Exhibit 10.5
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CREDIT AGREEMENT
AMONG
RJR NABISCO, INC.
RJR NABISCO HOLDINGS CORP.,
AND
THE CHASE MANHATTAN BANK,
AS ADMINISTRATIVE AGENT
AND
BANKERS TRUST COMPANY,
CITIBANK, N.A.,
CREDIT LYONNAIS NEW YORK BRANCH
THE FUJI BANK, LIMITED
AND
BARCLAYS BANK PLC,
AS SYNDICATION AGENTS
AND
VARIOUS LENDING INSTITUTIONS
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Dated as of May 7, 1999
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$1,235,000,000
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TABLE OF CONTENTS
Page
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SECTION 1. Amount and Terms of Credit........................................1
1.01 Commitments.......................................................1
1.02 Minimum Amount of Each Borrowing; Maximum Number of Borrowings....3
1.03 Notice of Borrowing of Committed Loans............................3
1.04 Competitive Bid Borrowings........................................4
1.05 Disbursement of Funds.............................................6
1.06 Notes; Register...................................................6
1.07 Conversions.......................................................7
1.08 Pro Rata Borrowings...............................................7
1.09 Interest..........................................................8
1.10 Interest Periods..................................................9
1.11 Increased Costs, Illegality, etc.................................10
1.12 Compensation.....................................................12
1.13 Change of Lending Office.........................................12
1.14 Maturity Date Extensions.........................................12
1.15 Replacement of Lenders...........................................13
1.16 Notice of Certain Costs..........................................14
SECTION 2. Letters of Credit................................................14
2.01 Letters of Credit................................................14
2.02 Letter of Credit Requests........................................16
2.03 Letter of Credit Participations..................................16
2.04 Agreement to Repay Letter of Credit Drawings.....................18
2.05 Increased Costs..................................................19
2.06 Indemnification; Nature of Letter of Credit Issuers' Duties......20
SECTION 3. Fees; Commitments................................................21
3.01 Fees.............................................................21
3.02 Voluntary Reduction of Commitments...............................22
3.03 Mandatory Reduction of Commitments, etc..........................22
SECTION 4. Payments.........................................................23
4.01 Voluntary Prepayments............................................23
4.02 Mandatory Prepayments............................................23
4.03 Method and Place of Payment......................................24
4.04 Net Payments.....................................................25
SECTION 5. Conditions Precedent.............................................26
5.01 Conditions Precedent to Closing Date.............................26
(i)
5.02 Conditions Precedent to All Credit Events........................28
SECTION 6. Representations, Warranties and Agreements.......................29
6.01 Corporate Status.................................................30
6.02 Corporate Power and Authority....................................30
6.03 No Violation.....................................................30
6.04 Litigation.......................................................30
6.05 Use of Proceeds; Margin Regulations..............................30
6.06 Governmental Approvals...........................................31
6.07 Investment Company Act...........................................31
6.08 True and Complete Disclosure.....................................31
6.09 Financial Condition; Financial Statements........................31
6.10 Tax Returns and Payments.........................................32
6.11 Compliance with ERISA............................................32
6.12 Subsidiaries.....................................................32
6.13 Patents, etc.....................................................32
6.14 Pollution and Other Regulations..................................33
6.15 Properties.......................................................33
6.16 Year 2000 Compliance.............................................33
SECTION 7. Affirmative Covenants............................................33
7.01 Information Covenants............................................33
7.02 Books, Records and Inspections...................................35
7.03 Insurance........................................................36
7.04 Payment of Taxes.................................................36
7.05 Consolidated Corporate Franchises................................36
7.06 Compliance with Statutes, etc....................................36
7.07 ERISA............................................................36
7.08 Good Repair......................................................37
7.09 End of Fiscal Years; Fiscal Quarters.............................37
7.10 Competitive Bid Loan Outstandings................................37
7.11 Subsidiary Guaranty; Collateral..................................38
7.12 Indebtedness.....................................................38
SECTION 8. Negative Covenants...............................................38
8.01 Changes in Business..............................................38
8.02 Consolidation, Merger, Sale of Assets, etc.......................39
8.03 Liens............................................................39
8.04 Indebtedness.....................................................41
8.05 Limitation on Dividends..........................................42
8.06 Transactions with Affiliates.....................................44
8.07 Consolidated Net Worth...........................................44
8.08 Fixed Charge Coverage Ratio......................................44
8.09 Investments......................................................44
8.10 No Negative Pledge...............................................45
8.11 Prepayments of Indebtedness......................................45
(ii)
SECTION 9. Events of Default................................................45
9.01 Payments.........................................................45
9.02 Representations, etc.............................................45
9.03 Covenants........................................................45
9.04 Default Under Other Agreements...................................45
9.05 Bankruptcy, etc..................................................46
9.06 ERISA............................................................46
9.07 Guaranty.........................................................47
9.08 Judgments........................................................47
9.09 Security Documents...............................................47
SECTION 10. Definitions......................................................48
SECTION 11. The Senior Managing Agents.......................................70
11.01 Appointment.....................................................70
11.02 Delegation of Duties............................................70
11.03 Exculpatory Provisions..........................................71
11.04 Reliance by Senior Managing Agents..............................71
11.05 Notice of Default...............................................71
11.06 Non-Reliance on Senior Managing Agents and Other Lenders........72
11.07 Indemnification.................................................72
11.08 Senior Managing Agents in Their Individual Capacities...........73
11.09 Successor Senior Managing Agents................................73
SECTION 12. Miscellaneous...................................................73
12.01 Payment of Expenses, etc........................................73
12.02 Right of Setoff.................................................74
12.03 Notices.........................................................74
12.04 Benefit of Agreement............................................74
12.05 No Waiver; Remedies Cumulative..................................77
12.06 Payments Pro Rata...............................................78
12.07 Calculations; Computations......................................78
12.08 Governing Law; Submission to Jurisdiction; Venue................79
12.09 Counterparts....................................................80
12.10 Execution.......................................................80
12.11 Headings Descriptive............................................80
12.12 Amendment or Waiver.............................................80
12.13 Survival........................................................81
12.14 Domicile of Loans...............................................81
12.15 Confidentiality.................................................81
12.16 Waiver of Jury Trial............................................81
SECTION 13. Holdings Guaranty...............................................82
13.01 The Holdings Guaranty...........................................82
13.02 Bankruptcy......................................................82
(iii)
13.03 Nature of Liability.............................................82
13.04 Independent Obligation..........................................82
13.05 Authorization...................................................83
13.06 Reliance........................................................83
13.07 Subordination...................................................83
13.08 Waiver..........................................................83
ANNEX I -- List of Lenders and Commitments
ANNEX II -- Lender Addresses
ANNEX III -- Existing Letters of Credit
ANNEX IV -- Certain Litigation
ANNEX V -- Schedule of Material Subsidiaries
ANNEX VI -- Existing Debt
EXHIBIT A -- Form of Note
EXHIBIT B -- Form of Letter of Credit Request
EXHIBIT C-1 -- Form of Opinion of Senior Vice President, Associate
General Counsel and Secretary of the Borrower
EXHIBIT C-2 -- Form of Opinion of White & Case LLP
EXHIBIT D -- Subsidiary Guaranty
EXHIBIT E-1 -- Notice of Assignment
EXHIBIT E-2 -- Form of Assignment Agreement
EXHIBIT F -- Form of Confidentiality Agreement
(iv)
CREDIT AGREEMENT, dated as of May 7, 1999, among RJR NABISCO,
INC., a Delaware corporation, and until consummation of the Spin-Off referred to
below, RJR NABISCO HOLDINGS CORP., a Delaware corporation, and the lending
institutions listed from time to time on Annex I hereto (each a "Lender" and,
collectively, the "Lenders"). Unless otherwise defined herein, all capitalized
terms used herein and defined in Section 10 are used herein as so defined.
W I T N E S S E T H:
WHEREAS, subject to and upon the terms and conditions herein
set forth, the Lenders are willing to make available the credit facility
provided for herein.
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
1.01 Commitments. (A) Subject to and upon the terms and
conditions herein set forth, each Lender severally agrees to make a loan or
loans (each a "Revolving Loan" and, collectively, the "Revolving Loans") to the
Borrower, which Revolving Loans:
(i) shall be made at any time and from time to time on and
after the Closing Date and prior to such Lender's Maturity Date;
(ii) may, at the option of the Borrower, be incurred and
maintained as, and/or converted into, Reference Rate Loans or
Eurodollar Loans, provided that all Revolving Loans made by all Lenders
pursuant to the same Borrowing shall, unless otherwise specifically
provided herein, consist entirely of Revolving Loans of the same Type;
(iii) may be repaid and reborrowed in accordance with the
provisions hereof; and
(iv) shall not exceed for any Lender at any time outstanding
that aggregate principal amount which, when added to (A) the product of
(x) such Lender's Adjusted Percentage and (y) the sum of (I) the
aggregate Letter of Credit Outstandings and (II) the aggregate
outstanding principal amount of all Swingline Loans then outstanding
plus (B) the product of (x) such Lender's Percentage and (y) the
aggregate outstanding principal amount of all Competitive Bid Loans
then outstanding, equals the Commitment of such Lender at such time.
(B) Subject to and upon the terms and conditions herein set
forth, each Swingline Lender severally agrees, at any time and from time to time
on and after the Closing Date and prior to the Swingline Maturity Date, to make
a loan or loans (each a "Swingline Loan" and, collectively, the "Swingline
Loans") to the Borrower, which Swingline Loans:
(i) shall be Reference Rate Loans;
(ii) shall have the benefit of the provisions of Section
1.01(C);
(iii) shall not exceed in the aggregate at any one time
outstanding the Swingline Commitment of such Swingline Lender at such
time;
(iv) shall not exceed in the aggregate for all Swingline Lenders
at any one time outstanding, when combined with the aggregate principal
amount of all Revolving Loans and Competitive Bid Loans then
outstanding and all Letter of Credit Outstandings at such time, the
Total Commitment then in effect; and
(v) may be repaid and reborrowed in accordance with the
provisions hereof.
On (x) the Swingline Maturity Date, all Swingline Loans shall be repaid in full
and (y) the last Business Day of each calendar quarter, all Swingline Loans
shall be repaid in full and may not be reborrowed until the next succeeding
Business Day, provided that repayment of the Swingline Loans pursuant to this
clause (y) shall not be required to the extent that the aggregate outstanding
principal amount of Swingline Loans to be repaid is less than $10,000,000. No
Swingline Lender will make a Swingline Loan after it has received written notice
from the Required Lenders that one or more of the applicable conditions to
Credit Events specified in Section 5 are not then satisfied.
(C) On any Business Day, a Swingline Lender (the "Notifying SL
Lender") may, in its sole discretion, give notice to the Lenders that all then
outstanding Swingline Loans shall be funded with a Borrowing of Revolving Loans
(provided that such notice shall be deemed to have been automatically given by
each Swingline Lender and each Swingline Lender shall constitute a Notifying SL
Lender upon the occurrence of an Event of Default under Section 9.05), in which
case a Borrowing of Revolving Loans constituting Reference Rate Loans (each such
Borrowing, a "Mandatory Borrowing") shall be made on the immediately succeeding
Business Day by all Lenders pro rata based on each Lender's Adjusted Percentage,
and the proceeds thereof shall be applied directly to repay ratably all
Swingline Lenders for their outstanding Swingline Loans. Each Lender hereby
irrevocably agrees to make Reference Rate Loans upon one Business Day's notice
pursuant to each Mandatory Borrowing in the amount and in the manner specified
in the preceding sentence and on the date specified in writing by the Notifying
SL Lender notwithstanding (i) that the amount of the Mandatory Borrowing may not
comply with the Minimum Borrowing Amount otherwise required hereunder, (ii)
whether any conditions specified in Section 5 are then satisfied, (iii) whether
a Default or an Event of Default has occurred and is continuing, (iv) the date
of such Mandatory Borrowing and (v) any reduction in the Total Commitment after
any such Swingline Loans were made. In the event that any Mandatory Borrowing
cannot for any reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a proceeding under the
Bankruptcy Code in respect of the Borrower), each Lender (other than each
Swingline Lender with respect to its Swingline Loans) hereby agrees that it
shall forthwith purchase from each Swingline Lender (without recourse or
warranty) such assignment of its outstanding Swingline Loans as shall be
necessary to cause the Lenders to share in such Swingline Loans ratably based
upon their respective Adjusted Percentages; provided that all interest payable
on such Swingline Loans shall be for the account of the Swingline Lenders until
the date the respective assignment is purchased and, to the extent attributable
to the purchased assignment, shall be payable to the Lender purchasing same from
and after such date of purchase.
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(D) Subject to and upon the terms and conditions herein set
forth, each Lender severally agrees that the Borrower may incur a loan or loans
(each a "Competitive Bid Loan" and, collectively, the "Competitive Bid Loans")
pursuant to a Competitive Bid Borrowing from time to time on and after the
Closing Date and prior to the date which is the third Business Day preceding the
date which is 14 days prior to the Facility Maturity Date; provided that, after
giving effect to any Competitive Bid Borrowing and the use of the proceeds
thereof, (x) the aggregate outstanding principal amount of Competitive Bid Loans
when combined with the aggregate outstanding principal amount of all Revolving
Loans and Swingline Loans then outstanding and the aggregate Letter of Credit
Outstandings at such time shall not exceed the Total Commitment at such time or
(y) if the Interest Period applicable to such Competitive Bid Borrowing extends
beyond the then Maturity Date of any Lender, the aggregate outstanding principal
amount of all Competitive Bid Loans and Revolving Loans with Interest Periods
that extend beyond such Maturity Date when combined with the Stated Amount of
all outstanding Letters of Credit with expiration dates that extend beyond such
Maturity Date will not exceed the Expected Total Commitment in effect for each
day of the Interest Period applicable to such Competitive Bid Loan that occurs
beyond such Maturity Date. Within the foregoing limits and subject to the
conditions set out in Section 1.04, Competitive Bid Loans may be repaid and
reborrowed in accordance with the provisions hereof.
1.02 Minimum Amount of Each Borrowing; Maximum Number of
Borrowings. The aggregate principal amount of each Borrowing of Committed Loans
shall not be less than the Minimum Borrowing Amount with respect thereto (except
that Mandatory Borrowings shall be made in the amounts required by Section
1.01(C)). More than one Borrowing may be incurred on any date; provided, that at
no time shall there be outstanding more than twenty Borrowings of Eurodollar
Loans under this Agreement.
1.03 Notice of Borrowing of Committed Loans. (a) Whenever the
Borrower desires to incur Revolving Loans hereunder (other than Mandatory
Borrowings), it shall give the Administrative Agent at the Administrative
Agent's Office (x) prior to 11:00 A.M. (New York time) at least three Business
Days' prior written notice (or telephonic notice promptly confirmed in writing)
of each Borrowing of Revolving Loans constituting Eurodollar Loans and (y) prior
to 11:00 A.M. (New York time) at least one Business Day's prior written notice
(or telephonic notice promptly confirmed in writing) of each Borrowing of
Revolving Loans constituting Reference Rate Loans. Each such notice (each,
together with each notice of a Borrowing of Swingline Loans pursuant to Section
1.03(b), a "Notice of Borrowing") shall be irrevocable and shall specify (i) the
aggregate principal amount of the Revolving Loans to be made pursuant to such
Borrowing, (ii) the date of Borrowing (which shall be a Business Day) and (iii)
whether the respective Borrowing shall consist of Reference Rate Loans or
Eurodollar Loans and, if Eurodollar Loans, the Interest Period to be initially
applicable thereto. The Administrative Agent shall promptly give each Lender
written notice (or telephonic notice promptly confirmed in writing) of each
proposed Borrowing of Revolving Loans, of such Lender's proportionate share
thereof and of the other matters covered by the Notice of Borrowing.
(b) Whenever the Borrower desires to incur Swingline Loans
hereunder, it shall give the Administrative Agent at the Administrative Agent's
Office written notice (or telephonic
3
notice promptly confirmed in writing) of each Borrowing of Swingline Loans prior
to 11:00 A.M. (New York time) on the date of such Borrowing. Each such notice
shall be irrevocable and shall specify (i) the aggregate principal amount of the
Swingline Loans to be made pursuant to such Borrowing and (ii) the date of
Borrowing (which shall be a Business Day). The Administrative Agent shall
promptly give each Swingline Lender written notice (or telephonic notice
promptly confirmed in writing) of each proposed Borrowing of Swingline Loans, of
such Swingline Lender's proportionate share thereof and of the other matters
covered by the Notice of Borrowing.
(c) Mandatory Borrowings shall be made upon the notice
specified in Section 1.01(C), with the Borrower irrevocably agreeing, by its
incurrence of any Swingline Loan, to the making of Mandatory Borrowings as set
forth in such Section.
(d) Without in any way limiting the obligation of the Borrower
to confirm in writing any notice it may give hereunder by telephone, the
Administrative Agent may act prior to receipt of written confirmation without
liability upon the basis of such telephonic notice, believed by the
Administrative Agent in good faith to be from the Chairman, Chief Financial
Officer or Treasurer of the Borrower, or from any other person designated in
writing to the Administrative Agent by the Chief Financial Officer or Treasurer
of the Borrower as a person entitled to give telephonic notices under this
Agreement on behalf of the Borrower. In each such case the Borrower hereby
waives the right to dispute the Administrative Agent's record of the terms of
any such telephonic notice.
1.04 Competitive Bid Borrowings. (a) Whenever the Borrower
desires to incur a Competitive Bid Borrowing, it shall deliver to the
Administrative Agent at the Administrative Agent's Office, prior to 11:00 A.M.
(New York time) at least three Business Days prior to the date of such proposed
Competitive Bid Borrowing, a written notice (a "Notice of Competitive Bid
Borrowing"), which notice shall specify in each case (i) the date (which shall
be a Business Day) and the aggregate amount of the proposed Competitive Bid
Borrowing, (ii) the maturity date for repayment of each Competitive Bid Loan to
be made as part of such Competitive Bid Borrowing (which maturity date may not
be earlier than 14 days after the date of such Competitive Bid Borrowing or
later than the earlier to occur of (x) 180 days after the date of such
Competitive Bid Borrowing and (y) the third Business Day preceding the Facility
Maturity Date), (iii) the interest payment date or dates relating thereto and
(iv) any other terms to be applicable to such Competitive Bid Borrowing. The
Administrative Agent shall promptly notify each Bidder of each such request for
a Competitive Bid Borrowing received by it from the Borrower by telecopying to
each such Bidder a copy of the related Notice of Competitive Bid Borrowing.
(b) Each Bidder shall, if, in its sole discretion, it elects
to do so, irrevocably offer to make one or more Competitive Bid Loans to the
Borrower as part of such proposed Competitive Bid Borrowing at a rate or rates
of interest specified by such Lender in its sole discretion and determined by
such Lender independently of each other Lender, by notifying the Administrative
Agent (which shall give prompt notice thereof to the Borrower) before 11:00 A.M.
(New York time) on the date (the "Reply Date") which is two Business Days before
the
4
date of such proposed Competitive Bid Borrowing, of the minimum amount and
maximum amount of each Competitive Bid Loan which such Lender would be willing
to make as part of such proposed Competitive Bid Borrowing (which amounts may,
subject to the proviso to the first sentence of Section 1.01(D), exceed such
Lender's Commitment), the rate or rates of interest therefor and such Lender's
lending office with respect to such Competitive Bid Loan; provided, that if the
Administrative Agent in its capacity as a Lender shall, in its sole discretion,
elect to make any such offer, it shall notify the Borrower of such offer before
9:30 A.M. (New York time) on the Reply Date. Any Bidder not giving the
Administrative Agent the notice specified in the preceding sentence shall not be
obligated to, and shall not, make any Competitive Bid Loan as part of such
Competitive Bid Borrowing.
(c) The Borrower shall, in turn, before 12:00 Noon (New York
time) on the Reply Date, either:
(i) cancel such Competitive Bid Borrowing by giving the
Administrative Agent notice to such effect, or
(ii) accept one or more of the offers made by any Bidder or
Bidders by giving notice (in writing or by telephone confirmed in
writing) to the Administrative Agent of the amount of each Competitive
Bid Loan (which amount shall be equal to or greater than the minimum
amount, and equal to or less than the maximum amount, notified to the
Borrower by the Administrative Agent on behalf of such Bidder for such
Competitive Bid Borrowing) to be made by each Bidder as part of such
Competitive Bid Borrowing, and reject any remaining offers made by
Bidders by giving the Administrative Agent notice to that effect;
provided, that (x) acceptance of offers may only be made on the basis
of ascending Absolute Rates commencing with the lowest rate so offered
and (y) if offers are made by two or more Bidders at the same rate and
acceptance of all such equal offers would result in a greater principal
amount of Competitive Bid Loans being accepted than the aggregate
principal amount requested by the Borrower, the Borrower shall then
have the right to accept one or more such equal offers in their
entirety and reject the other equal offer or offers or to allocate
acceptance among all such equal offers (but giving effect to the
minimum and maximum amounts specified for each such offer), as the
Borrower may elect in its sole discretion; provided further, that in no
event shall the aggregate principal amount of the Competitive Bid Loans
accepted by the Borrower as part of a Competitive Bid Borrowing exceed
the amount specified by the Borrower in the related Notice of
Competitive Bid Borrowing.
(d) If the Borrower notifies the Administrative Agent that
such Competitive Bid Borrowing is canceled, the Administrative Agent shall give
prompt notice thereof to the Bidders and such Competitive Bid Borrowing shall
not be made.
(e) If the Borrower accepts one or more of the offers made by
any Bidder or Bidders, the Administrative Agent shall in turn promptly notify
(x) each Bidder that has made an offer of the date and aggregate amount of such
Competitive Bid Borrowing and whether or not any offer or offers made by such
Bidder have been accepted by the Borrower and (y) each Bidder
5
that is to make a Competitive Bid Loan as part of such Competitive Bid Borrowing
of the amount of each Competitive Bid Loan to be made by such Bidder.
(f) On the last Business Day of each calendar quarter, the
Administrative Agent shall notify the Lenders of the aggregate principal amount
of Competitive Bid Loans outstanding at such time.
1.05 Disbursement of Funds. (a) No later than 1:00 P.M. (New
York time) on the date of each Borrowing (including Mandatory Borrowings), each
Lender will make available its pro rata portion, if any, of each Borrowing
requested to be made on such date in the manner provided below.
(b) Each Lender shall make available all amounts it is to fund
under any Borrowing in U.S. dollars and immediately available funds to the
Administrative Agent at the Administrative Agent's Office and the Administrative
Agent will (except in the case of Mandatory Borrowings) make available to the
Borrower by depositing to its account at the Administrative Agent's Office the
aggregate of the amounts so made available in U.S. dollars and the type of funds
received. Unless the Administrative Agent shall have been notified by any Lender
prior to the date of any such Borrowing that such Lender does not intend to make
available to the Administrative Agent its portion of the Borrowing or Borrowings
to be made on such date, the Administrative Agent may assume that such Lender
has made such amount available to the Administrative Agent on such date of
Borrowing, and the Administrative Agent, in reliance upon such assumption, may
(in its sole discretion and without any obligation to do so) make available to
the Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Administrative Agent by such Lender and the Administrative
Agent has made available same to the Borrower, the Administrative Agent shall be
entitled to recover such corresponding amount from such Lender. If such Lender
does not pay such corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent shall promptly notify the Borrower,
and the Borrower shall immediately pay such corresponding amount to the
Administrative Agent. The Administrative Agent shall also be entitled to recover
from such Lender or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Administrative Agent to the Borrower to the
date such corresponding amount is recovered by the Administrative Agent, at a
rate per annum equal to (x) if paid by such Lender, the overnight Federal Funds
Rate or (y) if paid by the Borrower, the then applicable rate of interest,
calculated in accordance with Section 1.09, for the respective Loans.
(c) Nothing in this Section 1.05 shall be deemed to relieve
any Lender from its obligation to fulfill its commitments hereunder or to
prejudice any rights which the Borrower may have against any Lender as a result
of any default by such Lender hereunder.
1.06 Notes; Register. (a) The Borrower's obligation to pay the
principal of, and interest on, the Revolving Loans made by each Lender shall,
except as provided in Sections 1.15 and 12.04 and only to the extent requested
by such Lender, be evidenced by a promissory note
6
duly executed and delivered by the Borrower substantially in the form of Exhibit
A with blanks appropriately completed in conformity herewith (each a "Note" and,
collectively, the "Notes").
(b) The Note issued to each Lender shall (i) be payable to the
order of such Lender and be dated the Closing Date, (ii) be in a stated
principal amount equal to the Commitment of such Lender and be payable in the
principal amount of the Revolving Loans evidenced thereby, (iii) mature on such
Lender's Maturity Date and (iv) bear interest as provided in the appropriate
clause of Section 1.09 in respect of the Reference Rate Loans and Eurodollar
Loans, as the case may be, evidenced thereby.
(c) Each Lender will note on its internal records the amount
of each Loan made by it and each payment in respect thereof and will prior to
any transfer of its Note endorse on the reverse side thereof the outstanding
principal amount of Revolving Loans evidenced thereby. Failure to make any such
notation or any error in any such notation shall not affect the Borrower's
obligations in respect of such Revolving Loans.
(d) The Administrative Agent shall maintain at the
Administrative Agent's Office a register for the recordation of the names and
addresses of the Lenders, the Commitments of the Lenders from time to time, and
the principal amount of the Revolving Loans, Swingline Loans and Competitive Bid
Loans owing to each Lender from time to time together with the maturity and
interest rates applicable to each such Competitive Bid Loan, and other terms
applicable thereto (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error. The Register
shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
1.07 Conversions. The Borrower shall have the option to
convert on any Business Day all or a portion equal to at least the Minimum
Borrowing Amount of the outstanding principal amount of Revolving Loans of one
Type into a Borrowing or Borrowings of another Type; provided that (i) no
partial conversion of Eurodollar Loans shall reduce the outstanding principal
amount of Eurodollar Loans made pursuant to a single Borrowing to less than the
Minimum Borrowing Amount, (ii) Reference Rate Loans may only be converted into
Eurodollar Loans if no Event of Default is in existence on the date of the
conversion and (iii) Borrowings resulting from conversions pursuant to this
Section 1.07 shall be limited in number as provided in Section 1.02. Each such
conversion shall be effected by the Borrower by giving the Administrative Agent
at the Administrative Agent's Office prior to 11:00 A.M. (New York time) at
least three Business Days' (or one Business Day's in the case of a conversion
into Reference Rate Loans) prior written notice (or telephonic notice promptly
confirmed in writing) (each a "Notice of Conversion") specifying the Revolving
Loans to be so converted, the Type of Revolving Loans to be converted into and,
if to be converted into Eurodollar Loans, the Interest Period to be initially
applicable thereto. The Administrative Agent shall give each Lender notice as
promptly as practicable of any such proposed conversion affecting any of its
Revolving Loans.
1.08 Pro Rata Borrowings. All Borrowings of Revolving Loans
under this Agreement shall be loaned by the Lenders pro rata on the basis of
their Percentages; provided that all Borrowings of Revolving Loans made pursuant
to a Mandatory Borrowing shall be
7
loaned by the Lenders pro rata on the basis of their Adjusted Percentages.
All Borrowings of Swingline Loans shall be loaned by the Swingline Lenders pro
rata on the basis of their Swingline Commitments. It is understood that no
Lender shall be responsible for any default by any other Lender in its
obligation to make Loans hereunder and that each Lender shall be obligated to
make the Loans provided to be made by it hereunder, regardless of the failure
of any other Lender to fulfill its commitments hereunder.
1.09 Interest. (a) The unpaid principal amount of each
Reference Rate Loan shall bear interest from the date of the Borrowing thereof
until maturity (whether by acceleration or otherwise) at a rate per annum which
shall at all times be the Applicable Reference Rate Margin plus the Reference
Rate in effect from time to time.
(b) The unpaid principal amount of each Eurodollar Loan shall
bear interest from the date of the Borrowing thereof until maturity (whether by
acceleration or otherwise) at a rate per annum which shall at all times be the
Applicable Eurodollar Margin plus the relevant Eurodollar Rate.
(c) The unpaid principal amount of each Competitive Bid Loan
shall bear interest from the date the proceeds thereof are made available to the
Borrower until maturity (whether by acceleration or otherwise) at the rate or
rates per annum specified by a Bidder or Bidders, as the case may be, pursuant
to Section 1.04(b) and accepted by the Borrower pursuant to Section 1.04(c).
(d) Overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan shall bear interest at a rate per annum
equal to the Reference Rate in effect from time to time plus the sum of (i) 2%
and (ii) the Applicable Reference Rate Margin; provided, that each Eurodollar
Loan and Competitive Bid Loan shall bear interest after maturity (whether by
acceleration or otherwise) until the end of the Interest Period then applicable
thereto at a rate per annum equal to 2% in excess of the rate of interest
applicable thereto at maturity.
(e) Interest on each Loan shall accrue from and including the
date of any Borrowing to but excluding the date of any repayment thereof and
shall be payable (i) in respect of each Reference Rate Loan, quarterly in
arrears on the 15th day of each January, April, July and October, (ii) in
respect of any Competitive Bid Loan, at such times as specified in the Notice of
Competitive Bid Borrowing relating thereto, (iii) in respect of each Eurodollar
Loan, on the last day of each Interest Period applicable thereto and, in the
case of an Interest Period in excess of three months, on each date occurring at
three-month intervals after the first day of such Interest Period, (iv) in
respect of each Loan (other than a Reference Rate Loan), on any prepayment (on
the amount prepaid) and (v) in respect of each Loan, at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand.
(f) All computations of interest hereunder shall be made in
accordance with Section 12.07(b).
8
(g) The Administrative Agent, upon determining the interest
rate for any Borrowing of Eurodollar Loans for any Interest Period, shall
promptly notify the Borrower and the Lenders thereof.
1.10 Interest Periods. At the time the Borrower gives a Notice
of Competitive Bid Borrowing in respect of the making of a Competitive Bid
Borrowing or at the time it gives a Notice of Borrowing or Notice of Conversion
in respect of the making of, or conversion into, a Borrowing of Eurodollar Loans
(in the case of the initial Interest Period applicable thereto) or prior to
11:00 A.M. (New York time) on the third Business Day prior to the expiration of
an Interest Period applicable to a Borrowing of Eurodollar Loans, it shall have
the right to elect by giving the Administrative Agent written notice (or
telephonic notice promptly confirmed in writing) the Interest Period applicable
to such Borrowing, which Interest Period shall, at the option of the Borrower,
be (x) in the case of a Eurodollar Loan, a one, two, three or six month period
and (y) in the case of a Competitive Bid Loan, subject to availability, a period
of 14 to 180 days as elected by the Borrower in the related Notice of
Competitive Bid Borrowing. Notwithstanding anything to the contrary contained
above:
(i) the initial Interest Period for any Borrowing of Eurodollar
Loans shall commence on the date of such Borrowing (including the date
of any conversion from a Borrowing of Reference Rate Loans) and each
Interest Period occurring thereafter in respect of such Borrowing shall
commence on the day on which the next preceding Interest Period
expires;
(ii) if any Interest Period relating to a Borrowing of
Eurodollar Loans begins on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period, such Interest Period shall end on the last Business Day of such
calendar month;
(iii) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day, provided that if any Interest Period in
respect of a Eurodollar Loan would otherwise expire on a day which is
not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire on
the next preceding Business Day; and
(iv) no Interest Period in respect of any Borrowing of
Eurodollar Loans shall extend beyond the Maturity Date for any Lender
participating in such Borrowing.
Notwithstanding the foregoing, if an Event of Default is in existence at the
time any Interest Period in respect of any Eurodollar Loans is to expire, such
Eurodollar Loans may not be continued as Eurodollar Loans but instead shall be
automatically converted on the last day of such Interest Period into Reference
Rate Loans. If upon the expiration of any Interest Period in respect of
Eurodollar Loans, the Borrower has failed to elect a new Interest Period to be
applicable thereto as provided above, the Borrower shall be deemed to have
elected to convert such Borrowing into a Borrowing of Reference Rate Loans
effective as of the expiration date of such current Interest Period.
9
1.11 Increased Costs, Illegality, etc. (a) In the event that
(x) in the case of clause (i) below, the Administrative Agent or (y) in the case
of clauses (ii) and (iii) below, any Lender shall have determined (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto):
(i) on any date for determining the Eurodollar Rate for any
Interest Period that, by reason of any changes arising on or after the
date of this Agreement affecting the interbank Eurodollar market,
adequate and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition of Eurodollar
Rate; or
(ii) at any time, that such Lender shall incur increased costs
or reductions in the amounts received or receivable hereunder with
respect to any Eurodollar Loans or Competitive Bid Loans because of (x)
any change since the date of this Agreement (or, in the case of any
such cost or reduction with respect to any Competitive Bid Loan, since
the date of the making of such Competitive Bid Loan) in any applicable
law, governmental rule, regulation, guideline or order (or in the
interpretation or administration thereof and including the introduction
of any new law or governmental rule, regulation, guideline or order)
(such as, for example, but not limited to, a change in official reserve
requirements, but, in all events, excluding reserves required under
Regulation D and/or (y) other circumstances affecting the interbank
Eurodollar market; or
(iii) at any time, that the making or continuance of any Loan
(other than Reference Rate Loans) has become unlawful by compliance by
such Lender in good faith with any law, governmental rule, regulation,
guideline or order (or would conflict with any such governmental rule,
regulation, guideline or order not having the force of law even though
the failure to comply therewith would not be unlawful), or, in the case
of a Eurodollar Loan, has become impracticable as a result of a
contingency occurring after the date of this Agreement which materially
and adversely affects the interbank Eurodollar market;
then, and in any such event, such Lender (or the Administrative Agent, in the
case of clause (i) above) shall on such date give notice (if by telephone
confirmed in writing) to the Borrower and to the Administrative Agent of such
determination (which notice the Administrative Agent shall promptly transmit to
each of the other Lenders). Thereafter (x) in the case of clause (i) above,
Eurodollar Loans shall no longer be available until such time as the
Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice by the Administrative Agent no longer
exist, and any Notice of Borrowing or Notice of Conversion given by the Borrower
with respect to Eurodollar Loans which have not yet been incurred shall be
deemed rescinded by the Borrower, (y) in the case of clause (ii) above, the
Borrower shall pay to such Lender, upon written demand therefor, such additional
amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as such Lender in its sole discretion shall
determine) as shall be required to compensate such Lender for such increased
costs or reductions in amounts receivable hereunder (a written notice as to the
additional amounts owed to such Lender, showing in reasonable detail the basis
for the calculation thereof, submitted to the Borrower by such Lender shall,
absent manifest error, be final and conclusive and binding upon all parties
hereto) and (z) in the case of
10
clause (iii) above, the Borrower shall take one of the actions specified in
Section 1.11(b) as promptly as possible and, in any event, within the time
period required by law.
(b) At any time that any Eurodollar Loan or Competitive Bid
Loan is affected by the circumstances described in Section 1.11(a)(ii) (for
Eurodollar Loans only) or (iii), the Borrower may (and in the case of a
Eurodollar Loan or a Competitive Bid Loan affected pursuant to Section
1.11(a)(iii) shall) either (i) if the affected Eurodollar Loan or Competitive
Bid Loan is then being made pursuant to a Borrowing, cancel said Borrowing by
giving the Administrative Agent telephonic notice (confirmed promptly in
writing) thereof as promptly as practicable after the Borrower was notified by a
Lender pursuant to Section 1.11(a)(ii) or (iii), (ii) if the affected Eurodollar
Loan is then outstanding, upon at least three Business Days' notice to the
Administrative Agent, require the affected Lender to convert each such
Eurodollar Loan into a Reference Rate Loan or (iii) if the affected Competitive
Bid Loan is then outstanding, prepay such Competitive Bid Loan in full; provided
that if more than one Lender is affected in a similar manner at any time, then
all such similarly affected Lenders must be treated the same pursuant to this
Section 1.11(b).
(c) If after the date hereof, the adoption of any applicable
law, rule or regulation regarding capital adequacy, or any change therein, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by a Lender or its parent with any request
or directive made or adopted after the date hereof regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on such Lender's or its parent's capital or assets as a consequence of such
Lender's commitments or obligations hereunder to a level below that which such
Lender or its parent could have achieved but for such adoption, effectiveness,
change or compliance (taking into consideration such Lender's or its parent's
policies with respect to capital adequacy), then from time to time, within 15
days after demand by such Lender (with a copy to the Administrative Agent), the
Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender or its parent for such reduction. Each Lender, upon
determining in good faith that any additional amounts will be payable pursuant
to this Section 1.11(c), will give prompt written notice thereof to the
Borrower, which notice shall set forth in reasonable detail the basis of the
calculation of such additional amounts, although the failure to give any such
notice shall not, subject to Section 1.16, release or diminish any of the
Borrower's obligations to pay additional amounts pursuant to this Section
1.11(c) upon receipt of such notice.
(d) In the event that any Lender shall reasonably determine
(which determination shall, absent manifest error, be final and conclusive and
binding on all parties hereto) at any time that by reason of Regulation D such
Lender is required to maintain reserves in respect of eurodollar loans or
liabilities during any period it has a Eurodollar Loan outstanding, such Lender
shall promptly notify the Borrower in writing specifying the additional amounts
required to indemnify such Lender against the cost of maintaining such reserves
(such written notice to set forth in reasonable detail a computation of such
additional amounts) and the Borrower shall pay to such Lender such specified
amounts as additional interest at the time that such Borrower is
11
otherwise required to pay interest in respect of the affected Eurodollar Loan
or, if later, on written demand therefor from such Lender.
1.12 Compensation. The Borrower shall compensate each Lender,
upon its written request (which request shall set forth in reasonable detail the
basis for requesting such compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Lender to fund its Eurodollar Loans or Competitive Bid Loans
but excluding any loss of anticipated profit with respect to such Loans) which
such Lender may sustain: (i) if for any reason (other than a default by such
Lender or the Administrative Agent) a Borrowing of Eurodollar Loans or
Competitive Bid Loans accepted by the Borrower in accordance with Section
1.04(c)(ii) does not occur on a date specified therefor in a Notice of
Borrowing, Notice of Competitive Bid Borrowing or Notice of Conversion (whether
or not withdrawn by the Borrower or deemed withdrawn pursuant to Section 1.11);
(ii) if any repayment or conversion of any of its Eurodollar Loans or any
repayment of Competitive Bid Loans occurs on a date which is not the last day of
an Interest Period applicable thereto; (iii) if any prepayment of any of its
Eurodollar Loans is not made on any date specified in a notice of prepayment
given by the Borrower; or (iv) as a consequence of (x) any other default by the
Borrower to repay its Eurodollar Loans or Competitive Bid Loans when required by
the terms of this Agreement or (y) an election made pursuant to Section 1.11(b).
Calculation of all amounts payable to a Lender under this Section 1.12 in
respect of Eurodollar Loans shall be made as though that Lender had actually
funded its relevant Eurodollar Loan through the purchase of a Eurodollar deposit
bearing interest at the Eurodollar Rate in an amount equal to the amount of that
Loan, having a maturity comparable to the relevant Interest Period and through
the transfer of such Eurodollar deposit from an offshore office of that Lender
to a domestic office of that Lender in the United States of America; provided,
however, that each Lender may fund each of its Eurodollar Loans in any manner it
sees fit and the foregoing assumption shall be utilized only for the calculation
of amounts payable under this Section 1.12.
1.13 Change of Lending Office. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of Section 1.11(a)(ii)
or (iii), 2.05 or 4.04 with respect to such Lender, it will, if requested by the
Borrower, use reasonable efforts (subject to overall policy considerations of
such Lender) to designate another lending office for any Loans affected by such
event; provided, that such designation is made on such terms that such Lender
and its lending office suffer no economic, legal or regulatory disadvantage,
with the object of avoiding the consequence of the event giving rise to the
operation of any such Section. Nothing in this Section 1.13 shall affect or
postpone any of the obligations of the Borrower or the right of any Lender
provided in Section 1.11, 2.05 or 4.04.
1.14 Maturity Date Extensions. Prior to (but not less than 60
days nor more than 90 days prior to) the first anniversary of the Measurement
Date and prior to (but not less than 60 days nor more than 90 days prior to)
each subsequent anniversary of the Measurement Date, the Borrower may make a
written request to the Administrative Agent, who shall forward a copy of each
such request to each of the Continuing Lenders, that the Facility Maturity Date
then in effect be extended to the date which is one year after such existing
Facility Maturity Date. Such
12
request shall be accompanied by a certificate of an Authorized Officer of the
Borrower stating that no Default or Event of Default has occurred and is
continuing. If, by the date (a "Response Date") which is 30 days prior to any
such anniversary, Continuing Lenders which are not Defaulting Lenders holding at
least a majority of the Commitments held by Continuing Lenders which are not
Defaulting Lenders agree thereto in writing, the Facility Maturity Date, and the
Maturity Date of each Continuing Lender then consenting, shall be automatically
extended to such first anniversary of the then existing Facility Maturity Date.
In the event that the Borrower has not obtained the requisite percentage of
Continuing Lenders to permit an extension by the relevant Response Date, the
Borrower may extend the deadline for obtaining such percentage to the 30th day
following such Response Date in order to take such actions, including those
contemplated by Section 1.15, with respect to any Lender that is a
Non-Continuing Lender after giving effect to such Response Date in order to
obtain the requisite percentage of Lenders constituting Continuing Lenders to
permit such extension. The Administrative Agent shall notify the Borrower and
each Lender of the effectiveness of any such extension. No Lender shall be
obligated to grant any extensions pursuant to this Section 1.14 and any such
extension shall be in the sole discretion of each of them. A Lender's Maturity
Date shall not be so extended pursuant to this Section 1.14 for (x) any Lender
that is a Non-Continuing Lender at the time such request for extension is made
and (y) any Continuing Lender at the time of such request that has not consented
in writing, within the time specified above, to any such request for the
extension thereof.
1.15 Replacement of Lenders. If (w) any Lender becomes a
Non-Continuing Lender, (x) any Lender becomes a Defaulting Lender or otherwise
defaults in its obligations to make Loans or fund Unpaid Drawings, (y) any
Lender refuses to give timely consent to proposed changes, waivers, discharges
or terminations with respect to this Agreement which have been approved by the
Required Lenders or (z) any Lender is owed increased costs under Section 1.11(a)
or (c), Section 2.05 or Section 4.04 which in the judgment of the Borrower are
material in amount and which are not otherwise requested generally by the other
Lenders, the Borrower shall have the right, if no Event of Default then exists
and, in the case of a Lender described in clause (z) above, such Lender has not
withdrawn its request for such compensation or changed its applicable lending
office with the effect of eliminating or substantially decreasing (to a level
which in the judgment of the Borrower is not material) such increased cost, to
replace such Lender (the "Replaced Lender") with one or more other Eligible
Transferee or Transferees (collectively, the "Replacement Lender") reasonably
acceptable to the Majority SMA, provided that (i) at the time of any replacement
pursuant to this Section 1.15, the Replacement Lender shall enter into one or
more Assignment Agreements pursuant to which the Replacement Lender shall
acquire all of the Commitment and outstanding Loans of, and participations in
Letters of Credit by, the Replaced Lender and, in connection therewith, shall
pay to (x) the Replaced Lender in respect thereof an amount equal to the sum of
(a) an amount equal to the principal of, and all accrued interest on, all
outstanding Loans of the Replaced Lender, (b) an amount equal to such Replaced
Lender's participations in Unpaid Drawings that have been funded by such
Replaced Lender, together with all then unpaid interest with respect thereto at
such time, and (c) an amount equal to all accrued, but theretofore unpaid, Fees
owing to the Replaced Lender pursuant to Section 3.01 hereof and (y) the
appropriate Letter of Credit Issuer (or to the extent the Letter of Credit
Issuer has been funded for any portion of Unpaid Drawings not funded by
13
such Replacement Lender through an increase in the other Lenders' Adjusted
Percentages, the other Lenders so affected) an amount equal to such Replaced
Lender's Percentage of any Unpaid Drawing not funded by such Replaced Lender,
(ii) all obligations of the Borrower owing to the Replaced Lender (other than
those specifically described in clause (i) above in respect of which the
assignment purchase price has been, or is concurrently being, paid) shall be
paid in full to such Replaced Lender concurrently with such replacement and
(iii) the Maturity Date applicable to the Replacement Lender's Commitment shall
be the Facility Maturity Date then in effect. Upon the execution of the
respective assignment documentation, the payment of amounts referred to in
clauses (i) and (ii) above and, if so requested by the Replacement Lender,
delivery to the Replacement Lender of the appropriate Note executed by the
Borrower, the Replacement Lender shall become a Lender hereunder and the
Replaced Lender shall cease to constitute a Lender hereunder, except with
respect to indemnification provisions under this Agreement, which shall survive
as to such Replaced Lender.
1.16 Notice of Certain Costs. Notwithstanding anything in this
Agreement to the contrary, to the extent any notice required by Section 1.11 or
2.05 is given by any Lender more than 180 days after the occurrence of the event
giving rise to the additional cost, reduction in amounts or other additional
amounts of the type described in such Section, such Lender shall not be entitled
to compensation under Section 1.11 or Section 2.05, as the case may be, for any
such amounts incurred or accruing prior to the giving of such notice to the
Borrower.
SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower, at any time and from time to time on
or after the Closing Date and prior to the Facility Maturity Date, may request
that a Letter of Credit Issuer issue, for the account of the Borrower and in
support of any Permitted Obligations, to replace Existing Letters of Credit, to
effect Permitted Litigation Bonding or in support of such other obligations of
the Borrower and/or any of its Subsidiaries as are acceptable to the Majority
SMA, an irrevocable standby letter of credit or letters of credit in such form
as may be approved by such Letter of Credit Issuer and the Majority SMA, acting
reasonably, and, subject to and upon the terms and conditions set forth in this
Agreement, each Designated Issuer and, to the extent it has agreed to issue
Letters of Credit, each other Letter of Credit Issuer will issue the Letters of
Credit so requested to be issued. It is the intention of the Borrower and the
Designated Issuers that each Designated Issuer only issue Letters of Credit in
an aggregate Stated Amount that is substantially pro rata to the aggregate
Stated Amount of the Letters of Credit issued by each other Designated Issuer,
it being recognized that credit policies of beneficiaries may result in non-pro
rata treatment for one or more Designated Issuers and may require adjustments to
the procedures set forth in the next sentence. To effect the foregoing
intention, (i) subject to the following clauses (ii) and (iii), new Letters of
Credit issued after the Closing Date will be issued serially by the Designated
Issuers in the same order as the Designated Issuers are listed in the definition
thereof, (ii) any Letter of Credit with a Stated Amount in excess of
$100,000,000 that is to be issued by a Designated Issuer will be issued
severally by all Designated Issuers, pro rata among same (or otherwise allocated
to give effect to clause (i) above), with Chase, if an issuer thereunder (or, if
Chase is not an issuer, such other issuer as selected by the Borrower) to be the
paying agent under any
14
such Letter of Credit, and (iii) a Designated Issuer will not be obligated to
(but may in its sole discretion) issue any Letter of Credit if after giving
effect thereto the aggregate Stated Amount of all outstanding Letters of Credit
issued by such Designated Issuer shall exceed by more than $100,000,000 the
highest aggregate Stated Amount of outstanding Letters of Credit issued by any
other Designated Issuer, with the Administrative Agent to provide the
Designated Issuers at the time of issuance of any new Letter of Credit with any
requested information relating to the outstanding Letters of Credit issued by
the Designated Issuers. The Administrative Agent will coordinate the issuance
of Letters of Credit by the Designated Issuers to give effect to the two
foregoing sentences.
(b) Notwithstanding the foregoing (i) no Letter of Credit
shall be issued (x) the Stated Amount of which, when added to the Letter of
Credit Outstandings at such time would exceed, when added to the sum of the
aggregate principal amount of all Revolving Loans made by Non-Defaulting Lenders
and all Competitive Bid Loans and all Swingline Loans then outstanding, the
Adjusted Total Commitment at such time or (y) with an expiration date beyond the
then Maturity Date of any Lender if after giving effect thereto the Stated
Amount of all Letters of Credit with an expiration date beyond such Maturity
Date would exceed, when added to the aggregate outstanding principal amount of
all Competitive Bid Loans and Revolving Loans with Interest Periods that extend
beyond such Maturity Date, the Expected Total Commitment in effect for each day
on which such Letter of Credit is to be outstanding that occurs beyond such
Maturity Date; (ii) each Letter of Credit shall, unless otherwise agreed by the
Majority SMA and the Letter of Credit Issuer, have an expiry date occurring no
later than one year after the date of issuance thereof (except to the extent
consented to by the prospective Letter of Credit Issuer or Issuers), and in no
event occurring later than the Business Day next preceding the Maturity Date of
the Letter of Credit Issuer or Issuers thereunder, except that, in the case of
the Existing Letters of Credit, the initial expiry date will be automatically
extended for consecutive one year periods (or shorter period as required and
specified by the Borrower) (but not later than the Business Day preceding the
Maturity Date of the Letter of Credit Issuer or Issuers thereunder) unless (I)
any of the Letter of Credit Issuers thereof elects, in accordance with the terms
of such Existing Letter of Credit, not to permit any such extension, (II) the
Borrower elects not to obtain such extension or (III) the Required Lenders shall
have notified the Administrative Agent (who shall promptly inform the Letter of
Credit Issuers thereof) on or prior to the seventy-seventh day preceding any
such extension that a Default or Event of Default has occurred and is continuing
or would result from the extension of the then outstanding Existing Letters of
Credit and, accordingly, that the then expiry date for all the outstanding
Existing Letters of Credit shall not be extended, in which case the Letter of
Credit Issuers of all then outstanding Existing Letters of Credit shall, and
hereby agree to, give notice to the beneficiaries thereof of such nonextension;
(iii) each Letter of Credit shall be denominated in U.S. dollars or an Approved
Alternate Currency; and (iv) no Letter of Credit shall be issued by a Letter of
Credit Issuer after it has received a notice in writing from the Required
Lenders that one or more of the applicable conditions specified in Section 5 are
not then satisfied.
(c) Annex III hereto contains a description of all letters of
credit that were initially issued pursuant to the 1995 3 Year Credit Agreement
in whole or severally in part by institutions that are to be Lenders hereunder
on the Closing Date and that are to remain
15
outstanding on and after the Closing Date. Each such letter of credit (including
the several portions issued by Lenders), including any extension or renewal
thereof (each, as amended from time to time in accordance with the terms thereof
and hereof, an "Existing Letter of Credit") shall constitute a "Letter of
Credit" for all purposes of this Agreement, issued, for purposes of Section
2.03(a), on the Closing Date.
2.02 Letter of Credit Requests. Whenever the Borrower desires
that a Letter of Credit be issued for its account, it shall give the
Administrative Agent and the Letter of Credit Issuer or Letter of Credit Issuers
that are to issue same at least five Business Days' (or such lesser number of
days as may be agreed to by the relevant Letter of Credit Issuer) written notice
thereof. Each notice shall be executed by the Borrower and shall be in the form
of Exhibit B attached hereto (each a "Letter of Credit Request"). The
Administrative Agent shall promptly transmit copies of each Letter of Credit
Request to each Lender.
2.03 Letter of Credit Participations. (a) Immediately upon the
issuance by a Letter of Credit Issuer of any Letter of Credit, such Letter of
Credit Issuer shall be deemed to have sold and transferred to each other Lender
(each such other Lender, in its capacity under this Section 2.03, a
"Participant"), and each such Participant shall be deemed irrevocably and
unconditionally to have purchased and received from such Letter of Credit
Issuer, without recourse or warranty, an undivided interest and participation
(each a "participation"), to the extent of such Participant's Adjusted
Percentage, in such Letter of Credit, each substitute letter of credit, each
drawing made thereunder and the obligations of the Borrower under this Agreement
with respect thereto, and any security therefor that remains in effect after the
Closing Date, or guaranty pertaining thereto (although Letter of Credit Fees
will be paid directly to the Administrative Agent for the ratable account of the
Participants as provided in Section 3.01(c) and the Participants shall have no
right to receive any portion of any Facing Fees). Upon any change in the
Commitments of the Lenders pursuant to Section 1.15 or 12.04, the termination of
a Commitment of a Non-Continuing Lender or the occurrence of any Lender Default,
it is hereby agreed that, with respect to all outstanding Letters of Credit and
Unpaid Drawings, there shall be an automatic adjustment to the participations
pursuant to this Section 2.03 to reflect the new Adjusted Percentages of the
assignor and assignee Lender, of all Continuing Lenders or of all Non-Defaulting
Lenders, as the case may be.
(b) In determining whether to pay under any Letter of Credit,
the Letter of Credit Issuer issuing same shall have no obligation relative to
the Participants other than to confirm that any documents required to be
delivered under such Letter of Credit have been delivered and that they appear
to comply on their face with the requirements of such Letter of Credit. Any
action taken or omitted to be taken by a Letter of Credit Issuer under or in
connection with any Letter of Credit issued by it, if taken or omitted in the
absence of gross negligence or willful misconduct, shall not create for such
Letter of Credit Issuer any resulting liability.
(c) In the event that any Letter of Credit Issuer makes any
payment under any Letter of Credit issued by it and the Borrower shall not have
reimbursed such amount in full to such Letter of Credit Issuer pursuant to
Section 2.04(a), such Letter of Credit Issuer shall promptly notify the
Administrative Agent and each Participant of such failure, and each
16
Participant shall promptly and unconditionally pay to the Administrative Agent
for the account of such Letter of Credit Issuer, the amount of such
Participant's Adjusted Percentage of such unreimbursed payment in lawful money
of the United States of America and in same day funds; provided, however, that
no Participant shall be obligated to pay to the Administrative Agent for the
account of such Letter of Credit Issuer its Adjusted Percentage of such
unreimbursed amount for any wrongful payment made by such Letter of Credit
Issuer under a Letter of Credit as a result of acts or omissions constituting
willful misconduct or gross negligence as determined by a court of competent
jurisdiction on the part of such Letter of Credit Issuer. If such Letter of
Credit Issuer so notifies, prior to 11:00 A.M. (New York time) on any Business
Day, any Participant required to fund a payment under a Letter of Credit, such
Participant shall make available to the Administrative Agent for the account of
such Letter of Credit Issuer such Participant's Adjusted Percentage of the
amount of such payment on such Business Day in same day funds. If and to the
extent such Participant shall not have so made its Adjusted Percentage of the
amount of such payment available to the Administrative Agent for the account of
such Letter of Credit Issuer, such Participant agrees to pay to the
Administrative Agent for the account of such Letter of Credit Issuer, forthwith
on demand such amount, together with interest thereon for each day from such
date until the date such amount is paid to the Administrative Agent for the
account of such Letter of Credit Issuer at the overnight Federal Funds Rate. The
failure of any Participant to make available to the Administrative Agent for the
account of the applicable Letter of Credit Issuer its Adjusted Percentage of any
payment under any Letter of Credit shall not relieve any other Participant of
its obligation hereunder to make available to the Administrative Agent for the
account of such Letter of Credit Issuer its Adjusted Percentage of any payment
under any Letter of Credit on the date required, as specified above, but no
Participant shall be responsible for the failure of any other Participant to
make available to the Administrative Agent such other Participant's Adjusted
Percentage of any such payment.
(d) Whenever any Letter of Credit Issuer receives a payment in
respect of an unpaid reimbursement obligation as to which the Administrative
Agent has received for the account of such Letter of Credit Issuer any payments
from the Participants pursuant to the preceding clause (c), such Letter of
Credit Issuer shall pay to the Administrative Agent and the Administrative Agent
shall promptly pay to each Participant which has paid its Adjusted Percentage of
such reimbursement obligation, in lawful money of the United States of America
and in same day funds, an amount equal to such Participant's share (based upon
the proportionate aggregate amount originally funded by such Participant to the
aggregate amount funded by all Participants) of the principal amount of such
reimbursement obligation and interest thereon accruing after the purchase of the
respective participations.
(e) The obligations of the Participants to make payments to
the Administrative Agent for the account of the Letter of Credit Issuers with
respect to Letters of Credit shall be irrevocable and not subject to
counterclaim, set-off or other defense or any other qualification or exception
whatsoever (except as expressly provided in Section 2.03(c)) and shall be made
in accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
17
(i) any lack of validity or enforceability of this Agreement
or any of the other Credit Documents;
(ii) the existence of any claim, set-off, defense or other right
which the Borrower may have at any time against a beneficiary named in
a Letter of Credit, any transferee of any Letter of Credit (or any
Person for whom any such transferee may be acting), the Administrative
Agent, any Letter of Credit Issuer, any Lender, or other Person,
whether in connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated transactions
(including any underlying transaction between the Borrower and the
beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any other document presented
under the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents;
(v) the occurrence of any Default or Event of Default; or
(vi) the failure of any condition precedent set forth in Section
5 hereof to have been satisfied at the time of the issuance of any
Letter of Credit unless the applicable Letter of Credit Issuer shall
have received a notice in writing to such effect from the Required
Lenders pursuant to Section 2.01(b)(iv) hereof prior to the issuance of
such Letter of Credit.
2.04 Agreement to Repay Letter of Credit Drawings. (a) The
Borrower hereby agrees to reimburse the respective Letter of Credit Issuer, by
making payment to the Administrative Agent in U.S. dollars and immediately
available funds at the Administrative Agent's Office, for any payment or
disbursement made by such Letter of Credit Issuer under any Letter of Credit
issued by it (each such amount so paid until reimbursed, an "Unpaid Drawing")
immediately after, and in any event on the date of, notice given by such Letter
of Credit Issuer to the Borrower of such payment (which notice each Letter of
Credit Issuer hereby agrees to give promptly after the making of any payment or
disbursement under a Letter of Credit), with interest on the amount so paid or
disbursed by such Letter of Credit Issuer, to the extent not reimbursed prior to
1:00 P.M. (New York time) on the date of such payment or disbursement, from and
including the date paid or disbursed to but excluding the date such Letter of
Credit Issuer is reimbursed therefor, at a rate per annum which shall be the
Applicable Reference Rate Margin plus the Reference Rate as in effect from time
to time (plus an additional 2% per annum if not reimbursed by the second
Business Day following any such notice of payment or disbursement), such
interest to be payable on demand. Notwithstanding the foregoing, to the extent
that a Letter of Credit Issuer of a Letter of Credit denominated in a currency
other than U.S. dollars has agreed in writing to such arrangement at the time of
the issuance of such Letter of Credit, the Borrower shall reimburse any Drawing
thereunder in the currency in which such Letter of Credit is denominated;
provided, that (x) if any such Drawing is made at a time when there exists an
Event of Default or (y) if such reimbursement is not made by the close of
business
18
two Business Days after the Borrower has received notice of such Drawing, then,
in either such case, such reimbursement shall instead be made in U.S. dollars
and in immediately available funds.
(b) The Borrower's obligations under this Section 2.04 to
reimburse each Letter of Credit Issuer with respect to Unpaid Drawings
(including, in each case, interest thereon) issued by it shall be absolute and
unconditional under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which the Borrower or any other Person may
have or have had against any Lender (including in its capacity as a Letter of
Credit Issuer or as a Participant), including, without limitation, any defense
based upon the failure of any drawing under a Letter of Credit (each a
"Drawing") to conform to the terms of the Letter of Credit or any
non-application or misapplication by the beneficiary of the proceeds of such
Drawing; provided, that the Borrower shall not be obligated to reimburse the
respective Letter of Credit Issuer for any wrongful payment made by such Letter
of Credit Issuer under a Letter of Credit as a result of acts or omissions
constituting willful misconduct or gross negligence as determined by a court of
competent jurisdiction on the part of such Letter of Credit Issuer.
2.05 Increased Costs. If after the date hereof, the adoption
of any applicable law, rule or regulation, or any change therein, or any change
in the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or actual compliance by any Letter of Credit Issuer or
any Participant with any request or directive made or adopted after the date
hereof (whether or not having the force of law), by any such authority, central
bank or comparable agency shall either (i) impose, modify or make applicable any
reserve, deposit, capital adequacy or similar requirement against letters of
credit issued by such Letter of Credit Issuer, or such Participant's
participation therein, or (ii) impose on any Letter of Credit Issuer or any
Participant any other conditions affecting its obligations under this Agreement
in respect of Letters of Credit or participations therein or any Letter of
Credit or such Participant's participation therein; and the result of any of the
foregoing is to increase the cost to such Letter of Credit Issuer or such
Participant of issuing, maintaining or participating in any Letter of Credit, or
to reduce the amount of any sum received or receivable by such Letter of Credit
Issuer or such Participant hereunder in respect of Letters of Credit or
participations therein, then, upon demand to the Borrower by such Letter of
Credit Issuer or such Participant, as the case may be (a copy of which notice
shall be sent by such Letter of Credit Issuer or such Participant to each Senior
Managing Agent), the Borrower shall pay to such Letter of Credit Issuer or such
Participant such additional amount or amounts as will compensate such Letter of
Credit Issuer or such Participant for such increased cost or reduction. A
certificate submitted to the Borrower by such Letter of Credit Issuer or such
Participant, as the case may be (a copy of which certificate shall be sent by
such Letter of Credit Issuer or such Participant to each Senior Managing Agent),
setting forth in reasonable detail the basis for the determination of such
additional amount or amounts necessary to compensate such Letter of Credit
Issuer or such Participant as aforesaid shall be conclusive and binding on the
Borrower absent manifest error although the failure to deliver any such
certificate shall not, subject to Section 1.16, release or diminish any of the
Borrower's obligations to pay additional amounts pursuant to this Section 2.05
upon receipt of such certificate.
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2.06 Indemnification; Nature of Letter of Credit Issuers'
Duties. (a) In addition to its other obligations under this Section 2, the
Borrower hereby agrees to protect, indemnify, pay and save each of the Letter of
Credit Issuers harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
attorneys' fees but excluding those taxes excluded from the definition of Taxes
in Section 4.04) that any such Letter of Credit Issuer may incur or be subject
to as a consequence, direct or indirect, of (i) the issuance of any Letter of
Credit or (ii) the failure of any Letter of Credit Issuer to honor a drawing
under a Letter of Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
governmental authority (all such acts or omissions, herein called "Government
Acts").
(b) As between the Borrower and the Letter of Credit Issuers,
the Borrower shall assume all risks of the acts, omissions or misuse of any
Letter of Credit by the beneficiary thereof. The Letter of Credit Issuers shall
not be responsible: (i) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in connection
with the application for and issuance of any Letter of Credit, even if it should
in fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (ii) for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, that may prove to be invalid or ineffective for any reason; (iii) for
failure of the beneficiary of a Letter of Credit to comply fully with conditions
required in order to draw upon a Letter of Credit; (iv) for errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) for
errors in interpretation of technical terms; (vi) for any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under a Letter of Credit or of the proceeds thereof; and (vii) for any
consequences arising from causes beyond the control of the Letter of Credit
Issuers, including, without limitation, any Government Acts. None of the above
shall affect, impair, or prevent the vesting of any of the Letter of Credit
Issuers' rights or powers hereunder.
(c) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by any
Letter of Credit Issuer, under or in connection with any Letter of Credit or the
related certificates, if taken or omitted in good faith, shall not put such
Letter of Credit Issuer under any resulting liability to the Borrower. It is the
intention of the parties that this Agreement shall be construed and applied to
protect and indemnify the Letter of Credit Issuers against any and all risks
involved in the issuance of the Letters of Credit arising from any present or
future Government Acts. The Letter of Credit Issuers shall not, in any way, be
liable for any failure by the Letter of Credit Issuers or anyone else to pay any
Drawing under any Letter of Credit as a result of any Government Acts or any
other cause beyond the control of the Letter of Credit Issuers.
(d) Nothing in this Section 2.06 is intended to limit the
reimbursement obligation of the Borrower contained in Section 2.04 hereof. The
obligations of the Borrower under this Section 2.06 shall survive the
termination of this Agreement. No act or omission of any current
20
or prior beneficiary of a Letter of Credit shall in any way affect or impair the
rights of the Letter of Credit Issuers to enforce any right, power or benefit
under this Agreement.
(e) Notwithstanding anything to the contrary contained in this
Section 2.06, (i) the Borrower shall have no obligation to indemnify any Letter
of Credit Issuer in respect of any liability incurred by such Letter of Credit
Issuer arising solely out of the gross negligence or willful misconduct of such
Letter of Credit Issuer as determined by a court of competent jurisdiction and
(ii) the Borrower shall have a claim against any Letter of Credit Issuer and
such Letter of Credit Issuer shall be liable to the Borrower to the extent, but
only to the extent, of any direct, as opposed to consequential, damages suffered
by the Borrower which the Borrower proves were caused by (x) such Letter of
Credit Issuer's willful misconduct or gross negligence as determined by a court
of competent jurisdiction in determining whether the documents presented under
its Letter of Credit complied with the terms of such Letter of Credit or (y)
such Letter of Credit Issuer's willful or grossly negligent failure to pay under
its Letter of Credit after presentation to it of a drawing certificate and any
other documents strictly complying with the terms and conditions of such Letter
of Credit as determined by a court of competent jurisdiction.
SECTION 3. Fees; Commitments.
3.01 Fees. (a) The Borrower agrees to pay the Administrative
Agent for the account of Non-Defaulting Lenders a facility fee (the "Facility
Fee") in the amounts and at the times set forth in the letter dated as of May
__, 1999 (the "Facility Fee Letter") from the Borrower to the Administrative
Agent.
(b) The Borrower agrees to pay to the Administrative Agent for
the account of the Lenders pro rata on the basis of their respective Adjusted
Percentages, a fee in respect of each Letter of Credit (the "Letter of Credit
Fee"), computed for each day at a rate equal to the Applicable Eurodollar Margin
for such day multiplied by the then Stated Amount of such Letter of Credit. Such
Letter of Credit Fees shall be due and payable quarterly in arrears on the 15th
day of each January, April, July and October and on the date upon which the
Total Commitment is terminated.
(c) The Borrower agrees to pay to the Administrative Agent for
the account of each Letter of Credit Issuer a fee in respect of each Letter of
Credit issued by it (the "Facing Fee") computed for each day at a rate equal to
.25% multiplied by the average daily Stated Amount of such Letter of Credit.
Such Facing Fees shall be due and payable quarterly in arrears on the 15th day
of each January, April, July and October and on the date upon which the Total
Commitment is terminated.
(d) The Borrower hereby agrees to pay directly to each Letter
of Credit Issuer upon each issuance of, drawing under, and/or amendment of, a
Letter of Credit issued by such Letter of Credit Issuer such amount as shall at
the time of such issuance, drawing or amendment be the administrative charge
which such Letter of Credit Issuer is customarily charging for issuances of,
drawings under or amendments of, letters of credit issued by it.
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(e) The Borrower shall pay to the Administrative Agent for the
account of each Senior Managing Agent and each other Lender the fees specified
in the accepted commitment letter, or related fee letter, executed by such
Senior Managing Agent or such Lender, as the case may be, when and as due.
(f) All computations of Fees shall be made in accordance with
Section 12.07(b).
3.02 Voluntary Reduction of Commitments. Upon at least three
Business Days' prior written notice (or telephonic notice confirmed in writing)
to the Administrative Agent at the Administrative Agent's Office (which notice
the Administrative Agent shall promptly transmit to each of the Lenders), the
Borrower shall have the right, without premium or penalty, (i) to terminate the
Total Unutilized Commitment, in part or in whole (or, to the extent that at such
time there are no Loans outstanding and no Letter of Credit Outstandings, to
terminate the Total Commitment, in whole), provided, that (x) any such
termination shall apply to proportionately and permanently reduce the Commitment
of each of the Lenders and (y) any partial reduction pursuant to this Section
3.02(i) shall be in the amount of at least $10,000,000, and (ii) at any time
within the 30 days prior to the Maturity Date of any Non-Continuing Bank and so
long as no Event of Default then exists, to terminate the Commitment of such
Non-Continuing Bank provided that (x) all Loans, together with unpaid accrued
interest thereon, of such Non-Continuing Bank are repaid in full and (y) after
giving effect to such termination and repayment, the sum of the aggregate
principal amount of all outstanding Loans and the Letter of Credit Outstandings
does not exceed the Total Commitment.
3.03 Mandatory Reduction of Commitments, etc. (a) The Total
Commitment and the Total Swingline Commitment (and the Commitment and Swingline
Commitment, if any, of each Lender) shall be terminated on the Commitment
Termination Date unless the Closing Date has occurred on or before such date.
(b) On the date which is the earlier of (x) 30 days after any
date on which a Change of Control occurs and (y) the date on which any
Indebtedness of the Borrower in excess of $75,000,000 individually or
$150,000,000 in the aggregate is required to be repurchased as a result of any
such Change of Control, the Total Commitment and Total Swingline Commitment
shall be reduced to zero.
(c) The Total Commitment shall be reduced on any date on which
the Borrower issues or incurs Specified Debt if after giving effect to such
issuance the sum of (i) the Total Commitment plus (ii) the aggregate outstanding
principal amount of Specified Debt exceeds $3 billion, such reduction to be in
amount equal to the excess of such sum over $3 billion.
(d) The Total Commitment shall terminate on the Facility
Maturity Date.
(e) The Total Swingline Commitment shall terminate on the
Swingline Maturity Date.
(f) Each Lender's Commitment and Swingline Commitment, if any,
shall terminate on such Lender's Maturity Date.
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(g) Each partial reduction of the Total Commitment pursuant to
Section 3.03(c) shall apply proportionately to the Commitment of each Lender.
SECTION 4. Payments.
4.01 Voluntary Prepayments. The Borrower shall have the right
to prepay Revolving Loans and Swingline Loans in whole or in part from time to
time on the following terms and conditions: (i) the Borrower shall give the
Administrative Agent at the Administrative Agent's Office written notice (or
telephonic notice promptly confirmed in writing) of its intent to make such
prepayment, the amount of such prepayment and (in the case of Eurodollar Loans)
the specific Borrowing(s) pursuant to which made, which notice shall be given by
the Borrower no later than (x) in the case of Revolving Loans, 11:00 A.M. (New
York time) one Business Day prior to, or (y) in the case of Swingline Loans,
11:00 A.M. (New York time) on, the date of such prepayment and shall promptly be
transmitted by the Administrative Agent to each of the Lenders or Swingline
Lenders, as the case may be; (ii) each partial prepayment of any Borrowing shall
be in an aggregate principal amount of at least $10,000,000, provided that no
partial prepayment of Eurodollar Loans made pursuant to a single Borrowing shall
reduce the outstanding Revolving Loans made pursuant to such Borrowing to an
amount less than the Minimum Borrowing Amount for Eurodollar Loans; and (iii)
each prepayment in respect of any Revolving Loans or Swingline Loans made
pursuant to a Borrowing shall be applied pro rata among such Revolving Loans or
Swingline Loans, provided that, at the Borrower's election in connection with
any prepayment pursuant to this Section 4.01, such prepayment shall not be
applied to any Revolving Loan of a Defaulting Lender at any time when the
aggregate amount of Revolving Loans of any Non-Defaulting Lender exceeds such
Non-Defaulting Lender's Percentage of all Revolving Loans then outstanding. The
Borrower shall not have the right to voluntarily prepay any Competitive Bid Loan
without the consent of the Lender that has made same.
4.02 Mandatory Prepayments.
(A) Requirements. If on any date the sum of the outstanding
principal amount of Revolving Loans made by Non-Defaulting Lenders, Swingline
Loans and Competitive Bid Loans and the aggregate amount of Letter of Credit
Outstandings (all the foregoing, collectively, the "Aggregate Outstandings")
exceeds the Adjusted Total Commitment as then in effect, the Borrower shall
repay on such date the principal of Swingline Loans and, after Swingline Loans
have been paid in full, Revolving Loans, in an amount equal to such excess. If,
after giving effect to the prepayment of all outstanding Swingline Loans and
Revolving Loans, the Aggregate Outstandings exceed the Adjusted Total Commitment
then in effect, the Borrower shall pay to the Administrative Agent an amount in
cash equal to such excess and the Administrative Agent shall hold such payment
as security for the obligations of the Borrower hereunder (including without
limitation obligations in respect of Letter of Credit Outstandings) pursuant to
a cash collateral agreement to be entered into in form and substance
satisfactory to the Administrative Agent (which shall permit certain investments
in cash equivalents satisfactory to the Administrative Agent, until the proceeds
are applied to the secured obligations). If, after giving effect to the
prepayment of all outstanding Swingline Loans and Revolving Loans and the cash
23
collateralization of all Letter of Credit Outstandings as set forth above, the
remaining Aggregate Outstandings exceed the Adjusted Total Commitment, the
Borrower shall repay on such date the principal of Competitive Bid Loans in an
aggregate amount equal to such excess, provided that no Competitive Bid Loan
shall be prepaid pursuant to this sentence unless the Lender that made same
consents to such prepayment. In addition, the Borrower shall repay the Revolving
Loans and Swingline Loans, if any, of each Lender on such Lender's Maturity
Date.
(B) Application. With respect to each prepayment of Loans
required by this Section 4.02, the Borrower may designate the Types of Loans
which are to be prepaid and the specific Borrowing(s) pursuant to which made;
provided, that: (i) if any prepayment of Eurodollar Loans made pursuant to a
single Borrowing shall reduce the outstanding Revolving Loans made pursuant to
such Borrowing to an amount less than the Minimum Borrowing Amount for
Eurodollar Loans, such Borrowing shall immediately be converted into Reference
Rate Loans; (ii) each prepayment of any Loans made pursuant to a Borrowing shall
be applied pro rata among such Loans; and (iii) notwithstanding the provisions
of the preceding clause (ii), no prepayment made pursuant to Section 4.02(A)
(other than the last sentence thereof) of Revolving Loans shall be applied to
the Revolving Loans of any Defaulting Lender. In the absence of a designation by
the Borrower as described in the preceding sentence, the Administrative Agent
shall, subject to the above, make such designation in its sole discretion with a
view, but no obligation, to minimize breakage costs owing under Section 1.12.
4.03 Method and Place of Payment. (a) Except as otherwise
specifically provided herein, all payments under this Agreement shall be made to
the Administrative Agent for the ratable account of the Lenders entitled
thereto, not later than 1:00 P.M. (New York time) on the date when due and shall
be made in immediately available funds and in lawful money of the United States
of America at the Administrative Agent's Office, it being understood that
written, telex or facsimile notice by the Borrower to the Administrative Agent
to make a payment from the funds in the Borrower's account at the Administrative
Agent's Office shall constitute the making of such payment to the extent of such
funds held in such account. The Administrative Agent will thereafter cause to be
distributed on the same day (if payment was actually received by the
Administrative Agent prior to 2:00 P.M. (New York time) on such day) like funds
relating to the payment of principal or interest or Fees ratably to the Lenders
entitled thereto. If and to the extent that any such distribution shall not be
so made by the Administrative Agent in full on the same day (if payment was
actually received by the Administrative Agent prior to 2:00 P.M. (New York time)
on such day), the Administrative Agent shall pay to each Lender its ratable
amount thereof and each such Lender shall be entitled to receive from the
Administrative Agent, upon demand, interest on such amount at the overnight
Federal Funds Rate for each day from the date such amount is paid to the
Administrative Agent until the date the Administrative Agent pays such amount to
such Lender.
(b) Any payments under this Agreement which are made later
than 1:00 P.M. (New York time) shall be deemed to have been made on the next
succeeding Business Day. Whenever any payment to be made hereunder shall be
stated to be due on a day which is not a Business Day, the due date thereof
shall be extended to the next succeeding Business Day and,
24
with respect to payments of principal, interest shall be payable during such
extension at the applicable rate in effect immediately prior to such extension.
4.04 Net Payments. (a) All payments made by the Borrower
hereunder will be made without setoff or counterclaim. The Borrower will pay,
prior to the date on which penalties attach thereto, all present and future
income, stamp and other taxes, levies, or costs and charges whatsoever imposed,
assessed, levied or collected on or in respect of a Loan and/or the recording,
registration, notarization or other formalization thereof and/or any payments of
principal, interest or other amounts made on or in respect of a Loan (all such
taxes, levies, costs and charges being herein collectively called "Taxes";
provided that Taxes shall not include taxes imposed on or measured by the
overall net income of that Lender (or any alternative tax imposed generally by
any relevant jurisdiction in lieu of a tax on net income) by the United States
of America or any political subdivision or taxing authority thereof or therein,
taxes imposed under Section 884 of the Code or taxes on or measured by the
overall net income (or any alternative tax imposed generally by any relevant
jurisdiction in lieu of a tax on net income) of that Lender or any foreign
office, branch or subsidiary of that Lender by any foreign country or
subdivision thereof in which that Lender or that office, branch or subsidiary is
doing business). The Borrower shall also pay such additional amounts equal to
increases in taxes payable by that Lender described in the foregoing proviso
which increases are attributable to payments made by the Borrower described in
the immediately preceding sentence of this Section. Promptly after the date on
which payment of any such Tax is due pursuant to applicable law, the Borrower
will, at the request of that Lender, furnish to that Lender evidence, in form
and substance satisfactory to that Lender, that the Borrower has met its
obligation under this Section 4.04. The Borrower will indemnify each Lender
against, and reimburse each Lender on demand for, any Taxes, as determined by
that Lender in its good faith and reasonable discretion. Such Lender shall
provide the Borrower with appropriate receipts for any payments or
reimbursements made by the Borrower pursuant to this Section 4.04.
(b) Each Lender which is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) for Federal income tax
purposes agrees to provide to the Borrower on or prior to the Closing Date, or
in the case of a Lender that is an assignee or transferee of an interest under
this Agreement pursuant to Section 1.15 or Section 12.04 (unless the respective
Lender was already a Lender hereunder immediately prior to such assignment or
transfer and such Lender is in compliance with the provisions of this Section
4.04(b)), on the date of such assignment or transfer to such Lender, two
accurate and complete original signed copies of Internal Revenue Service Form
W8ECI or Form W8BEN (with respect to a complete exemption under an income tax
treaty) (or successor forms) certifying to such Lender's entitlement to a
complete exemption from United States withholding tax with respect to payments
to be made under this Agreement or any Note. Each Lender that is a United
States person (as such term is defined in Section 7701(a)(30) of the Code) for
Federal income tax purposes, but that is not a corporation (as such term is
defined in Section 7701(a)(3) of the Code) for such purposes, agrees to provide
to the Borrower on or prior to the Closing Date, or in the case of a Lender
that is an assignee or transferee of an interest under this Agreement pursuant
to Section 1.15 or Section 12.04 (unless the respective Lender was already a
Lender hereunder immediately prior to such assignment or transfer and such
Lender is in compliance with the provisions of this Section
25
4.04(b)), on the date of such assignment to such Lender, two accurate and
complete original signed copies of Internal Revenue Service Form W-9 (or
successor form). In addition, each such Lender agrees that from time to time
after the Measurement Date, when a lapse in time or change in circumstances
renders the previous certification obsolete or inaccurate in any material
respect, it will deliver to the Borrower two new accurate and complete original
signed copies of Internal Revenue Service Form W8ECI or W8BEN (with respect to
a claim for benefits of an income tax treaty), as the case may be, and such
other forms as may be required in order to confirm or establish the entitlement
of such Lender to a continued exemption from or reduction in United States
withholding tax with respect to payments under this Agreement or any Note, or
it shall immediately notify the Borrower and the Administrative Agent of its
inability to deliver any such form. Notwithstanding anything to the contrary
contained in Section 4.04(a), (x) the Borrower shall be entitled, to the extent
it is required to do so by law, to deduct or withhold income or other similar
taxes imposed by the United States (or any political subdivision or taxing
authority thereof or therein) from interest, fees or other amounts payable
hereunder for the account of any Lender which is not a United States person (as
such term is defined in Section 7701(a)(30) of the Code) for United States
federal income tax purposes and which has not provided to the Borrower such
forms that establish a complete exemption from such deduction or withholding
and (y) the Borrower shall not be obligated pursuant to Section 4.04(a) to pay
a Lender in respect of income or similar taxes imposed by the United States or
any additional amounts with respect thereto if such Lender has not provided to
the Borrower the Internal Revenue Service forms required to be provided to the
Borrower pursuant to this Section 4.04(b).
SECTION 5. Conditions Precedent.
5.01 Conditions Precedent to Closing Date. This Agreement
shall become effective on the date (the "Closing Date") when each of the
following conditions are first satisfied:
A. Execution; Notes. The Execution Date shall have occurred as
provided in Section 12.10 and there shall have been delivered to the
Administrative Agent for the account of each Lender the appropriate Note
executed by the Borrower in the amount, maturity and as otherwise provided
herein.
B. Officer's Certificate. The Administrative Agent shall have
received certificates dated the Closing Date signed by an appropriate officer of
each of Holdings and the Borrower stating that all of the applicable conditions
set forth in Sections 5.01E., F., G., H., J., K., L., M., N. and O. and 5.02
exist as of such date.
C. Opinions of Counsel. The Administrative Agent shall have
received an opinion, or opinions, in form and substance satisfactory to each
Senior Managing Agent, addressed to each of the Lenders and dated the Closing
Date, from (i) H. Xxxxx XxXxxxx, Senior Vice President, Associate General
Counsel and Secretary of Holdings and the Borrower, which opinion shall cover
the matters contained in Exhibit C-1 hereto and (ii) White & Case LLP, special
counsel to the Lenders, which opinion shall cover the matters contained in
Exhibit C-2 hereto, together with such other opinions, if any, covering such
matters as the Majority SMA
26
shall reasonably request, from counsel, and in form and substance, satisfactory
to the Majority SMA.
D. Corporate Proceedings. On the Closing Date, all corporate
and legal proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other Credit Documents shall
be satisfactory in form and substance to each Senior Managing Agent, and the
Administrative Agent shall have received all information and copies of all
certificates, documents and papers, including records of corporate proceedings
and governmental approvals, if any, which any Senior Managing Agent reasonably
may have requested in connection therewith, such documents and papers where
appropriate to be certified by proper corporate or governmental authorities.
E. Organizational Documentation etc. The Lenders shall have
received copies of the Certificate of Incorporation and By-Laws of each Credit
Party, certified on the Closing Date as true and complete by an appropriate
corporate officer or governmental authority.
F. Adverse Change, etc. (a) Nothing shall have occurred from
December 31, 1998 to the Closing Date which has (x) a material adverse effect on
the ability of any Credit Party to perform its obligations to the Lenders or (y)
a Material Adverse Effect.
(b) All governmental and third party approvals in connection
with Transactions and the transactions contemplated by the Credit Documents and
otherwise referred to therein to be completed on or before the Closing Date
shall have been obtained and remain in effect.
G. Litigation. Except as set forth in Annex IV hereto, there
shall be on the Closing Date no actions, suits, proceedings, inquiry, injunction
or restraining order pending, entered or threatened with respect to Holdings or
any of its Subsidiaries that are reasonably likely to have (x) a material
adverse effect on the rights or remedies of the Lenders or on the ability of any
Credit Party to perform its obligations to the Lenders hereunder or under any
other Credit Document to which it is a party or (y) a Material Adverse Effect.
H. Termination of the Existing Credit Agreements. The total
commitments under the Existing Credit Agreements shall have been terminated, and
all loans thereunder shall have been repaid in full, together with interest
thereon, and all other amounts owing pursuant to the Existing Credit Agreements
shall have been repaid in full (except to the extent the letters of credit
issued thereunder remain outstanding pursuant to arrangements satisfactory to
the issuers thereof) and the Existing Credit Agreements shall have been
terminated and be of no further force or effect (except as to indemnities
contained therein which survive the termination of the Existing Credit
Agreements in accordance with the terms thereof).
I. Projections; Pro Forma Balance Sheets. The Lenders shall
have received (i) financial forecasts for Borrower and its Non-Nabisco
Subsidiaries for the period from January 1, 1999 to and including the initial
Facility Maturity Date (the "Projections") and (ii) pro forma consolidated
balance sheet of the Borrower and its Non-Nabisco Subsidiaries as at December
31, 1998, which in each case give effect to the Transactions. The Projections
(and the supporting
27
assumptions and explanations thereto) and pro forma balance sheet shall be in
form and substance satisfactory to the Majority SMA.
J. International Tobacco. The International Tobacco Sale
shall have been consummated.
K. Existing Senior Notes. The Borrower shall have successfully
completed a tender offer and consent solicitation (collectively, the "Borrower
Tender") with respect to the Existing Senior Notes pursuant to which amendments
to the indentures governing the Existing Senior Notes not tendered shall have
become effective that substantially eliminate the covenants and restrictions
contained in such indentures, all as contemplated by the Borrower's Tender Offer
and Consent Solicitation (without any waiver of any conditions specified
therein) or otherwise on a basis reasonably satisfactory to the Senior Managing
Agents, and all Existing Senior Notes that have been duly tendered shall have
been, or shall on the Closing Date be, redeemed.
L. Holdings Indebtedness. Holdings shall have (i) redeemed the
9.5% TOPrS due 2047 duly tendered for redemption pursuant to Holdings' Tender
Offer and Consent Solicitation, (ii) irrevocably called for redemption all of
its 10% TOPrS due 2044 and its ESOP Convertible Preferred Stock, and (iii) set
aside from the proceeds of the Reorganization Merger Payment sufficient cash and
cash equivalents to (x) economically defease the untendered 9.5% TOPrS due 2047
and redeem all such securities called for redemption and (y) defray its expected
operating expenses, with all such redemptions and payments to be effected as
contemplated by Holdings' Tender Offer and Consent Solicitation (without any
waiver of any condition specified therein) or otherwise on a basis reasonably
satisfactory to the Senior Managing Agents (all the foregoing, the "Other Debt
Repayment").
M. Credit Ratings. The Loans under this Agreement and, if
issued, the New Senior Notes, each shall have received a Credit Rating from each
Rating Agency equal to or greater than the Minimum Investment Grade Rating
(after giving pro forma effect to the Spin-Off).
N. No Defaults. On the Closing Date, there shall exist no
event of default (or condition which would constitute an event of default with
the giving of notice or the passage of time) under any material financing or
lease agreement or other material contract of any of the Credit Parties, it
being agreed that this condition would not be breached by the Transactions
resulting in (i) a put of the Existing Foreign Currency Debt, (ii) the need to
cash collateralize any letter of credit (or several portion thereof) outstanding
immediately prior to the Closing Date to the extent not an Existing Letter of
Credit, and (iii) defaults under guaranties by the Parent or any of its
Subsidiaries of the obligations of International Tobacco to the extent Parent or
such Subsidiary is indemnified by Japan Tobacco Inc. for any liability under
such guaranties (the "Excluded Defaults").
O. Subsidiary Guaranty. Xxxxxxxx Tobacco shall have duly
authorized, executed and delivered a Guaranty substantially in the form of
Exhibit D hereto (as modified, amended or supplemented from time to time in
accordance with the terms hereof and thereof, the "Subsidiary Guaranty"), and
the Subsidiary Guaranty shall be in full force and effect.
28
P. New Senior Notes. If (i) any New Senior Notes had been
issued prior to, or are issued on, the Closing Date, Xxxxxxxx Tobacco shall have
duly authorized, executed and delivered a guaranty of such New Senior Notes that
satisfies the requirements of the agreements governing same (which guaranty will
be reasonably satisfactory to the Senior Managing Agents) and (ii) any New
Senior Notes had been issued prior to the Closing Date and the proceeds of such
issuance had been deposited in a trust arrangement provided for in the
agreements governing the New Senior Notes, all amounts so deposited in such
trust arrangement shall have been released to the Borrower.
Q. Fees, etc. On the Closing Date, the Borrower shall have
paid to each Senior Managing Agent and each Lender all costs, fees and expenses
payable to the Senior Managing Agents or the Lenders, to the extent then due.
5.02 Conditions Precedent to All Credit Events. The obligation
of each Lender to make any Loans (other than pursuant to a Mandatory Borrowing)
and the obligation of each Letter of Credit Issuer to issue (or in the case of
Existing Letters of Credit, to continue same hereunder on the Closing Date)
Letters of Credit, is subject, at the time of the making of each such Loan
and/or the issuance (or in the case of Existing Letters of Credit, continuance
hereunder on the Closing Date) of each such Letter of Credit, to the
satisfaction of the following conditions at such time:
A. No Default; Representations and Warranties. At the time of
each Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein or in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on and as of the date of such Credit Event.
The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by each Credit Party to each of the Lenders that all
of the applicable conditions specified above exist as of that time. All of the
certificates, legal opinions and other documents and papers referred to in
Section 5.01, unless otherwise specified, shall be delivered to the
Administrative Agent at the Administrative Agent's Office for the account of
each of the Lenders and, except for the Notes, in sufficient counterparts for
each of the Lenders and shall be satisfactory in form and substance to each
Senior Managing Agent.
SECTION 6. Representations, Warranties and Agreements. In
order to induce the Lenders to enter into this Agreement, to make the Loans and
issue or participate in Letters of Credit as provided for herein, the Borrower
and, so long as a Credit Party, Holdings each makes the following
representations and warranties to and agreements with the Lenders, all of which
shall survive the execution and delivery of this Agreement and the making of the
Loans and the issuance of the Letters of Credit (with (x) all such
representations, warranties and agreements being first made on the Closing Date
and (y) occurrence of each Credit Event being deemed to constitute a
representation and warranty that the matters specified in this Section 6 are
true and correct in all material respects on and as of the date hereof and as of
the date of each such Credit Event unless such representation and warranty
expressly indicates that it is being made as of any specific date):
29
6.01 Corporate Status. Each of Parent and each of its Material
Subsidiaries (i) is a duly organized and validly existing corporation or other
entity in good standing under the laws of the jurisdiction of its organization
and has the corporate or other organizational power and authority to own its
property and assets and to transact the business in which it is engaged and (ii)
has duly qualified and is authorized to do business and is in good standing in
all jurisdictions where it is required to be so qualified and where the failure
to be so qualified would have a material adverse effect on the operations,
business, properties, assets or financial condition of Parent and its
Subsidiaries taken as a whole.
6.02 Corporate Power and Authority. Each Credit Party has the
corporate power and authority to execute, deliver and carry out the terms and
provisions of the Credit Documents to which it is a party and has taken all
necessary corporate action to authorize the execution, delivery and performance
of the Credit Documents to which it is a party. Each Credit Party has duly
executed and delivered each Credit Document to which it is a party and each such
Credit Document constitutes the legal, valid and binding obligation of such
Person enforceable in accordance with its terms.
6.03 No Violation. Neither the execution, delivery and
performance by any Credit Party of the Credit Documents to which it is a party
nor compliance with the terms and provisions thereof, nor the consummation of
the transactions contemplated therein (including, without limitation, the
Transactions) (i) will contravene any applicable provision of any law, statute,
rule, regulation, order, writ, injunction or decree of any court or governmental
instrumentality, (ii) will conflict or be inconsistent with or result in any
breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien upon any of the property or assets of
Parent or any of its Subsidiaries pursuant to the terms of any material
indenture, mortgage, deed of trust, agreement or other instrument to which
Parent or any of its Subsidiaries is a party or by which it or any of its
property or assets is bound or to which it may be subject other than Excluded
Defaults or (iii) will violate any provision of the charter or By-Laws of Parent
or any of its Subsidiaries.
6.04 Litigation. Except as set forth on Annex IV, there are no
actions, suits or proceedings pending or threatened with respect to Parent or
any of its Subsidiaries that are reasonably likely to have (x) a material
adverse effect on the rights or remedies of the Lenders or on the ability of any
Credit Party to perform its obligations to them hereunder and under the other
Credit Documents to which it is a party or (y) a Material Adverse Effect.
6.05 Use of Proceeds; Margin Regulations. (a) The proceeds of
all Loans shall be utilized by the Borrower (i) to refinance outstandings, if
any, under the Existing Credit Agreements and (ii) for general corporate
purposes of the Borrower and/or its Non-Nabisco Subsidiaries (including, without
limitation, payment of fees and expenses in connection with the Transactions,
the refinancing of Indebtedness, the backing up of commercial paper issued by
the Borrower and Permitted Litigation Bonding).
30
(b) Neither the making of any Loan hereunder, nor the use of
the proceeds thereof, will violate or be inconsistent with the provisions of
Regulation T, U or X of the Board of Governors of the Federal Reserve System. At
the time of each Credit Event, not more than 25% of the value of the assets of
the Borrower or Parent and its Subsidiaries on a consolidated basis subject to
the restrictions contained in Sections 8.02 and 8.03 will constitute Margin
Stock. Notwithstanding the foregoing provisions of this Section 6.05, no
proceeds of any Loan will be utilized to purchase any Margin Stock (other than,
prior to the consummation of the Spin-Off, the stock of NHC) in a transaction,
or as part of a series of transactions, the result of which is the ownership by
Parent and/or its Subsidiaries of 5% or more of the capital stock of a
corporation unless the Board of Directors of such corporation has approved such
transaction prior to any public announcement of the purchase, or the intent to
purchase, any such Margin Stock.
6.06 Governmental Approvals. No order, consent, approval,
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, any foreign or domestic governmental or public body or
authority, or any subdivision thereof, is required to authorize or is required
in connection with (i) the execution, delivery and performance of any Credit
Document or (ii) the legality, validity, binding effect or enforceability of any
Credit Document.
6.07 Investment Company Act. Neither Parent nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
6.08 True and Complete Disclosure. All factual information
(taken as a whole) heretofore or contemporaneously furnished by or on behalf of
the Credit Parties or any of their Subsidiaries in writing to any Senior
Managing Agent or any Lender for purposes of or in connection with this
Agreement or any transaction contemplated herein is, and all other such factual
information (taken as a whole) hereafter furnished by or on behalf of such
Persons in writing to any Lender will be, true and accurate in all material
respects on the date as of which such information is dated or certified and not
incomplete by omitting to state any material fact necessary to make such
information (taken as a whole) not misleading at such time in light of the
circumstances under which such information was provided. The projections and pro
forma financial information contained in such materials were based on good faith
estimates and assumptions believed by such Persons to be reasonable at the time
made, it being recognized by the Lenders that such projections as to future
events are not to be viewed as facts and that actual results during the period
or periods covered by any such projections may differ from the projected
results.
6.09 Financial Condition; Financial Statements. The
consolidated balance sheets of each of Holdings and its Subsidiaries and the
Borrower and its Subsidiaries, at December 31, 1996, at December 31, 1997 and at
December 31, 1998 and the related consolidated statements of income and cash
flows (and retained earnings) for the fiscal years ended as of said dates, which
statements have been examined by Deloitte & Touche LLP, independent certified
public accountants, who delivered an unqualified opinion in respect thereof, and
the pro forma (after giving effect to the Transactions and related financings)
consolidated balance sheets of the Bor-
31
rower and its Non-Nabisco Subsidiaries as at December 31, 1998, copies of which
have heretofore been furnished to each Lender, present fairly the consolidated
financial position of Holdings and the Borrower at the dates of said statements
and the results of operations for the periods covered thereby (or, in the case
of the pro forma balance sheet, present a good faith estimate of the adjusted
consolidated pro forma financial condition of the Borrower at the date
thereof). All such financial statements (other than the aforesaid pro forma
balance sheet) have been prepared in accordance with GAAP consistently applied
except to the extent provided in the notes to said financial statements. Since
December 31, 1998, nothing has occurred which has had a Material Adverse
Effect.
6.10 Tax Returns and Payments. Each of Parent and its
Subsidiaries has filed all federal income tax returns and all other material tax
returns, domestic and foreign, required to be filed by it and has paid all
material taxes and assessments payable by it which have become due, other than
those not yet delinquent and except for those contested in good faith. Parent
and each of its Subsidiaries have paid, or have provided adequate reserves (in
the good faith judgment of the management of Parent) for the payment of, all
federal, state and foreign income taxes applicable for all prior fiscal years
and for the current fiscal year to the date hereof.
6.11 Compliance with ERISA. Except to the extent that all
events described in the following clauses of this sentence and then in existence
would not, in the aggregate, be likely to have a Material Adverse Effect, each
Plan is in substantial compliance with ERISA and the Code; no Reportable Event
has occurred with respect to any Plan; no Plan is insolvent or in
reorganization, no Plan has an Unfunded Current Liability, and no Plan has an
accumulated or waived funding deficiency or permitted decreases in its funding
standard account within the meaning of Section 412 of the Code; neither Parent,
any Subsidiary nor any ERISA Affiliate has incurred any material liability to or
on account of a Plan pursuant to Section 409, 502(i), 502(1), 515, 4062, 4063,
4064, 4069, 4201 or 4204 of ERISA or Section 4971 or 4975 of the Code; no
proceedings have been instituted to terminate any Plan; no condition exists
which presents a material risk to Parent or any Subsidiary of incurring a
liability to or on account of a Plan pursuant to the foregoing provisions of
ERISA and the Code. With respect to Plans that are multiemployer plans (within
the meaning of Section 3(37) of ERISA) and Plans which are not currently
maintained or contributed to by Parent, any Subsidiary or any ERISA Affiliate,
the representations and warranties in this Section are made to the best
knowledge of Parent.
6.12 Subsidiaries. Annex V hereto lists each Material
Subsidiary of Holdings (and the direct and indirect ownership interest of
Holdings therein) other than NHC and its Subsidiaries, in each case existing on
the Closing Date. All ownership percentages referred to in Annex V are
calculated without regard to directors' or nominees' qualifying shares.
6.13 Patents, etc. Parent and each of its Subsidiaries have
obtained all material patents, trademarks, servicemarks, trade names,
copyrights, licenses and other rights, free from burdensome restrictions, that
are necessary for the operation of their respective businesses as presently
conducted and as proposed to be conducted.
32
6.14 Pollution and Other Regulations. Parent and each of its
Subsidiaries are in material compliance with all material laws and regulations
relating to pollution and environmental control, equal employment opportunity
and employee safety in all domestic jurisdictions in which Parent and each of
its Subsidiaries is presently doing business, and Parent will comply and cause
each of its Subsidiaries to comply with all such laws and regulations which may
be imposed in the future in jurisdictions in which Parent or such Subsidiary may
then be doing business other than in each case those the non-compliance with
which would not have a material adverse effect on the business, assets,
properties or financial condition of Parent and its Subsidiaries taken as a
whole.
6.15 Properties. Parent and each of its Subsidiaries have good
title to all properties that are necessary for the operation of their respective
businesses as presently conducted and as proposed to be conducted, free and
clear of all Liens, other than as permitted by this Agreement.
6.16 Year 2000 Compliance. Any reprogramming required to
permit the proper functioning, in and following the year 2000, of (i) the
computer systems of Parent and its Subsidiaries and (ii) equipment containing
embedded microchips (including systems and equipment supplied by others or with
which the systems of Parent and its Subsidiaries interface) and the testing of
all such systems and equipment, as so reprogrammed, will be completed by
September 30, 1999. The cost to Parent and its Subsidiaries of such
reprogramming and testing and of the reasonably foreseeable consequences of year
2000 to Parent and its Subsidiaries (including, without limitation,
reprogramming errors and the failure of others' systems or equipment) will not
result in a Default or a Material Adverse Effect. Except for such of the
reprogramming referred to in the preceding sentence as may be necessary, the
computer and management information systems of Parent and its Subsidiaries are
and, with ordinary course upgrading and maintenance, will continue for the term
of this Agreement to be, sufficient to permit Parent and its Subsidiaries to
conduct their business without a Material Adverse Effect, resulting therefrom.
SECTION 7. Affirmative Covenants. Parent hereby covenants and
agrees that on the Closing Date and thereafter, for so long as this Agreement is
in effect and until the Commitments and each Letter of Credit have terminated
and the Loans and Unpaid Drawings, together with interest, Fees and all other
Obligations incurred hereunder, are paid in full:
7.01 Information Covenants. Parent will furnish to each
Lender:
(a) Annual Financial Statements. Within 100 days after the
close of each fiscal year of Parent (x) to the extent prepared to
comply with SEC requirements, a copy of the SEC Form 10-Ks filed by
Parent (and at such time when the Borrower is not Parent, the Borrower)
with the SEC for such fiscal year, or, if no such Form 10-K was so
filed by Parent and/or the Borrower for such fiscal year, the
consolidated balance sheet of Parent and its Subsidiaries (and at such
time when the Borrower is not Parent, of the Borrower and its
Subsidiaries), as at the end of such fiscal year and the related
consolidated statements of income and of cash flows for such fiscal
year, setting forth comparative
33
consolidated figures as of the end of and for the preceding fiscal
year, and examined by independent certified public accountants of
recognized national standing whose opinion shall not be qualified as
to the scope of audit or as to the status of Parent or any of its
Subsidiaries as a going concern, together in any event with a
certificate of such accounting firm stating that in the course of its
regular audit of the business of Parent (and at such time when the
Borrower is not Parent, the Borrower), which audit was conducted in
accordance with generally accepted auditing standards, such accounting
firm has obtained no knowledge of any Default or Event of Default
which has occurred and is continuing or, if in the opinion of such
accounting firm such a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof and (y) the
consolidated balance sheet of Parent and its Non-Nabisco Subsidiaries
(and at such time when the Borrower is not Parent, of the Borrower and
its Non-Nabisco Subsidiaries), as at the end of such fiscal year and
the related consolidated statements of income and of cash flows for
such fiscal year, setting forth comparative consolidated figures as of
the end of and for the preceding fiscal year, and examined by an
independent certified public accountant of recognized national
standing whose opinion shall not be qualified as to the scope of audit
or as to the status of Parent or any of its Non-Nabisco Subsidiaries
as a going concern.
(b) Quarterly Financial Statements. As soon as available and
in any event within 55 days after the close of each of the first three
quarterly accounting periods in each fiscal year of Parent (x) to the
extent prepared to comply with SEC requirements, a copy of the SEC Form
10-Qs filed by Parent (and at such time when the Borrower is not
Parent, the Borrower) with the SEC for each such quarterly period, or,
if no such Form 10-Q was so filed by Parent or the Borrower with
respect to any such quarterly period, the consolidated condensed
balance sheet of Parent and its Subsidiaries (and at such time when the
Borrower is not Parent, of the Borrower and its Subsidiaries) as at the
end of such quarterly period and the related consolidated condensed
statements of income for such quarterly period and for the elapsed
portion of the fiscal year ended with the last day of such quarterly
period, and the related consolidated condensed statement of cash flows
for the elapsed portion of the fiscal year ended with the last day of
such quarterly period, and (y) the consolidated condensed balance sheet
of Parent and its Non-Nabisco Subsidiaries (and at such time when the
Borrower is not Parent, of the Borrower and its Non-Nabisco
Subsidiaries), as at the end of such quarterly period and the related
consolidated condensed statements of income for such quarterly period
and for the elapsed portion of the fiscal year ended with the last day
of such quarterly period, and the related consolidated condensed
statement of cash flows for the elapsed portion of the fiscal year
ended with the last day of such quarterly period, and in each case
setting forth comparative consolidated figures for the related periods
in the prior fiscal year or, in the case of such consolidated condensed
balance sheet, for the last day of the prior fiscal year, all of which
shall be certified by the Chief Financial Officer, Controller, Chief
Accounting Officer or other Authorized Officer of Parent or the
Borrower, as the case may be, subject to changes resulting from audit
and normal year-end audit adjustments.
34
(c) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Section 7.01(a) and (b), a
certificate of the Chief Financial Officer, Controller, Chief
Accounting Officer or other Authorized Officer of Parent to the effect
that no Default or Event of Default exists or, if any Default or Event
of Default does exist, specifying the nature and extent thereof, which
certificate shall set forth the calculations required to establish
whether Parent and its Subsidiaries were in compliance with the
provisions of Sections 3.03(c), 8.03(g), 8.04(l), 8.05, 8.07, and 8.08
as at the end of such fiscal period or year, as the case may be.
(d) Notice of Default or Litigation. Promptly, and in any
event within three Business Days after any senior financial or legal
officer of Parent (or, if not Parent, the Borrower) obtains knowledge
thereof, notice of (x) the occurrence of any event which constitutes a
Default or Event of Default which notice shall specify the nature
thereof, the period of existence thereof and what action Parent
proposes to take with respect thereto and (y) any litigation or
governmental proceeding pending against or affecting Parent or any of
its Subsidiaries which is likely to have a material adverse effect on
the business, properties, assets, financial condition or prospects of
Parent and its Subsidiaries taken as a whole or the ability of any
Credit Party to perform its obligations hereunder or under any other
Credit Document.
(e) Credit Rating Changes. Promptly after any senior financial
or legal officer of Parent obtains knowledge thereof, notice of any
change in the Applicable Credit Rating assigned by either Rating
Agency.
(f) Other Information. Promptly upon transmission thereof,
copies of any filings and registrations with, and reports to, the
Securities and Exchange Commission or any successor thereto (the "SEC")
by Parent or any of its Subsidiaries (other than amendments to any
registration statement (to the extent such registration statement, in
the form it becomes effective, is delivered to the Lenders), exhibits
to any registration statement and any registration statements on Form
S-8 and Forms 3, 4 and 5) and copies of all financial statements, proxy
statements, notices and reports that Parent or any of its Subsidiaries
shall send to analysts or the holders of any publicly issued debt of
Parent and/or any of its Subsidiaries in their capacity as such holders
(in each case to the extent not theretofore delivered to the Lenders
pursuant to this Agreement) and, with reasonable promptness, such other
information or documents (financial or otherwise) as any Senior
Managing Agent on its own behalf or on behalf of the Required Lenders
may reasonably request from time to time.
7.02 Books, Records and Inspections. Parent will, and will
cause each of its Subsidiaries to, permit, upon reasonable notice to the Chief
Financial Officer, Controller or any other Authorized Officer of the Borrower,
officers and designated representatives of any Senior Managing Agent or the
Required Lenders to visit and inspect any of the properties or assets of Parent
and any of its Subsidiaries in whomsoever's possession, and to examine the books
of account of Parent and any of its Subsidiaries and discuss the affairs,
finances and accounts of Parent and of any of its Subsidiaries with, and be
advised as to the same by, its and their officers
35
and independent accountants, all at such reasonable times and intervals and to
such reasonable extent as any Senior Managing Agent or the Required Lenders may
desire.
7.03 Insurance. Parent will, and will cause each of its
Subsidiaries to, at all times maintain in full force and effect insurance in
such amounts, covering such risks and liabilities and with such deductibles or
self-insured retentions as are in accordance with normal industry practice.
7.04 Payment of Taxes. Parent will pay and discharge, and will
cause each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any properties belonging to it, prior to the date on which material
penalties attach thereto, and all lawful claims which, if unpaid, might become a
Lien or charge upon any properties of Parent or any of its Subsidiaries;
provided, that neither Parent nor any Subsidiary shall be required to pay any
such tax, assessment, charge, levy or claim which is being contested in good
faith and by proper proceedings if it has maintained adequate reserves (in the
good faith judgment of the management of Parent) with respect thereto in
accordance with GAAP.
7.05 Consolidated Corporate Franchises. Parent will do, and
will cause each of its Material Subsidiaries to do, or cause to be done, all
things necessary to preserve and keep in full force and effect its existence,
rights and authority; provided, that any transaction permitted by Section 8.02
will not constitute a breach of this Section 7.05.
7.06 Compliance with Statutes, etc. Parent will, and will
cause each Subsidiary to, comply with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (including applicable statutes, regulations, orders and
restrictions relating to environmental standards and controls) other than those
the non-compliance with which would not have a material adverse effect on the
business, properties, assets or financial condition of Parent and its
Subsidiaries taken as a whole or on the ability of any Credit Party to perform
its obligations under any Credit Document to which it is party.
7.07 ERISA. As soon as possible and, in any event, within 10
days after Parent or any Subsidiary knows or has reason to know of the
occurrence of any of the following, Parent will deliver to each of the Lenders a
certificate of the Chief Financial Officer, Treasurer or Controller of Parent
setting forth details as to such occurrence and the action, if any, which
Parent, such Subsidiary or an ERISA Affiliate is required or proposes to take,
together with any notices required or proposed to be given to or filed with or
by Parent, such Subsidiary, such ERISA Affiliate, the PBGC, a Plan participant
(other than notices relating to an individual participant's benefits) or the
Plan administrator with respect thereto: that a Reportable Event has occurred,
that an accumulated funding deficiency has been incurred or an application may
be or has been made to the Secretary of the Treasury for a waiver or
modification of the minimum funding standard (including any required installment
payments) or an extension of any amortization period under Section 412 of the
Code with respect to a Plan, that a Plan which has an Unfunded Current Liability
has been or may be terminated, reorganized, partitioned or
36
declared insolvent under Title IV of ERISA, that a Plan has an Unfunded Current
Liability giving rise to a lien under ERISA or the Code, that proceedings may be
or have been instituted to terminate a Plan which has an Unfunded Current
Liability, that a proceeding has been instituted pursuant to Section 515 of
ERISA to collect a delinquent contribution to a Plan, or that Parent, any
Subsidiary or any ERISA Affiliate will or may incur any liability (including any
contingent or secondary liability) to or on account of the termination of or
withdrawal from a Plan under Section 4062, 4063, 4064, 4069, 4201 or 4204 of
ERISA or with respect to a Plan under Section 4971 or 4975 of the Code or
Section 409 or 502(i) or 502(l) of ERISA. Upon request of a Lender, Parent will
deliver to such Lender a complete copy of the annual report (Form 5500) of each
Plan required to be filed with the Internal Revenue Service. In addition to any
certificates or notices delivered to the Lenders pursuant to the first sentence
hereof, copies of any notices received by Parent or any Subsidiary shall be
delivered to the Lenders no later than 10 days after the later of the date such
notice has been filed with the Internal Revenue Service or the PBGC, given to
Plan participants (other than notices relating to an individual participant's
benefits) or received by Parent or such Subsidiary.
7.08 Good Repair. Parent will, and will cause each of its
Subsidiaries to, ensure that its properties and equipment used or useful in its
business in whomsoever's possession they may be, are kept in good repair,
working order and condition, normal wear and tear excepted, and that from time
to time there are made in such properties and equipment all needful and proper
repairs, renewals, replacements, extensions, additions, betterments and
improvements thereto, to the extent and in the manner customary for companies in
similar businesses.
7.09 End of Fiscal Years; Fiscal Quarters. Parent will, for
financial reporting purposes, cause (i) each of its (and to the extent the
Borrower is not Parent, the Borrower's) fiscal years to end on December 31 of
each year, (ii) each of its (and to the extent the Borrower is not Parent, the
Borrower's) fiscal quarters to end on March 31, June 30, September 30 and
December 31 of each year and (iii) each of the Subsidiaries to maintain the
accounting periods maintained by such Subsidiary on the Closing Date, consistent
with the past practice and procedures of each such Subsidiary; provided that any
of the foregoing fiscal or reporting periods may be changed if (x) Parent gives
the Lenders 30 days' prior written notice of such proposed change and (y) prior
to effecting such change Parent and the Majority SMA shall have agreed upon
adjustments, if any, to Sections 3.03(c), 8.03(h), 8.04(c) and (j), 8.05, 8.07
and 8.08 (and the definitions used therein) the sole purpose of which shall be
to give effect to the proposed change in fiscal or accounting periods (it being
understood and agreed that to the extent that Parent and the Majority SMA cannot
agree on appropriate adjustments to such Sections (or that no adjustments are
necessary), the proposed change may not be effected).
7.10 Competitive Bid Loan Outstandings. On the date of the
delivery by the Borrower of any Notice of Borrowing, Notice of Competitive Bid
Borrowing or Letter of Credit Request at any time when the Borrower shall have
knowledge that a mandatory prepayment is required pursuant to Section 4.02(A) of
this Agreement and, in any event, on the last Business Day of each fiscal
quarter of the Borrower, the Borrower will furnish to the Administrative Agent a
statement setting forth the aggregate outstanding principal amount of
Competitive Bid Loans at such time.
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7.11 Subsidiary Guaranty; Collateral. (a) No later than 15
days after the date on which a Guaranty Event occurs, each Material Subsidiary
not then a Subsidiary Guarantor shall (i) authorize the execution of, and
execute and deliver to the Administrative Agent on behalf of the Lenders, a
Subsidiary Guaranty and (ii) cause to be delivered such opinions of counsel as
are reasonably requested by, and are reasonably satisfactory to, the Senior
Managing Agents in respect of such Subsidiary Guaranty.
(b) No later than 15 days after the date on which a Trigger
Event occurs each Credit Party (including any Person required by Section 7.11(a)
to become a Credit Party at such time) shall (i) authorize, execute and deliver
to the Collateral Agent on behalf of the Secured Creditors pledge agreements,
security agreements and/or mortgages that are reasonably acceptable in form and
substance to the Senior Managing Agents (the "Security Documents") which create
in favor of the Collateral Agent on behalf of the Secured Creditors a pledge of
and/or a lien on substantially all of its assets with such exceptions as are
reasonably satisfactory to the Senior Managing Agents (the "Collateral") with
such priority as is provided for in the representations contained in the
respective Security Documents, (ii) deliver in pledge thereunder all securities,
notes and stock powers required to be delivered by the terms of the respective
Security Documents, (iii) execute and cause to be filed such financing
statements and mortgages as are required to perfect the pledges and Liens
created under the Security Documents and to obtain the priority of such
perfection required by the respective Security Documents and (iv) cause to be
delivered such opinions of counsel as are reasonably requested by, and as are
reasonably satisfactory to, the Senior Managing Agents with respect to the
Security Documents and the pledges and Liens created thereunder. Notwithstanding
the foregoing, all Collateral shall be automatically released (subject to
reinstatement upon the occurrence of a new Trigger Event) if at any time
subsequent to the Credit Parties providing the Collateral in compliance with the
preceding sentence the Applicable Credit Rating issued by each Rating Agency
shall, giving effect to such release and subject to the completion of such
release, if applicable, each be the Minimum Investment Grade Rating or higher.
7.12 Indebtedness. The Borrower shall issue prior to, and
shall have outstanding on, December 31, 1999 New Senior Notes in an aggregate
principal amount which, when combined with the aggregate principal amount of
Qualified Stub Notes outstanding on such date, equals at least $1 billion.
SECTION 8. Negative Covenants. Parent hereby covenants and
agrees that on the Closing Date and thereafter, for so long as this Agreement is
in effect and until the Commitments and each Letter of Credit have terminated
and the Loans and Unpaid Drawings, together with interest, Fees and all other
Obligations incurred hereunder, are paid in full:
8.01 Changes in Business. Except as otherwise permitted by
Section 8.02, Parent and its Non-Nabisco Subsidiaries, taken as a whole, will
not substantively alter the character of their business from that conducted by
Parent and its Non-Nabisco Subsidiaries taken as a whole at the Execution Date.
38
8.02 Consolidation, Merger, Sale of Assets, etc. (a) Parent
will not, and will not permit Borrower (if not Parent), any Subsidiary Guarantor
and (whether or not a Subsidiary Guarantor) any Specified Subsidiary to, wind
up, liquidate or dissolve its affairs, or enter into any transaction of merger
or consolidation, or sell or otherwise dispose of all or any substantial part of
its property or assets (other than inventory and equipment to the extent sold or
disposed of in the ordinary course of business) or agree to do any of the
foregoing at any future time, except that the following shall be permitted:
(i) any other Non-Nabisco Subsidiary (including any of the
Specified Subsidiaries) may merge with, or liquidate into, Xxxxxxxx
Tobacco, with Xxxxxxxx Tobacco being the survivor thereof, or transfer
all or any of their business, properties and assets to Xxxxxxxx
Tobacco;
(ii) FSH and GMB may merge or consolidate with each other and
all of the capital stock of IHC may be transferred to GMB;
(iii) if not effected on or prior to the Closing Date and, in
such case, no Event of Default exists at the time of the consummation
thereof, the Reorganization Merger; and
(iv) if no Event of Default exists at the time of the
consummation thereof, the Spin-Off.
(b) Parent will not permit any Non-Nabisco Subsidiary to enter
into any transaction of merger of consolidation with, or to sell or otherwise
dispose of all or any substantial part of its assets to, Holdings, the Borrower,
NHC or any Subsidiary of NHC.
(c) Parent will not, and will not permit Borrower (if not
Parent) or any Non-Nabisco Subsidiary to liquidate into, or enter into any
transaction of merger or consolidation with, or sell or otherwise dispose of any
part of its properties to any other Subsidiary (including one formed as a result
thereof) if (x) any such transaction involves a Subsidiary Guarantor and the
survivor of such merger or consolidation or the transferee of such properties or
assets is not a Subsidiary Guarantor and/or (y) the Person that is the survivor
of any such merger or consolidation is a Material Subsidiary and none of the
Persons so merging or consolidating were Material Subsidiaries prior thereto, or
the Person that is any such transferee is a Material Subsidiary after giving
effect thereto but was not a Material Subsidiary prior thereto unless, in each
case, either (I) the Senior Managing Agents have consented to such transaction
in writing or (II) the new Material Subsidiary resulting becomes a Subsidiary
Guarantor and executes (x) a counterpart of the Subsidiary Guaranty and (y) if
the Security Documents are in effect at such time, such Security Documents as
the Majority SMA shall reasonably request, with, in the case of this clause (y)
such actions having been taken to perfect the pledge of, and Liens on, the stock
and substantially all of the assets of such new Subsidiary as would have been
taken if such new Subsidiary had been a Subsidiary at the time of the last
Trigger Event, all to the reasonable satisfaction of the Majority SMA.
8.03 Liens. Parent will not, and will not permit Borrower (if
not Parent) or any Non-Nabisco Subsidiary to, (x) create, incur, assume or
suffer to exist any Lien in respect of
39
Indebtedness upon any property or assets of any kind (real or personal, tangible
or intangible) of Parent, the Borrower (if not Parent) or any such Non-Nabisco
Subsidiary whether now owned or hereafter acquired or (y) assign any right to
receive income as security for the payment of Indebtedness, except:
(a) Liens encumbering customary initial deposits and margin
deposits, and other Liens incurred in the ordinary course of business
and which are within the general parameters customary in the industry,
securing obligations under Permitted Commodities Agreements;
(b) Liens securing reimbursement obligations of the Borrower
and its Non-Nabisco Subsidiaries with respect to (x) trade letters of
credit incurred in the ordinary course of business, which are to be
repaid in full not more than one year after the date originally
incurred to finance the purchase of goods by the Borrower or any of its
Non-Nabisco Subsidiaries, provided that such Liens shall attach only to
documents or other property relating to such letters of credit and the
products and proceeds thereof and (y) letters of credit incurred in the
ordinary course of business in connection with payments of foreign
excise taxes in respect of tobacco sales, provided that (i) no such
letter of credit shall have an expiry date later than six months after
the date of issuance thereof and (ii) such Liens are granted in the
ordinary course of business;
(c) Liens (x) arising pursuant to purchase money mortgages
securing Indebtedness (and any extensions, renewals or refinancings of
such Indebtedness to the extent not increasing the outstanding
principal amount thereof) representing the purchase price (or financing
of the purchase price within 180 days after the respective purchase) of
assets acquired after the Closing Date, provided that (i) any such
Liens attach only to the assets so purchased and (ii) the Indebtedness
(including any such permitted extensions, renewals or refinancings)
secured by any such Lien does not exceed 100%, nor is less than 70%, of
the purchase price of the property being purchased and (y) existing on
specific tangible assets at the time acquired by the Borrower or any of
its Non-Nabisco Subsidiaries or on assets of a Person at the time such
Person first becomes a Subsidiary (together with Liens securing any
extensions, renewals or refinancings of the Indebtedness secured
thereby to the extent not increasing the outstanding principal amount
thereof), provided that (i) any such Liens were not created at the time
of or in contemplation of the acquisition of such assets or Person by
the Borrower and/or its Non-Nabisco Subsidiaries, (ii) in the case of
any such acquisition of a Person, any such Lien attaches only to a
specific tangible asset of such Person and not assets of such Person
generally and (iii) the Indebtedness secured by any such Lien does not
exceed 100% of the fair market value of the asset to which such Lien
attaches, determined at the time of the acquisition of such asset or at
the time such Person first becomes a Subsidiary, as the case may be;
(d) Liens created pursuant to the Security Documents and the
Escrow;
40
(e) Liens resulting from the Borrower cash collateralizing
supersedeas and other appeal bonds, or providing cash collateral
directly to courts to satisfy such courts' requirements for a stay to
appeal verdicts, orders and/or judgments, in each case to the extent
utilizing Permanent Surplus Cash;
(f) Existing Liens (and any extensions or renewals of such
Liens (to the extent included in clause (i) of the definition of
Existing Liens) to the extent such Liens do not attach to any
additional properties and the Indebtedness secured thereby is not
increased); and
(g) Liens not otherwise permitted by the foregoing clauses (a)
through (f) securing any Indebtedness of the Borrower and/or its
Non-Nabisco Subsidiaries provided that the aggregate principal amount
of Indebtedness on a consolidated basis secured by Liens permitted by
this clause (g) shall not exceed $25,000,000 at any time.
8.04 Indebtedness. Parent (to the extent Holdings) will not,
and Parent will not permit any Non-Nabisco Subsidiary to, contract, create,
incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of (x) Holdings under the Holdings Guaranty
and (y) Subsidiary Guarantors under the Subsidiary Guaranty;
(b) (i) Indebtedness owing by any Subsidiary Guarantor to the
Borrower or any other Subsidiary Guarantor and (ii) Indebtedness of any
Subsidiary (other than a Specified Subsidiary) (x) consisting of
Contingent Obligations in respect of, or (y) constituting reimbursement
obligations under letters of credit issued in support of, obligations
(other than Contingent Obligations) of any Subsidiary of the Borrower
to the extent such other obligations are permitted by this Agreement
but excluding any Contingent Obligations in respect of, or
reimbursement obligations relating to, Independent Litigation Bonds;
(c) Obligations under letters of credit described in Section
8.03(b);
(d) Indebtedness of Xxxxxxxx Tobacco under any guaranty of
Permitted Currency Agreements;
(e) Obligations of any Non-Nabisco Subsidiary (other than any
Specified Subsidiary) under letters of credit incurred in the ordinary
course of business in connection with the purchase of tobacco or other
products or goods for use in the day-to-day operations of the Borrower
and its Subsidiaries consistent with the Borrower's past practices or
then current industry practices;
(f) Indebtedness secured by Liens permitted by Section
8.03(e);
(g) Existing Debt (and any extensions, renewals or
refinancings of such Indebtedness to the extent not increasing the
outstanding principal amount thereof);
41
(h) Indebtedness of Subsidiary Guarantors as guarantors of the
Borrower's obligations in respect of any Specified Debt (other than the
Stub Notes) and/or any Supported CP;
(i) Indebtedness of Xxxxxxxx Tobacco (x) owing to IHC on the
Closing Date together with any interest accrued in respect thereof, (y)
owing from time to time to FHS and (z) owing from time to time to other
Subsidiaries of Xxxxxxxx Tobacco to the extent arising in the normal
course of business in connection with their cash management systems, in
each case to the extent such Indebtedness is subordinated to the
obligations of Xxxxxxxx Tobacco under the Subsidiary Guaranty in a
manner reasonably satisfactory to the Majority SMA;
(j) Indebtedness of any Non-Nabisco Subsidiary (other than any
Specified Subsidiary) in any manner guaranteeing or intended to
guarantee, whether directly or indirectly, any leases, dividends or
other monetary obligations of any Person in which such Subsidiary has
an ownership interest, provided that the aggregate maximum stated or
determinable amount (or, if not stated or determinable, the maximum
reasonably anticipated liability in respect of such Indebtedness as
determined in good faith by such Subsidiary) of all Indebtedness
permitted pursuant to this clause (j) shall not exceed at any time an
amount in excess of $50,000,000;
(k) Indebtedness of (i) Non-Nabisco Subsidiaries other than
Xxxxxxxx Tobacco owing to Xxxxxxxx Tobacco to the extent incurred in
the ordinary course of business consistent with past practices, (ii)
Non-Nabisco Subsidiaries that are not Subsidiary Guarantors or
Specified Subsidiaries to other Non-Nabisco Subsidiaries that are not
Subsidiary Guarantors or Specified Subsidiaries; and (iii) GMB to FSH
and/or FSH to GMB;
(l) Indebtedness of Non-Nabisco Subsidiaries (other than the
Specified Subsidiaries) not otherwise permitted by the foregoing
clauses (a) through (k), provided that the aggregate outstanding
principal amount of Indebtedness on a consolidated basis incurred
pursuant to this clause (l) shall not exceed $50,000,000 at any time.
8.05 Limitation on Dividends. Parent will not, and to the
extent not Parent, the Borrower will not, declare or pay any dividends (other
than dividends payable solely in its capital stock) or return any capital to its
stockholders or authorize or make any other distribution, payment or delivery of
property or cash to its stockholders as such, or redeem, retire, purchase or
otherwise acquire, directly or indirectly, for a consideration, any shares of
any class of its capital stock now or hereafter outstanding (or any warrants for
or options or stock appreciation rights in respect of any of such shares but not
including any convertible debt), or set aside any funds for any of the foregoing
purposes, or permit any of its Subsidiaries to purchase or otherwise acquire for
consideration any shares of any class of the capital stock of Holdings or the
Borrower now or hereafter outstanding (or any options or warrants or stock
appreciation rights issued by Holdings or the Borrower with respect to its
capital stock) (all of the foregoing "Dividends"), provided that so long as no
Event of Default then exists in the case of clauses (i), (iii), (iv) and (vii):
42
(i) the Reorganization Merger shall be permitted to the extent
not in violation of Section 8.02 and in connection therewith the
Borrower may make the Reorganization Merger Payment to Holdings with
Holdings to utilize substantially all of the proceeds of such payment
for the purposes described in Section 5.01L;
(ii) Parent may issue shares of Parent Common Stock upon the
exercise of any warrants or options or upon the conversion or
redemption of any convertible or redeemable preferred or preference
stock, and in connection with any such exercise, conversion or
redemption Parent may pay cash in lieu of issuing fractional shares of
Parent Common Stock;
(iii) Parent may repurchase Parent Common Stock (and/or options
or warrants in respect thereof) pursuant to, and in accordance with the
terms of, management and/or employee stock plans, provided that the
aggregate amount of cash paid in respect of all such repurchases in any
calendar year pursuant to this clause (iii) does not exceed $15,000,000
and to the extent not Parent, the Borrower may declare and pay, or
otherwise effect, Dividends to Holdings to fund the repurchases made by
Holdings while Parent pursuant to this clause (iii);
(iv) Parent may declare and pay, or otherwise effect, any other
Dividend provided that, at the time it is declared, the aggregate
amount of such Dividend, when added to all Dividends theretofore
declared pursuant to this clause (iv) after the Closing Date shall not
exceed an amount equal to the sum of (x) $500,000,000 plus (y) 50% of
Cumulative Adjusted Cash Net Income plus (z) the aggregate cash
proceeds (net of underwriting discounts and commissions) received by
Parent after the Closing Date from issuances of its equity securities
(provided that the aggregate amount of such aggregate net cash proceeds
received in any twelve-month period shall be deemed not to exceed
$250,000,000 for purposes of this clause (iv)(z)), in each case
determined at the time of the declaration thereof, provided that such
Dividend is paid within 45 days of the making of such declaration, and
to the extent not Parent, the Borrower may declare and pay, or
otherwise effect, Dividends to Holdings to fund the permitted Dividends
that are paid by Holdings while Parent pursuant to this clause (iv),
provided that (a) any Dividend declared by Holdings while Parent that
is paid by Holdings after the consummation of the Spin-Off and is not
funded by Dividends from the Borrower will not be included in the
computation of Dividends declared by Parent for the purposes of this
clause (iv), (b) Holdings, while Parent, may declare a Dividend for
payment on or prior to July 1, 1999 in an amount not in excess of the
last regularly scheduled Dividend paid by Holdings prior to the Closing
Date and such Dividend (except to the extent not funded by a cash pass
through dividend paid by NHC in an amount at least comparable to the
dividend paid by NHC in respect of such last scheduled quarterly
Dividend so paid by Holdings) will not be included in the computation
of Dividends declared by Parent for purposes of this clause (iv) and
(c) Dividends may only be paid by Parent under this clause (iv) if at
the time of the declaration thereof the excess of (i) the sum of the
Total Unutilized Commitment and Permanent Surplus Cash, in each case at
such time over (ii) the sum of
43
the amount of such Dividends so declared and the outstanding principal
or face amount of Supported CP at such time shall equal at least
$225,000,000;
(v) the Spin-Off shall be permitted to the extent not in
violation of Section 8.02;
(vi) Parent and the Borrower (if not Parent) may issue and
exchange shares of any class or series of its common stock now or
hereafter outstanding for shares of any other class or series of its
common stock now or hereafter outstanding; and
(vii) Parent and the Borrower (if not Parent) may, in connection
with any reclassification of its common stock and any exchange
permitted by clause (vi) above, pay cash in lieu of issuing fractional
shares of any class or series of its common stock.
8.06 Transactions with Affiliates. Parent will not, and will
not permit any Subsidiary to, enter into any transaction or series of
transactions, whether or not in the ordinary course of business, with any
Affiliate (other than any Wholly-Owned Subsidiary of Parent and, prior to the
Spin-Off in the case of a member of the Nabisco Group, any other member of the
Nabisco Group) other than on terms and conditions substantially as favorable to
Parent or such Subsidiary as would be obtainable by Parent or such Subsidiary at
the time in a comparable arm's-length transaction with a Person other than an
Affiliate; provided, that the foregoing restrictions shall not apply to: (i)
customary fees paid to members of the Board of Directors of Parent and of its
Subsidiaries; (ii) the Distribution Agreement and, prior to the consummation of
the Spin-Off, the RJRN Agreements; (iii) the Transactions; and (iv) prior to the
consummation of the Spin-Off, any transaction with any member of the Nabisco
Group if the Board of Directors of Holdings determines in good faith that such
transaction is in the best interest of Holdings and/or such Subsidiary, as the
case may be.
8.07 Consolidated Net Worth. Parent will not permit
Consolidated Net Worth to be less than (x) at any time on or prior to March 31,
2000, $6,800,000,000 and (y) at any time thereafter, $6,900,000,000.
8.08 Fixed Charge Coverage Ratio. Parent will not permit the
ratio of (i) Adjusted Operating Income to (ii) Consolidated Fixed Charges for
any Test Period ending (x) after the Closing Date and on or prior to March 31,
2000, to be less than 1.05 to 1.00 and (y) at any time thereafter, to be less
than 1.10 to 1.00.
8.09 Investments. The Parent will not, and will not permit the
Borrower (if not Parent) and the Non-Nabisco Subsidiaries to, purchase or
acquire any stock of, or any other ownership or equity interest in, or make any
capital contribution to, any other Person except pursuant to an acquisition
wherein the merger or consolidation, and/or the consideration paid by Parent,
the Borrower and/or the Non-Nabisco Subsidiaries in connection with such
acquisition, is permitted by Section 8.02, provided that any such acquisition of
the stock or interests in a Person that has theretofore been conducting a
business or that theretofore has owned assets and that was not theretofore a
Subsidiary must constitute a Permitted Investment:
44
8.10 No Negative Pledge. Parent shall not, and shall not
permit the Borrower (if not Parent) or any Non-Nabisco Subsidiary to, enter into
any agreement or arrangement that prohibits or restricts (including by requiring
ratable sharing of Liens) the Borrower or any Subsidiary Guarantor from entering
into the Security Documents and/or granting any Lien in favor of the Collateral
Agent for the benefit of the Secured Creditors other than (i) any ratable
sharing of Liens provisions governing any of the New Senior Notes to the extent
such provisions shall be satisfied by the entering into of the Security
Documents and the granting of Liens thereunder in favor of the Collateral Agent
for the benefit of the Secured Creditors and (ii) any prohibition created in
connection with any Lien permitted by Section 8.03 to the extent applicable only
to the property subject to such Lien.
8.11 Prepayments of Indebtedness. The Borrower will not prepay
or redeem any Qualified Stub Notes or New Senior Notes if after giving effect
thereto the aggregate outstanding principal amount of Qualified Stub Notes and
New Senior Notes would be less than $1 billion.
SECTION 9. Events of Default. Upon the occurrence of any of
the following specified events (each an "Event of Default"):
9.01 Payments. The Borrower shall (i) default in the payment
when due of any principal of the Loans or (ii) default, and such default shall
continue for five or more days, in the payment when due of any interest on the
Loans or any Fees or any Unpaid Drawings or any other amounts owing hereunder or
under any other Credit Document; or
9.02 Representations, etc. Any representation, warranty or
statement made or deemed made by any Credit Party herein or in any other Credit
Document or in any statement or certificate delivered or required to be
delivered pursuant hereto or thereto shall prove to be untrue in any material
respect on the date as of which made or deemed made; or
9.03 Covenants. Any Credit Party shall (a) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 7.10, 7.11, 7.12 or 8, or (b) default in the due performance or
observance by it of any term, covenant or agreement (other than those referred
to in Section 9.01, 9.02 or clause (a) of this Section 9.03) contained in this
Agreement and such default shall continue unremedied for a period of at least 30
days after notice to the Borrower by any Senior Managing Agent or the Required
Lenders; or
9.04 Default Under Other Agreements. (a) Except in all cases
for Excluded Defaults, Parent or any of its Subsidiaries shall (i) default in
any payment with respect to any Indebtedness (other than the Obligations) in
excess of $75,000,000 individually or $150,000,000 in the aggregate, for Parent
and its Subsidiaries, beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was created or (ii)
default in the observance or performance of any agreement or condition relating
to any such Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition exist,
the effect of which default or other event or condition is to cause, or to
permit the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause (determined without regard to whether
any notice or lapse of time is required, provided that, prior to the
consummation of the Spin-Off, the existence of any
45
Event of Default under this Section 9.04(a)(ii) with respect to Indebtedness
outstanding under the Nabisco Credit Agreement shall be determined after giving
effect to any notice or lapse of time provided to Nabisco, Inc. in the Nabisco
Credit Agreement, as the case may be), any such Indebtedness to become due prior
to its stated maturity; or (b) any such Indebtedness shall be declared to be due
and payable, or required to be prepaid other than by a regularly scheduled
required prepayment or as a mandatory prepayment (unless such required
prepayment or mandatory prepayment results from a default or an event of the
type that constitutes an Event of Default), prior to the stated maturity
thereof; or
9.05 Bankruptcy, etc. Parent or any of its Material
Subsidiaries shall commence a voluntary case concerning itself under Title 11 of
the United States Code entitled "Bankruptcy," as now or hereafter in effect, or
any successor thereto (the "Bankruptcy Code"); or an involuntary case is
commenced against Parent or any of its Material Subsidiaries and the petition is
not controverted within 10 days after service of notice of such case on Parent
or such Material Subsidiary, or is not dismissed within 60 days after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
Parent or any of its Material Subsidiaries; or Parent or any of its Material
Subsidiaries commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to Parent or any of its Material Subsidiaries; or there is
commenced against Parent or any of its Material Subsidiaries any such proceeding
which remains undismissed for a period of 60 days; or Parent or any of its
Material Subsidiaries is adjudicated insolvent or bankrupt; or any order of
relief or other order approving any such case or proceeding is entered; or
Parent or any of its Material Subsidiaries suffers any appointment of any
custodian or the like for it or any substantial part of its property to continue
undischarged or unstayed for a period of 60 days; or Parent or any of its
Material Subsidiaries makes a general assignment for the benefit of creditors;
or any corporate action is taken by Parent or any of its Material Subsidiaries
for the purpose of effecting any of the foregoing; or
9.06 ERISA. (a) A single-employer plan (as defined in Section
4001 of ERISA) maintained or contributed to by any Credit Party or any of its
Subsidiaries or any ERISA Affiliate shall fail to maintain the minimum funding
standard required by Section 412 of the Code for any plan year or part thereof
or a waiver of such standard or extension of any amortization period is sought
or granted under Section 412 of the Code or shall provide security to induce the
issuance of such waiver or extension, (b) any Plan is or shall have been
terminated or the subject of termination proceedings under ERISA or an event has
occurred entitling the PBGC to terminate a Plan under Section 4042(a) of ERISA,
(c) any Plan shall have an Unfunded Current Liability, (d) Parent or any
Subsidiary or any ERISA Affiliate has incurred or is likely to incur a material
liability to or on account of a termination of or a withdrawal from a Plan under
Section 515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA, (e) Parent or any
Subsidiary has incurred after the Closing Date liabilities (after giving effect
to any reserves applicable thereto and maintained on the Closing Date) pursuant
to one or more employee welfare benefit plans (as defined in Section 3(1) of
ERISA) which provide benefits to retired employees (other than as required by
Section 601 of ERISA) or employee pension benefit plans (as defined in Section
3(2)
46
of ERISA) (except in each case solely as a result of a change in estimate
or adjustment of liabilities existing on the Closing Date upon the adoption or
implementation of Financial Accounting Statement 106), or (f) Parent or any
Subsidiary or any ERISA Affiliate has incurred a liability under Section 409,
502(i) or 502(l) of ERISA or Section 4971 or 4975 of the Code; and there shall
result from any such event or events described in the preceding clauses of this
Section 9.06 the imposition of a Lien upon the assets of Parent or any
Subsidiary, the granting of a security interest, or a liability or a material
risk of incurring a liability, which Lien, security interest or liability would
have a material adverse effect upon the business, operations or financial
condition of Parent and its Subsidiaries taken as a whole; or
9.07 Guaranty. Any Guaranty or any provision thereof shall
cease to be in full force or effect (other than in each case as a result of the
termination of the Holdings Guaranty upon the consummation of the Spin-Off), or
Holdings (for so long as the Holdings Guaranty is in effect) or any Subsidiary
Guarantor or any Person acting by or on behalf thereof shall deny or disaffirm
Holdings' or such Subsidiary Guarantor's obligations under any Guaranty (other
than in each case as a result of the termination of the Holdings Guaranty upon
the consummation of the Spin-Off) or Holdings (for so long as the Holdings
Guaranty is in effect) or any Subsidiary Guarantor shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to the Guaranty and such default, if a default of
the covenant therein not to violate the provisions of Section 7 hereof, shall
continue unremedied for a period of at least 30 days after written notice to the
Borrower from the Administrative Agent; or
9.08 Judgments. One or more judgments or decrees shall be
entered against Parent or any of its Material Subsidiaries involving a liability
of $75,000,000 or more in the case of any one such judgment or decree and
$150,000,000 or more in the aggregate for all such judgments and decrees for
Parent and its Material Subsidiaries (to the extent not paid or fully covered by
insurance) and any such judgments or decrees shall not have been vacated,
discharged or stayed or bonded pending appeal within 60 days from the entry
thereof; or
9.09 Security Documents. At any time the Security Documents
are required to be in effect pursuant to Section 7.11, (a) any Security Document
shall cease to be in full force and effect, or shall cease to give the
Collateral Agent the Liens or any of the material rights, powers and privileges
purported to be created thereby in favor of the Collateral Agent, or (b) any
Credit Party shall default in the due performance or observance of any material
term, covenant or agreement on its part to be performed or observed pursuant to
any such Security Document and such default (other than a default arising from
the failure to deliver collateral) shall continue unremedied for a period of at
least 30 days after written notice to the Borrower by the Collateral Agent;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent shall, upon the written
request of the Required Lenders, by written notice to the Borrower, take any or
all of the following actions, without prejudice to the rights of any Senior
Managing Agent or any Lender to enforce its claims against the Borrower, except
as otherwise specifically provided for in this Agreement (provided that, if an
Event of Default specified in Section 9.05 shall occur with respect to the
Borrower, the result which would occur upon the giving of written notice by the
Administrative Agent as specified in clauses (i) and (ii)
47
below shall occur automatically without the giving of any such notice): (i)
declare the Total Commitment terminated, whereupon the Commitment and Swingline
Commitment, if any, of each Lender shall forthwith terminate immediately and any
Facility Fee theretofore accrued shall forthwith become due and payable without
any other notice of any kind; (ii) declare the principal of and any accrued
interest in respect of all Loans and all other Obligations owing hereunder and
thereunder to be, whereupon the same shall become, forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by Holdings and the Borrower; (iii) terminate any Letter of
Credit which may be terminated in accordance with its terms; (iv) direct the
Borrower to pay (and the Borrower agrees that upon receipt of such notice, or
upon the occurrence of an Event of Default specified in Section 9.05 with
respect to the Borrower, it will pay) to the Administrative Agent at the
Administrative Agent's Office such additional amounts of cash, to be held as
security for the Borrower's reimbursement obligations for Drawings that may
subsequently occur thereunder, equal to the aggregate Stated Amount of all
Letters of Credit issued and then outstanding; and/or (v) direct the Collateral
Agent to enforce any or all of the Security Documents then in effect.
Notwithstanding anything contained in the foregoing paragraph,
if at any time within 60 days after an acceleration of the Loans pursuant to the
preceding paragraph, the Borrower shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than by
acceleration (with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in this Agreement) and all Events of
Default and Defaults (other than non-payment of the principal of and accrued
interest on the Loans, in each case which is due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to Section 12.12, then
Non-Defaulting Lenders holding at least 66-2/3% of the Adjusted Total Commitment
(which Lenders shall include in any event the Majority SMA), by written notice
to the Borrower, may at their option rescind and annul the acceleration and its
consequences; but such action shall not affect any subsequent Event of Default
or Default or impair any right consequent thereon. The provisions of this
paragraph are intended merely to bind the Lenders to a decision which may be
made at the election of the aforesaid percentage of the Lenders and are not
intended to benefit the Borrower and do not grant the Borrower the right to
require the Lenders to rescind or annul any acceleration hereunder, even if the
conditions set forth herein are met.
SECTION 10. Definitions. As used herein, the following terms
shall have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural the singular:
"Absolute Rate" shall mean an interest rate (rounded to the
nearest .0001) expressed as a decimal.
"Adjusted Operating Income" shall mean for any period (x) the
consolidated operating income of Parent, the Borrower (if not Parent) and the
Non-Nabisco Subsidiaries for such period plus (y) the sum of the consolidated
depreciation expense and consolidated amortization expense of Parent, the
Borrower (if not Parent) and the Non-Nabisco Subsidiaries for such period, all
as determined in accordance with GAAP, it being understood that the
determination of the amount specified in clauses (x) and (y) shall be made on a
consistent basis with the
48
methodology utilized by Holdings to determine such amount on the Closing Date,
provided that (i) for the purposes of Section 8.08 only, for any Test Period
during which Consolidated Fixed Charges includes cash taxes paid as a result of
any extraordinary sale of assets (other than the International Tobacco Sale),
Adjusted Operating Income shall include a portion of the gross cash proceeds
received by Parent, the Borrower (if not Parent) and the Non-Nabisco
Subsidiaries as a result of such extraordinary sale of assets equal to the
percentage of such gross cash proceeds determined by dividing the cash taxes
paid during such Test Period as a result of such sale by the aggregate cash
taxes payable as a result of such sale, (ii) for the purposes only of Section
8.08 (to the extent such acquisition resulted in Consolidated Capital
Expenditures) for any Test Period during which any acquisition of any Person or
business occurs, Adjusted Operating Income shall give pro forma effect to such
acquisition as if it occurred on the first day of such Test Period, (iii) for
all purposes, Adjusted Operating Income shall be adjusted by subtracting
therefrom the amount of all payments made by Parent and its Subsidiaries during
any Test Period pursuant to any settlement with respect to tobacco liability
which otherwise did not reduce Adjusted Operating Income for such period or
prior periods and (iv) for all purposes, Adjusted Operating Income shall be
adjusted for (x) any Test Period including either or both of the last two fiscal
quarters in 1998, by adding thereto the amounts that were otherwise deducted in
determining Adjusted Operating Income for such quarter or quarters to the extent
attributable to tobacco liability settlements and/or restructuring charges and
(y) any Test Period during which they were otherwise deducted in determining
Adjusted Operating Income, by adding thereto the Reorganization Severance Costs
payable by the Borrower and the Non-Nabisco Subsidiaries.
"Adjusted Percentage" shall mean (x) at a time when no Lender
Default exists, for each Lender such Lender's Percentage and (y) at a time when
a Lender Default exists (i) for each Lender that is a Defaulting Lender, zero
and (ii) for each Lender that is a Non-Defaulting Lender, the percentage
determined by dividing such Lender's Commitment at such time by the Adjusted
Total Commitment at such time, it being understood that all references herein to
Commitments at a time when the Total Commitment has been terminated shall be
references to the Commitments in effect immediately prior to such termination,
provided that (A) no Lender's Adjusted Percentage shall change upon the
occurrence of a Lender Default from that in effect immediately prior to such
Lender Default if after giving effect to such Lender Default, and any repayment
of Loans at such time pursuant to Section 4.02(A)(a) or otherwise, the sum of
(i) the aggregate outstanding principal amount of Loans plus (ii) the Letter of
Credit Outstandings exceeds the Adjusted Total Commitment, (B) the changes to
the Adjusted Percentage that would have become effective upon the occurrence of
a Lender Default but that did not become effective as a result of the preceding
clause (A) shall become effective on the first date after the occurrence of the
relevant Lender Default on which the sum of (i) the aggregate outstanding
principal amount of the Loans plus (ii) the Letter of Credit Outstandings is
equal to or less than the Adjusted Total Commitment and (C) if (i) a
Non-Defaulting Lender's Adjusted Percentage is changed pursuant to the preceding
clause (B) and (ii) any repayment of such Lender's Loans that were made during
the period commencing after the date of the relevant Lender Default and ending
on the date of such change to its Adjusted Percentage must be returned to the
Borrower as a preferential or similar payment in any Bankruptcy or similar
proceeding of the Borrower, then the change to such Non-Defaulting Lender's
Adjusted Percentage effected pursuant to said clause (B) shall be reduced to
that positive change, if any, as would have been made to its Adjusted Percentage
if (x)
49
such repayments had not been made and (y) the maximum change to its
Adjusted Percentage would have resulted in the sum of the outstanding principal
of Revolving Loans made by such Lender plus such Lender's new Adjusted
Percentage of the outstanding principal amount of Swingline Loans and of Letter
of Credit Outstandings equaling such Lender's Commitment at such time.
"Adjusted Total Commitment" shall mean at any time the Total
Commitment less the aggregate Commitments of all Defaulting Lenders.
"Administrative Agent" shall mean Chase, provided that if
Chase shall cease to constitute a Senior Managing Agent hereunder, the remaining
Senior Managing Agents shall have the option to appoint one of such remaining
Senior Managing Agents as the Administrative Agent.
"Administrative Agent's Office" shall mean the office of the
Administrative Agent located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or
such other office in New York City as the Administrative Agent may hereafter
designate in writing as such to the other parties hereto.
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under direct or
indirect common control with such Person. A Person shall be deemed to control a
corporation if such Person possesses, directly or indirectly, the power (i) to
vote 20% or more of the securities having ordinary voting power for the election
of directors of such corporation or (ii) to direct or cause the direction of the
management and policies of such corporation, whether through the ownership of
voting securities, by contract or otherwise.
"Aggregate Outstandings" shall have the meaning provided in
Section 4.02(A)(a).
"Agreement" shall mean this Credit Agreement, as the same may
be from time to time modified, amended and/or supplemented.
"Applicable Credit Rating" shall mean the highest rating level
(a rating level being, e.g., each of BBB-, BBB and BBB+, in the case of S&P)
assigned by each Rating Agency to any of the Long Term Debt Issues of the
Borrower.
"Applicable Eurodollar Margin" shall mean, in respect of each
Interest Period commencing during a period set forth below, the percentage set
forth below opposite such period below:
50
Applicable
Period Eurodollar Margin
------ -----------------
Level II NIG Period 1.500%
Level I NIG Period 1.500%
Minimum Investment Grade Period 1.500%
Increased Investment Grade Period 1.375%
Maximum Investment Grade Period 1.250%
"Applicable Reference Rate Margin" shall mean, at any time
during a period set forth below, the percentage set forth opposite such period
below:
Applicable
Reference
Period Rate Margin
------ -----------
Level II NIG Period .500%
Level I NIG Period .500%
Minimum Investment Grade Period .500%
Increased Investment Grade Period .375%
Maximum Investment Grade Period .250%
"Approved Alternate Currency" shall mean Deutsche Marks and
Swiss Francs.
"Assignment Agreement" shall have the meaning provided in
Section 12.04(b)(A).
"Authorized Officer" shall mean any senior officer of Holdings
or the Borrower, as the case may be, designated as such in writing to the Senior
Managing Agents by Holdings or the Borrower, as the case may be, in each case to
the extent acceptable to the Majority SMA.
"Bankruptcy Code" shall have the meaning provided in Section
9.05.
"Barclays" shall mean Barclays Bank PLC and any successor
corporation thereto by merger, consolidation or otherwise.
"Base Rate" shall mean, for any day, the publicly announced
prime rate on such date of Chase.
51
"Bidder" shall mean each Lender that has notified in writing
(and has not withdrawn such notice) the Administrative Agent that it desires to
participate generally in the bidding arrangements relating to Competitive Bid
Borrowings.
"Borrower" shall mean RJR Nabisco, Inc., a Delaware
corporation (which shall change its name to X.X. Xxxxxxxx Tobacco Holdings, Inc.
upon consummation of the Spin-Off).
"Borrower Tender" shall have the meaning provided in Section
5.01K.
"Borrowing" shall mean and include (i) the incurrence of
Swingline Loans from the Swingline Lenders on a pro rata basis on a given date,
(ii) the incurrence of one Type of Loan by the Borrower from all of the Lenders
on a pro rata basis on a given date (or resulting from conversions on a given
date), having in the case of Eurodollar Loans the same Interest Period, provided
that Reference Rate Loans incurred pursuant to Section 1.11(b) shall be
considered part of any related Borrowing of Eurodollar Loans and (iii) a
Competitive Bid Borrowing.
"BTCo" shall mean Bankers Trust Company and any successor
corporation thereto by merger, consolidation or otherwise.
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day excluding Saturday, Sunday and any day
which shall be in the City of New York a legal holiday or a day on which banking
institutions are authorized by law or other governmental actions to close and
(ii) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (i) and which is also a day for trading by and
between banks in U.S. dollar deposits in the interbank Eurodollar market.
"Capital Lease," as applied to any Person, shall mean any
lease of any property (whether real, personal or mixed) by that Person as lessee
which, in conformity with GAAP, is, or is required to be, accounted for as a
capital lease on the balance sheet of that Person.
"Capitalized Lease Obligations" shall mean all obligations
under Capital Leases of Holdings or any of its Subsidiaries in each case taken
at the amount thereof accounted for as liabilities in accordance with GAAP.
"Change of Control" shall mean and include (a) at any time
Continuing Directors shall not constitute a majority of the Board of Directors
of Parent (and if the Borrower is not Parent, the Borrower); and/or (b) any
Person or group (as such term is defined in Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), shall acquire, directly
or indirectly, beneficial ownership (within the meaning of Rule 13d-3 and 13d-5
of the Exchange Act) of 30% or more, on a fully diluted basis, of the economic
or voting interest in Parent's capital stock; and/or (c) prior to the
consummation of the Spin-Off, Holdings ceases to own 100% of the common stock of
the Borrower.
"Chase" shall mean The Chase Manhattan Bank and any successor
corporation thereto by merger, consolidation or otherwise.
52
"Citibank" shall mean Citibank, N.A. and any successor
corporation thereto by merger, consolidation or otherwise.
"Closing Date" shall have the meaning provided in Section
5.01.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to the Code are to the Code, as in effect at the
date of this Agreement and any subsequent provisions of the Code, amendatory
thereof, supplemental thereto or substituted therefor.
"Collateral" shall have the meaning provided in Section 7.11.
"Collateral Agent" shall mean the Administrative Agent acting
as Collateral Agent under the Security Documents.
"Commitment" shall mean, with respect to each Lender, the
amount set forth opposite such Lender's name in Annex I hereto, as the same may
be reduced from time to time pursuant to Section 3.02, 3.03, 9 and/or
12.04(b)(A).
"Commitment Termination Date" shall mean June 30, 1999.
"Committed Loans" shall mean Revolving Loans and Swingline
Loans.
"Commodities Agreement" shall mean any forward contract,
futures contract, option contract or similar agreement or arrangement, in each
case intended to protect the Persons entering into same from fluctuations in the
price of, or shortage of supply of, commodities.
"Competitive Bid Borrowing" shall mean a Borrowing of
Competitive Bid Loans pursuant to Section 1.04 with respect to which the
Borrower has requested that the Lenders offer to make Competitive Bid Loans at
Absolute Rates.
"Competitive Bid Loans" shall have the meaning provided in
Section 1.01(D).
"Computation Date" shall mean the last Business Day of each
month and any other date specified in writing by a Letter of Credit Issuer with
respect to an Existing Letter of Credit, or any replacement or renewal thereof.
"Consolidated Capital Expenditures" shall mean, for any
period, the aggregate of all expenditures (whether paid in cash or accrued as
liabilities and including in all events all amounts expended or capitalized
under Capital Leases but excluding any amount representing capitalized interest)
by Parent, the Borrower (if not Parent) and the Non-Nabisco Subsidiaries during
that period that, in conformity with GAAP, are or are required to be included as
additions during such period to property, plant or equipment reflected in a
consolidated balance sheet of Parent, the Borrower (if not Parent) and the
Non-Nabisco Subsidiaries, provided that (x) except as set forth in clause (y)
below, Consolidated Capital Expenditures shall in any event include the purchase
price paid in connection with the acquisition of any Person (including through
the purchase of all of the capital stock or other ownership interests of such
Person, or through merger
53
or consolidation with any Person but not including any capital contribution that
forms or establishes any Subsidiary) whether or not allocable to property, plant
and equipment and (y) Consolidated Capital Expenditures shall in any event
exclude expenditures made in connection with the replacement, substitution or
restoration of assets (i) to the extent financed from insurance proceeds paid on
account of the loss of or damage to the assets being replaced or restored or
(ii) with awards of compensation arising from the taking by eminent domain or
condemnation of the assets being replaced.
"Consolidated Cash Interest Expense" shall mean, for any
period, (x) (i) consolidated interest expense of Parent, the Borrower (if not
Parent) and the Non-Nabisco Subsidiaries, but excluding, however, to the extent
included in such consolidated interest expense, (I) non-cash interest expense
and (II) amortization of debt issuance cost less (ii) consolidated cash interest
income of Parent, the Borrower (if not Parent) and Non-Nabisco Subsidiaries plus
(y) cash dividends paid on all preferred stock of Parent, the Borrower (if not
Parent) and the Non-Nabisco Subsidiaries during such period, it being understood
that the determination of the amounts specified in clauses (x)(i)(I) and
(x)(i)(II) shall be made on a consistent basis with the methodology utilized by
Holdings to determine such amounts on the Closing Date.
"Consolidated Fixed Charges" shall mean, for any period, the
sum, without duplication, of (A) the amounts for such period of (i) Consolidated
Cash Interest Expense, (ii) cash taxes paid during such period, and (iii)
Consolidated Capital Expenditures, all as determined on a consolidated basis for
Parent, the Borrower (if not Parent) and the Non-Nabisco Subsidiaries in
accordance with GAAP, it being understood that the determination of the amounts
specified in clause (iii) shall be made on a consistent basis with the
methodology utilized by Holdings to determine such amount on the Closing Date
plus (B) all Dividends paid (x) by Parent during such period pursuant to Section
8.05 (iii), (iv) or (vii) (including, if during such period, any Dividend paid
by Holdings pursuant to Section 8.05(iv)(b) but only to the extent in excess of
the pass through dividend paid by NHC in connection therewith) and (y) during
any portion of such period prior to the Closing Date, by Holdings but only to
the extent in excess of the pass through dividend paid by NHC in connection
therewith.
"Consolidated Net Worth" shall mean, as at any date of
determination, the stockholders' equity of Parent determined in accordance with
GAAP and as would be reflected on a consolidated balance sheet of Parent, the
Borrower (if not Parent) and the Non-Nabisco Subsidiaries only prepared as of
such date, it being understood that determinations of such amounts shall be made
on a consistent basis with the methodology utilized by Holdings to determine
such amounts on the Closing Date.
"Contingent Obligations" shall mean, as to any Person, any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other monetary obligations including
reimbursement obligations in respect of Litigation Bonds "primary obligations")
of any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary obligation or any
property constituting direct or
54
indirect security therefor, (b) to advance or supply funds (i) for the purchase
or payment of any such primary obligation or (ii) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (c) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (d) otherwise to assure or hold harmless the owner of such primary
obligation against loss in respect thereof; provided, however, that the term
Contingent Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the lesser of (x) the
maximum stated or determinable amount of such Contingent Obligation and (y) the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Continuing Director" shall mean, at any date, an individual
(x) who is a member of the Board of Directors of Holdings or the Borrower, as
the case may be, on the date of this Agreement, (y) who, as at such date, has
been a member of such Board of Directors for at least the twelve preceding
months, or (z) who has been nominated to be a member of such Board of Directors
by a majority of the other Continuing Directors then in office or, in the case
of the Borrower, by Holdings on or prior to the consummation of the Spin-Off.
"Continuing Lender" shall mean, at any time, each Lender whose
Maturity Date is the Facility Maturity Date.
"Credit Documents" shall mean this Agreement, the Notes, the
Subsidiary Guaranty, the Facility Fee Letter and once executed and delivered and
in effect, the Security Documents.
"Credit Event" shall mean and include the making of a Loan
and/or the issuance of a Letter of Credit.
"Credit Lyonnais" shall mean Credit Lyonnais New York Branch
and any successor corporation thereto by merger, consolidation or otherwise.
"Credit Party" shall mean each of the Borrower, each
Subsidiary Guarantor and, prior to the consummation of the Spin-Off, Holdings.
"Credit Rating" shall mean (i) the Applicable Credit Rating
assigned by each Rating Agency, if such Applicable Credit Ratings are the same
or (ii) if the Applicable Credit Ratings assigned by the Rating Agencies differ,
the lower of the Applicable Credit Ratings assigned by the Rating Agencies.
"Cumulative Adjusted Cash Net Income" shall mean, at any time
for any determination thereof, the sum of (i) consolidated net income of Parent,
the Borrower (if not Parent) and the Non-Nabisco Subsidiaries, determined in
accordance with GAAP, for the period
55
(taken as one accounting period) commencing July 1, 1999 and ending on the last
day of the last fiscal quarter of Parent then ended plus (ii) all losses from
debt retirement deducted in determining such consolidated net income of Parent,
the Borrower (if not Parent) and the Non-Nabisco Subsidiaries for the period
referred to in clause (i) above plus (iii) all cash dividends actually received
from NHC during such period to the extent not included in clause (i) above plus
(iv) all trademark and goodwill amortization deducted in determining such
consolidated net income, reduced by any tax benefit relating thereto included in
determining such consolidated net income for such period.
"Currency Agreement" shall mean any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic cap or
other similar agreement designed to protect the Persons entering into same
against fluctuations in currency values.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default other
than an Event of Default under Section 9.08.
"Defaulting Lender" shall mean any Lender with respect to
which a Lender Default is in effect.
"Designated Issuers" shall mean Chase, BTCo, Credit Lyonnais
and Barclays.
"Distribution Agreement" shall mean the Distribution Agreement
among Holdings, the Borrower and Xxxxxxxx Tobacco in the form of the draft dated
April ___, 1999 delivered to, and found acceptable by, the Senior Managing
Agents prior to the Execution Date as the same may be changed, modified or
amended with the consent of the Senior Managing Agents.
"Dividends" shall have the meaning provided in Section 8.05.
"Domestic Tobacco" shall mean Xxxxxxxx Tobacco, except for the
businesses and operations thereof (and capital stock interests therein) which
are included in International Tobacco and the intangibles as used by
International Tobacco.
"Drawing" shall have the meaning provided in Section 2.04(b).
"Eligible Transferee" shall mean and include a commercial
Lender, financial institution or other "accredited investor" (as defined in SEC
Regulation D); provided that Eligible Transferee shall not include any Person
(or any Affiliate thereof) who competes with Parent and its Subsidiaries in the
tobacco business or prior to the consummation of the Spin-Off, the cookie,
cracker, snack food or candy business.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement and any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
56
"ERISA Affiliate" shall mean each person (as defined in
Section 3(9) of ERISA) which together with Parent, a Subsidiary or a Credit
Party would be deemed to be a "single employer" within the meaning of Section
414(b), (c), (m) or (o) of the Code.
"Escrow" shall have the meaning provided in the definition of
Specified Debt.
"Eurodollar Loans" shall mean each Revolving Loan bearing
interest at the rates provided in Section 1.09(b).
"Eurodollar Rate" shall mean, with respect to each day during
each Interest Period for a Eurodollar Loan, the rate of interest determined on
the basis of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on the first day of such Interest Period appearing on
Page 3750 of the Telerate screen as of 11:00 A.M., London time, two Business
Days prior to the beginning of such Interest Period. In the event that such rate
does not appear on Page 3750 of the Telerate Service (or otherwise on such
service), the "Eurodollar Rate" shall be determined by reference to such other
publicly available service for displaying eurodollar rates as may be agreed upon
by the Administrative Agent and the Borrower or, in the absence of such
agreement, the "Eurodollar Rate" shall instead be the rate per annum announced
by the Administrative Agent as the rate at which the Administrative Agent is
offered Dollar deposits at or about 10:00 A.M., New York time, two Business Days
prior to the beginning of such Interest Period, in the interbank eurodollar
market where the eurodollar and foreign currency and exchange operations in
respect of its Eurodollar Loans are then being conducted for delivery on the
first day of such Interest Period for the number of days comprised therein and
in an amount comparable to the amount of its Eurodollar Loan to be outstanding
during such Interest Period.
"Event of Default" shall have the meaning provided in Section
9.
"Excluded Default" shall have the meaning provided in Section
5.01N.
"Execution Date" shall have the meaning provided in Section
12.10.
"Existing Credit Agreements" shall mean, collectively, (i) the
364 Day Credit Agreement and (ii) the 3 Year Credit Agreement, each as in effect
on the Execution Date.
"Existing Debt" shall mean (i) the Indebtedness of the
Non-Nabisco Subsidiaries outstanding on the Closing Date and set forth in Annex
VII provided that such Indebtedness shall not exceed $200,000,000 in aggregate
outstanding principal amount and (ii) Indebtedness of Holdings in respect of the
Indebtedness described in Section 5.01L.(iii) until such Indebtedness is repaid.
"Existing Foreign Currency Debt" shall mean the 5%/10% Dual
Coupon/Dual Currency Swiss Franc/U.S. Dollar Bonds due 2001, the 5 3/8% Swiss
Franc Bonds due 2000 and the 6 7/8% Deutsche Xxxx Xxxxxx Bonds due 2000.
"Existing Letter of Credit" shall have the meaning provided in
Section 2.01(c).
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"Existing Liens" shall mean (i) the Liens on the assets and
properties of the Non-Nabisco Subsidiaries outstanding on the Closing Date and
set forth in Annex VI provided that the Indebtedness secured by all such Liens
shall not exceed $20,000,000 in aggregate outstanding principal amount and (ii)
Liens resulting from the cash collateralization of letters of credit issued
under the 3 Year Credit Agreement in whole or severally in part by institutions
that are not Lenders hereunder and that remain outstanding on and after the
Closing Date provided that such letters of credit are as promptly as practical
terminated or replaced by Letters of Credit.
"Existing Senior Notes" shall mean the outstanding senior
notes of the Borrower on April 1, 1999 other than any thereof constituting
Existing Foreign Currency Debt, which senior notes aggregated approximately $4.4
billion in outstanding principal amount on April 1, 1999.
"Expected Total Commitment" shall mean, at any time of
determination with respect to any future date, the Adjusted Total Commitment in
effect at such time of determination less the aggregate Commitments of all
Non-Defaulting Lenders with a Maturity Date prior to such future date.
"Facility Fee" shall have the meaning provided in Section
3.01(a).
"Facility Fee Letter" shall have the meaning provided in
Section 3.01(a).
"Facility Maturity Date" shall mean the date which is the
second anniversary of the Measurement Date, as the same may be extended pursuant
to Section 1.14.
"Facing Fee" shall have the meaning provided in Section
3.01(d).
"Federal Funds Rate" shall mean for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to, or referred
to in, Section 3.01.
"FSH" shall mean FHS, LLC, a Delaware limited liability
company.
"Fuji" shall mean The Fuji Bank, Limited and any successor
corporation thereto by merger, consolidation or otherwise.
"GAAP" shall mean generally accepted accounting principles in
the United States of America as in effect from time to time; it being understood
and agreed that determinations in
58
accordance with GAAP for purposes of Section 8, including defined terms as used
therein, shall be made pursuant to Section 12.07(a).
"GMB" shall mean GMB, Inc. a North Carolina corporation.
"Government Acts" shall have the meaning provided in Section
2.06(a).
"Guaranteed L/C Obligations" shall mean the reimbursement
obligations of the Borrower in respect of letters of credit (other than Letters
of Credit) issued for its account to the extent such reimbursement obligations
are guaranteed by Xxxxxxxx Tobacco.
"Guarantor" for purposes of Section 13 of this Agreement shall
mean Holdings.
"Guaranty" shall mean and include (i) the Subsidiary Guaranty
and (ii) prior to the consummation of the Spin-Off, the Holdings Guaranty.
"Guaranty Event" shall mean that the Applicable Credit Rating
issued by at least one Rating Agency is at least one level below the Minimum
Investment Grade Rating.
"Hedging Agreements" shall mean and include Commodities
Agreements, Currency Agreements and Interest Rate Agreements and all other
similar hedging arrangements.
"Holdings" shall mean RJR Nabisco Holdings Corp., a Delaware
corporation.
"Holdings Guaranty" shall mean the guaranty of Holdings set
forth in Section 13, as the same may be supplemented, amended, modified or
terminated from time to time.
"IHC" shall mean RJR Tobacco Consolidated IHC, Inc., a
Delaware corporation.
"Increased Investment Grade Period" shall mean any period
during which the Credit Rating at all times is the Increased Investment Grade
Rating.
"Increased Investment Grade Rating" shall mean the rating
assigned by each Rating Agency which is one rating level above the Minimum
Investment Grade Rating, it being understood that as of the date of this
Agreement the "Increased Investment Grade Rating" of S&P is BBB and the
"Increased Investment Grade Rating" of Xxxxx'x is Baa2.
"Indebtedness" of any Person shall mean (i) all indebtedness
of such Person for borrowed money, (ii) the deferred purchase price of assets or
services which in accordance with GAAP would be shown on the liability side of
the balance sheet of such Person, (iii) the face amount of all letters of credit
issued for the account of such Person and, without duplication, all drafts drawn
thereunder until reimbursed in full, (iv) the stated amount of all Litigation
Bonds issued for the account of such Person and without duplication of all
payments made thereunder until reimbursed in full, (v) all Indebtedness of a
second Person secured by any Lien on any property owned by such first Person,
whether or not such Indebtedness has been assumed, (vi) all Capitalized Lease
Obligations of such Person, (vii) all obligations of such Person to pay a
specified purchase price for goods or services whether or not delivered or
accepted, i.e., take-or-
59
pay and similar obligations, (viii) all obligations of such Person under Hedging
Agreements and (ix) all Contingent Obligations of such Person, provided that
Indebtedness shall not include (x) trade payables and accrued expenses, in each
case arising in the ordinary course of business and (y) any obligation of the
Borrower or any Subsidiary thereof to purchase tobacco and/or other products,
services and produce utilized in its business pursuant to the RJRN Agreements or
agreements entered into in the ordinary course of business on a basis consistent
with the Borrower's past practices or then current industry practices; and
provided further, that (a) for the purposes of Section 9.04, the amount of
Indebtedness represented by any Hedging Agreement shall be at any time the
unrealized net loss position, if any, of the Borrower and/or its Subsidiaries
thereunder on a marked to market basis determined no more than one month prior
to such time and (b) for the purposes of determining the Indebtedness permitted
to be secured by Section 8.03(h) or outstanding under Section 8.04(i), the
amount of Indebtedness included in such determination that is attributable to
all Hedging Agreements secured or permitted thereunder, as the case may be,
shall be the Net Termination Value, if any, of all such Hedging Agreements.
"Independent Litigation Bond" shall mean any surety bond,
judgment bond or other bond or insurance policy issued for bonding litigation
judgments for appeal, other than any such bond or insurance policy that has been
fully cash collateralized (to the satisfaction of the Majority SMA) by the
Borrower or which is supported by Letters of Credit issued hereunder in the full
stated amount of such bond or insurance policy.
"Interest Period" shall mean, with respect to any Loan, the
interest period applicable thereto, as determined pursuant to Section 1.10.
"Interest Rate Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement, interest
rate futures contract, interest rate option contract or other similar agreement
or arrangement.
"International Tobacco" shall mean the international tobacco
business managed by RJR International Tobacco Holding B.V. and consisting of (i)
the manufacture for export from the United States and the sale outside the
United States of tobacco products by Domestic Tobacco and (ii) the manufacture
and sale outside the United States of tobacco products by certain Subsidiaries
of the Borrower, it being understood and agreed that Puerto Rico shall be deemed
to be in the United States for the purpose of this definition.
"International Tobacco Sale" shall mean the sale of
International Tobacco to Japan Tobacco, Inc. for at least $7.8 billion in cash
(subject to post-closing adjustment) on terms consistent with those publicly
announced by the Borrower and Holdings prior to April 1, 1999 and otherwise as
are acceptable to the Majority SMA provided that the International Tobacco Sale
shall be deemed to have been consummated if (i) the sale closes with respect to
each of International Tobacco's operations except those in Russia, Ukraine
and/or Poland, (ii) the proceeds received from such closing consist of at least
$3.7 billion in cash (subject to post-closing adjustment) and (iii) the sellers
and buyer agree to complete the sale of the remaining International Tobacco
operations as soon as they receive required governmental approvals.
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"Lender" shall have the meaning provided in the first
paragraph of this Agreement.
"Lender Default" shall mean (i) the refusal (which has not
been retracted) of a Lender to make available its portion of any Borrowing or to
fund its portion of any unreimbursed payment under Section 2.03(c) or (ii) a
Lender having notified any Senior Managing Agent and/or the Borrower that it
does not intend to comply with its obligations under Section 1.01(A) or 1.01(C)
or under Section 2.03(c), in the case of either (i) or (ii) as a result of the
appointment of a receiver or conservator with respect to such Lender at the
direction or request of any regulatory agency or authority.
"Letter of Credit" shall mean each standby letter of credit
issued pursuant to Section 2.01.
"Letter of Credit Fee" shall have the meaning provided in
Section 3.01(c).
"Letter of Credit Issuer" shall mean and include (i) each of
the Designated Issuers and (ii) each other Lender requested by the Borrower to
issue Letters of Credit to the extent consented to by such Lender.
"Letter of Credit Outstandings" shall mean, at any time, the
sum of, without duplication, (i) the aggregate Stated Amount of all outstanding
Letters of Credit and (ii) the aggregate amount of all Unpaid Drawings in
respect of all Letters of Credit.
"Letter of Credit Request" shall have the meaning provided in
Section 2.02.
"Level I NIG Period" shall mean any period during which the
Credit Rating is at all times the Level I NIG Rating.
"Level I NIG Rating" shall mean the rating assigned by each
Rating Agency which is one level below the Minimum Investment Grade Rating, it
being understood that as of the Closing Date the "Level I NIG Rating" of S&P is
BB+ and the "Level I NIG Rating" of Xxxxx'x is Ba1.
"Level II NIG Period" shall mean any period during which the
Credit Rating is at all times below the Level I NIG Rating.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement (other than
customary negative pledge clauses) to give any of the foregoing, any conditional
sale or other title retention agreement or any lease in the nature thereof).
"Loan" shall mean any Competitive Bid Loan, Revolving Loan or
Swingline Loan.
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"Long Term Debt Issues" shall mean, with respect to the
Borrower, each issuance of long-term senior debt of the Borrower which ranks on
a parity, as to payment and security, with the Loans.
"Majority SMA" shall mean, at any time, at least one-half in
number of the Senior Managing Agents.
"Mandatory Borrowing" shall have the meaning provided in
Section 1.01(C).
"Margin Stock" shall have the meaning provided in Regulation
U.
"Material Adverse Effect" shall mean (i) a material adverse
effect on the operations, business, property, assets or financial condition of
Parent and its Subsidiaries taken as a whole or of the Borrower and its
Non-Nabisco Subsidiaries taken as a whole and/or (ii) in the case of Section
5.01G and Section 6.04, a material adverse effect on the prospects of Parent and
its Subsidiaries taken as a whole or the Borrower and its Non-Nabisco
Subsidiaries taken as a whole provided that (w) neither the existence of the
Permitted Obligations described in clause (ix) of the definition thereof nor the
issuance of Letters of Credit to support such Permitted Obligations shall
constitute a Material Adverse Effect, (x) the existence of any action, suit,
proceeding or inquiry or the rendering of any verdict or entry of any order,
injunction or judgment thereunder will not have a Material Adverse Effect, or a
material adverse effect on the rights or remedies of the Lenders or the ability
of any Credit Party to perform its obligations to the Lenders hereunder or under
any other Credit Documents to which it is party unless such action, suit,
proceeding or verdict, order, injunction and/or judgment has also been
designated in writing by the Required Lenders as having such a Material Adverse
Effect or material adverse effect, as the case may be, (y) the existence of, or
the rendering of any verdict or entry of any order, injunction or judgment in,
any action, suit, proceeding or inquiry listed on Annex IV will not have a
Material Adverse Effect for purposes of Section 5.01G and Section 6.04 and (z)
(I) the existence of, or the rendering of, any verdict or entry of any order,
injunction or judgment that in each case can be stayed pending appeal (but only
for so long as such stay can still be obtained) or that is stayed pending appeal
and (II) the posting of a supersedeas or other appeal bond in respect of any
verdict, order or judgment shall not, in each case, in and of itself have a
Material Adverse Effect for purposes of Section 5.01F or Section 6.09, even if
such verdict, order or judgment could be viewed as having a material adverse
effect on future litigation prospects, unless such verdict, order or judgment
results in an actual material adverse effect on the operations, business,
property, assets or financial condition of Parent and its Subsidiaries taken as
a whole or of the Borrower and its Non-Nabisco Subsidiaries taken as a whole.
"Material Subsidiary" shall mean and include (x) for purposes
of Section 9.05 and 9.08 only, the Borrower (if not Parent) and (y) for all
purposes, Xxxxxxxx Tobacco, each of the Specified Subsidiaries and each other
Non-Nabisco Subsidiary (including any Person first becoming a Subsidiary upon
consummation of a Permitted Investment) to the extent that (x) the aggregate
book value of the assets of such other Non-Nabisco Subsidiary, determined on a
62
consolidating basis, is equal to or more than $100,000,000 or (y) the net sales
of such other Non-Nabisco Subsidiary during its then most recently ended fiscal
year, determined on a consolidating basis, were equal to or more than
$75,000,000 provided that such net sales shall be determined on a pro forma
basis for the 12 months last ended when determining whether any Person that is
the survivor of any merger or consolidation or that is the transferee of any
property or assets from other Subsidiaries of Parent is a Material Subsidiary.
"Maturity Date" shall mean, with respect to each Lender, the
date which is the second anniversary of the Measurement Date, as the same may be
extended for such Lender pursuant to Section 1.14.
"Maximum Investment Grade Period" shall mean any period during
which the Credit Rating is at all times above the Increased Investment Grade
Rating.
"Measurement Date" shall mean the date which is six months
after the Closing Date.
"Minimum Borrowing Amount" shall mean (i) with respect to a
Borrowing of Revolving Loans, $10,000,000 and (ii) with respect to a Borrowing
of Swingline Loans, $5,000,000.
"Minimum Investment Grade Period" shall mean any period during
which the Credit Rating is at all times the Minimum Investment Grade Rating.
"Minimum Investment Grade Rating" shall mean the lowest rating
level established as investment grade by each Rating Agency, it being understood
that as of the date of this Agreement the "Minimum Investment Grade Rating" of
S&P is BBB- and the "Minimum Investment Grade Rating" of Xxxxx'x is Baa3.
"Xxxxx'x" shall mean Xxxxx'x Investors Service, Inc., or any
successor corporation thereto.
"Nabisco Credit Agreement" shall mean the Credit Agreement
dated as of April 28, 1995 among NHC, Nabisco, Inc. and the lending institutions
party thereto, as the same may be modified, supplemented or amended from time to
time.
"Net Termination Value" shall mean at any time, with respect
to all Hedging Agreements for which a Net Termination Value is being determined,
the excess, if positive, of (i) the aggregate of the unrealized net loss
position of the Borrower and/or its Subsidiaries under each of such Hedging
Agreements on a marked to market basis determined no more than one month prior
to such time less (ii) the aggregate of the unrealized net gain position of the
Borrower and/or its Subsidiaries under each of such Hedging Agreements on a
marked to market basis determined no more than one month prior to such time.
"New Senior Notes" shall mean senior notes of the Borrower
issued after May 1, 1999 on terms specified in the Borrower's Preliminary
Offering Memorandum dated April ___, 1999 relating to the issuance of such notes
(a copy of which was delivered to the Senior Managing Agents prior to the
Execution Date) or otherwise on terms reasonably satisfactory to
63
the Senior Managing Agents, which term shall not include any Stub Notes or the
Existing Foreign Currency Debt.
"NHC" shall mean Nabisco Holdings Corp., a Delaware
corporation.
"Non-Continuing Lender" shall mean, at any time, each Lender
which is not a Continuing Lender at such time.
"Non-Defaulting Lender" shall mean and include each Lender
other than a Defaulting Lender.
"Non-Nabisco Subsidiary" shall mean (i) prior to the
consummation of the Reorganization Merger, each Subsidiary of the Borrower other
than NHC and its Subsidiaries and (ii) thereafter, all Subsidiaries of the
Borrower.
"Note" shall have the meaning provided in Section 1.06(a).
"Notice of Borrowing" shall have the meaning provided in
Section 1.03.
"Notice of Competitive Bid Borrowing" shall have the meaning
provided in Section 1.04.
"Notice of Conversion" shall have the meaning provided in
Section 1.07.
"Notifying SL Lender" shall have the meaning provided in
Section 1.01(C).
"Obligations" shall mean all amounts, direct or indirect,
contingent or absolute, of every type or description, and at any time existing,
owing to any Senior Managing Agent, the Administrative Agent or any Lender
pursuant to the terms of this Agreement or any other Credit Document.
"Other Debt Repayment" shall have the meaning provided in
Section 5.01L.
"Parent" shall mean (x) until the consummation of the
Spin-Off, Holdings and (y) on and after such consummation, the Borrower.
"Parent Common Stock" shall mean the common stock of Holdings.
"Participant" shall have the meaning provided in Section
2.03(a).
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" shall mean at any time for each Lender, the
percentage obtained by dividing such Lender's Commitment by the Total
Commitment, provided that at any time when the Total Commitment shall have been
terminated each Lender's Percentage shall be the
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percentage obtained by dividing such Lender's outstanding Revolving Loans by the
aggregate outstanding Revolving Loans.
"Permanent Surplus Cash" shall mean cash on hand and cash
equivalents (including marketable securities) at the Borrower and its Domestic
Subsidiaries that (x) has not been designated to be used to pay income, excise
or other taxes (including taxes payable in respect of the International Tobacco
Sale) or to make settlement payments in respect of tobacco liability or (y) is
not on deposit in the Escrow, provided that the lesser of $100,000,000 and the
total amount of cash on hand in the cash management systems of the Borrower and
its Domestic Subsidiaries shall be excluded from Permanent Surplus Cash.
"Permitted Currency Agreement" shall mean any Currency
Agreement entered into in the ordinary course of business by the Borrower with
any Lender or Lenders (and/or their affiliates) to the extent consistent with
the practices of the Borrower and the Non-Nabisco Subsidiaries prior to the
Closing Date or with then current practices in the industry.
"Permitted Investment" shall mean the acquisition of a Person
that theretofore has been conducting a business or that theretofore has owned
assets and was not a Subsidiary prior to such acquisition to the extent that (i)
all or substantially all of the purchase price would constitute Consolidated
Capital Expenditures and (ii) such Person shall not be a Material Subsidiary
after giving effect to such acquisition unless such acquisition has been
consented to in writing by the Senior Managing Agents or such Person becomes a
Subsidiary Guarantor upon the consummation of such acquisition and takes all of
the actions specified in clause (ii)(II) of the proviso in Section 8.02(a)
"Permitted Litigation Bonding" shall mean the making of
deposits with the proceeds of Loans and/or the issuance of Letters of Credit, in
each case for the purposes of bonding litigation judgments entered against any
Credit Party after the Closing Date provided that at the time of the making of
any such Loan or issuance of any such Letter of Credit, and after giving effect
to any usage by the Credit Parties of Permanent Surplus Cash to effect such
bonding of litigation judgments, the amount of Permanent Surplus Cash shall be
zero.
"Permitted Obligations" shall mean and include obligations (i)
to pay taxes, (ii) to pay import duties, to post customs bonds and otherwise in
connection with customs and trade laws, (iii) to purchase equipment or fixtures
and otherwise in connection with capital expenditures, (iv) in connection with
the importation or purchase of tobacco or other products or goods for use in the
day-to-day operations of the Borrower and its Non-Nabisco Subsidiaries
consistent with the Borrower's practices in effect prior to the Closing Date or
with then current practices in the industry, (v) to make utility payments, (vi)
in connection with worker's compensation obligations or other employee
disability obligations, (vii) to provide credit support for any of the
foregoing, (viii) in respect of employee loans made in connection with
transfers, (ix) to provide credit support for suppliers and distributors in the
ordinary course of business, (ix) imposed by the PBGC in connection with the
Transactions provided that the Letter of Credit issued in connection with such
obligations shall not exceed $125 million in aggregate Stated Amount and (x) to
support Indebtedness supported by Existing Letters of Credit on the Closing
Date.
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"Person" shall mean any individual, partnership, joint
venture, firm, corporation, association, trust or other enterprise or any
government or political subdivision or any agency, department or instrumentality
thereof.
"Plan" shall mean any multiemployer or single-employer plan as
defined in Section 4001 of ERISA, which is maintained or contributed to by (or
to which there is an obligation to contribution of), or at any time during the
five calendar years preceding the date of this Agreement was maintained or
contributed to by (or to which there is an obligation to contribution of),
Holdings, a Subsidiary, a Credit Party or an ERISA Affiliate.
"Qualified Stub Notes" shall mean Stub Notes with no scheduled
principal payment due prior to the initial Facility Maturity Date.
"Rating Agency" shall mean each of S&P and Moody's.
"Reference Rate" shall mean, at any time, the higher of (x)
the rate which is 1/2 of 1% in excess of the Federal Funds Rate and (y) the Base
Rate as in effect from time to time.
"Reference Rate Loan" shall mean each Revolving Loan or
Swingline Loan bearing interest at the rates provided in Section 1.09(a).
"Register" shall have the meaning provided in Section 1.06(d).
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.
"Regulation U" shall mean Regulation U of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing margin requirements.
"Reorganization Merger" shall mean the transfer by the
Borrower of its 80.5% interest in NHC, together with approximately $1.6 billion
(adjusted upwards to the extent Holdings pays Reorganization Severance Costs) in
after-tax proceeds of the International Tobacco Sale (the "Reorganization Merger
Payment"), to Holdings through a merger that is intended to be tax-free.
"Reorganization Merger Payment" shall have the meaning
provided in the definition of Reorganization Merger.
"Reorganization Severance Costs" shall mean severance costs
and expenses, together with headquarters elimination costs and expenses, payable
by the Borrower and/or Holdings as a result of the Transactions, with all such
costs and expenses not to exceed $305 million.
"Reply Date" shall have the meaning provided in Section
1.04(b).
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"Reportable Event" shall mean an event described in Section
4043(b) of ERISA with respect to a Plan as to which the 30-day notice
requirement has not been waived by the PBGC.
"Required Lenders" shall mean at any time Non-Defaulting
Lenders holding more than 50% of the Adjusted Total Commitment (or, if the Total
Commitment has been terminated, of the Adjusted Total Commitment as in effect
immediately prior to such termination).
"Revolving Loan" shall have the meaning provided in Section
1.01(A).
"Xxxxxxxx Tobacco" shall mean X.X. Xxxxxxxx Tobacco Company, a
New Jersey corporation.
"RJRN Agreements" shall have the meaning provided such term in
the Nabisco Credit Agreement and shall include the agreements that, on and after
the date of the Reorganization Merger, replace, modify or supplement such
agreements to the extent reasonably satisfactory to the Majority SMA.
"S&P" shall mean Standard & Poor's Ratings Services, a
division of XxXxxx-Xxxx, Inc., or any successor thereto.
"SEC" shall have the meaning provided in Section 7.01(f).
"SEC Regulation D" shall mean Regulation D as promulgated
under the Securities Act of 1933, as amended, as the same may be in effect from
time to time.
"Secured Creditors" shall mean and include with respect to any
Collateral (i) all Lenders (including in their capacity as Letter of Credit
Issuers or parties to Hedging Agreements) and their affiliates and other Hedging
Agreements parties as provided in the Security Documents, (ii) all holders of
the Existing Foreign Currency Debt to the extent the Lien sharing provisions of
the Existing Foreign Currency Debt require them to be secured by such Collateral
and (iii) all holders of New Senior Notes to the extent the Lien sharing
provisions of the New Senior Notes require them to be secured by such
Collateral.
"Security Documents" shall have the meaning provided in
Section 7.11(b).
"Senior Managing Agent" shall mean and include Chase, BTCo,
Citibank, Credit Lyonnais, Fuji and Barclays, and any successor to any thereof
appointed pursuant to Section 11.09.
"Specified Debt" shall mean and include (x) all Indebtedness
for borrowed money of the Borrower (including Stub Notes and the Existing
Foreign Currency Debt) other than (i) any Indebtedness for borrowed money
outstanding under this Agreement, (ii) Stub Notes with principal payments due
earlier than the initial Facility Maturity Date to the extent an amount equal to
the principal payments so due has been escrowed for the payment thereof pursuant
to arrangements (the "Escrow") reasonably satisfactory to the Majority SMA,
(iii) Qualified Stub
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Notes and/or New Senior Notes in an aggregate principal amount of up to $500
million and (iv) Supported CP, (y) the full stated amount of all outstanding
Independent Litigation Bonds issued for the account of the Borrower and (z) all
Guaranteed L/C Obligations.
"Specified Subsidiaries" shall mean GMB, IHC and FSH.
"Spin-Off" shall mean the spin-off of all of the capital stock
of the Borrower owned by Holdings to the shareholders of Holdings on terms
consistent with those announced prior to April 1, 1999 or as otherwise
reasonably acceptable to the Majority SMA.
"Stated Amount" of any Letter of Credit shall mean the maximum
amount available to be drawn thereunder, determined without regard to whether
any conditions to drawing could then be met.
"Stub Notes" shall mean any Existing Senior Notes that are not
tendered pursuant to the Borrower Tender and remain outstanding after the
closing thereof.
"Subsidiary" of any Person shall mean and include (i) any
corporation more than 50% of whose stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such Person directly
or indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity in which such Person directly or indirectly through
Subsidiaries has more than a 50% equity interest at the time. Unless otherwise
expressly provided, all references herein to "Subsidiary" shall mean a
Subsidiary of Parent.
"Subsidiary Guarantor" shall mean each Subsidiary of the
Borrower that has executed and delivered the Subsidiary Guaranty.
"Subsidiary Guaranty" shall have the meaning provided in
Section 5.01.
"Supported CP" shall mean outstanding commercial paper issued
by the Borrower to the extent the credit rating assigned to such commercial
paper by any rating agency is premised on the liquidity support provided by this
Agreement.
"Swingline Commitment" shall mean for each Swingline Lender,
$16,666,666.66.
"Swingline Lender" shall mean and include each of Chase, BTCo,
Citibank, Credit Lyonnais, Fuji and Barclays, in each case, so long as such
entity constitutes a Lender hereunder.
"Swingline Loans" shall have the meaning provided in Section
1.01(B).
"Swingline Maturity Date" shall mean the date which is five
Business Days prior to the Facility Maturity Date.
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"Taxes" shall have the meaning provided in Section 4.04(a).
"Tender Offer and Consent Solicitation" shall mean (i) the
Tender Offer and Consent Solicitation Statement of the Borrower relating to
$4,389,486,000 of debt securities, and (ii) the Tender Offer and Consent
Solicitation Statement of Holdings relating to $373,750,000 of TOPrS, each dated
as of April 13, 1999, as the same may be amended from time to time with the
consent of the Majority SMA.
"Test Period" shall mean for any determination under Section
8.08, the four consecutive fiscal quarters of the Borrower then last ended.
"364 Day Credit Agreement" shall mean the Credit Agreement
dated as of April 28, 1995 among Holdings, the Borrower and the lending
institutions party thereto relating to commitments aggregating $750 million.
"3 Year Credit Agreement" shall mean the Credit Agreement
dated as of April 28, 1995 among Holdings, the Borrower and the lending
institutions party thereto relating to commitments aggregating $2.75 billion.
"Total Commitment" shall mean the sum of the Commitments of
each Lender.
"Total Swingline Commitment" shall mean the sum of the
Swingline Commitments of each of the Swingline Lenders, provided that the Total
Swingline Commitment shall not at any time exceed the Total Commitment.
"Total Unutilized Commitment" shall mean the excess of (x) the
Total Commitment over (y) the sum of (i) the aggregate outstanding principal
amount of all Revolving Loans, Swingline Loans and Competitive Bid Loans and
(ii) the Letter of Credit Outstandings.
"Transactions" shall mean and include: (i) the refinancing of
the Existing Credit Agreements; (ii) the International Tobacco Sale; (iii) the
Borrower Tender and the redemption of Existing Senior Notes; (iv) the Other Debt
Repayments; (v) the Reorganization Merger; and (vi) the Spin-Off.
"Trigger Event" shall mean that the Applicable Credit Rating
issued by each Rating Agency is at least one level below the Minimum Investment
Grade Rating or that the Applicable Credit Rating issued by either Rating Agency
is at least two levels below the Minimum Investment Grade Rating.
"Type" shall mean any type of Loan determined with respect to
the interest option applicable thereto, i.e., a Reference Rate Loan or
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code.
"Unfunded Current Liability" of any Plan shall mean the
amount, if any, by which the present value of the accrued benefits under such
Plan as of the close of its most recent plan year, determined in accordance with
Statement of Financial Accounting Standards No. 35, based
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upon the actuarial assumptions used by such Plan's actuary in the most recent
annual valuation of such Plan, exceeds the fair market value of the assets
allocable thereto, determined in accordance with Section 412 of the Code.
"Unpaid Drawing" shall have the meaning provided in Section
2.04(a).
"Wholly-Owned Subsidiary" of any Person shall mean any
Subsidiary of such Person to the extent all of the capital stock or other
ownership interests in such Subsidiary, other than directors' or nominees'
qualifying shares is owned directly or indirectly by such Person.
"Written" or "in writing" shall mean any form of written
communication or a communication by means of telex, telecopier device, telegraph
or cable.
SECTION 11. The Senior Managing Agents.
11.01 Appointment. Each Lender hereby irrevocably designates
and appoints Chase, BTCo, Citibank, Credit Lyonnais, Fuji and Barclays as Senior
Managing Agents (such term to include any of the Senior Managing Agents acting
as Administrative Agent or Syndication Agent and the Administrative Agent acting
as Collateral Agent) of such Lender to act as specified herein and in the other
Credit Documents, and each such Lender hereby irrevocably authorizes Chase,
BTCo, Citibank, Credit Lyonnais, Fuji and Barclays , as the Senior Managing
Agents for such Lender, to take such action on its behalf under the provisions
of this Agreement and the other Credit Documents and to exercise such powers and
perform such duties as are expressly delegated to the respective Senior Managing
Agents by the terms of this Agreement and the other Credit Documents, together
with such other powers as are reasonably incidental thereto. Each Senior
Managing Agent agrees to act as such upon the express conditions contained in
this Section 11. Notwithstanding any provision to the contrary elsewhere in this
Agreement, no Senior Managing Agent shall have any duties or responsibilities,
except those expressly set forth herein or in the other Credit Documents, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against any Senior Managing Agent. The provisions
of this Section 11 are solely for the benefit of the Senior Managing Agents and
the Lenders, and no Credit Party shall have any rights as a third party
beneficiary of any of the provisions hereof, provided that the Borrower shall
have the rights granted to it pursuant to Section 11.09. In performing its
functions and duties under this Agreement, each Senior Managing Agent shall act
solely as agent of the Lenders and does not assume and shall not be deemed to
have assumed any obligation or relationship of agency or trust with or for
either Credit Party. No Managing Agent, Lead Manager, Manager or Co-Manager
shall have any duties or obligations in its capacity as such under this
Agreement.
11.02 Delegation of Duties. Each Senior Managing Agent may
execute any of its duties under this Agreement or any other Credit Document by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. No Senior Managing
Agent shall be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care except to the extent
otherwise required by Section 11.03.
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11.03 Exculpatory Provisions. No Senior Managing Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement (except for its or
such Person's own gross negligence or willful misconduct) or (ii) responsible in
any manner to any of the Lenders for any recitals, statements, representations
or warranties made by Holdings, any Subsidiary or any of their respective
officers contained in this Agreement, any other Credit Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by any Senior Managing Agent under or in connection with, this
Agreement or any other Credit Document or for any failure of Holdings or any
Subsidiary or any of their respective officers to perform its obligations
hereunder or thereunder. No Senior Managing Agent shall be under any obligation
to any Lender to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement, or to
inspect the properties, books or records of Holdings or any Subsidiary. No
Senior Managing Agent shall be responsible to any Lender for the effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency of this
Agreement or any Credit Document or for any representations, warranties,
recitals or statements made herein or therein or made in any written or oral
statement or in any financial or other statements, instruments, reports,
certificates or any other documents in connection herewith or therewith
furnished or made by any Senior Managing Agent to the Lenders or by or on behalf
of the Borrower to any Senior Managing Agent or any Lender or be required to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained herein or therein or
as to the use of the proceeds of the Loans or of the existence or possible
existence of any Default or Event of Default.
11.04 Reliance by Senior Managing Agents. Each Senior Managing
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, facsimile transmission, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Credit Parties), independent accountants and other
experts selected by such Senior Managing Agent. Each Senior Managing Agent shall
be fully justified in failing or refusing to take any action under this
Agreement or any other Credit Document unless it shall first receive such advice
or concurrence of the Required Lenders as it deems appropriate or it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. Each Senior Managing Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Credit Documents in accordance with a request of the Required Lenders (or
to the extent specifically provided in Section 12.12, all the Lenders), and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders.
11.05 Notice of Default. No Senior Managing Agent shall be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless such Senior Managing Agent has received notice from a
Lender or the Borrower or Holdings referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a
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"notice of default". In the event that any Senior Managing Agent receives such a
notice, such Senior Managing Agent shall give prompt notice thereof to the
Lenders. Each Senior Managing Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Required
Lenders; provided, that, unless and until a Senior Managing Agent shall have
received such directions, such Senior Managing Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
11.06 Non-Reliance on Senior Managing Agents and Other
Lenders. Each Lender expressly acknowledges that no Senior Managing Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates have made any representations or warranties to it and that no act by
any Senior Managing Agent hereafter taken, including any review of the affairs
of Holdings or any Subsidiary, shall be deemed to constitute any representation
or warranty by any Senior Managing Agent to any Lender. Each Lender represents
to each Senior Managing Agent that it has, independently and without reliance
upon any Senior Managing Agent or any other Lender, and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, assets, operations, property, financial and
other conditions, prospects and creditworthiness of Parent and its Subsidiaries
and made its own decision to make its Loans hereunder and enter into this
Agreement. Each Lender also represents that it will, independently and without
reliance upon any Senior Managing Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement, and to make such investigation as it deems
necessary to inform itself as to the business, assets, operations, property,
financial and other condition, prospects and creditworthiness of Parent and its
Subsidiaries. Except for notices, reports and other documents expressly required
to be furnished to the Lenders by the Administrative Agent hereunder, no Senior
Managing Agent shall have any duty or responsibility to provide any Lender with
any credit or other information concerning the business, operations, assets,
property, financial and other conditions, prospects or creditworthiness of
Parent or any of its Subsidiaries which may come into the possession of such
Senior Managing Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
11.07 Indemnification. The Lenders agree to indemnify each
Senior Managing Agent in its capacity as such ratably according to their
aggregate Commitments (or, if the Total Commitment has been terminated, their
aggregate Commitments as in effect immediately prior to such termination), from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, reasonable expenses or disbursements of any
kind whatsoever which may at any time (including, without limitation, at any
time following the payment of the Obligations) be imposed on, incurred by or
asserted against such Senior Managing Agent in its capacity as such in any way
relating to or arising out of this Agreement or any other Credit Document, or
any documents contemplated by or referred to herein or the transactions
contemplated hereby or any action taken or omitted to be taken by any Senior
Managing Agent under or in connection with any of the foregoing, but only to the
extent that any of the foregoing is not paid by Parent or any of its
Subsidiaries; provided that no Lender shall be liable to any Senior
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Managing Agent for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from such Senior Managing Agent's gross
negligence or willful misconduct. If any indemnity furnished to any Senior
Managing Agent for any purpose shall, in the opinion of such Senior Managing
Agent, be insufficient or become impaired, such Senior Managing Agent may call
for additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished. The agreements in this
Section 11.07 shall survive the payment of all Obligations.
11.08 Senior Managing Agents in Their Individual Capacities.
Each Senior Managing Agent and its affiliates may make loans to, accept deposits
from and generally engage in any kind of business with Parent and its
Subsidiaries as though such Senior Managing Agent were not a Senior Managing
Agent hereunder. With respect to the Loans made by it and all Obligations owing
to it, each Senior Managing Agent shall have the same rights and powers under
this Agreement as any Lender and may exercise the same as though it were not a
Senior Managing Agent, and the terms "Lender" and "Lenders" shall include each
Senior Managing Agent in its individual capacity.
11.09 Successor Senior Managing Agents. Any Senior Managing
Agent may resign as a Senior Managing Agent upon 20 days' notice to the Lenders,
provided that prior to, and as a condition of, the last remaining Senior
Managing Agent so resigning, the Required Lenders shall appoint from among the
Lenders a successor Senior Managing Agent for the Lenders subject to prior
approval by the Borrower (such approval not to be unreasonably withheld,
provided that such Lender agrees to assume the Swingline Commitment of such
Senior Managing Agent in full), whereupon such successor agent shall succeed to
the rights, powers and duties of the Senior Managing Agents, and the term
"Senior Managing Agents" shall include such successor agent effective upon its
appointment, and the resigning Senior Managing Agent's rights, powers and duties
as a Senior Managing Agent shall be terminated, without any other or further act
or deed on the part of such former Senior Managing Agent or any of the parties
to this Agreement. After any retiring Senior Managing Agent's resignation
hereunder as a Senior Managing Agent, the provisions of this Section 11 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was a Senior Managing Agent under this Agreement.
SECTION 12. Miscellaneous.
12.01 Payment of Expenses, etc. The Borrower agrees to: (i)
pay all reasonable out-of-pocket costs and expenses of (x) the Senior Managing
Agents, whether or not the transactions herein contemplated are consummated, in
connection with the negotiation, preparation, execution and delivery of the
Credit Documents and the documents and instruments referred to therein and any
amendment, waiver or consent relating thereto (including, without limitation,
the reasonable fees and disbursements of White & Case LLP but of no other
counsel) and (y) each Senior Managing Agent and each of the Lenders in
connection with the enforcement of the Credit Documents and the documents and
instruments referred to therein (including, without limitation, the reasonable
fees and disbursements of counsel for each Senior Managing Agent and for each of
the Lenders); (ii) pay and hold each of the Lenders harmless from and against
any
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and all present and future stamp and other similar taxes with respect to the
foregoing matters and save each of the Lenders harmless from and against any and
all liabilities with respect to or resulting from any delay or omission (other
than to the extent attributable to such Lender) to pay such taxes; and (iii)
indemnify each Lender, its affiliates and their respective officers, directors,
employees, representatives, agents and affiliates from and hold each of them
harmless against any and all losses, liabilities, claims, damages or expenses
incurred by any of them as a result of, or arising out of, or in any way related
to, or by reason of, any investigation, litigation or other proceeding (whether
or not any Lender is a party thereto) related to the entering into and/or
performance of any Credit Document or the use of the proceeds of any Loans
hereunder or the Transactions or the consummation of any other transactions
contemplated in any Credit Document, including, without limitation, the
reasonable fees and disbursements of counsel incurred in connection with any
such investigation, litigation or other proceeding (but excluding any such
losses, liabilities, claims, damages or expenses to the extent incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified).
12.02 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence of an Event of Default, each
Lender is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to either Credit Party
or to any other Person, any such notice being hereby expressly waived, to set
off and to appropriate and apply any and all deposits (general or special) and
any other Indebtedness at any time held or owing by such Lender (including,
without limitation, by branches and agencies of such Lender wherever located) to
or for the credit or the account of either Credit Party against and on account
of the Obligations and liabilities of such Credit Party to such Lender under
this Agreement or under any of the other Credit Documents, including, without
limitation, all interests in Obligations of such Credit Party purchased by such
Lender pursuant to Section 12.06(b), and all other claims of any nature or
description arising out of or connected with this Agreement or any other Credit
Document, irrespective of whether or not such Lender shall have made any demand
hereunder and although said Obligations, liabilities or claims, or any of them,
shall be contingent or unmatured.
12.03 Notices. Except as otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile transmission or cable communication)
and mailed, telegraphed, telexed, telecopied, cabled or delivered, if to a
Credit Party, at the address specified opposite its signature below or in the
other relevant Credit Documents, as the case may be; if to any Lender, at its
address specified for such Lender on Annex II hereto; or, at such other address
as shall be designated by any party in a written notice to the other parties
hereto. All such notices and communications shall be telegraphed, telexed,
telecopied, or cabled or sent by overnight courier, and shall be effective when
received.
12.04 Benefit of Agreement. (a) This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto, provided that no Credit Party may
assign or transfer any of its interests hereunder, except to the extent any such
assignment results from the consummation of a transaction permitted
74
under Section 8.02, without the prior written consent of the Lenders and
provided further that the rights of each Lender to transfer, assign or grant
participations in its rights and/or obligations hereunder shall be limited as
set forth below in this Section 12.04, provided that nothing in this Section
12.04 shall prevent or prohibit any Lender from pledging its rights under this
Agreement and/or its Loans and/or Note hereunder to a Federal Reserve Lender in
support of borrowings made by such Lender from such Federal Reserve Lender.
(b) Each Lender shall have the right to transfer, assign or
grant participations in all or any part of its remaining rights and obligations
hereunder on the basis set forth below in this clause (b).
(A) Assignments. At any time, each Lender may assign pursuant
to an Assignment Agreement substantially in the form of Exhibit E-2 hereto
(each, an "Assignment Agreement") all or a portion of its rights and obligations
hereunder pursuant to this clause (b)(A) to (x) one or more Lenders and/or their
affiliates or (y) with the consent of the Administrative Agent and so long as no
Event of Default then exists with the consent of the Borrower (which consent
shall not be unreasonably withheld), one or more other Eligible Transferees,
provided that any such assignment pursuant to clause (y) above shall be in the
aggregate amount of at least $5,000,000, except to the extent that after giving
effect to such assignment such Lender's Commitment is reduced to zero. Any
assignment to another Lender pursuant to this clause (b)(A) will become
effective upon the payment to the Administrative Agent by (I) either the
assigning or the assignee Lender or (II) in the case of an assignment pursuant
to Section 1.15, the Replacement Lender, of a nonrefundable assignment fee of
$3,500 and the recording by the Administrative Agent of such assignment, and the
resultant effects thereof on the Commitments of the assigning Lender and the
assignee Lender, in the Register, the Administrative Agent hereby agreeing to
effect such recordation no later than five Business Days after its receipt of a
written notification by the assigning Lender and the assignee Lender of the
proposed assignment, provided that the Administrative Agent shall not be
required to (but may if it so elects) so record any assignment in the Register
on or after the date on which any proposed amendment, modification or supplement
in respect of this Agreement has been circulated to the Lenders for approval
until the earlier of (x) the effectiveness of such amendment, modification or
supplement in accordance with Section 12.12 or (y) 30 days following the date
on which such proposed amendment, modification or supplement was circulated to
the Lenders. Assignments pursuant to this clause (b)(A) to any Person not
theretofore a Lender hereunder will only be effective if the Administrative
Agent shall have received a written notice in the form of Exhibit E-1 hereto
from the assigning Lender and the assignee Lender and payment of a
nonrefundable assignment fee of $3,500 to the Administrative Agent by (I)
either the assigning or the assignee Lender or (II) in the case of an
assignment pursuant to Section 1.15, the Replacement Lender. No later than five
Business Days after its receipt of such written notice, the Administrative
Agent will record such assignment, and the resultant effects thereof on the
Commitment of the assigning Lender, in the Register, at which time such
assignment shall become effective, provided that the Administrative Agent shall
not be required to (but may if it so elects) record any assignment in the
Register on or after the date on which any proposed amendment, modification or
supplement in respect of this Agreement has been circulated to the Lenders for
approval until the earlier of (x) the effectiveness of such amendment,
modification or supplement in accordance with Section 12.12
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or (y) 30 days following the date on which such proposed amendment,
modification or supplement was circulated to the Lenders. Upon the
effectiveness of any assignment pursuant to this clause (b)(A), (x) the
assignee will become a "Lender" for all purposes of this Agreement and the
other Credit Documents with a Commitment as so recorded by the Administrative
Agent in the Register, and to the extent of such assignment, the assigning
Lender shall be relieved of its obligations hereunder with respect to the
portion of its Commitment being assigned and (y) if such assignment occurs
after the Closing Date, the Borrower shall issue new Notes (in exchange for the
Note of the assigning Lender) to the assigning Lender (to the extent such
Lender's Commitment is not reduced to zero as a result of such assignment) and
to the assignee Lender, in each case to the extent requested by the assigning
Lender or assignee Lender, as the case may be, in conformity with the
requirements of Section 1.06 to the extent needed to reflect the revised
Commitments of such Lenders. The Administrative Agent will (x) notify each
Letter of Credit Issuer within 5 Business Days of the effectiveness of any
assignment hereunder and (y) prepare on the last Business Day of each calendar
quarter during which an assignment has become effective pursuant to this clause
(b)(A) a new Annex I giving effect to all such assignments effected during such
quarter and will promptly provide same to the Borrower and each of the Lenders.
(B) Participations. Each Lender may transfer, grant or assign
participations in all or any part of such Lender's interests and obligations
hereunder pursuant to this clause (b)(B) to any Eligible Transferee, provided
that (i) such Lender shall remain a "Lender" for all purposes of this Agreement
and the transferee of such participation shall not constitute a Lender hereunder
and (ii) no participant under any such participation shall have rights to
approve any amendment to or waiver of this Agreement or any other Credit
Document except to the extent such amendment or waiver would (x) extend the
final scheduled maturity of any of the Loans or the Commitment in which such
participant is participating, (y) reduce the interest rate (other than as a
result of waiving the applicability of any post-default increases in interest
rates) or Fees applicable to any of the Loans, Commitments or Letters of Credit
or postpone the payment of any thereof or (z) release Xxxxxxxx Tobacco from the
Subsidiary Guaranty or prior to the consummation of the Spin-Off, release the
Holdings Guaranty. In the case of any such participation, the participant shall
not have any rights under this Agreement or any of the other Credit Documents
(the participant's rights against the granting Lender in respect of such
participation to be those set forth in the agreement with such Lender creating
such participation) and all amounts payable by the Borrower hereunder shall be
determined as if such Lender had not sold such participation, provided that such
participant shall be entitled to receive additional amounts under Sections 1.11,
1.12, 2.05 and 4.04 on the same basis as if it were a Lender. In addition, each
agreement creating any participation must include an agreement by the
participant to be bound by the provisions of Section 12.15 and such participant
shall have executed a confidentiality agreement in the form of Exhibit E hereto.
(c) Notwithstanding any other provisions of this Section
12.04, no transfer or assignment of the interests or obligations of any Lender
hereunder or any grant of participations therein shall be permitted if such
transfer, assignment or grant would require the Borrower or the Guarantor to
file a registration statement with the SEC or to qualify the Loans under the
"Blue Sky" laws of any State.
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(d) Each Lender initially party to this Agreement hereby
represents, and each Person that becomes a Lender pursuant to an assignment
permitted by the preceding clause (b)(A) will upon its becoming party to this
Agreement represent, that it is an Eligible Transferee which makes loans in the
ordinary course of its business and that it will make or acquire Loans for its
own account in the ordinary course of such business, provided that, subject to
the preceding clauses (a) through (c), the disposition of any promissory notes
or other evidences of or interests in Indebtedness held by such Lender shall at
all times be within its exclusive control.
(e) Notwithstanding anything to the contrary contained herein,
any Lender (a "Granting Lender") may grant to a special purpose funding vehicle
(an "SPC") of such Granting Lender, identified as such in writing from time to
time by the Granting Lender to the Administrative Agent and the Borrower, the
option to provide to the Borrower all or any part of any Loan that such Granting
Lender would otherwise be obligated to make to the Borrower pursuant to Section
1.01(A) or (D) provided that (i) nothing herein shall constitute a commitment to
make any Loan by any SPC and (ii) if an SPC elects not to exercise such option
or otherwise fails to provide all or any part of such Loan, the Granting Lender
shall be obligated to make such Loan pursuant to the terms hereof. The making of
a Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender
to the same extent, and as if, such Loan were made by the Granting Lender. Each
party hereto hereby agrees that no SPC shall be liable for any payment under
this Agreement for which a Lender would otherwise be liable, for so long as, and
to the extent, the related Granting Lender makes such payment. In furtherance of
the foregoing, each party hereto hereby agrees that, prior to the date that is
one year and one day after the payment in full of all outstanding senior
indebtedness of any SPC, it will not institute against, or join any other person
in instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or similar proceedings under the laws of
the United States or any State thereof. In addition, notwithstanding anything to
the contrary contained in this Section 12.04 any SPC may (i) with notice to, but
without the prior written consent of, the Borrower or the Administrative Agent
and without paying any processing fee therefor, assign all or a portion of its
interests in any Loans to its Granting Lender or to any financial institutions
(if consented to by the Borrower and the Administrative Agent) providing
liquidity and/or credit facilities to or for the account of such SPC to fund the
Loans made by such SPC or to support the securities (if any) issued by such SPC
to fund such Loans and (ii) disclose on a confidential basis any non-public
information relating to its Loans to any rating agency, commercial paper dealer
or provider of a surety, guarantee or credit or liquidity enhancement to such
SPC.
12.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of any Senior Managing Agent, Administrative Agent or any Lender in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between either Credit Party and any Senior
Managing Agent or any Lender shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or under
any other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights and remedies herein expressly provided are cumulative and not exclusive
of any rights or remedies which any Senior Managing Agent or any Lender would
otherwise have. No notice to or demand on either Credit Party in any case shall
entitle either Credit Party to any other or further notice or demand in similar
or other cir-
77
cumstances or constitute a waiver of the rights of the Senior Managing Agents
or the Lenders to any other or further action in any circumstances without
notice or demand.
12.06 Payments Pro Rata. (a) The Administrative Agent agrees
that promptly after its receipt of each payment from or on behalf of either
Credit Party in respect of any Obligations of such Credit Party, it shall,
except as otherwise provided in this Agreement, distribute such payment to the
Lenders pro rata based upon their respective shares, if any, of the Obligations
with respect to which such payment was received.
(b) Each of the Lenders agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon security, by
the exercise of the right of setoff or Lender's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans or Fees, of a sum which with respect to the related sum or sums
received by other Lenders is in a greater proportion than the total of such
Obligations then owed and due to such Lender bears to the total of such
Obligations then owed and due to all of the Lenders immediately prior to such
receipt, then such Lender receiving such excess payment shall purchase for cash
without recourse or warranty from the other Lenders an interest in the
Obligations of the respective Credit Party to such Lenders in such amount as
shall result in a proportional participation by all of the Lenders in such
amount; provided, that if all or any portion of such excess amount is thereafter
recovered from such Lender, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.
12.07 Calculations; Computations. (a) The financial statements
to be furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by Holdings to the Lenders); provided, that, except as otherwise specifically
provided herein, all computations determining compliance with Section 8,
including definitions used therein, shall utilize accounting principles and
policies in effect at the time of the preparation of, and in conformity with
those used to prepare, the historical financial statements delivered to the
Lenders pursuant to Section 6.09, provided that in the event GAAP shall be
modified from that in effect at the time of the preparation of such financial
statements, the Borrower shall be entitled to utilize GAAP, as so modified, for
purposes of such computations to the extent that (x) the Borrower gives the
Lenders 30 days' prior written notice of such proposed modification and (y)
prior thereto the Borrower and the Majority SMA shall have agreed upon
adjustments, if any, to Sections 8.03(g), 8.04(l), 8.05, 8.07 and 8.08 (and the
definitions used therein) the sole purpose of which shall be to give effect to
such proposed change (it being understood and agreed that to the extent that the
Borrower and the Majority SMA cannot agree on appropriate adjustments to such
Sections (or that no adjustments are necessary), the proposed change may not be
effected); and provided further, that if at any time the computations
determining compliance with Section 8 utilize accounting principles different
from those utilized in the financial statements furnished to the Lenders, such
financial statements shall be accompanied by reconciliation work-sheets.
Notwithstanding the foregoing, for purposes of the computations determining
compliance with Section 8, all expenses and other charges arising from any
settlement of tobacco liability which are required by GAAP to be retroactively
applied
78
to a previous fiscal quarter of Parent shall instead be accrued in the fiscal
quarter in which such expenses and charges occur.
(b) All computations of interest and Fees hereunder shall be
made on the actual number of days elapsed over a year of 360 days.
(c) All determinations of the Stated Amount of Letters of
Credit and of the principal amount of Unpaid Drawings, in each case to the
extent denominated in a currency other than U.S. dollars, shall be made by
converting same into U.S. dollars at (x) if a Currency Agreement has been
entered into by the Borrower and/or any of its Subsidiaries in connection with
such Indebtedness, and is in effect at the time of such determination, the rate
provided in such Currency Agreement, provided that this clause (x) shall not be
applicable (I) unless the Administrative Agent has received sufficient
information from the Borrower to determine the exchange rate established by such
Currency Agreement and the duration thereof, or (II) to any determination of the
Borrower's obligation to reimburse in U.S. dollars a Drawing under a Letter of
Credit denominated in a currency other than U.S. dollars, (y) in the case of a
determination of the Borrower's obligation to reimburse in U.S. dollars a
Drawing under a Letter of Credit denominated in a currency other than U.S.
dollars, the spot exchange rate for the currency in question of the Letter of
Credit Issuer on the date of such Drawing or (z) if the provisions of the
foregoing clauses (x) and (y) are not applicable, the "official" exchange rate,
if applicable, or the spot exchange rate for the currency in question calculated
by the Administrative Agent on the last Computation Date preceding the date on
which any such determination is being made and at such other times as the
Administrative Agent elects to make such determination, it being understood that
the Administrative Agent shall have no obligation to make any such other
determinations. The Administrative Agent will promptly notify the Borrower and
each Letter of Credit Issuer of its determinations hereunder.
12.08 Governing Law; Submission to Jurisdiction; Venue. (a)
THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding
with respect to this Agreement or any other Credit Document may be brought in
the courts of the State of New York or of the United States for the Southern
District of New York, and, by execution and delivery of this Agreement, each
Credit Party hereby irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid
courts. Each Credit Party further irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
the respective Credit Party at its address for notices pursuant to Section
12.03, such service to become effective 30 days after such mailing. Each Credit
Party hereby irrevocably appoints the Borrower as its agent for service of
process in respect of any such action or proceeding. Nothing herein shall affect
the right of any Senior Managing Agent or any Lender to serve process in any
other manner permitted by law or to commence legal proceedings or otherwise
proceed against either Credit Party in any other jurisdiction.
79
(b) Each Credit Party hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Agreement or any other Credit Document brought in the courts referred to in the
preceding clause (a) and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.
12.09 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be lodged with the
Borrower and the Administrative Agent.
12.10 Execution. This Agreement shall be fully executed on the
date (the "Execution Date") on which each of Holdings and the Borrower and each
of the Lenders shall have signed a copy hereof (whether the same or different
copies) and shall have delivered the same to the Administrative Agent at the
Administrative Agent's Office or, in the case of the Lenders, shall have given
to the Administrative Agent telephonic (confirmed in writing), written, telex or
facsimile notice (actually received) at such office that the same has been
signed and mailed to it. The Administrative Agent will give Holdings, the
Borrower and each Lender prompt written notice of the occurrence of the
Execution Date.
12.11 Headings Descriptive. The headings of the several
sections and subsections of this Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Agreement.
12.12 Amendment or Waiver. Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the Required Lenders; provided, that (x) no such change,
waiver, discharge or termination shall, without the consent of each Lender
(other than a Defaulting Lender) with Obligations being directly affected
thereby, (i) extend the scheduled final maturity of any Loan or Note, or any
portion thereof, or reduce the rate or extend the time of payment of interest
(other than as a result of waiving the applicability of any post-default
increase in interest rates) thereon or Fees or reduce the principal amount
thereof, or increase the Commitment of any Lender over the amount thereof then
in effect (it being understood that a waiver of any Default or Event of Default
or of a mandatory reduction in the Total Commitment shall not constitute a
change in the terms of the Commitment of any Lender), (ii) release Xxxxxxxx
Tobacco from the Subsidiary Guaranty or prior to the consummation of the
Spin-Off, the Holdings Guaranty, (iii) at any time Collateral is pledged
pursuant to the Security Documents release (other than pursuant to the automatic
release provided for in Section 7.11) all or substantially all of the
Collateral, (iv) amend, modify or waive any provision of this Section, or
Section 1.11, 1.12, 1.14, 2.05, 4.04, 9.01, 11.07, 12.01, 12.02, 12.04, 12.06,
12.07(b) or 12.15, (v) reduce any percentage specified in, or otherwise modify,
the definition of Required Lenders or (vi) consent to the assignment or transfer
by the Borrower or (prior to the consummation of the Spin-Off) Holdings of any
of its rights and
80
obligations under this Agreement; and (y) the financial covenants set forth in
Sections 8.03(g), 8.04(l), 8.05, 8.07 and 8.08, (and the defined terms used
therein) may be adjusted with the consent of the Borrower and the Majority SMA
to the extent provided in Sections 7.09 and 12.07(a). No provision of Section 11
may be amended or modified without the consent of any Senior Managing Agent
adversely affected thereby. The obligations of Swingline Lenders to make
Swingline Loans, the terms of any such Swingline Loans and the obligations of
the other Lenders to fund Mandatory Drawings shall not be amended or modified
without the consent of the Swingline Lenders. The terms of Section 2 shall not
be amended or modified without the consent of any Letter of Credit Issuer
adversely affected thereby.
12.13 Survival. All indemnities set forth herein including,
without limitation, in Section 1.11, 1.12, 2.05, 4.04, 11.07 or 12.01 shall
survive the execution and delivery of this Agreement and the making of the
Loans, the issuances of Letters of Credit, the repayment of the Obligations and
the termination of the Total Commitment.
12.14 Domicile of Loans. Subject to Section 12.04, each Lender
may transfer and carry its Loans at, to or for the account of any branch office,
subsidiary or affiliate of such Lender; provided, that the Borrower shall not be
responsible for costs arising under Section 1.11, 1.12, 2.05 or 4.04 resulting
from any such transfer (other than a transfer pursuant to Section 1.13) to the
extent not otherwise applicable to such Lender prior to such transfer.
12.15 Confidentiality. Subject to Section 12.04, each Lender
shall hold all non-public information furnished by or on behalf of Holdings or
the Borrower in connection with such Lender's evaluation of whether to become a
Lender hereunder or obtained pursuant to the requirements of this Agreement,
which has been identified as such by Holdings ("Confidential Information"), in
accordance with its customary procedure for handling confidential information of
this nature and in accordance with safe and sound banking practices and in any
event may make disclosure reasonably required by any bona fide transferee or
participant (which shall be an Eligible Transferee) in connection with the
contemplated transfer of any Loans or participations therein or as required or
requested by any governmental agency or representative thereof or pursuant to
legal process or to such Lender's attorneys or independent auditors; provided,
that, unless specifically prohibited by applicable law or court order, each
Lender shall notify Holdings of any request by any governmental agency or
representative thereof (other than any such request in connection with an
examination of the financial condition of such Lender by such governmental
agency) for disclosure of any such non-public information prior to disclosure of
such information; and provided further, that in no event shall any Lender be
obligated or required to return any materials furnished by Holdings or any
Subsidiary. Each Lender agrees that it will not provide to prospective
assignees, transferees or participants any of the Confidential Information
unless such Person has executed a Confidentiality Agreement in the form of
Exhibit F.
12.16 Waiver of Jury Trial. Each of the parties to this
Agreement hereby irrevocably waives all right to a trial by jury in any action,
proceeding or counterclaim arising out of or relating to this Agreement, the
other Credit Documents or the transactions contemplated hereby or thereby.
81
SECTION 13. Holdings Guaranty.
13.01 The Holdings Guaranty. In order to induce the Lenders to
enter into this Agreement and to extend credit hereunder and in recognition of
the direct benefits to be received by the Guarantor from the proceeds of the
Loans and the issuance of the Letters of Credit, the Guarantor hereby agrees
with the Lenders as follows: the Guarantor hereby unconditionally and
irrevocably guarantees as primary obligor and not merely as surety the full and
prompt payment when due, whether upon maturity, by acceleration or otherwise, of
any and all indebtedness of the Borrower to the Lenders. If any or all of the
indebtedness of the Borrower to the Lenders becomes due and payable hereunder,
the Guarantor unconditionally promises to pay such indebtedness to the Lenders,
or order, on demand, together with any and all expenses which may be incurred by
the Senior Managing Agents or the Lenders in collecting any of the indebtedness.
The word "indebtedness" is used in this Section 13 in its most comprehensive
sense and includes any and all advances, debts, obligations and liabilities of
the Borrower arising in connection with this Agreement and any other Credit
Document, in each case, heretofore, now, or hereafter made, incurred or created,
whether voluntarily or involuntarily, absolute or contingent, liquidated or
unliquidated, determined or undetermined, whether or not such indebtedness is
from time to time reduced, or extinguished and thereafter increased or incurred,
whether the Borrower may be liable individually or jointly with others, whether
or not recovery upon such indebtedness may be or hereafter become barred by any
statute of limitations, and whether or not such indebtedness may be or hereafter
become otherwise unenforceable.
13.02 Bankruptcy. Additionally, the Guarantor unconditionally
and irrevocably guarantees the payment of any and all indebtedness of the
Borrower to the Lenders whether or not due or payable by the Borrower upon the
occurrence in respect of the Borrower of any of the events specified in Section
9.05, and unconditionally promises to pay such indebtedness to the Lenders, or
order, on demand, in lawful money of the United States.
13.03 Nature of Liability. The liability of the Guarantor
hereunder is exclusive and independent of any security for or other guaranty of
the indebtedness of the Borrower whether executed by the Guarantor, any other
guarantor or by any other party, and the liability of the Guarantor hereunder
shall not be affected or impaired by (a) any direction as to application of
payment by the Borrower or by any other party, or (b) any other continuing or
other guaranty, undertaking or maximum liability of a guarantor or of any other
party as to the indebtedness of the Borrower, or (c) any payment on or in
reduction of any such other guaranty or undertaking, or (d) any dissolution,
termination or increase, decrease or change in personnel by the Borrower, or (e)
any payment made to the Senior Managing Agents or the Lenders on the
indebtedness which the Senior Managing Agents or such Lenders repay the Borrower
pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and the Guarantor waives any right
to the deferral or modification of its obligations hereunder by reason of any
such proceeding.
13.04 Independent Obligation. The obligations of the Guarantor
hereunder are independent of the obligations of any other guarantor or the
Borrower, and a separate action or actions may be brought and prosecuted against
the Guarantor whether or not action is brought
82
against any other guarantor or the Borrower and whether or not any other
guarantor or the Borrower be joined in any such action or actions. The Guarantor
waives, to the fullest extent permitted by law, the benefit of any statute of
limitations affecting its liability hereunder or the enforcement thereof. Any
payment by the Borrower or other circumstance which operates to toll any statute
of limitations as to the Borrower shall operate to toll the statute of
limitations as to the Guarantor.
13.05 Authorization. The Guarantor authorizes the Senior
Managing Agents and the Lenders without notice or demand (except as shall be
required by applicable statute and cannot be waived), and without affecting or
impairing its liability hereunder, from time to time to (a) renew, compromise,
extend, increase, accelerate or otherwise change the time for payment of, or
otherwise change the terms of, the indebtedness or any part thereof in
accordance with this Agreement, including any increase or decrease of the rate
of interest thereon, (b) take and hold security from any guarantor or any other
party for the payment of this Holdings Guaranty or the indebtedness and
exchange, enforce, waive and release any such security, (c) apply such security
and direct the order or manner of sale thereof as the Senior Managing Agents and
the Lenders in their discretion may determine and (d) release or substitute any
one or more endorsers, guarantors, the Borrower or other obligors.
13.06 Reliance. It is not necessary for the Senior Managing
Agents or the Lenders to inquire into the capacity or powers of the Borrower or
its Subsidiaries or the officers, directors, partners or agents acting or
purporting to act on its behalf, and any indebtedness made or created in
reliance upon the professed exercise of such powers shall be guaranteed
hereunder.
13.07 Subordination. Any indebtedness of the Borrower now or
hereafter held by the Guarantor is hereby subordinated to the indebtedness of
the Borrower to the Senior Managing Agents and the Lenders; and such
indebtedness of the Borrower to the Guarantor, if any Senior Managing Agent,
after an Event of Default has occurred, so requests, shall be collected,
enforced and received by the Guarantor as trustee for the Lenders and be paid
over to the Lenders on account of the indebtedness of the Borrower to the
Lenders, but without affecting or impairing in any manner the liability of the
Guarantor under the other provisions of this Holdings Guaranty. Prior to the
transfer by the Guarantor of any note or negotiable instrument evidencing any
indebtedness of the Borrower to the Guarantor, the Guarantor shall xxxx such
note or negotiable instrument with a legend that the same is subject to this
subordination.
13.08 Waiver. (a) The Guarantor waives any right (except as
shall be required by applicable statute and cannot be waived) to require the
Senior Managing Agents or the Lenders to (a) proceed against the Borrower, any
other guarantor or any other party, (b) proceed against or exhaust any security
held from the Borrower, any other guarantor or any other party or (c) pursue any
other remedy in the Senior Managing Agents' or the Lenders' power whatsoever.
The Guarantor waives any defense based on or arising out of any defense of the
Borrower, any other guarantor or any other party other than payment in full of
the indebtedness, including, without limitation, any defense based on or arising
out of the disability of the Borrower, any other guarantor or any other party,
or the unenforceability of the indebtedness or any part thereof from any cause,
or the cessation from any cause of the liability of the Borrower other than
83
payment in full of the indebtedness. The Senior Managing Agents and the Lenders
may, at their election, foreclose on any security held by the Senior Managing
Agents or the Lenders by one or more judicial or nonjudicial sales, whether or
not every aspect of any such sale is commercially reasonable (to the extent such
sale is permitted by applicable law), or exercise any other right or remedy the
Senior Managing Agents and the Lenders may have against the Borrower or any
other party, or any security, without affecting or impairing in any way the
liability of the Guarantor hereunder except to the extent the indebtedness has
been paid. The Guarantor waives any defense arising out of any such election by
the Senior Managing Agents and the Lenders, even though such election operates
to impair or extinguish any right of reimbursement or subrogation or other right
or remedy of the Guarantor against the Borrower or any other party or any
security. Until all indebtedness of the Borrower to the Lenders shall have been
paid in full, the Guarantor shall not have any right of subrogation, and waives
any right to enforce any remedy which the Senior Managing Agents and the Lenders
now have or may hereafter have against the Borrower, and waives any benefit of,
and any right to participate in, any security now or hereafter held by the
Senior Managing Agents and the Lenders.
(b) The Guarantor waives all presentments, demands for
performance, protests and notices, including without limitation notices of
nonperformance, notice of protest, notices of dishonor, notices of acceptance of
this Holdings Guaranty, and notices of the existence, creation or incurring of
new or additional indebtedness. The Guarantor assumes all responsibility for
being and keeping itself informed of the Borrower's financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the indebtedness and the nature, scope and extent of the risks which the
Guarantor assumes and incurs hereunder, and agrees that the Senior Managing
Agents and the Lenders shall have no duty to advise the Guarantor of information
known to them regarding such circumstances or risks.
13.09 Limitation on Enforcement. The Lenders agree that this
Holdings Guaranty may be enforced only by the action of a Senior Managing Agent
acting upon the instructions of the Required Lenders and that no Lender shall
have any right individually to seek to enforce or to enforce this Holdings
Guaranty, it being understood and agreed that such rights and remedies may be
exercised by each Senior Managing Agent for the benefit of the Lenders upon the
terms of this Agreement.
13.10 Termination. The guaranty of the Guarantor set forth in
this Section 13 shall terminate, and be of no further force and effect, upon the
consummation of the Spin-Off and upon such termination the Guarantor shall have
no obligations or liabilities under this Section 13 or any Credit Document.
* * *
84
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.
Address
RJR NABISCO, INC.
By______________________________________________
Title:
RJR NABISCO HOLDINGS CORP.
By______________________________________________
Title:
SENIOR MANAGING AGENTS
THE CHASE MANHATTAN BANK,
Individually and as Administrative Agent
By______________________________________________
Title:
BANKERS TRUST COMPANY,
Individually and as Syndication Agent
By______________________________________________
Title:
CITIBANK, N.A.,
Individually and as Syndication Agent
By______________________________________________
Title:
85
CREDIT LYONNAIS NEW YORK BRANCH,
Individually and as Syndication Agent
By______________________________________________
Title:
THE FUJI BANK LIMITED,
Individually and as Syndication Agent
By______________________________________________
Title:
BARCLAYS BANK PLC, Individually and as
Syndication Agent
By______________________________________________
Title:
86
