Execution Copy
------------------------------------------------------------------------------
------------------------------------------------------------------------------
CREDIT AGREEMENT
Dated as of August 13, 1999
Among
PENTAIR, INC.
THE BANKS
as defined herein
and
U.S. BANK NATIONAL ASSOCIATION
as a Bank and as Agent
------------------------------------------------------------------------------
------------------------------------------------------------------------------
REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT, dated as of August 13, 1999, is by and
between PENTAIR, INC., a Minnesota corporation (the "Borrower"), the banks or
financial institutions listed on the signature pages hereof or which
hereafter become parties hereto by means of assignment and assumption as
hereinafter described (individually referred to as a "Bank" or collectively
as the "Banks"), and U.S. BANK NATIONAL ASSOCIATION, a national banking
association, as agent for the Banks (in such capacity, the "Agent").
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
Section 1.1 DEFINED TERMS. In addition to the terms defined elsewhere
in this Agreement, the following terms shall have the following respective
meanings (and such meanings shall be equally applicable to both the singular
and plural form of the terms defined, as the context may require):
"ADVANCE": The portion of the outstanding Loans bearing interest at an
identical rate for an identical Interest Period, provided that all Reference
Rate Advances shall be deemed a single Advance. An Advance may be a "Daily
Pricing Advance", "Eurodollar Advance", or "Reference Rate Advance" (each, a
"type" of Advance).
"AGENT": U.S. Bank National Association, as agent for the Banks
hereunder and each successor, as provided in SECTION 10.8, who shall act as
Agent.
"AGREEMENT": This Credit Agreement, as it may be amended, modified,
supplemented, restated or replaced from time to time.
"ALTERNATIVE APPLICABLE MARGIN": The margin added to the Eurodollar
Rate (Reserve Adjusted) or equivalent base rate to obtain the rate of
interest on borrowings under the New Syndicated Agreement, or any commitment
accepted by the Borrower to enter into the New Syndicated Agreement, if
higher than the Applicable Margin as determined below.
"APPLICABLE MARGIN" and "APPLICABLE FACILITY FEE RATE": The following
percentages when the following Levels apply:
Percentage for Percentage for Applicable
Applicable Level: Applicable Margin: Facility Fee Rate:
----------------- ------------------ -------------------------
Level I 0.375% 0.125%
Level II 0.475% 0.150%
Level III 0.575% 0.175%
Level IV 0.6875% 0.1875%
Level V 0.80% 0.20%
Level VI 1.025% 0.225%
Level VII 1.225% 0.275%
The applicable level shall be determined as follows:
LEVEL I shall apply if the Borrower's Long Term Debt Rating is A- or
better (S&P) and A3 or better (Xxxxx'x).
LEVEL II shall apply if the Borrower's Long Term Debt Rating is BBB+ or
better (S&P) and Baa1 or better (Moody's) but no numerically lower
Level applies.
LEVEL III shall apply if the Borrower's Long Term Debt Rating is BBB or
better (S&P) and Baa2 or better (Moody's) but no numerically lower
Level applies.
LEVEL IV shall apply if the Borrower's Long Term Debt Rating is BBB or
better (S&P) and Baa3 or better (Moody's) OR if the Borrower's Long
Term Debt Rating is BBB- or better (S&P) and Baa2 or better (Moody's)
but no numerically lower Level applies.
LEVEL V shall apply if the Borrower's Long Term Debt Rating is BBB- or
better (S&P) and Baa3 or better (Moody's) but no numerically lower
Level applies.
LEVEL VI shall apply if the Borrower's Long Term Debt Rating is BB+ or
better (S&P) and Ba1 or better (Moody's) but no numerically lower Level
applies.
LEVEL VII shall apply if no other level shall apply.
As used herein:
"LONG TERM DEBT RATING" means the rating assigned by S&P and Moody's to
the long term, unsecured, senior indebtedness of the Borrower.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"S&P" means Standard & Poor's Ratings Group.
"BUSINESS DAY": Any day (other than a Saturday, Sunday or legal holiday
in the State of Minnesota) on which national banks are permitted to be open
in Minneapolis, Minnesota and, with respect to Eurodollar Advances, a day on
which dealings in Dollars may be carried on by the Agent in the interbank
eurodollar market.
"COMMITMENT": The maximum unpaid principal amount of the Loans of all
Banks which may from time to time be outstanding hereunder, being initially
$100,000,000, as the same may be reduced from time to time pursuant to
SECTION 4.3 , or, if so indicated, the maximum unpaid principal amount of
Loans of any Bank (which amounts are set forth on the signature pages hereof
or in the relevant Assignment and Assumption Agreement for such Bank) and, as
the context may require, the agreement of each Bank to make Loans to the
Borrower subject to the terms and conditions of this Agreement up to its
Commitment.
2
"DAILY PRICING ADVANCE": An Advance designated as such in a notice of
borrowing under SECTION 2.3 or a notice of continuation or conversion under
SECTION 2.4.
"DEFAULT": Any event which, with the giving of notice to the Borrower
or lapse of time, or both, would constitute an Event of Default.
"EURODOLLAR ADVANCE": An Advance designated as such in a notice of
borrowing under SECTION 2.3 or a notice of continuation or conversion under
SECTION 2.4.
"EURODOLLAR INTERBANK RATE": The offered rate for deposits in United
States Dollars (rounded upwards, if necessary, to the nearest 1/16 of 1%),
for delivery of such deposits on the first day of an Interest Period of a
Eurodollar Advance, for the number of days comprised therein, or for Daily
Pricing Advances an Interest Period of one month, which appears on Page 3750
of the Dow Xxxxx Markets (Telerate) screen as of 11:00 a.m., London time, on
the day that is two Banking Days preceding the first day of the Interest
Period of such Eurodollar Advance (or in the case of Daily Pricing Advances,
on each Business Day, without giving effect to the two-day forward
convention), or the rate for such deposits determined by the Bank at such
time based on such other published service of general application as shall be
selected by the Bank for such purpose; PROVIDED, that in lieu of determining
the rate in the foregoing manner, the Bank may determine the rate based on
rates offered to the Bank for deposits in United States Dollars (rounded
upwards, if necessary, to the nearest 1/16 of 1%) in the interbank eurodollar
market at such time for delivery on the first day of the Interest Period for
the number of days comprised therein.
"EURODOLLAR RATE (RESERVE ADJUSTED)": A rate per annum (rounded upward,
if necessary, to the nearest 1/16th of 1%) calculated for the Interest Period
of a Eurodollar Advance (or in the case of Daily Pricing Advances, determined
on each Business Day, which rate shall apply until the next-following
Business Day) in accordance with the following formula:
Eurodollar Interbank Rate
ERRA = -------------------------
1.00 - ERR
In such formula, "ERR" means "Eurodollar Reserve Rate" and "ERRA" means
"Eurodollar Rate (Reserve Adjusted)", in each instance determined by the
Agent for the applicable Interest Period. The Agent's determination of all
such rates for any Interest Period shall be conclusive in the absence of
manifest error.
"EURODOLLAR RESERVE RATE": A percentage equal to the daily average
during such Interest Period of the aggregate maximum reserve requirements
(including all basic, supplemental, marginal and other reserves), as
specified under Regulation D of the Federal Reserve Board, or any other
applicable regulation that prescribes reserve requirements applicable to
Eurocurrency liabilities (as presently defined in Regulation D) or applicable
to extensions of credit by the Agent the rate of interest on which is
determined with regard to rates applicable to Eurocurrency liabilities.
Without limiting the generality of the foregoing, the Eurocurrency Reserve
Requirement shall reflect any reserves required to be maintained by the Agent
against (i) any category of liabilities that includes deposits by reference to
3
which the Eurodollar Interbank Rate is to be determined, or (ii) any category
of extensions of credit or other assets that includes Eurodollar Advances.
"EVENT OF DEFAULT": Any event described in ARTICLE X.
"EXISTING CREDIT AGREEMENT": That certain Credit Agreement, dated as of
November 15, 1996, as amended and restated as of August 13, 1999, and as
further amended, between the Borrower and U.S. Bank National Association,
formerly known as First Bank National Association.
"FEDERAL RESERVE BOARD": The Board of Governors of the Federal Reserve
System or an successor thereto.
"INTEREST PERIOD": Either (a) for any Eurodollar Advance, the period
commencing on the borrowing date of such Eurodollar Advance or the date a
Reference Rate Advance is converted into such Eurodollar Advance, or the last
day of the preceding Interest Period for such Eurodollar Advance, as the case
may be, and ending on the numerically corresponding day one, two or three
months thereafter, as selected by the Borrower pursuant to SECTION 2.3 or
SECTION 2.4; provided, that:
(i) any Interest Period which would otherwise end on a day which is not
a Business Day shall end on the next succeeding Business Day unless such
next succeeding Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day;
(ii) any Interest Period which begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the
end of such Interest Period; and
(iii) no Interest Period shall extend beyond the Termination Date; or
(b) for each Daily Pricing Advance, a period lasting until the
next-following Business Day (provided, that the Eurodollar Interbank Rate
shall be determined based on an interest period of one month, as provided in
the definition thereof).
"INTEREST STEP-UPS": The following percentages, added as provided in the
definition of Applicable Margin, if the following events apply:
Amount of Interest
Event: Step-Up:
------ ------------------
(a) If on October 1, 1999, the Commitment
shall be $50,000,000 or less, giving effect
to all reductions under SECTION 4.3: 0.25%
(b) If on October 1, 1999, the Commitment
is more than $50,000,000, giving effect
4
to all reductions under SECTION 4.3: 0.50%
(c) If the Termination Date has not
occurred on or before December 1, 1999: 1.00%
The Interest Step-Up under (a) and (b) shall be determined, and if (c) shall
apply, the Interest Step-Up under (c) shall be added to that determined under
(a) or (b) on and after December 1, 1999 (for example, if (a) applied, on and
after December 1, 1999, the total Interest Step-Up added as provided in the
definition of Applicable Margin shall be 1.25%).
"LOAN DOCUMENTS": This Agreement, the Notes, the fee letter described
in SECTION 3.5, and each other instrument, document, guaranty, security
agreement, mortgage, or other agreement executed and delivered by the
Borrower or any guarantor or party granting security interests in connection
with this Agreement, the Loans or any collateral for the Loans.
"MULTI-FACILITY CREDIT AGREEMENT": That certain Amended and Restated
Credit Agreement, dated as of August 1, 1997 (amending and restating the
Multi-Facility Credit Agreement dated as of November 15, 1996), among the
Borrower, certain Subsidiaries of the Borrower, the Agents, and the Banks
listed therein, as the same has been and shall hereafter be amended from time
to time after such date.
"NEW PLACEMENT AGREEMENT": Any new agreement or agreements entered by
the Borrower after the date hereof under which the Borrower will issue debt
securities with a maturity exceeding one year, common or preferred equity,
equity equivalent securities, convertible debt or other debt securities or
equities.
"NEW SYNDICATED AGREEMENT": Any new credit agreement entered by the
Borrower after the date hereof except for (a) the Other Bridge Loan
Agreements, (b) any agreements pertaining to synthetic lease obligations of
the Borrower and its Subsidiaries, and (c) any agreements pertaining to sale
of receivables by the Borrower and its Subsidiaries.
"OTHER BRIDGE LOAN AGREEMENTS": Other separate credit agreements
between the Borrower and Xxxxxx Guaranty Trust Company and Bank of America,
to be dated on or about the date of this Agreement, which are anticipated to
be replaced by and refunded from the proceeds of the New Syndicated Agreement
or New Placement Agreement.
"PAYMENT DATE": The Termination Date, plus (a) the last day of each
Interest Period for each Eurodollar Advance; and (b) the last day of each
month of each year for each Daily Pricing Advances and Reference Rate Advance
and for any fees including, without limitation, the Facility Fees.
"PERCENTAGE": As to any Bank the proportion, expressed as a percentage,
that such Bank's Commitment bears to the total Commitments of all Banks.
"PERSON": Any natural person, corporation, partnership, joint venture,
firm, association, trust, unincorporated organization, government or
governmental agency or
5
political subdivision or any other entity, whether acting in an individual,
fiduciary or other capacity.
"REFERENCE RATE": The rate of interest from time to time publicly
announced by the Agent as its "reference rate." The Agent may lend to its
customers at rates that are at, above or below the Reference Rate. For
purposes of determining any interest rate which is based on the Reference
Rate, such interest rate shall change on the effective date of any change in
the Reference Rate.
"REFERENCE RATE ADVANCE": An Advance designated as such in a notice of
borrowing under SECTION 2.3 or a notice of continuation or conversion under
SECTION 2.4.
"REQUIRED BANKS": Those Banks whose total Percentage exceeds 50%, or if
no Commitments remain in effect, whose share of principal of the Loans
exceeds 50% of the aggregate outstanding principal of all Loans.
"SUBSIDIARY": Any Person of which or in which the Borrower and its
other Subsidiaries own directly or indirectly 50% or more of: (a) the
combined voting power of all classes of stock having general voting power
under ordinary circumstances to elect a majority of the board of directors of
such Person, if it is a corporation, (b) the capital interest or profit
interest of such Person, if it is a partnership, joint venture or similar
entity, or (c) the beneficial interest of such Person, if it is a trust,
association or other unincorporated organization.
"TERMINATION DATE": The earliest of (a) March 30, 2000, (b) the date on
which the Commitments are terminated pursuant to SECTION 9.4 hereof or (c)
the date on which the Commitments are reduced to zero pursuant to SECTION 4.3
or 4.4 hereof.
Section 1.2 COMPUTATION OF TIME PERIODS. In this Agreement, in the
computation of a period of time from a specified date to a later specified
date, unless otherwise stated the word "from" means "from and including" and
the word "to" or "until" each means "to but excluding."
Section 1.3 OTHER DEFINITIONAL TERMS. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of
this Agreement. References to Sections, Exhibits, schedules and like
references are to this Agreement unless otherwise expressly provided.
ARTICLE II TERMS OF LENDING
Section 2.1 THE COMMITMENTS. Subject to the terms and conditions
hereof and in reliance upon the warranties of the Borrower herein, each Bank
agrees, severally and not jointly, to make loans (each, a "Loan" and,
collectively, the "Loans") to the Borrower from time to time from the date
hereof until the Termination Date, during which period the Borrower may repay
and reborrow in accordance with the provisions hereof, provided, that the
aggregate unpaid principal amount of the Loans of any Bank at any one time
6
outstanding shall not exceed its Commitment. The Loans shall be made by the
Banks on a pro rata basis, calculated for each Bank based on its Percentage.
Section 2.2 ADVANCE OPTIONS. The Loan shall be constituted of Daily
Pricing Advances, Eurodollar Advances and Reference Rate Advances, as shall
be selected by the Borrower, except as otherwise provided herein. Any
combination of types of Advances may be outstanding at the same time, except
that the total number of outstanding Daily Pricing Advances and Eurodollar
Advances shall not exceed 6 at any one time. Each Eurodollar Advance shall be
in a minimum amount of $500,000 or in an integral multiple of $100,000 above
such amount. Each Daily Pricing Advance and Reference Rate Advance shall be
in an amount that is an integral multiple of $100,000. The Loans may not be
made as, or converted into or continued as, Daily Pricing Advances after
September 30, 1999.
Section 2.3 BORROWING PROCEDURES.
(a) REQUEST BY XXXXXXXX. Any request by the Borrower for a Loan shall be
in writing, or by telephone promptly confirmed in writing, and must be
given so as to be received by the Agent not later than:
(i) 10:00 a.m., Minneapolis time, on the date of the requested
Loan, if the Loan shall be comprised of Daily Pricing Advances or
Reference Rate Advances; or
(ii) 12:00 noon, Minneapolis time, three Business days prior to the
date of the requested Loan, if the Loan shall be, or shall include, a
Eurodollar Advance.
Each request for a Loan shall specify (1) the borrowing date (which shall
be a Business Day), (2) the amount of such Loan and the type or types of
Advances comprising such Loan, and (3) if such Loan shall include
Eurodollar Advances, the initial Interest Periods for such Advances.
(b) FUNDING OF AGENT. The Agent shall promptly notify each other Bank of
the receipt of such request, the matters specified therein, and of such
Bank's Percentage of the requested Loans. On the date of the requested
Loans, each Bank shall provide its share of the requested Loans to the
Agent in immediately available funds not later than 11:00 a.m.,
Minneapolis time. Unless the Agent determines that any applicable
condition specified in ARTICLE VI has not been satisfied, the Agent will
make the requested Loans available to the Borrower at the Agent's
principal office in Minneapolis, Minnesota in immediately available funds
not later than 5:00 p.m. (Minneapolis time) on the lending date so
requested. If the Agent has made a Loan to the Borrower on behalf of a
Bank but has not received the amount of such Loan from such Bank by the
time herein required, such Bank shall pay interest to the Agent on the
amount so advanced at the overnight Federal Funds rate from the date of
such Loan to the date funds are received by the Agent from such Bank, such
interest to be payable with such remittance from such Bank of the
principal amount of such Loan (provided, however, that the Agent shall not
make any Loan on behalf of a Bank if the Agent has received prior notice
from such Bank that it will not make
7
such Loan). If the Agent does not receive payment from such Bank by the
next Business Day after the date of any Loan, the Agent shall be entitled
to recover such Loan, with interest thereon at the rate then applicable to
the such Loan, on demand, from the Borrower, without prejudice to the
Agent's and the Borrower's rights against such Bank. If such Bank pays the
Agent the amount herein required with interest at the overnight rate
before the Agent has recovered from the Borrower, such Bank shall be
entitled to the interest payable by the Borrower with respect to the Loan
in question accruing from the date the Agent made such Loan.
2.4 CONTINUATION OR CONVERSION OF LOANS. The Borrower may elect to (i)
continue any outstanding Eurodollar Advance from one Interest Period into a
subsequent Interest Period to begin on the last day of the earlier Interest
Period, or (ii) convert any outstanding Advance into another type of Advance
(on the last day of an Interest Period only, in the instance of a Eurodollar
Advance), by giving the Agent notice in writing, or by telephone promptly
confirmed in writing, given so as to be received by the Agent not later than:
(a) 10:00 a.m., Minneapolis time, on the date of the requested
continuation or conversion, if the continuing or converted Advance shall
be a Daily Pricing Advance or Reference Rate Advance; or
(b) 12:00 noon, Minneapolis time, three Business days prior to the date
of the requested continuation or conversion, if the continuing or
converted Advance shall be a Eurodollar Advance.
Each notice of continuation or conversion of an Advance shall specify (i) the
effective date of the continuation or conversion date (which shall be a
Business Day), (ii) the amount and the type or types of Advances following
such continuation or conversion (subject to the limitation on amount set
forth in SECTION 2.2), and (iii) for continuation as, or conversion into,
Eurodollar Advances, the Interest Periods for such Advances. Absent timely
notice of continuation or conversion, each Eurodollar Advance shall
automatically convert into a Reference Rate Advance on the last day of an
applicable Interest Period, unless paid in full on such last day. No Advance
shall be continued as, or converted into, a Eurodollar Advance if the
shortest Interest Period for such Advance may not transpire prior to the
Termination Date or if a Default or Event of Default shall exist.
Section 2.5 THE NOTES. The Loans of each Bank shall be evidenced by a
promissory note of the Borrower (the "Notes"), substantially in the form of
EXHIBIT A hereto, in the amount of such Bank's Commitment originally in
effect and dated as of the date of this Agreement. The Banks shall enter in
their respective records the amount of each Loan and Advance, the rate of
interest borne by each Advance and the payments made on the Loans, and such
records shall be deemed conclusive evidence of the subject matter thereof,
absent manifest error.
Section 2.6 FUNDING LOSSES. The Borrower will indemnify each Bank upon
demand against any loss or expense which such Bank may sustain or incur
(including, without limitation, any loss or expense sustained or incurred in
obtaining, liquidating or employing deposits or other funds acquired to
effect, fund, or maintain any Advance) as a consequence of (i) any failure of
the Borrower to make any payment when due of any
8
amount due hereunder or under the Note, (ii) any failure of the Borrower to
borrow, continue or convert an Advance on a date specified therefor in a
notice thereof, or (iii) any payment (including, without limitation, any
payment pursuant to SECTION 4.2, 4.3 or 10.2), prepayment or conversion of
any Eurodollar Advance on a date other than the last day of the Interest
Period for such Advance. Determinations by each Bank for purposes of this
SECTION 2.6 of the amount required to indemnify such Bank shall be conclusive
in the absence of manifest error.
ARTICLE III INTEREST AND FEES
Section 3.1 INTEREST.
(a) EURODOLLAR ADVANCES. The unpaid principal amount of each Eurodollar
Advance shall bear interest prior to maturity at a rate per annum equal
to the Eurodollar Rate (Reserve Adjusted) in effect for each Interest
Period for such Eurodollar Advance plus the higher of (i) the Applicable
Margin PLUS any applicable Interest Step-Ups, or (ii) the Alternative
Applicable Margin.
(b) DAILY PRICING ADVANCES. The unpaid principal amount of each Daily
Pricing Advance shall bear interest prior to maturity at a rate per annum
equal to the Eurodollar Rate (Reserve Adjusted) in effect for each
Business Day plus the higher of (i) the Applicable Margin PLUS any
applicable Interest Step-Ups, or (ii) the Alternative Applicable Margin.
(c) REFERENCE RATE ADVANCES. The unpaid principal amount of each
Reference Rate Advance shall bear interest prior to maturity at a rate per
annum equal to the Reference Rate.
(d) INTEREST AFTER MATURITY. Any amount of the Loans not paid when due,
whether at the date scheduled therefor or earlier upon acceleration, shall
bear interest until paid in full at a rate per annum equal to the greater
of (i) 1.00% in excess of the rate applicable to the unpaid principal
amount immediately before it became due, or (ii) 1.00% in excess of the
Reference Rate in effect from time to time.
Section 3.2 FACILITY FEE. The Borrower shall pay fees (the "Facility
Fees") to the Agent for the account of the Banks in an amount determined by
applying a rate of the Applicable Facility Fee Rate per annum to the average
daily amount of the Commitments of the respective Banks (whether used or
unused) for the period from the date hereof to the Termination Date.
Section 3.3 COMPUTATION. Interest and Facility Fees shall be computed
on the basis of actual days elapsed and a year of 360 days.
Section 3.4 PAYMENT DATES. Accrued interest under SECTION 3.1(a), (b)
and (c) and Facility Fees shall be payable on the applicable Payment Dates.
Accrued interest under SECTION 3.1(d) shall be payable on demand.
9
Section 3.5 AGENT'S FEE LETTER. The Borrower shall pay to the Agent
the fees described in a letter dated as of August 13, 1999 by the Agent,
accepted by the Borrower.
ARTICLE IV PAYMENTS, PREPAYMENTS, REDUCTION OR TERMINATION
OF THE CREDIT AND SETOFF
Section 4.1 REPAYMENT. Principal of the Loans, together with all
accrued and unpaid interest thereon, shall be due and payable on the
Termination Date.
Section 4.2 OPTIONAL PREPAYMENTS. The Borrower may prepay the Loans,
in whole or in part, at any time subject to the provisions of SECTION 2.6,
without any other premium or penalty. Any such prepayment must be accompanied
by accrued and unpaid interest on the amount prepaid. Each partial prepayment
shall be in an amount of $500,000 or an integral multiple thereof.
Section 4.3 OPTIONAL REDUCTION OR TERMINATION OF COMMITMENTS. The
Borrower may, at any time, upon no less than 3 Business Days prior written or
telephonic notice received by the Agent, reduce the Commitments of all Banks,
such reduction to be in a minimum amount of $1,000,000 or an integral
multiple thereof and to be applied ratably to the Commitments of the
respective Banks. Upon any reduction in the Commitments pursuant to this
Section, the Borrower shall pay to the Agent for the account of the Banks the
amount, if any, by which the aggregate unpaid principal amount of outstanding
Loans exceeds the total Commitments of all Banks as so reduced. Amounts so
paid cannot be reborrowed. The Borrower may, at any time, upon not less than
3 Business Days prior written notice to the Agent, terminate the Commitments
in their entirety. Upon termination of the Commitments pursuant to this
Section, the Borrower shall pay to the Agent for the account of the Banks the
full amount of all outstanding Loans, all accrued and unpaid interest
thereon, all unpaid Facility Fees accrued to the date of such termination and
all other unpaid obligations of the Borrower to the Banks hereunder. All
payment described in this Section is subject to the provisions of SECTION 2.6.
Section 4.4 MANDATORY REDUCTION OF COMMITMENTS. If the Termination Date
has not occurred sooner, the Commitments shall be reduced by (a) $50,000,000
upon the closing of the New Syndicated Agreement, and (b) $50,000,000 upon the
closing of any New Placement Agreement (provided that any reduction of the
Commitments under SECTION 4.3 shall be applied ratably to reduce the dollar
amounts of such mandatory reductions). Upon any reduction in the Commitments
pursuant to this Section, the Borrower shall pay to the Agent for the account of
the Banks the amount, if any, by which the aggregate unpaid principal amount of
outstanding Loans exceeds the total Commitments of all Banks as so reduced.
Section 4.5 PAYMENTS. Payments and prepayments of principal of, and
interest on, the Notes and all fees, expenses and other obligations under the
Loan Documents shall be made without set-off or counterclaim in immediately
available funds not later than 2:00 p.m., Minneapolis time, on the dates due
at the main office of the Agent in Minneapolis, Minnesota. Funds received on
any day after such time shall be deemed to have been received on the next
Business Day. The Agent shall promptly distribute in like funds to
10
each Bank its Percentage share of each such payment of principal, interest
and Facility Fees. Subject to the definition of the term "Interest Period",
whenever any payment to be made hereunder or on the Notes shall be stated to
be due on a day which is not a Business Day, such payment shall be made on
the next succeeding Business Day and such extension of time shall be included
in the computation of any interest or fees.
Section 4.6 PRORATION OF PAYMENTS. If any Bank or other holder of a
Loan shall obtain any payment or other recovery (whether voluntary,
involuntary, by application of offset, pursuant to the guaranty hereunder, or
otherwise) on account of principal of, interest on, or fees with respect to
any Loan, or payment of any Letter of Credit Obligations, in any case in
excess of the share of payments and other recoveries of other Banks or
holders, such Bank or other holder shall purchase from the other Banks or
holders, in a manner to be specified by the Agent, such participations in the
Loans held by such other Banks or holders as shall be necessary to cause such
purchasing Bank or other holder to share the excess payment or other recovery
ratably with each of such other Banks or holders; PROVIDED, HOWEVER, that if
all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing Bank or holder, the purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.
ARTICLE V ADDITIONAL PROVISIONS RELATING TO LOANS
Section 5.1 INCREASED COSTS. If, as a result of any law, rule,
regulation, treaty or directive, or any change therein or in the
interpretation or administration thereof, or compliance by the Banks with any
request or directive (whether or not having the force of law) from any court,
central bank, governmental authority, agency or instrumentality, or
comparable agency:
(a) any tax, duty or other charge with respect to any Loan, the Notes
or the Commitments is imposed, modified or deemed applicable, or the
basis of taxation of payments to any Bank of interest or principal of
the Loans or of the Facility Fees (other than taxes imposed on the
overall net income of such Bank by the jurisdiction in which such Bank
has its principal office) is changed;
(b) any reserve, special deposit, special assessment or similar
requirement against assets of, deposits with or for the account of, or
credit extended by, any Bank is imposed, modified or deemed applicable;
(c) any increase in the amount of capital required or expected to be
maintained by any Bank or any Person controlling such Bank is imposed,
modified or deemed applicable; or
(d) any other condition affecting this Agreement or the Commitments is
imposed on any Bank or the relevant funding markets;
and such Bank determines that, by reason thereof, the cost to such Bank of
making or maintaining the Loans, issuing or participating in the Letters of
Credit or extending its Commitment is increased, or the amount of any sum
receivable by such Bank hereunder or under the Notes in respect of any Loan
is reduced;
11
THEN, the Borrower shall pay to such Bank upon demand such additional amount or
amounts as will compensate such Bank (or the controlling Person in the instance
of (c) above) for such additional costs or reduction (provided that the Banks
have not been compensated for such additional cost or reduction in the
calculation of the Eurodollar Reserve Rate). Determinations by each Banks for
purposes of this SECTION 5.1 of the additional amounts required to compensate
such Bank shall be conclusive in the absence of manifest error. In determining
such amounts, the Banks may use any reasonable averaging, attribution and
allocation methods.
Section 5.2 DEPOSITS UNAVAILABLE OR INTEREST RATE UNASCERTAINABLE OR
INADEQUATE; IMPRACTICABILITY. If the Agent determines (which determination
shall be conclusive and binding on the parties hereto) that:
(a) deposits of the necessary amount for the relevant Interest Period
for any Eurodollar Advance are not available in the relevant markets or
that, by reason of circumstances affecting such market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Interbank
Rate for such Interest Period;
(b) the Eurodollar Rate (Reserve Adjusted) will not adequately and
fairly reflect the cost to the Banks of making or funding the Daily
Pricing Advances or the Eurodollar Advance for a relevant Interest
Period; or
(c) the making or funding of the Daily Pricing Advances or the
Eurodollar Advances has become impracticable as a result of any event
occurring after the date of this Agreement which, in the opinion of the
Agent, materially and adversely affects such Advances or any Bank's
Commitment or the relevant market;
the Agent shall promptly give notice of such determination to the Borrower,
and (i) any notice of a new Daily Pricing Advances or Eurodollar Advance
previously given by the Borrower and not yet borrowed or converted shall be
deemed to be a notice to make a Reference Rate Advance, and (ii) the Borrower
shall be obligated to either prepay in full any outstanding Daily Pricing
Advances or Eurodollar Advances, without premium or penalty on the last day
of the current Interest Period with respect thereto or convert any such Daily
Pricing Advances or Eurodollar Advance to a Reference Rate Advance on such
last day.
Section 5.3 CHANGES IN LAW RENDERING EURODOLLAR ADVANCES UNLAWFUL. If
at any time due to the adoption of any law, rule, regulation, treaty or
directive, or any change therein or in the interpretation or administration
thereof by any court, central bank, governmental authority, agency or
instrumentality, or comparable agency charged with the interpretation or
administration thereof, or for any other reason arising subsequent to the
date of this Agreement, it shall become unlawful or impossible for any Bank
to make or fund any Daily Pricing Advances or Eurodollar Advance, the
obligation of such Bank to provide such Advance shall, upon the happening of
such event, forthwith be suspended for the duration of such illegality or
impossibility. If any such event shall make it unlawful or impossible for the
Bank to continue any Daily Pricing Advances or Eurodollar Advance previously
made by it hereunder, such Bank shall, upon the happening of such event,
notify the Agent and the Borrower thereof in writing, and the Borrower shall,
at the time notified
12
by such Bank, either convert each such unlawful Advance to a Reference Rate
Advance or repay such Advance in full, together with accrued interest
thereon, subject to the provisions of SECTION 2.6.
Section 5.4 DISCRETION OF THE BANKS AS TO MANNER OF FUNDING.
Notwithstanding any provision of this Agreement to the contrary, each Bank
shall be entitled to fund and maintain its funding of all or any part of the
Loans in any manner it elects; it being understood, however, that for
purposes of this Agreement, all determinations hereunder shall be made as if
the Banks had actually funded and maintained each Daily Pricing Advances and
Eurodollar Advance during the Interest Period for such Advance through the
purchase of deposits having a term corresponding to such Interest Period and
bearing an interest rate equal to the Eurodollar Interbank Rate for such
Interest Period (whether or not any Bank shall have granted any
participations in such Advances).
ARTICLE VI CONDITIONS PRECEDENT
Section 6.1 CONDITIONS OF INITIAL LOAN. The obligation of the Banks to
make the initial Loan hereunder shall be subject to the satisfaction of the
conditions precedent, in addition to the applicable conditions precedent set
forth in SECTION 6.2 below, that the Agent shall have received all of the
following, in form and substance satisfactory to the Agent, each duly
executed and certified or dated the date of the initial Loan or such other
date as is satisfactory to the Agent:
(a) The Notes executed by a duly authorized officer (or officers) of
the Borrower.
(b) A certificate or certificates of the Secretary or an Assistant
Secretary of the Borrower, attesting to and attaching (i) a copy of the
corporate resolution of the Borrower authorizing the execution, delivery
and performance of the Loan Documents, (ii) an incumbency certificate
showing the names and titles, and bearing the signatures of, the
officers of the Borrower authorized to execute the Loan Documents, (iii)
a copy of the Articles or Certificate of Incorporation of the Borrower
with all amendments thereto, and (iv) a copy of the By-Laws of the
Borrower with all amendments thereto.
(c) A Certificate of Good Standing for the Borrower in the jurisdiction
of its incorporation, certified by the appropriate governmental
officials.
(d) An opinion of counsel to the Borrower, addressed to the Bank, in
substantially the form of EXHIBIT B.
Section 6.2 CONDITIONS PRECEDENT TO ALL LOANS. The obligation of the
Banks to make any Loan hereunder (including the initial Loan) shall be subject
to the satisfaction of the following conditions precedent (and any request for a
Loan shall be deemed a representation and warranty by the Borrower that the
following have been satisfied):
(a) Before and after giving effect to such Loan, the representation and
warranties contained in ARTICLE VII shall be true and correct, as though
made on the date of such Loan.
13
(b) Before and after giving effect to such Loan, no Default or Event of
Default shall have occurred and be continuing.
ARTICLE VII REPRESENTATIONS AND WARRANTIES
Section 7.1 MULTI-FACILITY CREDIT AGREEMENT. To induce the Agent and
the Banks to enter into this Agreement, to grant the Commitments and to make
Loans hereunder, the hereby makes the representations and warranties contained
in ARTICLE XI of the Multi-Facility Credit Agreement, which provisions, together
with the related definitions, as in effect on the date hereof are hereby
incorporated herein by reference (MUTATIS MUTANDIS) for the benefit of the Agent
and the Banks hereunder and shall continue for the purposes of this Article VII
regardless of the termination of the Multi-Facility Credit Agreement or the
Agent's participation therein; PROVIDED that (a) the date "December 31, 1995"
contained in Section 11.4 of the Multi-Facility Credit Agreement shall be deemed
to mean "December 31, 1998"; (b) references in ARTICLE XI of the Multi-Facility
Credit Agreement to the (i) "Agreement" and "Loan Documents," (ii) "Banks,"
(iii) "Loans" and (iv) "Administrative Agent" shall be deemed to mean this
Agreement, the Loan Documents as defined hereunder, the Banks, the Agent and the
Loans, each hereunder, respectively; and (c) all amendments to the
Multi-Facility Credit Agreement before or after the date hereof shall be given
effect of purposes of this Article VII.
Section 7.2 NEW SYNDICATED AGREEMENT. Upon the closing of the New
Syndicated Agreement, if the Commitment or Loans remain outstanding hereunder,
the Agent, upon direction of the Required Banks given at their discretion, may
elect to have the representations and warranties set forth in the New Syndicated
Agreement incorporated into this Agreement in place of those of the
Multi-Facility Credit Agreement incorporated as provided in SECTION 7.1 above,
and the Agent shall give notice to the Borrower of such election, together with
any conforming drafting provisions reasonably necessary for such incorporation.
Section 7.3 ADDITIONAL REPRESENTATION. The Borrower hereby makes the
following additional representation, which shall be deemed an representation
under such Article XI for purpose of the references thereto in Article X hereof:
The Borrower is in the process of reviewing its operations and
those of its Subsidiaries and has requested from third parties with
which the Borrower of any of its Subsidiaries has a material
relationship a certification of compliance, in order to evaluate the
extent to which the business or operations of the Borrower and its
Subsidiaries will be affected by the Year 2000 problem. As a result of
such review, the Borrower has no reason to believe and does not believe
that the Year 2000 problem will have a material adverse effect on the
business, consolidated financial position, stockholders' equity or
results of operations of the Borrower and its Subsidiaries, taken as a
whole.
14
ARTICLE VIII COVENANTS
Section 8.1 MULTI-FACILITY CREDIT AGREEMENT. So long as this Agreement
shall remain in effect and until the Commitments have been terminated and all
amounts owing hereunder shall have been paid in full, the Borrower shall
comply with and be bound by the covenants contained in ARTICLE XII of the
Multi-Facility Credit Agreement and will provide all of the information and
notice required by such Article, which provisions, together with the related
definitions, as in effect on the date hereof are hereby incorporated herein
by reference (MUTATIS MUTANDIS) for the benefit of the Agent and the Banks
hereunder and shall continue for the purposes of this Article VIII regardless
of the termination of the Multi-Facility Credit Agreement or the Agent's
participation therein; PROVIDED, that (i) references to the "Agent," "Banks"
or the "Required Banks" shall be deemed to mean the Agent, Xxxxx and Required
Banks, hereunder; and (ii) references to "Default" or "Event of Default"
shall be deemed to mean a Default or Event of Default hereunder; and (ii) all
amendments to the Multi-Facility Credit Agreement before or after the date
hereof shall be given effect of purposes of this Article VIII.
Section 8.2 NEW SYNDICATED AGREEMENT. Upon the closing of the New
Syndicated Agreement, if the Commitment or Loans remain outstanding
hereunder, the Agent, upon direction of the Required Banks given at their
discretion, may elect to have the covenants set forth in the New Syndicated
Agreement incorporated into this Agreement in place of those of the
Multi-Facility Credit Agreement incorporated as provided in SECTION 8.1
above, and the Agent shall give notice to the Borrower of such election,
together with any conforming drafting provisions reasonably necessary for
such incorporation.
Section 8.3 INFORMATION. The Borrower has also agreed to provide to
the Agent all information required by the Agent to determine the Applicable
Margin and Alternative Applicable Margin, certified by the appropriate
officer of the Borrower if so requested by the Bank.
ARTICLE IX EVENTS OF DEFAULT
Section 9.1 MULTI-FACILITY CREDIT AGREEMENT. If any of the events
described in ARTICLE XIII of the Multi-Facility Credit Agreement (each an
"EVENT OF DEFAULT") (which provisions, together with the related definitions,
as in effect on the date hereof are hereby incorporated herein by reference
(MUTATIS MUTANDIS) for the benefit of the Banks and the Agent hereunder and
shall continue for the purposes of this Article IX regardless of the
termination of the Multi-Facility Credit Agreement or the Agent's
participation therein, or any amendment of, or any consent to any deviation
from or other modification of, the Multi-Facility Credit Agreement; PROVIDED
that (a) references to (i) any "document delivered pursuant to this
Agreement," (ii) "Loan" or (iii) "Fee" shall be deemed to mean this
Agreement, the Loan Documents as defined hereunder, the Loans hereunder and
the Facility Fee hereunder, respectively; (b) references to Sections in
ARTICLE XIII shall be deemed to be references to such clauses as incorporated
herein by reference; and (c) all amendments to the Multi-Facility Credit
Agreement before or after the date hereof shall be given effect of purposes
of this Article IX.
15
Section 9.2 NEW SYNDICATED AGREEMENT. Upon the closing of the New
Syndicated Agreement, if the Commitment or Loans remain outstanding
hereunder, the Agent, upon direction of the Required Banks given at their
discretion, may elect to have the events of default set forth in the New
Syndicated Agreement incorporated into this Agreement in place of those of
the Multi-Facility Credit Agreement incorporated as provided in SECTION 9.1
above, and the Agent shall give notice to the Borrower of such election,
together with any conforming drafting provisions reasonably necessary for
such incorporation.
Section 9.3 EXISTING CREDIT AGREEMENT. Any Event of Default under the
Existing Credit Agreement shall constitute an Event of Default hereunder.
Section 9.4 REMEDIES. If (a) any Event of Default under which
termination of the relevant commitments and acceleration of loans occurs
automatically without notice (for example, an Event of Default under SECTIONS
13.1(2) of the Multi-Facility Credit Agreement) shall occur, the Commitments
shall automatically terminate and the outstanding unpaid principal balance of
the Notes, the accrued interest thereon and all other obligations of the
Borrower to the Banks and the Agent under the Loan Documents shall
automatically become immediately due and payable; or (b) any other Event of
Default shall occur and be continuing, then the Agent may take any or all of
the following actions (and shall take any or all of the following actions on
direction of the Required Banks): (i) declare the Commitments terminated,
whereupon the Commitments shall terminate, (ii) declare that the outstanding
unpaid principal balance of the Notes, the accrued and unpaid interest
thereon and all other obligations of the Borrower to the Banks and the Agent
under the Loan Documents to be forthwith due and payable, whereupon the
Notes, all accrued and unpaid interest thereon and all such obligations shall
immediately become due and payable, in each case without demand or notice of
any kind, all of which are hereby expressly waived, anything in this
Agreement or in the Notes to the contrary notwithstanding, (iii) exercise all
rights and remedies under any other instrument, document or agreement between
the Borrower and the Agent or the Banks, and (iv) enforce all rights and
remedies under any applicable law.
In addition to the remedies set forth in the foregoing paragraph, upon
the occurrence of any Event of Default or at any time thereafter while such
Event of Default continues, each Bank or any other holder of the Note may
offset any and all balances, credits, deposits (general or special, time or
demand, provisional or final), accounts or monies of the Borrower then or
thereafter with such Bank or such other holder, or any obligations of such
Bank or such other holder of the Note, against the Indebtedness then owed by
the Borrower to such Bank.
ARTICLE X THE AGENT
Section 10.1 APPOINTMENT AND GRANT OF AUTHORITY. Each Bank hereby
appoints the Agent, and the Agent xxxxxx agrees to act, as agent under this
Agreement. The Agent shall have and may exercise such powers under this
Agreement as are specifically delegated to the Agent by the terms hereof and
thereof, together with such other powers as are reasonably
16
incidental thereto. Each Bank hereby authorizes, consents to, and directs the
Borrower to deal with the Agent as the true and lawful agent of such Bank to
the extent set forth herein.
Section 10.2 NON RELIANCE ON AGENT. Each Bank agrees that it has,
independently and without reliance on the Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis of the Borrower and decision to enter into this Agreement and
that it will, independently and without reliance upon the Agent, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking or not taking
action under this Agreement. The Agent shall not be required to keep informed
as to the performance or observance by the Borrower of this Agreement and the
Loan Documents or to inspect the properties or books of the Borrower. Except
for notices, reports and other documents and information expressly required
to be furnished to the Banks by the Agent hereunder, the Agent shall not have
any duty or responsibility to provide any Bank with any credit or other
information concerning the affairs, financial condition or business of the
Borrower (or any of its related companies) which may come into the Agent's
possession.
Section 10.3 RESPONSIBILITY OF THE AGENT AND OTHER MATTERS.
(a) The Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement and those duties and liabilities
shall be subject to the limitations and qualifications set forth in this
Section. The duties of the Agent shall be mechanical and administrative
in nature.
(b) Neither the Agent nor any of its directors, officers or employees
shall be liable for any action taken or omitted (whether or not such
action taken or omitted is within or without the Agent's
responsibilities and duties expressly set forth in this Agreement) under
or in connection with this Agreement, or any other instrument or
document in connection herewith, except for gross negligence or willful
misconduct. Without limiting the foregoing, neither the Agent nor any of
its directors, officers or employees shall be responsible for, or have
any duty to examine:
(i) the genuineness, execution, validity, effectiveness,
enforceability, value or sufficiency of (a) this Agreement, or the
Notes, or (b) any document or instrument furnished pursuant to or
in connection with this Agreement or the Notes;
(ii) the collectibility of any amounts owed by the Borrower;
(iii) any recitals or statements or representations or warranties
in connection with this Agreement or the Notes;
(iv) any failure of any party to this Agreement to receive any
communication sent; or
(v) the assets, liabilities, financial condition, results of
operations, business or creditworthiness of the Borrower.
17
(c) The Agent shall be entitled to act, and shall be fully protected in
acting upon, any communication in whatever form believed by the Agent in
good faith to be genuine and correct and to have been signed or sent or
made by a proper person or persons or entity. The Agent may consult
counsel and shall be entitled to act, and shall be fully protected
in-any action taken in good faith, in accordance with advice given by
counsel. The Agent may employ agents and attorneys-in-fact and shall not
be liable for the default or misconduct of any such agents or
attorneys-in-fact selected by the Agent with reasonable care. The Agent
shall not be bound to ascertain or inquire as to the performance or
observance of any of the terms, provisions or conditions of this
Agreement or the Notes on the Borrower's part.
Section 10.4 ACTION ON INSTRUCTIONS. The Agent shall be entitled to
act or refrain from acting, and in all cases shall be fully protected in
acting or refraining from acting under this Agreement or the Notes or any
other instrument or document in connection herewith or therewith in
accordance with instructions in writing from (i) the Required Banks except
for instructions which under the express provisions hereof must be received
by the Agent from all the Banks, and (ii) in the case of such instructions,
from all the Banks.
Section 10.5 INDEMNIFICATION. To the extent the Borrower does not
reimburse and save the Agent harmless according to the terms hereof for and
from all costs, expenses and disbursements in connection herewith or with the
other Loan Documents, such costs, expenses and disbursements to the extent
reasonable shall be borne by the Banks ratably in accordance with their
Percentages and the Banks hereby agree on such basis (a) to reimburse the
Agent for all such reasonable costs, expenses and disbursements on request
and (b) to indemnify and save harmless the Agent against and from any and all
losses, obligations, penalties, actions, judgments and suits and other
reasonable costs, expenses and disbursements of any kind or nature whatsoever
which may be imposed on, incurred by or asserted against the Agent, other
than as a consequence of actual gross negligence or willful misconduct on the
part of the Agent, arising out of or in connection with this Agreement or the
Notes or any instrument or document in connection herewith or therewith, or
any request of the Banks, including without limitation the reasonable costs,
expenses and disbursements in connection with defending itself against any
claim or liability, or answering any subpoena, related to the exercise or
performance of any of its powers or duties under this Agreement or the other
Loan Documents or the taking of any action under or in connection with this
Agreement or the Notes.
Section 10.6 U.S. BANK NATIONAL ASSOCIATION AND AFFILIATES. With
respect to U.S. Bank National Association's Commitment and any Loans by U.S.
Bank National Association under this Agreement and any Note and any interest
of U.S. Bank National Association in any Note, U.S. Bank National Association
shall have the same rights, powers and duties under this Agreement and such
Note as any other Bank and may exercise the same as though it were not the
Agent. U.S. Bank National Association and its affiliates may accept deposits
from, lend money to, and generally engage, and continue to engage, in any
kind of business with the Borrower as if U.S. Bank National Association were
not the Agent.
Section 10.7 NOTICE TO HOLDER OF NOTES. The Agent may deem and treat
the payees of the Notes as the owners thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof has been filed
with the Agent. Any request, authority or
18
consent of any holder of any Note shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Note.
Section 10.8 SUCCESSOR AGENT. The Agent may resign at any time by
giving at least 30 days written notice thereof to the Banks and the Borrower.
Upon any such resignation, the Required Banks shall have the right to appoint
a successor Agent. If no successor Agent shall have been appointed by the
Required Xxxxx and shall have accepted such appointment within 30 days after
the retiring Agent's giving notice of resignation, then the retiring Agent
may, but shall not be required to, on behalf of the Banks, appoint a
successor Agent.
ARTICLE XI MISCELLANEOUS
Section 11.1 NO WAIVER AND AMENDMENT. No failure on the part of the
Banks or the holder of the Notes to exercise and no delay in exercising any
power or right hereunder or under any other Loan Document shall operate as a
waiver thereof; nor shall any single or partial exercise of any power or
right preclude any other or further exercise thereof or the exercise of any
other power or right. The remedies herein and in any other instrument,
document or agreement delivered or to be delivered to the Banks hereunder or
in connection herewith are cumulative and not exclusive of any remedies
provided by law. No notice to or demand on the Borrower not required
hereunder or under the Notes shall in any event entitle the Borrower to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the right of the Banks or the holder of the Notes to
any other or further action in any circumstances without notice or demand.
Section 11.2 AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Borrower therefrom,
shall in any event be effective unless the same shall be in writing and
signed by the Borrower and the Agent upon direction of the required Banks and
then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; PROVIDED, HOWEVER, that no
amendment, waiver or consent shall, unless agreed to by the Agent and all of
the Banks:
(a) increase the amounts of or extend the terms of the Commitments or
subject the Banks to any additional obligations;
(b) reduce the principal of, or interest on, the Notes or any fees or
other amounts payable hereunder;
(c) postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder;
(d) change the definition of Required Banks or amend this SECTION 11.2
PROVIDED, FURTHER that amendments, waivers or consents affecting the rights
of the Agent shall also require the consent of the Agent.
Section 11.3 ASSIGNMENTS AND PARTICIPATIONS.
19
(a) ASSIGNMENTS. Each Bank shall have the right, subject to the
further provisions of this SECTIONS 11.3, to sell or assign all or any
part of its Commitments, Loans, Notes, and other rights and obligations
under this Agreement and related documents (such transfer, and
"Assignment") to any commercial lender, other financial institution or
other entity (an "Assignee"). Upon such Assignment becoming effective as
provided in SECTION 11.3(b), the assigning Bank shall be relieved from
the portion of its Commitment, obligations to indemnify the Agent and
other obligations hereunder to the extent assumed and undertaken by the
Assignee, and to such extent the Assignee shall have the rights and
obligations of a "Bank" hereunder. Notwithstanding the foregoing, unless
otherwise consented to by the Borrower and the Agent, each Assignment
shall be in the initial principal amount of not less than $5,000,000 in
the aggregate for all Loans and Commitments assigned, or an integral
multiple of $1,000,000 if above such amount. Each Assignment shall be
documented by an agreement between the assigning Bank and the Assignee
(an "Assignment and Assumption Agreement") in form and substance
satisfactory to the Agent.
(b) EFFECTIVENESS OF ASSIGNMENTS. An Assignment shall become effective
hereunder when all of the following shall have occurred: (i) the Agent
and the Borrower shall have been given notice of the Assignment and
shall have given prior written consent to such Assignment, unless the
Assignee is already a Bank under this Agreement, provided, that consent
by the Borrower shall not be unreasonably withheld and that the
Borrower's consent shall not be required if an Event of Default shall
have occurred and continued hereunder, (ii) either the assigning Bank or
the Assignee shall have paid a processing fee of $3,500 to the Agent for
its own account, (iii) the Assignee shall have submitted the assignment
document in form satisfactory to the Agent, in which the Assignee shall
have agreed in writing to have irrevocably assumed and undertaken the
transferred portion of the assigning Bank's obligations hereunder
(including without limitation the obligations to indemnify the Agent
hereunder), to the Agent with a copy for the Borrower, and shall have
provided to the Agent information the Agent shall have reasonably
requested to make payments to the Assignee, and (iv) the assigning Bank
and the Agent shall have agreed upon a date upon which the Assignment
shall become effective. Upon the Assignment becoming effective, (x) if
requested by the assigning Bank, the Agent and the Borrower shall make
appropriate arrangements so that new Notes are issued to the assigning
Bank and the Assignee; and (y) the Agent shall forward all payments of
interest, principal, fees and other amounts that would have been made to
the assigning Bank, in proportion to the percentage of the assigning
Bank's rights transferred, to the Assignee.
(c) PARTICIPATIONS. Each Bank shall have the right, subject to the
further provisions of this SECTION 11.3, to grant or sell a
participation in all or any part of its Loans, Notes and Commitments (a
"Participation") to any commercial lender, other financial institution
or other entity (a "Participant") without the consent of the Borrower,
the Agent of any other party hereto. The Borrower agrees that if amounts
outstanding under this agreement and the Notes are due and unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to
have the right of setoff in respect of its
20
Participation in amounts owing under this Agreement and any Note to the
same extent as if the amount of its Participation were owing directly to
it as a Bank under this agreement or any note; provided, that such right
of setoff shall be subject to the obligation of such Participant to
share with the Banks, and the Banks agree to share with such
Participant, as provided in SECTION 4.5 hereof. The Borrower also agrees
that each Participant shall be entitled to the benefits of ARTICLE V
with respect to its Participation, provided, that no Participant shall
be entitled to receive any greater amount pursuant to such Sections than
the transferor Bank would have been entitled to receive in respect of
the amount of the Participation transferred by such transferor Bank to
such Participant had no such transfer occurred.
(d) LIMITATION OF RIGHTS OF ANY ASSIGNEE OR PARTICIPANT.
Notwithstanding anything in the foregoing to the contrary, except in the
instance of an Assignment that has become effective as provided in
SECTION 11.3(b), (i) no Assignee or Participant shall have any direct
rights hereunder, (ii) the Borrower, the Agent and the Banks other than
the assigning or selling Bank shall deal solely with the assigning or
selling Bank and shall not be obligated to extend any rights or make any
payment to, or seek any consent of, the Assignee or Participant, (iii)
no Assignment or Participation shall relieve the assigning or selling
Bank from its Commitment to make Loans hereunder or any of its other
obligations hereunder and such Bank shall remain solely responsible for
the performance hereof, the (iv) no Assignee or Participant, other than
an affiliate of the assigning or selling Bank, shall be entitled to
require such Bank to take or omit to take any action hereunder, except
that such Bank may agree with such Assignee or Participant that such
Bank will not, without such Assignee's or Participant's consent, take
any action which would, in the case of any principal, interest or fee in
which the Assignee or Participant has an ownership or beneficial
interest: (w) extend the final maturity of any Loans or extend the
Termination Date, (x) reduce the interest rate on the Loans or the rate
of Facility Fees, (y) forgive any principal of, or interest on, the
Loans or any fees, or (z) release all or substantially all of the
Collateral for the Loans.
(e) TAX MATTERS. No Bank shall be permitted to enter into any
Assignment or Participation with any Assignee or Participant who is not
a United States Person unless such Assignee or Participant represents
and warrants to such Bank that, as at the date of such Assignment or
Participation, it is entitled to receive interest payments without
withholding or deduction of any taxes and such Assignee or Participant
executes and delivers to such Bank on or before the date of execution
and delivery of documentation of such Participation or Assignment, a
United States Internal Revenue Service Form 1001 or 4224, or any
successor to either of such forms, as appropriate, properly completed an
claiming complete exemption from withholding and deduction of all
Federal Income Taxes. A "United States Person" means any citizen,
national or resident of the United States, any corporation or other
entity created or organized in or under the laws of the United States or
any political subdivision hereof or any estate or trust, in each case
that is not subject to withholding of United States Federal income taxes
or other taxes on payment of interest, principal of fees hereunder.
21
(f) INFORMATION. Each Bank may furnish any information concerning the
Borrower in the possession of such Bank from time to time to Assignees
and Participants and potential Assignees and Participants.
(g) FEDERAL RESERVE BANK. Nothing herein stated shall limit the right
of any Bank to assign any interest herein and in any Note to a Federal
Reserve Bank.
Section 11.4 COSTS, EXPENSES AND TAXES. The Borrower agrees, whether
or not any Loan is made hereunder, to pay on demand (without duplication) all
costs and expenses of the following persons (including the reasonable fees
and expenses of counsel and paralegals for such persons who may be employees
of such persons), incurred in connection with the following matters: (i) the
Agent in connection with the preparation, execution and delivery of the Loan
Documents and the preparation, negotiation and execution of any and all
amendments to each thereof and (ii) the Agent and the Banks in connection
with the enforcement of the Loan Documents. The Borrower agrees to pay, and
save the Banks harmless from all liability for, any stamp or other taxes
which may be payable with respect to the execution or delivery of the Loan
Documents. The Borrower agrees to indemnify and hold the Banks harmless from
any loss or expense which may arise or be created by the acceptance of
telephonic or other instructions for making Loans or disbursing the proceeds
thereof. The obligations of the Borrower under this SECTION 11.4 shall
survive any termination of this Agreement.
Section 11.5 NOTICES. Except when telephonic notice is expressly
authorized by this Agreement, any notice or other communication to any party
in connection with this Agreement shall be in writing and shall be sent by
manual delivery, telegram, telex, facsimile transmission, overnight courier
or United States mail (postage prepaid) addressed to such party at the
address specified on the signature page hereof, or at such other address as
such party shall have specified to the other party hereto in writing. All
periods of notice shall be measured from the date of delivery thereof if
manually delivered, from the date of sending thereof if sent by telegram,
telex or facsimile transmission, from the first Business Day after the date
of sending if sent by overnight courier, or from four days after the date of
mailing if mailed; PROVIDED, HOWEVER, that any notice to the Agent under
ARTICLE II hereof shall be deemed to have been given only when received by
the Agent.
Section 11.6 SUCCESSORS. This Agreement shall be binding upon the
Borrower, the Banks and the Agent and their respective successors and
assigns, and shall inure to the benefit of the Borrower, the Banks and the
Agent and the successors and assigns of the Banks. The Borrower shall not
assign its rights or duties hereunder without the written consent of the
Banks.
Section 11.7 SEVERABILITY. Any provision of the Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 11.8 SUBSIDIARY REFERENCES. The provisions of this Agreement
relating to Subsidiaries shall apply only during such times as the Borrower
has one or more Subsidiaries.
22
Section 11.9 CAPTIONS. The captions or headings herein and any table
of contents hereto are for convenience only and in no way define, limit or
describe the scope or intent of any provision of this Agreement.
Section 11.10 ENTIRE AGREEMENT. The Loan Documents embody the entire
agreement and understanding between the Borrower, the Banks and the Agent
with respect to the subject matter hereof and thereof. This Agreement
supersedes all prior agreements and understandings relating to the subject
matter hereof.
Section 11.11 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same instrument, and either of the parties hereto may execute this
Agreement by signing any such counterpart.
Section 11.12 GOVERNING LAW. THE VALIDITY, CONSTRUCTION AND
ENFORCEABILITY OF THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF
LAWS PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS OF THE UNITED
STATES APPLICABLE TO NATIONAL BANKS.
Section 11.13 CONSENT TO JURISDICTION. AT THE OPTION OF THE BANKS,
THIS AGREEMENT AND THE NOTES MAY BE ENFORCED IN ANY FEDERAL COURT OR
MINNESOTA STATE COURT SITTING IN MINNEAPOLIS OR ST. XXXX, MINNESOTA; AND THE
BORROWER CONSENTS TO THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES
ANY ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT CONVENIENT. IN THE EVENT THE
BORROWER COMMENCES ANY ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT
OR CONTRACT THEORY ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP
CREATED BY THIS AGREEMENT, THE BANKS AT ITS OPTION SHALL BE ENTITLED TO HAVE
THE CASE TRANSFERRED TO ONE OF THE JURISDICTIONS AND VENUES ABOVE-DESCRIBED,
OR IF SUCH TRANSFER CANNOT BE ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH
CASE DISMISSED WITHOUT PREJUDICE.
Section 11.14 WAIVER OF JURY TRIAL. THE BORROWER, THE BANKS AND THE
AGENT EACH WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS (a) UNDER THIS AGREEMENT OR UNDER ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE
DELIVERED IN CONNECTION HEREWITH OR (b) ARISING FROM ANY BANKING RELATIONSHIP
EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREE THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
23
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above.
PENTAIR, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Title: CFO
Waters Edge Plaza
0000 Xxxxxx Xxxx X0 Xxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: Chief Financial Officer
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
U.S. BANK NATIONAL ASSOCIATION
By: /s/ Xxxx X. Xxxxx
------------------------------------
Title: Senior Vice President
000 0xx Xxx. S.
Minneapolis, MN 55402-4302
Attention: Xxxx X. Xxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
24
