION 10(3).
shall apply.
"FISCAL QUARTER" means a fiscal quarter of the Guarantor.
"GUARANTEE" means the guarantee contained in SECTION 9.
"GUARANTOR'S 1996 FORM 10-K" means the Guarantor's annual report on Form 10-K
for the year ended December 31, 1996, as filed with the Securities and Ex
change Commission pursuant to the Securities Exchange Act of 1934, as
amended.
"GUARANTOR'S EQUITY SECURITIES" means shares of any class of the
Guarantor's capital stock or options, warrants or other rights to acquire
such shares.
"HIGH QUALITY INVESTMENT" means any investment in (i) direct obligations of
the United States of America or any agency thereof, or obligations
guaranteed by the United States of America or any agency thereof,
(ii) commercial paper rated at least A-1 by S&P and at least P-1 by Moody's
or (iii) time deposits with, including certificates of deposit issued by,
any bank which was a party to US $ 750,000,000 Amended and Restated Credit
Agreement dated as of November 14, 1996 among the Guarantor, the banks
party thereto and the Agent named therein on its effective date or any
office located in the United States of America of any bank or trust company
which is organized under the laws of the United States of America or any
State thereof and has capital, surplus and undivided profits aggregating at
least US $ 500,000,000; provided in each case that such investment matures
within six months from the date of acquisition thereof by the Guarantor or
a Subsidiary.
"INSTRUCTING GROUP" means Lenders whose Commitments exceed 66% in aggregate,
or, if an Advance has been made, Lenders whose participations in
the Loan exceed 66% in aggregate.
"INTEREST PERIOD" means each period described in SECTION 6(1).
"INTERNAL REVENUE CODE" means the United States Internal Revenue Code of
1986, as amended, or any successor statute.
"LENDER" means a lender listed in Schedule 1 acting through the office
appearing under its name or any other office which it may notify to the
Agent. A lender which acquires an interest in this Facility by way of
transfer or substitution under SECTION 21 will become a "Lender" and will act
through its office notified to the Agent. The expression also includes
universal successors to Lenders.
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"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or similar encumbrance of any kind in respect of
such asset; provided that a subordination agreement shall not be deemed to
create a Lien. For the purposes of this Agreement, the Guarantor or any
Consolidated Subsidiary shall be deemed to own subject to a Lien any asset
which it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other similar
title retention agreement relating to such asset.
"LOAN" means the principal amount borrowed and not repaid under the
Facility.
"MARGIN", in relation to any Interest Period or other period in respect of
which an interest rate is to be determined pursuant to this Agreement,
means the rate determined by the Agent by reference to the credit rating
assigned from time to time by Xxxxx'x Investor Service, Inc. ("Moody's") to
the long-term debt of the Guarantor as at the Rate Fixing Day and shall be:
(a) 0.325 per cent. per annum if such rating is A2 or higher;
(b) 0.350 per cent. per annum if such rating is A3;
(c) 0.375 per cent. per annum if such rating is Baa1, Baa2 or Baa3; or
(d) 0.600 per cent. per annum if such rating is Ba1 or lower.
provided that a change in rating shall not affect the Margin applicable to
a running Interest Period.
"MASCO GROUP" means the Guarantor and its Subsidiaries.
"MATERIAL DEBT" means Debt of the Guarantor and/or one or more of its
Subsidiaries, arising in one or more related or unrelated transactions, in
an aggregate outstanding principal amount exceeding US $ 25,000,000.
"MATERIAL PLAN" has the meaning set forth in SECTION 17(1)(j).
"MULTIEMPLOYER PLAN" means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of
the ERISA Group is then making or, pursuant to an applicable collective
bargaining agreement, 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.
"OBLIGOR" at any time means the Borrower or the Guarantor.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.
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"PLAN" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code
and either (i) is maintained, or contributed to, by any member of the ERISA
Group for employees of any member of the ERISA Group or (ii) has at any
time within the preceding five years been maintained, or contributed to, by
any Person which was at such time a member of the ERISA Group for employees
of any Person which was at such time a member of the ERISA Group.
"POTENTIAL TERMINATION EVENT" means any event or circumstance which, with
the giving of notice and/or the lapse of time and/or the fulfilment of any
other condition, is likely to constitute a Termination Event.
"PRIOR PLAN" means at any time (i) any Plan which at such time is no longer
maintained or contributed to by any member of the ERISA Group or (ii) any
Multiemployer Plan to which no member of the ERISA Group is at such time
any longer making contributions or, pursuant to an applicable collective
bargaining agreement, accruing an obligation to make contributions.
"RATE FIXING DAY" means, in relation to any Interest Period or other period
for which an interest rate is to be determined pursuant to this Agreement,
the second Business Day before the commencement of the Interest Period or
such other period.
"REFERENCE BANKS" means, initially, the principal Frankfurt offices of
Commerzbank Aktiengesellschaft, Xxxxxx Guaranty Trust Company of New York,
Zweigniederlassung Frankfurt am Main and The Bank of Tokyo-Mitsubishi Ltd.,
Dusseldorf Branch. The Agent, following consultation with the Borrower and
the Lenders, may replace a "Reference Bank" with another Lender or an
affiliate of a Lender. This replacement will take effect when notice is
delivered to the Borrower and the Lenders.
"REPAYMENT DATE" means the date which falls on the fifth anniversary of the
date of this Agreement. If the "Repayment Date" date is not a Business Day,
the "Repayment Date" will instead be the next Business Day.
"SECURITY" means security of any type created or existing over an asset.
"Security" includes also any arrangement providing a creditor with a prior
right to an asset, or its proceeds of sale, over other creditors in an
insolvency or liquidation.
"SHAREHOLDERS' EQUITY" means at any date the shareholder's equity of the
Guarantor.
"SIGNIFICANT SUBSIDIARIES" means any one or more Subsidiaries which, if
considered in the aggregate as a single Subsidiary, would be a "significant
subsidiary" as defined in Rule 1-02 of Regulation S-X under the Securities
51
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Exchange Act of 1934. For purposes of this Agreement, a type of event shall
not be deemed to have occurred with respect to Significant Subsidiaries
unless such type of event has occurred with respect to each of the
Subsidiaries required to be included to constitute "Significant
Subsidiaries" as defined in the preceding sentence.
"SUBSIDIARY", in relation to the Borrower, means a company controlled or
majority-owned by the Borrower within the meaning of SECTIONS 16 and 17 of the
Stock Corporation Act ("Aktiengesetz"), and, in relation to the Guarantor,
means any corporation or other entity of which securities or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions are at the
time owned by the Guarantor or by the Guarantor and one or more
Subsidiaries or by one or more Subsidiaries.
"SUBSTITUTION CERTIFICATE" means a document substantially in the form set
out in Schedule 3.
"SYNDICATE PARTY" means the Agent, the Arranger and any Lender.
"TERMINATION EVENT" has the meaning described in SECTION 17(1).
"TOTAL COMMITMENTS" means the aggregate of the Commitments of all the Lenders.
"UNFUNDED LIABILITIES" means, with respect to any Plan at any time, the
amount (if any) by which (i) the value of all benefit liabilities under
such Plan, determined on a plan termination basis using the assumptions
prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds
(ii) the fair market value of all Plan assets allocable to such liabilities
under Title IV of ERISA (excluding any accrued but unpaid contributions),
all determined as of the then most recent valuation date for such Plan, but
only to the extent that such excess represents a potential liability of a
member of the ERISA Group to the PBGC or any other Person under Title IV of
ERISA.
"UNITED STATES SUBSIDIARY" means a Subsidiary which is incorporated under
the laws of the United States of America or any State thereof.
2. CERTAIN REFERENCES
Unless otherwise indicated, a reference in this Agreement to:
"Deutsche Xxxx" or "DM" is to the lawful currency for the time being of
Germany;
"fees" or "expenses" includes any value added tax on those fees or expenses;
00
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"Xxxxxxx" is to the Federal Republic of Germany;
unless stated otherwise, a "time of day" is to Frankfurt time.
3. CONSTRUCTION
In relation to the Guarantor, and unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial statements required
to be delivered hereunder shall be prepared in accordance with United
States generally accepted accounting principles as in effect from time to
time, applied on a basis consistent (except for changes concurred in by the
Guarantor's independent public accountants) with the most recent audited
consolidated financial statements of the Guarantor and its Consolidated
Subsidiaries delivered to the Lenders; provided that, if the Guarantor notifies
the Agent that the Guarantor wishes to amend any covenant in SECTION 14(2)(d)
to eliminate the effect of any change in United States generally accepted
accounting principles on the operation of such covenant (or if the
Agent notifies the Guarantor that an Instructing Group wishes to amend
SECTION 14(2)(d) for such purpose), then the Guarantor's compliance with such
covenant shall be determined on the basis of generally accepted accounting
principles in effect immediately before the relevant change in United
States generally accepted accounting principles became effective, until
either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Guarantor and the Instructing Group.
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SCHEDULE 1
LENDERS AND COMMITMENTS
ADDRESS DETAILS
Lender Commitment in DM
------ --------------------
Commerzbank Aktiengesellschaft 100,000,000
Xxxxxxx Xxxxxxxxxx
Xxxxxxxxxxxxxxxx 00 - 00
00000 Xxxxxxxxxx
Telefax-No.: 06221-901846
Bayerische Vereinsbank AG 50,000,000
Filiale Heidelberg
Xxxxxxxx 00 00 00
00000 Xxxxxxxxxx
Telefax-No.: 00000-000-000
Xxxxxx Guaranty Trust Company of 50,000,000
New York
Zweigniederlassung Frankfurt am
Main
Xxxxxxxxxxxx 0 - 0
00000 Xxxxxxxxx xx Xxxx
Telefax-No.: 000-0000-0000
Royal Bank of Canada Europe Limited 50,000,000
Zweigniederlassung Frankfurt am
Main
Xxxxxx Xxxxxx 00
00000 Xxxxxxxxx xx Xxxx
Telefax-No.: 000-00000-000
The Bank of Tokyo - Mitsubishi, 50,000,000
Ltd.
Dusseldorf Branch
Xxxxxxxxxxxxxxx 00
00000 Xxxxxxxxxx
Telefax-No.: 0000-0000-000
The Dai-Ichi Kangyo Bank, Ltd. 50,000,000
Filiale Dusseldorf
Xxxxxxxxxxx 00 X
00000 Xxxxxxxxxx
Telefax-No.: 0211-3249-35
The First National Bank of Chicago 50,000,000
Frankfurt am Main Branch
Xxxxxxxxxx 00 - 00
00000 Xxxxxxxxx xx Xxxx
Telefax-No.: 000-000000-00
-----------
Total: 400,000,000
===========
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Arranger:
Commerzbank Aktiengesellschaft
Xxxx Xxxxxxx Xxxxxx 00 - 00
00000 Xxxxxxxxx xx Xxxx
Telephone-No.: 000-0000-0000
Telefax-No.: 000-0000-0000
Agent:
Commerzbank International S.A.
z.H. Herrn Xxxxx
00, Xxx Xxxxx Xxxx
X-0000 Xxxxxxxxxx
Telephone-No.: 00000-000 000 000
Telefax-No.: 00352-477 911 419
Borrower:
Masco GmbH
Xxxxxxx Xxxx 00
00000 Xxxxxxxxxx
Telephone-No.: 00000-00000
Telefax-No.: 06224-52709
Guarantor:
Masco Corporation
00000 Xxx Xxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
XXX
Telephone-No.: 001313-3746258
Telefax-No.: 001313-3746135
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SCHEDULE 2
CONDITIONS PRECEDENT
1. IN RESPECT OF THE BORROWER:
(a) A copy of the Articles of Association (Gesellschaftsvertrag) of the
Borrower as last filed with the Commercial Register and of the related
certificate of the Notary Public pursuant to SECTION 54(1) GmbHG, certified
by two Authorized Persons to be correct and up-to-date.
(b) An extract from the Commercial Register dated not earlier than
1st July, 1997 certified by the Commercial Register.
(c) A list of Authorized Persons complying with the definition of
"Authorized Person".
2. IN RESPECT OF THE GUARANTOR:
A copy of the charter, by-laws and authorizing resolutions of the
Guarantor, certified by the corporate secretary of the Guarantor.
3. LEGAL OPINIONS FROM:
(a) Xxxx X. Xxxxxxx, General Counsel of the Guarantor;
(b) Xxxxx Xxxx & Xxxxxxxx, legal advisers in the United States of America
to the Agent; and
(c) Hengeler Xxxxxxx Xxxxxxx Xxxxx, legal advisers in Germany to the
Agent,
all legal opinions to be addressed to the Syndicate Parties and to be in a
form satisfactory to the Agent.
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SCHEDULE 3
FORM OF SUBSTITUTION CERTIFICATE
To: Commerzbank International S.A.
From: [The Existing Lender] and [The New Lender]
MASCO GMBH - DM 400,000,000 TERM LOAN FACILITY AGREEMENT DATED 9TH JULY,
1997 (THE "AGREEMENT")
We refer to SECTION 21(4) of the Agreement.
1. We (the "EXISTING LENDER") and (the "NEW LENDER") agree to the New
Lender substituting the Existing Lender in respect of all the Existing
Lender's rights and obligations referred to in the Schedule in
accordance with SECTION 21(4).
2. The specified date for the purposes of SECTION 21(4) is [date of
substitution].
3. The office through which the New Lender will be acting and the address
for notices of the New Lender for the purposes of SECTION 20(5) are set out
in the Schedule.
4. This Substitution Certificate is governed by the laws of the Federal
Republic of Germany.
The Existing Lender and the New Lender agree as follows:
1. The New Lender is responsible for its own decision to become involved
in the Facility. It should make its own credit appraisal of the
Borrower and the Guarantor and the terms of the Facility. The Existing
Lender makes no representation that any information provided to the
New Lender before or after the date of this certificate is true.
Accordingly the New Lender should take whatever action it believes is
necessary to verify that information. In addition the Existing Lender
is not responsible for the legality, validity or adequacy of the Loan
Agreement. The New Lender will satisfy itself on these issues.
2. There is no obligation on the Existing Lender to accept any transfer
back of the rights and obligations referred to in this Substitution
Certificate. The Existing Lender accepts no obligation to indemnify
the New Lender
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for any losses incurred as a result of a failure by the
Borrower or the Guarantor to perform their obligations or for any
other losses.
This Substitution Certificate is to be governed by the law of the Federal
Republic of Germany.
Existing Lender: New Lender:
[Name of Existing Lender] [Name of New Lender]
By: ___________________ By: ___________________
Agent (on behalf of the other Lenders, the Borrower and itself)
Commerzbank International S.A.
By: ___________________
Date:
THE SCHEDULE
RIGHTS AND OBLIGATIONS TO BE SUBJECT TO THE SUBSTITUTION
[Insert details of the rights and obligations of the Existing Lender to be
subject to the substitution].
NAME OF NEW LENDER: __________________________
Office through which the New Lender will be acting and address for notices:
Address: __________________________
Fax Number: __________________________
Telex Number: __________________________
Attention: __________________________
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SCHEDULE 4
FORM OF BORROWING NOTICE
To: Commerzbank International S.A., in its capacity as Agent
From: Masco GmbH
MASCO GMBH
DM 400,000,000 TERM LOAN FACILITY
Dear Sirs,
(1) With reference to SECTION 5(1) of the Credit Agreement, dated 9th July,
1997 (the "Agreement") we herewith give notice of our intention to borrow under
the Facility, subject to the following conditions:
(a) Advance Date: [________]
(b) Amount: DM [________](1)
(c) First Interest Period: [________]
(2) We herewith confirm
(a)that the representations and warranties in SECTION 14 of the Agreement are
true on the date of delivery of this notice and on the Advance Date;
and
(b)no Termination Event or Potential Termination Event exists on the
Advance Date.
We request that the Advance be disbursed to our account No. [________] with
[________].
(3) Terms not defined herein shall have the meaning attributed to them in
the Agreement.
Yours sincerely
Masco GmbH
By: _______________________
(1) DM 50 Mio. or any higher integral multiple of DM 10 Mio.
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SCHEDULE 5
FORM OF TAX CONFIRMATION
[Letterhead of Lender]
Masco GmbH
[address]
MASCO GMBH
DM 400 MIO. TERM LOAN FACILITY
Dear Sirs,
With reference to SECTION 23(4) of the Facility Agreement, dated 9th July, 1997,
entered into in connection with the DM 400 Mio. Term Loan Facility made
available to you by a syndicate of banks including our institution, we
herewith confirm the following to you with respect to the calendar year
[___]:
Any interest paid to ourselves in respect of the Facility is subject to
taxation in Germany (after deduction of related expenses). We have not made
any payments (directly or indirectly) to any entity belonging to the Masco
Group (in which respect we have relied on the Schedule of entities
belonging to the Masco Group supplied by Masco Corporation to the Agent)
that would be treated as a "related payment", as such term is construed by
the German tax authorities for the purpose of SECTION 8(a) KStG.
Yours sincerely
60
AMENDMENT TO
CREDIT AGREEMENT
AMENDMENT dated as of June 12, 1998 to the DEM 400 Million Credit Agreement
dated as of July 9, 1997 among MASCO GmbH (the "Borrower"), MASCO CORPORATION
(the "Guarantor"), the BANKS party thereto (the "Lenders") and COMMERZBANK
INTERNATIONAL S.A.; (the "Agent").
WHEREAS, the parties hereto desire to amend the Credit Agreement with effect
from the date hereof (the "Amendment Effective Date") to:
(i) change the minimum tangible net worth covenant to a minimum net worth
covenant and update the minimum amount specified therein,
(ii) reduce the maximum permitted ratio of (x) Consolidated Debt to (y) the
sum of Consolidated Debt and Consolidated Adjusted Net Worth from 57%
to 53% and
(iii) replace the defined term "Shareholders' Equity with the term
"Consolidated Net Worth";
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Defined Terms; References. Unless otherwise specifically defined
herein, each term used herein which is defined in the Credit
Agreement has the meaning assigned to such term in the Credit
Agreement. Each reference to "hereof", "hereunder", "herein" and
"hereby" and each other similar reference and each reference to
"this Agreement" and each other similar reference contained in the
Credit Agreement shall, after this Amendment becomes effective,
refer to the Credit Agreement as amended hereby.
SECTION 2. Definitions.
(a) The definitions of "Consolidated Tangible Net Worth" and
"Shareholders' Equity" in the Annex of the Credit Agreement are
deleted.
(b) the following new definition is added to the Annex of the Credit
Agreement in the appropriate alphabetical order.
"Consolidated Net Worth" means at any date the consolidated
shareholders' equity of the Guarantor and its Consolidated
Subsidiaries determined as of such date.
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(c) The definitions of "Consolidated Adjusted Net Worth" and
"Consolidated Total Liabilities" in the Annex of the Credit
Agreement are amended by changing the words "Shareholders' Equity"
to Consolidated Net Worth".
SECTION 3. Minimum Consolidated Net Worth.Section 16 (2) (a) of the Credit
Agreement is amended to read in full as follows:
Section 16 (2) (a). Minimum Consolidated Net Worth. At no time will
Consolidated Net Worth be less than Minimum Consolidated Net Worth.
"Minimum Consolidated Net Worth" means US$ 1,700,000,000 provided
that such amount shall be adjusted at the end of each Fiscal Quarter
ending after March 31, 1998, as follows:
(i) increased by 50% of Consolidated Net Income for such Fiscal
Quarter; provided that, if Consolidated Net Income for such Fiscal
Quarter is a negative number (a "Consolidated Net Loss"), an amount
up to 50% of such Consolidated Net Loss shall be applied first to
reduce Minimum Consolidated Net Worth to the extent of offsetting
prior increases (if any) in Miminum Consolidated Net Worth made
pursuant to the sub-paragraph (i) during the same fiscal year and
second to reduce (but not below zero) any future increase in Minimum
Consolidated Net Worth that would otherwise be made pursuant to this
sub-paragraph (i) during the same fiscal year; and
(ii) increased by an amount equal to 50% of all increases in
Consolidated Net Worth during such Fiscal Quarter attributable to
sales or issuances of the Guarantor's Equity Securities: provided
that an amount up to 50% of all decreases in Consolidated Net Worth
during such Fiscal Quarter attributable to purchases or other
retirements of the Guarantor's Equity Securities shall be applied
first to offset any increase in Minimum Consolidated Net Worth that
would otherwise be made pursuant to this sub-paragraph (ii) at the
end of such Fiscal Quarter, second to reduce Minimum Consolidated
Net Worth to the extent of offsetting prior increases (if any) in
Minimum Consolidated Net Worth made pursuant to this clause (ii) and
third to reduce (but not below zero) any future increase in Minimum
Consolidated Net Worth that would otherwise be made pursuant to this
clause (ii).
SECTION 4. Limitations on Debt.Section 16 (2) (b) of the Credit Agreement
is amended as follows:
a) Section 16 (2) (b) (i) is amended to read in full as follows: (i)
It will not at any time, and will not suffer or permit any
Consolidated Subsidiary at any time to, create, incur, issue,
guarantee or assume any
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Debt if, immediately after giving effect thereto, the ratio of (y)
Consolidated Debt to (z) the sum of Consolidated Debt and
Consolidated Adjusted Net Worth would exceed 53%.
b) sub-paragraphs (ii) and (iv) of Section 16 (2)(b) of the Credit
Agreement are amended by changing the words "Shareholders' Equity"
to "Consolidated Net Worth".
SECTION 5. Negative Pledge. sub-paragraph (ix) of Section 16 (2)(c) of the
Credit Agreement is amended by changing "5% of Consolidated Tangible
Net Worth" to 3% of "Consolidated Net Worth".
SECTION 6. Financial Statements.Section 14(2) of the Credit Agreement is
amended to read as follows:
Section 14(2)(d), Financial statements.
(i) The consolidated balance sheet of the Guarantor and its
Consolidated Subsidiaries as of December 31, 1997 and the
related consolidated statements of income and cash flows for
the fiscal year then ended, reported on by Coopers & Xxxxxxx
L.L.P. and set forth in the Guarantor's 1997 Form 10-K, a copy
of which has been delivered to each of the Banks, fairly
present, in conformity with generally accepted accounting
principles, the consolidated financial position of the
Guarantor and its consolidated Subsidiaries as of such date
and the consolidated results of their operations and their
cash flows for such fiscal year.
(ii) The unaudited condensed consolidated balance sheet of the
Guarantor and its Consolidated Subsidiaries as of March 31,
1998 and the related unaudited condensed statements of
consolidated income and consolidated cash flows for the three
months then ended, set forth in the Guarantor's quarterly
report for the Fiscal Quarter ended March 31, 1998 as filed
with the Securities and Exchange Commission on Form 10-Q, a
copy of which has been delivered to each of the Lenders,
fairly present, on a basis consistent with the financial
statements referred to inSection 14 (2) (d) (i), the
consolidated financial position of the Guarantor and its
Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such
three-months period (subject to normal year-end adjustments).
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(iii) There has been no material adverse change since December 31,
1997 in the business or financial position of the Guarantor
and its Consolidated Subsidiaries, considered as a whole, as
reflected in the financial statements referred to in
sub-paragraph (2) (d) (i) of this Clause.
SECTION 7. Representations of Guarantor. The Guarantor represents and warrants
that (i) the representations and warranties of the Guarantor set
forth in Article 14 of the Credit Agreement will be true on and as
of the Amendment Effective Date and (ii) no Default will have
occurred and be continuing on such date.
SECTION 8. Law. This Amendment is governed by the law of the Federal Republic
of Germany.
SECTION 9. Submission. The courts of Frankfurt am Main shall have non-exclusive
jurisdiction for any proceedings arising under or in connection with
this Agreement. This submission to the jurisdiction of the courts in
Frankfurt am Main shall not limit the right of any Syndicate party
to take proceedings against any of the Obligors in any court of
competent jurisdiction.
SECTION 10. Service of Process Without prejudice to any other mode of
service MASCO CORPORATION irrevocably appoints MASCO GmbH, Hinterm
Xxxx 10, 69207 Sandhausen, as its agent for service of process
relating to any proceedings before the German courts arising under
or in connection with this Agreement.
SECTION 11. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same
instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the date first above written.
MASCO GMBH MASCO CORPORATION
By: /s/ By: /s/ Xxxxxx X. Xxxxxxxx
Vice President -
Controller & Treasurer
COMMERZBANK INTERNATIONAL S.A.
(in its capacity as Agent)
By: /s/
COMMERZBANK INTERNATIONAL S.A.
(on behalf of the Lenders)
/s/
