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[EXECUTION COPY]
October 9, 1998
AlliedSignal Inc.
101 Columbia Road
Morristown, NJ 07962-1219
Attention: John W. Gamble, Jr., Assistant Treasurer
ALLIEDSIGNAL INC.
US$900,000,000 364-DAY REVOLVING CREDIT FACILITY
US$7,000,000,000 364-DAY REVOLVING CREDIT FACILITY
US$2,250,000,000 FIVE YEAR REVOLVING CREDIT FACILITY
COMMITMENT LETTER
-----------------
Ladies and Gentlemen:
You have advised us of your proposed acquisition of a controlling
interest in AMP Inc., a Pennsylvania corporation (the "TARGET"). As we
understand the transaction, you have offered to acquire up to 20,000,000
shares of the Target's outstanding common stock, without par value (the
"TARGET STOCK"), on or after October 2, 1998 for $44.50 net per common
share for up to an aggregate of $890,000,000 in cash. This acquisition of
the Target's common shares will initially be funded through the issuance of
your commercial paper. Thereafter, you will promptly offer to purchase
through a tender offer (the "TENDER OFFER"), subject to removal of the
Target's poison pill, the inapplicability of anti-takeover statutes and
other customary conditions, all shares of Target Stock. The Tender Offer,
the acquisition of the Target and the certain financings contemplated by
the foregoing are collectively referred to as the "TRANSACTION".
You have requested that Salomon Smith Barney Inc., ("SSB"),
Banque Nationale de Paris ("BNP"), Barclays Capital, the investment banking
division of Barclays Bank PLC ("BARCLAYS CAPITAL"), Deutsche Bank
Securities Inc. ("DBSI"), J.P. Morgan Securities Inc. ("MORGAN") and
NationsBanc Montgomery Securities LLC ("NMS") arrange $9,250,000,000 of
Senior Facilities (as hereinafter defined) described in this letter and in
the attached summaries of terms and conditions (the "ANNEXES" and, together
with this letter, the "COMMITMENT LETTER"). Based on our discussions
concerning the Transaction, (a) SSB is pleased to agree to act as book
runner in connection with the Senior Facilities, (b) Citibank, N.A.
("CITIBANK") is pleased to provide you with financing commitments for a
portion of, and to agree to act as administrative agent (the
"ADMINISTRATIVE AGENT") in connection with, the Senior Facilities, (c) each
of the other Initial Lenders (as hereinafter defined) is pleased to provide
you with financing commitments for a portion of the Senior Facilities and
(d) each of SSB, BNP, Barclays, DBSI, Morgan and NMS, as arrangers, is
pleased to provide you with its undertaking to arrange and syndicate the
Senior Facilities to the Lenders (as defined under the section "LENDERS" in
the Annexes). SSB, BNP, Barclays Capital, DBSI, Morgan and NMS are,
collectively, the "ARRANGERS".
You have asked each of Citibank, Bank of America NT&SA ("BOFA"),
BNP, Barclays Bank PLC ("BARCLAYS"), Deutsche Bank AG, New York Branch
and/or Cayman Islands Branch ("DEUTSCHE BANK") and Morgan Guaranty Trust
Company of New York ("MORGAN GUARANTY") (collectively, the "INITIAL
LENDERS") to provide you with their several commitments for a portion of
the senior debt facilities aggregating $9,250,000,000 (the "SENIOR
FACILITIES") required to consummate the Transaction, consisting of (a) a
364-day multicurrency commercial paper backstop facility (the "BACKSTOP
FACILITY") in the amount of $900,000,000, (b) a 364-day multicurrency
revolving credit facility (the "364-DAY FACILITY") in the amount of
$7,000,000,000 (which will replace the Backstop Facility) and (c) a five
year multicurrency revolving credit facility (the "FIVE-YEAR FACILITY") in
the amount of $2,250,000,000. Each of the Backstop Facility, 364-Day
Facility and the Five-Year Facility will also provide a competitive bid
option to you. The proceeds of the Senior Facilities are intended to be
used primarily in connection with the Transaction, and after the
acquisition of the Target is completed in connection with general corporate
purposes.
Subject to the satisfaction of the conditions contained in this
Commitment Letter and your acceptance hereof, Citibank commits to lend
$200,000,000 of the Backstop Facility and $1,000,000,000 of the 364-Day and
Five-Year Facilities, and BofA, BNP, Barclays, Deutsche Bank and Morgan
Guaranty each commits to lend $140,000,000 of the Backstop Facility and
$750,000,000 of the 364-Day and Five Year Facilities, on the terms and
conditions referred to in this Commitment Letter. The Arrangers agree to
use their best efforts, but without any obligation to underwrite a
syndication, to arrange a syndicate of lenders for the balance of the
financing for the Transaction (it being understood that none of the
Arrangers or the Initial Lenders, individually or in the aggregate, have
agreed to underwrite the Senior Facilities). The commitment of each Initial
Lender will be allocated pro rata to the 364-Day and Five Year Facilities.
Please note, however, that the terms and conditions of this
commitment and undertaking are not limited to those set forth in this
Commitment Letter. Those matters that are not covered or made clear herein
or in the attached Annexes are subject to mutual agreement of the parties.
The terms and conditions of this commitment and undertaking may be modified
only in writing. In addition, this commitment and undertaking is subject to
(a) the preparation, execution and delivery of mutually acceptable loan
documentation, including credit agreements incorporating substantially the
terms and conditions outlined herein and in the Annexes, (b) the absence of
(i) a material adverse change in the business, condition (financial or
otherwise), operations, performance, properties or prospects of you and
your subsidiaries, taken as a whole, since December 31, 1997 and (ii) any
material adverse change in loan syndication or financial or capital market
conditions generally from those currently in effect, (c) the accuracy and
completeness of all representations that you make to us and all information
that you furnish to us in connection with this commitment and undertaking
and your compliance with the terms of this Commitment Letter, (d) with
respect to the commitment and undertaking for the 364-Day and Five Year
Facilities, syndication of such Facilities shall have commenced by November
15, 1998 (meaning that the Information Memorandum (as defined below) shall
have been prepared and the bank information meeting shall have been
scheduled to take place no later than one week after such date), (e)
receipt of commitments from other Lenders on the terms and conditions
referred to in the attached Annexes for the balance of the financing of the
Transaction and (f) the acquisition of the Target Stock on a basis or
pursuant to terms not materially different from those previously agreed to
by the Arrangers (it being understood that an increase of the price per
share of Target Stock of 10% or less shall be deemed not to be material).
Each Initial Lender's commitment and each Arranger's undertaking with
respect to the 364-Day Facility and the Five-Year Facility set forth in
this Commitment Letter will terminate on January 25, 1999, unless the loan
documentation relating thereto is executed on or before such date.
The Initial Lenders' commitments and the Arrangers' undertaking
with respect to the (a) 364-Day Facility and the Five-Year Facility or (b)
the Backstop Facility set forth in this Commitment Letter may also be
terminated upon written notice by you at any time at your option upon
payment of all Agreed Fees (as hereinafter defined) then payable and all
fees, expenses and other amounts then payable under this Commitment Letter.
The Arrangers intend to syndicate the 364-Day Facility and the
Five-Year Facility promptly and, if the commitments for the 364-Day
Facility and the Five-Year Facility have been terminated, the Backstop
Facility, to additional Lenders and, to the extent that commitments are
received from other Lenders, the initial commitments of each Initial Lender
shall be reduced. The Arrangers will manage all aspects of the syndication
in consultation with you, including the timing of all offers to potential
Lenders and the acceptance of commitments, the amounts offered and the
compensation provided. By acceptance of this Commitment Letter, you agree
to take all actions that the Arrangers may reasonably request to assist
them in forming a syndicate acceptable to the Arrangers. Your assistance in
forming such a syndicate shall include but not be limited to: (a) making
your senior management and representatives available to participate in
information meetings with potential Lenders at such times and places as the
Arrangers may reasonably request; (b) using your best efforts to ensure
that the syndication efforts of the Arrangers benefit from your lending
relationships; (c) providing the Arrangers with all information reasonably
deemed necessary by them to complete a successful syndication and (d)
assisting in the preparation of an information memorandum for use in
connection with the syndication of the Senior Facilities (the "INFORMATION
MEMORANDUM"), the contents of which you shall be solely responsible for.
You agree to advise the Arrangers immediately of the occurrence of any
event or other development that results in the Information Memorandum
failing to comply with the representation and warranties set forth in the
first paragraph on page five of this Commitment Letter.
To ensure an orderly and effective syndication of the Senior
Facilities, you agree that until the termination of the syndication (as
determined by the Arrangers and evidenced by written notification received
by you from SSB), you will not, and will not permit any of
your affiliates to, syndicate or issue, attempt to syndicate or issue,
announce or authorize the announcement of the syndication or issuance of,
or engage in discussions concerning the syndication or issuance of, any
debt facility or debt security (including any renewals thereof), without
the prior written consent of the Arrangers; provided, however, that the
foregoing shall not limit your ability to amend your $750,000,000 existing
credit agreement, or to issue commercial paper, extendable notes or similar
financial products, other short-term debt instruments not syndicated in the
bank loan market, public debt securities or securitizations.
You agree that Citibank will act as the sole administrative agent
for the Senior Facilities and that the Arrangers will act as sole arrangers
for the Senior Facilities and that no additional agents, co-agents or
arrangers will be appointed, or other titles conferred, without the prior
consent of each of the Arrangers. You agree that no Lender will receive any
compensation of any kind for its participation in the Senior Facilities,
except as expressly provided for in the Fee Letters (as hereinafter
defined) or in the Annexes.
In addition to the fees described in the Annexes, you hereby
confirm your agreement to pay the nonrefundable fees set forth in the fee
letters dated the date hereof (the "FEE LETTERS") with the Initial Lenders
and the Arrangers (the "AGREED FEES").
You agree to indemnify and hold harmless each Initial Lender,
each Arranger, each Lender and each of their affiliates and their officers,
directors, employees, agents, advisors and other representatives (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) that may be 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) (a) the Transaction or any similar transaction and
any of the other transactions contemplated thereby, (b) any acquisition or
proposed acquisition or similar business combination or proposed business
combination (including, without limitation, the transactions contemplated
hereby) by you or any of your subsidiaries or affiliates of all or any
portion of the capital stock or substantially all of the assets of the
Target or any of its subsidiaries or (c) the Senior Facilities and any
other financings, or any use made or proposed to be made with the proceeds
thereof, except to the extent such claim, damage, loss, liability or
expense is found in a final, nonappealable 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 proceeding to which the indemnity in this paragraph applies,
such indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by you, your shareholders or creditors
or an Indemnified Party or an Indemnified Party is otherwise a party
thereto and whether or not the Transaction is consummated. You also agree
that no Indemnified Party shall have any liability (whether direct or
indirect, in contract or tort or otherwise) to you or your subsidiaries or
affiliates or to your or their respective security holders or creditors
arising out of, related to or in connection with the Transaction, except
for direct, as opposed to consequential, damages determined in a final
nonappealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful
misconduct.
In further consideration of the commitment of each Initial Lender
and the undertakings of each Arranger, respectively, hereunder, and
recognizing that in connection herewith each of them is incurring
substantial costs and expenses, including, without limitation, fees and
expenses of counsel and due diligence, syndication (including printing,
distribution and bank meetings), transportation, computer, duplication,
appraisal, audit, insurance, consultant, search, filing and recording fees,
you agree to pay, from time to time on request, such costs and expenses
directly related to the Senior Facilities (whether incurred before or after
the date hereof), regardless of whether the Transaction (or any part
thereof) is consummated or any loan documentation is entered into. You also
agree to pay all costs and expenses of each Initial Lender and each
Arranger (including, without limitation, fees and expenses of counsel)
incurred in connection with the enforcement of this Commitment Letter.
You should be aware that any Initial Lender, any Arranger or one
or more of their affiliates may be providing financing or other services to
parties whose interests may conflict with yours. However, be assured that,
consistent with each Initial Lender's and each Arranger's longstanding
policies to hold in confidence the affairs of their customers, none of the
Initial Lenders, the Arrangers or any of their affiliates will furnish
confidential information obtained from you to any of their other customers.
By the same token, the Initial Lenders, the Arrangers and their affiliates
will not make available to you confidential information that they have
obtained or may obtain from any other customer.
You agree that this Commitment Letter is for your confidential
use only and neither its existence nor the terms hereof will be disclosed
by you to any person or entity other than your officers, directors,
accountants, attorneys and other advisors, and then only on a "need to
know" basis in connection with the Transaction and on a confidential basis,
except that, following your return of an executed counterpart hereof to
each Arranger, you may (a) make public disclosure of the existence and
amount of the Initial Lenders' commitments and the Arrangers' undertakings
hereunder, (b) file a copy of this Commitment Letter in any public record
in which it is required by law to be filed, (c) provide a copy of this
Commitment Letter on a confidential basis to the Target and its
accountants, attorneys and other advisors and (d) make such other public
disclosures of the terms and conditions hereof as you are required by law,
in the opinion of your counsel, to make. You agree that you will permit
each Arranger and each Initial Lender to review and approve any reference
to it or to any of its affiliates or any other agent or arranger under the
Senior Facilities contained in any press release or similar public
disclosure prior to public release. Each Initial Lender and Arranger agrees
that you will be permitted to review and approve any reference to you and
your affiliates relating to the Senior Facilities contained in any press
release, advertisement or similar public disclosure prior to public
release.
You represent and warrant that (a) all information that has been
or will hereafter be made available by or on behalf of you or by any of
your representatives in connection with the Transaction and the other
transactions contemplated hereby to any Initial Lender, any Arranger or any
of their affiliates or representatives or to any Lender or any potential
Lender is and will be complete and correct in all material respects and
does not and will not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
contained therein not misleading in light of the circumstances under which
such statements were or are made and (b) all financial projections, if any,
that have been or will be prepared by you or on your behalf or by any of
your representatives and made available to any Initial Lender, any Arranger
or any of their affiliates or representatives or to any Lender or any
potential Lender in connection with the Transaction and the other
transactions contemplated hereby have been or will be prepared in good
faith based upon reasonable assumptions (it being understood that such
projections are subject to significant uncertainties and contingencies,
many of which are beyond your control, and that no assurance can be given
that any particular projections will be realized). You agree to supplement
the information and projections from time to time so that the
representations and warranties contained in this paragraph remain complete
and correct.
In issuing this commitment and undertaking, each Initial Lender
and each Arranger is relying on the accuracy of the information furnished
to it by you or on your behalf. The obligations of each Initial Lender and
each Arranger under this Commitment Letter and of any Lender that issues a
commitment for the Senior Facilities are made solely for your benefit and
may not be relied upon or enforced by any other person or entity.
This Commitment Letter shall be governed by, and construed in
accordance with, the laws of the State of New York. Delivery of an executed
counterpart of this Commitment Letter by telecopier shall be effective as
delivery of a manually executed counterpart of this Commitment Letter. Each
of you, each Initial Lender and each Arranger 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
Commitment Letter, the transactions contemplated hereby or the actions of
any Initial Lender or any Arranger in the negotiation, performance or
enforcement hereof.
<PAGE>
Please evidence your acceptance of the provisions of this
Commitment Letter (including, without limitation, the attached Annexes) and
the other matters referred to above by signing the enclosed copy of this
Commitment Letter and returning it to Steven Victorin, Citibank, N.A., 399
Park Avenue, New York, New York 10043 at or before 5:00 P.M. (New York City
time) on October 7, 1998, the time at which each Initial Lender's
commitment and each Arranger's undertaking set forth above (if not so
accepted prior thereto) will expire.
Very truly yours,
CITIBANK, N.A.
By /s/ Carolyn A. Kee
------------------------------
Name: Carolyn A. Kee
Title: Attorney-in-Fact
SALOMON SMITH BARNEY INC.
By /s/ Steven R. Victorin
------------------------------
Name: Steven R. Victorin
Title: Attorney-in-Fact
BANK OF AMERICA NT&SA
By /s/ W.L. Hess
------------------------------
Name: W.L. Hess
Title: Managing Director
NATIONSBANC MONTGOMERY SECURITIES LLC
By /s/ John A. Finan
------------------------------
Name: John A. Finan
Title: Managing Director
BANQUE NATIONALE DE PARIS
By /s/ Robert S. Taylor, Jr.
------------------------------
Name: Robert S. Taylor, Jr.
Title: Senior Vice President
By /s/ Richard L. Sted
------------------------------
Name: Richard L. Sted
Title: Senior Vice President
BARCLAYS BANK PLC
By /s/ Keith Mackie
------------------------------
Name: Keith Mackie
Title: Director
DEUTSCHE BANK AG, NEW YORK BRANCH AND/OR
CAYMAN ISLANDS BRANCH
By /s/ Jean M. Hannigan
------------------------------
Name: Jean M. Hannigan
Title: Vice President
By /s/ Susan L. Pearson
------------------------------
Name: Susan L. Pearson
Title: Director
DEUTSCHE BANK SECURITIES INC.
By /s/ Jean M. Hannigan
------------------------------
Name: Jean M. Hannigan
Title: Vice President
By /s/ Thomas A. Foley
------------------------------
Name: Thomas A. Foley
Title: Vice President
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By /s/ Christopher C. Kunhardt
------------------------------
Name: Christopher C. Kunhardt
Title: Vice President
J.P. MORGAN SECURITIES INC.
By /s/ Charles H. King
------------------------------
Name: Charles H. King
Title: Vice President
ACCEPTED this 9th day
of October, 1998
ALLIEDSIGNAL INC.
By /s/ Richard F. Wallman
-------------------------
Name: Richard F. Wallman
Title: Senior Vice President
and Chief Financial Officer
<PAGE>
ALLIEDSIGNAL INC.
SUMMARY OF TERMS AND CONDITIONS
$7,000,000,000 364-DAY MULTI CURRENCY REVOLVING CREDIT FACILITY
WITH ONE YEAR TERM-OUT OPTION
BORROWERS: AlliedSignal Inc. (the "Company") and any Designated
Subsidiaries (together with the Company, the
"Borrowers"), fully and unconditionally guaranteed by
the Company.
FACILITY AMOUNT: $7,000,000,000.
TYPE OF FACILITY: 364-day unsecured revolving credit facility (the
"364-Day Facility"). Provided there is no default or
Event of Default, the Company will have the option,
on the Commitment Termination Date, to convert up to
$4,000,000,000 of outstanding Advances into a term
loan maturing no later than the first anniversary of
the Commitment Termination Date (the "Term Loan
Conversion Option").
PURPOSE: Finance the acquisition of AMP Inc. (the "Target")
and general corporate purposes, including commercial
paper backstop.
ADMINISTRATIVE
AGENT: Citibank, N.A. ("Citibank", or the "Agent").
BOOKRUNNER: Salomon Smith Barney Inc. ("SSB").
ARRANGERS: Banque Nationale de Paris ("BNP"), Barclays
Capital, the investment banking division of
Barclays Bank PLC, Deutsche Bank Securities Inc.,
J.P. Morgan Securities Inc., NationsBanc Montgomery
Securities LLC and SSB.
LENDERS: Citibank, Bank of America NT&SA ("BofA"), BNP,
Barclays Bank PLC ("Barclays"), Deutsche Bank AG, New
York Branch and/or Cayman Islands Branch
("Deutsche"), Morgan Guaranty Trust Company of New
York ("Morgan") and other financial institutions
acceptable to the Arrangers and the Company.
CLOSING DATE: Such date as may be agreed upon by the Company, the
Arrangers and the Agent.
COMMITMENT
TERMINATION DATE: 364 Days from the Closing Date, subject to the
Renewal of Commitments section.
FINAL
MATURITY DATE: The Commitment Termination Date, provided that, if
the Company elects the Term Loan Conversion Option,
the Final Maturity Date will be the first anniversary
of the Commitment Termination Date.
ADVANCES: At the applicable Borrower's option, either
Eurocurrency Rate Advances, Base Rate Advances or
Competitive Bid Advances. Each Lender will be
severally obligated to make its pro rata share of any
Eurocurrency Rate Advance or Base Rate Advance.
Eurocurrency Rate Advances, at the applicable
Borrower's option, may be made in U.S. Dollars,
Pounds Sterling, Deutsche Marks, French Francs,
Euros/Ecu and Japanese Yen (the "Major Currencies").
RENEWAL OF
COMMITMENTS: At least 45 but no earlier than 60 days prior to each
anniversary date of the 364-Day Facility and provided
all representations and warranties are true and
correct in all material respects and no Event of
Default has occurred and is continuing, the Company
may request that the Lenders extend for an additional
364 days the then applicable Commitment Termination
Date. The Company may replace any non-consenting
Lender by assignment to any consenting Lender or new
Lender, or by termination of a non-consenting
Lender's commitment.
COMMITMENT
REDUCTION: The Company will have the right, upon at least three
business days' notice, to terminate or cancel, in
whole or in part, the unused portion of the 364-Day
Facility Amount in excess of the aggregate
outstanding Competitive Bid Advances, provided that
each partial reduction shall be in a minimum amount
of $10,000,000 or any whole multiple of $1,000,000 in
excess thereof. Once terminated, a commitment may
not be reinstated.
FACILITY FEE: At all times unless the Term Loan Conversion Option
has been selected and is in effect, an amount which
will vary as per attached Pricing Grid, based on the
Company's long-term senior unsecured non-credit
enhanced debt ratings, payable on each Lender's
commitment, irrespective of usage, quarterly in
arrears on the last day of each March, June,
September and December, and on the Commitment
Termination Date. The Facility Fee shall be
calculated on the basis of actual number of days
elapsed in a year of 365/366 days. No Facility Fee
will be payable after the Term Loan Conversion Option
has been selected and is in effect.
INTEREST RATES AND
INTEREST PERIODS: At the applicable Borrower's option, any Advance that
is made to it will be available at the rates and for
the Interest Periods stated below:
a) Base Rate: a fluctuating rate equal to the
Base Rate plus the Applicable Margin.
The Base Rate is a fluctuating rate per annum
equal at all times to the highest of (i)
Citibank's publicly announced "base" rate, (ii)
1/2 of 1% percent per annum above the latest
three-week moving average of secondary market
morning offering rates in the United States for
three-month certificates of deposit of major
U.S. money market banks, adjusted to the
nearest 1/16 of 1%, and (iii) a rate equal to
1/2 of 1% per annum above the weighted average
of the rates on overnight Federal funds
transactions with members of the Federal
Reserve System arranged by Federal funds
brokers.
b) Eurocurrency Rate: a periodic fixed rate equal
to the Eurocurrency Rate plus the
Applicable Margin.
The Eurocurrency Rate, which is a rate per
annum equal to the London Interbank Offered
Rate as determined by reference to Dow Jones
Markets screen 3750 (or other applicable
pages with respect to a Major Currency), or
if not applicable the average rate per annum
(rounded upward to the nearest 1/16 of 1%) at
which deposits in the applicable Major
Currency are offered by the Reference Banks
to prime banks in the London interbank market
at 11:00 A.M. (London time) two business days
before the first day of the Interest Period
and in amounts approximately equal to the
Reference Banks' pro rata share of the
contemplated Advance for a given Interest
Period and with a maturity equal to such
Interest Period, adjusted for reserve
requirements and, in the case of particular
Major Currencies, as appropriate for such
currencies. The Eurocurrency Rate shall be
fixed for Interest Periods of 1, 2, 3, 6 or 9
months if available to all Lenders.
APPLICABLE MARGIN: The Applicable Margin means:
(i) for Base Rate Advances, 0.00 basis points per
annum;
(ii) for Eurocurrency Rate Advances, (i) at all
times unless the Term Loan Conversion Option
has been selected and is in effect an amount
which will vary as per the attached Pricing
Grid, based on the Company's long-term senior
unsecured non-credit enhanced debt ratings and,
(ii) if the Term Loan Conversion Option has
been selected and is in effect, an amount which
will vary as per the attached Term-Out Option
Pricing Grid.
Upon the occurrence and during the continuance of any
monetary Event of Default, the Applicable Margin will
increase by 100 basis points per annum, and if such
Advance is a Eurocurrency Rate Advance, it will
convert to a Base Rate Advance at the end of the
Interest Period then in effect for such Eurocurrency
Rate Advance.
REFERENCE BANKS: Citibank, BofA, BNP, Barclays, Deutsche and Morgan.
INTEREST PAYMENTS: At the end of each Interest Period for each Advance,
but no less frequently than quarterly. Interest will
be computed on a 365/366-day basis for Base Rate
Advances and a 360-day basis for Eurocurrency Rate
Advances.
UTILIZATION FEE: As per the attached Pricing Grid, based on the
Company's long-term senior unsecured
non-credit-enhanced debt ratings. The Utilization
Fee will be added to the Applicable Margin for any
date where outstanding Advances exceed 33 1/3% and
66 2/3% of commitments. The Utilization Fee will be
calculated on a 360-day basis and will be payable on
the same basis as interest.
BORROWINGS: Borrowings shall be in minimum principal amounts of
$10,000,000 and integral multiples of $1,000,000 in
excess thereof. All Advances (other than Competitive
Bid Advances) shall be made by the Lenders ratably in
proportion to their respective Commitments. Other
than Competitive Bid Advances, borrowings will be
available on same day notice for Base Rate Advances
and 3 business days notice for Eurocurrency Rate
Advances.
AVAILABILITY: From the Closing Date and prior to the Commitment
Termination Date, the Borrowers may, subject to the
terms of the 364-Day Facility, borrow, repay and
reborrow.
COMPETITIVE BID
OPTION: The Borrowers may request the Agent to solicit
competitive bids from the Lenders (individually a
"Bidder" and collectively the "Bidders") for Advances
in U.S. Dollars or Foreign Currencies (meaning any
currency other than U.S. Dollars which is freely
transferable and convertible into U.S. Dollars), for
requested maturities of 5 days or more. Each Bidder
will bid at its discretion. Each Borrower's notice
requesting such bids will be given to the Agent at
least 1 business day prior to the proposed Advance
date for fixed rate U.S. Dollar based bids, at least
4 business days prior to the proposed Advance date
for Eurocurrency Rate U.S. Dollar based bids, at
least 3 business days prior to the proposed Advance
date for fixed or local rate based bids in Foreign
Currencies and at least 5 business days prior to the
proposed Advance date for Eurocurrency Rate based
bids in Foreign Currencies, and will specify the
proposed date of Advance, amount, currency and
maturity date of the proposed Advance, interest
payment schedule, the interest rate basis to be used
by the Bidders in bidding, the location of such
Borrower's account to which funds are to be advanced,
and such other terms as such Borrower may specify.
The Agent will advise the Bidders of the terms of the
applicable Borrower's notice, and such Bidders as
elect may submit bids, which the Agent shall provide
to such Borrower.
The Borrower giving the notice may accept one or more
bids, provided that the aggregate outstanding
Advances of all Lenders on the date of, and after
giving effect to, any Competitive Bid Advance shall
not exceed the aggregate Commitments at such time.
Bids will be accepted in order of the lowest to the
highest rates ("Bid Rates"). The Borrowers may not
accept bids in excess of the requested bid amount for
any maturity. If two or more Bidders bid at the same
Bid Rate, the amount to be borrowed at such Bid Rate
will be allocated among such Bidders in proportion to
the amount which each Bidder bid at such Bid Rate.
Each Borrowing under the Competitive Bid Option shall
be in an amount of not less than $10,000,000 and
integral multiples of $1,000,000 in excess thereof.
While any such Borrowing is outstanding, it will be
deemed usage of the 364-Day Facility for the purposes
of availability and the Commitment of each Lender
(whether or not a Bidder) shall be reduced and deemed
used for all purposes by its pro rata share (based on
its respective Commitment) of an amount equal to the
outstanding amount of such Borrowing. However, each
Lender's Advance made under the Competitive Bid
Option shall not reduce such Lender's obligation to
lend its pro rata share of the remaining undrawn
Commitment.
COMPETITIVE BID
ADMINISTRATIVE FEE: As agreed between Citibank and the Company.
ANNUAL AGENCY FEE: As agreed between Citibank and the Company.
REPAYMENT: The Borrowers will repay (i) each Advance (other than
a Competitive Bid Advance) no later than on the
Commitment Termination Date , subject to the Term
Loan Conversion Option and (ii) each Competitive Bid
Advance at the maturity date specified in the
applicable Borrower's notice requesting such
Competitive Bid Advance.
OPTIONAL
PREPAYMENT: Advances (other than Competitive Bid Advances) may be
prepaid without penalty, with notice not later than
11:00 A.M. for Base Rate Advances, and with two
business days notice for Eurocurrency Rate Advances,
in minimum amounts of $10,000,000 and increments of
$1,000,000 in excess thereof. The Borrowers will
bear all costs related to the prepayment of a
Eurocurrency Rate Advance prior to the last day of
its Interest Period. Competitive Bid Advances may
not be prepaid unless the invitation for Competitive
Bid Advances specifies the right to prepay, and in
such case the Borrowers will reimburse the Lender(s)
for any funding losses.
LOAN
DOCUMENTATION: The commitments will be subject to preparation,
execution and delivery of mutually acceptable loan
documentation which will contain conditions
precedent, representations and warranties, covenants,
events of default and other provisions customary for
facilities of this nature, including, but not limited
to, those noted below. Except as otherwise
specifically stated in this term sheet, terms and
conditions set forth in documentation for the 364-Day
Facility shall be substantially the same as such
terms and conditions set forth in the Company's
existing $750 million five-year credit facility.
DOLLAR EQUIVALENT
VALUE LIMITATION
FOR ALL ADVANCES: If at any time the dollar equivalent value of all
Advances exceeds 103% of the Facility Amount, the
Borrowers shall promptly make a mandatory prepayment
to reduce the dollar equivalent value of all Advances
to 100% of the Facility Amount.
DOLLAR EQUIVALENT
VALUE LIMITATION FOR
ADVANCES IN MAJOR
CURRENCIES: If at any time the dollar equivalent value of all
Advances in Major and Alternate Currencies exceeds
110% of $200,000,000 (the "Major Currency Sublimit"),
the Borrowers shall make a mandatory prepayment at
the end of the respective Interest Periods for such
Advances to reduce the dollar equivalent value of all
Advances in Major Currencies to 100% of the Major
Currency Sublimit.
CONDITIONS
PRECEDENT TO
CLOSING: Customary for facilities of this nature, including,
but not limited to:
(1) The Notes, if requested.
(2) Board resolutions.
(3) Incumbency certificate.
(4) Favorable legal opinion from counsel for the
Company.
(5) Favorable legal opinion from counsel for the
Agent.
(6) Accuracy of representations and warranties.
(7) Amendment of the Borrowers' existing
$750,000,000 credit facility to have terms
substantially similar to the $2,250,000,000
Five-Year Credit Facility among the Borrowers,
the Lenders and the Agent.
(8) Termination of commitments and repayment in
full of amounts owing under the $900,000,000
364-Day Backstop Credit Agreement among the
Borrowers, the Lenders and the Agent.
CONDITION PRECEDENT
TO INITIAL ADVANCE: The Lenders shall be satisfied that any applicable
state takeover law and any supermajority charter
provisions are not applicable to the acquisition of
the Target or that any conditions for avoiding the
restrictions set forth therein have been satisfied.
CONDITIONS
PRECEDENT TO ALL
ADVANCES: Customary for facilities of this nature, including,
but not limited to:
(1) All representations and warranties are true and
correct in all material respects on and as of
the date of the Borrowing, before and after
giving effect to such Borrowing and to the
application of the proceeds therefrom, as
though made on and as of such date; provided
that the representation as to no material
adverse change shall be made only at Closing
and Renewal of Commitments.
(2) No Event of Default or event which, with the
giving of notice or passage of time or both,
would be an Event of Default, has occurred and
is continuing, or would result from such
Borrowing.
CONDITIONS PRECEDENT TO
INITIAL ADVANCE TO EACH
BORROWER THAT IS A
DESIGNATED SUBSIDIARY: Customary for facilities of this nature, including,
but not limited to:
(1) Such Borrower's Note if requested;
(2) Representations by the Company that such
Borrower has received all governmental
authorizations, consents, approvals and
licenses under applicable laws and regulations
for such Borrower to execute and deliver the
Credit Agreement and to perform its obligations
thereunder;
(3) Board resolutions of such Borrower;
(4) Incumbency Certificate of such Borrower;
(5) Designation Letter;
(6) Accuracy of representations and warranties of
such Borrower;
(7) Favorable legal opinion from counsel for such
Borrower.
ADDITIONAL CONDITION
PRECEDENT TO
COMPETITIVE
BID ADVANCES: The information provided by the applicable Borrower
does not contain an untrue statement or omit to state
any material fact necessary to make the statements
contained therein, in light of the circumstances
under which they are made, not misleading.
REPRESENTATIONS
AND WARRANTIES: Customary for facilities of this nature, including,
but not limited to:
(1) Confirmation of corporate status and authority;
(2) Execution, delivery, and performance of loan
documents do not violate law or existing
agreements;
(3) No government or regulatory approvals required;
(4) No litigation currently or threatened which is
likely to be determined adversely so as to
affect materially the ability of the Company to
pay its debts, including the Advances, or which
would affect the legality, validity and
enforceability of the loan documents;
(5) No material adverse change in financial
condition or results of operations or prospects
since December 31, 1997 for the Company and its
Consolidated Subsidiaries taken as a whole;
(6) Accuracy of information, financial statements;
(7) Material compliance with laws and regulations,
including ERISA and all applicable
environmental laws and regulations;
(8) Legality, validity, binding effect and
enforceability of the loan documents;
(9) Not an investment company or public utility
holding company.
FINANCIAL
COVENANTS: (1) Minimum Net Worth greater than or equal to
$3,300,000,000;
(2) Limitation on Domestic Subsidiary Indebtedness.
COVENANTS: Customary for facilities of this nature, including,
but not limited to:
(1) Preservation of corporate existence;
(2) Material compliance with laws (including ERISA
and applicable environmental laws);
(3) Payment of taxes;
(4) Payment of material obligations;
(5) Visitation rights;
(6) Maintenance of books and records;
(7) Maintenance of properties;
(8) Maintenance of insurance;
(9) Negative pledge and limitations on liens and
secured debt with certain exceptions
essentially in conformity to Section 1005 of
the 1985 Indenture (which will not be
incorporated by reference, but will be directly
inserted);
(10) Certain restrictions on change of business,
consolidations, mergers, sale of assets;
(11) Certain reporting requirements, including
financial and ERISA;
(12) Use of proceeds;
(13) Change of control.
EVENTS OF DEFAULT: Customary for facilities of this nature, including,
but not limited to:
(1) Failure to pay principal when due and
interest, Facility Fee and Utilization Fee
within three business days of when due;
(2) Representations or warranties materially
incorrect;
(3) Failure to comply with covenants (with notice
and cure periods as applicable);
(4) Cross-default to payment defaults on principal
aggregating $100,000,000, excluding defaults on
indebtedness to any institution to the extent
the Company or a Subsidiary has deposits with
such institution sufficient to repay such
indebtedness, or to default or event if the
effect is to accelerate or permit acceleration
of any such debt. This cross default provision
shall not apply to debt of any subsidiary or
affiliate of the Company located in China,
India, Commonwealth of Independent States or
Turkey provided that such debt is not
guaranteed or supported in any legally
enforceable manner by any Borrower or by any
subsidiary or affiliate of the Company located
outside of these countries, and such default is
due to the direct or indirect action of any
government entity or agency of these countries
and provided further each subsidiary to which
this exception applies shall not have assets of
more than $80 million individually nor
collectively $300 million measured as of the
most recent calendar quarter end;
(5) Unsatisfied judgment or order in excess of
$100,000,000 individually or in the
aggregate. A carve-out will be provided
similar to that contained in the second
sentence of item (4) immediately above;
(6) Bankruptcy/insolvency;
(7) ERISA Event and aggregate Plan Insufficiencies
exceed $100,000,000, or Plan reorganization or
termination resulting in an increase in annual
contributions exceeding $100,000,000.
ECONOMIC MONETARY
UNION: Appropriate language will be incorporated into the
364-Day Facility to address certain issues that will
be raised by the introduction of the Euro on January
1, 1999 and the removal from circulation of the
various national currency denominations on and after
January 1, 2002.
OTHER: Loan documentation will include:
(1) Indemnification of Agent and Lenders and their
respective affiliates, officers, directors,
employees, agents and advisors for any
liabilities and expenses arising out of the
364-Day Facility or the use of proceeds.
(2) Normal agency language.
(3) Majority Lenders defined as those holding 51%
of outstanding Advances (excluding Competitive
Bid Advances) or, if none, Commitments. The
consent of all the Lenders will be required to
increase the size of the 364-Day Facility, to
extend the maturity or to decrease interest
rates or fees.
(4) The Company will have the right to replace any
Lender through assignment or the addition of a
new Lender provided that no Event of Default
has occurred and is continuing and no more than
3 Lenders in any calendar year may be replaced.
ASSIGNMENTS AND
PARTICIPATIONS: Each Lender will have the right to assign to one or
more Eligible Assignees all or a portion of its
rights and obligations under the loan documents with
the consent of the Company (not to be unreasonably
withheld). Minimum aggregate assignment level of
$10,000,000 and increments of $1,000,000 in excess
thereof. The parties to the assignment (other than
the Company) shall pay to the Agent an administrative
fee of $3,500 per assignment.
Each Lender will also have the right, without the
consent of the Company or the Agent, to assign (i) as
security, all or part of its rights under the loan
documents to any Federal Reserve Bank and (ii) with
notice to the Company and the Agent, all or part of
its rights or obligations under the loan documents to
any of its affiliates.
Each Lender will have the right to sell
participations in its rights and obligations under
the loan documents, subject to customary restrictions
on the participants' voting rights. Each Lender
selling a participation shall notify the Company
within 30 days of such sale.
YIELD PROTECTION,
TAXES, AND
OTHER DEDUCTIONS: (1) The loan documents will contain yield
protection provisions, customary for facilities
of this nature, protecting the Lenders in the
event of unavailability of funding, funding
losses, reserve and capital adequacy
requirements.
(2) All payments to be free and clear of any
present or future taxes, withholdings or other
deductions whatsoever (other than income taxes
in the jurisdiction of the Lender's applicable
lending office).
The Company will have the right to replace any Lender
which requests reimbursements for amounts owing under
(1) and (2) above provided that (i) no Event of
Default, or event which with the giving of notice or
lapse of time or both would be an Event of Default,
has occurred and is continuing, (ii) the Company has
satisfied all of its obligations under the Facility
relating to such Lender, and (iii) any replacement is
acceptable to the Agent and the Company will have
paid the Agent a $3,500 administrative fee if such
replacement Lender is not an existing Lender.
GOVERNING LAW: State of New York.
COUNSEL TO
THE AGENT: Shearman & Sterling
EXPENSES: The Company shall reimburse each Arranger, the
Co-Arranger and Citibank for all agreed out-of-pocket
expenses incurred by them in the negotiation,
syndication and execution of the Facility. Such
expenses shall be reimbursed by the Company upon
presentation of a statement of account, regardless of
whether the transaction contemplated is actually
completed or the loan documents are signed.
<PAGE>
ALLIEDSIGNAL INC.
$7,000,000,000 364-DAY REVOLVING CREDIT FACILITY
PRICING GRID
<TABLE>
<CAPTION>
===============================================================================================
LEVEL 1 LEVEL 2 LEVEL 3 LEVEL 4 LEVEL 5 LEVEL 6
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BASIS FOR LT Senior LT Senior LT Senior LT Senior LT Senior LT Senior
PRICING Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured
Debt Rated Debt Rated Debt Rated Debt Rated Debt Rated Debt Rated
At Least A Less Than Less Than Less Than Less Than Less Than
By Standard Level 1 But Level 2 But Level 3 But Level 4 But Level 5.
& Poor's Or At Least A- At Least At Least At Least
A2 By By Standard BBB+ By BBB By BBB-By
Moody's. & Poor's Or Standard & Standard & Standard &
A3 By Poor's Or Poor's Or Poor's Or
Moody's. BAA1 By BAA2 By BAA3 By
Moody's. Moody's. Moody's.
-----------------------------------------------------------------------------------------------
FACILITY FEE 5.5 bps 7.0 bps 8.5 bps 9.5 bps 12.0 bps 20.0 bps
(FN1)
-----------------------------------------------------------------------------------------------
APPLICABLE 17.0 bps 20.5 bps 26.5 bps 30.5 bps 40.5 bps 50.0 bps
MARGIN
-----------------------------------------------------------------------------------------------
DRAWN COST LIBOR+22.5 LIBOR+27.5 LIBOR+35.0 LIBOR+40.0 LIBOR+52.5 LIBOR+70.0
(FN2) bps bps bps bps bps bps
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
UTILIZATION
FEE (USAGE 0.0 bps 2.5 bps 2.5 bps 5.0 bps 5.0 bps 5.0 bps
(greater than
or equal to)
33 1/3% AND
(less than)
66 2/3%)
-----------------------------------------------------------------------------------------------
UTILIZATION
FEE 2.5 bps 5.0 bps 5.0 bps 10.0 bps 10.0 bps 17.5 bps
(USAGE
(greater than
or equal to)
66 2/3%)
-----------------------------------------------------------------------------------------------
FULLY DRAWN LIBOR+25.0 LIBOR+32.5 LIBOR+40.0 LIBOR+50.0 LIBOR+62.5 LIBOR+87.5
COST (FN3) bps bps bps bps bps bps
-----------------------------------------------------------------------------------------------
<FN>
(1) Paid quarterly in arrears on each bank's commitment irrespective of usage.
(2) Facility Fee plus Applicable Margin.
(3) Drawn Cost plus Utilization Fee.
bps = basis points per annum
</FN>
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
ALLIEDSIGNAL INC.
$7,000,000,000 ONE YEAR TERM-OUT OPTION
PRICING GRID
----------------------------------------------------------------------------------=============
LEVEL 1 LEVEL 2 LEVEL 3 LEVEL 4 LEVEL 5 LEVEL 6
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BASIS FOR LT Senior LT Senior LT Senior LT Senior LT Senior LT Senior
PRICING Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured
Debt Rated Debt Rated Debt Rated Debt Rated Debt Rated Debt Rated
At Least A Less Than Less Than Less Than Less Than Less Than
By Standard Level 1 But Level 2 But Level 3 But Level 4 But Level 5.
& Poor's Or At Least A- At Least At Least At Least
A2 By By Standard BBB+ By BBB By BBB-By
Moody's. & Poor's Or Standard & Standard & Standard &
A3 By Poor's Or Poor's Or Poor's Or
Moody's. BAA1 By BAA2 By BAA3 By
Moody's. Moody's. Moody's.
===============================================================================================
APPLICABLE 22.5 bps 27.5 bps 35.0 bps 40.0 bps 52.5 bps 70.0 bps
MARGIN
===============================================================================================
UTILIZATION
FEE (USAGE 0.0 bps 2.5 bps 2.5 bps 5.0 bps 5.0 bps 5.0 bps
(greater
than or
equal to)
33 1/3% AND
(less than)
66 2/3%)
-----------------------------------------------------------------------------------------------
UTILIZATION
FEE 2.5 bps 5.0 bps 5.0 bps 10.0 bps 10.0 bps 17.5 bps
(USAGE
(greater
than or
equal to)
66 2/3%)
-----------------------------------------------------------------------------------------------
FULLY DRAWN LIBOR+25.0 LIBOR+32.5 LIBOR+40.0 LIBOR+50.0 LIBOR+62.5 LIBOR+87.5
COST (FN1) bps bps bps bps bps bps
===============================================================================================
<FN>
(1) Applicable Margin plus Utilization Fee.
bps = basis points per annum
</FN>
</TABLE>
ALLIEDSIGNAL INC.
$900,000,000 ONE YEAR TERM-OUT OPTION
PRICING GRID
<TABLE>
<CAPTION>
==================================================================================================================
LEVEL 1 LEVEL 2 LEVEL 3 LEVEL 4 LEVEL 5 LEVEL 6
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BASIS FOR LT Senior LT Senior LT Senior LT Senior LT Senior LT Senior
PRICING Unsecured Debt Unsecured Debt Unsecured Debt Unsecured Debt Unsecured Debt Unsecured Debt
Rated At Least Rated Less Than Rated Less Rated Less Rated Less Than Rated Less
A By Standard Level 1 But At Than Level 2 Than Level 3 Level 4 But At Than Level 5.
& Poor's Or A2 Least A- By But At Least But At Least Least BBB-By
By Moody's. Standard & BBB+ By BBB By Standard &
Poor's Or A3 By Standard & Standard & Poor's Or BAA3
Moody's. Poor's Or BAA1 Poor's Or BAA2 By Moody's.
By Moody's. By Moody's.
------------------------------------------------------------------------------------------------------------------
APPLICABLE 22.5 bps 27.5 bps 35.0 bps 40.0 bps 52.5 bps 70.0 bps
MARGIN
------------------------------------------------------------------------------------------------------------------
UTILIZATION FEE
(USAGE 0.0 bps 2.5 bps 2.5 bps 5.0 bps 5.0 bps 5.0 bps
(greater than
or equal to)
33 1/3% AND
(less than)
66 2/3%)
------------------------------------------------------------------------------------------------------------------
UTILIZATION FEE
(USAGE
(greater than
or equal to)
66 2/3%) 2.5 bps 5.0 bps 5.0 bps 10.0 bps 10.0 bps 17.5 bps
------------------------------------------------------------------------------------------------------------------
FULLY DRAWN LIBOR+25.0 bps LIBOR+32.5 bps LIBOR+40.0 bps LIBOR+50.0 bps LIBOR+62.5 bps LIBOR+87.5 bps
COST(FN1)
------------------------------------------------------------------------------------------------------------------
---------------------
<FN>
(1) Applicable Margin plus Utilization Fee.
bps = basis points per annum
</FN>
</TABLE>
<PAGE>
ALLIEDSIGNAL INC.
SUMMARY OF TERMS AND CONDITIONS
$2,250,000,000 5-YEAR MULTI CURRENCY REVOLVING CREDIT FACILITY
BORROWERS: AlliedSignal Inc. (the "Company") and any
Designated Subsidiaries (together with the
Company, the "Borrowers"), fully and
unconditionally guaranteed by the Company.
FACILITY AMOUNT: $2,250,000,000 or such other amount as
provided for under the Commitment Increase
and Commitment Reduction sections of this
Summary of Terms and Conditions, but, in any
event, no more than $5,000,000,000.
TYPE OF FACILITY: Five year unsecured multi currency revolving
credit facility (the "5-Year Facility").
PURPOSE: Finance the acquisition of AMP Inc. (the
"Target") and general corporate purposes,
including commercial paper backstop.
ADMINISTRATIVE
AGENT: Citibank, N.A. ("Citibank", or the "Agent").
BOOKRUNNER: Salomon Smith Barney Inc. ("SSB").
ARRANGERS: Banque Nationale de Paris ("BNP"), Barclays
Capital, the investment banking division of
Barclays Bank PLC, Deutsche Bank Securities
Inc., J.P. Morgan Securities, Inc.,
NationsBanc Montgomery Securities LLC and
SSB.
LENDERS: Citibank, Bank of America NT&SA ("BofA"),
BNP, Barclays Bank PLC ("Barclays"), Deutsche
Bank AG, New York Branch and/or Cayman
Islands Branch ("Deutsche"), Morgan Guaranty
Trust Company of New York ("Morgan") and
other financial institutions acceptable to
the Arrangers and the Company.
CLOSING DATE: Such date as may be agreed upon by the
Company, the Arrangers and the Agent.
COMMITMENT
TERMINATION DATE: Fifth anniversary of the Closing Date.
ADVANCES: At the applicable Borrower's option, either
Eurocurrency Rate Advances, Base Rate
Advances or Competitive Bid Advances. Each
Lender will be severally obligated to make
its pro rata share of any Eurocurrency Rate
Advance or Base Rate Advance. Eurocurrency
Rate Advances, at the applicable Borrower's
option, may be made in U.S. Dollars, Pounds
Sterling, Deutsche Marks, French Francs,
Euros/Ecu and Japanese Yen (the "Major
Currencies").
COMMITMENT
INCREASE: The Company shall have the right, no more
than once a year after Closing, to increase
the Facility Amount, in minimum increments of
$50,000,000, up to a maximum Facility Amount
of $5,000,000,000, provided that no Event of
Default, or event which with the giving of
notice or lapse of time or both would be an
Event of Default, has occurred and is
continuing. The Company may offer the
increase to (x) its existing Lenders, and
each existing Lender will have the right, but
no obligation, to commit to all or a portion
of the proposed increase (the "Proposed
Increased Commitment") or (y) third party
financial institutions provided that the
minimum commitment of each such institution
equals or exceeds $10,000,000.
COMMITMENT
REDUCTION: The Company will have the right, upon at
least three business days' notice, to
terminate or cancel, in whole or in part, the
unused portion of the 5-Year Facility Amount
in excess of the aggregate outstanding
Competitive Bid Advances, provided that each
partial reduction shall be in a minimum
amount of $10,000,000 or any whole multiple
of $1,000,000 in excess thereof. Once
terminated, a commitment may not be
reinstated except as provided for in the
Commitment Increase section.
FACILITY FEE: As per attached Pricing Grid, based on the
Company's long-term senior unsecured
non-credit enhanced debt ratings, payable on
each Lender's commitment, irrespective of
usage, quarterly in arrears on the last day
of each March, June, September and December,
and on the Commitment Termination Date. The
Facility Fee shall be calculated on the basis
of actual number of days elapsed in a year of
365/366 days.
EXTENSION OF COMMITMENT
TERMINATION DATE: At least 45 but no earlier than 60 days prior
to each anniversary date of the 5-Year
Facility and provided all representations and
warranties are true and correct in all
material respects and no Event of Default has
occurred and is continuing, the Company may
request that the Lenders extend for an
additional one year the then applicable
Commitment Termination Date. The Company may
replace any non-consenting Lender by
assignment to any consenting Lender or new
Lender, or by termination of a non-consenting
Lender's commitment.
INTEREST RATES AND
INTEREST PERIODS: At the applicable Borrower's option, any
Advance that is made to it will be available
at the rates and for the Interest Periods
stated below:
a) Base Rate: a fluctuating rate equal to
the Base Rate plus the Applicable
Margin.
The Base Rate is a fluctuating rate per
annum equal at all times to the highest
of (i) Citibank's publicly announced
"base" rate, (ii) 1/2 of 1% percent per
annum above the latest three-week moving
average of secondary market morning
offering rates in the United States for
three-month certificates of deposit of
major U.S. money market banks, adjusted
to the nearest 1/16 of 1%, and (iii) a
rate equal to 1/2 of 1% per annum above
the weighted average of the rates on
overnight Federal funds transactions
with members of the Federal Reserve
System arranged by Federal funds
brokers.
b) Eurocurrency Rate: a periodic fixed rate
equal to the Eurocurrency Rate plus the
Applicable Margin.
The Eurocurrency Rate, which is a rate
per annum equal to the London Interbank
Offered Rate as determined by reference
to Dow Jones Markets screen 3750 (or
other applicable pages with respect to a
Major Currency), or if not applicable
the average rate per annum (rounded
upward to the nearest 1/16 of 1%) at
which deposits in the applicable Major
Currency are offered by the Reference
Banks to prime banks in the London
interbank market at 11:00 A.M. (London
time) two business days before the first
day of the Interest Period and in
amounts approximately equal to the
Reference Banks' pro rata share of the
contemplated Advance for a given
Interest Period and with a maturity
equal to such Interest Period, adjusted
for reserve requirements and, in the
case of particular Major Currencies, as
appropriate for such currencies. The
Eurocurrency Rate shall be fixed for
Interest Periods of 1, 2, 3, 6, 9 or 12
months (9 or 12 month options if
available to all Lenders).
APPLICABLE MARGIN: The Applicable Margin means:
(i) for Base Rate Advances, 0.00 basis
points per annum;
(ii) for Eurocurrency Rate Advances, an
amount which will vary as per the
attached Pricing Grid, based on the
Company's long-term senior
unsecured non-credit enhanced debt
ratings.
Upon the occurrence and during the
continuance of any monetary Event of Default,
the Applicable Margin will increase by 100
basis points per annum, and if such Advance
is a Eurocurrency Rate Advance, it will
convert to a Base Rate Advance at the end of
the Interest Period then in effect for such
Eurocurrency Rate Advance.
REFERENCE BANKS: Citibank, BofA, BNP, Barclays, Deutsche and
Morgan.
INTEREST PAYMENTS: At the end of each Interest Period for each
Advance, but no less frequently than
quarterly. Interest will be computed on a
365/366-day basis for Base Rate Advances and
a 360-day basis for Eurocurrency Rate
Advances.
UTILIZATION FEE: As per the attached Pricing Grid, based on
the Company's long-term senior unsecured
non-credit-enhanced debt ratings. The
Utilization Fee will be added to the
Applicable Margin for any date where
outstanding Advances exceed 33 1/3% and 66
2/3% of commitments. The Utilization Fee will
be calculated on a 360-day basis and will be
payable on the same basis as interest.
BORROWINGS: Borrowings shall be in minimum principal
amounts of $10,000,000 and integral multiples
of $1,000,000 in excess thereof. All Advances
(other than Competitive Bid Advances) shall
be made by the Lenders ratably in proportion
to their respective Commitments. Other than
Competitive Bid Advances, borrowings will be
available on same day notice for Base Rate
Advances and 3 business days notice for
Eurocurrency Rate Advances.
AVAILABILITY: From the Closing Date and prior to the
Commitment Termination Date, the Borrowers
may, subject to the terms of the 5-Year
Facility, borrow, repay and reborrow.
COMPETITIVE BID
OPTION: The Borrowers may request the Agent to
solicit competitive bids from the Lenders
(individually a "Bidder" and collectively the
"Bidders") for Advances in U.S. Dollars or
Foreign Currencies (meaning any currency
other than U.S. Dollars which is freely
transferable and convertible into U.S.
Dollars), for requested maturities of 5 days
or more. Each Bidder will bid at its
discretion. Each Borrower's notice requesting
such bids will be given to the Agent at least
1 business day prior to the proposed Advance
date for fixed rate U.S. Dollar based bids,
at least 4 business days prior to the
proposed Advance date for Eurocurrency Rate
U.S. Dollar based bids, at least 3 business
days prior to the proposed Advance date for
fixed or local rate based bids in Foreign
Currencies and at least 5 business days prior
to the proposed Advance date for Eurocurrency
Rate based bids in Foreign Currencies, and
will specify the proposed date of Advance,
amount, currency and maturity date of the
proposed Advance, interest payment schedule,
the interest rate basis to be used by the
Bidders in bidding, the location of such
Borrower's account to which funds are to be
advanced, and such other terms as such
Borrower may specify. The Agent will advise
the Bidders of the terms of the applicable
Borrower's notice, and such Bidders as elect
may submit bids, which the Agent shall
provide to such Borrower.
The Borrower giving the notice may accept one
or more bids, provided that the aggregate
outstanding Advances of all Lenders on the
date of, and after giving effect to, any
Competitive Bid Advance shall not exceed the
aggregate Commitments at such time. Bids will
be accepted in order of the lowest to the
highest rates ("Bid Rates"). The Borrowers
may not accept bids in excess of the
requested bid amount for any maturity. If two
or more Bidders bid at the same Bid Rate, the
amount to be borrowed at such Bid Rate will
be allocated among such Bidders in proportion
to the amount which each Bidder bid at such
Bid Rate.
Each Borrowing under the Competitive Bid
Option shall be in an amount of not less than
$10,000,000 and integral multiples of
$1,000,000 in excess thereof. While any such
Borrowing is outstanding, it will be deemed
usage of the 5-Year Facility for the purposes
of availability and the Commitment of each
Lender (whether or not a Bidder) shall be
reduced and deemed used for all purposes by
its pro rata share (based on its respective
Commitment) of an amount equal to the
outstanding amount of such Borrowing.
However, each Lender's Advance made under the
Competitive Bid Option shall not reduce such
Lender's obligation to lend its pro rata
share of the remaining undrawn Commitment.
COMPETITIVE BID
ADMINISTRATIVE FEE: As agreed between Citibank and the Company.
ANNUAL AGENCY FEE: As agreed between Citibank and the Company.
REPAYMENT: The Borrowers shall repay (i) each Advance
(including a Competitive Bid Advance) no
later than on the Commitment Termination Date
and (ii) each Competitive Bid Advance at the
maturity date specified in the applicable
Borrower's notice requesting such Competitive
Bid Advance.
OPTIONAL
PREPAYMENT: Advances (other than Competitive Bid
Advances) may be prepaid without penalty,
with notice not later than 11:00 A.M. for
Base Rate Advances, and with two business
days notice for Eurocurrency Rate Advances,
in minimum amounts of $10,000,000 and
increments of $1,000,000 in excess thereof.
The Borrowers will bear all costs related to
the prepayment of a Eurocurrency Rate Advance
prior to the last day of its Interest Period.
Competitive Bid Advances may not be prepaid
unless the invitation for Competitive Bid
Advances specifies the right to prepay, and
in such case the Borrowers will reimburse the
Lender(s) for any funding losses.
LOAN
DOCUMENTATION: The commitments will be subject to
preparation, execution and delivery of
mutually acceptable loan documentation which
will contain conditions precedent,
representations and warranties, covenants,
events of default and other provisions
customary for facilities of this nature,
including, but not limited to, those noted
below. Except as otherwise specifically
stated in this term sheet, terms and
conditions set forth in documentation for the
5-Year Facility shall be substantially the
same as such terms and conditions set forth
in the Company's existing $750 million
five-year facility.
DOLLAR EQUIVALENT
VALUE LIMITATION
FOR ALL ADVANCES: If at any time the dollar equivalent value of
all Advances exceeds 103% of the Facility
Amount, the Borrowers shall promptly make a
mandatory prepayment to reduce the dollar
equivalent value of all Advances to 100% of
the Facility Amount.
DOLLAR EQUIVALENT
VALUE LIMITATION FOR
ADVANCES IN MAJOR
CURRENCIES: If at any time the dollar equivalent value of
all Advances in Major and Alternate
Currencies exceeds 110% of $200,000,000 (the
"Major Currency Sublimit"), the Borrowers
shall make a mandatory prepayment at the end
of the respective Interest Periods for such
Advances to reduce the dollar equivalent
value of all Advances in Major Currencies to
100% of the Major Currency Sublimit.
CONDITIONS
PRECEDENT TO
CLOSING: Customary for facilities of this nature,
including, but not limited to:
(1) The Notes, if requested.
(2) Board resolutions.
(3) Incumbency certificate.
(4) Favorable legal opinion from counsel for
the Company.
(5) Favorable legal opinion from counsel for
the Agent.
(6) Accuracy of representations and
warranties.
(7) Amendment of the Borrowers' existing
$750,000,000 credit facility to have
terms substantially similar to this
Facility.
CONDITIONS PRECEDENT
TO INITIAL ADVANCE: The Lenders shall be satisfied that any
applicable state takeover law and any
supermajority charter provisions are not
applicable to the acquisition of the Target
or that any conditions for avoiding the
restrictions set forth therein have been
satisfied.
CONDITIONS
PRECEDENT TO ALL
ADVANCES: Customary for facilities of this nature,
including, but not limited to:
(1) All representations and warranties are
true and correct in all material
respects on and as of the date of the
Borrowing, before and after giving
effect to such Borrowing and to the
application of the proceeds therefrom,
as though made on and as of such date;
provided that the representation as to
no material adverse change shall be made
only at Closing and Extension of
Termination Date.
(2) No Event of Default or event which, with
the giving of notice or passage of time
or both, would be an Event of Default,
has occurred and is continuing, or would
result from such Borrowing.
CONDITIONS PRECEDENT TO
INITIAL ADVANCE TO EACH
BORROWER THAT IS A
DESIGNATED SUBSIDIARY: Customary for facilities of this nature,
including, but not limited to:
(1) Such Borrower's Note, if requested;
(2) Representations by the Company that such
Borrower has received all governmental
authorizations, consents, approvals and
licenses under applicable laws and
regulations for such Borrower to execute
and deliver the Credit Agreement and to
perform its obligations thereunder;
(3) Board resolutions of such Borrower;
(4) Incumbency Certificate of such Borrower;
(5) Designation Letter;
(6) Accuracy of representations and
warranties of such Borrower;
(7) Favorable legal opinion from counsel for
such Borrower.
ADDITIONAL CONDITION
PRECEDENT TO COMPETITIVE
BID ADVANCES: The information provided by the applicable
Borrower does not contain an untrue statement
or omit to state any material fact necessary
to make the statements contained therein, in
light of the circumstances under which they
are made, not misleading.
REPRESENTATIONS
AND WARRANTIES: Customary for facilities of this nature,
including, but not limited to:
(1) Confirmation of corporate status and
authority;
(2) Execution, delivery, and performance of
loan documents do not violate law or
existing agreements;
(3) No government or regulatory approvals
required;
(4) No litigation currently or threatened
which is likely to be determined
adversely so as to affect materially the
ability of the Company to pay its debts,
including the Advances, or which would
affect the legality, validity and
enforceability of the loan documents;
(5) No material adverse change in financial
condition or results of operations or
prospects since December 31, 1997 for
the Company and its Consolidated
Subsidiaries taken as a whole;
(6) Accuracy of information, financial
statements;
(7) Material compliance with laws and
regulations, including ERISA and all
applicable environmental laws and
regulations;
(8) Legality, validity, binding effect and
enforceability of the loan documents;
(9) Not an investment company or public
utility holding company.
FINANCIAL
COVENANTS: (1) Minimum Net Worth greater than or equal
to $3,300,000,000;
(2) Limitation on Domestic Subsidiary
Indebtedness.
OTHER COVENANTS: Customary for facilities of this nature,
including, but not limited to:
(1) Preservation of corporate existence;
(2) Material compliance with laws (including
ERISA and applicable environmental
laws);
(3) Payment of taxes;
(4) Payment of material obligations;
(5) Visitation rights;
(6) Maintenance of books and records;
(7) Maintenance of properties;
(8) Maintenance of insurance;
(9) Negative pledge and limitations on liens
and secured debt with certain exceptions
essentially in conformity to Section
1005 of the 1985 Indenture (which will
not be incorporated by reference, but
will be directly inserted);
(10) Certain restrictions on change of
business, consolidations, mergers, sale
of assets;
(11) Certain reporting requirements,
including financial and ERISA;
(12) Use of proceeds;
(13) Change of control.
EVENTS OF DEFAULT: Customary for facilities of this nature,
including, but not limited to:
(1) Failure to pay principal when due and
interest, Facility Fee and Utilization
Fee within three business days of when
due;
(2) Representations or warranties materially
incorrect;
(3) Failure to comply with covenants (with
notice and cure periods as applicable);
(4) Cross-default to payment defaults on
principal aggregating $100,000,000,
excluding defaults on indebtedness to
any institution to the extent the
Company or a Subsidiary has deposits
with such institution sufficient to
repay such indebtedness, or to default
or event if the effect is to accelerate
or permit acceleration of any such debt.
This cross default provision shall not
apply to debt of any subsidiary or
affiliate of the Company located in
China, India, Commonwealth of
Independent States or Turkey provided
that such debt is not guaranteed or
supported in any legally enforceable
manner by any Borrower or by any
subsidiary or affiliate of the Company
located outside of these countries, and
such default is due to the direct or
indirect action of any government entity
or agency of these countries and
provided further each subsidiary to
which this exception applies shall not
have assets of more than $80 million
individually nor collectively $300
million measured as of the most recent
calendar quarter end;
(5) Unsatisfied judgment or order in excess
of $100,000,000 individually or in the
aggregate. A carve-out will be provided
similar to that contained in the second
sentence of item (4) immediately above;
(6) Bankruptcy/insolvency;
(7) ERISA Event and aggregate Plan
Insufficiencies exceed $100,000,000, or
Plan reorganization or termination
resulting in an increase in annual
contributions exceeding $100,000,000.
ECONOMIC MONETARY
UNION: Appropriate language will be incorporated
into the 5-Year Facility to address certain
issues that will be raised by the
introduction of the Euro on January 1, 1999
and the removal from circulation of the
various national currency denominations on
and after January 1, 2002.
OTHER: Loan documentation will include:
(1) Indemnification of Agent and Lenders and
their respective affiliates, officers,
directors, employees, agents and
advisors for any liabilities and
expenses arising out of the 5-Year
Facility or the use of proceeds.
(2) Normal agency language.
(3) Majority Lenders defined as those
holding 51% of outstanding Advances
(excluding Competitive Bid Advances) or,
if none, Commitments. The consent of all
the Lenders will be required to increase
the size of the 5-Year Facility (other
than as provided for in the Commitment
Increase section), to extend the
maturity or to decrease interest rates
or fees.
(4) The Company will have the right to
replace any Lender through assignment or
the addition of a new Lender, provided
that no Event of Default has occurred
and is continuing and no more than 3
Lenders in any calendar year may be
replaced.
ASSIGNMENTS AND
PARTICIPATIONS: Each Lender will have the right to assign to
one or more Eligible Assignees all or a
portion of its rights and obligations under
the loan documents with the consent of the
Company (not to be reasonably withheld).
Minimum aggregate assignment level of
$10,000,000 and increments of $1,000,000 in
excess thereof. The parties to the assignment
(other than the Company) shall pay to the
Agent an administrative fee of $3,500 per
assignment.
Each Lender will also have the right, without
the consent of the Company or the Agent, to
assign (i) as security, all or part of its
rights under the loan documents to any
Federal Reserve Bank and (ii) with notice to
the Company and the Agent, all or part of its
rights or obligations under the loan
documents to any of its affiliates.
Each Lender will have the right to sell
participations in its rights and obligations
under the loan documents, subject to
customary restrictions on the participants'
voting rights. Each Lender selling a
participation shall notify the Company within
30 days of such sale.
YIELD PROTECTION,
TAXES, AND
OTHER DEDUCTIONS: (1) The loan documents will contain yield
protection provisions, customary for
facilities of this nature, protecting
the Lenders in the event of
unavailability of funding, funding
losses, reserve and capital adequacy
requirements.
(2) All payments to be free and clear of any
present or future taxes, withholdings or
other deductions whatsoever (other than
income taxes in the jurisdiction of the
Lender's applicable lending office).
The Company will have the right to replace
any Lender which requests reimbursements for
amounts owing under (1) and (2) above,
provided that (i) no Event of Default, or
event which with the giving of notice or
lapse of time or both would be an Event of
Default, has occurred and is continuing, (ii)
the Company has satisfied all of its
obligations under the Facility relating to
such Lender, and (iii) any replacement is
acceptable to the Agent and the Company will
have paid the Agent a $3,500 administrative
fee if such replacement Lender is not an
existing Lender.
GOVERNING LAW: State of New York.
COUNSEL TO
THE AGENT: Shearman & Sterling
EXPENSES: The Company shall reimburse each Arranger,
the Co-Arranger and Citibank for all agreed
out-of-pocket expenses incurred by them in
the negotiation, syndication and execution of
the Facility. Such expenses shall be
reimbursed by the Company upon presentation
of a statement of account, regardless of
whether the transaction contemplated is
actually completed or the loan documents are
signed.
<PAGE>
ALLIEDSIGNAL INC.
$2,250,000,000 5-YEAR REVOLVING CREDIT FACILITY
PRICING GRID
<TABLE>
<CAPTION>
============================================================================================
LEVEL 1 LEVEL 2 LEVEL 3 LEVEL 4 LEVEL 5 LEVEL 6
------------- ----------- ------------ ----------- ----------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
BASIS FOR LT Senior LT Senior LT Senior LT Senior LT Senior LT Senior
PRICING Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured
Debt Debt Rated Debt Debt Debt Rated Debt
Rated At Less Than Rated Rated Less Than Rated
Least A Level 1 Less Than Less Level 4 Less Than
By But At Level 2 Than But At Level 5.
Standard Least A- But At Level 3 Least BBB-
& Poor's By Least But At By
Or A2 By Standard & BBB+ By Least BBB Standard &
Moody's. Poor's Or Standard By Poor's Or
A3 by & Poor's Standard BAA3 By
Moody's. Or BAA1 & Poor's Moody's.
by Or BAA2
Moody's. By
Moody's.
------------- ----------- ------------ ----------- ----------- ------------ ---------
FACILITY 7.5 bps 9.0 bps 10.5 bps 12.0 bps 14.5 bps 25.0 bps
FEE(FN1)
------------- ----------- ------------ ----------- ----------- ------------ ---------
APPLICABLE 15.0 bps 18.5 bps 24.5 bps 28.50bps 38.0 bps 45.0 bps
MARGIN
------------- ----------- ------------ ----------- ----------- ------------ ---------
DRAWN LIBOR LIBOR LIBOR LIBOR LIBOR LIBOR
COST(FN2) +22.5 bps +27.5 bps +35.0 bps +40.0 bps +52.5 bps +70.0 bps
------------- ----------- ------------ ----------- ----------- ------------ ---------
UTILIZATION 0.0 bps 2.5 bps 2.5 bps 5.0 bps 5.0 bps 5.0 bps
FEE (USAGE
(greater
than or
equal to)
33 1/3% AND
(less than)
66 2/3%)
------------- ----------- ------------ ----------- ----------- ------------ ---------
UTILIZATION 2.5 bps 5.0 bps 5.0 bps 10.0 bps 10.0 bps 17.5 bps
FEE (USAGE
(greater
than or
equal to)
66 2/3%)
------------- ----------- ------------ ----------- ----------- ------------ ---------
FULLY DRAWN LIBOR LIBOR LIBOR LIBOR LIBOR LIBOR
COST(FN3) +25.0 bps +32.5 bps +40.0 bps +50.0 bps +62.5 bps +87.5 bps
============================================================================================
<FN>
(1) Paid quarterly in arrears on each bank's commitment irrespective of usage.
(2) Facility Fee plus Applicable Margin.
(3) Drawn Cost plus Utilization Fee.
bps = basis points per annum
</FN>
</TABLE>
<PAGE>
ALLIEDSIGNAL INC.
SUMMARY OF TERMS AND CONDITIONS
$900,000,000 364-DAY MULTI CURRENCY REVOLVING CREDIT FACILITY
WITH ONE YEAR TERM-OUT OPTION
BORROWERS: AlliedSignal Inc. (the "Company") and any
Designated Subsidiaries (together with the
Company, the "Borrowers"), fully and
unconditionally guaranteed by the Company.
FACILITY AMOUNT: $900,000,000.
TYPE OF FACILITY: 364-day unsecured revolving credit facility (the
"Backstop Facility"). Provided there is no default
or Event of Default, the Company will have the
option, on the Commitment Termination Date, to
convert outstanding Advances into a term loan
maturing no later than the first anniversary of
the Commitment Termination Date (the "Term Loan
Conversion Option").
PURPOSE: Finance the acquisition of AMP Inc. (the "Target")
and general corporate purposes, including
commercial paper backstop.
ADMINISTRATIVE AGENT: Citibank, N.A. ("Citibank", or the "Agent").
BOOKRUNNER: Salomon Smith Barney Inc. ("SSB").
ARRANGERS: Banque Nationale de Paris ("BNP"), Barclays
Capital, the investment banking division of
Barclays Bank PLC, Deutsche Bank Securities Inc.,
J.P. Morgan Securities Inc., NationsBanc
Montgomery Securities LLC and SSB.
LENDERS: Citibank, Bank of America NT&SA ("BofA"), BNP,
Barclays Bank PLC ("Barclays"), Deutsche Bank AG,
New York Branch and/or Cayman Islands Branch
("Deutsche"), Morgan Guaranty Trust Company of New
York ("Morgan") and other financial institutions
acceptable to the Arrangers and the Company.
CLOSING DATE: Such date as may be agreed upon by the Company,
the Arrangers and the Agent.
COMMITMENT
TERMINATION DATE: 364 days from the Closing Date, subject to the
Renewal of Commitments section.
FINAL
MATURITY DATE: The Commitment Termination Date, provided that, if
the Company elects the Term Loan Conversion
Option, the Final Maturity Date will be the first
anniversary of the Commitment Termination Date.
ADVANCES: At the applicable Borrower's option, either
Eurocurrency Rate Advances, Base Rate Advances or
Competitive Bid Advances. Each Lender will be
severally obligated to make its pro rata share of
any Eurocurrency Rate Advance or Base Rate
Advance. Eurocurrency Rate Advances, at the
applicable Borrower's option, may be made in U.S.
Dollars, Pounds Sterling, Deutsche Marks, French
Francs, Euros/Ecu and Japanese Yen (the "Major
Currencies").
RENEWAL OF
COMMITMENTS: At least 45 but no earlier than 60 days prior to
each anniversary date of the Backstop Facility and
provided all representations and warranties are
true and correct in all material respects and no
Event of Default has occurred and is continuing,
the Company may request that the Lenders extend
for an additional 364 days the then applicable
Commitment Termination Date. The Company may
replace any non-consenting Lender by assignment to
any consenting Lender or new Lender, or by
termination of a non-consenting Lender's
commitment.
COMMITMENT
REDUCTION: The Company will have the right, upon at least
three business days' notice, to terminate or
cancel, in whole or in part, the unused portion of
the Backstop Facility Amount in excess of the
aggregate outstanding Competitive Bid Advances,
provided that each partial reduction shall be in a
minimum amount of $10,000,000 or any whole
multiple of $1,000,000 in excess thereof. Once
terminated, a commitment may not be reinstated.
FACILITY FEE: At all times unless the Term Loan Conversion
Option has been selected and is in effect, an
amount which will vary as per attached Pricing
Grid, based on the Company's long-term senior
unsecured non-credit enhanced debt ratings,
payable on each Lender's commitment, irrespective
of usage, quarterly in arrears on the last day of
each March, June, September and December, and on
the Commitment Termination Date. The Facility Fee
shall be calculated on the basis of actual number
of days elapsed in a year of 365/366 days. No
Facility Fee will be payable after the Term Loan
Conversion Option has been selected and is in
effect.
INTEREST RATES AND
INTEREST PERIODS: At the applicable Borrower's option, any Advance
that is made to it will be available at the rates
and for the Interest Periods stated below:
a) Base Rate: a fluctuating rate equal to the
Base Rate plus the Applicable Margin.
The Base Rate is a fluctuating rate per annum
equal at all times to the highest of (i)
Citibank's publicly announced "base" rate,
(ii) 1/2 of 1% percent per annum above the
latest three-week moving average of secondary
market morning offering rates in the United
States for three-month certificates of
deposit of major U.S. money market banks,
adjusted to the nearest 1/16 of 1%, and (iii)
a rate equal to 1/2 of 1% per annum above the
weighted average of the rates on overnight
Federal funds transactions with members of
the Federal Reserve System arranged by
Federal funds brokers.
b) Eurocurrency Rate: a periodic fixed rate
equal to the Eurocurrency Rate plus the
Applicable Margin.
The Eurocurrency Rate, which is a rate per
annum equal to the London Interbank Offered
Rate as determined by reference to Dow Jones
Markets screen 3750 (or other applicable
pages with respect to a Major Currency), or
if not applicable the average rate per annum
(rounded upward to the nearest 1/16 of 1%) at
which deposits in the applicable Major
Currency are offered by the Reference Banks
to prime banks in the London interbank market
at 11:00 A.M. (London time) two business days
before the first day of the Interest Period
and in amounts approximately equal to the
Reference Banks' pro rata share of the
contemplated Advance for a given Interest
Period and with a maturity equal to such
Interest Period, adjusted for reserve
requirements and, in the case of particular
Major Currencies, as appropriate for such
currencies. The Eurocurrency Rate shall be
fixed for Interest Periods of 1, 2, 3, 6 or 9
months if available to all Lenders.
APPLICABLE MARGIN: The Applicable Margin means:
(i) for Base Rate Advances, 0.00 basis points per
annum;
(ii) for Eurocurrency Rate Advances, (i) at all
times unless the Term Loan Conversion Option
has been selected and is in effect an amount
which will vary as per the attached Pricing
Grid, based on the Company's long-term senior