SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 2001 Commission file number 1-4858
------------------------------------------------------------------
INTERNATIONAL FLAVORS & FRAGRANCES INC.
---------------------------------------
(Exact Name of Registrant as specified in its charter)
New York 13-1432060
- --------------------------------------------- -------------------
(State or other jurisdiction of incorporation (IRS Employer
or organization) identification No.)
521 West 57th Street, New York, N.Y. 10019-2960
- --------------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 765-5500
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Sections 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding twelve months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes |X| No |_|
Number of shares outstanding as of November 6, 2001: 94,823,475
1
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
INTERNATIONAL FLAVORS & FRAGRANCES INC.
CONSOLIDATED BALANCE SHEET
(Dollars in thousands)
(Unaudited)
9/30/01 12/31/00
----------- -----------
Assets
Current Assets:
Cash & Cash Equivalents $ 66,384 $ 128,869
Short-term Investments 406 369
Trade Receivables 377,753 343,294
Allowance For Doubtful Accounts (15,400) (11,074)
Inventories: Raw Materials 220,003 243,327
Work in Process 16,244 21,212
Finished Goods 183,716 170,773
----------- -----------
Total Inventories 419,963 435,312
Deferred Income Taxes 59,555 62,057
Other Current Assets 52,689 60,113
----------- -----------
Total Current Assets 961,350 1,018,940
----------- -----------
Property, Plant & Equipment, At Cost 1,065,035 1,141,301
Accumulated Depreciation (488,084) (461,427)
----------- -----------
576,951 679,874
----------- -----------
Intangible Assets, net 773,779 755,923
Other Assets 62,554 34,296
----------- -----------
Total Assets $ 2,374,634 $ 2,489,033
=========== ===========
Liabilities and Shareholders' Equity
Current Liabilities:
Bank Loans $ 38,480 $ 43,633
Commercial Paper 267,676 809,352
Accounts Payable-Trade 76,235 75,021
Dividends Payable 14,274 14,614
Income Taxes 33,877 61,073
Other Current Liabilities 207,970 175,324
----------- -----------
Total Current Liabilities 638,512 1,179,017
----------- -----------
Other Liabilities:
Deferred Income Taxes 64,980 103,151
Long-term Debt 944,610 417,402
Retirement and Other Liabilities 185,859 158,204
----------- -----------
Total Other Liabilities 1,195,449 678,757
----------- -----------
Shareholders' Equity:
Common Stock 12 1/2 cent par value; authorized
500,000,000 shares; issued 115,761,840 shares 14,470 14,470
Capital in Excess of Par Value 127,892 133,041
Restricted Stock (1,481) --
Retained Earnings 1,248,397 1,204,561
Accumulated Other Comprehensive Income (Loss):
Cumulative Translation Adjustment (160,470) (77,578)
Accumulated Gains on Derivatives
Qualifying as Hedges 900 --
----------- -----------
1,229,708 1,274,494
Treasury Stock, at cost - 20,582,615 shares in '01
and 18,335,796 in '00 (689,035) (643,235)
----------- -----------
Total Shareholders' Equity 540,673 631,259
----------- -----------
Total Liabilities and Shareholders' Equity $ 2,374,634 $ 2,489,033
=========== ===========
See Notes to Consolidated Financial Statements
2
INTERNATIONAL FLAVORS & FRAGRANCES INC.
CONSOLIDATED STATEMENT OF INCOME
(Amounts in thousands except per share amounts)
(Unaudited)
3 Months Ended 9/30
-----------------------------
2001 2000
---- ----
Net Sales $ 462,719 $ 339,591
----------- -----------
Cost of Goods Sold 268,631 191,499
Research and Development Expenses 31,596 28,666
Selling and Administrative Expenses 72,545 62,181
Amortization of Goodwill and Other Intangibles 11,491 --
Nonrecurring Charges 8,869 7,685
Interest Expense 16,545 4,195
Other (Income) Expense, Net (1,864) 2,614
----------- -----------
407,813 296,840
----------- -----------
Income Before Taxes on Income 54,906 42,751
Taxes on Income 21,351 13,824
----------- -----------
Net Income 33,555 28,927
Other Comprehensive Income (Loss):
Foreign Currency Translation Adjustments (5,306) (27,915)
Accumulated Gains on Derivatives
Qualifying as Hedges 2,676 --
----------- -----------
Comprehensive Income $ 30,925 $ 1,012
=========== ===========
Net Income Per Share - Basic $0.35 $0.29
Net Income Per Share - Diluted $0.35 $0.29
Average Number of Shares Outstanding - Basic 95,467 99,833
Average Number of Shares Outstanding - Diluted 96,746 99,833
Dividends Paid Per Share $0.15 $0.38
9 Months Ended 9/30
-----------------------------
2001 2000
---- ----
Net Sales $ 1,424,596 $ 1,078,262
----------- -----------
Cost of Goods Sold 822,276 599,738
Research and Development Expenses 102,504 82,423
Selling and Administrative Expenses 239,391 185,684
Amortization of Goodwill and Other Intangibles 34,246 --
Nonrecurring Charges 30,069 17,039
Interest Expense 56,479 9,406
Other (Income) Expense, Net (1,098) 2,488
----------- -----------
1,283,867 896,778
----------- -----------
Income Before Taxes on Income 140,729 181,484
Taxes on Income 53,897 59,865
----------- -----------
Net Income 86,832 121,619
Other Comprehensive Income (Loss):
Foreign Currency Translation Adjustments (82,892) (43,143)
Accumulated Gains on Derivatives
Qualifying as Hedges 900 --
----------- -----------
Comprehensive Income (Loss) $ 4,840 $ 78,476
=========== ===========
Net Income Per Share - Basic $0.90 $1.19
Net Income Per Share - Diluted $0.89 $1.19
Average Number of Shares Outstanding - Basic 96,069 102,152
Average Number of Shares Outstanding - Diluted 97,022 102,169
Dividends Paid Per Share $0.45 $1.14
See Notes to Consolidated Financial Statements
3
INTERNATIONAL FLAVORS & FRAGRANCES INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
9 Months Ended 9/30
-------------------------
2001 2000
--------- ---------
Cash Flows From Operating Activities:
Net Income $ 86,832 $ 121,619
Adjustments to Reconcile to Net Cash
Provided by Operations:
Depreciation and Amortization 93,183 44,732
Deferred Income Taxes (8,381) (12,743)
Changes in Assets and Liabilities:
Current Receivables (40,191) (14,694)
Inventories 3,543 37,947
Current Payables (11,963) 16,424
Other, Net (6,324) 17,939
--------- ---------
Net Cash Provided by Operations 116,699 211,224
--------- ---------
Cash Flows From Investing Activities:
Proceeds from Investments 8,229 1,614
Purchases of Investments (19,786) (1,111)
Additions to Property, Plant & Equipment (33,893) (49,425)
Proceeds from Disposal of Assets 5,718 4,696
--------- ---------
Net Cash Used in Investing Activities (39,732) (44,226)
--------- ---------
Cash Flows From Financing Activities:
Cash Dividends Paid to Shareholders (43,336) (117,600)
Increase in Bank Loans 1,171 18,257
Net Change in Commercial Paper Outstanding (541,677) 143,895
Net Proceeds from Long-term Debt 549,379 13,747
Repayments of Long-term Debt (48,679) (1,538)
Proceeds From Issuance of Stock Under Stock Option Plans 2,494 1,319
Purchase of Treasury Stock (55,954) (177,074)
--------- ---------
Net Cash Used in Financing Activities (136,602) (118,994)
--------- ---------
Effect of Exchange Rate Changes on Cash and Cash Equivalents (2,850) (3,319)
--------- ---------
Net Change in Cash and Cash Equivalents (62,485) 44,685
Cash and Cash Equivalents at Beginning of Year 128,869 62,135
--------- ---------
Cash and Cash Equivalents at End of Period $ 66,384 $ 106,820
========= =========
Interest Paid $ 48,717 $ 7,238
Income Taxes Paid $ 75,737 $ 68,502
See Notes to Consolidated Financial Statements
4
Notes to Consolidated Financial Statements
- ------------------------------------------
These interim statements and management's related discussion and analysis should
be read in conjunction with the consolidated financial statements and their
related notes, and management's discussion and analysis of results of operations
and financial condition included in the Company's 2000 Annual Report to
Shareholders. These interim statements are unaudited. In the opinion of the
Company's management, all normal recurring adjustments necessary for a fair
presentation of the results for the interim periods have been made.
New Accounting Pronouncements:
Statement of Financial Accounting Standards No. 141 (FAS 141), Business
Combinations, was issued in June 2001. FAS 141 establishes accounting and
reporting standards for business combinations. The provisions of FAS 141 will
apply to all business combinations initiated after June 30, 2001.
Statement of Financial Accounting Standards No. 142 (FAS 142), Goodwill and
Other Intangible Assets, was issued in June 2001 and is effective for fiscal
years beginning after December 15, 2001. FAS 142 eliminates goodwill
amortization and requires an evaluation of goodwill impairment upon adoption of
this standard, as well as subsequent evaluations on an annual basis, and more
frequently if circumstances indicate a possible impairment. Impairment, if any,
resulting from the initial application of the new standard will be classified as
a cumulative effect of a change in accounting principle. Subsequent impairments,
if any, would be classified as an operating expense. Under this standard, other
intangible assets that meet certain criteria will qualify for recognition on the
balance sheet and will continue to be amortized in the income statement.
Intangible assets with indefinite lives are not amortized and will be evaluated
on an annual basis, and more frequently if circumstances indicate a possible
impairment.
The Company is currently evaluating the impact of adoption of FAS 142 on its
recorded amount of goodwill and other intangible assets. Based on the
preliminary acquisition accounting at September 30, 2001, adoption of this
standard would eliminate annual amortization expense associated with goodwill of
approximately $33.0 million. Although this standard will increase the Company's
results of operations in the future due to the elimination of goodwill
amortization, any future impairment would result in a charge as discussed above.
Statement of Financial Accounting Standards No. 143 (FAS 143), Accounting
for Asset Retirement Obligations, was issued in June 2001. FAS 143 establishes
accounting and reporting standards for obligations associated with the
retirement of tangible long-lived assets. FAS 143 is effective for fiscal years
beginning after June 15, 2002 and the Company is evaluating the impact if any of
adopting this Standard.
Statement of Financial Accounting Standards No. 144 (FAS 144), Accounting for
the Impairment or Disposal of Long-Lived Assets was issued in August 2001. FAS
144 establishes accounting and reporting standards for impairment of long-lived
assets to be disposed of. FAS 144 is effective for fiscal years beginning after
December 15, 2001. The impact of adopting this Standard is not expected to be
material.
Derivative Instruments and Hedging Activities:
Effective January 1, 2001, the Company adopted Statement of Financial Accounting
Standards No. 133 (FAS 133), Accounting for Derivative Instruments and Hedging
Activities. FAS 133 establishes accounting and reporting standards for
derivative instruments, and for hedging activities. It requires that an entity
recognize all derivatives as either assets or liabilities in the statement of
financial position and measure those instruments at fair value. The effect of
adopting this Standard was not material.
5
The Company enters into various interest rate swaps with the objective of
managing and optimizing its interest rate exposure. On May 7, 2001, the Company
realized a net gain of $3.5 million on the $700.0 million notional amount of
U.S. Treasury lock hedges, which had been taken out in anticipation of the
issuance of the 6.45% Notes due 2006. These swaps were designated as qualified
cash flow hedges and the net gain is being amortized over the life of the Notes.
Following the five-year Notes offering, the Company entered into a $700.0
million notional amount swap on May 18, 2001 to effectively convert the 6.45%
coupon interest rate on the Notes to a short-term rate based upon three-month
LIBOR (London Interbank Borrowing Rate) plus an interest mark-up. Since notional
amount, fixed interest rate and the interest setting periods match the $700.0
million Note and coupon dates, the swap was designated as a fully effective,
qualified fair value hedge. During the third quarter the Company amended the
swap on four occasions, which changed the short-term LIBOR basis and the spread.
As a result of market conditions and these changes in the swaps, the
counter-party paid and the Company received in cash, $19.9 million, including
accrued swap interest of $3.3 million, during the quarter. The settlement,
excluding the accrued swap interest, will be amortized over the remaining life
of the Notes. As a result of these actions, the Company has reduced the
effective interest rate at September 30, 2001 on the 6.45% Notes to
approximately 4.8%. The Company has recorded the swap and the debt at fair value
resulting in an increase to Long-term Debt of $28.1 million and the recording of
corresponding swap assets of $15.2 million to Other Current Assets and $12.9
million to Other Assets. The Company has also designated this new swap as a
fully effective, qualified fair value hedge. The Company currently has no
ineffective interest rate swaps nor did it have any ineffective interest rate
swaps at September 30, 2001.
The Company enters into foreign currency forward contracts with the objective of
reducing exposure to cash flow volatility arising from foreign currency
fluctuations associated with certain foreign currency receivables and payables.
The notional amount and maturity dates of these contracts match those of the
underlying receivables or payables. The Company also enters into foreign
currency forward contracts to reduce cash flow volatility associated with
anticipated purchases of certain raw materials used in operations. At September
30, 2001, the Company had outstanding foreign currency forward contracts of
approximately $100.4 million. The Company has designated these contracts as
qualified fair value and cash flow hedges. Accordingly, the effective portion of
the gain or loss on the derivative instrument is reported as a component of
other comprehensive income and recognized in earnings in the same period or
periods during which the hedged transaction affects earnings. The Company had no
ineffective foreign currency forward contracts at September 30, 2001.
Nonrecurring and Other Charges:
As described in Note 2 of the Notes to the Consolidated Financial Statements
included in the Company's 2000 Annual Report to Shareholders, in October 2000,
the Company announced a reorganization, including management changes, further
consolidation of production facilities and related actions. In connection with
this program, the Company recorded a nonrecurring charge of $8.9 million ($5.7
million after tax) in the third quarter 2001, related primarily to employee
separation costs and other reorganization activities. $4.1 million of this
charge related to a non-cash asset write-off. The majority of the pretax
nonrecurring charges recorded in the third quarter 2001 relate to operations in
North America, including corporate, ($5.4 million), Latin America ($1.4 million)
and Asia-Pacific ($2.1 million). For the first nine months of 2001, the Company
recorded nonrecurring charges of $30.1 million ($19.1 million after tax). The
year to date 2001 nonrecurring charges by area were North America, including
corporate, ($14.7 million), Asia-Pacific ($8.6 million), Europe ($2.0 million),
CAME ($2.2 million) and Latin America ($2.6 million). During the first nine
months 2001, approximately 320 employees have been affected by the program. The
total pretax cost of actions taken in connection with the reorganization,
including $31.9 million recorded in 2000, is expected to approximate $90.0
million to $100.0 million through the end of 2002. Certain costs associated with
the merger and the integration of BBA operations are accounted for as part of
the acquisition cost, and do not affect current earnings.
6
Movements in the accruals related to the nonrecurring charges were as follows
(in thousands):
Employee - Asset-Related
Related and Other Total
----------------------------------------
Balance December 31, 2000 $ 24,379 $ 2,053 $ 26,432
Additional Charges 10,083 19,986 30,069
Cash Costs in 2001 (13,159) (18,017) (31,176)
-------- -------- --------
Balance September 30, 2001 $ 21,303 $ 4,022 $ 25,325
======== ======== ========
The balance of the accrual is expected to be utilized in 2001 and 2002 in
connection with the final decommissioning and disposal of affected equipment and
as severance and other benefit obligations to affected employees are satisfied.
There have been no reversals of previously established reserves.
Segment Information:
The Company acquired Bush Boake Allen ("BBA"), effective November 3, 2000, and
BBA operating results are included in the Company's consolidated results from
that date.
As previously announced, effective January 1, 2001 the Company was reorganized
into five geographic regions with an individual manager responsible for each
region. The five regions include North America, Europe, the newly-constituted
Central Asia, Middle East ("CAME"), Latin America and Asia-Pacific; previously
Europe and CAME had been combined as one geographic region - Europe, Africa and
the Middle East ("EAME"). North and Latin America and Asia-Pacific were
unaffected by the geographic reorganization.
The Company's reportable segment information, based on geographic region,
follows. Certain prior year amounts have been reclassified for comparative
purposes to reflect the separation of EAME into the regions of Europe and CAME.
The Company evaluates the performance of its geographic areas based on operating
profit, excluding interest expense, other income and expense, certain
unallocated expenses, amortization of goodwill and other intangibles, the
effects of nonrecurring items and accounting changes, and income tax expense.
Three Months Ended September 30, 2001
- --------------------------------------------------------------------------------------------------------------------------------
North Latin Asia-
(Dollars in thousands) America Europe CAME America Pacific Eliminations Consolidated
- --------------------------------------------------------------------------------------------------------------------------------
Sales to unaffiliated customers $160,050 $155,233 $18,777 $63,978 $64,681 $ -- $462,719
Transfers between areas 21,421 35,077 168 590 4,210 (61,466) --
- --------------------------------------------------------------------------------------------------------------------------------
Total sales $181,471 $190,310 $18,945 $64,568 $68,891 $(61,466) $462,719
================================================================================================================================
Operating profit $ 26,847 $ 37,787 $ 3,341 $14,936 $15,746 $ 143 $ 98,800
===================================================================================================================
Corporate and other unallocated
expenses (8,853)
Amortization of goodwill and
other intangibles (11,491)
Nonrecurring charges (8,869)
Interest expense (16,545)
Other income (expense), net 1,864
--------
Income before taxes on income $ 54,906
================================================================================================================================
7
Three Months Ended September 30, 2000
- --------------------------------------------------------------------------------------------------------------------------------
North Latin Asia-
(Dollars in thousands) America Europe CAME America Pacific Eliminations Consolidated
- --------------------------------------------------------------------------------------------------------------------------------
Sales to unaffiliated customers $112,994 $125,051 $5,762 $47,533 $48,251 $ -- $339,591
Transfers between areas 12,904 29,047 -- 555 4,153 (46,659) --
- --------------------------------------------------------------------------------------------------------------------------------
Total sales $125,898 $154,098 $5,762 $48,088 $52,404 $(46,659) $339,591
================================================================================================================================
Operating profit $ 11,890 $ 38,389 $1,033 $ 7,351 $ 9,039 $ 214 $ 67,916
===================================================================================================================
Corporate and other unallocated
expenses (10,671)
Nonrecurring charges (7,685)
Interest expense (4,195)
Other income (expense), net (2,614)
--------
Income before taxes on income $ 42,751
================================================================================================================================
Nine Months Ended September 30, 2001
- --------------------------------------------------------------------------------------------------------------------------------
North Latin Asia-
(Dollars in thousands) America Europe CAME America Pacific Eliminations Consolidated
- --------------------------------------------------------------------------------------------------------------------------------
Sales to unaffiliated customers $481,813 $493,692 $59,124 $187,226 $202,741 $ -- $1,424,596
Transfers between areas 65,423 107,668 2,511 1,247 12,777 (189,626) --
- --------------------------------------------------------------------------------------------------------------------------------
Total sales $547,236 $601,360 $61,635 $188,473 $215,518 $(189,626) $1,424,596
================================================================================================================================
Operating profit $ 70,857 $123,207 $11,188 $ 42,217 $ 48,662 $ (904) $ 295,227
===================================================================================================================
Corporate and other unallocated
expenses (34,802)
Amortization of goodwill and
other intangibles (34,246)
Nonrecurring charges (30,069)
Interest expense (56,479)
Other income (expense), net 1,098
----------
Income before taxes on income $ 140,729
================================================================================================================================
Nine Months Ended September 30, 2000
- --------------------------------------------------------------------------------------------------------------------------------
North Latin Asia-
(Dollars in thousands) America Europe CAME America Pacific Eliminations Consolidated
- --------------------------------------------------------------------------------------------------------------------------------
Sales to unaffiliated customers $348,940 $401,176 $16,853 $160,547 $150,746 $ -- $1,078,262
Transfers between areas 40,520 91,647 4 1,323 10,346 (143,840) --
- --------------------------------------------------------------------------------------------------------------------------------
Total sales $389,460 $492,823 $16,857 $161,870 $161,092 $(143,840) $1,078,262
================================================================================================================================
Operating profit $ 46,272 $128,699 $ 3,325 $ 30,417 $ 31,361 $ 537 $ 240,611
===================================================================================================================
Corporate and other unallocated
expenses (30,194)
Nonrecurring charges (17,039)
Interest expense (9,406)
Other income (expense), net (2,488)
----------
Income before taxes on income $ 181,484
================================================================================================================================
Net Income Per Share:
Options to purchase 3,404,047 and 4,414,882 shares were outstanding for the
third quarter and the first nine months of 2001, respectively, and for 6,047,955
and 5,181,829 for the third quarter and first nine months of 2000, respectively,
but were not included in the computation of diluted net income per share because
the options' exercise prices were greater than the average market price of the
common shares in the respective periods.
8
Comprehensive Income:
The accumulated comprehensive income component of Shareholders' Equity,
comprised principally of the cumulative translation adjustment, at September 30,
2001, was ($159.6 million) compared to ($77.6 million) at December 31, 2000.
Changes in the cumulative translation adjustment component result from
translating the net assets of the majority of the Company's foreign subsidiaries
into U.S. dollars at current exchange rates as required by the Statement of
Financial Accounting Standards No. 52 on accounting for foreign currency
translation. Included in the cumulative translation adjustment at September 30,
2001 is the effect of the previously disclosed change in functional currency for
certain subsidiaries from the U.S. dollar to local currency, effective January
1, 2001. Accumulated gains on derivatives qualifying as hedges totaled $0.9
million at September 30, 2001 and are also included in the accumulated
comprehensive income component of Shareholders' Equity.
Acquisition of Bush Boake Allen Inc.:
On November 3, 2000, the Company acquired all of the outstanding shares of Bush
Boake Allen Inc. ("BBA") for $48.50 per share in cash; total consideration paid,
including transaction costs, approximated $970.0 million.
The acquisition was accounted for under the purchase method and,
accordingly, the purchase price has been preliminarily allocated to the assets
acquired and liabilities assumed based on their estimated fair values at the
date of acquisition. Final determination of the purchase price, as well as its
allocation to the net assets acquired, is not complete as of September 30, 2001
pending the final valuation of tangible and intangible assets acquired. Such
valuation was substantially complete in November and will be reflected in the
fourth quarter. The excess of the purchase price over the estimated value of
tangible and identified intangible assets acquired is recorded as goodwill, and
is being amortized on a straight-line basis over 20 years. Other intangible
assets include patents, trademarks and other intellectual property owned or
developed by BBA, the value of which is being amortized over periods ranging
from 7 to 20 years. At September 30, 2001, goodwill and other intangible assets,
net of accumulated amortization, was $773.8 million compared to $755.9 million
at December 31, 2000. The increase in goodwill and other intangible assets
relates to further quantification of certain liabilities assumed in connection
with the merger, primarily associated with the integration of the BBA operations
into the Company.
The Company has established accruals relating primarily to employee separation
costs, facility closure costs and other actions relating to the integration of
certain BBA operations into IFF. Costs associated with these integration actions
are recognized as a component of the purchase accounting resulting in an
adjustment to goodwill; such costs do not directly impact current earnings.
Movements in the accruals related to the acquisition accounting effects were as
follows (in thousands):
Employee - Asset-Related
Related and Other Total
---------------------------------------
Balance December 31, 2000 $ 4,103 $ 10,330 $ 14,433
Additional Charges 41,588 25,353 66,941
Cash Costs in 2001 (23,096) (17,006) (40,102)
-------- -------- ---------
Balance September 30, 2001 $ 22,595 $ 18,677 $ 41,272
======== ======== =========
The following unaudited pro-forma results of operations give effect to the BBA
acquisition as if it had occurred as of January 1, 2000. These pro-forma results
do not purport to be indicative of the results that would have actually been
obtained if the BBA acquisition had occurred as of the beginning of the period
presented or that may be obtained in the future.
3 Months Ended 9 Months Ended
(Dollars in thousands except per share amounts) 9/30/00 9/30/00
------------------------------------------------------------------------------------------------
Net sales $459,804 $1,436,511
Net income 19,055 84,803
Net income per share-basic $0.19 $0.83
Net income per share-diluted $0.19 $0.83
9
Restricted Stock:
In January 2001, the Company awarded approximately 190,000 IFF Stock Units
("Units") to eligible employees in exchange for surrender of their "under water"
stock options. The Units vest, in four equal installments, over not more than a
seven-year period, upon the Company's Common Stock attaining successively higher
market price targets beginning at $22.50 per share, and earn dividend
equivalents as and when cash dividends are paid. Compensation expense is
recognized over the Units' vesting period. In the first nine months of 2001, the
first two market price targets were achieved and, accordingly, 50% of these
Units vested. Compensation expense of $1.6 million was recognized and is
included in operating expenses. The remaining unvested Units are reported as
Restricted Stock on the Company's Consolidated Balance Sheet.
Borrowings:
At September 30, 2001, the Company's total debt outstanding was $1,250.8
million, consisting of $916.5 million long-term debt, $306.2 million short-term
debt and $28.1 million in a mark to market adjustment on the interest rate swaps
included in long-term debt. Long-term debt included $700.0 million of 6.45%
Notes due May 15, 2006, which were issued May 2, 2001 in the U.S. 144A private
placement market and on October 17 exchanged for new certificates that have been
registered under the Securities Act of 1933, as amended, for a like principal
amount of the Company's issued and outstanding 6.45% Notes due 2006 from the
registered holders thereof. As a result of the interest rate swaps discussed in
the Notes to Consolidated Financial Statements, the Company's effective interest
rate on the 6.45% Notes is 4.8%. The Company has in place a five-year EURO 140
million credit facility underwritten by a major European financial institution.
The facility has a four-year fixed term component and a five-year revolving
credit component. The Company's intent is to have the borrowing in place for the
full term of the agreement. Long-term debt included $105.9 million (EURO 115.0
million) under this facility. Interest on this debt will not exceed the
applicable LIBOR base rate plus 1.4%. The Company also borrowed 11.8 billion Yen
($99.1 million) in the U.S. from a major financial institution. This bank
borrowing has been classified as long-term as the Company expects to convert
this to a 7-year note held by its Japanese subsidiary. The remainder of the
long-term debt is primarily in the Asia-Pacific region. Proceeds from the
issuance of long-term debt were used to reduce commercial paper outstanding.
Short-term debt included $267.7 million of commercial paper outstanding at
September 30, 2001 at an average interest rate of 3.71%. Commercial paper
maturities at September 30, 2001 did not extend beyond November 2, 2001.
Additional short-term bank borrowings of $38.5 million were held in various
countries, primarily in the Europe, Latin America and Asia-Pacific regions.
The Company has resyndicated its revolving credit facility, which is used
primarily as a backstop for the U.S. commercial paper program. Effective
September 26, 2001, the Company replaced all prior facilities with a $500.0
million credit facility. This facility contains $300.0 million five-year and
$200.0 million 364-day portions. There were no amounts drawn under this
facility. The Company compensates the banks participating in this credit
facility in the form of fees, the amounts of which are not significant.
Intangible Assets, net:
(Dollars in thousands) 9/30/01 12/31/00
----------------------------------------------------
Goodwill $658,862 $563,897
Trademarks and other 160,829 199,058
-------- --------
819,691 762,955
Accumulated amortization 45,912 7,032
-------- --------
$773,779 $755,923
======== ========
Changes in the value of intangibles reflect adjustments of the preliminary
allocation of the BBA purchase price as recorded at December 31, 2000.
Reclassifications:
Certain reclassifications have been made to the prior year's financial
statements to conform to 2001 classifications.
Subsequent Events:
On October 8, 2001 the Company announced an agreement in principle for the J.M.
Smucker Company to acquire its United States and Brazilian formulated fruit and
vegetable preparation businesses. The businesses have combined annual sales of
$28 million. The products are sold primarily to bakeries and dairies for the
manufacture of yogurts and baked goods. The transaction was completed on October
22, 2001, with proceeds used to reduce commercial paper borrowings.
10
On October 25, 2001, the Company announced that its management is exploring the
strategic alternatives for its fruit and vegetable preparation business in
Europe and has engaged an investment banker to assist in this process. This
business manufactures processed fruit and other natural product preparations
that are used in a wide variety of food products, including baked goods and
dairy products. Annual sales are approximately $70 million.
Item 2. Management's Discussion and Analysis of Results of Operations and
- -------------------------------------------------------------------------
Financial Condition
- -------------------
Operations
- ----------
Worldwide net sales for the third quarter of 2001 were $462.7 million, compared
to reported sales in the third quarter 2000 of $339.6 million. The Company
acquired BBA effective November 3, 2000; BBA's sales and operating results are
included in the Company's consolidated results. On a pro-forma basis, third
quarter 2000 sales of the combined Company totaled $459.8 million.
On a local currency basis, consolidated third quarter 2001 sales increased
approximately 3% in comparison to the third quarter 2000 pro-forma sales.
However, the local currency sales gains were unfavorably impacted on translation
into the continuing strong U.S. dollar, resulting in an increase of 1% in
reported dollars on a pro-forma basis. For the quarter, there was an approximate
5% unfavorable exchange effect on translating European results into the U.S.
dollar, and a 6% unfavorable effect on translation of Asia-Pacific results.
Local currency sales increases were strongest in North America and Latin America
with growth of 4% and 9%, respectively. Asia-Pacific was flat in local currency
reflecting weak economic conditions in Japan as well as political uncertainties
in the Philippines and Indonesia. European sales declined 1% for the quarter
reflecting continued weakness in the major European markets.
For the first nine months of 2001, worldwide net sales totaled $1,424.6 million,
compared to prior year comparable period reported sales of $1,078.3 million. On
a pro-forma basis, net sales for the nine-month period ended September 30, 2000
totaled $1,436.5 million. Local currency sales for the nine months ended
September 30, 2001 were strongest in Latin America where sales increased 3%.
North America, Europe and Asia-Pacific each achieved a 2% increase in local
currency. CAME sales declined 3% in relation to the comparable 2000 period. Had
exchange rates been the same for the first nine months of 2001 and 2000, on a
pro-forma basis, sales would have increased 2%.
The percentage relationship of cost of goods sold and other operating expenses
to sales for the third quarter 2001 and 2000, respectively, are detailed below.
The pro-forma information presented in the table below reflects operating
expenses as a percent of sales as though the acquisition of BBA had taken place
as of January 1, 2000.
Third Quarter
-------------
IFF Alone Pro-Forma
2001 2000 2000
---- ---- ----
Cost of Goods Sold 58.1% 56.4% 58.3%
Research and Development Expenses 6.8% 8.4% 7.7%
Selling and Administrative Expenses 15.7% 18.3% 18.4%
The above table reflects the reclassification of shipping and handling costs for
2000 (both reported and pro-forma) from Selling expense to Cost of goods sold in
accordance with guidance established by Emerging Issues Task Force Issue No.
00-10, "Accounting for Shipping and Handling Fees and Costs." The amount
reclassified in the third quarter 2000 was $4.0 million.
Cost of goods sold, as a percentage of net sales, decreased from the prior year
pro-forma percentage due to integration savings offset somewhat by lower gross
profit margins resulting from a change in product mix.
Research and development expenses in the quarter decreased as a percentage of
sales.
11
Selling and administrative expenses on a pro-forma basis declined in the third
quarter as the benefits of the BBA integration were realized.
Net income for the third quarter of 2001 totaled $33.6 million compared to
reported net income of $28.9 million in the third quarter of 2000. The results
for 2001 and 2000 include the effects of certain nonrecurring charges discussed
below. Excluding such charges, net income for the third quarter 2001 and 2000
was $39.2 million and $33.7 million, respectively. On a pro-forma basis, third
quarter 2000 net income totaled $19.1 million including nonrecurring charges,
and $23.8 million excluding such charges.
The effective tax rate for the third quarter of 2001 was 38.9% compared to the
reported 32.3% for the third quarter 2000. The pro-forma effective tax rate was
39.1% for the third quarter 2000. The higher effective tax rate in 2001 compared
to the 2000 reported rate results from the amortization of goodwill which is not
deductible for purposes of determination of the Company's taxable income.
The percentage relationship of cost of goods sold and other operating expenses
to sales for the first nine months 2001 and 2000, respectively, are detailed
below. The pro-forma information presented in the table below reflects operating
expenses as a percent of sales as though the acquisition of BBA had taken place
as of January 1, 2000.
First Nine Months
-----------------
IFF Alone Pro-Forma
2001 2000 2000
---- ---- ----
Cost of Goods Sold 57.7% 55.6% 57.6%
Research and Development Expenses 7.2% 7.6% 7.2%
Selling and Administrative Expenses 16.8% 17.2% 17.9%
The above table reflects the reclassification of shipping and handling costs for
2000 (both reported and pro-forma) from Selling expense to Cost of goods sold in
accordance with guidance established by Emerging Issues Task Force Issue No.
00-10, "Accounting for Shipping and Handling Fees and Costs." The amount
reclassified in the first nine months of 2000 was $11.9 million.
Cost of goods sold, as a percentage of net sales, did not vary significantly
from the prior year pro-forma results.
Research and development expenses for the nine-month period were on target
compared to the pro-forma expenses. Selling and administrative expenses on a
pro-forma basis declined in the nine-month period as the benefits of the BBA
integration were realized.
Net income for the first nine months of 2001 totaled $86.8 million compared to
net income in the first nine months of 2000 of $121.6 million. The amounts for
the first nine months of 2001 and 2000 include the effects of certain
nonrecurring charges discussed below. Excluding such charges, net income for the
first nine months of 2001 and 2000 was $105.9 million and $132.6 million,
respectively. Pro-forma net income for the first nine months of 2000 was $84.8
million including nonrecurring charges, and $95.8 million excluding such
charges.
The effective tax rate was 38.3% for the first nine months of 2001 compared to a
reported 33.0% for the first nine months 2000, and the pro-forma effective tax
rate was 38.5% for the first nine months of 2000. The higher effective tax rate
in 2001 compared to the 2000 reported rate results from the amortization of
goodwill which is not deductible for purposes of determination of the Company's
taxable income.
12
Nonrecurring and Other Charges:
As described in Note 2 of the Notes to the Consolidated Financial Statements
included in the Company's 2000 Annual Report to Shareholders, in October 2000,
the Company announced a reorganization, including management changes, further
consolidation of production facilities and related actions. In connection with
this program, the Company recorded a nonrecurring charge of $8.9 million ($5.7
million after tax) in the third quarter 2001, related primarily to employee
separation costs and other reorganization activities. $4.1 million of this
charge related to a non-cash asset write-off. The majority of the pretax
nonrecurring charges recorded in the third quarter 2001 relate to operations in
North America, including corporate, ($5.4 million), Latin America ($1.4 million)
and Asia-Pacific ($2.1 million). For the first nine months of 2001, the Company
recorded nonrecurring charges of $30.1 million ($19.1 million after tax). The
year to date 2001 nonrecurring charges by area were North America, including
corporate, ($14.7 million), Asia-Pacific ($8.6 million), Europe ($2.0 million),
CAME ($2.2 million) and Latin America ($2.6 million). During the first nine
months 2001, approximately 320 employees have been affected by the program. The
total pretax cost of actions taken in connection with the reorganization,
including $31.9 million recorded in 2000, is expected to approximate $90.0
million to $100.0 million through the end of 2002. Certain costs associated with
the merger and the integration of BBA operations are accounted for as part of
the acquisition cost, and do not affect current earnings.
Movements in the accruals related to the nonrecurring charges were as follows
(in thousands):
Employee - Asset-Related
Related and Other Total
--------------------------------------
Balance December 31, 2000 $ 24,379 $ 2,053 $ 26,432
Additional Charges 10,083 19,986 30,069
Asset Write-offs and Cash Costs
in 2001 (13,159) (18,017) (31,176)
-------- -------- --------
Balance September 30, 2001 $ 21,303 $ 4,022 $ 25,325
======== ======== ========
The balance of the accrual is expected to be utilized in 2001 and 2002 in
connection with the final decommissioning and disposal of affected equipment and
as severance and other benefit obligations to affected employees are satisfied.
There have been no reversals of previously established reserves.
Acquisition of Bush Boake Allen Inc.:
On November 3, 2000, the Company acquired all of the outstanding shares of Bush
Boake Allen Inc. ("BBA") for $48.50 per share in cash; total consideration paid,
including transaction costs, approximated $970.0 million.
The acquisition was accounted for under the purchase method and, accordingly,
the purchase price has been preliminarily allocated to the assets acquired and
liabilities assumed based on their estimated fair values at the date of
acquisition. Final determination of the purchase price, as well as its
allocation to the net assets acquired, is not complete as of September 30, 2001
pending the final valuation of tangible and intangible assets acquired. Such
valuation was substantially complete in November and will be reflected in the
fourth quarter. The excess of the purchase price over the estimated value of
tangible and identified intangible assets acquired is recorded as goodwill, and
is being amortized on a straight-line basis over 20 years. Other intangible
assets include patents, trademarks and other intellectual property owned or
developed by BBA, the value of which is being amortized over periods ranging
from 7 to 20 years. At September 30, 2001, goodwill and other intangible assets,
net of accumulated amortization, was $773.8 million compared to $755.9 million
at December 31, 2000. The increase in goodwill and other intangible assets
relates to further quantification of certain liabilities assumed in connection
with the merger, primarily associated with the integration of the BBA operations
into the Company.
The Company has established accruals relating primarily to employee separation
costs, facility closure costs and other actions relating to the integration of
certain BBA operations into IFF. Costs associated with these integration actions
are recognized as a component of the purchase accounting resulting in an
adjustment to goodwill; such costs do not directly impact current earnings.
13
Movements in the accruals related to the acquisition accounting effects were as
follows (in thousands):
Employee - Asset-Related
Related and Other Total
---------------------------------------
Balance December 31, 2000 $ 4,103 $ 10,330 $ 14,433
Additional Charges 41,588 25,353 66,941
Asset Write-offs and Cash Costs
in 2001 (23,096) (17,006) (40,102)
-------- -------- ---------
Balance September 30, 2001 $ 22,595 $ 18,677 $ 41,272
======== ======== =========
Pro-Forma Financial Data:
The following unaudited pro-forma income statement gives effect to the BBA
acquisition as if it had occurred as of January 1, 2000. These pro-forma results
do not purport to be indicative of the results that would have actually been
obtained if the BBA acquisition had occurred as of the beginning of the period
presented or that may be obtained in the future.
Pro-Forma
3 Months Ended 9 Months Ended
(Amounts in thousands) 9/30/00 9/30/00
- ----------------------------------------------------------------------------------------
Net Sales $ 459,804 $1,436,511
---------- ----------
Cost of Goods Sold 268,021 827,756
Research and Development Expenses 35,435 103,183
Selling and Administrative Expenses 84,700 257,068
Amortization of Goodwill and Other Intangibles 10,548 31,644
Nonrecurring Charges 7,685 17,039
Interest Expense 20,878 59,590
Other (income) expense, net 1,234 2,375
---------- ----------
428,501 1,298,655
---------- ----------
Income Before Taxes on Income 31,303 137,856
Taxes on Income 12,248 53,053
---------- ----------
Net Income $ 19,055 $ 84,803
========== ==========
Net Income per share-basic $0.19 $0.83
Net Income per share-diluted $0.19 $0.83
The Company's pro-forma reportable segment information, based on geographic
area, for the three months ended September 30, 2000 follows. The pro-forma
reportable segment information gives effect to the BBA acquisition as if it had
occurred as of January 1, 2000.
- --------------------------------------------------------------------------------------------------------------------------------
Pro-Forma (includes BBA) North Latin Asia-
2000 (Dollars in thousands) America Europe CAME America Pacific Eliminations Consolidated
- --------------------------------------------------------------------------------------------------------------------------------
Sales to unaffiliated customers $156,048 $159,898 $21,248 $53,392 $69,218 $ -- $459,804
Transfers between areas 19,085 36,049 233 555 4,164 (60,086) --
- --------------------------------------------------------------------------------------------------------------------------------
Total sales $175,133 $195,947 $21,481 $53,947 $73,382 $(60,086) $459,804
================================================================================================================================
Operating profit $ 19,327 $ 41,041 $ 4,274 $ 7,809 $12,470 $ 275 $ 85,196
===================================================================================================================
Corporate and other unallocated
expenses (13,548)
Amortization of goodwill and
other intangibles (10,548)
Nonrecurring charges (7,685)
Interest expense (20,878)
Other income (expense), net (1,234)
--------
Income before taxes on income $ 31,303
================================================================================================================================
14
The Company's pro-forma reportable segment information, based on geographic
area, for the nine months ending September 30, 2000 follows. The pro-forma
reportable segment information gives effect to the BBA acquisition as if it had
occurred as of January 1, 2000.
- --------------------------------------------------------------------------------------------------------------------------------
Pro-Forma (includes BBA) North Latin Asia-
2000 (Dollars in thousands) America Europe CAME America Pacific Eliminations Consolidated
- --------------------------------------------------------------------------------------------------------------------------------
Sales to unaffiliated customers $475,029 $506,516 $63,972 $177,081 $213,913 $ -- $1,436,511
Transfers between areas 59,819 112,823 766 1,323 10,381 (185,112) --
- --------------------------------------------------------------------------------------------------------------------------------
Total sales $534,848 $619,339 $64,738 $178,404 $224,294 $(185,112) $1,436,511
================================================================================================================================
Operating profit $ 67,998 $136,221 $12,754 $ 31,283 $ 41,380 $ 720 $ 290,356
===================================================================================================================
Corporate and other unallocated
expenses (41,852)
Amortization of goodwill and
other intangibles (31,644)
Nonrecurring charges (17,039)
Interest expense (59,590)
Other income (expense), net (2,375)
----------
Income before taxes on income $ 137,856
================================================================================================================================
Financial Condition
- -------------------
Cash, cash equivalents and short-term investments totaled $66.8 million at
September 30, 2001. Working capital, at September 30, 2001 was $322.8 million
compared to $409.9 million at December 31, 2000, excluding commercial paper used
to finance the BBA acquisition. Gross additions to property, plant and equipment
during the third quarter and first nine months of 2001 were $13.7 million and
$33.9 million, respectively.
At September 30, 2001, the Company's outstanding commercial paper had an
effective interest rate of 3.71%. Commercial paper maturities did not extend
beyond November 2, 2001. Long-term debt increased $549.4 million in the first
nine months of 2001 due to the issuance of $700.0 million of 6.45% five-year
notes in the 144A private placement market on May 2, 2001 offset by commercial
paper classified as noncurrent at December 31, 2000. On October 17, 2001, the
Company exchanged the five-year notes for new certificates that have been
registered under the Securities Act of 1933, as amended, for a like principal
amount of the Company's issued and outstanding 6.45% Notes due 2006 from the
registered holders thereof. As a result of the interest rate swaps discussed in
the Notes to Consolidated Financial Statements, the Company's effective interest
rate on the 6.45% Notes is 4.8%. The Company has in place a five-year EURO 140
million credit facility underwritten by a major European financial institution.
The facility has a four-year fixed term component and a five-year revolving
credit component. The Company's intent is to have borrowing in place for the
full term of the agreement. Long-term debt included $105.9 million (EURO 115.0
million) under this facility. Interest on this debt will not exceed the
applicable LIBOR base rate plus 1.4%. Proceeds from long-term debt were used to
reduce commercial paper outstanding. The company also borrowed 11.8 billion Yen
($99.1 million) in the U.S. from a major financial institution. This bank
borrowing has been classified as long-term as the company intends to convert
this to a 7-year note to be held by its Japanese subsidiary. As discussed in
Note 8 of the Notes to the Consolidated Financial Statements in the Company's
2000 Annual Report to Shareholders, the Company classified $400.0 million of
commercial paper as noncurrent in the December 31, 2000 consolidated balance
sheet.
The Company has resyndicated its revolving credit facility, which is used
primarily as a backstop for the U.S. commercial paper program. Effective
September 26, 2001, the Company replaced all prior facilities with a $500.0
million credit facility. This facility contains $300.0 million five-year and
$200.0 million 364-day portions. There were no amounts drawn under this
facility. The Company compensates the banks participating in this credit
facility in the form of fees, the amounts of which are not significant.
In each of January, April and July 2001, the Company paid a quarterly cash
dividend of $.15 per share to shareholders. The Company repurchased
approximately 2.4 million shares in the first nine months of 2001. Repurchases
will be made from time to time on the open market or through private
transactions as market and business conditions warrant. The repurchased shares
will be available for use in connection with the Company's employee benefit
plans and for other general corporate purposes. At September 30, 2001, the
Company has approximately $74.6 million available under its September 2000
repurchase plan.
The Company anticipates that its financing requirements will be funded from
internal sources and credit facilities currently in place.
15
Subsequent Events:
On October 8, 2001 the Company announced an agreement in principle for the J.M.
Smucker Company to acquire its United States and Brazilian formulated fruit and
vegetable preparation businesses. The businesses have combined annual sales of
$28 million. The products are sold primarily to bakeries and dairies for the
manufacture of yogurts and baked goods. The transaction was completed on October
22, 2001, with proceeds used to reduce commercial paper borrowings.
On October 25, 2001, the Company announced that its management is exploring the
strategic alternatives for its fruit and vegetable preparation business in
Europe and has engaged an investment banker to assist in this process. This
business manufactures processed fruit and other natural product preparations
that are used in a wide variety of food products, including baked goods and
dairy products. Annual sales are approximately $70 million.
Cautionary Statement Under the Private Securities Litigation Reform Act of 1995
- -------------------------------------------------------------------------------
Statements in this Management's Discussion and Analysis which are not historical
facts or information are "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995, and are subject to risks and
uncertainties that could cause the Company's actual results to differ materially
from those expressed or implied by such forward-looking statements. Risks and
uncertainties with respect to the Company's business include general economic
and business conditions, interest rates, the price and availability of raw
materials, and political and economic uncertainties, including the fluctuation
or devaluation of currencies in countries in which the Company does business.
The Company intends its forward-looking statements to speak only as of the time
of such statements, and does not undertake to update or revise them as more
information becomes available.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
- ------------------------------------------------------------------
There are no material changes from the disclosures in Form 10-K filed with the
Securities and Exchange Commission as of December 31, 2000.
16
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Number
10(a) 364-day Credit Agreement dated as of September 26, 2001 among
the Company, as Borrower, certain Initial Lenders, Citibank
N.A., as Administrative Agent, and Salomon Smith Barney Inc.,
as Arranger.
10(b) Five Year Credit Agreement dated as of September 26, 2001
among the Company, as Borrower, certain Initial Lenders,
Citibank N.A., as Administrative Agent, and Salomon Smith
Barney Inc., as Arranger.
10(c) Credit agreement dated as of September 27, 2001 by and between
the Company and Bank of Tokyo-Mitsubishi Trust Company.
(b) Reports on Form 8-K
Registrant filed the following reports on Form 8-K since the
beginning of the quarter for which this report on Form 10-Q is
filed:
. Report on Form 8-K dated October 5, 2001 containing the
Company's position and statement related to a purported class
action filed in Jasper County, Missouri.
17
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INTERNATIONAL FLAVORS & FRAGRANCES INC.
Dated: November 14, 2001 By: /S/ DOUGLAS J. WETMORE
----------------------------------------------
Douglas J. Wetmore, Senior Vice President and
Chief Financial Officer
Dated: November 14, 2001 By: /S/ STEPHEN A. BLOCK
----------------------------------------------
Stephen A. Block, Senior Vice President,
General Counsel and Secretary
EXHIBIT INDEX
Number Description
------ -----------
10(a) 364-day Credit Agreement dated as of September 26, 2001 among
the Company, as Borrower, certain Initial Lenders, Citibank
N.A., as Administrative Agent, and Salomon Smith Barney Inc., as
Arranger
10(b) Five Year Credit Agreement dated as of September 26, 2001 among
the Company, as Borrower, certain Initial Lenders, Citibank
N.A., as Administrative Agent, and Salomon Smith Barney Inc., as
Arranger
10(c) Credit Agreement dated as of September 27, 2001 by and between
the Company and Bank of Tokyo-Mitsubishi Trust Company
Exhibit 10(a)
EXECUTION COPY
U.S. $200,000,000
364-DAY CREDIT AGREEMENT
Dated as of September 26, 2001
Among
INTERNATIONAL FLAVORS & FRAGRANCES INC.
as Borrower
and
THE INITIAL LENDERS NAMED HEREIN
as Initial Lenders
and
CITIBANK, N.A.
as Administrative Agent
and
SALOMON SMITH BARNEY INC.
as Arranger
TABLE OF CONTENTS
ARTICLE I 1
SECTION 1.01. Certain Defined Terms 1
SECTION 1.02. Computation of Time Periods 11
SECTION 1.03. Accounting Terms 11
ARTICLE II
SECTION 2.01. The Revolving Credit Advances 11
SECTION 2.02. Making the Revolving Credit Advances 11
SECTION 2.03. The Competitive Bid Advances 12
SECTION 2.04. Fees 15
SECTION 2.05. Termination or Reduction of the Commitments 15
SECTION 2.06. Repayment of Revolving Credit Advances 15
SECTION 2.07. Interest on Revolving Credit Advances 15
SECTION 2.08. Interest Rate Determination 16
SECTION 2.09. Optional Conversion of Revolving Credit Advances 17
SECTION 2.10. Prepayments of Revolving Credit Advances 17
SECTION 2.11. Increased Costs 17
SECTION 2.12. Illegality 18
SECTION 2.13. Payments and Computations 18
SECTION 2.14. Taxes 19
SECTION 2.15. Sharing of Payments, Etc. 20
SECTION 2.16. Evidence of Debt 20
SECTION 2.17. Use of Proceeds 21
SECTION 2.18. Increase in the Aggregate Commitments 21
SECTION 2.19. Extension of Termination Date 22
i
ARTICLE III
SECTION 3.01. Conditions Precedent to Effectiveness of
Sections 2.01 and 2.03 24
SECTION 3.02. Conditions Precedent to Each Revolving Credit
Borrowing, Commitment Increase and Extension Date. 25
SECTION 3.03. Conditions Precedent to Each Competitive Bid Borrowing 25
SECTION 3.04. Determinations Under Section 3.01 26
ARTICLE IV
SECTION 4.01. Representations and Warranties of the Borrower 26
ARTICLE V
SECTION 5.01. Affirmative Covenants 27
SECTION 5.02. Negative Covenants 29
SECTION 5.03. Financial Covenant 30
ARTICLE VI
SECTION 6.01. Events of Default 30
ARTICLE VII
SECTION 7.01. Authorization and Action 32
SECTION 7.02. Agent's Reliance, Etc. 32
SECTION 7.03. Citibank and Affiliates 33
SECTION 7.04. Lender Credit Decision 33
SECTION 7.05. Indemnification 33
SECTION 7.06. Successor Agent 33
SECTION 7.07. Other Agents. 33
ARTICLE VIII
SECTION 8.01. Amendments, Etc. 34
SECTION 8.02. Notices, Etc. 34
SECTION 8.03. No Waiver; Remedies 34
ii
SECTION 8.04. Costs and Expenses 34
SECTION 8.05. Right of Set-off 35
SECTION 8.06. Binding Effect 35
SECTION 8.07. Assignments and Participations 36
SECTION 8.08. Confidentiality 37
SECTION 8.09. Governing Law 37
SECTION 8.10. Execution in Counterparts 37
SECTION 8.11. Jurisdiction, Etc. 38
SECTION 8.12. Integration 38
SECTION 8.13. WAIVER OF JURY TRIAL 39
iii
Schedules
Schedule I - List of Applicable Lending
Schedule 5.02(a) - Existing Liens
Exhibits
Exhibit A-1 - Form of Revolving Credit Note
Exhibit A-2 - Form of Competitive Bid Note
Exhibit B-1 - Form of Notice of Revolving Credit Borrowing
Exhibit B-2 - Form of Notice of Competitive Bid Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Opinion of Counsel for the Borrower
iv
364-DAY CREDIT AGREEMENT
Dated as of September 26, 2001
INTERNATIONAL FLAVORS & FRAGRANCES INC., a New York corporation (the
"Borrower"), the banks, financial institutions and other institutional lenders
(the "Initial Lenders") listed on the signature pages hereof, and CITIBANK, N.A.
("Citibank"), as administrative agent (the "Agent"), and SALOMON SMITH BARNEY
INC., as arranger, for the Lenders (as hereinafter defined), agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Advance" means a Revolving Credit Advance or a Competitive Bid
Advance.
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with
such Person or is a director or officer of such Person. For purposes of
this definition, the term "control" (including the terms "controlling",
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 5% or more of the
Voting Stock of such Person or to direct or cause the direction of the
management and policies of such Person, whether through the ownership of
Voting Stock, by contract or otherwise.
"Agent's Account" means the account of the Agent maintained by the
Agent at Citibank at its office at 399 Park Avenue, New York, New York
10043, Account No. 36852248, Attention: Melissa Hamilton.
"Applicable Lending Office" means, with respect to each Lender, such
Lender's Domestic Lending Office in the case of a Base Rate Advance and
such Lender's Eurodollar Lending Office in the case of a Eurodollar Rate
Advance and, in the case of a Competitive Bid Advance, the office of such
Lender notified by such Lender to the Agent as its Applicable Lending
Office with respect to such Competitive Bid Advance.
"Applicable Margin" means (a) for Base Rate Advances, 0% per annum
and (b) for Eurodollar Rate Advances as of any date, a percentage per
annum determined by reference to the Public Debt Rating in effect on such
date as set forth below:
-------------------------------------------------------------------------------------------
Public Debt Rating Applicable Margin for Applicable Margin for
S&P/Moody's Eurodollar Rate Eurodollar Rate
Advances prior to the Advances on and after
Term Loan Conversion the Term Loan
Date Conversion Date
-------------------------------------------------------------------------------------------
Level 1
A+/A1or above 0.190% 0.425%
-------------------------------------------------------------------------------------------
Level 2
A/A2 0.255% 0.550%
-------------------------------------------------------------------------------------------
Level 3
A-/A3 0.315% 0.750%
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Level 4
BBB+/Baa1 0.400% 1.000%
-------------------------------------------------------------------------------------------
Level 5
BBB/Baa2 0.625% 1.375%
-------------------------------------------------------------------------------------------
Level 6
Lower than Level 5 0.800% 1.500%
-------------------------------------------------------------------------------------------
"Applicable Percentage" means, as of any date, a percentage per
---------------------
annum determined by reference to the Public Debt Rating in effect on such
date as set forth below:
---------------------------------------------------------------------
Public Debt Rating Applicable
S&P/Moody's Percentage
---------------------------------------------------------------------
Level 1
A+/A1or above 0.060%
---------------------------------------------------------------------
Level 2
A/A2 0.070%
---------------------------------------------------------------------
Level 3
A-/A3 0.085%
---------------------------------------------------------------------
Level 4
BBB+/Baa1 0.100%
---------------------------------------------------------------------
Level 5
BBB/Baa2 0.125%
---------------------------------------------------------------------
Level 6
Lower than Level 5 0.200%
---------------------------------------------------------------------
"Applicable Utilization Fee" means, as of any date prior to the Term
--------------------------
Loan Conversion Date that the aggregate Advances exceed 33% of the
aggregate Commitments, a percentage per annum determined by reference to
the Public Debt Rating in effect on such date as set forth below:
---------------------------------------------------------------------
Public Debt Rating Applicable
S&P/Moody's Utilization Fee
---------------------------------------------------------------------
Level 1
A+/A1or above 0.100%
---------------------------------------------------------------------
Level 2
A/A2 0.100%
---------------------------------------------------------------------
Level 3
A-/A3 0.100%
---------------------------------------------------------------------
Level 4
BBB+/Baa1 0.125%
---------------------------------------------------------------------
Level 5
BBB/Baa2 0.250%
---------------------------------------------------------------------
Level 6
Lower than Level 5 0.250%
---------------------------------------------------------------------
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the
Agent, in substantially the form of Exhibit C hereto.
"Assuming Lender" has the meaning specified in Section 2.18(d).
"Assumption Agreement" has the meaning specified in Section
2.18(d)(ii).
2
"Base Rate" means a fluctuating interest rate per annum in effect
from time to time, which rate per annum shall at all times be equal to the
highest of:
(a) the rate of interest announced publicly by Citibank in New
York, New York, from time to time, as Citibank's base rate;
(b) the sum (adjusted to the nearest 1/4 of 1% or, if there is
no nearest 1/4 of 1%, to the next higher 1/4 of 1%) of (i) 1/2 of 1%
per annum, plus (ii) the rate obtained by dividing (A) the latest
three-week moving average of secondary market morning offering rates
in the United States for three-month certificates of deposit of
major United States money market banks, such three-week moving
average (adjusted to the basis of a year of 360 days) being
determined weekly on each Monday (or, if such day is not a Business
Day, on the next succeeding Business Day) for the three-week period
ending on the previous Friday by Citibank on the basis of such rates
reported by certificate of deposit dealers to and published by the
Federal Reserve Bank of New York or, if such publication shall be
suspended or terminated, on the basis of quotations for such rates
received by Citibank from three New York certificate of deposit
dealers of recognized standing selected by Citibank, by (B) a
percentage equal to 100% minus the average of the daily percentages
specified during such three-week period by the Board of Governors of
the Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including, but not limited to, any
emergency, supplemental or other marginal reserve requirement) for
Citibank with respect to liabilities consisting of or including
(among other liabilities) three-month U.S. dollar non-personal time
deposits in the United States, plus (iii) the average during such
three-week period of the annual assessment rates estimated by
Citibank for determining the then current annual assessment payable
by Citibank to the Federal Deposit Insurance Corporation (or any
successor) for insuring U.S. dollar deposits of Citibank in the
United States; and
(c) 1/2 of one percent per annum above the Federal Funds Rate.
"Base Rate Advance" means a Revolving Credit Advance that bears
interest as provided in Section 2.07(a)(i).
"Borrowing" means a Revolving Credit Borrowing or a Competitive Bid
Borrowing.
"Business Day" means a day of the year on which banks are not
required or authorized by law to close in New York City and, if the
applicable Business Day relates to any Eurodollar Rate Advances or LIBO
Rate Advances, on which dealings are carried on in the London interbank
market.
"Commitment" means as to any Lender (a) the amount set forth
opposite such Lender's name on the signature pages hereof, (b) if such
Lender has become a Lender hereunder pursuant to an Assumption Agreement,
the amount set forth in such Assumption Agreement or (c) if such Lender
has entered into any Assignment and Acceptance, the amount set forth for
such Lender in the Register maintained by the Agent pursuant to Section
8.07(d) or increased pursuant to Section 2.18.
"Commitment Date" has the meaning specified in Section 2.18(b).
"Commitment Increase" has the meaning specified in Section 2.18(a).
"Competitive Bid Advance" means an advance by a Lender to the
Borrower as part of a Competitive Bid Borrowing resulting from the
competitive bidding procedure described in Section 2.03 and refers to a
Fixed Rate Advance or a LIBO Rate Advance.
"Competitive Bid Borrowing" means a borrowing consisting of
simultaneous Competitive Bid Advances from each of the Lenders whose offer
to make one or more Competitive Bid Advances as part of such borrowing has
been accepted under the competitive bidding procedure described in Section
2.03.
3
"Competitive Bid Note" means a promissory note of the Borrower
payable to the order of any Lender, in substantially the form of Exhibit
A-2 hereto, evidencing the indebtedness of the Borrower to such Lender
resulting from a Competitive Bid Advance made by such Lender.
"Competitive Bid Reduction" has the meaning specified in Section
2.01.
"Confidential Information" means information that the Borrower
furnishes to the Agent or any Lender, but does not include any such
information that is or becomes generally available to the public or that
is or becomes available to the Agent or such Lender from a source other
than the Borrower.
"Consenting Lender" has the meaning specified in Section 2.19(b).
"Consolidated" refers to the consolidation of accounts in accordance
with GAAP.
"Convert", "Conversion" and "Converted" each refers to a conversion
of Revolving Credit Advances of one Type into Revolving Credit Advances of
the other Type pursuant to Section 2.08 or 2.09.
"Debt" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of
such Person for the deferred purchase price of property or services (other
than trade payables not overdue by more than 60 days incurred in the
ordinary course of such Person's business), (c) all obligations of such
Person evidenced by notes, bonds, debentures or other similar instruments,
(d) all obligations of such Person created or arising under any
conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of
the seller or lender under such agreement in the event of default are
limited to repossession or sale of such property), (e) all obligations of
such Person as lessee under leases that have been or should be, in
accordance with GAAP, recorded as capital leases, (f) all obligations,
contingent or otherwise, of such Person in respect of acceptances, letters
of credit or similar extensions of credit, (g) all obligations of such
Person in respect of Hedge Agreements, (h) all Debt of others referred to
in clauses (a) through (g) above or clause (i) below guaranteed directly
or indirectly in any manner by such Person, or in effect guaranteed
directly or indirectly by such Person through an agreement (1) to pay or
purchase such Debt or to advance or supply funds for the payment or
purchase of such Debt, (2) to purchase, sell or lease (as lessee or
lessor) property, or to purchase or sell services, primarily for the
purpose of enabling the debtor to make payment of such Debt or to assure
the holder of such Debt against loss, (3) to supply funds to or in any
other manner invest in the debtor (including any agreement to pay for
property or services irrespective of whether such property is received or
such services are rendered) or (4) otherwise to assure a creditor against
loss, and (i) all Debt referred to in clauses (a) through (h) above
secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on property
(including, without limitation, accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable for
the payment of such Debt.
"Debt for Borrowed Money" of a Person means all items that, in
accordance with GAAP, would be classified as indebtedness on a
Consolidated balance sheet of such Person.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite
its name on Schedule I hereto or in the Assumption Agreement or the
Assignment and Acceptance pursuant to which it became a Lender, or such
other office of such Lender as such Lender may from time to time specify
to the Borrower and the Agent.
"EBITDA" means, for any period, net income (or net loss) plus the
sum of (a) interest expense, (b) income tax expense, (c) depreciation
expense, (d) amortization expense and all other non-cash charges
4
and (e) extraordinary or unusual losses deducted in calculating net income
less extraordinary or unusual gains added in calculating net income, in
each case determined in accordance with GAAP for such period.
"Effective Date" has the meaning specified in Section 3.01.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a
Lender; and (iii) any other Person approved by the Agent and, unless an
Event of Default has occurred and is continuing at the time any assignment
is effected in accordance with Section 8.07, the Borrower, such approval
not to be unreasonably withheld or delayed; provided, however, that
neither the Borrower nor an Affiliate of the Borrower shall qualify as an
Eligible Assignee.
"Environmental Action" means any action, suit, demand, demand
letter, claim, notice of non-compliance or violation, notice of liability
or potential liability, investigation, proceeding, consent order or
consent agreement relating in any way to any Environmental Law,
Environmental Permit or Hazardous Materials or arising from alleged injury
or threat of injury to health, safety or the environment, including,
without limitation, (a) by any governmental or regulatory authority for
enforcement, cleanup, removal, response, remedial or other actions or
damages and (b) by any governmental or regulatory authority or any third
party for damages, contribution, indemnification, cost recovery,
compensation or injunctive relief.
"Environmental Law" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, judgment, decree
or judicial or agency interpretation, policy or guidance relating to
pollution or protection of the environment, health, safety or natural
resources, including, without limitation, those relating to the use,
handling, transportation, treatment, storage, disposal, release or
discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental
Law.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV of
ERISA is a member of the Borrower's controlled group, or under common
control with the Borrower, within the meaning of Section 414 of the
Internal Revenue Code.
"ERISA Event" means (a) (i) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan
unless the 30-day notice requirement with respect to such event has been
waived by the PBGC, or (ii) the requirements of subsection (1) of Section
4043(b) of ERISA (without regard to subsection (2) of such Section) are
met with a contributing sponsor, as defined in Section 4001(a)(13) of
ERISA, of a Plan, and an event described in paragraph (9), (10), (11),
(12) or (13) of Section 4043(c) of ERISA is reasonably expected to occur
with respect to such Plan within the following 30 days; (b) the
application for a minimum funding waiver with respect to a Plan; (c) the
provision by the administrator of any Plan of a notice of intent to
terminate such Plan pursuant to Section 4041(a)(2) of ERISA (including any
such notice with respect to a plan amendment referred to in Section
4041(e) of ERISA); (d) the cessation of operations at a facility of the
Borrower or any ERISA Affiliate in the circumstances described in Section
4062(e) of ERISA; (e) the withdrawal by the Borrower or any ERISA
Affiliate from a Multiple Employer Plan during a plan year for which it
was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (f)
the conditions for the imposition of a lien under Section 302(f) of ERISA
shall have been met with respect to any Plan; (g) the adoption of an
amendment to a Plan requiring the provision of security to such Plan
pursuant to Section 307 of ERISA; or (h) the institution by the PBGC of
proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition described in Section 4042 of ERISA
that constitutes grounds for the termination of, or the appointment of a
trustee to administer, a Plan.
5
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as
in effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office"
opposite its name on Schedule I hereto or in the Assumption Agreement or
the Assignment and Acceptance pursuant to which it became a Lender (or, if
no such office is specified, its Domestic Lending Office), or such other
office of such Lender as such Lender may from time to time specify to the
Borrower and the Agent.
"Eurodollar Rate" means, for any Interest Period for each Eurodollar
Rate Advance comprising part of the same Revolving Credit Borrowing, an
interest rate per annum equal to the rate per annum obtained by dividing
(a) the rate per annum (rounded upward to the nearest whole multiple of
1/16 of 1% per annum) appearing on Telerate Markets Page 3750 (or any
successor page) as the London interbank offered rate for deposits in U.S.
dollars at approximately 11:00 A.M. (London time) two Business Days prior
to the first day of such Interest Period for a term comparable to such
Interest Period or, if for any reason such rate is not available, the
average (rounded upward to the nearest whole multiple of 1/16 of 1% per
annum, if such average is not such a multiple) of the rate per annum at
which deposits in U.S. dollars are offered by the principal office of each
of the Reference Banks in London, England to prime banks in the London
interbank market at 11:00 A.M. (London time) two Business Days before the
first day of such Interest Period in an amount substantially equal to such
Reference Bank's Eurodollar Rate Advance comprising part of such Revolving
Credit Borrowing to be outstanding during such Interest Period and for a
period equal to such Interest Period by (b) a percentage equal to 100%
minus the Eurodollar Rate Reserve Percentage for such Interest Period. If
the Telerate Markets Page 3750 (or any successor page) is unavailable, the
Eurodollar Rate for any Interest Period for each Eurodollar Rate Advance
comprising part of the same Revolving Credit Borrowing shall be determined
by the Agent on the basis of applicable rates furnished to and received by
the Agent from the Reference Banks two Business Days before the first day
of such Interest Period, subject, however, to the provisions of Section
2.08.
"Eurodollar Rate Advance" means a Revolving Credit Advance that
bears interest as provided in Section 2.07(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest Period for all
Eurodollar Rate Advances or LIBO Rate Advances comprising part of the same
Borrowing means the reserve percentage applicable two Business Days before
the first day of such Interest Period under regulations issued from time
to time by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System in New York
City with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the interest rate
on Eurodollar Rate Advances or LIBO Rate Advances is determined) having a
term equal to such Interest Period.
"Extension Date" has the meaning specified in Section 2.19(b).
"Events of Default" has the meaning specified in Section 6.01.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum 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 that is a Business Day, the
average of the quotations for such day on such transactions received by
the Agent from three Federal funds brokers of recognized standing selected
by it.
"Fixed Rate Advances" has the meaning specified in Section
2.03(a)(i).
6
"Founder" means (a) each Person who is a beneficial owner (within
the meaning of Rule 13d-3 of the Securities and Exchange Commission under
the Securities Exchange Act of 1934) of 20% or more of the outstanding
shares of Voting Stock of the Borrower on the date hereof or any Person
that is or becomes a fiduciary of any Person who is a beneficial owner of
(or any Person for whose account were held) outstanding shares of Voting
Stock of the Borrower on the date hereof (in any such case, an "Existing
Shareholder"), including any group that is comprised solely of Existing
Shareholders and (b) any such Existing Shareholder or group comprised
solely of Existing Shareholders who shall become the beneficial owner of
20% or more of the outstanding shares of Voting Stock of the Borrower
solely as a result of an acquisition by the Borrower of shares of its
Voting Stock, in each case until such time as the Persons or group
described in clause (a) or (b) above shall become the beneficial owner
(other than by means of a stock dividend, stock split, gift or inheritance
or receipt or exercise of, or accrual of any right to exercise, any stock
options of shares of stock granted by the Borrower) of any additional
shares of Voting Stock of the Borrower. In addition, the Borrower, any
wholly-owned Subsidiary of the Borrower and any employee stock ownership
or other employee benefit plan of the Borrower or a wholly-owned
Subsidiary of the Borrower shall be a "Founder".
"GAAP" has the meaning specified in Section 1.03.
"Hazardous Materials" means (a) petroleum and petroleum products,
byproducts or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas and
(b) any other chemicals, materials or substances designated, classified or
regulated as hazardous or toxic or as a pollutant or contaminant under any
Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other similar
agreements.
"Increase Date" has the meaning specified in Section 2.18(a).
"Increasing Lender" has the meaning specified in Section 2.18(b).
"Information Memorandum" means the information memorandum dated
__________, 2001 used by the Agent in connection with the syndication of
the Commitments.
"Interest Period" means, for each Eurodollar Rate Advance comprising
part of the same Revolving Credit Borrowing and each LIBO Rate Advance
comprising part of the same Competitive Bid Borrowing, the period
commencing on the date of such Eurodollar Rate Advance or LIBO Rate
Advance or the date of the Conversion of any Base Rate Advance into such
Eurodollar Rate Advance and ending on the last day of the period selected
by the Borrower pursuant to the provisions below and, thereafter, with
respect to Eurodollar Rate Advances, each subsequent period commencing on
the last day of the immediately preceding Interest Period and ending on
the last day of the period selected by the Borrower pursuant to the
provisions below. The duration of each such Interest Period shall be one,
two, three or six months, as the Borrower may, upon notice received by the
Agent not later than 11:00 A.M. (New York City time) on the third Business
Day prior to the first day of such Interest Period, select; provided,
however, that:
(i) the Borrower may not select any Interest Period that ends
after the Termination Date or, if the Revolving Credit Advances have
been converted to a term loan pursuant to Section 2.06 prior to such
selection, that ends after the Maturity Date;
(ii) Interest Periods commencing on the same date for
Eurodollar Rate Advances comprising part of the same Revolving
Credit Borrowing or for LIBO Rate Advances comprising part of the
same Competitive Bid Borrowing shall be of the same duration;
7
(iii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next
succeeding Business Day, provided, however, that, if such extension
would cause the last day of such Interest Period to occur in the
next following calendar month, the last day of such Interest Period
shall occur on the next preceding Business Day; and
(iv) whenever the first day of any Interest Period occurs on a
day of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months
in such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"Lenders" means the Initial Lenders, each Assuming Lender that shall
become a party hereto pursuant to Section 2.18 or 2.19 and each Person
that shall become a party hereto pursuant to Section 8.07.
"LIBO Rate" means, for any Interest Period for all LIBO Rate
Advances comprising part of the same Competitive Bid Borrowing, an
interest rate per annum equal to the rate per annum obtained by dividing
(a) the rate per annum (rounded upward to the nearest whole multiple of
1/16 of 1% per annum) appearing on Telerate Markets Page 3750 (or any
successor page) as the London interbank offered rate for deposits in U.S.
dollars at approximately 11:00 A.M. (London time) two Business Days prior
to the first day of such Interest Period for a term comparable to such
Interest Period or, if for any reason such rate is not available, the
average (rounded upward to the nearest whole multiple of 1/16 of 1% per
annum, if such average is not such a multiple) of the rate per annum at
which deposits in U.S. dollars offered by the principal office of each of
the Reference Banks in London, England to prime banks in the London
interbank market at 11:00 A.M. (London time) two Business Days before the
first day of such Interest Period in an amount substantially equal to the
amount that would be the Reference Banks' respective ratable shares of
such Borrowing if such Borrowing were to be a Revolving Credit Borrowing
to be outstanding during such Interest Period and for a period equal to
such Interest Period by (b) a percentage equal to 100% minus the
Eurodollar Rate Reserve Percentage for such Interest Period. If the
Telerate Markets Page 3750 (or any successor page) is unavailable, the
LIBO Rate for any Interest Period for each LIBO Rate Advance comprising
part of the same Competitive Bid Borrowing shall be determined by the
Agent on the basis of applicable rates furnished to and received by the
Agent from the Reference Banks two Business Days before the first day of
such Interest Period, subject, however, to the provisions of Section 2.08.
"LIBO Rate Advances" means a Competitive Bid Advance bearing
interest based on the LIBO Rate.
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on
title to real property.
"Material Adverse Change" means any material adverse change in the
business, condition (financial or otherwise) or results of operations of
the Borrower and its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, condition (financial or otherwise) or results of operations of
the Borrower and its Subsidiaries taken as a whole, (b) the rights and
remedies of the Agent or any Lender under this Agreement or any Note or
(c) the ability of the Borrower to perform its obligations under this
Agreement or any Note.
8
"Maturity Date" means the earlier of (a) the first anniversary of
the Termination Date and (b) the date of termination in whole of the
aggregate Commitments pursuant to Section 2.05 or 6.01.
"Moody's" means Moody's Investors Service, Inc., or any successor by
merger or change of name which is a nationally recognized rating agency.
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate
is making or accruing an obligation to make contributions, or has within
any of the preceding five plan years made or accrued an obligation to make
contributions.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Borrower or any ERISA Affiliate and at least one Person other than the
Borrower and the ERISA Affiliates or (b) was so maintained and in respect
of which the Borrower or any ERISA Affiliate could have liability under
Section 4064 or 4069 of ERISA in the event such plan has been or were to
be terminated.
"Non-Consenting Lender" has the meaning specified in Section
2.19(b).
"Note" means a Revolving Credit Note or a Competitive Bid Note.
"Notice of Revolving Credit Borrowing" has the meaning specified in
Section 2.02(a).
"Notice of Competitive Bid Borrowing" has the meaning specified in
Section 2.03(a).
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"Permitted Liens" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall
have been commenced: (a) Liens for taxes, assessments and governmental
charges or levies to the extent not required to be paid under Section
5.01(b) hereof; (b) Liens imposed by law, such as materialmen's,
mechanics', carriers', workmen's and repairmen's Liens and other similar
Liens arising in the ordinary course of business securing obligations that
are not overdue for a period of more than 30 days; (c) pledges or deposits
to secure obligations under workers' compensation laws or similar
legislation or to secure public or statutory obligations; and (d)
easements, rights of way and other encumbrances on title to real property
that do not render title to the property encumbered thereby unmarketable
or materially adversely affect the use of such property for its present
purposes.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association,
joint venture, limited liability company or other entity, or a government
or any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Public Debt Rating" means, as of any date, the lowest rating that
has been most recently announced by either S&P or Moody's, as the case may
be, for any class of non-credit enhanced long-term senior unsecured debt
issued by the Borrower. For purposes of the foregoing, (a) if only one of
S&P and Moody's shall have in effect a Public Debt Rating, the Applicable
Margin, the Applicable Percentage and the Applicable Utilization Fee shall
be determined by reference to the available rating; (b) if neither S&P nor
Moody's shall have in effect a Public Debt Rating, the Applicable Margin,
the Applicable Percentage and the Applicable Utilization Fee will be set
in accordance with Level 5 under the definition of "Applicable Margin",
"Applicable Percentage" or "Applicable Utilization Fee", as the case may
be; (c) if the ratings established by S&P and Moody's shall fall within
different levels, the Applicable Margin, the Applicable Percentage and the
Applicable Utilization Fee shall be based upon the higher rating, except
that, in the event that the lower of such ratings is more than one level
below the higher of such ratings, the Applicable Margin, the Applicable
Percentage and the Applicable Utilization Fee shall be based upon the
9
level immediately above the lower of such ratings; (d) if any rating
established by S&P or Moody's shall be changed, such change shall be
effective as of the date on which such change is first announced publicly
by the rating agency making such change; and (e) if S&P or Moody's shall
change the basis on which ratings are established, each reference to the
Public Debt Rating announced by S&P or Moody's, as the case may be, shall
refer to the then equivalent rating by S&P or Moody's, as the case may be.
"Reference Banks" means Citibank and First Union National Bank.
"Register" has the meaning specified in Section 8.07(d).
"Required Lenders" means at any time Lenders owed at least a
majority in interest of the then aggregate unpaid principal amount of the
Revolving Credit Advances owing to Lenders, or, if no such principal
amount is then outstanding, Lenders having at least a majority in interest
of the Commitments.
"Revolving Credit Advance" means an advance by a Lender to the
Borrower as part of a Revolving Credit Borrowing and refers to a Base Rate
Advance or a Eurodollar Rate Advance (each of which shall be a "Type" of
Revolving Credit Advance).
"Revolving Credit Borrowing" means a borrowing consisting of
simultaneous Revolving Credit Advances of the same Type made by each of
the Lenders pursuant to Section 2.01.
"Revolving Credit Note" means a promissory note of the Borrower
payable to the order of any Lender, delivered pursuant to a request made
under Section 2.16 in substantially the form of Exhibit A-1 hereto,
evidencing the aggregate indebtedness of the Borrower to such Lender
resulting from the Revolving Credit Advances made by such Lender.
"S&P" means Standard & Poor's, a division of The McGraw-Hill
Companies, Inc., or any successor by merger or change of name which is a
nationally recognized rating agency
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Borrower or any ERISA Affiliate and no Person other than the Borrower and
the ERISA Affiliates or (b) was so maintained and in respect of which the
Borrower or any ERISA Affiliate could have liability under Section 4069 of
ERISA in the event such plan has been or were to be terminated.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which)
more than 50% of (a) the issued and outstanding capital stock having
ordinary voting power to elect a majority of the Board of Directors of
such corporation (irrespective of whether at the time capital stock of any
other class or classes of such corporation shall or might have voting
power upon the occurrence of any contingency), (b) the interest in the
capital or profits of such limited liability company, partnership or joint
venture or (c) the beneficial interest in such trust or estate is at the
time directly or indirectly owned or controlled by such Person, by such
Person and one or more of its other Subsidiaries or by one or more of such
Person's other Subsidiaries.
"Term Loan Conversion Date" means the Termination Date on which all
Revolving Credit Advances outstanding on such date are converted into a
term loan pursuant to Section 2.06.
"Term Loan Election" has the meaning specified in Section 2.06.
"Termination Date" means the earlier of (a) September 24, 2002,
subject to the extension thereof pursuant to Section 2.19 and (b) the date
of termination in whole of the Commitments pursuant to Section 2.05 or
6.01; provided, however, that the Termination Date of any Lender that is a
Non-Consenting Lender to any requested extension pursuant to Section 2.19
shall be the Termination Date in effect immediately prior to the
applicable Extension Date for all purposes of this Agreement.
10
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the happening
of such a contingency.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(e) ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Revolving Credit Advances. Each Lender severally
agrees, on the terms and conditions hereinafter set forth, to make Revolving
Credit Advances to the Borrower from time to time on any Business Day during the
period from the Effective Date until the Termination Date in an aggregate amount
not to exceed at any time outstanding such Lender's Commitment provided that the
aggregate amount of the Commitments of the Lenders shall be deemed used from
time to time to the extent of the aggregate amount of the Competitive Bid
Advances then outstanding and such deemed use of the aggregate amount of the
Commitments shall be allocated among the Lenders ratably according to their
respective Commitments (such deemed use of the aggregate amount of the
Commitments being a "Competitive Bid Reduction"). Each Revolving Credit
Borrowing shall be in an aggregate amount of $10,000,000 or an integral multiple
of $1,000,000 in excess thereof and shall consist of Revolving Credit Advances
of the same Type made on the same day by the Lenders ratably according to their
respective Commitments. Within the limits of each Lender's Commitment, the
Borrower may borrow under this Section 2.01, prepay pursuant to Section 2.10 and
reborrow under this Section 2.01.
SECTION 2.02. Making the Revolving Credit Advances. (a) Each
Revolving Credit Borrowing shall be made on notice, given not later than (x)
11:00 A.M. (New York City time) on the third Business Day prior to the date of
the proposed Revolving Credit Borrowing in the case of a Revolving Credit
Borrowing consisting of Eurodollar Rate Advances or (y) 11:00 A.M. (New York
City time) on the date of the proposed Revolving Credit Borrowing in the case of
a Revolving Credit Borrowing consisting of Base Rate Advances, by the Borrower
to the Agent, which shall give to each Lender prompt notice thereof by
telecopier or telex. Each such notice of a Revolving Credit Borrowing (a "Notice
of Revolving Credit Borrowing") shall be by telephone, confirmed immediately in
writing, or telecopier or telex in substantially the form of Exhibit B-1 hereto,
specifying therein the requested (i) date of such Revolving Credit Borrowing,
(ii) Type of Advances comprising such Revolving Credit Borrowing, (iii)
aggregate amount of such Revolving Credit Borrowing, and (iv) in the case of a
Revolving Credit Borrowing consisting of Eurodollar Rate Advances, initial
Interest Period for each such Revolving Credit Advance. Each Lender shall,
before 12:00 Noon (New York City time) on the date of such Revolving Credit
Borrowing make available for the account of its Applicable Lending Office to the
Agent at the Agent's Account, in same day funds, such Lender's ratable portion
of such Revolving Credit Borrowing. After the Agent's receipt of such funds and
upon fulfillment of the applicable conditions set forth in Article III, the
Agent will make such funds available to the Borrower at the Agent's address
referred to in Section 8.02.
(b) Anything in subsection (a) above to the contrary
notwithstanding, (i) the Borrower may not select Eurodollar Rate Advances for
any Revolving Credit Borrowing if the aggregate amount of such Revolving Credit
Borrowing is less than $10,000,000 or if the obligation of the Lenders to make
Eurodollar Rate Advances shall then be suspended pursuant to Section 2.08 or
2.12 and (ii) the Eurodollar Rate Advances may not be outstanding as part of
more than six separate Revolving Credit Borrowings.
(c) Each Notice of Revolving Credit Borrowing shall be irrevocable
and binding on the Borrower. In the case of any Revolving Credit Borrowing that
the related Notice of Revolving Credit Borrowing
11
specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall
indemnify each Lender against any loss, cost or expense incurred by such Lender
as a result of any failure to fulfill on or before the date specified in such
Notice of Revolving Credit Borrowing for such Revolving Credit Borrowing the
applicable conditions set forth in Article III, including, without limitation,
any loss (excluding loss of anticipated profits), cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such Lender to fund the Revolving Credit Advance to be made by such Lender as
part of such Revolving Credit Borrowing when such Revolving Credit Advance, as a
result of such failure, is not made on such date.
(d) Unless the Agent shall have received notice from a Lender prior
to the date of any Revolving Credit Borrowing that such Lender will not make
available to the Agent such Lender's ratable portion of such Revolving Credit
Borrowing, the Agent may assume that such Lender has made such portion available
to the Agent on the date of such Revolving Credit Borrowing in accordance with
subsection (a) of this Section 2.02 and the Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent that such Lender shall not have so made such ratable
portion available to the Agent, such Lender and the Borrower severally agree to
repay to the Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Borrower until the date such amount is repaid to the Agent, at (i) in the
case of the Borrower, the interest rate applicable at the time to Revolving
Credit Advances comprising such Revolving Credit Borrowing and (ii) in the case
of such Lender, the Federal Funds Rate. If such Lender shall repay to the Agent
such corresponding amount, such amount so repaid shall constitute such Lender's
Revolving Credit Advance as part of such Revolving Credit Borrowing for purposes
of this Agreement.
(e) The failure of any Lender to make the Revolving Credit Advance
to be made by it as part of any Revolving Credit Borrowing shall not relieve any
other Lender of its obligation, if any, hereunder to make its Revolving Credit
Advance on the date of such Revolving Credit Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make the Revolving Credit
Advance to be made by such other Lender on the date of any Revolving Credit
Borrowing.
SECTION 2.03. The Competitive Bid Advances. (a) Each Lender
severally agrees that the Borrower may make Competitive Bid Borrowings under
this Section 2.03 from time to time on any Business Day during the period from
the date hereof until the date occurring 30 days prior to the Termination Date
in the manner set forth below; provided that, following the making of each
Competitive Bid Borrowing, the aggregate amount of the Advances then outstanding
shall not exceed the aggregate amount of the Commitments of the Lenders
(computed without regard to any Competitive Bid Reduction).
(i) The Borrower may request a Competitive Bid Borrowing under this
Section 2.03 by delivering to the Agent, by telecopier or telex, a notice
of a Competitive Bid Borrowing (a "Notice of Competitive Bid Borrowing"),
in substantially the form of Exhibit B-2 hereto, specifying therein the
requested (v) date of such proposed Competitive Bid Borrowing, (w)
aggregate amount of such proposed Competitive Bid Borrowing, (x) in the
case of a Competitive Bid Borrowing consisting of LIBO Rate Advances,
Interest Period, or in the case of a Competitive Bid Borrowing consisting
of Fixed Rate Advances, maturity date for repayment of each Fixed Rate
Advance to be made as part of such Competitive Bid Borrowing (which
maturity date may not be earlier than the date occurring 30 days after the
date of such Competitive Bid Borrowing or later than the Termination
Date), (y) interest payment date or dates relating thereto, and (z) other
terms (if any) to be applicable to such Competitive Bid Borrowing, not
later than 10:00 A.M. (New York City time) (A) at least one Business Day
prior to the date of the proposed Competitive Bid Borrowing, if the
Borrower shall specify in the Notice of Competitive Bid Borrowing that the
rates of interest to be offered by the Lenders shall be fixed rates per
annum (the Advances comprising any such Competitive Bid Borrowing being
referred to herein as "Fixed Rate Advances") and (B) at least four
Business Days prior to the date of the proposed Competitive Bid Borrowing,
if the Borrower shall instead specify in the Notice of Competitive Bid
Borrowing that the Advances comprising such Competitive Bid Borrowing
shall be LIBO Rate Advances. Each Notice of Competitive Bid Borrowing
shall be irrevocable and binding on the Borrower. The Agent shall in turn
promptly notify each Lender of each request for a Competitive Bid
Borrowing received by it from the Borrower by sending such Lender a copy
of the related Notice of Competitive Bid Borrowing.
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(ii) Each Lender may, if, in its sole discretion, it elects to do
so, irrevocably offer to make one or more Competitive Bid Advances 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, by
notifying the Agent (which shall give prompt notice thereof to the
Borrower), (A) before 9:30 A.M. (New York City time) on the date of such
proposed Competitive Bid Borrowing, in the case of a Competitive Bid
Borrowing consisting of Fixed Rate Advances and (B) before 10:00 A.M. (New
York City time) three Business Days before the date of such proposed
Competitive Bid Borrowing, in the case of a Competitive Bid Borrowing
consisting of LIBO Rate Advances of the minimum amount and maximum amount
of each Competitive Bid Advance which such Lender would be willing to make
as part of such proposed Competitive Bid Borrowing (which amounts of such
proposed Competitive Bid may, subject to the proviso to the first sentence
of this Section 2.03(a), exceed such Lender's Commitment, if any), the
rate or rates of interest therefor and such Lender's Applicable Lending
Office with respect to such Competitive Bid Advance; provided that if the
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 at least
30 minutes before the time and on the date on which notice of such
election is to be given to the Agent, by the other Lenders. If any Lender
shall elect not to make such an offer, such Lender shall so notify the
Agent before 10:00 A.M. (New York City time), and such Lender shall not be
obligated to, and shall not, make any Competitive Bid Advance as part of
such Competitive Bid Borrowing; provided that the failure by any Lender to
give such notice shall not cause such Lender to be obligated to make any
Competitive Bid Advance as part of such proposed Competitive Bid
Borrowing.
(iii) The Borrower shall, in turn, (A) before 10:30 A.M. (New York
City time) on the date of such proposed Competitive Bid Borrowing, in the
case of a Competitive Bid Borrowing consisting of Fixed Rate Advances and
(B) before 11:00 A.M. (New York City time) three Business Days before the
date of such proposed Competitive Bid Borrowing, in the case of a
Competitive Bid Borrowing consisting of LIBO Rate Advances, either:
(x) cancel such Competitive Bid Borrowing by giving the Agent
notice to that effect, or
(y) accept one or more of the offers made by any Lender or
Lenders pursuant to paragraph (ii) above, in its sole discretion, by
giving notice to the Agent of the amount of each Competitive Bid
Advance (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 Agent on behalf of such Lender for such
Competitive Bid Advance pursuant to paragraph (ii) above) to be made
by each Lender as part of such Competitive Bid Borrowing, and reject
any remaining offers made by Lenders pursuant to paragraph (ii)
above by giving the Agent notice to that effect. The Borrower shall
accept the offers made by any Lender or Lenders to make Competitive
Bid Advances in order of the lowest to the highest rates of interest
offered by such Lenders. If two or more Lenders have offered the
same interest rate, the amount to be borrowed at such interest rate
will be allocated among such Lenders in proportion to the amount
that each such Lender offered at such interest rate.
(iv) If the Borrower notifies the Agent that such Competitive Bid
Borrowing is cancelled pursuant to paragraph (iii)(x) above, the Agent
shall give prompt notice thereof to the Lenders and such Competitive Bid
Borrowing shall not be made.
(v) If the Borrower accepts one or more of the offers made by any
Lender or Lenders pursuant to paragraph (iii)(y) above, the Agent shall in
turn promptly notify (A) each Lender that has made an offer as described
in paragraph (ii) above, of the date and aggregate amount of such
Competitive Bid Borrowing and whether or not any offer or offers made by
such Lender pursuant to paragraph (ii) above have been accepted by the
Borrower, (B) each Lender that is to make a Competitive Bid Advance as
part of such Competitive Bid Borrowing, of the amount of each Competitive
Bid Advance to be made by such Lender as part of such Competitive Bid
Borrowing, and (C) each Lender that is to make a Competitive Bid
13
Advance as part of such Competitive Bid Borrowing, upon receipt, that the
Agent has received forms of documents appearing to fulfill the applicable
conditions set forth in Article III. Each Lender that is to make a
Competitive Bid Advance as part of such Competitive Bid Borrowing shall,
before 11:00 A.M. (New York City time) on the date of such Competitive Bid
Borrowing specified in the notice received from the Agent pursuant to
clause (A) of the preceding sentence or any later time when such Lender
shall have received notice from the Agent pursuant to clause (C) of the
preceding sentence, make available for the account of its Applicable
Lending Office to the Agent at its address referred to in Section 8.02, in
same day funds, such Lender's portion of such Competitive Bid Borrowing.
Upon fulfillment of the applicable conditions set forth in Article III and
after receipt by the Agent of such funds, the Agent will make such funds
available to the Borrower at the location specified by the Borrower in its
Notice of Competitive Bid Borrowing. Promptly after each Competitive Bid
Borrowing the Agent will notify each Lender of the amount of the
Competitive Bid Borrowing, the consequent Competitive Bid Reduction and
the dates upon which such Competitive Bid Reduction commenced and will
terminate.
(vi) If the Borrower notifies the Agent that it accepts one or more
of the offers made by any Lender or Lenders pursuant to paragraph (iii)(y)
above, such notice of acceptance shall be irrevocable and binding on the
Borrower. The Borrower shall indemnify each Lender against any loss, cost
or expense incurred by such Lender as a result of any failure to fulfill
on or before the date specified in the related Notice of Competitive Bid
Borrowing for such Competitive Bid Borrowing the applicable conditions set
forth in Article III, including, without limitation, any loss (excluding
loss of anticipated profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such
Lender to fund the Competitive Bid Advance to be made by such Lender as
part of such Competitive Bid Borrowing when such Competitive Bid Advance,
as a result of such failure, is not made on such date.
(b) Each Competitive Bid Borrowing shall be in an aggregate amount
of $10,000,000 or an integral multiple of $1,000,000 in excess thereof and,
following the making of each Competitive Bid Borrowing, the Borrower shall be in
compliance with the limitation set forth in the proviso to the first sentence of
subsection (a) above.
(c) Within the limits and on the conditions set forth in this
Section 2.03, the Borrower may from time to time borrow under this Section 2.03,
repay or prepay pursuant to subsection (d) below, and reborrow under this
Section 2.03, provided that a Competitive Bid Borrowing shall not be made within
three Business Days of the date of any other Competitive Bid Borrowing.
(d) The Borrower shall repay to the Agent for the account of each
Lender that has made a Competitive Bid Advance, on the maturity date of each
Competitive Bid Advance (such maturity date being that specified by the Borrower
for repayment of such Competitive Bid Advance in the related Notice of
Competitive Bid Borrowing delivered pursuant to subsection (a)(i) above and
provided in the Competitive Bid Note evidencing such Competitive Bid Advance),
the then unpaid principal amount of such Competitive Bid Advance. The Borrower
shall have no right to prepay any principal amount of any Competitive Bid
Advance unless, and then only on the terms, specified by the Borrower for such
Competitive Bid Advance in the related Notice of Competitive Bid Borrowing
delivered pursuant to subsection (a)(i) above and set forth in the Competitive
Bid Note evidencing such Competitive Bid Advance.
(e) The Borrower shall pay interest on the unpaid principal amount
of each Competitive Bid Advance from the date of such Competitive Bid Advance to
the date the principal amount of such Competitive Bid Advance is repaid in full,
at the rate of interest for such Competitive Bid Advance specified by the Lender
making such Competitive Bid Advance in its notice with respect thereto delivered
pursuant to subsection (a)(ii) above, payable on the interest payment date or
dates specified by the Borrower for such Competitive Bid Advance in the related
Notice of Competitive Bid Borrowing delivered pursuant to subsection (a)(i)
above, as provided in the Competitive Bid Note evidencing such Competitive Bid
Advance. Upon the occurrence and during the continuance of an Event of Default
under Section 6.01(a), the Borrower shall pay interest on the amount of unpaid
principal of and interest on each Competitive Bid Advance owing to a Lender,
payable in arrears on the date or dates interest is payable thereon, at a rate
per annum equal at all times to 1% per annum above the rate per annum required
to be
14
paid on such Competitive Bid Advance under the terms of the Competitive Bid Note
evidencing such Competitive Bid Advance unless otherwise agreed in such
Competitive Bid Note.
(f) The indebtedness of the Borrower resulting from each Competitive
Bid Advance made to the Borrower as part of a Competitive Bid Borrowing shall be
evidenced by a separate Competitive Bid Note of the Borrower payable to the
order of the Lender making such Competitive Bid Advance.
SECTION 2.04. Fees. (a) Facility Fee. The Borrower agrees to pay to
the Agent for the account of each Lender a facility fee on the aggregate amount
of such Lender's Commitment from the date hereof in the case of each Initial
Lender and from the effective date specified in the Assumption Agreement or in
the Assignment and Acceptance pursuant to which it became a Lender in the case
of each other Lender until the Termination Date at a rate per annum equal to the
Applicable Percentage, payable in arrears quarterly on the last day of each
March, June, September and December, commencing December 31, 2001, and on the
Termination Date.
(b) Utilization Fee. The Borrower agrees to pay to the Agent for the
account of each Lender for each date prior to the Term Loan Conversion Date on
which the aggregate outstanding Advances exceed 33% of the Commitments, a fee on
the aggregate amount of the outstanding Advances at a rate per annum equal to
the Applicable Utilization Fee, payable in arrears quarterly on the last day of
each March, June, September and December, commencing December 31, 2001, and on
the Termination Date.
(c) Agent's Fees. The Borrower shall pay to the Agent for its own
account such fees as may from time to time be agreed between the Borrower and
the Agent.
SECTION 2.05. Termination or Reduction of the Commitments. (a)
Optional. The Borrower shall have the right, upon at least three Business Days'
notice to the Agent, to terminate in whole or reduce ratably in part the unused
portions of the respective Commitments of the Lenders, provided that each
partial reduction shall be in the aggregate amount of $10,000,000 or an integral
multiple of $1,000,000 in excess thereof and provided further that the aggregate
amount of the Commitments of the Lenders shall not be reduced to an amount that
is less than the aggregate principal amount of the Competitive Bid Advances then
outstanding.
(b) Mandatory. On the Termination Date, if the Borrower has made the
Term Loan Election in accordance with Section 2.06 prior to such date, and
from time to time thereafter upon each prepayment of the Revolving Credit
Advances, the Commitments of the Lenders shall be automatically and
permanently reduced on a pro rata basis by an amount equal to the amount
by which (i) the aggregate Commitments immediately prior to such reduction
exceeds (ii) the aggregate unpaid principal amount of all Revolving Credit
Advances outstanding at such time.
SECTION 2.06. Repayment of Revolving Credit Advances. The Borrower
shall, subject to the next succeeding sentence, repay to the Agent for the
ratable account of the Lenders on the Termination Date the aggregate principal
amount of the Revolving Credit Advances then outstanding. The Borrower may, upon
not less than 15 days' notice to the Agent, elect (the "Term Loan Election") to
convert all of the Revolving Credit Advances outstanding on the Termination Date
in effect at such time into a term loan which the Borrower shall repay in full
ratably to the Lenders on the Maturity Date; provided that the Term Loan
Election may not be exercised if a Default has occurred and is continuing on the
date of notice of the Term Loan Election or on the date on which the Term Loan
Election is to be effected. All Revolving Credit Advances converted into a term
loan pursuant to this Section 2.06 shall continue to constitute Revolving Credit
Advances except that the Borrower may not reborrow pursuant to Section 2.01
after all or any portion of such Revolving Credit Advances have been prepaid
pursuant to Section 2.10.
SECTION 2.07. Interest on Revolving Credit Advances. (a) Scheduled
Interest. The Borrower shall pay interest on the unpaid principal amount of each
Revolving Credit Advance owing to each Lender from the date of such Revolving
Credit Advance until such principal amount shall be paid in full, at the
following rates per annum:
(i) Base Rate Advances. During such periods as such Revolving Credit
Advance is a Base Rate Advance, a rate per annum equal at all times to the
sum of (x) the Base Rate in effect from time to
15
time plus (y) the Applicable Margin in effect from time to time, payable
in arrears quarterly on the last day of each March, June, September and
December during such periods and on the date such Base Rate Advance shall
be Converted or paid in full.
(ii) Eurodollar Rate Advances. During such periods as such Revolving
Credit Advance is a Eurodollar Rate Advance, a rate per annum equal at all
times during each Interest Period for such Revolving Credit Advance to the
sum of (x) the Eurodollar Rate for such Interest Period for such Revolving
Credit Advance plus (y) the Applicable Margin in effect from time to time,
payable in arrears on the last day of such Interest Period and, if such
Interest Period has a duration of more than three months, on each day that
occurs during such Interest Period every three months from the first day
of such Interest Period and on the date such Eurodollar Rate Advance shall
be Converted or paid in full.
(b) Default Interest. Upon the occurrence and during the continuance
of an Event of Default under Section 6.01(a), the Borrower shall pay interest on
(i) the unpaid principal amount of each Revolving Credit Advance owing to each
Lender, payable in arrears on the dates referred to in clause (a)(i) or (a)(ii)
above, at a rate per annum equal at all times to 1% per annum above the rate per
annum required to be paid on such Revolving Credit Advance pursuant to clause
(a)(i) or (a)(ii) above and (ii) to the fullest extent permitted by law, the
amount of any interest, fee or other amount payable hereunder that is not paid
when due, from the date such amount shall be due until such amount shall be paid
in full, payable in arrears on the date such amount shall be paid in full and on
demand, at a rate per annum equal at all times to 1% per annum above the rate
per annum required to be paid on Base Rate Advances pursuant to clause (a)(i)
above.
SECTION 2.08. Interest Rate Determination. (a) Each Reference Bank
agrees to furnish to the Agent timely information for the purpose of determining
each Eurodollar Rate and each LIBO Rate. If any one or more of the Reference
Banks shall not furnish such timely information to the Agent for the purpose of
determining any such interest rate, the Agent shall determine such interest rate
on the basis of timely information furnished by the remaining Reference Banks.
The Agent shall give prompt notice to the Borrower and the Lenders of the
applicable interest rate determined by the Agent for purposes of Section
2.07(a)(i) or (ii), and the rate, if any, furnished by each Reference Bank for
the purpose of determining the interest rate under Section 2.07(a)(ii).
(b) If, with respect to any Eurodollar Rate Advances, the Required
Lenders notify the Agent that the Eurodollar Rate for any Interest Period for
such Advances will not adequately reflect the cost to such Required Lenders of
making, funding or maintaining their respective Eurodollar Rate Advances for
such Interest Period, the Agent shall forthwith so notify the Borrower and the
Lenders, whereupon (i) each Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a Base Rate
Advance, and (ii) the obligation of the Lenders to make, or to Convert Revolving
Credit Advances into, Eurodollar Rate Advances shall be suspended until the
Agent shall notify the Borrower and the Lenders that the circumstances causing
such suspension no longer exist.
(c) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Agent will forthwith so notify the Borrower and the Lenders and such Advances
will automatically, on the last day of the then existing Interest Period
therefor, be Converted into Base Rate Advances.
(d) On the date on which the aggregate unpaid principal amount of
Eurodollar Rate Advances comprising any Borrowing shall be reduced, by payment
or prepayment or otherwise, to less than $10,000,000, such Advances shall
automatically Convert into Base Rate Advances.
(e) Upon the occurrence and during the continuance of any Event of
Default under Section 6.01(a), (i) each Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance and (ii) the obligation of the Lenders to make,
or to Convert Advances into, Eurodollar Rate Advances shall be suspended.
16
(f) If Telerate Markets Page 3750 is unavailable and fewer than two
Reference Banks furnish timely information to the Agent for determining the
Eurodollar Rate or LIBO Rate for any Eurodollar Rate Advances or LIBO Rate
Advances, as the case may be,
(i) the Agent shall forthwith notify the Borrower and the Lenders
that the interest rate cannot be determined for such Eurodollar Rate
Advances or LIBO Rate Advances, as the case may be,
(ii) with respect to Eurodollar Rate Advances, each such Advance
will automatically, on the last day of the then existing Interest Period
therefor, be prepaid by the Borrower or be automatically Converted into a
Base Rate Advance (or if such Advance is then a Base Rate Advance, will
continue as a Base Rate Advance), and
(iii) the obligation of the Lenders to make Eurodollar Rate Advances
or LIBO Rate Advances or to Convert Revolving Credit Advances into
Eurodollar Rate Advances shall be suspended until the Agent shall notify
the Borrower and the Lenders that the circumstances causing such
suspension no longer exist.
SECTION 2.09. Optional Conversion of Revolving Credit Advances. The
Borrower may on any Business Day, upon notice given to the Agent not later than
11:00 A.M. (New York City time) on the third Business Day prior to the date of
the proposed Conversion and subject to the provisions of Sections 2.08 and 2.12,
Convert all Revolving Credit Advances of one Type comprising the same Borrowing
into Revolving Credit Advances of the other Type; provided, however, that any
Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made
only on the last day of an Interest Period for such Eurodollar Rate Advances,
any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in
an amount not less than the minimum amount specified in Section 2.02(b) and no
Conversion of any Revolving Credit Advances shall result in more separate
Revolving Credit Borrowings than permitted under Section 2.02(b). Each such
notice of a Conversion shall, within the restrictions specified above, specify
(i) the date of such Conversion, (ii) the Revolving Credit Advances to be
Converted, and (iii) if such Conversion is into Eurodollar Rate Advances, the
duration of the initial Interest Period for each such Advance. Each notice of
Conversion shall be irrevocable and binding on the Borrower.
SECTION 2.10. Prepayments of Revolving Credit Advances. The Borrower
may, upon notice at least two Business Days' prior to the date of such
prepayment, in the case of Eurodollar Rate Advances, and not later than 11:00
A.M. (New York City time) on the date of such prepayment, in the case of Base
Rate Advances, to the Agent stating the proposed date and aggregate principal
amount of the prepayment, and if such notice is given the Borrower shall, prepay
the outstanding principal amount of the Revolving Credit Advances comprising
part of the same Revolving Credit Borrowing in whole or ratably in part,
together with accrued interest to the date of such prepayment on the principal
amount prepaid; provided, however, that (x) each partial prepayment shall be in
an aggregate principal amount of $10,000,000 or an integral multiple of
$1,000,000 in excess thereof and (y) in the event of any such prepayment of a
Eurodollar Rate Advance, the Borrower shall be obligated to reimburse the
Lenders in respect thereof pursuant to Section 8.04(c).
SECTION 2.11. Increased Costs. (a) If after the date hereof, due to
either (i) the introduction of or any change in or in the interpretation of any
law or regulation or (ii) the compliance with any guideline or request from any
central bank or other governmental authority (whether or not having the force of
law), there shall be any increase in the cost to any Lender of agreeing to make
or making, funding or maintaining Eurodollar Rate Advances or LIBO Rate Advances
(excluding for purposes of this Section 2.11 any such increased costs resulting
from (i) Taxes or Other Taxes (as to which Section 2.14 shall govern) and (ii)
changes in the basis of taxation of overall net income or overall gross income
by the United States or by the foreign jurisdiction or state under the laws of
which such Lender is organized or has its Applicable Lending Office or any
political subdivision thereof), then the Borrower shall from time to time, upon
demand by such Lender (with a copy of such demand to the Agent), pay to the
Agent for the account of such Lender additional amounts sufficient to compensate
such Lender for such increased cost. A certificate as to the amount of such
increased cost, submitted to the Borrower and the Agent by such Lender, shall be
conclusive and binding for all purposes, absent manifest error.
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(b) If after the date hereof any Lender determines that compliance
with any law or regulation or any guideline or request from any central bank or
other governmental authority (whether or not having the force of law) affects or
would affect the amount of capital required or expected to be maintained by such
Lender or any corporation controlling such Lender and that the amount of such
capital is increased by or based upon the existence of such Lender's commitment
to lend hereunder and other commitments of this type, then, upon demand by such
Lender (with a copy of such demand to the Agent), the Borrower shall pay to the
Agent for the account of such Lender, from time to time as specified by such
Lender, additional amounts sufficient to compensate such Lender or such
corporation in the light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the existence
of such Lender's commitment to lend hereunder. A certificate as to such amounts
submitted to the Borrower and the Agent by such Lender shall be conclusive and
binding for all purposes, absent manifest error.
SECTION 2.12. Illegality. Notwithstanding any other provision of
this Agreement, if any Lender shall notify the Agent that the introduction of or
any change in or in the interpretation of any law or regulation makes it
unlawful, or any central bank or other governmental authority asserts that it is
unlawful, for any Lender or its Eurodollar Lending Office to perform its
obligations hereunder to make Eurodollar Rate Advances or to fund or maintain
Eurodollar Rate Advances hereunder, (a) each Eurodollar Rate Advance will
automatically, upon such demand, Convert into a Base Rate Advance and (b) the
obligation of the Lenders to make Eurodollar Rate Advances or LIBO Rate Advances
or to Convert Revolving Credit Advances into Eurodollar Rate Advances shall be
suspended until the Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist.
SECTION 2.13. Payments and Computations. (a) The Borrower shall make
each payment hereunder not later than 11:00 A.M. (New York City time) on the day
when due to the Agent at the Agent's Account in same day funds without
deduction, set-off or counterclaim. The Agent will promptly thereafter cause to
be distributed like funds relating to the payment of principal or interest or
facility fees ratably (other than amounts payable pursuant to Section 2.03,
2.11, 2.14 or 8.04(c)) to the Lenders for the account of their respective
Applicable Lending Offices, and like funds relating to the payment of any other
amount payable to any Lender to such Lender for the account of its Applicable
Lending Office, in each case to be applied in accordance with the terms of this
Agreement. Upon any Assuming Lender becoming a Lender hereunder as a result of a
Commitment Increase pursuant to Section 2.18 or an extension of the Termination
Date pursuant to Section 2.19, and upon the Agent's receipt of such Lender's
Assumption Agreement and recording of the information contained therein in the
Register, from and after the applicable Increase Date or Extension Date, as the
case may be, the Agent shall make all payments hereunder and under any Notes
issued in connection therewith in respect of the interest assumed thereby to the
Assuming Lender. Upon its acceptance of an Assignment and Acceptance and
recording of the information contained therein in the Register pursuant to
Section 8.07(c), from and after the effective date specified in such Assignment
and Acceptance, the Agent shall make all payments hereunder and under the Notes
in respect of the interest assigned thereby to the Lender assignee thereunder,
and the parties to such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective date directly
between themselves.
(b) The Borrower hereby authorizes each Lender, if and to the extent
payment owed to such Lender is not made when due hereunder or under the Note
held by such Lender, to charge from time to time against any or all of the
Borrower's accounts with such Lender any amount so due.
(c) All computations of interest based on the Base Rate shall be
made by the Agent on the basis of a year of 365 or 366 days, as the case may be,
all computations of interest based on the Eurodollar Rate, the LIBO Rate or the
Federal Funds Rate or in respect of Fixed Rate Advances and of fees shall be
made by the Agent on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or facility fees are payable.
Each determination by the Agent of an interest rate hereunder shall be
conclusive and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or facility fee, as
the case may be; provided, however, that, if such extension would cause payment
of interest on or principal of Eurodollar Rate
18
Advances or LIBO Rate Advances to be made in the next following calendar month,
such payment shall be made on the next preceding Business Day.
(e) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Lenders hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each Lender on
such due date an amount equal to the amount then due such Lender. If and to the
extent the Borrower shall not have so made such payment in full to the Agent,
each Lender shall repay to the Agent forthwith on demand such amount distributed
to such Lender together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender repays such
amount to the Agent, at the Federal Funds Rate.
SECTION 2.14. Taxes. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made, in accordance with Section 2.13,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender and the Agent, taxes
imposed on its overall net income, and franchise taxes imposed on it in lieu of
net income taxes, by the jurisdiction under the laws of which such Lender or the
Agent (as the case may be) is organized or any political subdivision thereof
and, in the case of each Lender, taxes imposed on its overall net income, and
franchise taxes imposed on it in lieu of net income taxes, by the jurisdiction
of such Lender's Applicable Lending Office or any political subdivision thereof
(all such non-excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities in respect of payments hereunder or under the Notes being
hereinafter referred to as "Taxes"). If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under any
Note to any Lender or the Agent, (i) the sum payable shall be increased as may
be necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.14) such Lender or
the Agent (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law.
(b) In addition, the Borrower shall pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made hereunder or under the Notes or from the
execution, delivery or registration of, performing under, or otherwise with
respect to, this Agreement or the Notes (hereinafter referred to as "Other
Taxes").
(c) The Borrower shall indemnify each Lender and the Agent for and
hold it harmless against the full amount of Taxes or Other Taxes (including,
without limitation, taxes of any kind imposed by any jurisdiction on amounts
payable under this Section 2.14) imposed on or paid by such Lender or the Agent
(as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto. This indemnification shall
be made within 30 days from the date such Lender or the Agent (as the case may
be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower shall furnish to the Agent, at its address referred to in Section 8.02,
the original or a certified copy of a receipt evidencing such payment. In the
case of any payment hereunder or under the Notes by or on behalf of the Borrower
through an account or branch outside the United States or by or on behalf of the
Borrower by a payor that is not a United States person, if the Borrower
determines that no Taxes are payable in respect thereof, the Borrower shall
furnish, or shall cause such payor to furnish, to the Agent, at such address, an
opinion of counsel reasonably acceptable to the Agent stating that such payment
is exempt from Taxes. For purposes of this subsection (d) and subsection (e),
the terms "United States" and "United States person" shall have the meanings
specified in Section 7701 of the Internal Revenue Code.
(e) Each Lender organized under the laws of a jurisdiction outside
the United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Initial Lender and on the date of the Assignment
and Acceptance pursuant to which it becomes a Lender in the case of each other
Lender, and from time to time thereafter as requested in writing by the Borrower
(but only so long as such Lender remains lawfully able to do so), shall provide
each of the Agent and the Borrower with two original Internal Revenue Service
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forms W-8BEN or W-8EC1, as appropriate, or any successor or other form
prescribed by the Internal Revenue Service, certifying that such Lender is
exempt from or entitled to a reduced rate of United States withholding tax on
payments pursuant to this Agreement or the Notes. If the form provided by a
Lender at the time such Lender first becomes a party to this Agreement indicates
a United States interest withholding tax rate in excess of zero, withholding tax
at such rate shall be considered excluded from Taxes unless and until such
Lender provides the appropriate forms certifying that a lesser rate applies,
whereupon withholding tax at such lesser rate only shall be considered excluded
from Taxes for periods governed by such form; provided, however, that, if at the
date of the Assignment and Acceptance pursuant to which a Lender assignee
becomes a party to this Agreement, the Lender assignor was entitled to payments
under subsection (a) in respect of United States withholding tax with respect to
interest paid at such date, then, to such extent, the term Taxes shall include
(in addition to withholding taxes that may be imposed in the future or other
amounts otherwise includable in Taxes) United States withholding tax, if any,
applicable with respect to the Lender assignee on such date. If any form or
document referred to in this subsection (e) requires the disclosure of
information, other than information necessary to compute the tax payable and
information required on the date hereof by Internal Revenue Service form 1001 or
4224, that the Lender reasonably considers to be confidential, the Lender shall
give notice thereof to the Borrower and shall not be obligated to include in
such form or document such confidential information.
(f) For any period with respect to which a Lender has failed to
provide the Borrower with the appropriate form described in Section 2.14(e)
(other than if such failure is due to a change in law occurring subsequent to
the date on which a form originally was required to be provided, or if such form
otherwise is not required under subsection (e) above), such Lender shall not be
entitled to indemnification under Section 2.14(a) or (c) with respect to Taxes
imposed by the United States by reason of such failure; provided, however, that
should a Lender become subject to Taxes because of its failure to deliver a form
required hereunder, the Borrower shall take such steps as the Lender shall
reasonably request to assist the Lender to recover such Taxes.
(g) Any Lender claiming any additional amounts payable pursuant to
this Section 2.14 agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of its
Eurodollar Lending Office if the making of such a change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.
SECTION 2.15. Sharing of Payments, Etc. If any Lender shall obtain
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise) on account of the Revolving Credit Advances owing to
it (other than pursuant to Section 2.11, 2.14 or 8.04(c)) in excess of its
ratable share of payments on account of the Revolving Credit Advances obtained
by all the Lenders, such Lender shall forthwith purchase from the other Lenders
such participations in the Revolving Credit Advances owing to them as shall be
necessary to cause such purchasing Lender to share the excess payment ratably
with each of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender, such purchase from
each Lender shall be rescinded and such Lender shall repay to the purchasing
Lender the purchase price to the extent of such recovery together with an amount
equal to such Lender's ratable share (according to the proportion of (i) the
amount of such Lender's required repayment to (ii) the total amount so recovered
from the purchasing Lender) of any interest or other amount paid or payable by
the purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.15 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
SECTION 2.16. Evidence of Debt. (a) Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from each Revolving Credit
Advance owing to such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder in respect of Revolving Credit Advances. The Borrower agrees that upon
notice by any Lender to the Borrower (with a copy of such notice to the Agent)
to the effect that a Revolving Credit Note is required or appropriate in order
for such Lender to evidence (whether for purposes of pledge, enforcement or
otherwise) the Revolving Credit Advances owing to, or to be made by, such
Lender, the Borrower shall promptly execute and deliver to such Lender a
Revolving Credit Note payable to the order of such Lender in a principal amount
up to the Commitment of such Lender.
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(b) The Register maintained by the Agent pursuant to Section 8.07(d)
shall include a control account, and a subsidiary account for each Lender, in
which accounts (taken together) shall be recorded (i) the date and amount of
each Borrowing made hereunder, the Type of Advances comprising such Borrowing
and, if appropriate, the Interest Period applicable thereto, (ii) the terms of
each Assumption Agreement and each Assignment and Acceptance delivered to and
accepted by it, (iii) the amount of any principal or interest due and payable or
to become due and payable from the Borrower to each Lender hereunder and (iv)
the amount of any sum received by the Agent from the Borrower hereunder and each
Lender's share thereof.
(c) Entries made in good faith by the Agent in the Register pursuant
to subsection (b) above, and by each Lender in its account or accounts pursuant
to subsection (a) above, shall be prima facie evidence of the amount of
principal and interest due and payable or to become due and payable from the
Borrower to, in the case of the Register, each Lender and, in the case of such
account or accounts, such Lender, under this Agreement, absent manifest error;
provided, however, that the failure of the Agent or such Lender to make an
entry, or any finding that an entry is incorrect, in the Register or such
account or accounts shall not limit or otherwise affect the obligations of the
Borrower under this Agreement.
SECTION 2.17. Use of Proceeds. The proceeds of the Advances shall be
available (and the Borrower agrees that it shall use such proceeds) for general
corporate purposes of the Borrower and its Subsidiaries, including commercial
paper backstop.
SECTION 2.18. Increase in the Aggregate Commitments. (a) The
Borrower may, at any time but in any event not more than once in any calendar
year prior to the Termination Date, by notice to the Agent, request that the
aggregate amount of the Commitment be increased by an amount of $50,000,000 or
an integral multiple of $10,000,000 in excess thereof (each a "Commitment
Increase") to be effective as of a date that is at least 90 days prior to the
scheduled Termination Date then in effect (the "Increase Date") as specified in
the related notice to the Agent; provided, however that (i) in no event shall
the aggregate amount of the Commitments at any time exceed $300,000,000 and (ii)
on the date of any request by the Borrower for a Commitment Increase and on the
related Increase Date, the applicable conditions set forth in Article III shall
be satisfied.
(b) The Agent shall promptly notify the Lenders of a request by the
Borrower for a Commitment Increase, which notice shall include (i) the proposed
amount of such requested Commitment Increase, (ii) the proposed Increase Date
and (iii) the date by which Lenders wishing to participate in the Commitment
Increase must commit to an increase in the amount of their respective
Commitments (the "Commitment Date"). Each Lender that is willing to participate
in such requested Commitment Increase (each an "Increasing Lender") shall, in
its sole discretion, give written notice to the Agent on or prior to the
Commitment Date of the amount by which it is willing to increase its Commitment.
If the Lenders notify the Agent that they are willing to increase the amount of
their respective Commitments by an aggregate amount that exceeds the amount of
the requested Commitment Increase, the requested Commitment Increase shall be
allocated among the Lenders willing to participate therein in such amounts as
are agreed between the Borrower and the Agent.
(c) Promptly following each Commitment Date, the Agent shall notify
the Borrower as to the amount, if any, by which the Lenders are willing to
participate in the requested Commitment Increase. If the aggregate amount by
which the Lenders are willing to participate in any requested Commitment
Increase on any such Commitment Date is less than the requested Commitment
Increase, then the Borrower may extend offers to one or more Eligible Assignees
to participate in any portion of the requested Commitment Increase that has not
been committed to by the Lenders as of the applicable Commitment Date; provided,
however, that the Commitment of each such Eligible Assignee shall be in an
amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof.
(d) On each Increase Date, each Eligible Assignee that accepts an
offer to participate in a requested Commitment Increase in accordance with
Section 2.18(b) (each such Eligible Assignee and each Eligible Assignee that
agrees to an extension of the Termination Date in accordance with Section
2.19(c), an "Assuming Lender") shall become a Lender party to this Agreement as
of such Increase Date and the Commitment of each Increasing Lender for such
requested Commitment Increase shall be so increased by such amount (or by the
amount allocated to such Lender pursuant to the last sentence of Section
2.18(b)) as of such Increase Date; provided, however, that the Agent shall have
received on or before such Increase Date the following, each dated such date:
21
(i) (A) certified copies of resolutions of the Board of Directors of
the Borrower or the Executive Committee of such Board approving the
Commitment Increase and the corresponding modifications to this Agreement
and (B) an opinion of counsel for the Borrower (which may be in-house
counsel), in substantially the form of Exhibit D hereto;
(ii) an assumption agreement from each Assuming Lender, if any, in
form and substance satisfactory to the Borrower and the Agent (each an
"Assumption Agreement"), duly executed by such Eligible Assignee, the
Agent and the Borrower; and
(iii) confirmation from each Increasing Lender of the increase in
the amount of its Commitment in a writing satisfactory to the Borrower and
the Agent.
On each Increase Date, upon fulfillment of the conditions set forth in the
immediately preceding sentence of this Section 2.18(d), the Agent shall notify
the Lenders (including, without limitation, each Assuming Lender) and the
Borrower, on or before 1:00 P.M. (New York City time), by telecopier or telex,
of the occurrence of the Commitment Increase to be effected on such Increase
Date and shall record in the Register the relevant information with respect to
each Increasing Lender and each Assuming Lender on such date.
SECTION 2.19. Extension of Termination Date. (a) At least 30 days
but not more than 45 days prior to the Termination Date in effect at such time,
the Borrower, by written notice to the Agent, may request an extension of the
Termination Date in effect at such time by 364 days from its then scheduled
expiration; provided, however, that the Borrower shall not have made the Term
Loan Election for Revolving Credit Advances outstanding on such Termination Date
prior to such time. The Agent shall promptly notify each Lender of such request,
and each Lender shall in turn, in its sole discretion, not later than 20 days
prior to the Termination Date, notify the Borrower and the Agent in writing as
to whether such Lender will consent to such extension. If any Lender shall fail
to notify the Agent and the Borrower in writing of its consent to any such
request for extension of the Termination Date at least 20 days prior to the
Termination Date, such Lender shall be deemed to be a Non-Consenting Lender with
respect to such request. The Agent shall notify the Borrower not later than 15
days prior to the Termination Date of the decision of the Lenders regarding the
Borrower's request for an extension of the Termination Date.
(b) If all the Lenders consent in writing to any such request in
accordance with subsection (a) of this Section 2.19, the Termination Date in
effect at such time shall, effective as at the Termination Date (the "Extension
Date"), be extended for 364 days; provided that on each Extension Date the
applicable conditions set forth in Article III shall be satisfied. If less than
all of the Lenders consent in writing to any such request in accordance with
subsection (a) of this Section 2.19, the Termination Date in effect at such time
shall, effective as at the applicable Extension Date and subject to subsection
(d) of this Section 2.19, be extended as to those Lenders that so consented
(each a "Consenting Lender") but shall not be extended as to any other Lender
(each a "Non-Consenting Lender"). To the extent that the Termination Date is not
extended as to any Lender pursuant to this Section 2.19 and the Commitment of
such Lender is not assumed in accordance with subsection (c) of this Section
2.19 on or prior to the applicable Extension Date, the Commitment of such
Non-Consenting Lender shall automatically terminate in whole on such unextended
Termination Date without any further notice or other action by the Borrower,
such Lender or any other Person; provided that such Non-Consenting Lender's
rights under Sections 2.11, 2.14 and 8.04, and its obligations under Section
7.05, shall survive the Termination Date for such Lender as to matters occurring
prior to such date. It is understood and agreed that no Lender shall have any
obligation whatsoever to agree to any request made by the Borrower for any
requested extension of the Termination Date.
(c) If less than all of the Lenders consent to any such request
pursuant to subsection (a) of this Section 2.19, the Agent shall promptly so
notify the Consenting Lenders, and each Consenting Lender may, in its sole
discretion, give written notice to the Agent not later than 10 days prior to the
Termination Date of the amount of the Non-Consenting Lenders' Commitments for
which it is willing to accept an assignment. If the Consenting Lenders notify
the Agent that they are willing to accept assignments of Commitments in an
aggregate amount that exceeds the amount of the Commitments of the
Non-Consenting Lenders, such Commitments shall be allocated among the Consenting
Lenders willing to accept such assignments in such amounts as are agreed between
the Borrower and the Agent. If after giving effect to the assignments of
Commitments described above there
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remains any Commitments of Non-Consenting Lenders, the Borrower may arrange for
one or more Consenting Lenders or other Eligible Assignees as Assuming Lenders
to assume, effective as of the Extension Date, any Non-Consenting Lender's
Commitment and all of the obligations of such Non-Consenting Lender under this
Agreement thereafter arising, without recourse to or warranty by, or expense to,
such Non-Consenting Lender; provided, however, that the amount of the Commitment
of any such Assuming Lender as a result of such substitution shall in no event
be less than $10,000,000 unless the amount of the Commitment of such
Non-Consenting Lender is less than $10,000,000, in which case such Assuming
Lender shall assume all of such lesser amount; and provided further that:
(i) any such Consenting Lender or Assuming Lender shall have paid to
such Non-Consenting Lender (A) the aggregate principal amount of, and any
interest accrued and unpaid to the effective date of the assignment on,
the outstanding Advances, if any, of such Non-Consenting Lender plus (B)
any accrued but unpaid facility fees owing to such Non-Consenting Lender
as of the effective date of such assignment;
(ii) all additional costs reimbursements, expense reimbursements and
indemnities payable to such Non-Consenting Lender, and all other accrued
and unpaid amounts owing to such Non-Consenting Lender hereunder, as of
the effective date of such assignment shall have been paid to such
Non-Consenting Lender; and
(iii) with respect to any such Assuming Lender, the applicable
processing and recordation fee required under Section 8.07(a) for such
assignment shall have been paid;
provided further that such Non-Consenting Lender's rights under Sections 2.11,
2.14 and 8.04, and its obligations under Section 7.05, shall survive such
substitution as to matters occurring prior to the date of substitution. At least
three Business Days prior to any Extension Date, (A) each such Assuming Lender,
if any, shall have delivered to the Borrower and the Agent an Assumption
Agreement, duly executed by such Assuming Lender, such Non-Consenting Lender,
the Borrower and the Agent, (B) any such Consenting Lender shall have delivered
confirmation in writing satisfactory to the Borrower and the Agent as to the
increase in the amount of its Commitment and (C) each Non-Consenting Lender
being replaced pursuant to this Section 2.19 shall have delivered to the Agent
any Note or Notes held by such Non-Consenting Lender. Upon the payment or
prepayment of all amounts referred to in clauses (i), (ii) and (iii) of the
immediately preceding sentence, each such Consenting Lender or Assuming Lender,
as of the Extension Date, will be substituted for such Non-Consenting Lender
under this Agreement and shall be a Lender for all purposes of this Agreement,
without any further acknowledgment by or the consent of the other Lenders, and
the obligations of each such Non-Consenting Lender hereunder shall, by the
provisions hereof, be released and discharged.
(d) If (after giving effect to any assignments or assumptions
pursuant to subsection (c) of this Section 2.19) Lenders having Commitments
equal to at least 50% of the Commitments in effect immediately prior to the
Extension Date consent in writing to a requested extension (whether by execution
or delivery of an Assumption Agreement or otherwise) not later than one Business
Day prior to such Extension Date, the Agent shall so notify the Borrower, and,
subject to the satisfaction to the applicable conditions in Article III, the
Termination Date then in effect shall be extended for the additional 364-day
period as described in subsection (a) of this Section 2.19, and all references
in this Agreement, and in the Notes, if any, to the "Termination Date" shall,
with respect to each Consenting Lender and each Assuming Lender for such
Extension Date, refer to the Termination Date as so extended. Promptly following
each Extension Date, the Agent shall notify the Lenders (including, without
limitation, each Assuming Lender) of the extension of the scheduled Termination
Date in effect immediately prior thereto and shall thereupon record in the
Register the relevant information with respect to each such Consenting Lender
and each such Assuming Lender.
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
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SECTION 3.01. Conditions Precedent to Effectiveness of Sections 2.01
and 2.03. Sections 2.01 and 2.03 of this Agreement shall become effective on and
as of the first date (the "Effective Date") on which the following conditions
precedent have been satisfied:
(a) There shall have occurred no Material Adverse Change since
December 31, 2000.
(b) There shall exist no action, suit, investigation, litigation or
proceeding affecting the Borrower or any of its Subsidiaries pending or
threatened before any court, governmental agency or arbitrator that (i)
could be reasonably likely to have a Material Adverse Effect or (ii)
purports to affect the legality, validity or enforceability of this
Agreement or any Note or the consummation of the transactions contemplated
hereby.
(c) Nothing shall have come to the attention of the Lenders during
the course of their due diligence investigation to lead them to believe
that the Information Memorandum was or has become misleading, incorrect or
incomplete in any material respect; without limiting the generality of the
foregoing, the Lenders shall have been given such access to the
management, records, books of account, contracts and properties of the
Borrower and its Subsidiaries as they shall have requested.
(d) All governmental and third party consents and approvals
necessary in connection with the transactions contemplated hereby shall
have been obtained (without the imposition of any conditions that are not
acceptable to the Lenders) and shall remain in effect, and no law or
regulation shall be applicable in the reasonable judgment of the Lenders
that restrains, prevents or imposes materially adverse conditions upon the
transactions contemplated hereby.
(e) The Borrower shall have notified each Lender and the Agent in
writing as to the proposed Effective Date.
(f) The Borrower shall have paid all accrued fees and expenses of
the Agent and the Lenders (including the accrued fees and expenses of
counsel to the Agent).
(g) On the Effective Date, the following statements shall be true
and the Agent shall have received for the account of each Lender a
certificate signed by a duly authorized officer of the Borrower, dated the
Effective Date, stating that:
(i) The representations and warranties contained in Section
4.01 are correct on and as of the Effective Date, and
(ii) No event has occurred and is continuing that constitutes
a Default.
(h) The Agent shall have received on or before the Effective Date
the following, each dated such day, in form and substance satisfactory to
the Agent and (except for the Revolving Credit Notes) in sufficient copies
for each Lender:
(i) The Revolving Credit Notes to the order of the Lenders to
the extent requested by any Lender pursuant to Section 2.16.
(ii) Certified copies of the resolutions of the Board of
Directors of the Borrower approving this Agreement and the Notes,
and of all documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this Agreement and
the Notes.
(iii) A certificate of the Secretary or an Assistant Secretary
of the Borrower certifying the names and true signatures of the
officers of the Borrower authorized to sign this Agreement and the
Notes and the other documents to be delivered hereunder.
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(iv) A favorable opinion of Stephen A. Block, Senior Vice
President and General Counsel, counsel for the Borrower,
substantially in the form of Exhibit D hereto and as to such other
matters as any Lender through the Agent may reasonably request.
(v) A favorable opinion of Shearman & Sterling, counsel for
the Agent, in form and substance satisfactory to the Agent.
(i) The Borrower shall have terminated the commitments, and paid in
full all Debt, interest, fees and other amounts outstanding, under (x) the
364-Day Credit Agreement dated as of November 28, 2001, as amended, among
the Borrower, the lenders parties thereto, Citibank, as administrative
agent for the lenders, and (y) the 180-Day Credit Agreement dated as of
November 2, 2000 among the Borrower, Citibank, N.A., as lender and as
administrative agent, and Salomon Smith Barney Inc., as arranger, and each
of the Lenders that is a party to any such credit agreement hereby waives,
upon execution of this Agreement, the requirement of prior notice under
such credit agreement relating to the termination of commitments
thereunder.
SECTION 3.02. Conditions Precedent to Each Revolving Credit
Borrowing, Commitment Increase and Extension Date. The obligation of each Lender
to make a Revolving Credit Advance on the occasion of each Revolving Credit
Borrowing, each Commitment Increase and each extension of Commitments pursuant
to Section 2.19 shall be subject to the conditions precedent that the Effective
Date shall have occurred and on the date of such Revolving Credit Borrowing, the
applicable Increase Date or the applicable Extension Date (a) the following
statements shall be true (and each of the giving of the applicable Notice of
Revolving Credit Borrowing, request for Commitment Increase, request for
Commitment Extension and the acceptance by the Borrower of the proceeds of such
Revolving Credit Borrowing shall constitute a representation and warranty by the
Borrower that on the date of such Borrowing, such Increase Date or such
Extension Date such statements are true):
(i) the representations and warranties contained in Section 4.01
(except, in the case of Revolving Credit Borrowings, the representations
set forth in the last sentence of subsection (e) thereof and in subsection
(f)(i) thereof) are correct on and as of such date, before and after
giving effect to such Revolving Credit Borrowing, such Commitment Increase
or such Extension Date and to the application of the proceeds therefrom,
as though made on and as of such date, and
(ii) no event has occurred and is continuing, or would result from
such Revolving Credit Borrowing, such Commitment Increase or such
Extension Date or from the application of the proceeds therefrom, that
constitutes a Default;
and (b) the Agent shall have received such other approvals, opinions or
documents as any Lender through the Agent may reasonably request.
SECTION 3.03. Conditions Precedent to Each Competitive Bid
Borrowing. The obligation of each Lender that is to make a Competitive Bid
Advance on the occasion of a Competitive Bid Borrowing to make such Competitive
Bid Advance as part of such Competitive Bid Borrowing is subject to the
conditions precedent that (a) the Agent shall have received the written
confirmatory Notice of Competitive Bid Borrowing with respect thereto, (b) on or
before the date of such Competitive Bid Borrowing, but prior to such Competitive
Bid Borrowing, the Agent shall have received a Competitive Bid Note payable to
the order of such Lender for each of the one or more Competitive Bid Advances to
be made by such Lender as part of such Competitive Bid Borrowing, in a principal
amount equal to the principal amount of the Competitive Bid Advance to be
evidenced thereby and otherwise on such terms as were agreed to for such
Competitive Bid Advance in accordance with Section 2.03, and (c) on the date of
such Competitive Bid Borrowing the following statements shall be true (and each
of the giving of the applicable Notice of Competitive Bid Borrowing and the
acceptance by the Borrower of the proceeds of such Competitive Bid Borrowing
shall constitute a representation and warranty by the Borrower that on the date
of such Competitive Bid Borrowing such statements are true):
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(i) the representations and warranties contained in Section 4.01 are
correct on and as of the date of such Competitive Bid Borrowing, before
and after giving effect to such Competitive Bid Borrowing and to the
application of the proceeds therefrom, as though made on and as of such
date, and
(ii) no event has occurred and is continuing, or would result from
such Competitive Bid Borrowing or from the application of the proceeds
therefrom, that constitutes a Default.
SECTION 3.04. Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Agent responsible for the transactions contemplated by this Agreement
shall have received notice from such Lender prior to the date that the Borrower,
by notice to the Lenders, designates as the proposed Effective Date, specifying
its objection thereto. The Agent shall promptly notify the Lenders of the
occurrence of the Effective Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) The Borrower is a corporation duly organized, validly existing
and in good standing under the laws of the State of New York.
(b) The execution, delivery and performance by the Borrower of this
Agreement and the Notes to be delivered by it, and the consummation of the
transactions contemplated hereby, are within the Borrower's corporate
powers, have been duly authorized by all necessary corporate action, and
do not contravene (i) the Borrower's charter or by-laws or (ii) any law or
any contractual restriction binding on or affecting the Borrower.
(c) No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body or any
other third party is required for the due execution, delivery and
performance by the Borrower of this Agreement or the Notes to be delivered
by it.
(d) This Agreement has been, and each of the Notes to be delivered
by it when delivered hereunder will have been, duly executed and delivered
by the Borrower. This Agreement is, and each of the Notes when delivered
hereunder will be, the legal, valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with their respective
terms.
(e) The Consolidated balance sheet of the Borrower and its
Subsidiaries as at December 31, 2000, and the related Consolidated
statements of income and cash flows of the Borrower and its Subsidiaries
for the fiscal year then ended, accompanied by an opinion of
PricewaterhouseCoopers LLP, independent public accountants, and the
Consolidated balance sheet of the Borrower and its Subsidiaries as at June
30, 2001, and the related Consolidated statements of income and cash flows
of the Borrower and its Subsidiaries for the six months then ended, duly
certified by the chief financial officer of the Borrower, copies of which
have been furnished to each Lender, fairly present subject, in the case of
said balance sheet as at June 30, 2001 and said statements of income and
cash flows for the six months then ended, to year-end audit adjustments,
the Consolidated financial condition of the Borrower and its Subsidiaries
as at such dates and the Consolidated results of the operations of the
Borrower and its Subsidiaries for the periods ended on such date, all in
accordance with generally accepted accounting principles consistently
applied. Since December 31, 2000, there has been no Material Adverse
Change.
26
(f) There is no pending or threatened action, suit, investigation,
litigation or proceeding, including, without limitation, any Environmental
Action, affecting the Borrower or any of its Subsidiaries before any
court, governmental agency or arbitrator that (i) could be reasonably
likely to have a Material Adverse Effect or (ii) purports to affect the
legality, validity or enforceability of this Agreement or any Note or the
consummation of the transactions contemplated hereby.
(g) The Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying margin stock (within the meaning
of Regulation U issued by the Board of Governors of the Federal Reserve
System), and no proceeds of any Advance will be used to purchase or carry
any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock.
(h) The Borrower is not an "investment company", or a company
"controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Advance shall
remain unpaid or any Lender shall have any Commitment hereunder, the Borrower
will:
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable
laws, rules, regulations and orders, such compliance to include, without
limitation, compliance with ERISA and Environmental Laws.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges or levies
imposed upon it or upon its property and (ii) all lawful claims that, if
unpaid, might by law become a Lien upon its property; provided, however,
that neither the Borrower nor any of its Subsidiaries shall be required to
pay or discharge any such tax, assessment, charge or claim that is being
contested in good faith and by proper proceedings and as to which
appropriate reserves are being maintained, unless and until any Lien
resulting therefrom attaches to its property and becomes enforceable
against its other creditors.
(c) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which the Borrower
or such Subsidiary operates; provided, however, that the Borrower and its
Subsidiaries may self-insure to the same extent as other companies engaged
in similar businesses and owning similar properties in the same general
areas in which the Borrower or such Subsidiary operates and to the extent
consistent with prudent business practice.
(d) Preservation of Corporate Existence, Etc. Preserve and maintain,
and cause each of its Subsidiaries to preserve and maintain, its corporate
existence, rights (charter and statutory) and franchises; provided,
however, that the Borrower and its Subsidiaries may consummate any merger
or consolidation permitted under Section 5.02(b) and provided further that
neither the Borrower nor any of its Subsidiaries shall be required to
preserve any right or franchise or, in the case of any Subsidiary, its
corporate existence, if the Board of Directors of the Borrower shall
determine that the preservation thereof is no longer desirable in the
conduct of the business of the Borrower, and that the loss thereof is not
disadvantageous in any material respect to the Borrower or the Lenders.
(e) Visitation Rights. At any reasonable time and from time to time,
permit the Agent or any of the Lenders or any agents or representatives
thereof, to examine and make copies of and abstracts from the records and
books of account of, and visit (subject to applicable safety laws and
regulations) the
27
properties of, the Borrower and any of its Subsidiaries, and to discuss
the affairs, finances and accounts of the Borrower and any of its
Subsidiaries with any of their officers or directors and with their
independent certified public accountants.
(f) Keeping of Books. Keep, and cause each of its Subsidiaries to
keep, proper books of record and account, in which full and correct
entries shall be made of all financial transactions and the assets and
business of the Borrower and each such Subsidiary in accordance with
generally accepted accounting principles in effect from time to time.
(g) Maintenance of Properties, Etc. Maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, all of its properties
that are used or useful in the conduct of its business in good working
order and condition, ordinary wear and tear excepted.
(h) Reporting Requirements. Furnish to the Lenders:
(i) as soon as available and in any event within 45 days after
the end of each of the first three quarters of each fiscal year of
the Borrower, the Consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such quarter and Consolidated
statements of income and cash flows of the Borrower and its
Subsidiaries for the period commencing at the end of the previous
fiscal year and ending with the end of such quarter, duly certified
(subject to year-end audit adjustments) by the chief financial
officer of the Borrower as having been prepared in accordance with
generally accepted accounting principles and certificates of the
chief financial officer of the Borrower as to compliance with the
terms of this Agreement and setting forth in reasonable detail the
calculations necessary to demonstrate compliance with Section 5.03,
provided that in the event of any change in GAAP used in the
preparation of such financial statements, the Borrower shall also
provide, if necessary for the determination of compliance with
Section 5.03, a statement of reconciliation conforming such
financial statements to GAAP;
(ii) as soon as available and in any event within 90 days
after the end of each fiscal year of the Borrower, a copy of the
annual audit report for such year for the Borrower and its
Subsidiaries, containing the Consolidated balance sheet of the
Borrower and its Subsidiaries as of the end of such fiscal year and
Consolidated statements of income and cash flows of the Borrower and
its Subsidiaries for such fiscal year, in each case accompanied by
an opinion acceptable to the Required Lenders by
PricewaterhouseCoopers LLP or other "Big Five" independent public
accountants, provided that in the event of any change in GAAP used
in the preparation of such financial statements, the Borrower shall
also provide, if necessary for the determination of compliance with
Section 5.03, a statement of reconciliation conforming such
financial statements to GAAP;
(iii) as soon as possible and in any event within five days
after the occurrence of each Default continuing on the date of such
statement, a statement of the chief financial officer of the
Borrower setting forth details of such Default and the action that
the Borrower has taken and proposes to take with respect thereto;
(iv) promptly after the sending or filing thereof, copies of
all reports that the Borrower sends to any of its securityholders,
and copies of all reports and registration statements that the
Borrower or any Subsidiary files with the Securities and Exchange
Commission or any national securities exchange;
(v) promptly after the commencement thereof, notice of all
actions and proceedings before any court, governmental agency or
arbitrator affecting the Borrower or any of its Subsidiaries of the
type described in Section 4.01(f); and
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(vi) such other information respecting the Borrower or any of
its Subsidiaries as any Lender through the Agent may from time to
time reasonably request.
Reports and financial statements required to be delivered by the
Borrower pursuant to paragraphs (i), (ii) and (iv) of this Section 5.01(h) shall
be deemed to have been delivered on the date on which it posts such reports, or
reports containing such financial statements, on its website on the Internet at
www.iff.com and when such reports, or reports containing such financial
statements are posted on the SEC's website at www.sec.gov; provided that it
shall deliver paper copies of the reports and financial statements referred to
in paragraphs (i), (ii) and (iv) of this Section 5.01(h) to the Agent or any
Lender who requests it to deliver such paper copies until written notice to
cease delivering paper copies is given by the Agent or such Lender; and provided
further that in every instance it shall provide paper copies of the certificates
required by subsection (i) and (ii) to the Agent and each of the Lenders until
such time as the Agent shall provide it written notice otherwise.
SECTION 5.02. Negative Covenants. So long as any Advance shall
remain unpaid or any Lender shall have any Commitment hereunder, the Borrower
will not:
(a) Liens, Etc. Create or suffer to exist, or permit any of its
Subsidiaries to create or suffer to exist, any Lien on or with respect to
any of its properties, whether now owned or hereafter acquired, or assign,
or permit any of its Subsidiaries to assign, any right to receive income,
other than:
(i) Permitted Liens,
(ii) purchase money Liens upon or in any real property or
equipment acquired or held by the Borrower or any Subsidiary in the
ordinary course of business to secure the purchase price of such
property or equipment or to secure Debt incurred solely for the
purpose of financing the acquisition of such property or equipment,
or Liens existing on such property or equipment at the time of its
acquisition (other than any such Liens created in contemplation of
such acquisition that were not incurred to finance the acquisition
of such property) or extensions, renewals or replacements of any of
the foregoing for the same or a lesser amount, provided, however,
that no such Lien shall extend to or cover any properties of any
character other than the real property or equipment being acquired,
and no such extension, renewal or replacement shall extend to or
cover any properties not theretofore subject to the Lien being
extended, renewed or replaced, provided further that the aggregate
principal amount of the indebtedness secured by the Liens referred
to in this clause (ii) shall not exceed $50,000,000 at any time
outstanding,
(iii) the Liens existing on the Effective Date and described
on Schedule 5.02(a) hereto,
(iv) Liens on property of a Person existing at the time such
Person is merged into or consolidated with the Borrower or any
Subsidiary of the Borrower or becomes a Subsidiary of the Borrower;
provided that such Liens were not created in contemplation of such
merger, consolidation or acquisition and do not extend to any assets
other than those of the Person so merged into or consolidated with
the Borrower or such Subsidiary or acquired by the Borrower or such
Subsidiary,
(v) other Liens securing Debt in an aggregate principal amount
not to exceed $100,000,000 at any time outstanding, and
(vi) the replacement, extension or renewal of any Lien
permitted by clause (iii) or (iv) above upon or in the same property
theretofore subject thereto or the replacement, extension or renewal
(without increase in the amount or change in any direct or
contingent obligor) of the Debt secured thereby.
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(b) Mergers, Etc. Merge or consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in
a series of transactions) all or substantially all of the assets (whether
now owned or hereafter acquired) of the Borrower and its Subsidiaries,
taken as a whole, to, any Person, or permit any of its Subsidiaries to do
so, except that any Subsidiary of the Borrower may merge or consolidate
with or into, or dispose of assets to, any other Subsidiary of the
Borrower, and except that any Subsidiary of the Borrower may merge into or
dispose of assets to the Borrower and the Borrower may merge with any
other Person so long as the Borrower is the surviving corporation,
provided, in each case, that no Default shall have occurred and be
continuing at the time of such proposed transaction or would result
therefrom.
(c) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in accounting policies or
reporting practices, except as required or permitted by generally accepted
accounting principles.
(d) Change in Nature of Business. Make, or permit any of its
Subsidiaries to make, any material change in the nature of the business of
the Borrower and its Subsidiaries, taken as a whole, as carried on at the
date hereof.
(e) Subsidiary Debt. Permit any of its Subsidiaries to create or
suffer to exist, any Debt other than:
(i) Debt owed to the Borrower or to a wholly owned Subsidiary
of the Borrower,
(ii) Debt aggregating for all of the Borrower's Subsidiaries
not more than $400,000,000 at any one time outstanding, and
(iii) endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of
business.
SECTION 5.03. Financial Covenant. So long as any Advance shall
remain unpaid or any Lender shall have any Commitment hereunder, the Borrower
will maintain a ratio of Debt for Borrowed Money as at the end of each fiscal
quarter ending in the periods set forth below to EBITDA for the period of four
fiscal quarters then ended of not more than 3.25:1.0.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Advance when
the same becomes due and payable; or the Borrower shall fail to pay any
interest on any Advance or make any other payment of fees or other amounts
payable under this Agreement or any Note within three Business Days after
the same becomes due and payable; or
(b) Any representation or warranty made by the Borrower herein or by
the Borrower (or any of its officers) in connection with this Agreement
shall prove to have been incorrect in any material respect when made; or
(c) (i) The Borrower shall fail to perform or observe any term,
covenant or agreement contained in Section 5.01(d), (e) or (h), 5.02 or
5.03, or (ii) the Borrower shall fail to perform or observe any other
term, covenant or agreement contained in this Agreement on its part to be
performed or observed
30
if such failure shall remain unremedied for 10 days after written notice
thereof shall have been given to the Borrower by the Agent or any Lender;
or
(d) The Borrower or any of its Subsidiaries shall fail to pay any
principal of or premium or interest on any Debt that is outstanding in a
principal or notional amount of at least $50,000,000 in the aggregate (but
excluding Debt outstanding hereunder) of the Borrower or such Subsidiary
(as the case may be), when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such
Debt; or any other event shall occur or condition shall exist under any
agreement or instrument relating to any such Debt and shall continue after
the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate, or
to permit the acceleration of, the maturity of such Debt; or any such Debt
shall be declared to be due and payable, or required to be prepaid or
redeemed (other than by a regularly scheduled required prepayment or
redemption), purchased or defeased, or an offer to prepay, redeem,
purchase or defease such Debt shall be required to be made, in each case
prior to the stated maturity thereof; or
(e) The Borrower or any of its Subsidiaries shall generally not pay
its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment
for the benefit of creditors; or any proceeding shall be instituted by or
against the Borrower or any of its Subsidiaries seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar official
for it or for any substantial part of its property and, in the case of any
such proceeding instituted against it (but not instituted by it), either
such proceeding shall remain undismissed or unstayed for a period of 30
days, or any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the appointment
of a receiver, trustee, custodian or other similar official for, it or for
any substantial part of its property) shall occur; or the Borrower or any
of its Subsidiaries shall take any corporate action to authorize any of
the actions set forth above in this subsection (e); or
(f) Judgments or orders for the payment of money in excess of
$50,000,000 in the aggregate shall be rendered against the Borrower or any
of its Subsidiaries and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (ii) there shall
be any period of 20 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect; provided, however, that any such judgment or order shall
not be an Event of Default under this Section 6.01(f) if and for so long
as (i) the amount of such judgment or order is covered by a valid and
binding policy of insurance between the defendant and the insurer covering
payment thereof and (ii) such insurer, which shall be rated at least "A"
by A.M. Best Company, has been notified of, and has not disputed the claim
made for payment of, the amount of such judgment or order; or
(g) (i) Any Person or two or more Persons acting in concert (other
than any Founder) shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934), directly or indirectly, of Voting Stock
of the Borrower (or other securities convertible into such Voting Stock)
representing 20% or more of the combined voting power of all Voting Stock
of the Borrower; or (ii) during any period of up to 24 consecutive months,
commencing before or after the date of this Agreement, individuals who at
the beginning of such 24-month period were directors of the Borrower shall
cease for any reason (other than due to death or disability) to constitute
a majority of the board of directors of the Borrower (except to the extent
that individuals who at the beginning of such 24-month period were
replaced by individuals (x) elected by a majority of the remaining members
of the board of directors of the Borrower or (y) nominated for election by
a majority of the remaining members of the board of directors of the
Borrower and thereafter elected as directors by the shareholders of the
Borrower); or (iii) any Person or two or more Persons acting in concert
(other than any Founder) shall have acquired by contract or otherwise, or
shall
31
have entered into a contract or arrangement that, upon consummation, will
result in its or their acquisition of the power to exercise, directly or
indirectly, a controlling influence over the management or policies of the
Borrower; or
(h) The Borrower or any of its ERISA Affiliates shall incur, or
shall be reasonably likely to incur liability in excess of $50,000,000 in
the aggregate as a result of one or more of the following: (i) the
occurrence of any ERISA Event; (ii) the partial or complete withdrawal of
the Borrower or any of its ERISA Affiliates from a Multiemployer Plan; or
(iii) the reorganization or termination of a Multiemployer Plan;
then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the
obligation of each Lender to make Advances to be terminated, whereupon the same
shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the
Advances, all interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Advances, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrower; provided, however, that in the
event of an actual or deemed entry of an order for relief with respect to the
Borrower under the Federal Bankruptcy Code, (A) the obligation of each Lender to
make Advances shall automatically be terminated and (B) the Advances, all such
interest and all such amounts shall automatically become and be due and payable,
without presentment, demand, protest or any notice of any kind, all of which are
hereby expressly waived by the Borrower.
ARTICLE VII
THE AGENT
SECTION 7.01. Authorization and Action. Each Lender hereby appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers and discretion under this Agreement as are delegated to the
Agent by the terms hereof, together with such powers and discretion as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement (including, without limitation, enforcement or collection of the
Notes), the Agent shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding upon all Lenders
and all holders of Notes; provided, however, that the Agent shall not be
required to take any action that exposes the Agent to personal liability or that
is contrary to this Agreement or applicable law. The Agent agrees to give to
each Lender prompt notice of each notice given to it by the Borrower pursuant to
the terms of this Agreement.
SECTION 7.02. Agent's Reliance, Etc. Neither the Agent nor any of
its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection with this
Agreement, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent: (i) may treat
the Lender that made any Advance as the holder of the Debt resulting therefrom
until the Agent receives and accepts an Assumption Agreement entered into by an
Assuming Lender as provided in Section 2.18 or 2.19, as the case may be, or an
Assignment and Acceptance entered into by such Lender, as assignor, and an
Eligible Assignee, as assignee, as provided in Section 8.07; (ii) may consult
with legal counsel (including counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (iii) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations (whether written or oral) made in or
in connection with this Agreement; (iv) shall not have any duty to ascertain or
to inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement on the part of the Borrower or to inspect the
property (including the books and records) of the Borrower; (v) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
instrument or document furnished pursuant hereto; and (vi) shall incur no
liability under or in respect of this Agreement by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telecopier,
telegram or telex) believed by it to be genuine and signed or sent by the proper
party or parties.
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SECTION 7.03. Citibank and Affiliates. With respect to its
Commitment, the Advances made by it and the Note issued to it, Citibank shall
have the same rights and powers under this Agreement as any other Lender and may
exercise the same as though it were not the Agent; and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated, include Citibank in its
individual capacity. Citibank and its Affiliates may accept deposits from, lend
money to, act as trustee under indentures of, accept investment banking
engagements from and generally engage in any kind of business with, the
Borrower, any of its Subsidiaries and any Person who may do business with or own
securities of the Borrower or any such Subsidiary, all as if Citibank were not
the Agent and without any duty to account therefor to the Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender acknowledges that
it has, independently and without reliance upon the Agent or any other Lender
and based on the financial statements referred to in Section 4.01 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the 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 decisions in taking or
not taking action under this Agreement.
SECTION 7.05. Indemnification. The Lenders agree to indemnify the
Agent (to the extent not reimbursed by the Borrower), ratably according to the
respective principal amounts of the Revolving Credit Advances then owed to each
of them (or if no Revolving Credit Advances are at the time outstanding, ratably
according to the respective amounts of their Commitments), from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by, or asserted against the Agent in
any way relating to or arising out of this Agreement or any action taken or
omitted by the Agent under this Agreement (collectively, the "Indemnified
Costs"), provided that no Lender shall be liable for any portion of the
Indemnified Costs resulting from the Agent's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to reimburse
the Agent promptly upon demand for its ratable share of any out-of-pocket
expenses (including reasonable counsel fees) incurred by the Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement, to the extent that the Agent is not reimbursed for such expenses
by the Borrower. In the case of any investigation, litigation or proceeding
giving rise to any Indemnified Costs, this Section 7.05 applies whether any such
investigation, litigation or proceeding is brought by the Agent, any Lender or a
third party.
SECTION 7.06. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrower and may be removed
at any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Agent, provided that, so long as no Default has occurred and is
continuing, the Borrower shall have the right to consent to such successor Agent
(which consent shall not be unreasonably withheld or delayed) . If no successor
Agent shall have been so appointed by the Required Lenders, and shall have
accepted such appointment, within 30 days after the retiring Agent's giving of
notice of resignation or the Required Lenders' removal of the retiring Agent,
then the retiring Agent may, on behalf of the Lenders, appoint a successor
Agent, which shall be a commercial bank organized under the laws of the United
States of America or of any State thereof and having a combined capital and
surplus of at least $500,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, discretion, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations under this Agreement. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Article VII
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement.
SECTION 7.07. Other Agents. Each Lender hereby acknowledges that
neither any co-agent nor any other Lender designated as any "Agent" on the
signature pages hereof has any liability hereunder other than in its capacity as
a Lender.
ARTICLE VIII
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MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Revolving Credit Notes, nor consent to any
departure by the Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no amendment, waiver
or consent shall, unless in writing and signed by all the Lenders, do any of the
following: (a) waive any of the conditions specified in Section 3.01, (b)
increase the Commitments of the Lenders or subject the Lenders to any additional
obligations, (c) reduce the principal of, or interest on, the Revolving Credit
Advances or any fees or other amounts payable hereunder, (d) postpone any date
fixed for any payment of principal of, or interest on, the Revolving Credit
Advances or any fees or other amounts payable hereunder, (e) change the
percentage of the Commitments or of the aggregate unpaid principal amount of the
Revolving Credit Advances, or the number of Lenders, that shall be required for
the Lenders or any of them to take any action hereunder or (f) amend this
Section 8.01; and provided further that no amendment, waiver or consent shall,
unless in writing and signed by the Agent in addition to the Lenders required
above to take such action, affect the rights or duties of the Agent under this
Agreement or any Note.
SECTION 8.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telecopier, telegraphic or
telex communication) and mailed, telecopied, telegraphed, telexed or delivered,
if to the Borrower, at its address at 521 West 57th Street, New York, New York
10019, Attention: Treasurer, with a copy to Corporate Secretary; if to any
Initial Lender, at its Domestic Lending Office specified opposite its name on
Schedule I hereto; if to any other Lender, at its Domestic Lending Office
specified in the Assumption Agreement or the Assignment and Acceptance pursuant
to which it became a Lender; and if to the Agent, at its address at Two Penns
Way, New Castle, Delaware 19720, Attention: Bank Loan Syndications Department;
or, as to the Borrower or the Agent, at such other address as shall be
designated by such party in a written notice to the other parties and, as to
each other party, at such other address as shall be designated by such party in
a written notice to the Borrower and the Agent. All such notices and
communications shall, when mailed, telecopied, telegraphed or telexed, be
effective when deposited in the mails, telecopied, delivered to the telegraph
company or confirmed by telex answerback, respectively, except that notices and
communications to the Agent pursuant to Article II, III or VII shall not be
effective until received by the Agent. Delivery by telecopier of an executed
counterpart of any amendment or waiver of any provision of this Agreement or the
Notes or of any Exhibit hereto to be executed and delivered hereunder shall be
effective as delivery of a manually executed counterpart thereof.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any
Lender or the Agent to exercise, and no delay in exercising, any right hereunder
or under any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses. (a) The Borrower agrees to pay on
demand all costs and expenses of the Agent in connection with the preparation,
execution, delivery, administration, modification and amendment of this
Agreement, the Notes and the other documents to be delivered hereunder,
including, without limitation, (A) all due diligence, syndication (including
printing, distribution and bank meetings), transportation, computer,
duplication, appraisal, consultant, and audit expenses and (B) the reasonable
fees and expenses of counsel for the Agent with respect thereto and with respect
to advising the Agent as to its rights and responsibilities under this
Agreement. The Borrower further agrees to pay on demand all costs and expenses
of the Agent and the Lenders, if any (including, without limitation, reasonable
counsel fees and expenses), in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of this Agreement, the Notes and
the other documents to be delivered hereunder, including, without limitation,
reasonable fees and expenses of counsel for the Agent and each Lender in
connection with the enforcement of rights under this Section 8.04(a), provided
that in the case of any enforcement of this Agreement, the Notes and the other
documents to be delivered hereunder, the Agent and the Lenders shall retain one
counsel at the expense of the Borrower, provided, further, that if there exists
or is reasonably likely to exist a conflict of interest that would make it
inappropriate for the same counsel to represent all the Lenders, then each
Lender with such a conflict of interest shall be entitled to retain its own
counsel at the expense of the Borrower.
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(b) The Borrower agrees to indemnify and hold harmless the Agent and
each Lender and each of their Affiliates and their officers, directors,
employees, agents and advisors (each, an "Indemnified Party") from and against
any and all claims, damages, losses, liabilities and expenses (including,
without limitation, reasonable fees and expenses of counsel) incurred by or
asserted or awarded against any Indemnified Party, in each case arising out of
or in connection with or by reason of (including, without limitation, in
connection with any investigation, litigation or proceeding or preparation of a
defense in connection therewith) (i) the Notes, this Agreement, any of the
transactions contemplated herein or the actual or proposed use of the proceeds
of the Advances or (ii) the actual or alleged presence of Hazardous Materials on
any property of the Borrower or any of its Subsidiaries or any Environmental
Action relating in any way to the Borrower or any of its Subsidiaries, except to
the extent such claim, damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful misconduct. In the
case of an investigation, litigation or other proceeding to which the indemnity
in this Section 8.04(b) applies, such indemnity shall be effective whether or
not such investigation, litigation or proceeding is brought by the Borrower, its
directors, shareholders or creditors or an Indemnified Party or any other Person
or any Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated. The Borrower also agrees not
to assert any claim for special, indirect, consequential or punitive damages
against the Agent, any Lender, any of their Affiliates, or any of their
respective directors, officers, employees, attorneys and agents, and the Agent
and each Lender agrees not to assert any claim for special, indirect,
consequential or punitive damages against the Borrower, any of its Affiliates,
or any of their respective directors, officers, employees, attorneys and agents,
on any theory of liability arising out of or otherwise relating to the Notes,
this Agreement, any of the transactions contemplated herein or the actual or
proposed use of the proceeds of the Advances.
(c) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance, LIBO Rate Advance is made by the Borrower to or for the account of
a Lender other than on the last day of the Interest Period for such Advance, as
a result of a payment or Conversion pursuant to Section 2.08(d) or (e), 2.10 or
2.12, acceleration of the maturity of the Notes pursuant to Section 6.01 or for
any other reason or by an Eligible Assignee to a Lender other than on the last
day of the Interest Period for such Advance upon an assignment of rights and
obligations under this Agreement pursuant to Section 8.07 as a result of a
demand by the Borrower pursuant to Section 8.07(a), the Borrower shall, upon
demand by such Lender (with a copy of such demand to the Agent), pay to the
Agent for the account of such Lender any amounts required to compensate such
Lender for any additional losses, costs or expenses that it may reasonably incur
as a result of such payment or Conversion, including, without limitation, any
loss (excluding loss of anticipated profits), cost or expense incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain such Advance.
(d) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
Sections 2.11, 2.14 and 8.04 shall survive the payment in full of principal,
interest and all other amounts payable hereunder and under the Notes.
SECTION 8.05. Right of Set-off. Upon (i) the occurrence and during
the continuance of any Event of Default and (ii) the making of the request or
the granting of the consent specified by Section 6.01 to authorize the Agent to
declare the Notes due and payable pursuant to the provisions of Section 6.01,
each Lender and each of its Affiliates is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Lender or such
Affiliate to or for the credit or the account of the Borrower against any and
all of the obligations of the Borrower now or hereafter existing under this
Agreement and the Note held by such Lender, whether or not such Lender shall
have made any demand under this Agreement or such Note and although such
obligations may be unmatured. Each Lender agrees promptly to notify the Borrower
after any such set-off and application, provided that the failure to give such
notice shall not affect the validity of such set-off and application. The rights
of each Lender and its Affiliates under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
that such Lender and its Affiliates may have.
SECTION 8.06. Binding Effect. This Agreement shall become effective
(other than Sections 2.01 and 2.03, which shall only become effective upon
satisfaction of the conditions precedent set forth in Section 3.01) when it
shall have been executed by the Borrower and the Agent and when the Agent shall
have been notified by each Initial Lender that such Initial Lender has executed
it and thereafter shall be binding upon and inure
35
to the benefit of the Borrower, the Agent and each Lender and their respective
successors and assigns, except that the Borrower shall not have the right to
assign its rights hereunder or any interest herein without the prior written
consent of the Lenders.
SECTION 8.07. Assignments and Participations. (a) Each Lender may
and, if demanded by the Borrower (following a demand by such Lender pursuant to
Section 2.11 or 2.14 or a notification by such Lender pursuant to Section 2.12)
upon at least five Business Days' notice to such Lender and the Agent, will
assign to one or more Persons all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Commitment, the Revolving Credit Advances owing to it and the Revolving Credit
Note or Notes held by it); provided, however, that (i) each such assignment
shall be of a constant, and not a varying, percentage of all rights and
obligations under this Agreement (other than any right to make Competitive Bid
Advances, Competitive Bid Advances owing to it and Competitive Bid Notes), (ii)
except in the case of an assignment to a Person that, immediately prior to such
assignment, was a Lender or an assignment of all of a Lender's rights and
obligations under this Agreement, the amount of the Commitment of the assigning
Lender being assigned pursuant to each such assignment (determined as of the
date of the Assignment and Acceptance with respect to such assignment) shall in
no event be less than $10,000,000 or an integral multiple of $1,000,000 in
excess thereof, (iii) each such assignment shall be to an Eligible Assignee,
(iv) each such assignment made as a result of a demand by the Borrower pursuant
to this Section 8.07(a) shall be arranged by the Borrower after consultation
with the Agent and shall be either an assignment of all of the rights and
obligations of the assigning Lender under this Agreement or an assignment of a
portion of such rights and obligations made concurrently with another such
assignment or other such assignments that together cover all of the rights and
obligations of the assigning Lender under this Agreement, (v) no Lender shall be
obligated to make any such assignment as a result of a demand by the Borrower
pursuant to this Section 8.07(a) unless and until such Lender shall have
received one or more payments from either the Borrower or one or more Eligible
Assignees in an aggregate amount at least equal to the aggregate outstanding
principal amount of the Advances owing to such Lender, together with accrued
interest thereon to the date of payment of such principal amount and all other
amounts payable to such Lender under this Agreement, and (vi) the parties to
each such assignment shall execute and deliver to the Agent, for its acceptance
and recording in the Register, an Assignment and Acceptance, together with any
Revolving Credit Note subject to such assignment and a processing and
recordation fee of $3,500. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and
Acceptance, (x) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder and (y) the Lender assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Agent, such assigning Lender 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 decisions in taking or not taking action under
this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi)
such assignee appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers and discretion under this Agreement as
are delegated to the Agent by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all of the obligations that
by the terms of this Agreement are required to be performed by it as a Lender.
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(c) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
together with any Revolving Credit Note or Notes subject to such assignment, the
Agent shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrower.
(d) The Agent shall maintain at its address referred to in Section
8.02 a copy of each Assumption Agreement and each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of the names
and addresses of the Lenders and the Commitment of, and principal amount of the
Advances owing to, each Lender from time to time (the "Register"). The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrower, the Agent and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. 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.
(e) Each Lender may sell participations to one or more banks or
other entities (other than the Borrower or any of its Affiliates) in or to all
or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment, the Advances owing to it
and any Note or Notes held by it); provided, however, that (i) such Lender's
obligations under this Agreement (including, without limitation, its Commitment
to the Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Borrower, the Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and (v) no participant
under any such participation shall have any right to approve any amendment or
waiver of any provision of this Agreement or any Note, or any consent to any
departure by the Borrower therefrom, except to the extent that such amendment,
waiver or consent would reduce the principal of, or interest on, the Notes or
any fees or other amounts payable hereunder, in each case to the extent subject
to such participation, or postpone any date fixed for any payment of principal
of, or interest on, the Notes or any fees or other amounts payable hereunder, in
each case to the extent subject to such participation.
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower; provided that, prior to any such disclosure,
the assignee or participant or proposed assignee or participant shall agree to
preserve the confidentiality of any Confidential Information relating to the
Borrower received by it from such Lender.
(g) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security interest in all or any portion of
its rights under this Agreement (including, without limitation, the Advances
owing to it and any Note or Notes held by it) in favor of any Federal Reserve
Bank in accordance with Regulation A of the Board of Governors of the Federal
Reserve System.
SECTION 8.08. Confidentiality. Neither the Agent nor any Lender
shall disclose any Confidential Information to any other Person without the
consent of the Borrower, other than (a) to the Agent's or such Lender's
Affiliates and their officers, directors, employees, agents and advisors and, as
contemplated by Section 8.07(f), to actual or prospective assignees and
participants, and then only on a confidential basis, (b) as required by any law,
rule or regulation or judicial process and (c) as requested or required by any
state, federal or foreign authority or examiner regulating banks or banking.
SECTION 8.09. Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 8.10. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of
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an executed counterpart of a signature page to this Agreement by telecopier
shall be effective as delivery of a manually executed counterpart of this
Agreement.
SECTION 8.11. Jurisdiction, Etc. (a) Each of the parties hereto
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or the Notes, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in any such New York State court or, to the extent permitted by law,
in such federal court. Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Agreement shall affect any right that any party may
otherwise have to bring any action or proceeding relating to this Agreement or
the Notes in the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the Notes
in any New York State or federal court. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
SECTION 8.12. Integration. This Agreement and the commitment letter
dated __________ __, 2001 among the Borrower, Citibank, N.A. and Salomon Smith
Barney Inc. constitute the entire contract among the parties relating to the
subject matter hereof and supersedes any and all previous arrangements and
understandings, oral or written, relating to the subject matter hereof.
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SECTION 8.13. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE AGENT
AND THE LENDERS HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE NOTES OR THE
ACTIONS OF THE AGENT OR ANY LENDER IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
INTERNATIONAL FLAVORS & FRAGRANCES INC.
By_____________________________________
Title:
CITIBANK, N.A.,
as Agent
By_____________________________________
Title:
Initial Lenders
Administrative Agent and Book Manager
Commitment
$22,000,000 CITIBANK, N.A.
By_____________________________________
Title:
Syndication Agents
$20,600,000 BANK OF TOKYO-MITSUBISHI TRUST COMPANY
By_____________________________________
Title:
$20,600,000 BANK ONE, NA (Main Office Chicago)
By_____________________________________
Title:
39
Co-Documentation Agents
$20,600,000 ABN AMRO BANK N.V.
By_____________________________________
Title:
By_____________________________________
Title:
$20,600,000 FIRST UNION NATIONAL BANK
By_____________________________________
Title:
Senior Co-Agent
$19,600,000 FLEET NATIONAL BANK
By_____________________________________
Title:
Senior Managing Agents
$18,000,000 BNP PARIBAS
By_____________________________________
Title:
By_____________________________________
Title:
$18,000,000 ING (U.S.) CAPITAL LLC
By_____________________________________
Title:
$10,000,000 INTESABCI NEW YORK BRANCH
By_____________________________________
Title:
By_____________________________________
Title:
40
$10,000,000 FORTIS (USA) FINANCE LLC
By_____________________________________
Title:
By_____________________________________
Title:
$10,000,000 THE BANK OF NEW YORK
By_____________________________________
Title:
$10,000,000 MELLON BANK, N.A.
By_____________________________________
Title:
$200,000,000 Total of the Commitments
41
SCHEDULE I
INTERNATIONAL FLAVORS & FRAGRANCES INC.
364-DAY CREDIT AGREEMENT
APPLICABLE LENDING OFFICES
- -----------------------------------------------------------------------------------------------------------------
Name of Initial Lender Domestic Lending Office Eurodollar Lending Office
- -----------------------------------------------------------------------------------------------------------------
ABN AMRO BANK N.V. 208 South LaSalle, Suite 1500 208 South LaSalle, Suite 1500
Chicago, IL 60604-1003 Chicago, IL 60604-1003
Attn: Loan Administration Attn: Loan Administration
T: 312 992-5151 T: 312 992-5151
F: 312 992-5156 F: 312 992-5156
- -----------------------------------------------------------------------------------------------------------------
THE BANK OF NEW YORK One Wall Street One Wall Street
New York, NY 10286 New York, NY 10286
Attn: Rose Leonard Attn: Rose Leonard
T: 212 635-1471 T: 212 635-1471
F: 212 635-6397/6426 F: 212 635-6397/6426
- -----------------------------------------------------------------------------------------------------------------
BANK ONE, NA
- -----------------------------------------------------------------------------------------------------------------
BANK OF TOKYO-MITSUBISHI TRUST COMPANY 1251 Avenue of the Americas 1251 Avenue of the Americas
12th Floor 12th Floor
New York, NY 10020 New York, NY 10020
Attn: Mr. Rolando Attn: Mr. Rolando
T: 212 782-5637 T: 212 782-5637
F: 212 782-5635 F: 212 782-5635
- -----------------------------------------------------------------------------------------------------------------
BNP PARIBAS
- -----------------------------------------------------------------------------------------------------------------
CITIBANK, N.A. Two Penns Way Two Penns Way
New Castle, DE 19720 New Castle, DE 19720
Attn: Meaghan McCormack Attn: Meaghan McCormack
T: 302 894-6017 T: 302 894-6017
F: 302 894-6120 F: 302 894-6120
- -----------------------------------------------------------------------------------------------------------------
FIRST UNION NATIONAL BANK 50 Main Street 50 Main Street
White Plains, NY 10606 White Plains, NY 10606
Attn: David Ring Attn: David Ring
T: 914 286-5039 T: 914 286-5039
F: 914 681-8755 F: 914 681-8755
- -----------------------------------------------------------------------------------------------------------------
FLEET NATIONAL BANK 100 Federal Street 100 Federal Street
Mail Code: 01-10-04 Mail Code: 01-10-04
Boston, MA 02110 Boston, MA 02110
Attn: Deborah Dobbins Attn: Deborah Dobbins
T: 617 434-5455 T: 617 434-5455
F: 617 434-1574 F: 617 434-1574
- -----------------------------------------------------------------------------------------------------------------
FORTIS (USA) FINANCE LLC 520 Madison Avenue 520 Madison Avenue
New York, NY 10022 New York, NY 10022
Attn: Douglas Riahi Attn: Douglas Riahi
T: 212 418-8736 T: 212 418-8736
F: 212 750-7597 F: 212 750-7597
- -----------------------------------------------------------------------------------------------------------------
ING (U.S.) CAPITAL LLC
- -----------------------------------------------------------------------------------------------------------------
INTESABCI NEW YORK BRANCH One William Street One William Street
New York, NY 10004 New York, NY 10004
Attn: Charles Dougherty Attn: Charles Dougherty
T: 212 607-3656 T: 212 607-3656
F: 212 809-2124 F: 212 809-2124
- -----------------------------------------------------------------------------------------------------------------
MELLON BANK, N.A.
- -----------------------------------------------------------------------------------------------------------------
EXHIBIT A-1 - FORM OF
REVOLVING CREDIT
PROMISSORY NOTE
U.S.$_______________ Dated: _______________, 200_
FOR VALUE RECEIVED, the undersigned, INTERNATIONAL FLAVORS & FRAGRANCES
INC., a New York corporation (the "Borrower"), HEREBY PROMISES TO PAY to the
order of __________ (the "Lender") for the account of its Applicable Lending
Office on the later of Termination Date and the date designated pursuant to
Section 2.06 of the Credit Agreement (each as defined in the Credit Agreement
referred to below) the principal sum of U.S.$[amount of the Lender's Commitment
in figures] or, if less, the aggregate principal amount of the Revolving Credit
Advances made by the Lender to the Borrower pursuant to the 364-Day Credit
Agreement dated as of September 26, 2001 among the Borrower, the Lender and
certain other lenders parties thereto, and Citibank, N.A. as Agent for the
Lender and such other lenders (as amended or modified from time to time, the
"Credit Agreement"; the terms defined therein being used herein as therein
defined) outstanding on such date.
The Borrower promises to pay interest on the unpaid principal amount of
each Revolving Credit Advance from the date of such Revolving Credit Advance
until such principal amount is paid in full, at such interest rates, and payable
at such times, as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Citibank, as Agent, at 399 Park Avenue, New York, New York
10043, in same day funds. Each Revolving Credit Advance owing to the Lender by
the Borrower pursuant to the Credit Agreement, and all payments made on account
of principal thereof, shall be recorded by the Lender and, prior to any transfer
hereof, endorsed on the grid attached hereto which is part of this Promissory
Note.
This Promissory Note is one of the Revolving Credit Notes referred to in,
and is entitled to the benefits of, the Credit Agreement. The Credit Agreement,
among other things, (i) provides for the making of Revolving Credit Advances by
the Lender to the Borrower from time to time in an aggregate amount not to
exceed at any time outstanding the U.S. dollar amount first above mentioned, the
indebtedness of the Borrower resulting from each such Revolving Credit Advance
being evidenced by this Promissory Note and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
and also for prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions therein specified.
INTERNATIONAL FLAVORS & FRAGRANCES INC.
By______________________________________
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
- -----------------------------------------------------------------------------------------
Amount of
Date Amount of Principal Paid Unpaid Principal Notation
Advance or Prepaid Balance Made By
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
2
EXHIBIT A-2 - FORM OF
COMPETITIVE BID
PROMISSORY NOTE
U.S.$_______________ Dated: _______________, 200_
FOR VALUE RECEIVED, the undersigned, INTERNATIONAL FLAVORS & FRAGRANCES
INC., a New York corporation (the "Borrower"), HEREBY PROMISES TO PAY to the
order of __________ (the "Lender") for the account of its Applicable Lending
Office (as defined in the 364-Day Credit Agreement dated as of September 26,
2001 among the Borrower, the Lender and certain other lenders parties thereto,
and Citibank, N.A., as Agent for the Lender and such other lenders (as amended
or modified from time to time, the "Credit Agreement"; the terms defined therein
being used herein as therein defined)), on _______________, 200_, the principal
amount of U.S.$_______________.
The Borrower promises to pay interest on the unpaid principal amount
hereof from the date hereof until such principal amount is paid in full, at the
interest rate and payable on the interest payment date or dates provided below:
Interest Rate: _____% per annum (calculated on the basis of a year of
_____ days for the actual number of days elapsed).
Both principal and interest are payable in lawful money of the United
States to Citibank, as agent, for the account of the Lender at the office of
Citibank at 399 Park Avenue, New York, New York 10043 in same day funds.
This Promissory Note is one of the Competitive Bid Notes referred to in,
and is entitled to the benefits of, the Credit Agreement. The Credit Agreement,
among other things, contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events.
The Borrower hereby waives presentment, demand, protest and notice of any
kind. No failure to exercise, and no delay in exercising, any rights hereunder
on the part of the holder hereof shall operate as a waiver of such rights.
This Promissory Note shall be governed by, and construed in accordance
with, the laws of the State of New York.
INTERNATIONAL FLAVORS & FRAGRANCES INC.
By_____________________________________
Title:
EXHIBIT B-1 - FORM OF NOTICE OF
REVOLVING CREDIT BORROWING
Citibank, N.A., as Agent
for the Lenders parties
to the Credit Agreement
referred to below
Two Penns Way
New Castle, Delaware 19720
[Date]
Attention: Bank Loan Syndications Department
Ladies and Gentlemen:
The undersigned, International Flavors & Fragrances Inc., refers to the
364-Day Credit Agreement, dated as of September 26, 2001 (as amended or modified
from time to time, the "Credit Agreement", the terms defined therein being used
herein as therein defined), among the undersigned, certain Lenders parties
thereto and Citibank, N.A., as Agent for said Lenders, and hereby gives you
notice, irrevocably, pursuant to Section 2.02 of the Credit Agreement that the
undersigned hereby requests a Revolving Credit Borrowing under the Credit
Agreement, and in that connection sets forth below the information relating to
such Revolving Credit Borrowing (the "Proposed Revolving Credit Borrowing") as
required by Section 2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Revolving Credit Borrowing is
_______________, 200_.
(ii) The Type of Advances comprising the Proposed Revolving Credit
Borrowing is [Base Rate Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed Revolving Credit Borrowing is
$_______________.
[(iv) The initial Interest Period for each Eurodollar Rate Advance made as
part of the Proposed Revolving Credit Borrowing is _____ month[s].]
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the Proposed Revolving Credit
Borrowing:
(A) the representations and warranties contained in Section 4.01 of the
Credit Agreement (except the representations set forth in the last sentence of
subsection (e) thereof and in subsection (f)(i) thereof) are correct, before and
after giving effect to the Proposed Revolving Credit Borrowing and to the
application of the proceeds therefrom, as though made on and as of such date;
and
(B) no event has occurred and is continuing, or would result from such
Proposed Revolving Credit Borrowing or from the application of the proceeds
therefrom, that constitutes a Default.
Very truly yours,
INTERNATIONAL FLAVORS & FRAGRANCES INC.
By______________________________________
Title:
EXHIBIT B-2 - FORM OF NOTICE OF
COMPETITIVE BID BORROWING
Citibank, N.A., as Agent
for the Lenders parties
to the Credit Agreement
referred to below
Two Penns Way
New Castle, Delaware 19720
[Date]
Attention: Bank Loan Syndications Department
Ladies and Gentlemen:
The undersigned, International Flavors & Fragrances Inc., refers to the
364-Day Credit Agreement, dated as of September 26, 2001 (as amended or modified
from time to time, the "Credit Agreement", the terms defined therein being used
herein as therein defined), among the undersigned, certain Lenders parties
thereto and Citibank, N.A., as Agent for said Lenders, and hereby gives you
notice, irrevocably, pursuant to Section 2.03 of the Credit Agreement that the
undersigned hereby requests a Competitive Bid Borrowing under the Credit
Agreement, and in that connection sets forth the terms on which such Competitive
Bid Borrowing (the "Proposed Competitive Bid Borrowing") is requested to be
made:
(A) Date of Competitive Bid Borrowing ________________________
(B) Amount of Competitive Bid Borrowing ________________________
(C) [Maturity Date] [Interest Period] ________________________
(D) Interest Rate Basis ________________________
(E) Interest Payment Date(s) ________________________
(F) ___________________ ________________________
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the Proposed Competitive Bid
Borrowing:
(a) the representations and warranties contained in Section 4.01 are
correct, before and after giving effect to the Proposed Competitive Bid
Borrowing and to the application of the proceeds therefrom, as though made on
and as of such date;
(b) no event has occurred and is continuing, or would result from the
Proposed Competitive Bid Borrowing or from the application of the proceeds
therefrom, that constitutes a Default;
(c) no event has occurred and no circumstance exists as a result of which
the information concerning the undersigned that has been provided to the Agent
and each Lender by the undersigned in connection with the Credit Agreement would
include an untrue statement of a material fact or omit to state any material
fact or any fact necessary to make the statements contained therein, in the
light of the circumstances under which they were made, not misleading; and
(d) the aggregate amount of the Proposed Competitive Bid Borrowing and all
other Borrowings to be made on the same day under the Credit Agreement is within
the aggregate amount of the unused Commitments of the Lenders.
The undersigned hereby confirms that the Proposed Competitive Bid
Borrowing is to be made available to it in accordance with Section 2.03(a)(v) of
the Credit Agreement.
Very truly yours,
INTERNATIONAL FLAVORS & FRAGRANCES INC.
By ___________________________________
Title:
2
EXHIBIT C - FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the 364-Day Credit Agreement dated as of September
26, 2001 (as amended or modified from time to time, the "Credit Agreement")
among International Flavors & Fragrances Inc., a New York corporation (the
"Borrower"), the Lenders (as defined in the Credit Agreement) and Citibank,
N.A., as agent for the Lenders (the "Agent"). Terms defined in the Credit
Agreement are used herein with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule I hereto agree
as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, an interest in and to the
Assignor's rights and obligations under the Credit Agreement as of the date
hereof (other than in respect of Competitive Bid Advances and Competitive Bid
Notes) equal to the percentage interest specified on Schedule 1 hereto of all
outstanding rights and obligations under the Credit Agreement (other than in
respect of Competitive Bid Advances and Competitive Bid Notes). After giving
effect to such sale and assignment, the Assignee's Commitment and the amount of
the Revolving Credit Advances owing to the Assignee will be as set forth on
Schedule 1 hereto.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under the
Credit Agreement or any other instrument or document furnished pursuant thereto;
and (iv) attaches the Revolving Credit Note, if any held by the Assignor.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 4.01 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor 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 decisions in taking or not taking action under the Credit
Agreement; (iii) confirms that it is an Eligible Assignee; (iv) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement as are delegated to the
Agent by the terms thereof, together with such powers and discretion as are
reasonably incidental thereto; (v) agrees that it will perform in accordance
with their terms all of the obligations that by the terms of the Credit
Agreement are required to be performed by it as a Lender; and (vi) attaches any
U.S. Internal Revenue Service forms required under Section 2.14 of the Credit
Agreement.
4. Following the execution of this Assignment and Acceptance, it will be
delivered to the Agent for acceptance and recording by the Agent. The effective
date for this Assignment and Acceptance (the "Effective Date") shall be the date
of acceptance hereof by the Agent, unless otherwise specified on Schedule 1
hereto.
5. Upon such acceptance and recording by the Agent, as of the Effective
Date, (i) the Assignee shall be a party to the Credit Agreement and, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement and
the Revolving Credit Notes in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and facility
fees with respect thereto) to the Assignee. The Assignor and Assignee shall make
all appropriate adjustments in payments under the
Credit Agreement and the Revolving Credit Notes for periods prior to the
Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule 1
to this Assignment and Acceptance to be executed by their officers thereunto
duly authorized as of the date specified thereon.
2
Schedule 1
to
Assignment and Acceptance
Percentage interest assigned: _____%
Assignee's Commitment: $__________
Aggregate outstanding principal amount of Revolving Credit Advances assigned: $__________
Principal amount of Revolving Credit Note payable to Assignee: $__________
Principal amount of Revolving Credit Note payable to Assignor: $__________
Effective Date*: _______________, 200_
[NAME OF ASSIGNOR], as Assignor
By_______________________________
Title:
Dated: _______________, 200_
[NAME OF ASSIGNEE], as Assignee
By_______________________________
Title:
Dated: _______________, 200_
Domestic Lending Office:
[Address]
Eurodollar Lending Office:
[Address]
Accepted [and Approved] this
__________ day of _______________, 200_
CITIBANK, N.A., as Agent
By_______________________________
Title:
[Approved this __________ day
- ----------
* This date should be no earlier than five Business Days after the delivery
of this Assignment and Acceptance to the Agent.
3
of _______________, 200_
INTERNATIONAL FLAVORS & FRAGRANCES INC.
By_____________________________________]*
Title:
- ----------
* Required if the Assignee is an Eligible Assignee solely by reason of
clause (iii) of the definition of "Eligible Assignee".
4
EXHIBIT D - FORM OF
OPINION OF COUNSEL
FOR THE BORROWER
Exhibit 10(b)
EXECUTION COPY
U.S. $300,000,000
FIVE YEAR CREDIT AGREEMENT
Dated as of September 26, 2001
Among
INTERNATIONAL FLAVORS & FRAGRANCES INC.
as Borrower
and
THE INITIAL LENDERS NAMED HEREIN
as Initial Lenders
and
CITIBANK, N.A.
as Administrative Agent
and
SALOMON SMITH BARNEY INC.
as Arranger
TABLE OF CONTENTS
ARTICLE I 1
SECTION 1.01. Certain Defined Terms 1
SECTION 1.02. Computation of Time Periods 10
SECTION 1.03. Accounting Terms 10
ARTICLE II
SECTION 2.01. The Revolving Credit Advances 11
SECTION 2.02. Making the Revolving Credit Advances 11
SECTION 2.03. The Competitive Bid Advances 12
SECTION 2.04. Fees 14
SECTION 2.05. Optional Termination or Reduction of the Commitments 15
SECTION 2.06. Repayment of Revolving Credit Advances 15
SECTION 2.07. Interest on Revolving Credit Advances 15
SECTION 2.08. Interest Rate Determination 15
SECTION 2.09. Optional Conversion of Revolving Credit Advances 16
SECTION 2.10. Prepayments of Revolving Credit Advances 16
SECTION 2.11. Increased Costs 17
SECTION 2.12. Illegality 17
SECTION 2.13. Payments and Computations 17
SECTION 2.14. Taxes 18
SECTION 2.15. Sharing of Payments, Etc. 19
SECTION 2.16. Evidence of Debt 20
SECTION 2.17. Use of Proceeds 20
SECTION 2.18. Increase in the Aggregate Commitments 20
ARTICLE III
i
SECTION 3.01. Conditions Precedent to Effectiveness of
Sections 2.01 and 2.03 21
SECTION 3.02. Conditions Precedent to Each Revolving Credit
Borrowing and Commitment Increase. 23
SECTION 3.03. Conditions Precedent to Each Competitive
Bid Borrowing 23
SECTION 3.04. Determinations Under Section 3.01 23
ARTICLE IV
SECTION 4.01. Representations and Warranties of the Borrower 24
ARTICLE V
SECTION 5.01. Affirmative Covenants 25
SECTION 5.02. Negative Covenants 27
SECTION 5.03. Financial Covenant 28
ARTICLE VI
SECTION 6.01. Events of Default 28
ARTICLE VII
SECTION 7.01. Authorization and Action 30
SECTION 7.02. Agent's Reliance, Etc. 30
SECTION 7.03. Citibank and Affiliates 30
SECTION 7.04. Lender Credit Decision 30
SECTION 7.05. Indemnification 31
SECTION 7.06. Successor Agent 31
SECTION 7.07. Other Agents. 31
ARTICLE VIII
SECTION 8.01. Amendments, Etc. 31
SECTION 8.02. Notices, Etc. 32
SECTION 8.03. No Waiver; Remedies 32
SECTION 8.04. Costs and Expenses 32
ii
SECTION 8.05. Right of Set-off 33
SECTION 8.06. Binding Effect 33
SECTION 8.07. Assignments and Participations 33
SECTION 8.08. Confidentiality 35
SECTION 8.09. Governing Law 35
SECTION 8.10. Execution in Counterparts 35
SECTION 8.11. Jurisdiction, Etc. 35
SECTION 8.12. Integration 36
SECTION 8.13. WAIVER OF JURY TRIAL 37
iii
Schedules
Schedule I - List of Applicable Lending
Schedule 5.02(a) - Existing Liens
Exhibits
Exhibit A-1 - Form of Revolving Credit Note
Exhibit A-2 - Form of Competitive Bid Note
Exhibit B-1 - Form of Notice of Revolving Credit Borrowing
Exhibit B-2 - Form of Notice of Competitive Bid Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Opinion of Counsel for the Borrower
iv
FIVE YEAR CREDIT AGREEMENT
Dated as of September 26, 2001
INTERNATIONAL FLAVORS & FRAGRANCES INC., a New York corporation (the
"Borrower"), the banks, financial institutions and other institutional lenders
(the "Initial Lenders") listed on the signature pages hereof, and CITIBANK, N.A.
("Citibank"), as administrative agent (the "Agent"), and SALOMON SMITH BARNEY
INC., as arranger, for the Lenders (as hereinafter defined), agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Advance" means a Revolving Credit Advance or a Competitive Bid
Advance.
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with
such Person or is a director or officer of such Person. For purposes of
this definition, the term "control" (including the terms "controlling",
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 5% or more of the
Voting Stock of such Person or to direct or cause the direction of the
management and policies of such Person, whether through the ownership of
Voting Stock, by contract or otherwise.
"Agent's Account" means the account of the Agent maintained by the
Agent at Citibank at its office at 399 Park Avenue, New York, New York
10043, Account No. 36852248, Attention: Melissa Hamilton.
"Applicable Lending Office" means, with respect to each Lender, such
Lender's Domestic Lending Office in the case of a Base Rate Advance and
such Lender's Eurodollar Lending Office in the case of a Eurodollar Rate
Advance and, in the case of a Competitive Bid Advance, the office of such
Lender notified by such Lender to the Agent as its Applicable Lending
Office with respect to such Competitive Bid Advance.
"Applicable Margin" means (a) for Base Rate Advances, 0% per annum
and (b) for Eurodollar Rate Advances as of any date, a percentage per
annum determined by reference to the Public Debt Rating in effect on such
date as set forth below:
------------------------------------------------
Public Debt Rating Applicable Margin for
S&P/Moody's Eurodollar Rate Advances
------------------------------------------------
Level 1
A+/A1or above 0.170%
------------------------------------------------
Level 2
A/A2 0.235%
------------------------------------------------
Level 3
A-/A3 0.290%
------------------------------------------------
Level 4
BBB+/Baa1 0.375%
------------------------------------------------
------------------------------------------------
Level 5
BBB/Baa2 0.600%
------------------------------------------------
Level 6
Lower than Level 5 0.750%
------------------------------------------------
"Applicable Percentage" means, as of any date, a percentage per
annum determined by reference to the Public Debt Rating in effect on such
date as set forth below:
---------------------------------------------
Public Debt Rating Applicable
S&P/Moody's Percentage
---------------------------------------------
Level 1
A+/A1or above 0.080%
---------------------------------------------
Level 2
A/A2 0.090%
---------------------------------------------
Level 3
A-/A3 0.110%
---------------------------------------------
Level 4
BBB+/Baa1 0.125%
---------------------------------------------
Level 5
BBB/Baa2 0.150%
---------------------------------------------
Level 6
Lower than Level 5 0.250%
---------------------------------------------
"Applicable Utilization Fee" means, as of any date that the
aggregate Advances exceed 33% of the aggregate Commitments, a percentage
per annum determined by reference to the Public Debt Rating in effect on
such date as set forth below:
---------------------------------------------
Public Debt Rating Applicable
S&P/Moody's Utilization Fee
---------------------------------------------
Level 1
A+/A1or above 0.100%
---------------------------------------------
Level 2
A/A2 0.100%
---------------------------------------------
Level 3
A-/A3 0.100%
---------------------------------------------
Level 4
BBB+/Baa1 0.125%
---------------------------------------------
Level 5
BBB/Baa2 0.250%
---------------------------------------------
Level 6
Lower than Level 5 0.250%
---------------------------------------------
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the
Agent, in substantially the form of Exhibit C hereto.
"Assuming Lender" has the meaning specified in Section 2.18(d).
"Assumption Agreement" has the meaning specified in Section
2.18(d)(ii).
2
"Base Rate" means a fluctuating interest rate per annum in effect
from time to time, which rate per annum shall at all times be equal to the
highest of:
(a) the rate of interest announced publicly by Citibank in New
York, New York, from time to time, as Citibank's base rate;
(b) the sum (adjusted to the nearest 1/4 of 1% or, if there is
no nearest 1/4 of 1%, to the next higher 1/4 of 1%) of (i) 1/2 of 1%
per annum, plus (ii) the rate obtained by dividing (A) the latest
three-week moving average of secondary market morning offering rates
in the United States for three-month certificates of deposit of
major United States money market banks, such three-week moving
average (adjusted to the basis of a year of 360 days) being
determined weekly on each Monday (or, if such day is not a Business
Day, on the next succeeding Business Day) for the three-week period
ending on the previous Friday by Citibank on the basis of such rates
reported by certificate of deposit dealers to and published by the
Federal Reserve Bank of New York or, if such publication shall be
suspended or terminated, on the basis of quotations for such rates
received by Citibank from three New York certificate of deposit
dealers of recognized standing selected by Citibank, by (B) a
percentage equal to 100% minus the average of the daily percentages
specified during such three-week period by the Board of Governors of
the Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including, but not limited to, any
emergency, supplemental or other marginal reserve requirement) for
Citibank with respect to liabilities consisting of or including
(among other liabilities) three-month U.S. dollar non-personal time
deposits in the United States, plus (iii) the average during such
three-week period of the annual assessment rates estimated by
Citibank for determining the then current annual assessment payable
by Citibank to the Federal Deposit Insurance Corporation (or any
successor) for insuring U.S. dollar deposits of Citibank in the
United States; and
(c) 1/2 of one percent per annum above the Federal Funds Rate.
"Base Rate Advance" means a Revolving Credit Advance that bears
interest as provided in Section 2.07(a)(i).
"Borrowing" means a Revolving Credit Borrowing or a Competitive Bid
Borrowing.
"Business Day" means a day of the year on which banks are not
required or authorized by law to close in New York City and, if the
applicable Business Day relates to any Eurodollar Rate Advances or LIBO
Rate Advances, on which dealings are carried on in the London interbank
market.
"Commitment" means as to any Lender (a) the amount set forth
opposite such Lender's name on the signature pages hereof, (b) if such
Lender has become a Lender hereunder pursuant to an Assumption Agreement,
the amount set forth in such Assumption Agreement or (c) if such Lender
has entered into any Assignment and Acceptance, the amount set forth for
such Lender in the Register maintained by the Agent pursuant to Section
8.07(d) or increased pursuant to Section 2.18.
"Commitment Date" has the meaning specified in Section 2.18(b).
"Commitment Increase" has the meaning specified in Section 2.18(a).
"Competitive Bid Advance" means an advance by a Lender to the
Borrower as part of a Competitive Bid Borrowing resulting from the
competitive bidding procedure described in Section 2.03 and refers to a
Fixed Rate Advance or a LIBO Rate Advance.
"Competitive Bid Borrowing" means a borrowing consisting of
simultaneous Competitive Bid Advances from each of the Lenders whose offer
to make one or more Competitive Bid Advances as part of such borrowing has
been accepted under the competitive bidding procedure described in Section
2.03.
3
"Competitive Bid Note" means a promissory note of the Borrower
payable to the order of any Lender, in substantially the form of Exhibit
A-2 hereto, evidencing the indebtedness of the Borrower to such Lender
resulting from a Competitive Bid Advance made by such Lender.
"Competitive Bid Reduction" has the meaning specified in Section
2.01.
"Confidential Information" means information that the Borrower
furnishes to the Agent or any Lender, but does not include any such
information that is or becomes generally available to the public or that
is or becomes available to the Agent or such Lender from a source other
than the Borrower.
"Consolidated" refers to the consolidation of accounts in accordance
with GAAP.
"Convert", "Conversion" and "Converted" each refers to a conversion
of Revolving Credit Advances of one Type into Revolving Credit Advances of
the other Type pursuant to Section 2.08 or 2.09.
"Debt" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of
such Person for the deferred purchase price of property or services (other
than trade payables not overdue by more than 60 days incurred in the
ordinary course of such Person's business), (c) all obligations of such
Person evidenced by notes, bonds, debentures or other similar instruments,
(d) all obligations of such Person created or arising under any
conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of
the seller or lender under such agreement in the event of default are
limited to repossession or sale of such property), (e) all obligations of
such Person as lessee under leases that have been or should be, in
accordance with GAAP, recorded as capital leases, (f) all obligations,
contingent or otherwise, of such Person in respect of acceptances, letters
of credit or similar extensions of credit, (g) all obligations of such
Person in respect of Hedge Agreements, (h) all Debt of others referred to
in clauses (a) through (g) above or clause (i) below guaranteed directly
or indirectly in any manner by such Person, or in effect guaranteed
directly or indirectly by such Person through an agreement (1) to pay or
purchase such Debt or to advance or supply funds for the payment or
purchase of such Debt, (2) to purchase, sell or lease (as lessee or
lessor) property, or to purchase or sell services, primarily for the
purpose of enabling the debtor to make payment of such Debt or to assure
the holder of such Debt against loss, (3) to supply funds to or in any
other manner invest in the debtor (including any agreement to pay for
property or services irrespective of whether such property is received or
such services are rendered) or (4) otherwise to assure a creditor against
loss, and (i) all Debt referred to in clauses (a) through (h) above
secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on property
(including, without limitation, accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable for
the payment of such Debt.
"Debt for Borrowed Money" of a Person means all items that, in
accordance with GAAP, would be classified as indebtedness on a
Consolidated balance sheet of such Person.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite
its name on Schedule I hereto or in the Assumption Agreement or the
Assignment and Acceptance pursuant to which it became a Lender, or such
other office of such Lender as such Lender may from time to time specify
to the Borrower and the Agent.
"EBITDA" means, for any period, net income (or net loss) plus the
sum of (a) interest expense, (b) income tax expense, (c) depreciation
expense, (d) amortization expense and all other non-cash charges and (e)
extraordinary or unusual losses deducted in calculating net income less
extraordinary or unusual gains added in calculating net income, in each
case determined in accordance with GAAP for such period.
4
"Effective Date" has the meaning specified in Section 3.01.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a
Lender; and (iii) any other Person approved by the Agent and, unless an
Event of Default has occurred and is continuing at the time any assignment
is effected in accordance with Section 8.07, the Borrower, such approval
not to be unreasonably withheld or delayed; provided, however, that
neither the Borrower nor an Affiliate of the Borrower shall qualify as an
Eligible Assignee.
"Environmental Action" means any action, suit, demand, demand
letter, claim, notice of non-compliance or violation, notice of liability
or potential liability, investigation, proceeding, consent order or
consent agreement relating in any way to any Environmental Law,
Environmental Permit or Hazardous Materials or arising from alleged injury
or threat of injury to health, safety or the environment, including,
without limitation, (a) by any governmental or regulatory authority for
enforcement, cleanup, removal, response, remedial or other actions or
damages and (b) by any governmental or regulatory authority or any third
party for damages, contribution, indemnification, cost recovery,
compensation or injunctive relief.
"Environmental Law" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, judgment, decree
or judicial or agency interpretation, policy or guidance relating to
pollution or protection of the environment, health, safety or natural
resources, including, without limitation, those relating to the use,
handling, transportation, treatment, storage, disposal, release or
discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental
Law.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV of
ERISA is a member of the Borrower's controlled group, or under common
control with the Borrower, within the meaning of Section 414 of the
Internal Revenue Code.
"ERISA Event" means (a) (i) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan
unless the 30-day notice requirement with respect to such event has been
waived by the PBGC, or (ii) the requirements of subsection (1) of Section
4043(b) of ERISA (without regard to subsection (2) of such Section) are
met with a contributing sponsor, as defined in Section 4001(a)(13) of
ERISA, of a Plan, and an event described in paragraph (9), (10), (11),
(12) or (13) of Section 4043(c) of ERISA is reasonably expected to occur
with respect to such Plan within the following 30 days; (b) the
application for a minimum funding waiver with respect to a Plan; (c) the
provision by the administrator of any Plan of a notice of intent to
terminate such Plan pursuant to Section 4041(a)(2) of ERISA (including any
such notice with respect to a plan amendment referred to in Section
4041(e) of ERISA); (d) the cessation of operations at a facility of the
Borrower or any ERISA Affiliate in the circumstances described in Section
4062(e) of ERISA; (e) the withdrawal by the Borrower or any ERISA
Affiliate from a Multiple Employer Plan during a plan year for which it
was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (f)
the conditions for the imposition of a lien under Section 302(f) of ERISA
shall have been met with respect to any Plan; (g) the adoption of an
amendment to a Plan requiring the provision of security to such Plan
pursuant to Section 307 of ERISA; or (h) the institution by the PBGC of
proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition described in Section 4042 of ERISA
that constitutes grounds for the termination of, or the appointment of a
trustee to administer, a Plan.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as
in effect from time to time.
5
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office"
opposite its name on Schedule I hereto or in the Assumption Agreement or
the Assignment and Acceptance pursuant to which it became a Lender (or, if
no such office is specified, its Domestic Lending Office), or such other
office of such Lender as such Lender may from time to time specify to the
Borrower and the Agent.
"Eurodollar Rate" means, for any Interest Period for each Eurodollar
Rate Advance comprising part of the same Revolving Credit Borrowing, an
interest rate per annum equal to the rate per annum obtained by dividing
(a) the rate per annum (rounded upward to the nearest whole multiple of
1/16 of 1% per annum) appearing on Telerate Markets Page 3750 (or any
successor page) as the London interbank offered rate for deposits in U.S.
dollars at approximately 11:00 A.M. (London time) two Business Days prior
to the first day of such Interest Period for a term comparable to such
Interest Period or, if for any reason such rate is not available, the
average (rounded upward to the nearest whole multiple of 1/16 of 1% per
annum, if such average is not such a multiple) of the rate per annum at
which deposits in U.S. dollars are offered by the principal office of each
of the Reference Banks in London, England to prime banks in the London
interbank market at 11:00 A.M. (London time) two Business Days before the
first day of such Interest Period in an amount substantially equal to such
Reference Bank's Eurodollar Rate Advance comprising part of such Revolving
Credit Borrowing to be outstanding during such Interest Period and for a
period equal to such Interest Period by (b) a percentage equal to 100%
minus the Eurodollar Rate Reserve Percentage for such Interest Period. If
the Telerate Markets Page 3750 (or any successor page) is unavailable, the
Eurodollar Rate for any Interest Period for each Eurodollar Rate Advance
comprising part of the same Revolving Credit Borrowing shall be determined
by the Agent on the basis of applicable rates furnished to and received by
the Agent from the Reference Banks two Business Days before the first day
of such Interest Period, subject, however, to the provisions of Section
2.08.
"Eurodollar Rate Advance" means a Revolving Credit Advance that
bears interest as provided in Section 2.07(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest Period for all
Eurodollar Rate Advances or LIBO Rate Advances comprising part of the same
Borrowing means the reserve percentage applicable two Business Days before
the first day of such Interest Period under regulations issued from time
to time by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System in New York
City with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the interest rate
on Eurodollar Rate Advances or LIBO Rate Advances is determined) having a
term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum 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 that is a Business Day, the
average of the quotations for such day on such transactions received by
the Agent from three Federal funds brokers of recognized standing selected
by it.
"Fixed Rate Advances" has the meaning specified in Section
2.03(a)(i).
"Founder" means (a) each Person who is a beneficial owner (within
the meaning of Rule 13d-3 of the Securities and Exchange Commission under
the Securities Exchange Act of 1934) of 20% or more of the outstanding
shares of Voting Stock of the Borrower on the date hereof or any Person
that is or becomes a fiduciary of any Person who is a beneficial owner of
(or any Person for whose account were held)
6
outstanding shares of Voting Stock of the Borrower on the date hereof (in
any such case, an "Existing Shareholder"), including any group that is
comprised solely of Existing Shareholders and (b) any such Existing
Shareholder or group comprised solely of Existing Shareholders who shall
become the beneficial owner of 20% or more of the outstanding shares of
Voting Stock of the Borrower solely as a result of an acquisition by the
Borrower of shares of its Voting Stock, in each case until such time as
the Persons or group described in clause (a) or (b) above shall become the
beneficial owner (other than by means of a stock dividend, stock split,
gift or inheritance or receipt or exercise of, or accrual of any right to
exercise, any stock options of shares of stock granted by the Borrower) of
any additional shares of Voting Stock of the Borrower. In addition, the
Borrower, any wholly-owned Subsidiary of the Borrower and any employee
stock ownership or other employee benefit plan of the Borrower or a
wholly-owned Subsidiary of the Borrower shall be a "Founder".
"GAAP" has the meaning specified in Section 1.03.
"Hazardous Materials" means (a) petroleum and petroleum products,
byproducts or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas and
(b) any other chemicals, materials or substances designated, classified or
regulated as hazardous or toxic or as a pollutant or contaminant under any
Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other similar
agreements.
"Increase Date" has the meaning specified in Section 2.18(a).
"Increasing Lender" has the meaning specified in Section 2.18(b).
"Information Memorandum" means the information memorandum dated
__________, 2001 used by the Agent in connection with the syndication of
the Commitments.
"Interest Period" means, for each Eurodollar Rate Advance comprising
part of the same Revolving Credit Borrowing and each LIBO Rate Advance
comprising part of the same Competitive Bid Borrowing, the period
commencing on the date of such Eurodollar Rate Advance or LIBO Rate
Advance or the date of the Conversion of any Base Rate Advance into such
Eurodollar Rate Advance and ending on the last day of the period selected
by the Borrower pursuant to the provisions below and, thereafter, with
respect to Eurodollar Rate Advances, each subsequent period commencing on
the last day of the immediately preceding Interest Period and ending on
the last day of the period selected by the Borrower pursuant to the
provisions below. The duration of each such Interest Period shall be one,
two, three or six months, as the Borrower may, upon notice received by the
Agent not later than 11:00 A.M. (New York City time) on the third Business
Day prior to the first day of such Interest Period, select; provided,
however, that:
(i) the Borrower may not select any Interest Period that ends
after the Termination Date;
(ii) Interest Periods commencing on the same date for
Eurodollar Rate Advances comprising part of the same Revolving
Credit Borrowing or for LIBO Rate Advances comprising part of the
same Competitive Bid Borrowing shall be of the same duration;
(iii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next
succeeding Business Day, provided, however, that, if such extension
would cause the last day of such Interest Period to occur in the
next following calendar month, the last day of such Interest Period
shall occur on the next preceding Business Day; and
7
(iv) whenever the first day of any Interest Period occurs on a
day of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months
in such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"Lenders" means the Initial Lenders, each Assuming Lender that shall
become a party hereto pursuant to Section 2.18 and each Person that shall
become a party hereto pursuant to Section 8.07.
"LIBO Rate" means, for any Interest Period for all LIBO Rate
Advances comprising part of the same Competitive Bid Borrowing, an
interest rate per annum equal to the rate per annum obtained by dividing
(a) the rate per annum (rounded upward to the nearest whole multiple of
1/16 of 1% per annum) appearing on Telerate Markets Page 3750 (or any
successor page) as the London interbank offered rate for deposits in U.S.
dollars at approximately 11:00 A.M. (London time) two Business Days prior
to the first day of such Interest Period for a term comparable to such
Interest Period or, if for any reason such rate is not available, the
average (rounded upward to the nearest whole multiple of 1/16 of 1% per
annum, if such average is not such a multiple) of the rate per annum at
which deposits in U.S. dollars offered by the principal office of each of
the Reference Banks in London, England to prime banks in the London
interbank market at 11:00 A.M. (London time) two Business Days before the
first day of such Interest Period in an amount substantially equal to the
amount that would be the Reference Banks' respective ratable shares of
such Borrowing if such Borrowing were to be a Revolving Credit Borrowing
to be outstanding during such Interest Period and for a period equal to
such Interest Period by (b) a percentage equal to 100% minus the
Eurodollar Rate Reserve Percentage for such Interest Period. If the
Telerate Markets Page 3750 (or any successor page) is unavailable, the
LIBO Rate for any Interest Period for each LIBO Rate Advance comprising
part of the same Competitive Bid Borrowing shall be determined by the
Agent on the basis of applicable rates furnished to and received by the
Agent from the Reference Banks two Business Days before the first day of
such Interest Period, subject, however, to the provisions of Section 2.08.
"LIBO Rate Advances" means a Competitive Bid Advance bearing
interest based on the LIBO Rate.
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on
title to real property.
"Material Adverse Change" means any material adverse change in the
business, condition (financial or otherwise) or results of operations of
the Borrower and its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, condition (financial or otherwise) or results of operations of
the Borrower and its Subsidiaries taken as a whole, (b) the rights and
remedies of the Agent or any Lender under this Agreement or any Note or
(c) the ability of the Borrower to perform its obligations under this
Agreement or any Note.
"Moody's" means Moody's Investors Service, Inc., or any successor by
merger or change of name which is a nationally recognized rating agency.
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate
is making or accruing an obligation to make contributions, or has within
any of the preceding five plan years made or accrued an obligation to make
contributions.
8
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Borrower or any ERISA Affiliate and at least one Person other than the
Borrower and the ERISA Affiliates or (b) was so maintained and in respect
of which the Borrower or any ERISA Affiliate could have liability under
Section 4064 or 4069 of ERISA in the event such plan has been or were to
be terminated.
"Note" means a Revolving Credit Note or a Competitive Bid Note.
"Notice of Revolving Credit Borrowing" has the meaning specified in
Section 2.02(a).
"Notice of Competitive Bid Borrowing" has the meaning specified in
Section 2.03(a).
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"Permitted Liens" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall
have been commenced: (a) Liens for taxes, assessments and governmental
charges or levies to the extent not required to be paid under Section
5.01(b) hereof; (b) Liens imposed by law, such as materialmen's,
mechanics', carriers', workmen's and repairmen's Liens and other similar
Liens arising in the ordinary course of business securing obligations that
are not overdue for a period of more than 30 days; (c) pledges or deposits
to secure obligations under workers' compensation laws or similar
legislation or to secure public or statutory obligations; and (d)
easements, rights of way and other encumbrances on title to real property
that do not render title to the property encumbered thereby unmarketable
or materially adversely affect the use of such property for its present
purposes.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association,
joint venture, limited liability company or other entity, or a government
or any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Public Debt Rating" means, as of any date, the lowest rating that
has been most recently announced by either S&P or Moody's, as the case may
be, for any class of non-credit enhanced long-term senior unsecured debt
issued by the Borrower. For purposes of the foregoing, (a) if only one of
S&P and Moody's shall have in effect a Public Debt Rating, the Applicable
Margin, the Applicable Percentage and the Applicable Utilization Fee shall
be determined by reference to the available rating; (b) if neither S&P nor
Moody's shall have in effect a Public Debt Rating, the Applicable Margin,
the Applicable Percentage and the Applicable Utilization Fee will be set
in accordance with Level 5 under the definition of "Applicable Margin",
"Applicable Percentage" or "Applicable Utilization Fee", as the case may
be; (c) if the ratings established by S&P and Moody's shall fall within
different levels, the Applicable Margin, the Applicable Percentage and the
Applicable Utilization Fee shall be based upon the higher rating, except
that, in the event that the lower of such ratings is more than one level
below the higher of such ratings, the Applicable Margin, the Applicable
Percentage and the Applicable Utilization Fee shall be based upon the
level immediately above the lower of such ratings; (d) if any rating
established by S&P or Moody's shall be changed, such change shall be
effective as of the date on which such change is first announced publicly
by the rating agency making such change; and (e) if S&P or Moody's shall
change the basis on which ratings are established, each reference to the
Public Debt Rating announced by S&P or Moody's, as the case may be, shall
refer to the then equivalent rating by S&P or Moody's, as the case may be.
"Reference Banks" means Citibank and First Union National Bank.
"Register" has the meaning specified in Section 8.07(d).
9
"Required Lenders" means at any time Lenders owed at least a
majority in interest of the then aggregate unpaid principal amount of the
Revolving Credit Advances owing to Lenders, or, if no such principal
amount is then outstanding, Lenders having at least a majority in interest
of the Commitments.
"Revolving Credit Advance" means an advance by a Lender to the
Borrower as part of a Revolving Credit Borrowing and refers to a Base Rate
Advance or a Eurodollar Rate Advance (each of which shall be a "Type" of
Revolving Credit Advance).
"Revolving Credit Borrowing" means a borrowing consisting of
simultaneous Revolving Credit Advances of the same Type made by each of
the Lenders pursuant to Section 2.01.
"Revolving Credit Note" means a promissory note of the Borrower
payable to the order of any Lender, delivered pursuant to a request made
under Section 2.16 in substantially the form of Exhibit A-1 hereto,
evidencing the aggregate indebtedness of the Borrower to such Lender
resulting from the Revolving Credit Advances made by such Lender.
"S&P" means Standard & Poor's, a division of The McGraw-Hill
Companies, Inc., or any successor by merger or change of name which is a
nationally recognized rating agency
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Borrower or any ERISA Affiliate and no Person other than the Borrower and
the ERISA Affiliates or (b) was so maintained and in respect of which the
Borrower or any ERISA Affiliate could have liability under Section 4069 of
ERISA in the event such plan has been or were to be terminated.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which)
more than 50% of (a) the issued and outstanding capital stock having
ordinary voting power to elect a majority of the Board of Directors of
such corporation (irrespective of whether at the time capital stock of any
other class or classes of such corporation shall or might have voting
power upon the occurrence of any contingency), (b) the interest in the
capital or profits of such limited liability company, partnership or joint
venture or (c) the beneficial interest in such trust or estate is at the
time directly or indirectly owned or controlled by such Person, by such
Person and one or more of its other Subsidiaries or by one or more of such
Person's other Subsidiaries.
"Termination Date" means the earlier of (a) September 26, 2006 and
(b) the date of termination in whole of the Commitments pursuant to
Section 2.05 or 6.01.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the happening
of such a contingency.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(e) ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
10
SECTION 2.01. The Revolving Credit Advances. Each Lender severally
agrees, on the terms and conditions hereinafter set forth, to make Revolving
Credit Advances to the Borrower from time to time on any Business Day during the
period from the Effective Date until the Termination Date in an aggregate amount
not to exceed at any time outstanding such Lender's Commitment provided that the
aggregate amount of the Commitments of the Lenders shall be deemed used from
time to time to the extent of the aggregate amount of the Competitive Bid
Advances then outstanding and such deemed use of the aggregate amount of the
Commitments shall be allocated among the Lenders ratably according to their
respective Commitments (such deemed use of the aggregate amount of the
Commitments being a "Competitive Bid Reduction"). Each Revolving Credit
Borrowing shall be in an aggregate amount of $10,000,000 or an integral multiple
of $1,000,000 in excess thereof and shall consist of Revolving Credit Advances
of the same Type made on the same day by the Lenders ratably according to their
respective Commitments. Within the limits of each Lender's Commitment, the
Borrower may borrow under this Section 2.01, prepay pursuant to Section 2.10 and
reborrow under this Section 2.01.
SECTION 2.02. Making the Revolving Credit Advances. (a) Each
Revolving Credit Borrowing shall be made on notice, given not later than (x)
11:00 A.M. (New York City time) on the third Business Day prior to the date of
the proposed Revolving Credit Borrowing in the case of a Revolving Credit
Borrowing consisting of Eurodollar Rate Advances or (y) 11:00 A.M. (New York
City time) on the date of the proposed Revolving Credit Borrowing in the case of
a Revolving Credit Borrowing consisting of Base Rate Advances, by the Borrower
to the Agent, which shall give to each Lender prompt notice thereof by
telecopier or telex. Each such notice of a Revolving Credit Borrowing (a "Notice
of Revolving Credit Borrowing") shall be by telephone, confirmed immediately in
writing, or telecopier or telex in substantially the form of Exhibit B-1 hereto,
specifying therein the requested (i) date of such Revolving Credit Borrowing,
(ii) Type of Advances comprising such Revolving Credit Borrowing, (iii)
aggregate amount of such Revolving Credit Borrowing, and (iv) in the case of a
Revolving Credit Borrowing consisting of Eurodollar Rate Advances, initial
Interest Period for each such Revolving Credit Advance. Each Lender shall,
before 12:00 Noon (New York City time) on the date of such Revolving Credit
Borrowing make available for the account of its Applicable Lending Office to the
Agent at the Agent's Account, in same day funds, such Lender's ratable portion
of such Revolving Credit Borrowing. After the Agent's receipt of such funds and
upon fulfillment of the applicable conditions set forth in Article III, the
Agent will make such funds available to the Borrower at the Agent's address
referred to in Section 8.02.
(b) Anything in subsection (a) above to the contrary
notwithstanding, (i) the Borrower may not select Eurodollar Rate Advances for
any Revolving Credit Borrowing if the aggregate amount of such Revolving Credit
Borrowing is less than $10,000,000 or if the obligation of the Lenders to make
Eurodollar Rate Advances shall then be suspended pursuant to Section 2.08 or
2.12 and (ii) the Eurodollar Rate Advances may not be outstanding as part of
more than six separate Revolving Credit Borrowings.
(c) Each Notice of Revolving Credit Borrowing shall be irrevocable
and binding on the Borrower. In the case of any Revolving Credit Borrowing that
the related Notice of Revolving Credit Borrowing specifies is to be comprised of
Eurodollar Rate Advances, the Borrower shall indemnify each Lender against any
loss, cost or expense incurred by such Lender as a result of any failure to
fulfill on or before the date specified in such Notice of Revolving Credit
Borrowing for such Revolving Credit Borrowing the applicable conditions set
forth in Article III, including, without limitation, any loss (excluding loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund the
Revolving Credit Advance to be made by such Lender as part of such Revolving
Credit Borrowing when such Revolving Credit Advance, as a result of such
failure, is not made on such date.
(d) Unless the Agent shall have received notice from a Lender prior
to the date of any Revolving Credit Borrowing that such Lender will not make
available to the Agent such Lender's ratable portion of such Revolving Credit
Borrowing, the Agent may assume that such Lender has made such portion available
to the Agent on the date of such Revolving Credit Borrowing in accordance with
subsection (a) of this Section 2.02 and the Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent that such Lender shall not have so made such ratable
portion available to the Agent, such Lender and the Borrower severally agree to
repay to the Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Borrower until the date such amount is repaid to the Agent, at (i) in the
case of the Borrower, the interest rate applicable at the time to Revolving
Credit Advances comprising such Revolving Credit Borrowing and (ii) in the case
of such
11
Lender, the Federal Funds Rate. If such Lender shall repay to the Agent such
corresponding amount, such amount so repaid shall constitute such Lender's
Revolving Credit Advance as part of such Revolving Credit Borrowing for purposes
of this Agreement.
(e) The failure of any Lender to make the Revolving Credit Advance
to be made by it as part of any Revolving Credit Borrowing shall not relieve any
other Lender of its obligation, if any, hereunder to make its Revolving Credit
Advance on the date of such Revolving Credit Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make the Revolving Credit
Advance to be made by such other Lender on the date of any Revolving Credit
Borrowing.
SECTION 2.03. The Competitive Bid Advances. (a) Each Lender
severally agrees that the Borrower may make Competitive Bid Borrowings under
this Section 2.03 from time to time on any Business Day during the period from
the date hereof until the date occurring 30 days prior to the Termination Date
in the manner set forth below; provided that, following the making of each
Competitive Bid Borrowing, the aggregate amount of the Advances then outstanding
shall not exceed the aggregate amount of the Commitments of the Lenders
(computed without regard to any Competitive Bid Reduction).
(i) The Borrower may request a Competitive Bid Borrowing under this
Section 2.03 by delivering to the Agent, by telecopier or telex, a notice
of a Competitive Bid Borrowing (a "Notice of Competitive Bid Borrowing"),
in substantially the form of Exhibit B-2 hereto, specifying therein the
requested (v) date of such proposed Competitive Bid Borrowing, (w)
aggregate amount of such proposed Competitive Bid Borrowing, (x) in the
case of a Competitive Bid Borrowing consisting of LIBO Rate Advances,
Interest Period, or in the case of a Competitive Bid Borrowing consisting
of Fixed Rate Advances, maturity date for repayment of each Fixed Rate
Advance to be made as part of such Competitive Bid Borrowing (which
maturity date may not be earlier than the date occurring 30 days after the
date of such Competitive Bid Borrowing or later than the Termination
Date), (y) interest payment date or dates relating thereto, and (z) other
terms (if any) to be applicable to such Competitive Bid Borrowing, not
later than 10:00 A.M. (New York City time) (A) at least one Business Day
prior to the date of the proposed Competitive Bid Borrowing, if the
Borrower shall specify in the Notice of Competitive Bid Borrowing that the
rates of interest to be offered by the Lenders shall be fixed rates per
annum (the Advances comprising any such Competitive Bid Borrowing being
referred to herein as "Fixed Rate Advances") and (B) at least four
Business Days prior to the date of the proposed Competitive Bid Borrowing,
if the Borrower shall instead specify in the Notice of Competitive Bid
Borrowing that the Advances comprising such Competitive Bid Borrowing
shall be LIBO Rate Advances. Each Notice of Competitive Bid Borrowing
shall be irrevocable and binding on the Borrower. The Agent shall in turn
promptly notify each Lender of each request for a Competitive Bid
Borrowing received by it from the Borrower by sending such Lender a copy
of the related Notice of Competitive Bid Borrowing.
(ii) Each Lender may, if, in its sole discretion, it elects to do
so, irrevocably offer to make one or more Competitive Bid Advances 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, by
notifying the Agent (which shall give prompt notice thereof to the
Borrower), (A) before 9:30 A.M. (New York City time) on the date of such
proposed Competitive Bid Borrowing, in the case of a Competitive Bid
Borrowing consisting of Fixed Rate Advances and (B) before 10:00 A.M. (New
York City time) three Business Days before the date of such proposed
Competitive Bid Borrowing, in the case of a Competitive Bid Borrowing
consisting of LIBO Rate Advances of the minimum amount and maximum amount
of each Competitive Bid Advance which such Lender would be willing to make
as part of such proposed Competitive Bid Borrowing (which amounts of such
proposed Competitive Bid may, subject to the proviso to the first sentence
of this Section 2.03(a), exceed such Lender's Commitment, if any), the
rate or rates of interest therefor and such Lender's Applicable Lending
Office with respect to such Competitive Bid Advance; provided that if the
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 at least
30 minutes before the time and on the date on which notice of such
election is to be given to the Agent, by the other Lenders. If any Lender
shall elect not to make such an offer, such Lender shall so notify the
Agent before 10:00 A.M. (New York City time),
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and such Lender shall not be obligated to, and shall not, make any
Competitive Bid Advance as part of such Competitive Bid Borrowing;
provided that the failure by any Lender to give such notice shall not
cause such Lender to be obligated to make any Competitive Bid Advance as
part of such proposed Competitive Bid Borrowing.
(iii) The Borrower shall, in turn, (A) before 10:30 A.M. (New York
City time) on the date of such proposed Competitive Bid Borrowing, in the
case of a Competitive Bid Borrowing consisting of Fixed Rate Advances and
(B) before 11:00 A.M. (New York City time) three Business Days before the
date of such proposed Competitive Bid Borrowing, in the case of a
Competitive Bid Borrowing consisting of LIBO Rate Advances, either:
(x) cancel such Competitive Bid Borrowing by giving the Agent
notice to that effect, or
(y) accept one or more of the offers made by any Lender or
Lenders pursuant to paragraph (ii) above, in its sole discretion, by
giving notice to the Agent of the amount of each Competitive Bid
Advance (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 Agent on behalf of such Lender for such
Competitive Bid Advance pursuant to paragraph (ii) above) to be made
by each Lender as part of such Competitive Bid Borrowing, and reject
any remaining offers made by Lenders pursuant to paragraph (ii)
above by giving the Agent notice to that effect. The Borrower shall
accept the offers made by any Lender or Lenders to make Competitive
Bid Advances in order of the lowest to the highest rates of interest
offered by such Lenders. If two or more Lenders have offered the
same interest rate, the amount to be borrowed at such interest rate
will be allocated among such Lenders in proportion to the amount
that each such Lender offered at such interest rate.
(iv) If the Borrower notifies the Agent that such Competitive Bid
Borrowing is cancelled pursuant to paragraph (iii)(x) above, the Agent
shall give prompt notice thereof to the Lenders and such Competitive Bid
Borrowing shall not be made.
(v) If the Borrower accepts one or more of the offers made by any
Lender or Lenders pursuant to paragraph (iii)(y) above, the Agent shall in
turn promptly notify (A) each Lender that has made an offer as described
in paragraph (ii) above, of the date and aggregate amount of such
Competitive Bid Borrowing and whether or not any offer or offers made by
such Lender pursuant to paragraph (ii) above have been accepted by the
Borrower, (B) each Lender that is to make a Competitive Bid Advance as
part of such Competitive Bid Borrowing, of the amount of each Competitive
Bid Advance to be made by such Lender as part of such Competitive Bid
Borrowing, and (C) each Lender that is to make a Competitive Bid Advance
as part of such Competitive Bid Borrowing, upon receipt, that the Agent
has received forms of documents appearing to fulfill the applicable
conditions set forth in Article III. Each Lender that is to make a
Competitive Bid Advance as part of such Competitive Bid Borrowing shall,
before 11:00 A.M. (New York City time) on the date of such Competitive Bid
Borrowing specified in the notice received from the Agent pursuant to
clause (A) of the preceding sentence or any later time when such Lender
shall have received notice from the Agent pursuant to clause (C) of the
preceding sentence, make available for the account of its Applicable
Lending Office to the Agent at its address referred to in Section 8.02, in
same day funds, such Lender's portion of such Competitive Bid Borrowing.
Upon fulfillment of the applicable conditions set forth in Article III and
after receipt by the Agent of such funds, the Agent will make such funds
available to the Borrower at the location specified by the Borrower in its
Notice of Competitive Bid Borrowing. Promptly after each Competitive Bid
Borrowing the Agent will notify each Lender of the amount of the
Competitive Bid Borrowing, the consequent Competitive Bid Reduction and
the dates upon which such Competitive Bid Reduction commenced and will
terminate.
(vi) If the Borrower notifies the Agent that it accepts one or more
of the offers made by any Lender or Lenders pursuant to paragraph (iii)(y)
above, such notice of acceptance shall be irrevocable and
13
binding on the Borrower. The Borrower shall indemnify each Lender against
any loss, cost or expense incurred by such Lender as a result of any
failure to fulfill on or before the date specified in the related Notice
of Competitive Bid Borrowing for such Competitive Bid Borrowing the
applicable conditions set forth in Article III, including, without
limitation, any loss (excluding loss of anticipated profits), cost or
expense incurred by reason of the liquidation or reemployment of deposits
or other funds acquired by such Lender to fund the Competitive Bid Advance
to be made by such Lender as part of such Competitive Bid Borrowing when
such Competitive Bid Advance, as a result of such failure, is not made on
such date.
(b) Each Competitive Bid Borrowing shall be in an aggregate amount
of $10,000,000 or an integral multiple of $1,000,000 in excess thereof and,
following the making of each Competitive Bid Borrowing, the Borrower shall be in
compliance with the limitation set forth in the proviso to the first sentence of
subsection (a) above.
(c) Within the limits and on the conditions set forth in this
Section 2.03, the Borrower may from time to time borrow under this Section 2.03,
repay or prepay pursuant to subsection (d) below, and reborrow under this
Section 2.03, provided that a Competitive Bid Borrowing shall not be made within
three Business Days of the date of any other Competitive Bid Borrowing.
(d) The Borrower shall repay to the Agent for the account of each
Lender that has made a Competitive Bid Advance, on the maturity date of each
Competitive Bid Advance (such maturity date being that specified by the Borrower
for repayment of such Competitive Bid Advance in the related Notice of
Competitive Bid Borrowing delivered pursuant to subsection (a)(i) above and
provided in the Competitive Bid Note evidencing such Competitive Bid Advance),
the then unpaid principal amount of such Competitive Bid Advance. The Borrower
shall have no right to prepay any principal amount of any Competitive Bid
Advance unless, and then only on the terms, specified by the Borrower for such
Competitive Bid Advance in the related Notice of Competitive Bid Borrowing
delivered pursuant to subsection (a)(i) above and set forth in the Competitive
Bid Note evidencing such Competitive Bid Advance.
(e) The Borrower shall pay interest on the unpaid principal amount
of each Competitive Bid Advance from the date of such Competitive Bid Advance to
the date the principal amount of such Competitive Bid Advance is repaid in full,
at the rate of interest for such Competitive Bid Advance specified by the Lender
making such Competitive Bid Advance in its notice with respect thereto delivered
pursuant to subsection (a)(ii) above, payable on the interest payment date or
dates specified by the Borrower for such Competitive Bid Advance in the related
Notice of Competitive Bid Borrowing delivered pursuant to subsection (a)(i)
above, as provided in the Competitive Bid Note evidencing such Competitive Bid
Advance. Upon the occurrence and during the continuance of an Event of Default
under Section 6.01(a), the Borrower shall pay interest on the amount of unpaid
principal of and interest on each Competitive Bid Advance owing to a Lender,
payable in arrears on the date or dates interest is payable thereon, at a rate
per annum equal at all times to 1% per annum above the rate per annum required
to be paid on such Competitive Bid Advance under the terms of the Competitive
Bid Note evidencing such Competitive Bid Advance unless otherwise agreed in such
Competitive Bid Note.
(f) The indebtedness of the Borrower resulting from each Competitive
Bid Advance made to the Borrower as part of a Competitive Bid Borrowing shall be
evidenced by a separate Competitive Bid Note of the Borrower payable to the
order of the Lender making such Competitive Bid Advance.
SECTION 2.04. Fees. (a) Facility Fee. The Borrower agrees to pay to
the Agent for the account of each Lender a facility fee on the aggregate amount
of such Lender's Commitment from the date hereof in the case of each Initial
Lender and from the effective date specified in the Assumption Agreement or in
the Assignment and Acceptance pursuant to which it became a Lender in the case
of each other Lender until the Termination Date at a rate per annum equal to the
Applicable Percentage, payable in arrears quarterly on the last day of each
March, June, September and December, commencing December 31, 2001, and on the
Termination Date.
(b) Utilization Fee. The Borrower agrees to pay to the Agent for the
account of each Lender for each date on which the aggregate outstanding Advances
exceed 33% of the Commitments, a fee on the aggregate amount of the outstanding
Advances at a rate per annum equal to the Applicable Utilization Fee, payable
14
in arrears quarterly on the last day of each March, June, September and
December, commencing December 31, 2001, and on the Termination Date.
(c) Agent's Fees. The Borrower shall pay to the Agent for its own
account such fees as may from time to time be agreed between the Borrower and
the Agent.
SECTION 2.05. Optional Termination or Reduction of the Commitments.
The Borrower shall have the right, upon at least three Business Days' notice to
the Agent, to terminate in whole or reduce ratably in part the unused portions
of the respective Commitments of the Lenders, provided that each partial
reduction shall be in the aggregate amount of $10,000,000 or an integral
multiple of $1,000,000 in excess thereof and provided further that the aggregate
amount of the Commitments of the Lenders shall not be reduced to an amount that
is less than the aggregate principal amount of the Competitive Bid Advances then
outstanding.
SECTION 2.06. Repayment of Revolving Credit Advances. The Borrower
shall repay to the Agent for the ratable account of the Lenders on the
Termination Date the aggregate principal amount of the Revolving Credit Advances
then outstanding.
SECTION 2.07. Interest on Revolving Credit Advances. (a) Scheduled
Interest. The Borrower shall pay interest on the unpaid principal amount of each
Revolving Credit Advance owing to each Lender from the date of such Revolving
Credit Advance until such principal amount shall be paid in full, at the
following rates per annum:
(i) Base Rate Advances. During such periods as such Revolving Credit
Advance is a Base Rate Advance, a rate per annum equal at all times to the
sum of (x) the Base Rate in effect from time to time plus (y) the
Applicable Margin in effect from time to time, payable in arrears
quarterly on the last day of each March, June, September and December
during such periods and on the date such Base Rate Advance shall be
Converted or paid in full.
(ii) Eurodollar Rate Advances. During such periods as such Revolving
Credit Advance is a Eurodollar Rate Advance, a rate per annum equal at all
times during each Interest Period for such Revolving Credit Advance to the
sum of (x) the Eurodollar Rate for such Interest Period for such Revolving
Credit Advance plus (y) the Applicable Margin in effect from time to time,
payable in arrears on the last day of such Interest Period and, if such
Interest Period has a duration of more than three months, on each day that
occurs during such Interest Period every three months from the first day
of such Interest Period and on the date such Eurodollar Rate Advance shall
be Converted or paid in full.
(b) Default Interest. Upon the occurrence and during the continuance
of an Event of Default under Section 6.01(a), the Borrower shall pay interest on
(i) the unpaid principal amount of each Revolving Credit Advance owing to each
Lender, payable in arrears on the dates referred to in clause (a)(i) or (a)(ii)
above, at a rate per annum equal at all times to 1% per annum above the rate per
annum required to be paid on such Revolving Credit Advance pursuant to clause
(a)(i) or (a)(ii) above and (ii) to the fullest extent permitted by law, the
amount of any interest, fee or other amount payable hereunder that is not paid
when due, from the date such amount shall be due until such amount shall be paid
in full, payable in arrears on the date such amount shall be paid in full and on
demand, at a rate per annum equal at all times to 1% per annum above the rate
per annum required to be paid on Base Rate Advances pursuant to clause (a)(i)
above.
SECTION 2.08. Interest Rate Determination. (a) Each Reference Bank
agrees to furnish to the Agent timely information for the purpose of determining
each Eurodollar Rate and each LIBO Rate. If any one or more of the Reference
Banks shall not furnish such timely information to the Agent for the purpose of
determining any such interest rate, the Agent shall determine such interest rate
on the basis of timely information furnished by the remaining Reference Banks.
The Agent shall give prompt notice to the Borrower and the Lenders of the
applicable interest rate determined by the Agent for purposes of Section
2.07(a)(i) or (ii), and the rate, if any, furnished by each Reference Bank for
the purpose of determining the interest rate under Section 2.07(a)(ii).
15
(b) If, with respect to any Eurodollar Rate Advances, the Required
Lenders notify the Agent that the Eurodollar Rate for any Interest Period for
such Advances will not adequately reflect the cost to such Required Lenders of
making, funding or maintaining their respective Eurodollar Rate Advances for
such Interest Period, the Agent shall forthwith so notify the Borrower and the
Lenders, whereupon (i) each Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a Base Rate
Advance, and (ii) the obligation of the Lenders to make, or to Convert Revolving
Credit Advances into, Eurodollar Rate Advances shall be suspended until the
Agent shall notify the Borrower and the Lenders that the circumstances causing
such suspension no longer exist.
(c) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Agent will forthwith so notify the Borrower and the Lenders and such Advances
will automatically, on the last day of the then existing Interest Period
therefor, be Converted into Base Rate Advances.
(d) On the date on which the aggregate unpaid principal amount of
Eurodollar Rate Advances comprising any Borrowing shall be reduced, by payment
or prepayment or otherwise, to less than $10,000,000, such Advances shall
automatically Convert into Base Rate Advances.
(e) Upon the occurrence and during the continuance of any Event of
Default under Section 6.01(a), (i) each Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance and (ii) the obligation of the Lenders to make,
or to Convert Advances into, Eurodollar Rate Advances shall be suspended.
(f) If Telerate Markets Page 3750 is unavailable and fewer than two
Reference Banks furnish timely information to the Agent for determining the
Eurodollar Rate or LIBO Rate for any Eurodollar Rate Advances or LIBO Rate
Advances, as the case may be,
(i) the Agent shall forthwith notify the Borrower and the Lenders
that the interest rate cannot be determined for such Eurodollar Rate
Advances or LIBO Rate Advances, as the case may be,
(ii) with respect to Eurodollar Rate Advances, each such Advance
will automatically, on the last day of the then existing Interest Period
therefor, be prepaid by the Borrower or be automatically Converted into a
Base Rate Advance (or if such Advance is then a Base Rate Advance, will
continue as a Base Rate Advance), and
(iii) the obligation of the Lenders to make Eurodollar Rate Advances
or LIBO Rate Advances or to Convert Revolving Credit Advances into
Eurodollar Rate Advances shall be suspended until the Agent shall notify
the Borrower and the Lenders that the circumstances causing such
suspension no longer exist.
SECTION 2.09. Optional Conversion of Revolving Credit Advances. The
Borrower may on any Business Day, upon notice given to the Agent not later than
11:00 A.M. (New York City time) on the third Business Day prior to the date of
the proposed Conversion and subject to the provisions of Sections 2.08 and 2.12,
Convert all Revolving Credit Advances of one Type comprising the same Borrowing
into Revolving Credit Advances of the other Type; provided, however, that any
Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made
only on the last day of an Interest Period for such Eurodollar Rate Advances,
any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in
an amount not less than the minimum amount specified in Section 2.02(b) and no
Conversion of any Revolving Credit Advances shall result in more separate
Revolving Credit Borrowings than permitted under Section 2.02(b). Each such
notice of a Conversion shall, within the restrictions specified above, specify
(i) the date of such Conversion, (ii) the Revolving Credit Advances to be
Converted, and (iii) if such Conversion is into Eurodollar Rate Advances, the
duration of the initial Interest Period for each such Advance. Each notice of
Conversion shall be irrevocable and binding on the Borrower.
SECTION 2.10. Prepayments of Revolving Credit Advances. The Borrower
may, upon notice at least two Business Days' prior to the date of such
prepayment, in the case of Eurodollar Rate Advances, and not later
16
than 11:00 A.M. (New York City time) on the date of such prepayment, in the case
of Base Rate Advances, to the Agent stating the proposed date and aggregate
principal amount of the prepayment, and if such notice is given the Borrower
shall, prepay the outstanding principal amount of the Revolving Credit Advances
comprising part of the same Revolving Credit Borrowing in whole or ratably in
part, together with accrued interest to the date of such prepayment on the
principal amount prepaid; provided, however, that (x) each partial prepayment
shall be in an aggregate principal amount of $10,000,000 or an integral multiple
of $1,000,000 in excess thereof and (y) in the event of any such prepayment of a
Eurodollar Rate Advance, the Borrower shall be obligated to reimburse the
Lenders in respect thereof pursuant to Section 8.04(c).
SECTION 2.11. Increased Costs. (a) If after the date hereof, due to
either (i) the introduction of or any change in or in the interpretation of any
law or regulation or (ii) the compliance with any guideline or request from any
central bank or other governmental authority (whether or not having the force of
law), there shall be any increase in the cost to any Lender of agreeing to make
or making, funding or maintaining Eurodollar Rate Advances or LIBO Rate Advances
(excluding for purposes of this Section 2.11 any such increased costs resulting
from (i) Taxes or Other Taxes (as to which Section 2.14 shall govern) and (ii)
changes in the basis of taxation of overall net income or overall gross income
by the United States or by the foreign jurisdiction or state under the laws of
which such Lender is organized or has its Applicable Lending Office or any
political subdivision thereof), then the Borrower shall from time to time, upon
demand by such Lender (with a copy of such demand to the Agent), pay to the
Agent for the account of such Lender additional amounts sufficient to compensate
such Lender for such increased cost. A certificate as to the amount of such
increased cost, submitted to the Borrower and the Agent by such Lender, shall be
conclusive and binding for all purposes, absent manifest error.
(b) If after the date hereof any Lender determines that compliance
with any law or regulation or any guideline or request from any central bank or
other governmental authority (whether or not having the force of law) affects or
would affect the amount of capital required or expected to be maintained by such
Lender or any corporation controlling such Lender and that the amount of such
capital is increased by or based upon the existence of such Lender's commitment
to lend hereunder and other commitments of this type, then, upon demand by such
Lender (with a copy of such demand to the Agent), the Borrower shall pay to the
Agent for the account of such Lender, from time to time as specified by such
Lender, additional amounts sufficient to compensate such Lender or such
corporation in the light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the existence
of such Lender's commitment to lend hereunder. A certificate as to such amounts
submitted to the Borrower and the Agent by such Lender shall be conclusive and
binding for all purposes, absent manifest error.
SECTION 2.12. Illegality. Notwithstanding any other provision of
this Agreement, if any Lender shall notify the Agent that the introduction of or
any change in or in the interpretation of any law or regulation makes it
unlawful, or any central bank or other governmental authority asserts that it is
unlawful, for any Lender or its Eurodollar Lending Office to perform its
obligations hereunder to make Eurodollar Rate Advances or to fund or maintain
Eurodollar Rate Advances hereunder, (a) each Eurodollar Rate Advance will
automatically, upon such demand, Convert into a Base Rate Advance and (b) the
obligation of the Lenders to make Eurodollar Rate Advances or LIBO Rate Advances
or to Convert Revolving Credit Advances into Eurodollar Rate Advances shall be
suspended until the Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist.
SECTION 2.13. Payments and Computations. (a) The Borrower shall make
each payment hereunder not later than 11:00 A.M. (New York City time) on the day
when due to the Agent at the Agent's Account in same day funds without
deduction, set-off or counterclaim. The Agent will promptly thereafter cause to
be distributed like funds relating to the payment of principal or interest or
facility fees ratably (other than amounts payable pursuant to Section 2.03,
2.11, 2.14 or 8.04(c)) to the Lenders for the account of their respective
Applicable Lending Offices, and like funds relating to the payment of any other
amount payable to any Lender to such Lender for the account of its Applicable
Lending Office, in each case to be applied in accordance with the terms of this
Agreement. Upon any Assuming Lender becoming a Lender hereunder as a result of a
Commitment Increase pursuant to Section 2.18, and upon the Agent's receipt of
such Lender's Assumption Agreement and recording of the information contained
therein in the Register, from and after the applicable Increase Date, the Agent
shall make all payments hereunder and under any Notes issued in connection
therewith in respect of the interest assumed thereby to the Assuming Lender.
Upon its acceptance of an Assignment and Acceptance and recording of the
information
17
contained therein in the Register pursuant to Section 8.07(c), from and after
the effective date specified in such Assignment and Acceptance, the Agent shall
make all payments hereunder and under the Notes in respect of the interest
assigned thereby to the Lender assignee thereunder, and the parties to such
Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.
(b) The Borrower hereby authorizes each Lender, if and to the extent
payment owed to such Lender is not made when due hereunder or under the Note
held by such Lender, to charge from time to time against any or all of the
Borrower's accounts with such Lender any amount so due.
(c) All computations of interest based on the Base Rate shall be
made by the Agent on the basis of a year of 365 or 366 days, as the case may be,
all computations of interest based on the Eurodollar Rate, the LIBO Rate or the
Federal Funds Rate or in respect of Fixed Rate Advances and of fees shall be
made by the Agent on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or facility fees are payable.
Each determination by the Agent of an interest rate hereunder shall be
conclusive and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or facility fee, as
the case may be; provided, however, that, if such extension would cause payment
of interest on or principal of Eurodollar Rate Advances or LIBO Rate Advances to
be made in the next following calendar month, such payment shall be made on the
next preceding Business Day.
(e) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Lenders hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each Lender on
such due date an amount equal to the amount then due such Lender. If and to the
extent the Borrower shall not have so made such payment in full to the Agent,
each Lender shall repay to the Agent forthwith on demand such amount distributed
to such Lender together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender repays such
amount to the Agent, at the Federal Funds Rate.
SECTION 2.14. Taxes. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made, in accordance with Section 2.13,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender and the Agent, taxes
imposed on its overall net income, and franchise taxes imposed on it in lieu of
net income taxes, by the jurisdiction under the laws of which such Lender or the
Agent (as the case may be) is organized or any political subdivision thereof
and, in the case of each Lender, taxes imposed on its overall net income, and
franchise taxes imposed on it in lieu of net income taxes, by the jurisdiction
of such Lender's Applicable Lending Office or any political subdivision thereof
(all such non-excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities in respect of payments hereunder or under the Notes being
hereinafter referred to as "Taxes"). If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under any
Note to any Lender or the Agent, (i) the sum payable shall be increased as may
be necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.14) such Lender or
the Agent (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law.
(b) In addition, the Borrower shall pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made hereunder or under the Notes or from the
execution, delivery or registration of, performing under, or otherwise with
respect to, this Agreement or the Notes (hereinafter referred to as "Other
Taxes").
18
(c) The Borrower shall indemnify each Lender and the Agent for and
hold it harmless against the full amount of Taxes or Other Taxes (including,
without limitation, taxes of any kind imposed by any jurisdiction on amounts
payable under this Section 2.14) imposed on or paid by such Lender or the Agent
(as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto. This indemnification shall
be made within 30 days from the date such Lender or the Agent (as the case may
be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower shall furnish to the Agent, at its address referred to in Section 8.02,
the original or a certified copy of a receipt evidencing such payment. In the
case of any payment hereunder or under the Notes by or on behalf of the Borrower
through an account or branch outside the United States or by or on behalf of the
Borrower by a payor that is not a United States person, if the Borrower
determines that no Taxes are payable in respect thereof, the Borrower shall
furnish, or shall cause such payor to furnish, to the Agent, at such address, an
opinion of counsel reasonably acceptable to the Agent stating that such payment
is exempt from Taxes. For purposes of this subsection (d) and subsection (e),
the terms "United States" and "United States person" shall have the meanings
specified in Section 7701 of the Internal Revenue Code.
(e) Each Lender organized under the laws of a jurisdiction outside
the United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Initial Lender and on the date of the Assignment
and Acceptance pursuant to which it becomes a Lender in the case of each other
Lender, and from time to time thereafter as requested in writing by the Borrower
(but only so long as such Lender remains lawfully able to do so), shall provide
each of the Agent and the Borrower with two original Internal Revenue Service
forms W-8BEN or W-8EC1, as appropriate, or any successor or other form
prescribed by the Internal Revenue Service, certifying that such Lender is
exempt from or entitled to a reduced rate of United States withholding tax on
payments pursuant to this Agreement or the Notes. If the form provided by a
Lender at the time such Lender first becomes a party to this Agreement indicates
a United States interest withholding tax rate in excess of zero, withholding tax
at such rate shall be considered excluded from Taxes unless and until such
Lender provides the appropriate forms certifying that a lesser rate applies,
whereupon withholding tax at such lesser rate only shall be considered excluded
from Taxes for periods governed by such form; provided, however, that, if at the
date of the Assignment and Acceptance pursuant to which a Lender assignee
becomes a party to this Agreement, the Lender assignor was entitled to payments
under subsection (a) in respect of United States withholding tax with respect to
interest paid at such date, then, to such extent, the term Taxes shall include
(in addition to withholding taxes that may be imposed in the future or other
amounts otherwise includable in Taxes) United States withholding tax, if any,
applicable with respect to the Lender assignee on such date. If any form or
document referred to in this subsection (e) requires the disclosure of
information, other than information necessary to compute the tax payable and
information required on the date hereof by Internal Revenue Service form 1001 or
4224, that the Lender reasonably considers to be confidential, the Lender shall
give notice thereof to the Borrower and shall not be obligated to include in
such form or document such confidential information.
(f) For any period with respect to which a Lender has failed to
provide the Borrower with the appropriate form described in Section 2.14(e)
(other than if such failure is due to a change in law occurring subsequent to
the date on which a form originally was required to be provided, or if such form
otherwise is not required under subsection (e) above), such Lender shall not be
entitled to indemnification under Section 2.14(a) or (c) with respect to Taxes
imposed by the United States by reason of such failure; provided, however, that
should a Lender become subject to Taxes because of its failure to deliver a form
required hereunder, the Borrower shall take such steps as the Lender shall
reasonably request to assist the Lender to recover such Taxes.
(g) Any Lender claiming any additional amounts payable pursuant to
this Section 2.14 agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of its
Eurodollar Lending Office if the making of such a change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.
SECTION 2.15. Sharing of Payments, Etc. If any Lender shall obtain
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise) on account of the Revolving Credit Advances owing to
it (other than pursuant to Section 2.11, 2.14 or 8.04(c)) in excess of its
ratable share of payments
19
on account of the Revolving Credit Advances obtained by all the Lenders, such
Lender shall forthwith purchase from the other Lenders such participations in
the Revolving Credit Advances owing to them as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an amount equal to
such Lender's ratable share (according to the proportion of (i) the amount of
such Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.15 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
SECTION 2.16. Evidence of Debt. (a) Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from each Revolving Credit
Advance owing to such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder in respect of Revolving Credit Advances. The Borrower agrees that upon
notice by any Lender to the Borrower (with a copy of such notice to the Agent)
to the effect that a Revolving Credit Note is required or appropriate in order
for such Lender to evidence (whether for purposes of pledge, enforcement or
otherwise) the Revolving Credit Advances owing to, or to be made by, such
Lender, the Borrower shall promptly execute and deliver to such Lender a
Revolving Credit Note payable to the order of such Lender in a principal amount
up to the Commitment of such Lender.
(b) The Register maintained by the Agent pursuant to Section 8.07(d)
shall include a control account, and a subsidiary account for each Lender, in
which accounts (taken together) shall be recorded (i) the date and amount of
each Borrowing made hereunder, the Type of Advances comprising such Borrowing
and, if appropriate, the Interest Period applicable thereto, (ii) the terms of
each Assumption Agreement and each Assignment and Acceptance delivered to and
accepted by it, (iii) the amount of any principal or interest due and payable or
to become due and payable from the Borrower to each Lender hereunder and (iv)
the amount of any sum received by the Agent from the Borrower hereunder and each
Lender's share thereof.
(c) Entries made in good faith by the Agent in the Register pursuant
to subsection (b) above, and by each Lender in its account or accounts pursuant
to subsection (a) above, shall be prima facie evidence of the amount of
principal and interest due and payable or to become due and payable from the
Borrower to, in the case of the Register, each Lender and, in the case of such
account or accounts, such Lender, under this Agreement, absent manifest error;
provided, however, that the failure of the Agent or such Lender to make an
entry, or any finding that an entry is incorrect, in the Register or such
account or accounts shall not limit or otherwise affect the obligations of the
Borrower under this Agreement.
SECTION 2.17. Use of Proceeds. The proceeds of the Advances shall be
available (and the Borrower agrees that it shall use such proceeds) for general
corporate purposes of the Borrower and its Subsidiaries, including commercial
paper backstop.
SECTION 2.18. Increase in the Aggregate Commitments. (a) The
Borrower may, at any time but in any event not more than once in any calendar
year prior to the Termination Date, by notice to the Agent, request that the
aggregate amount of the Commitment be increased by an amount of $50,000,000 or
an integral multiple of $10,000,000 in excess thereof (each a "Commitment
Increase") to be effective as of a date that is at least 90 days prior to the
scheduled Termination Date then in effect (the "Increase Date") as specified in
the related notice to the Agent; provided, however that (i) in no event shall
the aggregate amount of the Commitments at any time exceed $400,000,000 and (ii)
on the date of any request by the Borrower for a Commitment Increase and on the
related Increase Date, the applicable conditions set forth in Article III shall
be satisfied.
(b) The Agent shall promptly notify the Lenders of a request by the
Borrower for a Commitment Increase, which notice shall include (i) the proposed
amount of such requested Commitment Increase, (ii) the proposed Increase Date
and (iii) the date by which Lenders wishing to participate in the Commitment
Increase must commit to an increase in the amount of their respective
Commitments (the "Commitment Date").
20
Each Lender that is willing to participate in such requested Commitment Increase
(each an "Increasing Lender") shall, in its sole discretion, give written notice
to the Agent on or prior to the Commitment Date of the amount by which it is
willing to increase its Commitment. If the Lenders notify the Agent that they
are willing to increase the amount of their respective Commitments by an
aggregate amount that exceeds the amount of the requested Commitment Increase,
the requested Commitment Increase shall be allocated among the Lenders willing
to participate therein in such amounts as are agreed between the Borrower and
the Agent.
(c) Promptly following each Commitment Date, the Agent shall notify
the Borrower as to the amount, if any, by which the Lenders are willing to
participate in the requested Commitment Increase. If the aggregate amount by
which the Lenders are willing to participate in any requested Commitment
Increase on any such Commitment Date is less than the requested Commitment
Increase, then the Borrower may extend offers to one or more Eligible Assignees
to participate in any portion of the requested Commitment Increase that has not
been committed to by the Lenders as of the applicable Commitment Date; provided,
however, that the Commitment of each such Eligible Assignee shall be in an
amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof.
(d) On each Increase Date, each Eligible Assignee that accepts an
offer to participate in a requested Commitment Increase in accordance with
Section 2.18(b) (each such Eligible Assignee, an "Assuming Lender") shall become
a Lender party to this Agreement as of such Increase Date and the Commitment of
each Increasing Lender for such requested Commitment Increase shall be so
increased by such amount (or by the amount allocated to such Lender pursuant to
the last sentence of Section 2.18(b)) as of such Increase Date; provided,
however, that the Agent shall have received on or before such Increase Date the
following, each dated such date:
(i) (A) certified copies of resolutions of the Board of Directors of
the Borrower or the Executive Committee of such Board approving the
Commitment Increase and the corresponding modifications to this Agreement
and (B) an opinion of counsel for the Borrower (which may be in-house
counsel), in substantially the form of Exhibit D hereto;
(ii) an assumption agreement from each Assuming Lender, if any, in
form and substance satisfactory to the Borrower and the Agent (each an
"Assumption Agreement"), duly executed by such Eligible Assignee, the
Agent and the Borrower; and
(iii) confirmation from each Increasing Lender of the increase in
the amount of its Commitment in a writing satisfactory to the Borrower and
the Agent.
On each Increase Date, upon fulfillment of the conditions set forth in the
immediately preceding sentence of this Section 2.18(d), the Agent shall notify
the Lenders (including, without limitation, each Assuming Lender) and the
Borrower, on or before 1:00 P.M. (New York City time), by telecopier or telex,
of the occurrence of the Commitment Increase to be effected on such Increase
Date and shall record in the Register the relevant information with respect to
each Increasing Lender and each Assuming Lender on such date.
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01. Conditions Precedent to Effectiveness of Sections 2.01
and 2.03. Sections 2.01 and 2.03 of this Agreement shall become effective on and
as of the first date (the "Effective Date") on which the following conditions
precedent have been satisfied:
(a) There shall have occurred no Material Adverse Change since
December 31, 2000.
(b) There shall exist no action, suit, investigation, litigation or
proceeding affecting the Borrower or any of its Subsidiaries pending or
threatened before any court, governmental agency or arbitrator that (i)
could be reasonably likely to have a Material Adverse Effect or (ii)
purports to affect the
21
legality, validity or enforceability of this Agreement or any Note or the
consummation of the transactions contemplated hereby.
(c) Nothing shall have come to the attention of the Lenders during
the course of their due diligence investigation to lead them to believe
that the Information Memorandum was or has become misleading, incorrect or
incomplete in any material respect; without limiting the generality of the
foregoing, the Lenders shall have been given such access to the
management, records, books of account, contracts and properties of the
Borrower and its Subsidiaries as they shall have requested.
(d) All governmental and third party consents and approvals
necessary in connection with the transactions contemplated hereby shall
have been obtained (without the imposition of any conditions that are not
acceptable to the Lenders) and shall remain in effect, and no law or
regulation shall be applicable in the reasonable judgment of the Lenders
that restrains, prevents or imposes materially adverse conditions upon the
transactions contemplated hereby.
(e) The Borrower shall have notified each Lender and the Agent in
writing as to the proposed Effective Date.
(f) The Borrower shall have paid all accrued fees and expenses of
the Agent and the Lenders (including the accrued fees and expenses of
counsel to the Agent).
(g) On the Effective Date, the following statements shall be true
and the Agent shall have received for the account of each Lender a
certificate signed by a duly authorized officer of the Borrower, dated the
Effective Date, stating that:
(i) The representations and warranties contained in Section
4.01 are correct on and as of the Effective Date, and
(ii) No event has occurred and is continuing that constitutes
a Default.
(h) The Agent shall have received on or before the Effective Date
the following, each dated such day, in form and substance satisfactory to
the Agent and (except for the Revolving Credit Notes) in sufficient copies
for each Lender:
(i) The Revolving Credit Notes to the order of the Lenders to
the extent requested by any Lender pursuant to Section 2.16.
(ii) Certified copies of the resolutions of the Board of
Directors of the Borrower approving this Agreement and the Notes,
and of all documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this Agreement and
the Notes.
(iii) A certificate of the Secretary or an Assistant Secretary
of the Borrower certifying the names and true signatures of the
officers of the Borrower authorized to sign this Agreement and the
Notes and the other documents to be delivered hereunder.
(iv) A favorable opinion of Stephen A. Block, Senior Vice
President and General Counsel, counsel for the Borrower,
substantially in the form of Exhibit D hereto and as to such other
matters as any Lender through the Agent may reasonably request.
(v) A favorable opinion of Shearman & Sterling, counsel for
the Agent, in form and substance satisfactory to the Agent.
22
(i) The Borrower shall have terminated the commitments, and paid in
full all Debt, interest, fees and other amounts outstanding, under (x) the
364-Day Credit Agreement dated as of November 28, 2001, as amended, among
the Borrower, the lenders parties thereto, Citibank, as administrative
agent for the lenders, and (y) the 180-Day Credit Agreement dated as of
November 2, 2000 among the Borrower, Citibank, N.A., as lender and as
administrative agent, and Salomon Smith Barney Inc., as arranger, and each
of the Lenders that is a party to any such credit agreement hereby waives,
upon execution of this Agreement, the requirement of prior notice under
such credit agreement relating to the termination of commitments
thereunder.
SECTION 3.02. Conditions Precedent to Each Revolving Credit
Borrowing and Commitment Increase. The obligation of each Lender to make a
Revolving Credit Advance on the occasion of each Revolving Credit Borrowing and
each Commitment Increase shall be subject to the conditions precedent that the
Effective Date shall have occurred and on the date of such Revolving Credit
Borrowing or the applicable Increase Date (a) the following statements shall be
true (and each of the giving of the applicable Notice of Revolving Credit
Borrowing, request for Commitment Increase and the acceptance by the Borrower of
the proceeds of such Revolving Credit Borrowing shall constitute a
representation and warranty by the Borrower that on the date of such Borrowing
or such Increase Date such statements are true):
(i) the representations and warranties contained in Section 4.01
(except, in the case of Revolving Credit Borrowings, the representations
set forth in the last sentence of subsection (e) thereof and in subsection
(f)(i) thereof) are correct on and as of such date, before and after
giving effect to such Revolving Credit Borrowing or such Commitment
Increase and to the application of the proceeds therefrom, as though made
on and as of such date, and
(ii) no event has occurred and is continuing, or would result from
such Revolving Credit Borrowing or such Commitment Increase or from the
application of the proceeds therefrom, that constitutes a Default;
and (b) the Agent shall have received such other approvals, opinions or
documents as any Lender through the Agent may reasonably request.
SECTION 3.03. Conditions Precedent to Each Competitive Bid
Borrowing. The obligation of each Lender that is to make a Competitive Bid
Advance on the occasion of a Competitive Bid Borrowing to make such Competitive
Bid Advance as part of such Competitive Bid Borrowing is subject to the
conditions precedent that (a) the Agent shall have received the written
confirmatory Notice of Competitive Bid Borrowing with respect thereto, (b) on or
before the date of such Competitive Bid Borrowing, but prior to such Competitive
Bid Borrowing, the Agent shall have received a Competitive Bid Note payable to
the order of such Lender for each of the one or more Competitive Bid Advances to
be made by such Lender as part of such Competitive Bid Borrowing, in a principal
amount equal to the principal amount of the Competitive Bid Advance to be
evidenced thereby and otherwise on such terms as were agreed to for such
Competitive Bid Advance in accordance with Section 2.03, and (c) on the date of
such Competitive Bid Borrowing the following statements shall be true (and each
of the giving of the applicable Notice of Competitive Bid Borrowing and the
acceptance by the Borrower of the proceeds of such Competitive Bid Borrowing
shall constitute a representation and warranty by the Borrower that on the date
of such Competitive Bid Borrowing such statements are true):
(i) the representations and warranties contained in Section 4.01 are
correct on and as of the date of such Competitive Bid Borrowing, before
and after giving effect to such Competitive Bid Borrowing and to the
application of the proceeds therefrom, as though made on and as of such
date, and
(ii) no event has occurred and is continuing, or would result from
such Competitive Bid Borrowing or from the application of the proceeds
therefrom, that constitutes a Default.
SECTION 3.04. Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by
23
or acceptable or satisfactory to the Lenders unless an officer of the Agent
responsible for the transactions contemplated by this Agreement shall have
received notice from such Lender prior to the date that the Borrower, by notice
to the Lenders, designates as the proposed Effective Date, specifying its
objection thereto. The Agent shall promptly notify the Lenders of the occurrence
of the Effective Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) The Borrower is a corporation duly organized, validly existing
and in good standing under the laws of the State of New York.
(b) The execution, delivery and performance by the Borrower of this
Agreement and the Notes to be delivered by it, and the consummation of the
transactions contemplated hereby, are within the Borrower's corporate
powers, have been duly authorized by all necessary corporate action, and
do not contravene (i) the Borrower's charter or by-laws or (ii) any law or
any contractual restriction binding on or affecting the Borrower.
(c) No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body or any
other third party is required for the due execution, delivery and
performance by the Borrower of this Agreement or the Notes to be delivered
by it.
(d) This Agreement has been, and each of the Notes to be delivered
by it when delivered hereunder will have been, duly executed and delivered
by the Borrower. This Agreement is, and each of the Notes when delivered
hereunder will be, the legal, valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with their respective
terms.
(e) The Consolidated balance sheet of the Borrower and its
Subsidiaries as at December 31, 2000, and the related Consolidated
statements of income and cash flows of the Borrower and its Subsidiaries
for the fiscal year then ended, accompanied by an opinion of
PricewaterhouseCoopers LLP, independent public accountants, and the
Consolidated balance sheet of the Borrower and its Subsidiaries as at June
30, 2001, and the related Consolidated statements of income and cash flows
of the Borrower and its Subsidiaries for the six months then ended, duly
certified by the chief financial officer of the Borrower, copies of which
have been furnished to each Lender, fairly present subject, in the case of
said balance sheet as at June 30, 2001 and said statements of income and
cash flows for the six months then ended, to year-end audit adjustments,
the Consolidated financial condition of the Borrower and its Subsidiaries
as at such dates and the Consolidated results of the operations of the
Borrower and its Subsidiaries for the periods ended on such date, all in
accordance with generally accepted accounting principles consistently
applied. Since December 31, 2000, there has been no Material Adverse
Change.
(f) There is no pending or threatened action, suit, investigation,
litigation or proceeding, including, without limitation, any Environmental
Action, affecting the Borrower or any of its Subsidiaries before any
court, governmental agency or arbitrator that (i) could be reasonably
likely to have a Material Adverse Effect or (ii) purports to affect the
legality, validity or enforceability of this Agreement or any Note or the
consummation of the transactions contemplated hereby.
(g) The Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying margin stock (within the meaning
of Regulation U issued by the Board of Governors of the Federal Reserve
System), and no proceeds of any Advance will be used to purchase or carry
any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock.
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(h) The Borrower is not an "investment company", or a company
"controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Advance shall
remain unpaid or any Lender shall have any Commitment hereunder, the Borrower
will:
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable
laws, rules, regulations and orders, such compliance to include, without
limitation, compliance with ERISA and Environmental Laws.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges or levies
imposed upon it or upon its property and (ii) all lawful claims that, if
unpaid, might by law become a Lien upon its property; provided, however,
that neither the Borrower nor any of its Subsidiaries shall be required to
pay or discharge any such tax, assessment, charge or claim that is being
contested in good faith and by proper proceedings and as to which
appropriate reserves are being maintained, unless and until any Lien
resulting therefrom attaches to its property and becomes enforceable
against its other creditors.
(c) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which the Borrower
or such Subsidiary operates; provided, however, that the Borrower and its
Subsidiaries may self-insure to the same extent as other companies engaged
in similar businesses and owning similar properties in the same general
areas in which the Borrower or such Subsidiary operates and to the extent
consistent with prudent business practice.
(d) Preservation of Corporate Existence, Etc. Preserve and maintain,
and cause each of its Subsidiaries to preserve and maintain, its corporate
existence, rights (charter and statutory) and franchises; provided,
however, that the Borrower and its Subsidiaries may consummate any merger
or consolidation permitted under Section 5.02(b) and provided further that
neither the Borrower nor any of its Subsidiaries shall be required to
preserve any right or franchise or, in the case of any Subsidiary, its
corporate existence, if the Board of Directors of the Borrower shall
determine that the preservation thereof is no longer desirable in the
conduct of the business of the Borrower, and that the loss thereof is not
disadvantageous in any material respect to the Borrower or the Lenders.
(e) Visitation Rights. At any reasonable time and from time to time,
permit the Agent or any of the Lenders or any agents or representatives
thereof, to examine and make copies of and abstracts from the records and
books of account of, and visit (subject to applicable safety laws and
regulations) the properties of, the Borrower and any of its Subsidiaries,
and to discuss the affairs, finances and accounts of the Borrower and any
of its Subsidiaries with any of their officers or directors and with their
independent certified public accountants.
(f) Keeping of Books. Keep, and cause each of its Subsidiaries to
keep, proper books of record and account, in which full and correct
entries shall be made of all financial transactions and the assets and
business of the Borrower and each such Subsidiary in accordance with
generally accepted accounting principles in effect from time to time.
(g) Maintenance of Properties, Etc. Maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, all of its properties
that are used or useful in the conduct of its business in good working
order and condition, ordinary wear and tear excepted.
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(h) Reporting Requirements. Furnish to the Lenders:
(i) as soon as available and in any event within 45 days after
the end of each of the first three quarters of each fiscal year of
the Borrower, the Consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such quarter and Consolidated
statements of income and cash flows of the Borrower and its
Subsidiaries for the period commencing at the end of the previous
fiscal year and ending with the end of such quarter, duly certified
(subject to year-end audit adjustments) by the chief financial
officer of the Borrower as having been prepared in accordance with
generally accepted accounting principles and certificates of the
chief financial officer of the Borrower as to compliance with the
terms of this Agreement and setting forth in reasonable detail the
calculations necessary to demonstrate compliance with Section 5.03,
provided that in the event of any change in GAAP used in the
preparation of such financial statements, the Borrower shall also
provide, if necessary for the determination of compliance with
Section 5.03, a statement of reconciliation conforming such
financial statements to GAAP;
(ii) as soon as available and in any event within 90 days
after the end of each fiscal year of the Borrower, a copy of the
annual audit report for such year for the Borrower and its
Subsidiaries, containing the Consolidated balance sheet of the
Borrower and its Subsidiaries as of the end of such fiscal year and
Consolidated statements of income and cash flows of the Borrower and
its Subsidiaries for such fiscal year, in each case accompanied by
an opinion acceptable to the Required Lenders by
PricewaterhouseCoopers LLP or other "Big Five" independent public
accountants, provided that in the event of any change in GAAP used
in the preparation of such financial statements, the Borrower shall
also provide, if necessary for the determination of compliance with
Section 5.03, a statement of reconciliation conforming such
financial statements to GAAP;
(iii) as soon as possible and in any event within five days
after the occurrence of each Default continuing on the date of such
statement, a statement of the chief financial officer of the
Borrower setting forth details of such Default and the action that
the Borrower has taken and proposes to take with respect thereto;
(iv) promptly after the sending or filing thereof, copies of
all reports that the Borrower sends to any of its securityholders,
and copies of all reports and registration statements that the
Borrower or any Subsidiary files with the Securities and Exchange
Commission or any national securities exchange;
(v) promptly after the commencement thereof, notice of all
actions and proceedings before any court, governmental agency or
arbitrator affecting the Borrower or any of its Subsidiaries of the
type described in Section 4.01(f); and
(vi) such other information respecting the Borrower or any of
its Subsidiaries as any Lender through the Agent may from time to
time reasonably request.
Reports and financial statements required to be delivered by the
Borrower pursuant to paragraphs (i), (ii) and (iv) of this Section 5.01(h) shall
be deemed to have been delivered on the date on which it posts such reports, or
reports containing such financial statements, on its website on the Internet at
www.iff.com and when such reports, or reports containing such financial
statements are posted on the SEC's website at www.sec.gov; provided that it
shall deliver paper copies of the reports and financial statements referred to
in paragraphs (i), (ii) and (iv) of this Section 5.01(h) to the Agent or any
Lender who requests it to deliver such paper copies until written notice to
cease delivering paper copies is given by the Agent or such Lender; and provided
further that in every instance it shall provide paper copies of the certificates
required by subsection (i) and (ii) to the Agent and each of the Lenders until
such time as the Agent shall provide it written notice otherwise.
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SECTION 5.02. Negative Covenants. So long as any Advance shall
remain unpaid or any Lender shall have any Commitment hereunder, the Borrower
will not:
(a) Liens, Etc. Create or suffer to exist, or permit any of its
Subsidiaries to create or suffer to exist, any Lien on or with respect to
any of its properties, whether now owned or hereafter acquired, or assign,
or permit any of its Subsidiaries to assign, any right to receive income,
other than:
(i) Permitted Liens,
(ii) purchase money Liens upon or in any real property or
equipment acquired or held by the Borrower or any Subsidiary in the
ordinary course of business to secure the purchase price of such
property or equipment or to secure Debt incurred solely for the
purpose of financing the acquisition of such property or equipment,
or Liens existing on such property or equipment at the time of its
acquisition (other than any such Liens created in contemplation of
such acquisition that were not incurred to finance the acquisition
of such property) or extensions, renewals or replacements of any of
the foregoing for the same or a lesser amount, provided, however,
that no such Lien shall extend to or cover any properties of any
character other than the real property or equipment being acquired,
and no such extension, renewal or replacement shall extend to or
cover any properties not theretofore subject to the Lien being
extended, renewed or replaced, provided further that the aggregate
principal amount of the indebtedness secured by the Liens referred
to in this clause (ii) shall not exceed $50,000,000 at any time
outstanding,
(iii) the Liens existing on the Effective Date and described
on Schedule 5.02(a) hereto,
(iv) Liens on property of a Person existing at the time such
Person is merged into or consolidated with the Borrower or any
Subsidiary of the Borrower or becomes a Subsidiary of the Borrower;
provided that such Liens were not created in contemplation of such
merger, consolidation or acquisition and do not extend to any assets
other than those of the Person so merged into or consolidated with
the Borrower or such Subsidiary or acquired by the Borrower or such
Subsidiary,
(v) other Liens securing Debt in an aggregate principal amount
not to exceed $100,000,000 at any time outstanding, and
(vi) the replacement, extension or renewal of any Lien
permitted by clause (iii) or (iv) above upon or in the same property
theretofore subject thereto or the replacement, extension or renewal
(without increase in the amount or change in any direct or
contingent obligor) of the Debt secured thereby.
(b) Mergers, Etc. Merge or consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of the assets (whether now
owned or hereafter acquired) of the Borrower and its Subsidiaries, taken as a
whole, to, any Person, or permit any of its Subsidiaries to do so, except that
any Subsidiary of the Borrower may merge or consolidate with or into, or dispose
of assets to, any other Subsidiary of the Borrower, and except that any
Subsidiary of the Borrower may merge into or dispose of assets to the Borrower
and the Borrower may merge with any other Person so long as the Borrower is the
surviving corporation, provided, in each case, that no Default shall have
occurred and be continuing at the time of such proposed transaction or would
result therefrom.
(c) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in accounting policies or reporting
practices, except as required or permitted by generally accepted accounting
principles.
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(d) Change in Nature of Business. Make, or permit any of its
Subsidiaries to make, any material change in the nature of the business of the
Borrower and its Subsidiaries, taken as a whole, as carried on at the date
hereof.
(e) Subsidiary Debt. Permit any of its Subsidiaries to create or
suffer to exist, any Debt other than:
(i) Debt owed to the Borrower or to a wholly owned Subsidiary
of the Borrower,
(ii) Debt aggregating for all of the Borrower's Subsidiaries
not more than $400,000,000 at any one time outstanding, and
(iii) endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of
business.
SECTION 5.03. Financial Covenant. So long as any Advance shall
remain unpaid or any Lender shall have any Commitment hereunder, the Borrower
will maintain a ratio of Debt for Borrowed Money as at the end of each fiscal
quarter to EBITDA for the period of four fiscal quarters then ended of not more
than 3.25:1.0.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Advance when
the same becomes due and payable; or the Borrower shall fail to pay any
interest on any Advance or make any other payment of fees or other amounts
payable under this Agreement or any Note within three Business Days after
the same becomes due and payable; or
(b) Any representation or warranty made by the Borrower herein or by
the Borrower (or any of its officers) in connection with this Agreement
shall prove to have been incorrect in any material respect when made; or
(c) (i) The Borrower shall fail to perform or observe any term,
covenant or agreement contained in Section 5.01(d), (e) or (h), 5.02 or
5.03, or (ii) the Borrower shall fail to perform or observe any other
term, covenant or agreement contained in this Agreement on its part to be
performed or observed if such failure shall remain unremedied for 10 days
after written notice thereof shall have been given to the Borrower by the
Agent or any Lender; or
(d) The Borrower or any of its Subsidiaries shall fail to pay any
principal of or premium or interest on any Debt that is outstanding in a
principal or notional amount of at least $50,000,000 in the aggregate (but
excluding Debt outstanding hereunder) of the Borrower or such Subsidiary
(as the case may be), when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such
Debt; or any other event shall occur or condition shall exist under any
agreement or instrument relating to any such Debt and shall continue after
the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate, or
to permit the acceleration of, the maturity of such Debt; or any such Debt
shall be declared to be due and payable, or required to be prepaid or
redeemed (other than by a regularly scheduled required prepayment or
redemption), purchased or defeased, or an offer to prepay, redeem,
purchase or defease such Debt shall be required to be made, in each case
prior to the stated maturity thereof; or
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(e) The Borrower or any of its Subsidiaries shall generally not pay
its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment
for the benefit of creditors; or any proceeding shall be instituted by or
against the Borrower or any of its Subsidiaries seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar official
for it or for any substantial part of its property and, in the case of any
such proceeding instituted against it (but not instituted by it), either
such proceeding shall remain undismissed or unstayed for a period of 30
days, or any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the appointment
of a receiver, trustee, custodian or other similar official for, it or for
any substantial part of its property) shall occur; or the Borrower or any
of its Subsidiaries shall take any corporate action to authorize any of
the actions set forth above in this subsection (e); or
(f) Judgments or orders for the payment of money in excess of
$50,000,000 in the aggregate shall be rendered against the Borrower or any
of its Subsidiaries and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (ii) there shall
be any period of 20 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect; provided, however, that any such judgment or order shall
not be an Event of Default under this Section 6.01(f) if and for so long
as (i) the amount of such judgment or order is covered by a valid and
binding policy of insurance between the defendant and the insurer covering
payment thereof and (ii) such insurer, which shall be rated at least "A"
by A.M. Best Company, has been notified of, and has not disputed the claim
made for payment of, the amount of such judgment or order; or
(g) (i) Any Person or two or more Persons acting in concert (other
than any Founder) shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934), directly or indirectly, of Voting Stock
of the Borrower (or other securities convertible into such Voting Stock)
representing 20% or more of the combined voting power of all Voting Stock
of the Borrower; or (ii) during any period of up to 24 consecutive months,
commencing before or after the date of this Agreement, individuals who at
the beginning of such 24-month period were directors of the Borrower shall
cease for any reason (other than due to death or disability) to constitute
a majority of the board of directors of the Borrower (except to the extent
that individuals who at the beginning of such 24-month period were
replaced by individuals (x) elected by a majority of the remaining members
of the board of directors of the Borrower or (y) nominated for election by
a majority of the remaining members of the board of directors of the
Borrower and thereafter elected as directors by the shareholders of the
Borrower); or (iii) any Person or two or more Persons acting in concert
(other than any Founder) shall have acquired by contract or otherwise, or
shall have entered into a contract or arrangement that, upon consummation,
will result in its or their acquisition of the power to exercise, directly
or indirectly, a controlling influence over the management or policies of
the Borrower; or
(h) The Borrower or any of its ERISA Affiliates shall incur, or
shall be reasonably likely to incur liability in excess of $50,000,000 in
the aggregate as a result of one or more of the following: (i) the
occurrence of any ERISA Event; (ii) the partial or complete withdrawal of
the Borrower or any of its ERISA Affiliates from a Multiemployer Plan; or
(iii) the reorganization or termination of a Multiemployer Plan;
then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the
obligation of each Lender to make Advances to be terminated, whereupon the same
shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the
Advances, all interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Advances, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrower; provided, however, that in the
event of an actual or deemed
29
entry of an order for relief with respect to the Borrower under the Federal
Bankruptcy Code, (A) the obligation of each Lender to make Advances shall
automatically be terminated and (B) the Advances, all such interest and all such
amounts shall automatically become and be due and payable, without presentment,
demand, protest or any notice of any kind, all of which are hereby expressly
waived by the Borrower.
ARTICLE VII
THE AGENT
SECTION 7.01. Authorization and Action. Each Lender hereby appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers and discretion under this Agreement as are delegated to the
Agent by the terms hereof, together with such powers and discretion as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement (including, without limitation, enforcement or collection of the
Notes), the Agent shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding upon all Lenders
and all holders of Notes; provided, however, that the Agent shall not be
required to take any action that exposes the Agent to personal liability or that
is contrary to this Agreement or applicable law. The Agent agrees to give to
each Lender prompt notice of each notice given to it by the Borrower pursuant to
the terms of this Agreement.
SECTION 7.02. Agent's Reliance, Etc. Neither the Agent nor any of
its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection with this
Agreement, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent: (i) may treat
the Lender that made any Advance as the holder of the Debt resulting therefrom
until the Agent receives and accepts an Assumption Agreement entered into by an
Assuming Lender as provided in Section 2.18 or an Assignment and Acceptance
entered into by such Lender, as assignor, and an Eligible Assignee, as assignee,
as provided in Section 8.07; (ii) may consult with legal counsel (including
counsel for the Borrower), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (iii) makes no warranty or representation to any Lender
and shall not be responsible to any Lender for any statements, warranties or
representations (whether written or oral) made in or in connection with this
Agreement; (iv) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement on the part of the Borrower or to inspect the property (including the
books and records) of the Borrower; (v) shall not be responsible to any Lender
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; and (vi) shall incur no liability under or in respect
of this Agreement by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telecopier, telegram or telex) believed
by it to be genuine and signed or sent by the proper party or parties.
SECTION 7.03. Citibank and Affiliates. With respect to its
Commitment, the Advances made by it and the Note issued to it, Citibank shall
have the same rights and powers under this Agreement as any other Lender and may
exercise the same as though it were not the Agent; and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated, include Citibank in its
individual capacity. Citibank and its Affiliates may accept deposits from, lend
money to, act as trustee under indentures of, accept investment banking
engagements from and generally engage in any kind of business with, the
Borrower, any of its Subsidiaries and any Person who may do business with or own
securities of the Borrower or any such Subsidiary, all as if Citibank were not
the Agent and without any duty to account therefor to the Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender acknowledges that
it has, independently and without reliance upon the Agent or any other Lender
and based on the financial statements referred to in Section 4.01 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the 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 decisions in taking or
not taking action under this Agreement.
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SECTION 7.05. Indemnification. The Lenders agree to indemnify the
Agent (to the extent not reimbursed by the Borrower), ratably according to the
respective principal amounts of the Revolving Credit Advances then owed to each
of them (or if no Revolving Credit Advances are at the time outstanding, ratably
according to the respective amounts of their Commitments), from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by, or asserted against the Agent in
any way relating to or arising out of this Agreement or any action taken or
omitted by the Agent under this Agreement (collectively, the "Indemnified
Costs"), provided that no Lender shall be liable for any portion of the
Indemnified Costs resulting from the Agent's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to reimburse
the Agent promptly upon demand for its ratable share of any out-of-pocket
expenses (including reasonable counsel fees) incurred by the Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement, to the extent that the Agent is not reimbursed for such expenses
by the Borrower. In the case of any investigation, litigation or proceeding
giving rise to any Indemnified Costs, this Section 7.05 applies whether any such
investigation, litigation or proceeding is brought by the Agent, any Lender or a
third party.
SECTION 7.06. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrower and may be removed
at any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Agent, provided that, so long as no Default has occurred and is
continuing, the Borrower shall have the right to consent to such successor Agent
(which consent shall not be unreasonably withheld or delayed) . If no successor
Agent shall have been so appointed by the Required Lenders, and shall have
accepted such appointment, within 30 days after the retiring Agent's giving of
notice of resignation or the Required Lenders' removal of the retiring Agent,
then the retiring Agent may, on behalf of the Lenders, appoint a successor
Agent, which shall be a commercial bank organized under the laws of the United
States of America or of any State thereof and having a combined capital and
surplus of at least $500,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, discretion, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations under this Agreement. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Article VII
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement.
SECTION 7.07. Other Agents. Each Lender hereby acknowledges that
neither any co-agent nor any other Lender designated as any "Agent" on the
signature pages hereof has any liability hereunder other than in its capacity as
a Lender.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Revolving Credit Notes, nor consent to any
departure by the Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no amendment, waiver
or consent shall, unless in writing and signed by all the Lenders, do any of the
following: (a) waive any of the conditions specified in Section 3.01, (b)
increase the Commitments of the Lenders or subject the Lenders to any additional
obligations, (c) reduce the principal of, or interest on, the Revolving Credit
Advances or any fees or other amounts payable hereunder, (d) postpone any date
fixed for any payment of principal of, or interest on, the Revolving Credit
Advances or any fees or other amounts payable hereunder, (e) change the
percentage of the Commitments or of the aggregate unpaid principal amount of the
Revolving Credit Advances, or the number of Lenders, that shall be required for
the Lenders or any of them to take any action hereunder or (f) amend this
Section 8.01; and provided further that no amendment, waiver or consent shall,
unless in writing and signed by the Agent in addition to the Lenders required
above to take such action, affect the rights or duties of the Agent under this
Agreement or any Note.
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SECTION 8.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telecopier, telegraphic or
telex communication) and mailed, telecopied, telegraphed, telexed or delivered,
if to the Borrower, at its address at 521 West 57th Street, New York, New York
10019, Attention: Treasurer, with a copy to Corporate Secretary; if to any
Initial Lender, at its Domestic Lending Office specified opposite its name on
Schedule I hereto; if to any other Lender, at its Domestic Lending Office
specified in the Assumption Agreement or the Assignment and Acceptance pursuant
to which it became a Lender; and if to the Agent, at its address at Two Penns
Way, New Castle, Delaware 19720, Attention: Bank Loan Syndications Department;
or, as to the Borrower or the Agent, at such other address as shall be
designated by such party in a written notice to the other parties and, as to
each other party, at such other address as shall be designated by such party in
a written notice to the Borrower and the Agent. All such notices and
communications shall, when mailed, telecopied, telegraphed or telexed, be
effective when deposited in the mails, telecopied, delivered to the telegraph
company or confirmed by telex answerback, respectively, except that notices and
communications to the Agent pursuant to Article II, III or VII shall not be
effective until received by the Agent. Delivery by telecopier of an executed
counterpart of any amendment or waiver of any provision of this Agreement or the
Notes or of any Exhibit hereto to be executed and delivered hereunder shall be
effective as delivery of a manually executed counterpart thereof.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any
Lender or the Agent to exercise, and no delay in exercising, any right hereunder
or under any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses. (a) The Borrower agrees to pay on
demand all costs and expenses of the Agent in connection with the preparation,
execution, delivery, administration, modification and amendment of this
Agreement, the Notes and the other documents to be delivered hereunder,
including, without limitation, (A) all due diligence, syndication (including
printing, distribution and bank meetings), transportation, computer,
duplication, appraisal, consultant, and audit expenses and (B) the reasonable
fees and expenses of counsel for the Agent with respect thereto and with respect
to advising the Agent as to its rights and responsibilities under this
Agreement. The Borrower further agrees to pay on demand all costs and expenses
of the Agent and the Lenders, if any (including, without limitation, reasonable
counsel fees and expenses), in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of this Agreement, the Notes and
the other documents to be delivered hereunder, including, without limitation,
reasonable fees and expenses of counsel for the Agent and each Lender in
connection with the enforcement of rights under this Section 8.04(a), provided
that in the case of any enforcement of this Agreement, the Notes and the other
documents to be delivered hereunder, the Agent and the Lenders shall retain one
counsel at the expense of the Borrower, provided, further, that if there exists
or is reasonably likely to exist a conflict of interest that would make it
inappropriate for the same counsel to represent all the Lenders, then each
Lender with such a conflict of interest shall be entitled to retain its own
counsel at the expense of the Borrower.
(b) The Borrower agrees to indemnify and hold harmless the Agent and
each Lender and each of their Affiliates and their officers, directors,
employees, agents and advisors (each, an "Indemnified Party") from and against
any and all claims, damages, losses, liabilities and expenses (including,
without limitation, reasonable fees and expenses of counsel) incurred by or
asserted or awarded against any Indemnified Party, in each case arising out of
or in connection with or by reason of (including, without limitation, in
connection with any investigation, litigation or proceeding or preparation of a
defense in connection therewith) (i) the Notes, this Agreement, any of the
transactions contemplated herein or the actual or proposed use of the proceeds
of the Advances or (ii) the actual or alleged presence of Hazardous Materials on
any property of the Borrower or any of its Subsidiaries or any Environmental
Action relating in any way to the Borrower or any of its Subsidiaries, except to
the extent such claim, damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful misconduct. In the
case of an investigation, litigation or other proceeding to which the indemnity
in this Section 8.04(b) applies, such indemnity shall be effective whether or
not such investigation, litigation or proceeding is brought by the Borrower, its
directors, shareholders or creditors or an Indemnified Party or any other Person
or any Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated. The Borrower also agrees not
to assert any claim for special, indirect, consequential or punitive damages
against the Agent, any Lender, any of their Affiliates, or any of their
respective directors, officers, employees, attorneys and agents, and the
32
Agent and each Lender agrees not to assert any claim for special, indirect,
consequential or punitive damages against the Borrower, any of its Affiliates,
or any of their respective directors, officers, employees, attorneys and agents,
on any theory of liability arising out of or otherwise relating to the Notes,
this Agreement, any of the transactions contemplated herein or the actual or
proposed use of the proceeds of the Advances.
(c) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance, LIBO Rate Advance is made by the Borrower to or for the account of
a Lender other than on the last day of the Interest Period for such Advance, as
a result of a payment or Conversion pursuant to Section 2.08(d) or (e), 2.10 or
2.12, acceleration of the maturity of the Notes pursuant to Section 6.01 or for
any other reason or by an Eligible Assignee to a Lender other than on the last
day of the Interest Period for such Advance upon an assignment of rights and
obligations under this Agreement pursuant to Section 8.07 as a result of a
demand by the Borrower pursuant to Section 8.07(a), the Borrower shall, upon
demand by such Lender (with a copy of such demand to the Agent), pay to the
Agent for the account of such Lender any amounts required to compensate such
Lender for any additional losses, costs or expenses that it may reasonably incur
as a result of such payment or Conversion, including, without limitation, any
loss (excluding loss of anticipated profits), cost or expense incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain such Advance.
(d) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
Sections 2.11, 2.14 and 8.04 shall survive the payment in full of principal,
interest and all other amounts payable hereunder and under the Notes.
SECTION 8.05. Right of Set-off. Upon (i) the occurrence and during
the continuance of any Event of Default and (ii) the making of the request or
the granting of the consent specified by Section 6.01 to authorize the Agent to
declare the Notes due and payable pursuant to the provisions of Section 6.01,
each Lender and each of its Affiliates is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Lender or such
Affiliate to or for the credit or the account of the Borrower against any and
all of the obligations of the Borrower now or hereafter existing under this
Agreement and the Note held by such Lender, whether or not such Lender shall
have made any demand under this Agreement or such Note and although such
obligations may be unmatured. Each Lender agrees promptly to notify the Borrower
after any such set-off and application, provided that the failure to give such
notice shall not affect the validity of such set-off and application. The rights
of each Lender and its Affiliates under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
that such Lender and its Affiliates may have.
SECTION 8.06. Binding Effect. This Agreement shall become effective
(other than Sections 2.01 and 2.03, which shall only become effective upon
satisfaction of the conditions precedent set forth in Section 3.01) when it
shall have been executed by the Borrower and the Agent and when the Agent shall
have been notified by each Initial Lender that such Initial Lender has executed
it and thereafter shall be binding upon and inure to the benefit of the
Borrower, the Agent and each Lender and their respective successors and assigns,
except that the Borrower shall not have the right to assign its rights hereunder
or any interest herein without the prior written consent of the Lenders.
SECTION 8.07. Assignments and Participations. (a) Each Lender may
and, if demanded by the Borrower (following a demand by such Lender pursuant to
Section 2.11 or 2.14 or a notification by such Lender pursuant to Section 2.12)
upon at least five Business Days' notice to such Lender and the Agent, will
assign to one or more Persons all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Commitment, the Revolving Credit Advances owing to it and the Revolving Credit
Note or Notes held by it); provided, however, that (i) each such assignment
shall be of a constant, and not a varying, percentage of all rights and
obligations under this Agreement (other than any right to make Competitive Bid
Advances, Competitive Bid Advances owing to it and Competitive Bid Notes), (ii)
except in the case of an assignment to a Person that, immediately prior to such
assignment, was a Lender or an assignment of all of a Lender's rights and
obligations under this Agreement, the amount of the Commitment of the assigning
Lender being assigned pursuant to each such assignment (determined as of the
date of the Assignment and Acceptance with respect to such assignment) shall in
no event be less than $10,000,000 or an integral multiple of $1,000,000 in
excess thereof, (iii) each such assignment shall be to an Eligible Assignee,
(iv) each such assignment made as a result of a demand
33
by the Borrower pursuant to this Section 8.07(a) shall be arranged by the
Borrower after consultation with the Agent and shall be either an assignment of
all of the rights and obligations of the assigning Lender under this Agreement
or an assignment of a portion of such rights and obligations made concurrently
with another such assignment or other such assignments that together cover all
of the rights and obligations of the assigning Lender under this Agreement, (v)
no Lender shall be obligated to make any such assignment as a result of a demand
by the Borrower pursuant to this Section 8.07(a) unless and until such Lender
shall have received one or more payments from either the Borrower or one or more
Eligible Assignees in an aggregate amount at least equal to the aggregate
outstanding principal amount of the Advances owing to such Lender, together with
accrued interest thereon to the date of payment of such principal amount and all
other amounts payable to such Lender under this Agreement, and (vi) the parties
to each such assignment shall execute and deliver to the Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with any Revolving Credit Note subject to such assignment and a processing and
recordation fee of $3,500. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and
Acceptance, (x) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder and (y) the Lender assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Agent, such assigning Lender 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 decisions in taking or not taking action under
this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi)
such assignee appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers and discretion under this Agreement as
are delegated to the Agent by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all of the obligations that
by the terms of this Agreement are required to be performed by it as a Lender.
(c) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
together with any Revolving Credit Note or Notes subject to such assignment, the
Agent shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrower.
(d) The Agent shall maintain at its address referred to in Section
8.02 a copy of each Assumption Agreement and each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of the names
and addresses of the Lenders and the Commitment of, and principal amount of the
Advances owing to, each Lender from time to time (the "Register"). The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrower, the Agent and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. 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.
34
(e) Each Lender may sell participations to one or more banks or
other entities (other than the Borrower or any of its Affiliates) in or to all
or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment, the Advances owing to it
and any Note or Notes held by it); provided, however, that (i) such Lender's
obligations under this Agreement (including, without limitation, its Commitment
to the Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Borrower, the Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and (v) no participant
under any such participation shall have any right to approve any amendment or
waiver of any provision of this Agreement or any Note, or any consent to any
departure by the Borrower therefrom, except to the extent that such amendment,
waiver or consent would reduce the principal of, or interest on, the Notes or
any fees or other amounts payable hereunder, in each case to the extent subject
to such participation, or postpone any date fixed for any payment of principal
of, or interest on, the Notes or any fees or other amounts payable hereunder, in
each case to the extent subject to such participation.
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower; provided that, prior to any such disclosure,
the assignee or participant or proposed assignee or participant shall agree to
preserve the confidentiality of any Confidential Information relating to the
Borrower received by it from such Lender.
(g) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security interest in all or any portion of
its rights under this Agreement (including, without limitation, the Advances
owing to it and any Note or Notes held by it) in favor of any Federal Reserve
Bank in accordance with Regulation A of the Board of Governors of the Federal
Reserve System.
SECTION 8.08. Confidentiality. Neither the Agent nor any Lender
shall disclose any Confidential Information to any other Person without the
consent of the Borrower, other than (a) to the Agent's or such Lender's
Affiliates and their officers, directors, employees, agents and advisors and, as
contemplated by Section 8.07(f), to actual or prospective assignees and
participants, and then only on a confidential basis, (b) as required by any law,
rule or regulation or judicial process and (c) as requested or required by any
state, federal or foreign authority or examiner regulating banks or banking.
SECTION 8.09. Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 8.10. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.11. Jurisdiction, Etc. (a) Each of the parties hereto
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or the Notes, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in any such New York State court or, to the extent permitted by law,
in such federal court. Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Agreement shall affect any right that any party may
otherwise have to bring any action or proceeding relating to this Agreement or
the Notes in the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
35
action or proceeding arising out of or relating to this Agreement or the Notes
in any New York State or federal court. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
SECTION 8.12. Integration. This Agreement and the commitment letter
dated __________ __, 2001 among the Borrower, Citibank, N.A. and Salomon Smith
Barney Inc. constitute the entire contract among the parties relating to the
subject matter hereof and supersedes any and all previous arrangements and
understandings, oral or written, relating to the subject matter hereof.
36
SECTION 8.13. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE AGENT
AND THE LENDERS HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE NOTES OR THE
ACTIONS OF THE AGENT OR ANY LENDER IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
INTERNATIONAL FLAVORS & FRAGRANCES
INC.
By______________________________________
Title:
CITIBANK, N.A.,
as Agent
By______________________________________
Title:
Initial Lenders
Administrative Agent and Book Manager
Commitment
$33,000,000 CITIBANK, N.A.
By______________________________________
Title:
Syndication Agents
$30,900,000 BANK OF TOKYO-MITSUBISHI TRUST
COMPANY
By______________________________________
Title:
$30,900,000 BANK ONE, NA (Main Office Chicago)
By______________________________________
Title:
37
Co-Documentation Agents
$30,900,000 ABN AMRO BANK N.V.
By______________________________________
Title:
By______________________________________
Title:
$30,900,000 FIRST UNION NATIONAL BANK
By______________________________________
Title:
Senior Co-Agent
$29,400,000 FLEET NATIONAL BANK
By______________________________________
Title:
Senior Managing Agents
$27,000,000 BNP PARIBAS
By______________________________________
Title:
By______________________________________
Title:
$27,000,000 ING (U.S.) CAPITAL LLC
By______________________________________
Title:
Lenders
$15,000,000 INTESABCI NEW YORK BRANCH
By______________________________________
Title:
By______________________________________
Title:
38
$15,000,000 FORTIS (USA) FINANCE LLC
By______________________________________
Title:
By______________________________________
Title:
$15,000,000 THE BANK OF NEW YORK
By______________________________________
Title:
$15,000,000 MELLON BANK, N.A.
By______________________________________
Title:
$300,000,000 Total of the Commitments
39
SCHEDULE I
INTERNATIONAL FLAVORS & FRAGRANCES INC.
FIVE YEAR CREDIT AGREEMENT
APPLICABLE LENDING OFFICES
- --------------------------------------------------------------------------------------------
Name of Initial Lender Domestic Lending Office Eurodollar Lending Office
- --------------------------------------------------------------------------------------------
ABN AMRO BANK N.V. 208 South LaSalle, Suite 1500 208 South LaSalle, Suite 1500
Chicago, IL 60604-1003 Chicago, IL 60604-1003
Attn: Loan Administration Attn: Loan Administration
T: 312 992-5151 T: 312 992-5151
F: 312 992-5156 F: 312 992-5156
- --------------------------------------------------------------------------------------------
THE BANK OF NEW YORK One Wall Street One Wall Street
New York, NY 10286 New York, NY 10286
Attn: Rose Leonard Attn: Rose Leonard
T: 212 635-1471 T: 212 635-1471
F: 212 635-6397/6426 F: 212 635-6397/6426
- --------------------------------------------------------------------------------------------
BANK ONE, NA
- --------------------------------------------------------------------------------------------
BANK OF TOKYO-MITSUBISHI 1251 Avenue of the Americas 1251 Avenue of the Americas
TRUST COMPANY 12th Floor 12th Floor
New York, NY 10020 New York, NY 10020
Attn: Mr. Rolando Attn: Mr. Rolando
T: 212 782-5637 T: 212 782-5637
F: 212 782-5635 F: 212 782-5635
- --------------------------------------------------------------------------------------------
BNP PARIBAS
- --------------------------------------------------------------------------------------------
CITIBANK, N.A. Two Penns Way Two Penns Way
New Castle, DE 19720 New Castle, DE 19720
Attn: Meaghan McCormack Attn: Meaghan McCormack
T: 302 894-6017 T: 302 894-6017
F: 302 894-6120 F: 302 894-6120
- --------------------------------------------------------------------------------------------
FIRST UNION NATIONAL BANK 50 Main Street 50 Main Street
White Plains, NY 10606 White Plains, NY 10606
Attn: David Ring Attn: David Ring
T: 914 286-5039 T: 914 286-5039
F: 914 681-8755 F: 914 681-8755
- --------------------------------------------------------------------------------------------
FLEET NATIONAL BANK 100 Federal Street 100 Federal Street
Mail Code: 01-10-04 Mail Code: 01-10-04
Boston, MA 02110 Boston, MA 02110
Attn: Deborah Dobbins Attn: Deborah Dobbins
T: 617 434-5455 T: 617 434-5455
F: 617 434-1574 F: 617 434-1574
- --------------------------------------------------------------------------------------------
FORTIS (USA) FINANCE LLC 520 Madison Avenue 520 Madison Avenue
New York, NY 10022 New York, NY 10022
Attn: Douglas Riahi Attn: Douglas Riahi
T: 212 418-8736 T: 212 418-8736
F: 212 750-7597 F: 212 750-7597
- --------------------------------------------------------------------------------------------
ING (U.S.) CAPITAL LLC
- --------------------------------------------------------------------------------------------
INTESABCI NEW YORK BRANCH One William Street One William Street
New York, NY 10004 New York, NY 10004
Attn: Charles Dougherty Attn: Charles Dougherty
T: 212 607-3656 T: 212 607-3656
F: 212 809-2124 F: 212 809-2124
- --------------------------------------------------------------------------------------------
MELLON BANK, N.A.
- --------------------------------------------------------------------------------------------
EXHIBIT A-1 - FORM OF
REVOLVING CREDIT
PROMISSORY NOTE
U.S.$_______________ Dated: _______________, 200_
FOR VALUE RECEIVED, the undersigned, INTERNATIONAL FLAVORS & FRAGRANCES
INC., a New York corporation (the "Borrower"), HEREBY PROMISES TO PAY to the
order of __________ (the "Lender") for the account of its Applicable Lending
Office on the later of Termination Date and the date designated pursuant to
Section 2.06 of the Credit Agreement (each as defined in the Credit Agreement
referred to below) the principal sum of U.S.$[amount of the Lender's Commitment
in figures] or, if less, the aggregate principal amount of the Revolving Credit
Advances made by the Lender to the Borrower pursuant to the Five Year Credit
Agreement dated as of September 26, 2001 among the Borrower, the Lender and
certain other lenders parties thereto, and Citibank, N.A. as Agent for the
Lender and such other lenders (as amended or modified from time to time, the
"Credit Agreement"; the terms defined therein being used herein as therein
defined) outstanding on such date.
The Borrower promises to pay interest on the unpaid principal amount of
each Revolving Credit Advance from the date of such Revolving Credit Advance
until such principal amount is paid in full, at such interest rates, and payable
at such times, as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Citibank, as Agent, at 399 Park Avenue, New York, New York
10043, in same day funds. Each Revolving Credit Advance owing to the Lender by
the Borrower pursuant to the Credit Agreement, and all payments made on account
of principal thereof, shall be recorded by the Lender and, prior to any transfer
hereof, endorsed on the grid attached hereto which is part of this Promissory
Note.
This Promissory Note is one of the Revolving Credit Notes referred to in,
and is entitled to the benefits of, the Credit Agreement. The Credit Agreement,
among other things, (i) provides for the making of Revolving Credit Advances by
the Lender to the Borrower from time to time in an aggregate amount not to
exceed at any time outstanding the U.S. dollar amount first above mentioned, the
indebtedness of the Borrower resulting from each such Revolving Credit Advance
being evidenced by this Promissory Note and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
and also for prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions therein specified.
INTERNATIONAL FLAVORS & FRAGRANCES INC.
By______________________________________
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
- --------------------------------------------------------------------------------
Amount of
Amount of Principal Paid Unpaid Principal Notation
Date Advance or Prepaid Balance Made By
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2
EXHIBIT A-2 - FORM OF
COMPETITIVE BID
PROMISSORY NOTE
U.S.$_______________ Dated: _______________, 200_
FOR VALUE RECEIVED, the undersigned, INTERNATIONAL FLAVORS & FRAGRANCES
INC., a New York corporation (the "Borrower"), HEREBY PROMISES TO PAY to the
order of __________ (the "Lender") for the account of its Applicable Lending
Office (as defined in the Five Year Credit Agreement dated as of September 26,
2001 among the Borrower, the Lender and certain other lenders parties thereto,
and Citibank, N.A., as Agent for the Lender and such other lenders (as amended
or modified from time to time, the "Credit Agreement"; the terms defined therein
being used herein as therein defined)), on _______________, 200_, the principal
amount of U.S.$_______________.
The Borrower promises to pay interest on the unpaid principal amount
hereof from the date hereof until such principal amount is paid in full, at the
interest rate and payable on the interest payment date or dates provided below:
Interest Rate: _____% per annum (calculated on the basis of a year of
_____ days for the actual number of days elapsed).
Both principal and interest are payable in lawful money of the United
States to Citibank, as agent, for the account of the Lender at the office of
Citibank at 399 Park Avenue, New York, New York 10043 in same day funds.
This Promissory Note is one of the Competitive Bid Notes referred to in,
and is entitled to the benefits of, the Credit Agreement. The Credit Agreement,
among other things, contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events.
The Borrower hereby waives presentment, demand, protest and notice of any
kind. No failure to exercise, and no delay in exercising, any rights hereunder
on the part of the holder hereof shall operate as a waiver of such rights.
This Promissory Note shall be governed by, and construed in accordance
with, the laws of the State of New York.
INTERNATIONAL FLAVORS & FRAGRANCES INC.
By______________________________________
Title:
EXHIBIT B-1 - FORM OF NOTICE OF
REVOLVING CREDIT BORROWING
Citibank, N.A., as Agent
for the Lenders parties
to the Credit Agreement
referred to below
Two Penns Way
New Castle, Delaware 19720
[Date]
Attention: Bank Loan Syndications Department
Ladies and Gentlemen:
The undersigned, International Flavors & Fragrances Inc., refers to the
Five Year Credit Agreement, dated as of September 26, 2001 (as amended or
modified from time to time, the "Credit Agreement", the terms defined therein
being used herein as therein defined), among the undersigned, certain Lenders
parties thereto and Citibank, N.A., as Agent for said Lenders, and hereby gives
you notice, irrevocably, pursuant to Section 2.02 of the Credit Agreement that
the undersigned hereby requests a Revolving Credit Borrowing under the Credit
Agreement, and in that connection sets forth below the information relating to
such Revolving Credit Borrowing (the "Proposed Revolving Credit Borrowing") as
required by Section 2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Revolving Credit Borrowing is
_______________, 200_.
(ii) The Type of Advances comprising the Proposed Revolving Credit
Borrowing is [Base Rate Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed Revolving Credit Borrowing is
$---------------.
[(iv) The initial Interest Period for each Eurodollar Rate Advance made as
part of the Proposed Revolving Credit Borrowing is _____ month[s].]
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the Proposed Revolving Credit
Borrowing:
(A) the representations and warranties contained in Section 4.01 of the
Credit Agreement (except the representations set forth in the last sentence of
subsection (e) thereof and in subsection (f)(i) thereof) are correct, before and
after giving effect to the Proposed Revolving Credit Borrowing and to the
application of the proceeds therefrom, as though made on and as of such date;
and
(B) no event has occurred and is continuing, or would result from such
Proposed Revolving Credit Borrowing or from the application of the proceeds
therefrom, that constitutes a Default.
Very truly yours,
INTERNATIONAL FLAVORS & FRAGRANCES INC.
By______________________________________
Title:
EXHIBIT B-2 - FORM OF NOTICE OF
COMPETITIVE BID BORROWING
Citibank, N.A., as Agent
for the Lenders parties
to the Credit Agreement
referred to below
Two Penns Way
New Castle, Delaware 19720
[Date]
Attention: Bank Loan Syndications Department
Ladies and Gentlemen:
The undersigned, International Flavors & Fragrances Inc., refers to the
Five Year Credit Agreement, dated as of September 26, 2001 (as amended or
modified from time to time, the "Credit Agreement", the terms defined therein
being used herein as therein defined), among the undersigned, certain Lenders
parties thereto and Citibank, N.A., as Agent for said Lenders, and hereby gives
you notice, irrevocably, pursuant to Section 2.03 of the Credit Agreement that
the undersigned hereby requests a Competitive Bid Borrowing under the Credit
Agreement, and in that connection sets forth the terms on which such Competitive
Bid Borrowing (the "Proposed Competitive Bid Borrowing") is requested to be
made:
(A) Date of Competitive Bid Borrowing ________________________
(B) Amount of Competitive Bid Borrowing ________________________
(C) [Maturity Date] [Interest Period] ________________________
(D) Interest Rate Basis ________________________
(E) Interest Payment Date(s) ________________________
(F) ________________________ ________________________
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the Proposed Competitive Bid
Borrowing:
(a) the representations and warranties contained in Section 4.01 are
correct, before and after giving effect to the Proposed Competitive Bid
Borrowing and to the application of the proceeds therefrom, as though made on
and as of such date;
(b) no event has occurred and is continuing, or would result from the
Proposed Competitive Bid Borrowing or from the application of the proceeds
therefrom, that constitutes a Default;
(c) no event has occurred and no circumstance exists as a result of which
the information concerning the undersigned that has been provided to the Agent
and each Lender by the undersigned in connection with the Credit Agreement would
include an untrue statement of a material fact or omit to state any material
fact or any fact necessary to make the statements contained therein, in the
light of the circumstances under which they were made, not misleading; and
(d) the aggregate amount of the Proposed Competitive Bid Borrowing and all
other Borrowings to be made on the same day under the Credit Agreement is within
the aggregate amount of the unused Commitments of the Lenders.
The undersigned hereby confirms that the Proposed Competitive Bid
Borrowing is to be made available to it in accordance with Section 2.03(a)(v) of
the Credit Agreement.
Very truly yours,
INTERNATIONAL FLAVORS & FRAGRANCES INC.
By______________________________________
Title:
2
EXHIBIT C - FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Five Year Credit Agreement dated as of September
26, 2001 (as amended or modified from time to time, the "Credit Agreement")
among International Flavors & Fragrances Inc., a New York corporation (the
"Borrower"), the Lenders (as defined in the Credit Agreement) and Citibank,
N.A., as agent for the Lenders (the "Agent"). Terms defined in the Credit
Agreement are used herein with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule I hereto agree
as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, an interest in and to the
Assignor's rights and obligations under the Credit Agreement as of the date
hereof (other than in respect of Competitive Bid Advances and Competitive Bid
Notes) equal to the percentage interest specified on Schedule 1 hereto of all
outstanding rights and obligations under the Credit Agreement (other than in
respect of Competitive Bid Advances and Competitive Bid Notes). After giving
effect to such sale and assignment, the Assignee's Commitment and the amount of
the Revolving Credit Advances owing to the Assignee will be as set forth on
Schedule 1 hereto.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under the
Credit Agreement or any other instrument or document furnished pursuant thereto;
and (iv) attaches the Revolving Credit Note, if any held by the Assignor.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 4.01 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor 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 decisions in taking or not taking action under the Credit
Agreement; (iii) confirms that it is an Eligible Assignee; (iv) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement as are delegated to the
Agent by the terms thereof, together with such powers and discretion as are
reasonably incidental thereto; (v) agrees that it will perform in accordance
with their terms all of the obligations that by the terms of the Credit
Agreement are required to be performed by it as a Lender; and (vi) attaches any
U.S. Internal Revenue Service forms required under Section 2.14 of the Credit
Agreement.
4. Following the execution of this Assignment and Acceptance, it will be
delivered to the Agent for acceptance and recording by the Agent. The effective
date for this Assignment and Acceptance (the "Effective Date") shall be the date
of acceptance hereof by the Agent, unless otherwise specified on Schedule 1
hereto.
5. Upon such acceptance and recording by the Agent, as of the Effective
Date, (i) the Assignee shall be a party to the Credit Agreement and, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement and
the Revolving Credit Notes in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and facility
fees with respect thereto) to the Assignee. The Assignor and Assignee shall make
all appropriate adjustments in payments under the
Credit Agreement and the Revolving Credit Notes for periods prior to the
Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule 1
to this Assignment and Acceptance to be executed by their officers thereunto
duly authorized as of the date specified thereon.
2
Schedule 1
to
Assignment and Acceptance
Percentage interest assigned: _____%
Assignee's Commitment: $__________
Aggregate outstanding principal amount of Revolving Credit Advances assigned: $__________
Principal amount of Revolving Credit Note payable to Assignee: $__________
Principal amount of Revolving Credit Note payable to Assignor: $__________
Effective Date*: _______________, 200_
[NAME OF ASSIGNOR], as Assignor
By______________________________________
Title:
Dated: _______________________, 200_
[NAME OF ASSIGNEE], as Assignee
By______________________________________
Title:
Dated: _______________________, 200_
Domestic Lending Office:
[Address]
Eurodollar Lending Office:
[Address]
Accepted [and Approved] this
________ day of _______________, 200_
CITIBANK, N.A., as Agent
By___________________________________
Title:
[Approved this __________ day
___________________
* This date should be no earlier than five Business Days after the delivery
of this Assignment and Acceptance to the Agent.
3
of _______________, 200_
INTERNATIONAL FLAVORS & FRAGRANCES INC.
By_________________________________]*
Title:
- ----------
* Required if the Assignee is an Eligible Assignee solely by reason of
clause (iii) of the definition of "Eligible Assignee".
4
EXHIBIT D - FORM OF
OPINION OF COUNSEL
FOR THE BORROWER
Exhibit 10(c)
CREDIT AGREEMENT
----------------
This CREDIT AGREEMENT (this "Agreement") is dated as of September 27,
2001 and is by and between INTERNATIONAL FLAVORS & FRAGRANCES, INC. (the
"Borrower"), a corporation duly organized and validly existing under the laws of
the State of New York, and BANK OF TOKYO-MITSUBISHI TRUST COMPANY, a trust
company organized under the laws of the State of New York (the "Bank").
The Borrower desires the Bank to lend certain sums to the Borrower and
the Bank agrees to extend credit to the Borrower, in accordance with the terms
and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby confirmed and acknowledged, the Borrower and the
Bank hereby agree as follows:
Section 1. Definitions and Interpretation.
------------------------------
As used herein, the following terms shall have the meanings
set forth below:
(a) "Affiliate" shall mean, with respect to any Person, any
---------
other Person that, directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such first
Person.
(b) "Agreement Date" shall mean the date first set above, such
--------------
date being the date as of which this Agreement was executed and delivered by the
parties hereto.
(c) "Applicable Law" shall mean anything in Section 15 to the
--------------
contrary notwithstanding, (i) all applicable common law and principles of equity
and (ii) all applicable provisions of all (A) constitutions, statutes, rules,
regulations and orders of governmental bodies, (B) Governmental Approvals and
(C) orders, decisions, judgments and decrees of all courts (whether at law or in
equity).
(d) "Bank's Office" shall mean Bank of Tokyo-Mitsubishi Trust
-------------
Company., 1251 Avenue of the Americas, 12th Floor, New York, New York
10020-1104.
(e) "Borrowing Date" shall mean September 27, 2001.
--------------
(f) "Business Day" shall mean any day except a day which is a
------------
Saturday or a Sunday or on which commercial banks are not required or authorized
to remain open for the regular transaction of business in the City of New York;
provided, that, if any such day relates to
-1-
a payment or prepayment of principal of or interest on, or an Interest Period
for, the Term Loan or notice to the Borrower with respect to any such payment,
prepayment or Interest Period, then such day must also be a day on which
dealings in Yen deposits are carried out in the London interbank market.
(g) "Credit Agreement Related Claim" shall mean any claim
------------------------------
(whether sounding in tort, or contract or otherwise) in any way related to,
arising out of, or connected with, this Agreement, or the Term Loan Note whether
such claim arises or is asserted before or after the Term Loan Maturity Date.
(h) "Capital Lease Obligations" shall mean, as to any Person,
-------------------------
the obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) real and/or personal property which
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under generally accepted accounting principles
(including Statement of Financial Accounting Standards No. 13 of the Financial
Accounting Standards Board) and, for purposes of this Agreement, the amount of
such obligations shall be the capitalized amount thereof, determined in
accordance with generally accepted accounting principles (including Statement
No. 13).
(i) "Consolidated Subsidiary" shall mean, at any date with
-----------------------
respect to any Person, any Subsidiary or other entity the accounts of which
would be consolidated with those of such Person in the consolidated financial
statements of such Person if such statements were prepared in accordance with
GAAP as of such date.
(j) "Default" shall mean any condition or event that
-------
constitutes an Event of Default or that with the giving of notice or lapse of
time or both would, unless cured or waived, become an Event of Default.
(k) "Dollars" and the sign "$" shall each refer to the lawful
------- -
currency of the United States of America.
(l) "EBITDA" shall mean for any period, net income (or net
------
loss) plus the sum of (a) interest expense, (b) income tax expense, (c)
----
depreciation expense, (d) amortization expense and all other non-cash charges
and (e) extraordinary or unusual losses deducted in calculating net income less
extraordinary or unusual gains added in calculating net income, in each case
determined in accordance with GAAP for such period.
(m) "Environmental Laws" shall mean as of any date the
------------------
Comprehensive Environmental Response Compensation and Liability Act, the
Hazardous Materials Transportation Act, the Resource Conservation and Recovery
Act, the Federal Water Pollution Act, the Toxic Substances Control Act, and the
Occupational Safety and Health Act, as such laws have been amended or
supplemented, and any Federal, state, or local statute, ordinance, rule or
regulation in effect relating to the foregoing.
-2-
(n) "ERISA" shall mean the Employee Retirement Income Security
-----
Act of 1974, as amended from time to time.
(o) "Event of Default" shall have the meaning ascribed to such
----------------
term in Section 13 of this Agreement.
(p) "GAAP" shall mean generally accepted accounting principles
----
in the United States.
(q) "Governmental Approval" shall mean any authorization,
---------------------
consent, approval, license or exemption of, registration or filing with, or
report or notice to, a governmental unit.
(r) "Guarantee" of any Person shall mean any obligation of such
---------
Person directly guaranteeing any Indebtedness of any other Person or otherwise
providing for the payment of any Indebtedness of any Person, provided that the
term "Guarantee" shall not include endorsements for collection or deposits in
the ordinary course of business. The term "Guarantee" used as a verb has a
correlative meaning.
(s) "Indebtedness" of any Person shall mean the sum of the
------------
following (without duplication): (a) all obligations of such Person for borrowed
money or evidenced by bonds, debentures, notes, or other similar instruments
(other than any such obligations to the extent that the liability of such Person
is limited solely to the asset financed by such obligations); (b) all
obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business; (c) all Capital Lease Obligations of such Person (other than any such
obligations to the extent that the liability of such Person is limited solely to
the asset financed by such obligations); (d) all Indebtedness of others secured
by a Lien on any asset of such person, whether or not such Indebtedness is
assumed by such Person; (e) all Indebtedness of others Guaranteed by such
Person; and (f) all reimbursement obligations of other obligations (other than
contingent obligations) with respect to bankers' acceptances or letters of
credit or similar instruments created or issued at the request of such Person.
(t) "Interest Payment Date" shall mean the date on which
---------------------
interest shall be due and payable for the Interest Period, and such shall occur
on the final day of the Interest Period.
(u) "Interest Period" shall mean the period commencing on the
---------------
Borrowing Date and ending on the Term Loan Maturity Date.
(v) "LIBOR" shall mean, with respect to the Interest Period,
-----
the rate offered by The Bank of Tokyo-Mitsubishi, Ltd. through its London branch
for deposits in Yen for a period approximately equal to the duration of such
Interest Period which appears on Telerate page 3753 (or on such other page as
may replace such LIBO Page for the purpose of displaying
-3-
the London interbank offered rates of The Bank of Tokyo-Mitsubishi, Ltd.'s
London branch) as of 11:00 a.m. (London time) two Business Days before the first
day of such Interest Period.
(w) "Liability" of any Person shall mean any obligation or
---------
liability, whether arising under any indenture, agreement, lease, instrument,
Applicable Law or otherwise, in each case to the extent such obligation or
liability does not constitute Indebtedness of such Person.
(x) "Lien" shall mean with respect to any property or asset (or
----
any income or profits derived therefrom) of any Person, any mortgage, lien,
pledge, attachment, levy, charge or other security interest or encumbrance of
any kind upon or in respect of such property or asset (or upon or in respect of
any income or profits therefrom), in each case, whether the same is consensual
or nonconsensual or arises by contract, operation of law, legal process or
otherwise. For this purpose, a Person shall be deemed to own subject to a "Lien"
any property or asset that it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capitalized lease or
other title retention agreement relating to such property or asset.
(y) "Material Adverse Effect" shall mean, a material adverse
-----------------------
effect on (a) the business, assets, operations or condition, financial or
otherwise, of the Borrower and its Subsidiaries taken as a whole, or (b) the
ability of the Borrower to perform any of its obligations under this Agreement
or the Term Loan Note.
(z) "Maximum Permissible Rate" shall mean, with respect to
------------------------
interest payable on any amount, the rate of interest on such amount that, if
exceeded, could, under Applicable Law, result in (i) civil or criminal penalties
being imposed on the Bank or (ii) the Bank's being unable to enforce payment of
(or, if collected, retain) all or any part of such amount or the interest
payable thereon.
(aa) "Person" shall mean any individual, sole proprietorship,
------
corporation, partnership, trust, unincorporated association, mutual company,
joint stock company, trade association or other business organization.
(bb) "Post-Default Rate" shall mean a rate of interest per annum
-----------------
equal to the Prime Rate as in effect from time to time plus two percent (2.0%)
per annum.
(cc) "Prime Rate" shall mean the rate of interest per annum
----------
publicly announced by Bank of Tokyo-Mitsubishi Trust Company ("BTMT") from time
to time in the City of New York as its "prime rate", which rate of interest may
not be the lowest or best rate of interest offered by BTMT at any given time to
any class of borrowers.
(dd) "Regulations U and X" shall mean, respectively, Regulations
-------------------
U and X of the Board of Governors of the Federal Reserve System (or any
successor), as the same may be amended or supplemented from time to time.
-4-
(ee) "Significant Subsidiary" shall mean, at any time, a
----------------------
Subsidiary that as of such time, meets the definition of a "Significant
Subsidiary" contained in Regulation S-X of the Securities and Exchange
Commission as in effect on the date hereof.
(ff) "Subsidiary" shall mean, with respect to any Person, any
----------
other Person (i) the securities of which having ordinary voting power to elect a
majority of the board of directors (or other persons having similar functions)
or (ii) the other ownership interests of which ordinarily constituting a
majority voting interest, are at the time, directly or indirectly, owned or
controlled by such first Person, or by one or more of its Subsidiaries, or by
such first Person and one or more of its Subsidiaries; unless otherwise
specified, "Subsidiary" means a Subsidiary of the Borrower.
(gg) "Tax" shall mean any Federal, State or foreign tax,
---
assessment or other governmental charge or levy (including any withholding tax)
upon a Person or upon its assets, revenues, income or profits; excluding in the
case of the Bank, taxes imposed on its overall new income, and franchise taxes
imposed on it in lieu of net income taxes, by the jurisdiction under the laws of
which the Bank is organized or any political subdivision thereof, and taxes
imposed on its overall new income, and franchise taxes imposed in lieu of net
income taxes, by the jurisdiction of its applicable lending office or any
political subdivision thereof.
(hh) "Term Loan" shall have the meaning provided for in Section
---------
2.
(ii) "Term Loan Maturity Date" shall mean October 25, 2001.
-----------------------
(jj) "Term Loan Note" shall mean the Term Loan Promissory Note
--------------
provided for in Section 3 hereof and substantially in the form attached hereto
as Exhibit A, duly executed and delivered by the Borrower.
---------
(kk) "Yen" and the symbol (Y) shall refer to the lawful currency
---
of Japan.
Section 2. Principal Amount and Terms of the Credit.
----------------------------------------
The Bank agrees to extend to the Borrower, subject to the terms
and conditions of this Agreement and in reliance upon the representations and
warranties of the Borrower set forth in Section 10, a term loan in the principal
amount of Eleven Billion Eight Hundred Nine Million Yen ((Y)11,809,000,000) (the
"Term Loan") for the period and on the terms set forth herein and in the Notice
of Borrowing delivered by the Borrower to the Bank substantially in the form of
Exhibit C hereto.
Section 3. Term Loan Note.
--------------
The Borrower shall execute and deliver to the Bank a Term Loan
Promissory Note dated the date hereof and substantially in the form of Exhibit A
---------
hereto (the "Term Loan Note").
-5-
Section 4. Interest.
--------
(a) Rates of Interest. The Term Loan shall bear interest on
-----------------
the outstanding principal amount thereof at a rate per annum equal to the LIBOR
Rate plus 0. 50%. If any part of the Term Loan or any other amount due and
payable hereunder is not paid when due (whether at maturity, by reason of notice
of prepayment or acceleration or otherwise), such unpaid amount shall bear, to
the maximum extent permitted by Applicable Law, interest for each day during the
period from the date such amount became so due until it shall be paid in full
(whether before or after judgment) at a rate per annum equal to the applicable
Post-Default Rate. Interest shall be computed on the basis of a year of 360 days
(except it shall be computed on the basis of a year of 365 days if the
Post-Default Rate is applicable) and paid for the actual number of days elapsed.
Interest for any period shall be calculated from and including the first (1st)
day thereof to but excluding the last day thereof. Nothing contained in this
Agreement or in the Term Loan Note shall require the Borrower at any time to pay
interest at a rate exceeding the Maximum Permissible Rate.
(b) Payment. Accrued interest shall be due and payable (i) on
-------
each Interest Payment Date and (ii) when the outstanding balance of the Term
Loan shall be due (whether at maturity, by reason of notice of prepayment or
acceleration or otherwise). Interest at the Post-Default Rate shall be payable
on demand.
Section 5. Repayment The principal amount of the Term Loan shall be
---------
due and payable, and shall be repaid by the Borrower in Yen on the Term Loan
Maturity Date.
Section 6. Prepayments Permitted. Subject to Section 8 below, the
---------------------
Borrower may prepay the Term Loan in whole or in part at any time upon 5 days
prior written notice to the Bank.
Section 7. Payments by the Borrower.
------------------------
(a) Time, Place and Manner. All payments due to the Bank
----------------------
under this Agreement should be wire transferred in immediately available funds
to the following account of the Bank in accordance with the following
instructions:
Pay to: The Bank of Tokyo-Mitsubishi, Ltd. - Tokyo, Japan,
Swift code: BOTKJPJT, Favor of: Bank of Tokyo-Mitsubishi Trust
Company - New York Account No. 653-0410608, Reference:
International Flavors & Fragrances
or to such other account as the Bank may designate upon 4 days prior written
notice to the Borrower. A payment shall not be deemed to have been made on any
day unless such payment has been received in the required account in Yen and in
funds immediately available, no later than 12:00 noon ( Tokyo time) on such day.
-6-
(b) No Reductions. All payments due to the Bank under this
-------------
Agreement shall be made by the Borrower without any reduction or deduction
whatsoever, including any reduction or deduction for any set-off, recoupment,
counterclaim (whether sounding in tort, contract or otherwise) or Tax, except
for any withholding or deduction for Taxes required to be withheld or deducted
under Applicable Law.
(c) Taxes. If any Tax coming into effect after the date of
-----
this Agreement is required to be withheld or deducted from, or is otherwise
payable by the Borrower in connection with, any payment due to the Bank under
this Agreement, the Borrower (i) shall, if required, withhold or deduct the
amount of such Tax from such payment and, in any case, pay such Tax to the
appropriate taxing authority in accordance with Applicable Law and (ii) shall
pay to the Bank such additional amounts as may be necessary so that the net
amount received by the Bank with respect to such payment, after withholding or
deducting all Taxes required to be withheld or deducted, is equal to the full
amount payable under this Agreement.
(d) Modification of Payment Dates. Unless otherwise
-----------------------------
specified in this Agreement, whenever any payment to the Bank under this
Agreement shall be due (otherwise than by reason of acceleration) on a day that
is not a Business Day, the date of payment thereof shall be the immediately
succeeding Business Day; provided, that, if such immediately succeeding Business
-------- ----
Day shall fall in the next calendar month, then the date of payment thereof
shall be the immediately preceding Business Day.
Section 8. Funding Losses
--------------
The Borrower shall pay to the Bank, upon request,
such amounts as the Bank reasonably determines are necessary to compensate it
for any loss, cost or expense whatsoever other than loss of anticipated profits
incurred by it as a result of (i) any payment of principal or interest due on
the Term Loan on a date other than the Term Loan Maturity Date or an Interest
Payment Date, as the case may be (by reason of the occurrence of an Event of
Default or otherwise), or (ii) any failure of the Borrower to borrow the Term
Loan on the Borrowing Date.
Section 9. Evidence of Indebtedness. The Term Loan and the
------------------------
Borrower's obligation to repay the Term Loan with interest in accordance with
the terms of this Agreement shall be evidenced by this Agreement, the records of
the Bank and the Term Loan Note. The records of the Bank shall be binding and
conclusive evidence of the Term Loan and all payments made in respect thereof
absent manifest error.
Section 10. Representations and Warranties of the Borrower.
----------------------------------------------
In order to induce the Bank to enter into this Agreement and to make the Term
Loan, the Borrower hereby represents and warrants the following to the Bank as
of the Agreement Date:
-7-
(a) The Borrower (i) has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of New York and (ii) has the requisite corporate power and authority to execute
and deliver this Agreement and the Term Loan Note, to perform its obligations
hereunder and thereunder and to own its properties and conduct its business as
currently owned and conducted.
(b) The Borrower is not in violation of its by-laws or
certificate of incorporation or in default in the performance or observance of
any material obligation, agreement, covenant or condition contained in any
material contract, indenture, mortgage, loan agreement or lease to which the
Borrower is a party or by which it may be bound which default would have a
Material Adverse Effect. The execution and delivery of this Agreement and the
Term Loan Note and the incurrence of the obligations and the consummation of the
transactions herein and therein contemplated will not conflict with, or
constitute a breach of or default under, the certificate of incorporation or
by-laws of the Borrower or any material contractual restriction, instrument,
indenture, mortgage, agreement or lease to which the Borrower is a party or by
which it may be bound, or any law, administrative rule or regulation or court
decree except for any conflict, breach or default that will not, either
individually or in the aggregate, have a Material Adverse Effect.
(c) The copies of Borrower's certificate of incorporation
and by-laws made available to the Bank are true and complete as of the date
hereof.
(d) This Agreement has been duly authorized, executed and
delivered by the Borrower and constitutes a legal, valid and binding obligation
of the Borrower enforceable in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency or other similar
laws relating to or affecting generally the enforcement of creditors' rights or
by general equitable principles.
(e) The Term Loan Note has been duly authorized for
execution and delivery as contemplated by this Agreement and, when executed and
delivered, will constitute a legal, valid and binding obligation of the Borrower
enforceable in accordance with its terms, except as enforcement thereof may be
limited by bankruptcy, insolvency or other similar laws relating to or affecting
generally the enforcement of creditors' rights or by general equitable
principles.
(f) No consent, approval, authorization, order, registration
or qualification of or with any court, any regulatory authority or other
governmental agency or body of the State of New York or the United States of
America is required for the execution or delivery of this Agreement or the Term
Loan Note by the Borrower.
(g) The execution of this Agreement and the Term Loan Note
and the Borrower's exercise of its rights and performance of its obligations
hereunder and thereunder will not result in the existence of, nor oblige the
Borrower to create, any Lien or other encumbrance over all or any of its present
or future revenues or assets.
-8-
(h) The Borrower has delivered to the Bank a copy of the
consolidated balance sheet of the Borrower and its Subsidiaries for the fiscal
year of the Borrower ended December 31, 2000, and the related consolidated
statements of income, stockholders' equity and cash flows of the Borrower and
its Subsidiaries for such year, setting forth in each case in comparative form
the corresponding figures for the preceding fiscal year and accompanied by an
opinion of independent public accountants of recognized national standing
stating that such financial statements present fairly, in all material respects,
the consolidated financial position and results of operations of the Borrower
and its Subsidiaries as of the end of, and for, such fiscal year (collectively,
the "Financial Statements"). All such Financial Statements were prepared in
--------------------
accordance with GAAP, consistently applied, except as otherwise noted and
present fairly, in all material respects, the consolidated financial position
and the results of operations of the Borrower and its Subsidiaries in accordance
with GAAP, consistently applied as at the end of, and for, the respective
periods covered thereby.
(i) The obligations of the Borrower hereunder and under the Term
Loan Note rank at least pari passu in priority of payment with all of its other
---- -----
unsecured senior Indebtedness.
(j) No event of default has occurred and is continuing and no
condition exists which constitutes a Default or an Event of Default.
(k) (i) None of the Borrower or its Subsidiaries is engaged
principally, or as one if its important activities, in the business of extending
credit for the purpose of purchasing or carrying margin stock (as defined in
Regulation U).
(ii) No part of the proceeds of the Term Loan Note will be
used, whether directly or indirectly, and whether immediately, incidentally, or
ultimately, for any purpose which entails a violation of, or which is
inconsistent with, the provisions of Regulations U and X as in effect on the
date hereof and all official rulings and interpretations thereunder or thereof.
(l) The Borrower is not an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
Section 11. Conditions Precedent.
--------------------
The obligation of the Bank to make the Term Loan is subject to its
receipt, in form and substance satisfactory to the Bank, of duly executed
originals of the Term Loan Note, this Agreement, and corporate resolutions from
the Borrower indicating the Borrower's authority to borrow from the Bank.
Section 12. Covenants of the Borrower. From the date hereof and until
-------------------------
all amounts due hereunder are indefeasibly repaid in full:
(a) The Borrower will: (i) obtain promptly at any time and from
time to time and will maintain such licenses, consents, registrations and
authorizations as may be required
-9-
under Applicable Law to enable the Borrower to perform its obligations under
this Agreement and the Term Loan Note and will promptly furnish the Bank with
such evidence thereof as the Bank may reasonably request from time to time; (ii)
preserve and maintain its corporate existence.
(b) The Borrower will compensate the Bank for any loss, cost
or expense resulting from any change in law or regulation resulting in the
imposition by any government, governmental or regulatory agency or authority or
court of reserve requirements, additional reserve requirements, special deposit
requirements, capital adequacy requirements, insurance charges, taxes or other
assessments or charges (whether or not having the force of law) (other than any
Tax on the overall net income of the Bank or of the branch from which it is
maintaining the Term Loan) with respect to the Term Loan or Term Loan Note (or
with respect to any deposits or other funds acquired to fund the Term Loan), the
result of which shall be to (A) increase the cost to the Bank of the Term Loan
or the transactions contemplated hereunder or (B) reduce the amount of any sum
received or receivable by the Bank with respect to the Term Loan or the return
to be earned by the Bank on the Term Loan.
(c) The Borrower agrees that the Term Loan, this Agreement and
the Term Loan Note will at all times constitute the direct, binding and
enforceable obligations of the Borrower, enforceable in accordance with its
terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency or other similar laws relating to or affecting generally the
enforcement of creditors' rights or by general equitable principles.
(d) The Borrower will use the proceeds of the Term Loan for
general business purposes. None of the proceeds of the Term Loan shall be used
to purchase or carry, or to reduce or retire or refinance any credit incurred to
purchase or carry, any margin stock (within the meaning of Regulations U and X
of the Board of Governors of the Federal Reserve System) or to extend credit to
others for the purpose of purchasing or carrying any margin stock.
(e) So long as this Term Loan shall remain unpaid the Borrower
will maintain a ratio of Debt for Borrowed Money to EBITDA for the period of
four fiscal quarters then ended of not more than 3.25:1.0.
Section 13. Events of Default.
-----------------
If any of the following events (each individually referred to
herein as an "Event of Default") shall occur:
(a) the Borrower shall fail to pay any interest within 3
Business Days of the due date thereof, the principal when due or any other
amount within 10 days after the date when due hereunder or under the Term Loan
Note (other than interest or principal); or
-10-
(b) the Borrower shall fail to perform any of its other
obligations under this Agreement and such failure shall not be remedied within
fifteen (15) Business Days after notice thereof; or
(c) any representation or warranty of the Borrower contained
herein or in any certificate or document furnished to the Bank pursuant hereto
shall prove to be incorrect or misleading in any material respect when made; or
(d) the Borrower: (i) shall admit in writing its inability to,
or be generally unable to, pay its debts as such debts become due, (ii) shall
apply for or consent to the appointment of, or the taking of possession by, a
receiver, custodian, trustee or liquidator of itself or of all or a substantial
part of its property, (iii) make a general assignment for the benefit of its
creditors, (iv) commence a voluntary case under the Bankruptcy Code, (v) file a
petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, winding-up, or composition or readjustment of debts,
(vi) fail to controvert in a timely and appropriate manner, or acquiesce in
writing to, any petition filed against it in an involuntary case, under the
Bankruptcy Code, or (vii) take any corporate action for the purpose of effecting
any of the foregoing; or
(e) a proceeding or case shall be commenced, without the
application or consent of the Borrower or any Significant Subsidiary, in any
court of competent jurisdiction, seeking (i) its liquidation, reorganization,
dissolution or winding-up, or the composition or readjustment of its debts, (ii)
the appointment of a trustee, receiver, custodian, liquidator or the like of the
Borrower or such Significant Subsidiary or of all or any substantial part of its
assets, or (iii) similar relief in respect of the Borrower or such Significant
Subsidiary under any law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts, and such proceeding or case
shall continue undismissed, or an order, judgment or decree, approving or
ordering any of the foregoing shall be entered and continue unstayed in effect,
for a period of 60 days; or an order for relief against the Borrower or such
Significant Subsidiary shall be entered in an involuntary case under the
Bankruptcy Code;
(f) any authorization, consent, approval, registration or
license now or hereafter necessary to enable the Borrower to comply with its
obligations hereunder or under the Term Loan Note shall be revoked, withdrawn or
withheld; or
(g) Borrower shall fail to make payment of any Indebtedness
having an aggregate principal amount outstanding at maturity of $50,000,000 or
more when due and payable after the expiration of any applicable grace period,
or
(h) any event or condition shall occur which results in the
acceleration of the maturity of any Indebtedness of the Borrower having an
aggregate principal amount outstanding at maturity of $50,000,000 or more.
-11-
THEREUPON, in any case, for so long as the same shall be continuing,
the Bank may by notice to the Borrower decline to make the Term Loan or declare
any and all amounts of principal outstanding under the Term Loan and the Term
Loan Note to be forthwith due and payable together with accrued interest and any
and all other amounts payable or owing hereunder, whereupon the same shall
become forthwith due and payable, without further demand, presentment, notice of
dishonor, protest, notice of protest or other notice whatsoever, all of which
are expressly waived by the Borrower. Upon the occurrence of an Event of Default
specified in Sections 13(e) or 13(f), automatically and without any notice of
any kind to the Borrower, the principal and interest of the Term Loan and the
Term Loan Note and all other amounts owing under this Agreement shall be due and
payable immediately to the Bank.
Section 14. Illegality.
----------
If, after the date of this Agreement, the adoption of any Applicable
Law, any change therein or any change in the interpretation or administration
thereof by any government, governmental agency or authority, court, tribunal,
central bank or other comparable body charged with the interpretation or
administration thereof or compliance by the Bank with any interpretation,
request, guideline or directive (whether or not having the force of law) of any
such government, governmental agency or authority, court, tribunal, central bank
or other comparable body shall make it unlawful or impossible for the Bank to
maintain the Term Loan, then the Bank shall so notify the Borrower in writing
and the Term Loan shall become due and payable immediately upon the Borrower's
receipt of such notice.
Section 15. Governing Law.
-------------
This Agreement shall be governed by, and construed in accordance with,
the internal laws of the State of New York without regard to conflicts of law
principles. Each party irrevocably agrees that any Credit Agreement Related
Claim may be brought in any Federal or New York State Court located in the City
of New York and, by the execution and delivery of this Agreement, each party
hereby irrevocably accepts and submits to the jurisdiction of each of the
aforesaid courts in personam, generally and unconditionally, with respect to any
-----------
such action or proceedings for itself. Each party hereby also irrevocably
waives, to the fullest extent permitted by law, any objection which it may now
or hereafter have to the laying of venue of any such action or proceeding
brought in any such court and any claim that any such action or proceeding
brought in such court has been brought in an inconvenient forum. For the
purposes of any Credit Agreement Related Claim instituted in such courts and the
service of process relating thereto, each party hereby irrevocably agrees at all
times to either maintain an office in the City of New York or to designate an
authorized agent with an office in the City of New York on whom process may be
served for and on behalf of such party. Each party also irrevocably agrees to
take any and all action (including payment of the fees and expenses of such
agent) necessary to continue such designation in full force and effect and to
advise the other party of any change of address of such agent. Should such agent
become unavailable for this purpose for any reason, such party agrees forthwith
irrevocably to designate an agent within the City of New York which shall
irrevocably agree to act as such with the powers and for the purposes specified
herein.
-12-
Each party irrevocably waives, in any legal action or proceeding in any
jurisdiction (whether for an injunction, specific performance, damages or
otherwise), any right or claim of immunity of any kind with respect to itself or
its assets including, without limitation, from attachment or execution of
judgment, and such party irrevocably agrees that it and its assets are and shall
be subject to any legal action or proceeding, attachment or execution in respect
to its obligations under this Agreement and the Term Loan Note. EACH PARTY
HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH THEY ARE BOTH
PARTIES INVOLVING ANY CREDIT AGREEMENT RELATED CLAIM.
Section 16. Miscellaneous.
-------------
(a) The Borrower shall, on demand, pay or reimburse the Bank for
all reasonable fees, costs and expenses (including reasonable fees and
disbursements of legal counsel and other experts retained by the Bank) incurred,
and all payments made, and indemnify and hold the Bank harmless from and against
all losses suffered, by the Bank in connection with, arising out of, or in any
way related to (i) (A) the enforcement by the Bank of any of its rights under or
related to this Agreement or the Term Loan Note or (B) protecting, preserving,
exercising or enforcing any of the rights of the Bank under or related to this
Agreement or the Term Loan Note, except that the foregoing indemnity shall not
be applicable to any loss suffered by the Bank to the extent such loss is
determined by a judgment of a court referred to in the second sentence of
Section 15 hereof that is binding on the Borrower and the Bank, final and not
subject to review on appeal, to be the result of acts or omissions on the part
of the Bank constituting (x) willful misconduct or (y) gross negligence.
(b) Any notice or communication required to be delivered under
this Agreement (the "Notices") shall be in writing and shall be sent by
registered or certified U.S. mail (postage prepaid and return receipt
requested), by a reliable hand-delivery or overnight courier service or by
telecopier (if by telecopier, to be confirmed immediately by sending the
original documentation by registered or certified U.S. mail or by a reliable
hand-delivery or overnight courier service). Notwithstanding the foregoing
sentence, Notices may be given by telephone if confirmed in writing within
twenty-four (24) hours by sending a written version thereof by any of the
foregoing permitted methods of giving notice hereunder. In the event of a
discrepancy between any telephonic Notice and any written confirmation thereof,
such written confirmation shall be deemed effective notice except to the extent
that either party has acted in reliance on such telephonic Notice. All Notices
shall be delivered or otherwise conveyed to the parties at their respective
addresses and telephone and telecopier numbers as follows: (i) if to the
Borrower, 521 West 57/th/ Street, New York, New York 10019 Attention: Treasurer,
with a copy (which shall not constitute notice) to the Corporate Secretary
Telephone: (212) 708-7291, Telecopier: (212) 708-7191 and (ii) if to the Bank,
BTM Information Services, Inc., C/O The Bank of Tokyo-Mitsubishi, Ltd., NY
Branch, 1251 Avenue of the Americas, 12/th/ Floor, New York, New York,
10020-1104 Attention: Mr Rolando Uy, AVP, Loan Operations Dept., Telephone:
(201) 413-8570, Telecopier: (201) 521-2304. Except as otherwise expressly set
forth herein, all Notices shall be effective as against the Bank and the
Borrower only upon the receipt thereof.
-13-
(c) No modification or waiver of any provision of this Agreement or
the Term Loan Note shall in any event be effective unless the same shall be in
writing and signed by the parties hereto, and then in each such event such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. No notice to or demand on the Borrower in any case
shall, of itself, entitle the Borrower to any other or further notice or demand
in similar or other circumstances.
(d) The terms and provisions of this Agreement and the Term Loan Note
shall be binding upon, and the benefits thereof shall inure to, the parties
hereto and their respective successors and assigns; provided, however, that the
-------- -------
Borrower shall not assign any interest in this Agreement, the Term Loan Note,
the Term Loan or any of the Borrower's rights, duties or obligations hereunder
or thereunder without the prior written consent of the Bank. With the prior
written consent of the Borrower, the Bank may assign or otherwise transfer this
Agreement, the Term Loan Note or the Term Loan and, with such prior written
consent, may grant or assign to any person any participation interest in this
Agreement, the Term Loan Note or the Term Loan.
(e) No delay or omission to exercise any right, power, or remedy
accruing to the Bank upon any breach or default of the Borrower under this
Agreement or any instrument or agreement required hereunder shall impair any
such right, power, or remedy of the Bank, nor shall it be considered to be a
waiver of any such breach or default, or an acquiescence therein, or of or in
any similar breach or default thereafter occurring; and no waiver by the Bank of
any single breach or default shall be deemed a waiver of any other breach or
default theretofore and thereafter occurring. Any waiver, permit, consent, or
approval of any kind or character on the part of the Bank of any breach or
default under this Agreement or the Term Loan Note or any waiver on the part of
the Bank of any provision or condition of this Agreement or the Term Loan Note
must be in writing. No remedy herein conferred upon the Bank is intended to be
exclusive of any other remedy and each and every such remedy either under this
Agreement, the Term Loan Note or by law or otherwise afforded to the Bank, shall
be cumulative and not alternative and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by statute
or otherwise.
(f) Nothing in this Agreement shall be deemed a waiver or prohibition
of the Bank's rights of banker's lien or setoff.
(g) This Agreement may be executed in any number of counterparts and
on separate counterparts, each of which shall be deemed to be an original and
but all of which taken together shall constitute one and the same Agreement.
-14-
IN WITNESS WHEREOF, the Borrower and the Bank, acting through their
duly authorized representatives, have caused this Credit Agreement to be duly
executed in duplicate counterparts in the English language and signed in their
respective names as of the day and year first above written.
INTERNATIONAL FLAVORS & FRAGRANCES, INC.
By: /s/ Stephen A. Block
------------------------------------
Name: Stephen A. Block
Title: Senior Vice President
BANK OF TOKYO-MITSUBISHI TRUST COMPANY
By: /s/ Jeffrey Millar
------------------------------------
Name: Jeffrey Millar
Title: Vice President
-15-
Exhibit A to
Credit Agreement
TERM LOAN PROMISSORY NOTE
(Y)11,809,000,000 New York, New York
- -----------------
September __, 2001
FOR VALUE RECEIVED, the undersigned INTERNATIONAL FLAVORS & FRAGRANCES,
INC. a corporation duly organized and existing under the laws of the State of
New York (the "Borrower"), by this term loan promissory note (this "Note"),
unconditionally promises to pay to the order of BANK OF TOKYO-MITSUBISHI TRUST
COMPANY a trust company organized under the laws of the State of New York, (the
"Bank") having an office at 1251 Avenue of the Americas, 12th Floor, New York,
New York 10020, the principal sum of Eleven Billion Eight Hundred Nine Million
Yen ((Y)11,809,000,000) in immediately available funds in accordance with the
terms of the Credit Agreement described below.
The Borrower shall pay interest from the date hereof on the unpaid
principal amount outstanding hereunder from time to time in like money at the
per annum rates set forth in the Credit Agreement. Interest accrued hereon shall
be payable on each respective Interest Payment Date. Interest shall be computed
on the basis of a year of 360 days (except it shall be computed on the basis of
a year of 365 days if the Post-Default Rate is applicable) and the actual number
of days elapsed.
This Note is issued pursuant to, and evidences the Term Loan made
under, the terms of that certain Credit Agreement dated as of the date hereof
between the Borrower and the Bank, as the same may be amended from time to time
(the "Credit Agreement"). Capitalized, defined terms not defined herein shall
have the meanings ascribed to them in the Credit Agreement. The holder hereof is
entitled to the full benefit of all of the provisions thereof including, without
limitation, the provisions for acceleration and maturity of the Term Loan.
Notwithstanding the foregoing, any principal of or interest on the Term
Loan which is not paid when due (whether by acceleration or otherwise) shall
bear interest from the date of such Event of Default to the date of actual
payment (before as well as after judgment) at the Post-Default Rate. In any
event the rate of interest under this Note shall not at any time exceed the
Maximum Permissible Rate.
Both principal and interest shall be payable in Yen in immediately
available funds to the following account of the Bank in accordance with the
following instructions:
-16-
Pay to: The Bank of Tokyo-Mitsubishi, Ltd. - Tokyo, Japan, Swift code:
BOTKJPJT Favor of: Bank of Tokyo-Mitsubishi Trust Company - New York,
Account No. 653-0410608, Reference: International Flavors &
Fragrances, Inc.
or to such other account as the Bank may designate upon 4 days prior
written notice to the Borrower.
Presentment, demand, protest, notice of dishonor and other notice of
any kind are hereby expressly waived.
This Note is deemed to be a contract under the laws of the State of New
York, and for all purposes shall be governed by, and construed in accordance
with, the internal laws of said jurisdiction without regard to conflicts of law
principles.
IN WITNESS WHEREOF, the undersigned corporation has caused this Note to
be duly executed and delivered on its behalf on the date first above written.
INTERNATIONAL FLAVORS &
FRAGRANCES, INC.
By:_______________________________
Name:
Title:
-17-
Exhibit B to
Credit Agreement
Form of Opinion of Borrower's Counsel
-18-
Exhibit C to
Credit Agreement
Notice of Borrowing
September , 2001
Bank of Tokyo-Mitsubishi Trust Company
1251 Avenue of the Americas
New York, New York 10020-1104
Attention: Mr Rolando Uy
Ladies and Gentlemen:
The undersigned, International Flavors & Fragrances, Inc., refers to
the Credit Agreement, dated as of September 2001 (said Agreement as it may be
amended, modified or supplemented from time to time, being the "Credit
Agreement", the terms defined therein being used herein as therein defined),
between the undersigned and Bank of Tokyo-Mitsubishi Trust Company as Bank, and
hereby gives you notice, irrevocably, pursuant to Section 2 of the Credit
Agreement that the undersigned hereby requests a Term Loan under the Credit
Agreement, and in that connection sets forth below the information relating to
such Term Loan (the "Proposed Borrowing") as required by the Credit Agreement:
(i) The Borrowing Date of the Proposed Borrowing is September 27,
2001.
(ii) The Term Loan Maturity Date is October 25 , 2001.
(iii) The aggregate amount of the Proposed Borrowing is:
(Y)11,809,000,000.
The undersigned Authorized Representative of Borrower hereby certifies
that, each of the following statements is true, and will be true on the date of
the Proposed Borrowing:
(a) the representations and warranties of Borrower contained in
Section 10 of the Credit Agreement are true and correct in all material respects
on and as of the date of the Proposed Borrowing, before and after giving effect
to the Proposed Borrowing, and to the application of the proceeds therefrom, as
though made on and as of such date (except to the extent that such
representations and warranties relate to an earlier date, which representations
and warranties were correct in all material respects on and as of such earlier
date); and
-19-
(b) no event has occurred and is continuing, or would result from
such Proposed Borrowing or from the application of the proceeds therefrom, which
constitutes an Event of Default under the Credit Agreement or would constitute
an Event of Default thereunder but for the requirement that notice be given or
time elapse or both.
Very truly yours,
INTERNATIONAL FLAVORS & FRAGRANCES INC.
By:____________________
Name:
Title:
-20-
