EXHIBIT 10.64
EXECUTION COPY
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AMENDED AND RESTATED
FIVE YEAR FACILITY CREDIT AGREEMENT
dated as of June 5, 2002
among
FRANKLIN RESOURCES, INC.
THE BANKS PARTIES HERETO,
BANK OF AMERICA, N.A. and
THE BANK OF NEW YORK,
as Co-Syndication Agents
CITICORP USA INC. and
BNP PARIBAS,
as Co-Documentation Agents
and
JPMORGAN CHASE BANK,
as Administrative Agent
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J.P. MORGAN SECURITIES INC.,
as Sole Bookrunner and Sole Lead Arranger
TABLE OF CONTENTS
Page
Section 1. DEFINITIONS......................................................1
1.1 Defined Terms....................................................1
1.2 Other Definitional Provisions...................................16
Section 2. AMOUNT AND TERMS OF LOANS.......................................17
2.1 Revolving Credit Commitments....................................17
2.2 Procedure for Revolving Credit Borrowing........................17
2.3 The Bid Loans...................................................18
2.4 Repayment of Loans; Evidence of Debt............................20
2.5 Optional Termination or Reduction of Commitments................21
2.6 Optional Prepayments............................................21
2.7 Mandatory Prepayments...........................................22
2.8 Conversion and Continuation Options.............................22
2.9 Minimum Amounts of Tranches.....................................23
2.10 Interest Rates and Payment Dates................................23
2.11 Computation of Interest and Fees................................24
2.12 Inability to Determine Interest Rate............................24
2.13 Pro Rata Treatment and Payments.................................25
2.14 Illegality......................................................25
2.15 Requirements of Law.............................................26
2.16 Taxes...........................................................27
2.17 Indemnity.......................................................28
2.18 Facility and Utilization Fees...................................28
2.19 Mitigation of Costs; Replacement of Banks.......................29
2.20 New Banks; Exiting Banks........................................30
Section 3. REPRESENTATIONS AND WARRANTIES..................................30
3.1 Financial Condition.............................................30
3.2 No Change.......................................................31
3.3 Corporate Existence; Compliance with Law........................31
3.4 Corporate Power; Authorization; Enforceable Obligations.........31
3.5 No Legal Bar....................................................31
3.6 No Material Litigation..........................................32
3.7 Ownership of Property; Liens....................................32
3.8 Intellectual Property...........................................32
3.9 Taxes...........................................................32
3.10 Federal Regulations.............................................32
3.11 ERISA...........................................................33
3.12 Investment Company Act; Other Regulations.......................33
3.13 Investment Advisory Agreements..................................34
3.14 Subsidiaries....................................................34
3.15 Purpose of Loans................................................34
3.16 Environmental Matters...........................................34
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3.17 Accuracy and Completeness of Information........................35
Section 4. CONDITIONS PRECEDENT............................................35
4.1 Conditions to Execution.........................................35
4.2 Conditions to Each Loan.........................................36
Section 5. AFFIRMATIVE COVENANTS...........................................36
5.1 Financial Statements............................................36
5.2 Certificates; Other Information.................................38
5.3 Payment of Obligations..........................................38
5.4 Conduct of Business and Maintenance of Existence................38
5.5 Maintenance of Property; Insurance..............................38
5.6 Inspection of Property; Books and Records; Discussions..........39
5.7 Notices.........................................................39
5.8 Environmental Laws..............................................40
Section 6. NEGATIVE COVENANTS..............................................40
6.1 Financial Condition Covenants...................................40
6.2 Limitation on Indebtedness......................................41
6.3 Limitation on Liens.............................................41
6.4 Limitations on Fundamental Changes..............................43
6.5 Limitation on Sale of Assets....................................44
6.6 Limitation on Investments, Loans and Advances...................44
6.7 Transactions with Affiliates....................................44
6.8 Fiscal Year.....................................................45
6.9 Restrictions Affecting Subsidiaries.............................45
Section 7. EVENTS OF DEFAULT...............................................45
Section 8. THE AGENTS......................................................47
8.1 Appointment.....................................................47
8.2 Delegation of Duties............................................48
8.3 Exculpatory Provisions..........................................48
8.4 Reliance by Administrative Agent................................48
8.5 Notice of Default...............................................49
8.6 Non-Reliance on Administrative Agent and Other Banks............49
8.7 Indemnification.................................................49
8.8 The Administrative Agent, the Co-Syndication Agents and the
Co-Documentation Agents in their Individual Capacities........50
8.9 Successor Administrative Agent..................................50
8.10 Co-Syndication Agents and Co-Documentation Agents...............50
Section 9. MISCELLANEOUS...................................................51
9.1 Amendments and Waivers..........................................51
9.2 Notices.........................................................51
9.3 No Waiver; Cumulative Remedies..................................52
9.4 Survival of Representations and Warranties......................53
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9.5 Payment of Expenses and Taxes...................................53
9.6 Successors and Assigns; Participations; Purchasing Banks........53
9.7 Adjustments; Set-off............................................57
9.8 Counterparts....................................................57
9.9 Severability....................................................57
9.10 Integration.....................................................57
9.11 GOVERNING LAW...................................................58
9.12 Submission To Jurisdiction; Waivers; Appointment of Process
Agent.........................................................58
9.13 Acknowledgements................................................58
9.14 WAIVERS OF JURY TRIAL...........................................59
9.15 Confidentiality.................................................59
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SCHEDULES
Schedule I Commitments
Schedule II Sample Computations of Facility and Utilization Fees
Schedule III Required Consents
Schedule IV Subsidiary Investment Advisers
Schedule V Subsidiary Broker-Dealers
Schedule VI List of Subsidiaries of the Borrower
Schedule VII Outstanding Indebtedness
Schedule VIII Existing Liens
EXHIBITS
Exhibit A Form of Bid Loan Confirmation
Exhibit B Form of Bid Loan Offer
Exhibit C Form of Bid Loan Request
Exhibit D Form of Assignment and Assumption
Exhibit E-1 Form of Revolving Credit Note
Exhibit E-2 Form of Grid Bid Loan Note
Exhibit E-3 Form of Individual Bid Loan Note
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AMENDED AND RESTATED FIVE YEAR FACILITY CREDIT AGREEMENT, dated as of June
5, 2002 (as more fully defined below, this "Agreement"), among Franklin
Resources, Inc., a Delaware corporation (the "Borrower"), the several banks and
other financial institutions from time to time parties to this Agreement (the
"Banks"), Bank of America, N.A. and The Bank of New York, as Co-Syndication
Agents, Citicorp USA Inc. and BNP Paribas, as Co-Documentation Agents, and
JPMorgan Chase Bank ("JPMCB"), as administrative agent for the Banks hereunder
(in such capacity, the "Administrative Agent").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, this Agreement amends and restates that certain Amended, Extended
and Restated Five Year Facility Credit Agreement, dated as of May 16, 1997 (as
amended, supplemented or otherwise modified prior to the date hereof and in
effect immediately prior to the effectiveness of this Agreement, the "Existing
Credit Agreement") among the Borrower, the several banks and other financial
institutions from time to time parties thereto (the "Existing Banks"), Bank of
America National Trust and Savings Association, as Co-Agent and JPMCB (formerly
known as The Chase Manhattan Bank), as Administrative Agent;
WHEREAS, certain of the Existing Banks are willing to agree to the
amendment and restatement requested by the Borrower and have Commitments (as
defined herein) hereunder (the "Continuing Banks"), and the other Existing Banks
(individually, an "Exiting Bank", and collectively, the "Exiting Banks") will
cease to be Banks under the Existing Credit Agreement on the Closing Date (as
defined herein); and
WHEREAS, certain financial institutions that are not now Banks
(individually, a "New Bank", and collectively, the "New Banks") will become
Banks and have Commitments hereunder on the Closing Date;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto hereby agree that as of the Closing Date
the Existing Credit Agreement shall be amended and restated to read as follows:
Section 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the following terms shall
have the following meanings:
"ABSOLUTE RATE BID LOAN REQUEST": any Bid Loan Request requesting the
Bid Loan Banks to offer to make Absolute Rate Bid Loans.
"ABSOLUTE RATE BID LOANS": Bid Loans made at an absolute rate (as
opposed to a rate composed of the Applicable Index Rate plus (or minus) a
margin).
"ADMINISTRATIVE AGENT": as defined in the preamble hereto.
"ADMINISTRATIVE QUESTIONNAIRE": an administrative questionnaire in a
form supplied by the Administrative Agent.
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"ADVISERS ACT": as defined in subsection 3.12(b).
"AFFILIATE": as to any Person, (a) any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person or (b) any Person who is a
director, officer, shareholder or partner (i) of such Person, (ii) of any
Subsidiary of such Person or (iii) of any Person described in the preceding
clause (a). For purposes of this definition, "control" of a Person means
the power, directly or indirectly, either to (i) vote 10% or more of the
securities having ordinary voting power for the election of directors of
such Person or (ii) direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"AGREEMENT": this Amended and Restated Five Year Facility Credit
Agreement, as the same may be amended, supplemented or otherwise modified
from time to time.
"ALTERNATE BASE RATE": for any day, a rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the greatest of (a) the
Prime Rate in effect on such day, (b) the Base CD Rate in effect on such
day plus 1%, and (c) the Federal Funds Effective Rate in effect on such day
plus 1/2 of 1%. "PRIME RATE" shall mean the rate of interest per annum
publicly announced from time to time by the Administrative Agent as its
prime rate in effect at its principal office in New York City (the Prime
Rate not being intended to be the lowest rate of interest charged by JPMCB
in connection with extensions of credit to debtors); "BASE CD RATE" shall
mean the sum of (a) the product of (i) the Three-Month Secondary CD Rate
and (ii) a fraction, the numerator of which is one and the denominator of
which is one minus the C/D Reserve Percentage and (b) the C/D Assessment
Rate. "THREE-MONTH SECONDARY CD RATE" shall mean, for any day, the
secondary market rate for three-month certificates of deposit reported as
being in effect on such day (or, if such day shall not be a Business Day,
the next preceding Business Day) by the Board of Governors of the Federal
Reserve Bank of New York (the "BOARD") through the public information
telephone line of the Federal Reserve Bank of New York (which rate will,
under the current practices of the Board, be published in Federal Reserve
Statistical Release H.15(519) during the week following such day), or, if
such rate shall not be so reported on such day or such next preceding
Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York
City received at approximately 10:00 a.m., New York City time, on such day
(or, if such day shall not be a Business Day, on the next preceding
Business Day) by the Administrative Agent from three New York City
negotiable certificate of deposit dealers of recognized standing selected
by it; and "FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day, 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 on the next succeeding Business Day by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for the day of such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it. Any change in the Alternate
Base Rate due to a change in the
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Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds
Effective Rate shall be effective as of the opening of business on the
effective date of such change in the Prime Rate, the Three-Month Secondary
CD Rate or the Federal Funds Effective Rate, respectively.
"ALTERNATE BASE RATE LOANS": Revolving Credit Loans the rate of
interest applicable to which is based upon the Alternate Base Rate.
"APPLICABLE INDEX RATE": in respect of any Bid Loan requested pursuant
to a LIBOR Bid Loan Request, the LIBOR Adjusted Rate.
"APPLICABLE MARGIN": for any day, (a) for each LIBOR Loan the rate per
annum set forth below opposite the Rating in effect on such day:
RATING LIBOR
------ -----
Rating 1 0.325%
Rating 2 0.375%
Rating 3 0.500%
Rating 4 0.625%
Rating 5 0.875%
(b) for each Alternate Base Rate Loan, zero.
"ASSET DISPOSITION": the sale, sale leaseback, exchange or other
disposition (including by means of a merger, consolidation or amalgamation)
of any property, business or assets (other than marketable securities
(including "margin stock" within the meaning of Regulation U), liquid
investments and other financial instruments) of the Borrower or any of its
Subsidiaries to any Person or Persons other than the Borrower or any of its
Subsidiaries. Notwithstanding the foregoing, the consummation by the
Borrower or FTC of any transfers or other transactions in connection with
any Lease Financing Arrangement or otherwise involving all or any portion
of the Designated Property shall not constitute an Asset Disposition.
"ASSIGNMENT AND ASSUMPTION": an assignment and assumption entered into
by a Bank and an assignee (with the consent of any party whose consent is
required by Section 9.6), and accepted by the Administrative Agent,
substantially in the form of Exhibit D or any other form approved by the
Administrative Agent.
"AVAILABLE COMMITMENT": as to any Bank at any time, an amount equal to
the excess, if any, of (a) the amount of such Bank's Commitment over (b)
the aggregate principal amount of all Revolving Credit Loans made by such
Bank then outstanding; collectively, as to all the Banks, the "Available
Commitments".
"BANKING SUBSIDIARY": at any time, Fiduciary Trust Company
International, Franklin Templeton Bank and Trust Company, F.S.B. or any
other Subsidiary of the Borrower licensed to engage, and principally
engaged, at such time in the banking or trust business or any Subsidiary of
any such Subsidiary.
"BANKS": as defined in the preamble hereto.
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"BID LOAN": each Bid Loan made pursuant to subsection 2.3; the
aggregate amount advanced by a Bid Loan Bank pursuant to subsection 2.3 on
each Bid Loan Date shall constitute one or more Bid Loans, as specified by
such Bid Loan Bank pursuant to subsection 2.3(b)(vi).
"BID LOAN BANKS": Banks from time to time designated as Bid Loan Banks
by the Borrower, by written notice to the Administrative Agent (which
notice the Administrative Agent shall transmit to each such Bid Loan Bank).
"BID LOAN CONFIRMATION": each confirmation by the Borrower of its
acceptance of Bid Loan Offers, which Bid Loan Confirmation shall be
substantially in the form of Exhibit B and shall be delivered to the
Administrative Agent in writing, by telex or by facsimile transmission.
"BID LOAN NOTES": the collective reference to the Grid Bid Loan Notes
and the Individual Bid Loan Notes.
"BID LOAN OFFER": each offer by a Bid Loan Bank to make Bid Loans
pursuant to a Bid Loan Request, which Bid Loan Offer shall contain the
information specified in Exhibit B and shall be delivered to the
Administrative Agent by telephone, immediately confirmed by telex or
facsimile transmission.
"BID LOAN REQUEST": each request by the Borrower for Bid Loan Banks to
submit bids to make Bid Loans, which shall contain the information in
respect of such requested Bid Loans specified in Exhibit C and shall be
delivered to the Administrative Agent in writing, by telex or facsimile
transmission, or by telephone, immediately confirmed by telex or facsimile
transmission.
"BORROWER": as defined in the preamble hereto.
"BORROWING DATE": any Business Day or Working Day, as applicable,
specified in a notice pursuant to subsection 2.2 or 2.3 as a date on which
the Borrower requests the Banks to make Loans.
"BUSINESS DAY": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City or San Francisco are authorized or
required by law to close.
"CAPITALIZATION RATIO": at a particular date, the ratio of (a)
Indebtedness of the Borrower and its Included Subsidiaries at such date to
(b) the sum of (i) Indebtedness of the Borrower and its Included
Subsidiaries at such date and (ii) the Consolidated Net Worth at such date.
"CAPITAL STOCK": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants or options to purchase any of the
foregoing.
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"C/D ASSESSMENT RATE": for any day as applied to any C/D Rate Loan,
the annual assessment rate in effect on such day which is payable by a
member of the Bank Insurance Fund maintained by the Federal Deposit
Insurance Corporation ("FDIC") classified as well-capitalized and within
supervisory subgroup "B" (or a comparable successor assessment risk
classification) within the meaning of 12 C.F.R. section 327.3(d) (or any
successor provision) to the FDIC (or such successor's) insuring time
deposits at offices of such institution in the United States.
"C/D RATE LOANS": Loans the rate of interest applicable to which is
based upon the Base C/D Rate.
"C/D RESERVE PERCENTAGE": for any day as applied to any C/D Rate Loan,
that percentage which is in effect on such day, as prescribed by the Board
of Governors of the Federal Reserve System (or any successor)(the "BOARD"),
for determining the maximum reserve requirement for a Depository
Institution (as defined in Regulation D of the Board) in respect of new
non-personal time deposits in Dollars having a maturity comparable to the
Interest Period for such C/D Rate Loan.
"CHANGE IN CONTROL": any purchase or other acquisition of more than
50% of the shares of the common stock of the Borrower by any Person or
"group" of related Persons, within the meaning of Section 13(d)(3) under
the Securities and Exchange Act of 1934, as amended, other than Charles B.
Johnson and members of his family and Affiliates thereof.
"CLOSING DATE": the date on which each of the conditions set forth in
subsection 4.1 shall have been satisfied.
"CODE": the Internal Revenue Code of 1986, as amended from time to
time.
"COMMITMENT": as to any Bank, the obligation of such Bank to make
Revolving Credit Loans to the Borrower hereunder in an aggregate principal
amount at any one time outstanding not to exceed the amount set forth
opposite such Bank's name on Schedule I, as such amount may be reduced
pursuant to the terms hereof. The initial aggregate amount of the Banks'
Commitments is $210,000,000.
"COMMITMENT PERCENTAGE": as to any Bank at any time, the percentage of
the aggregate Commitments then constituted by such Bank's Commitment.
"COMMITMENT PERIOD": the period from and including the Closing Date to
but excluding the Termination Date or such earlier date as the Commitments
shall terminate as provided herein.
"COMMONLY CONTROLLED ENTITY": an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of
Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 of the Code.
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"CONSOLIDATED CURRENT ASSETS": at a particular date, all cash and
marketable securities owned by the Borrower and its Included Subsidiaries
and all liquid investments of such Person in the Funds as at such date.
"CONSOLIDATED CURRENT LIABILITIES": at a particular date, all amounts
which would, in conformity with GAAP, be included under current liabilities
on a consolidated balance sheet of the Borrower and its Included
Subsidiaries as at such date, excluding, however, the current maturities of
the Loans.
"CONSOLIDATED INTEREST EXPENSE": for any period, the aggregate
interest expense of the Borrower and its Included Subsidiaries for such
period, as determined in accordance with GAAP, including, without
limitation, (a) all commissions, discounts and other fees and charges owed
with respect to letters of credit allocable to or amortized over such
period, (b) net costs under Interest Rate Agreements allocable to or
amortized over such period and (c) the portion of any amount payable under
Financing Leases that is, in accordance with GAAP, allocable to interest
expense.
"CONSOLIDATED NET INCOME": for any period, the consolidated net income
(or deficit) of the Borrower and its Included Subsidiaries for such period
(taken as a cumulative whole), determined in accordance with GAAP,
excluding, however:
(a) any gains or losses from the sale or other disposition of
assets (including any such sale or other disposition of marketable
securities, liquid investments or other financial instruments but
excluding any such sale of obsolete or worn-out assets in the ordinary
course of business consistent with past practice) and any other
non-cash extraordinary or non-recurring gains or losses; and
(b) the equity interest of the Borrower and its Included
Subsidiaries in the net income (or deficit) of any Joint Venture
except to the extent of the actual receipt or payment by the Borrower
and its Subsidiaries thereof or therefor.
"CONSOLIDATED NET WORTH": at a particular date, all amounts which
would be included, under stockholders' equity, on a consolidated balance
sheet of the Borrower and its Included Subsidiaries determined on a
consolidated basis in accordance with GAAP as at such date.
"CONSOLIDATED WORKING CAPITAL": at a particular date, the excess, if
any, of Consolidated Current Assets over Consolidated Current Liabilities
at such date.
"CONTINUING BANK": as defined in the recitals hereto.
"CONTRACTUAL OBLIGATION": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"DEFAULT": any of the events specified in Section 7, whether or not
any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
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"DESIGNATED PROPERTY": All right, title and interest of the Borrower
or any Affiliate in the real property and related improvements consisting
of approximately 32 acres in Phase I of the Bay Meadows development located
in the general vicinity of Franklin Parkway and Saratoga Avenue in San
Mateo, California, which includes without limitation Borrower's corporate
campus and other developed or undeveloped, contiguous or non-contiguous
property located thereon.
"DOLLARS" and "$": dollars in lawful currency of the United States of
America.
"EFFECTIVE DATE": shall be June 5, 2002.
"ENVIRONMENTAL LAWS": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or requirements of law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the
environment, as now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"EVENT OF DEFAULT": any of the events specified in Section 7, PROVIDED
that any requirement for the giving of notice, the lapse of time, or both,
or any other condition, has been satisfied.
"EXCLUDED TAXES": with respect to the Administrative Agent, any Bank
or any other recipient of any payment to be made by or on account of any
obligation of the Borrower hereunder, (a) income or franchise taxes imposed
on (or measured by) its net income, net worth or capital (including taxes
based on capital gains, minimum taxes and alternative minimum taxes) by the
United States of America or any political subdivision thereof, or by the
jurisdiction under the laws of which such recipient is organized or in
which its principal office is located or, in the case of any Bank, in which
its applicable Lending Office is located,(b) any branch profits taxes
imposed by the United States of America or any similar tax imposed by any
other jurisdiction in which the Borrower is located and (c) in the case of
a Foreign Bank (including for purposes of this definition a Participant
claiming the benefits of subsection 2.16 pursuant to subsection 9.6(c)(ii)
that would be a Foreign Bank if it were a Bank), any withholding tax that
is imposed on amounts payable to such Foreign Bank at the time such Foreign
Bank becomes a party to this Agreement (or designates a new lending office
other than at the request of the Borrower) or is attributable to such
Foreign Bank's failure to comply with Section 2.16(e), except to the extent
that such Foreign Bank (or its assignor, if any) was entitled, at the time
of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 2.16(a).
"EXISTING BANK": as defined in the recitals hereto.
"EXISTING CREDIT AGREEMENT": as defined in the recitals hereto.
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"FEDERAL FUNDS EFFECTIVE RATE": as defined in the definition of
"ALTERNATE BASE RATE" contained in this subsection 1.1.
"FINANCE SUBSIDIARY": Franklin Capital Corporation.
"FINANCING LEASE": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee.
"FOREIGN BANK": any Bank that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes
of this definition, the United States of America, each State thereof and
the District of Columbia shall be deemed to constitute a single
jurisdiction.
"FTC": Franklin Templeton Companies, LLC, a Delaware limited liability
company (formerly known as Franklin Templeton Corporate Services, Inc., a
Delaware Corporation).
"FUNDS": the collective reference to all investment companies advised
by the Borrower or any of its Subsidiaries.
"GAAP": generally accepted accounting principles in the United States
of America in effect from time to time. If, at any time, GAAP changes in a
manner which will materially affect the calculations determining compliance
by the Borrower with any of its covenants in subsection 6.1, either the
Borrower or the Majority Banks may request an amendment to such covenant
(or the definitions related thereto) and the Majority Banks or the
Borrower, as the case may be, shall negotiate in good faith with the
requesting party to agree upon such amendment to adjust such covenant to
give to each of the parties hereto substantially the same protection and
benefits as were contemplated prior to such changes.
"GOVERNMENTAL AUTHORITY": any nation or government, any state or other
political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"GRID BID LOAN NOTE": as defined in subsection 2.4(e).
"GUARANTEE OBLIGATION": as to any Person (the "GUARANTEEING PERSON"),
any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to
induce the creation of which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends
or other obligations (the "PRIMARY OBLIGATIONS") of any other third Person
(the "PRIMARY OBLIGOR") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or
any property constituting direct or indirect security therefor, (ii) to
advance or supply funds for the purchase or payment of any such primary
obligation or to maintain working capital or equity capital of the primary
obligor or otherwise to maintain
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the net worth or solvency of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of assuring the
owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or
hold harmless the owner of any such primary obligation against loss in
respect thereof; PROVIDED, HOWEVER, that the term Guarantee Obligation
shall not include endorsements of instruments for deposit or collection in
the ordinary course of business. The amount of any Guarantee Obligation of
any guaranteeing person shall be deemed to be the lower of (a) an amount
equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum
amount for which such guaranteeing person may be liable pursuant to the
terms of the instrument embodying such Guarantee Obligation, unless such
primary obligation and the maximum amount for which such guaranteeing
person may be liable are not stated or determinable, in which case the
amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined
by the Borrower in good faith.
"INCLUDED SUBSIDIARY": any Subsidiary of the Borrower other than any
Banking Subsidiary, Finance Subsidiary, Insurance Subsidiary or Real Estate
Subsidiary.
"INDEBTEDNESS": of any Person at any date, without duplication, (a)
all indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (other than current trade
liabilities incurred in the ordinary course of business and payable in
accordance with customary practices) or which is evidenced by a note, bond,
debenture or similar instrument, (b) all obligations of such Person under
Financing Leases, (c) all obligations of such Person in respect of
acceptances issued or created for the account of such Person, (d) all
liabilities secured by any Lien on any property owned by such Person even
though such Person has not assumed or otherwise become liable for the
payment thereof, (e) all obligations of such Person, whether absolute or
contingent, in respect of letters of credit opened for the account of such
Person (other than any such letters of credit opened for the purpose of
facilitating the purchase of goods and services in the ordinary course of
business and having a term of not more than 360 days) and (f) all Guarantee
Obligations of such Person in respect of any indebtedness, obligations or
liabilities of any other Person of the type referred to in clauses (a)
through (e) of this definition.
"INDEMNIFIED TAXES": Taxes other than Excluded Taxes.
"INDIVIDUAL BID LOAN NOTE": as defined in subsection 2.4(e).
"INSOLVENCY": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"INSOLVENT": pertaining to a condition of Insolvency.
"INSURANCE SUBSIDIARY": at any time, ILA Financial Services, Inc., or
any other Subsidiary of the Borrower licensed to engage, and principally
engaged, at such time in the insurance business or any Subsidiary of such
Subsidiary.
10
"INTEREST PAYMENT DATE": (a) as to any Alternate Base Rate Loan, the
last day of each March, June, September and December, (b) as to any LIBOR
Loan or LIBOR Bid Loan having an Interest Period of three months or less or
any Absolute Rate Bid Loan having an interest period of 90 days or less,
the last day of such Interest Period, and (c) as to any LIBOR Loan or Bid
Loan having an Interest Period longer than three months (in the case of
LIBOR Loans and LIBOR Bid Loans) or 90 days (otherwise), each day which is
three months or 90 days, as the case may be, or a whole multiple thereof,
after the first day of such Interest Period and the last day of such
Interest Period and, in each case, on the day on which a Loan becomes due
and is payable in full and is paid or prepaid in full.
"INTEREST PERIOD": (a) with respect to any LIBOR Loans:
(i) initially, the period commencing on the borrowing or conversion
date, as the case may be, with respect to such LIBOR Loans and ending
one, two, three, or six, months thereafter, as selected by the
Borrower in its notice of borrowing as provided in subsection 2.2 or
its notice of conversion as provided in subsection 2.8(a), as the case
may be; and
(ii) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such LIBOR Loans and ending
one, two, three or six months thereafter, as selected by the Borrower
by irrevocable notice to the Administrative Agent not less than four
Working Days prior to the last day of the then current Interest Period
with respect to such LIBOR Loans;
(b) with respect to any Bid Loan, the period commencing on the
Borrowing Date in respect of such Bid Loan and ending on the scheduled
maturity date thereof;
PROVIDED that, all of the foregoing provisions relating to Interest Periods
are subject to the following:
(1) if any Interest Period pertaining to a LIBOR Loan or a LIBOR
Bid Loan would otherwise end on a day which is not a Working Day, such
Interest Period shall be extended to the next succeeding Working Day
unless the result of such extension would be to carry such Interest
Period into another calendar month in which event such Interest Period
shall end on the immediately preceding Working Day;
(2) if any Interest Period pertaining to an Absolute Rate Bid
Loan would otherwise end on a day that is not a Business Day) such
Interest Period shall be extended to the next succeeding Business Day;
(3) any Interest Period pertaining to a LIBOR Loan or a LIBOR Bid
Loan that begins on the last Working Day of a calendar month (or on a
day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the
last Working Day of a calendar month;
(4) any Interest Period that would otherwise end after the
Termination Date shall end on the Termination Date; and
11
(5) the Borrower shall use its best efforts to select Interest
Periods so as not to require a payment or prepayment of any LIBOR Loan
during an Interest Period for such Loan.
"INTEREST RATE AGREEMENT": any interest rate protection agreement,
interest rate future, interest rate option, interest rate swap, interest
rate cap or other interest rate hedge or arrangement under which the
Borrower or any of its Subsidiaries is a party or a beneficiary.
"INVESTMENT COMPANY ACT": as defined in subsection 3.12(a).
"JOINT VENTURE": any corporation, partnership or other entity (other
than a Subsidiary of the Borrower) as to which the Borrower, directly or
indirectly, owns 33% or more of the shares of any class of its capital
stock or of its other ownership interests, whether voting or non-voting,
and as to which the Borrower (or any relevant Subsidiary of the Borrower)
is not simply a passive investor.
"JPMCB": as defined in the preamble hereto.
"LEASE FINANCING ARRANGEMENT": any indebtedness, obligation,
contingent liability, guaranty, pledge, lien, lease, sublease, ground
lease, synthetic lease, financing, re-financing, sale, sale-leaseback,
exchange, disposition, acquisition or other transaction incurred, granted
or entered into by Borrower or FTC pursuant to (or as a result of the
rights or options available to Borrower or FTC under) (i) the Participation
Agreement, dated September 27, 1999, entered into by FTC, First Security
Bank, National Association, as owner trustee under the FRI Trust 1999-1,
Bank of America, N.A., as the agent for certain lenders and holders, and
certain banks and other lending institutions, as the same may be amended,
supplemented or extended from time to time, (ii) the leases and other
documents entered into in connection therewith, in each case as part of the
lease financing transaction relating to the Designated Property, as the
same may be amended, supplemented or extended from time to time, or (iii)
any transaction entered into by Borrower, FTC or any affiliate thereof from
time to time to substitute, refinance, replace discharge, reconvey,
restructure or release or enter into any other related transactions with
respect to any of the foregoing with respect to all or a portion of the
Designated Property.
"LENDING OFFICE": as defined in subsection 2.1(b).
"LIBOR": with respect to each day during each Interest Period
pertaining to a LIBOR Loan or a LIBOR Bid Loan, the rate per annum equal to
the rate that appears with respect to such Interest Period on Page 3750 of
the Dow Jones Market Service (or on any successor or substitute page of
such service, or any successor to or substitute for such service, providing
rate quotations comparable to those currently provided on such page for
such service, as determined by the Administrative Agent from time to time
for purposes of providing quotations of interest rates applicable to dollar
deposits in the London interbank market) as of 11:00 A.M., London time, two
Working Days prior to the beginning of such Interest Period (or, if such
rate is not available on any such page, the
12
average (rounded upward to the nearest 1/16th of 1%)of the respective rates
notified to the Administrative Agent by each of the Reference Banks as the
rate at which such Reference Bank is offered Dollar deposits at or about
11:00 A.M. London time, two Working Days prior to the beginning of such
Interest Period in the London interbank eurodollar market for delivery on
the first day of such Interest Period for the number of days comprised
therein and in an amount comparable to the amount of its LIBOR Loan to be
outstanding during such Interest Period or, in the case of a LIBOR Bid
Loan, in an amount approximately equal to such LIBOR Bid Loan).
"LIBOR ADJUSTED RATE": with respect to each day during each Interest
Period pertaining to a LIBOR Loan or LIBOR Bid Loan, a rate per annum
determined for such day in accordance with the following formula (rounded
upward to the nearest 1/100th of 1%):
LIBOR
---------------------------------------
1.00 - LIBOR Reserve Requirements
"LIBOR BID LOAN REQUEST": any Bid Loan Request requesting the Bid Loan
Banks to offer to make Bid Loans at an interest rate equal to the
Applicable Index Rate plus (or minus) a margin.
"LIBOR BID LOANS": Bid Loans made at a rate of interest based on the
Applicable Index Rate.
"LIBOR LOANS": Revolving Credit Loans the rate of interest applicable
to which is based upon LIBOR.
"LIBOR Reserve Requirements": for any day as applied to a LIBOR Loan
or LIBOR Bid Loan, as the case may be, the aggregate (without duplication)
of the maximum rates (expressed as a decimal fraction) of reserve
requirements in effect on such day (including, without limitation, basic,
supplemental, marginal and emergency reserves under any regulations of the
Board of Governors of the Federal Reserve System or other Governmental
Authority having jurisdiction with respect thereto) dealing with reserve
requirements prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of such Board) maintained by a
member bank of such System. As at the Signing Date, there are no such
reserve requirements.
"LIEN": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), or preference,
priority or other security agreement or preferential arrangement of any
kind or nature whatsoever (including, without limitation, any conditional
sale or other title retention agreement, any Financing Lease having
substantially the same economic effect as any of the foregoing, and the
filing of any financing statement under the Uniform Commercial Code or
comparable law of any jurisdiction in respect of any of the foregoing).
"LOANS": the collective reference to the Revolving Credit Loans and
the Bid Loans.
13
"LOAN DOCUMENTS": this Agreement and any Notes.
"MAJORITY BANKS": at any time, Banks the Commitment Percentages of
which aggregate more than 50%. If the Commitments are terminated, Majority
Banks shall mean Banks holding more than 50% of the outstanding Loans.
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a) the
business, operations, property or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole, (b) the ability of the
Borrower and its Subsidiaries to perform the obligations of the Borrower
under this Agreement or the Notes, or (c) the validity or enforceability of
this Agreement, any of the Notes or the rights or remedies of the
Administrative Agent or the Banks hereunder or thereunder.
"MOODY'S": Moody's Investors Service, Inc.
"MULTIEMPLOYER PLAN": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"NET PROCEEDS": with respect to any Asset Disposition, the net amount
equal to the aggregate amount received in cash (including any cash received
by way of deferred payment pursuant to a note receivable, other non-cash
consideration or otherwise, but only as and when such cash is so received)
in connection with such Asset Disposition minus the sum of (a) the
reasonable fees, commissions and other out-of-pocket expenses incurred by
the Borrower or any Subsidiary, as applicable, in connection with such
Asset Disposition (other than amounts payable to Affiliates of the Person
making such disposition) and (b) federal, state and local taxes incurred in
connection with such Asset Disposition, whether payable at such time or
thereafter.
"NEW BANK": as defined in the recitals hereto.
"NON-MATERIAL SUBSIDIARY": as to any Person at any time of
determination, a Subsidiary of such Person in which such Person and its
other Subsidiaries have made an aggregate investment of not more than
$2,000,000.
"NOTES": the collective reference to the Revolving Credit Notes and
the Bid Loan Notes.
"OBLIGATIONS": the unpaid principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans and
interest accruing on or after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding,
relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) the Notes and all
other obligations and liabilities of the Borrower to the Administrative
Agent or to the Banks, whether direct or indirect, absolute or contingent,
due or to become due, or now existing or hereafter incurred, which may
arise under, out of, or in connection with, this Agreement, the Notes, any
other Loan Document and any other document made, delivered or given in
connection herewith or therewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including, without
14
limitation, all fees and disbursements of counsel, and the allocated cost
of internal counsel, to the Administrative Agent or to the Banks that are
required to be paid by the Borrower pursuant to the terms of this
Agreement) or otherwise.
"OTHER TAXES": any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies
arising from any payment made hereunder or from the execution, delivery or
enforcement of, or otherwise with respect to, this Agreement.
"PARTICIPANT": as defined in subsection 9.6(c).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
"PERSON": an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"PLAN": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"PROPERTIES": the collective reference to the real and personal
property owned, leased or operated by the Borrower or any of its
Subsidiaries.
"RATING": at any date, the lower of the ratings then assigned by S&P
or Moody's to the unsecured, senior long-term debt of the Borrower
(including any medium-term notes of the Borrower). A Rating is one of the
following Ratings based upon the applicable rating from S&P or Moody's:
Rating S&P Moody's
------ --- -------
Rating 1 AA- or above Aa3 or above
Rating 2 A+, A, A- A1, A2, A3
Rating 3 BBB+ Baa1
Rating 4 BBB Baa2
Rating 5 BBB- or below Baa3 or below
If any Rating shall be changed by Moody's or S&P, such change shall be
effective as of the date on which it is first announced by the applicable
rating agency. Any change in the Applicable Margin due to a change in
Rating shall apply during the effective date of such change and end on the
date immediately preceding the effective date of the next such change. If
at any time the Borrower is not rated, Rating 5 will apply.
15
"REAL ESTATE SUBSIDIARY": at any time, Franklin Properties, Inc. or
any other Subsidiary of the Borrower principally engaged at such time in
the real estate investment and property management business or any
Subsidiary of any such Subsidiary.
"REFERENCE BANKS": JPMCB, Bank of America, N.A., The Bank of New York,
Citicorp USA Inc., and BNP Paribas.
"REGISTER": as defined in subsection 9.6(b)(iv).
"REGULATION U": Regulation U of the Board of Governors of the Federal
Reserve System.
"REGULATION X": Regulation X of the Board of Governors of the Federal
Reserve System.
"REORGANIZATION": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
"REPORTABLE EVENT": any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg.ss.
2615.
"REQUIREMENT OF LAW": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"RESPONSIBLE OFFICER": the chief executive officer, the president, any
senior vice president or any vice president of the Borrower or, with
respect to financial matters, the chief financial officer, treasurer or
controller of the Borrower.
"REVOLVING CREDIT LOANS": as defined in subsection 2.1(a).
"REVOLVING CREDIT NOTES": as defined in subsection 2.4(e).
"SEC": the Securities and Exchange Commission, any successor thereto
and any analogous Governmental Authority.
"S&P": Standard & Poor's Corporation.
"SIGNING DATE": the date hereof.
"SINGLE EMPLOYER PLAN": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"SUBSIDIARY": as to any Person at any time of determination, a
corporation, partnership or other entity (other than any Fund or any other
investment company or
16
similar investment entity existing under foreign law substantially
equivalent to an investment company) of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such
other ownership interests having such power only by reason of the happening
of a contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the time
owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries or Subsidiaries, or both, by
such Person. Unless otherwise qualified, all references to a "Subsidiary"
or to "Subsidiaries" in this Agreement shall refer to a Subsidiary or
Subsidiaries of the Borrower.
"TAXES": any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.
"TERMINATION DATE": the date that is five years after the Effective
Date.
"364 DAY FACILITY": the Amended and Restated 364 Day Facility Credit
Agreement, dated as of the date hereof, among the Borrower, the several
banks and other financial institutions from time to time parties thereto
and JPMCB, as administrative agent, as the same may be amended,
supplemented or otherwise modified from time to time.
"TRANCHE": the collective reference to LIBOR Loans the Interest
Periods with respect to all of which begin on the same date and end on the
same later date (whether or not such LIBOR Loans shall originally have been
made on the same day).
"TRANSFEREE": as defined in subsection 9.6(g).
"TYPE": as to any Revolving Credit Loan, its nature as an Alternate
Base Rate Loan or a LIBOR Loan.
"WORKING DAY": any Business Day on which dealings in foreign
currencies and exchange between banks may be carried on in London, England.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise specified therein,
all terms defined in this Agreement shall have the defined meanings when used in
the Notes or any certificate or other document made or delivered pursuant
hereto.
(b) As used herein and in the Notes, and any certificate or other document
made or delivered pursuant hereto, accounting terms relating to the Borrower and
its Subsidiaries not defined in subsection 1.1 and accounting terms partly
defined in subsection 1.1, to the extent not defined, shall have the respective
meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, subsection,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
17
(d) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF LOANS
2.1 REVOLVING CREDIT COMMITMENTS. (a) Subject to the terms and conditions
hereof, each Bank severally agrees to make revolving credit loans (the
"Revolving Credit Loans") to the Borrower from time to time during the
Commitment Period in an aggregate principal amount not to exceed the amount of
such Bank's Commitment, provided that the aggregate principal amount of
Revolving Credit Loans and Bid Loans outstanding at any one time shall not
exceed the aggregate amount of the Commitments at such time. During the
Commitment Period the Borrower may use the Commitments by borrowing, prepaying
the Revolving Credit Loans in whole or in part, and reborrowing, all in
accordance with the terms and conditions hereof.
(b) The Revolving Credit Loans may from time to time be (i) LIBOR Loans,
(ii) Alternate Base Rate Loans or (iii) a combination thereof, as determined by
the Borrower and notified to the Administrative Agent in accordance with
subsections 2.2 and 2.8, provided that no Revolving Credit Loan shall be made as
a LIBOR Loan after the day that is one month prior to the Termination Date. Each
Bank may make or maintain its Revolving Credit Loans to the Borrower by or
through any branch or other affiliate as determined by it from time to time and
notified to the Administrative Agent (any such branch or affiliate being herein
called a "Lending Office").
2.2 PROCEDURE FOR REVOLVING CREDIT BORROWING. The Borrower may borrow under
the Commitments during the Commitment Period on any Working Day if the borrowing
is a LIBOR Loan or on any Business Day if the borrowing is an Alternate Base
Rate Loan, provided that the Borrower shall give the Administrative Agent
irrevocable notice (which notice must be received by the Administrative Agent
(a) prior to 10:00 A.M., New York City time, four Working Days prior to the
requested Borrowing Date, if all or any part of the requested Revolving Credit
Loans are to be initially LIBOR Loans or (b) prior to 10:30 A.M., New York City
time, on the requested Borrowing Date, otherwise), specifying (i) the aggregate
amount to be borrowed, (ii) the requested Borrowing Date, (iii) whether the
borrowing is to be of LIBOR Loans, Alternate Base Rate Loans or a combination
thereof and (iv) if the borrowing is to be entirely or partly of LIBOR Loans,
the amounts of such Type of Loan and the lengths of the initial Interest Periods
therefor. Each borrowing under the Commitments shall be in an amount equal to
(x) in the case of Alternate Base Rate Loans, $5,000,000 or a whole multiple of
$1,000,000 in excess thereof (or, if the then Available Commitments are less
than $5,000,000, such lesser amount) and (y) in the case of LIBOR Loans,
$5,000,000 or a whole multiple of $1,000,000 in excess thereof. Upon receipt of
any such notice from the Borrower, the Administrative Agent shall promptly
notify each Bank thereof. Each Bank will make the amount of its pro rata share
of each borrowing available to the Administrative Agent for the account of the
Borrower at the office of the Administrative Agent specified in subsection 9.2
prior to 2:00 P.M., New York City time, on the Borrowing Date requested by the
Borrower in funds immediately available to the Administrative Agent. Such amount
will then be made available to the relevant Borrower by the Administrative Agent
crediting the account of such Borrower on
18
the books of such office with such amount made available to the Administrative
Agent by such Bank for such Borrower and in like funds as received by the
Administrative Agent.
2.3 THE BID LOANS. (a) The Borrower may borrow Bid Loans from time to time
on any Business Day (in the case of Bid Loans made pursuant to an Absolute Rate
Bid Loan Request) or on any Working Day (in the case of Bid Loans made pursuant
to a LIBOR Bid Loan Request) during the period from the Closing Date until the
date occurring 7 days prior to the Termination Date in the manner set forth in
this subsection 2.3 and in amounts such that the aggregate amount of Loans
outstanding at any time shall not exceed the aggregate amount of the Commitments
at such time.
(b) (i) The Borrower shall request Bid Loans by delivering a Bid Loan
Request to the Administrative Agent not later than 12:00 Noon (New York City
time) four Working Days prior to the proposed Borrowing Date (in the case of a
LIBOR Bid Loan Request), and not later than 10:00 A.M. (New York City time) one
Business Day prior to the proposed Borrowing Date (in the case of an Absolute
Rate Bid Loan Request). Each Bid Loan Request may solicit bids for Bid Loans in
an aggregate principal amount of $5,000,000 or an integral multiple of
$1,000,000 in excess thereof and for not more than three alternative maturity
dates for such Bid Loans. The maturity date for each Bid Loan shall be not less
than 7 days nor more than 360 days after the Borrowing Date therefor (and in any
event not after the Termination Date). The Administrative Agent shall promptly
notify each Bid Loan Bank by telex or facsimile transmission of the contents of
each Bid Loan Request received by it.
(ii) In the case of a LIBOR Bid Loan Request, upon receipt of notice from
the Administrative Agent of the contents of such Bid Loan Request, any Bid Loan
Bank that elects, in its sole discretion, to do so, shall irrevocably offer to
make one or more Bid Loans at the Applicable Index Rate plus or minus a margin
for each such Bid Loan determined by such Bid Loan Bank in its sole discretion.
Any such irrevocable offer shall be made by delivering a Bid Loan Offer to the
Administrative Agent before 10:30 A.M. (New York City time) three Working Days
before the proposed Borrowing Date, setting forth the maximum amount of Bid
Loans for each maturity date, and the aggregate maximum amount for all maturity
dates, which such Bid Loan Bank would be willing to make (which amounts may,
subject to subsection 2.3(a), exceed such Bid Loan Bank's Commitment) and the
margin above or below the Applicable Index Rate at which such Bid Loan Bank is
willing to make each such Bid Loan; the Administrative Agent shall advise the
Borrower before 11:15 A.M. (New York City time) three Working Days before the
proposed Borrowing Date, of the contents of each such Bid Loan Offer received by
it. If the Administrative Agent in its capacity as a Bid Loan Bank shall, in its
sole discretion, elect to make any such offer, it shall advise the Borrower of
the contents of its Bid Loan Offer before 10:15 A.M. (New York City time) three
Working Days before the proposed Borrowing Date.
(iii) In the case of an Absolute Rate Bid Loan Request, upon receipt of
notice from the Administrative Agent of the contents of such Bid Loan Request,
any Bid Loan Bank that elects, in its sole discretion, to do so, shall
irrevocably offer to make one or more Bid Loans at a rate or rates of interest
for each such Bid Loan determined by such Bid Loan Bank in its sole discretion.
Any such irrevocable offer shall be made by delivering a Bid Loan Offer to the
Administrative Agent before 9:30 A.M. (New York City time) on the proposed
Borrowing Date, setting forth the maximum amount of Bid Loans for each maturity
date, and the aggregate
19
maximum amount for all maturity dates, which such Bid Loan Bank would be willing
to make (which amounts may, subject to subsection 2.3(a), exceed such Bid Loan
Bank's Commitment) and the rate or rates of interest at which such Bid Loan Bank
is willing to make such Bid Loan; the Administrative Agent shall advise the
Borrower before 10:15 A.M. (New York City time) on the proposed Borrowing Date
of the contents of each such Bid Loan Offer received by it. If the
Administrative Agent in its capacity as a Bid Loan Bank shall, in its sole
discretion, elect to make any such offer, it shall advise the Borrower of the
contents of its Bid Loan Offer before 9:15 A.M. (New York City time) on the
proposed Borrowing Date.
(iv) The Borrower shall before 11:30 A.M. (New York City time) three
Working Days before the proposed Borrowing Date (in the case of Bid Loans
requested by a LIBOR Bid Loan Request) and before 10:30 A.M. (New York City
time) on the proposed Borrowing Date (in the case of Bid Loans requested by an
Absolute Rate Bid Loan Request) either, in its absolute discretion:
(A) cancel such Bid Loan Request by giving the Administrative Agent
telephone notice to that effect; or
(B) accept one or more of the offers made by any Bid Loan Bank or Bid
Loan Banks pursuant to clause (ii) or clause (iii) above, as the case may
be, by giving telephone notice to the Administrative Agent (immediately
confirmed by delivery to the Administrative Agent of a Bid Loan
Confirmation) of the amount of Bid Loans for each relevant maturity date to
be made by each Bid Loan Bank (which amount for each such maturity date
shall be equal to or less than the maximum amount for such maturity date
specified in the Bid Loan Offer of such Bid Loan Bank, and for all maturity
dates included in such Bid Loan Offer shall be equal to or less than the
aggregate maximum amount specified in such Bid Loan Offer for all such
maturity dates) and reject any remaining offers made by Bid Loan Banks
pursuant to clause (ii) or clause (iii) above, as the case may be;
PROVIDED, HOWEVER, that (x) the Borrower may not accept offers for Bid
Loans for any maturity date in an aggregate principal amount in excess of
the maximum principal amount requested in the related Bid Loan Request, (y)
if the Borrower accepts any of such offers, it must accept offers strictly
based upon pricing for such relevant maturity date and not any other
criteria whatsoever and (z) if two or more Bid Loan Banks submit offers for
any maturity date at identical pricing and the Borrower accepts any of such
offers but does not wish to borrow the total amount offered by such Bid
Loan Banks with such identical pricing, the Borrower shall accept offers
from all of such Bid Loan Banks in amounts allocated among them PRO RATA as
shall be practicable after giving effect to the requirement that Bid Loans
made by a Bid Loan Bank on a Borrowing Date for each relevant maturity date
shall be in a principal amount of $5,000,000 or a whole multiple of
$1,000,000 in excess thereof).
(v) If the Borrower notifies the Administrative Agent that a Bid Loan
Request is cancelled pursuant to clause (iv) (A) above, the Administrative Agent
shall give prompt telephone notice thereof to the Bid Loan Banks, and the Bid
Loans requested thereby shall not be made.
20
(vi) If the Borrower accepts pursuant to clause (iv) (B) above one or more
of the offers made by any Bid Loan Bank or Bid Loan Banks, the Administrative
Agent shall promptly notify each Bid Loan Bank which has made such an offer, of
the aggregate amount of such Bid Loans to be made on such Borrowing Date for
each maturity date and of the acceptance or rejection of any offers to make such
Bid Loans made by such Bid Loan Bank. Each Bid Loan Bank which is to make a Bid
Loan shall, before 12:00 Noon (New York City time) on the Borrowing Date
specified in the Bid Loan Request applicable thereto, make available to the
Administrative Agent at its office set forth in subsection 9.2 the amount of Bid
Loans to be made by such Bid Loan Bank, in immediately available funds. The
Administrative Agent will make such funds available to the Borrower as soon as
practicable on such date at the Administrative Agent's aforesaid address. As
soon as practicable after each Borrowing Date, the Administrative Agent shall
notify each Bank of the aggregate amount of Bid Loans advanced on such Borrowing
Date and the respective maturity dates thereof.
(c) Within the limits and on the conditions set forth in this subsection
2.3, the Borrower may from time to time borrow under this subsection 2.3, repay
pursuant to subsection 2.4, and reborrow under this subsection 2.3. The Borrower
shall not have the right to prepay any principal amount of any Bid Loan.
(d) The Borrower shall pay interest on the unpaid principal amount of each
Bid Loan made to it from the Borrowing Date to the stated maturity date thereof,
at the rate of interest determined pursuant to subsection 2.4 below (calculated
on the basis of a 360 day year for actual days elapsed), payable on each
Interest Payment Date for such Bid Loan. If all or a portion of the principal
amount of any Bid Loan shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue principal amount shall,
without limiting any rights of any Bank under this Agreement, bear interest from
the date on which such payment was due at a rate per annum which is 2% above the
rate which would otherwise be applicable pursuant to such Bid Loan until the
scheduled maturity date with respect thereto, and for each day thereafter at a
rate per annum which is 2% above the Alternate Base Rate until paid in full (as
well after as before judgment). Interest accruing pursuant to the immediately
preceding sentence shall be payable on demand.
2.4 REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) The Borrower hereby
unconditionally promises to pay (i) to the Administrative Agent for the account
of each Bank the then unpaid principal amount of each Revolving Credit Loan on
the Termination Date (or any earlier date on which, subject to the terms and
conditions of this Agreement, such payment shall become due and payable, by
acceleration or otherwise) and (ii) to the Administrative Agent for the account
of each relevant Bid Loan Bank the then unpaid principal amount of each Bid Loan
on the maturity date for such Loan (such maturity date being that specified by
the Borrower for the repayment of such Bid Loan in the related Bid Loan
Request).
(b) Each Bank shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Bank
resulting from each Loan made by such Bank, including the amounts of principal
and interest payable and paid to such Bank from time to time hereunder.
21
(c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, whether such Loan is a
Revolving Credit Loan or a Bid Loan, the Type thereof and the Interest Period
or, in the case of Bid Loans, the maturity date applicable thereto, (ii) the
amount of any principal or interest due and payable or to become due and payable
from the Borrower to each Bank hereunder and (iii) the amount of any sum
received by the Administrative Agent hereunder for the account of the Banks and
each Bank's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph (b)
or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Bank or the Administrative Agent to maintain such accounts or any error therein
shall not in any manner affect the obligation of the Borrower to repay the Loans
in accordance with the terms of this Agreement. The Administrative Agent shall
provide such back-up information and supporting documentation that is reasonably
requested by the Borrower from time to time to support entries made in said
accounts.
(e) Any Bank may request that Loans made by it be evidenced by a promissory
note. In such event, the Administrative Agent shall prepare, and the Borrower
shall execute and deliver to such Bank, a promissory note payable to the order
of such Bank (or, if requested by such Bank, to such Bank and its registered
assigns) substantially in the form of Exhibit E-1, in the case of Revolving
Loans (a "Revolving Credit Note"), or Exhibit E-2, in the case of any Bid Loans
(a "Grid Bid Loan Note"); provided that any Bid Loan Bank may request that any
individual Bid Loan (or portion thereof) made by it in an amount of at least
$5,000,000 be evidenced by an individual note in the form of Exhibit E-3 (an
"Individual Bid Loan Note"). Thereafter, the Loans evidenced by such promissory
note and interest thereon shall at all times (including after assignment
pursuant to Section 9.6) be represented by one or more promissory notes in
substantially such form payable to the order of the payee named therein (or, if
such promissory note is a registered note, to such payee and its registered
assigns).
2.5 OPTIONAL TERMINATION OR REDUCTION OF COMMITMENTS. The Borrower shall
have the right, upon not less than five Business Days' notice to the
Administrative Agent to terminate the Commitments or, from time to time, to
reduce the amount of the Commitments, provided that no such reduction or
termination shall be permitted if, after giving effect thereto, and to any
prepayment of the Revolving Credit Loans made on the effective date therein, the
then outstanding principal amount of Loans (including, without limitation, Bid
Loans) would exceed the aggregate amount of the Commitments as so reduced. Any
such reduction shall be in an amount equal to $5,000,000 or a whole multiple of
$1,000,000 in excess thereof and shall reduce permanently the Commitments then
in effect.
2.6 OPTIONAL PREPAYMENTS. Subject to subsection 2.17, the Borrower may, at
any time and from time to time, prepay the Revolving Credit Loans, in whole or
in part, without premium or penalty, upon at least four Business Days'
irrevocable notice from the Borrower to the Administrative Agent specifying the
date and amount of prepayment and whether the prepayment is of LIBOR Loans,
Alternate Base Rate Loans or a combination thereof, and, if of a combination
thereof, the amount allocable to each. Upon receipt of any such notice from the
Borrower, the Administrative Agent shall promptly notify each Bank thereof. If
any such notice
22
is given, the amount specified in such notice shall be due and payable by the
Borrower on the date specified therein, together with accrued interest to such
date on the amount prepaid. Partial prepayments shall be in an aggregate
principal amount of $1,000,000 or a whole multiple thereof and may only be made,
if after giving effect thereto, subsection 2.9 shall not have been contravened.
The Borrower shall not have the right to prepay the principal amount of any Bid
Loan.
2.7 MANDATORY PREPAYMENTS. (a) Upon receipt by the Borrower or any of its
Subsidiaries of any Net Proceeds with respect to an Asset Disposition, (i) if
such Net Proceeds exceed $10,000,000 or (ii) if such Net Proceeds do not exceed
$10,000,000 but such Net Proceeds, together with all other Net Proceeds from
other, prior Asset Dispositions in the same fiscal year of the Borrower, which,
in each case, have not exceeded $10,000,000, exceed $25,000,000, then on the
first Business Day after the receipt of Net Proceeds from such Asset
Disposition, the Revolving Credit Loans shall be prepaid, without an
accompanying reduction of the Commitments, in an amount equal to 100% of such
Net Proceeds (or, in the case of Net Proceeds described in clause (ii) of this
paragraph (a), if less, the amount by which such Net Proceeds, together with
such other Net Proceeds, exceed $25,000,000). To the extent that the Borrower
makes mandatory prepayments with such Net Proceeds under subsection 2.7(a) of
the 364 Day Facility Credit Agreement, no mandatory prepayment shall be due
under this subsection 2.7(a).
(b) In the event of any Change in Control, if the Majority Banks give the
Borrower a notice within 30 days of the announcement of such Change in Control
requiring the Borrower to prepay the Loans in full, then the Borrower shall
prepay the Loans in full on a date determined by the Borrower and notified by
the Borrower pursuant to the procedures of subsection 2.6 which is not more than
90 days after such Change in Control. If the Loans are required to be prepaid in
full pursuant to this subsection 2.7(b), such Loans shall not be permitted to be
reborrowed and the Commitments shall be deemed to be terminated as of the date
of such prepayment.
(c) If, after giving effect to any termination or reduction of any
Commitments pursuant to subsection 2.5 or this subsection 2.7, the outstanding
aggregate principal amount of the Loans exceeds the aggregate amount of such
Commitments then in effect, the Borrower shall pay or prepay such Loans
(including, without limitation, the Bid Loans) on the date of such termination
or reduction in an aggregate principal amount at least equal to such excess,
together with interest thereon accrued to the date of such payment or
prepayment. All prepayments made pursuant to this subsection 2.7(c) shall be
applied first to the Revolving Credit Loans until such Loans are paid in full
and second to the Bid Loans.
(d) Each prepayment of the Loans pursuant to this subsection 2.7 shall be
accompanied by payment in full of all accrued interest thereon to and including
the date of such prepayment, together with any additional amounts owing pursuant
to subsection 2.17.
2.8 CONVERSION AND CONTINUATION OPTIONS. (a) The Borrower may elect from
time to time to convert LIBOR Loans to Alternate Base Rate Loans, by giving the
Administrative Agent at least two Business Days' prior irrevocable notice of
such election, provided that any such conversion of LIBOR Loans may only be made
on the last day of an
23
Interest Period with respect thereto. The Borrower may elect from time to time
to convert Alternate Base Rate Loans to LIBOR Loans by giving the Administrative
Agent at least three Working Days' prior irrevocable notice of such election.
Any such notice of conversion to LIBOR Loans shall specify the length of the
initial Interest Period or Interest Periods therefor. Upon receipt of any such
notice the Administrative Agent shall promptly notify each Bank thereof. All or
any part of outstanding LIBOR Loans and Alternate Base Rate Loans may be
converted as provided herein, provided that (i) any such conversion may only be
made if, after giving effect thereto, subsection 2.9 shall not have been
contravened and (ii) no Revolving Credit Loan may be converted into a LIBOR Loan
after the date that is one month prior to the Termination Date.
(b) Any LIBOR Loans may be continued as such upon the expiration of the
then current Interest Period with respect thereto by the Borrower giving notice
to the Administrative Agent in accordance with the applicable provisions of the
term "Interest Period" set forth in subsection 1.1, of the length of the next
Interest Period to be applicable to such LIBOR Loans, PROVIDED that no LIBOR
Loan may be continued as such (i) if, after giving effect thereto, subsection
2.9 would be contravened or (ii) after the date that is one month prior to the
Termination Date and PROVIDED, FURTHER, that if the Borrower shall fail to give
any required notice as described above in this paragraph or if such continuation
is not permitted pursuant to the preceding proviso such Revolving Credit Loans
shall be automatically converted to Alternate Base Rate Loans on the last day of
such then expiring Interest Period.
2.9 MINIMUM AMOUNTS OF TRANCHES. All borrowings, conversions and
continuations of Revolving Credit Loans hereunder and all selections of Interest
Periods hereunder shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto, the aggregate principal amount
of the Revolving Credit Loans comprising each Tranche shall be equal to
$15,000,000 or a whole multiple of $1,000,000 in excess thereof.
2.10 INTEREST RATES AND PAYMENT DATES. (a) Each LIBOR Loan shall bear
interest for each day during each Interest Period with respect thereto at a rate
per annum equal to the LIBOR Adjusted Rate determined for such day plus the
Applicable Margin.
(b) Each Alternate Base Rate Loan shall bear interest at a rate per annum
equal to the Alternate Base Rate plus the Applicable Margin.
(c) Each Bid Loan shall bear interest as provided in subsection 2.3.
(d) If all or a portion of the principal amount of any Loan or any interest
payable on the Loans shall not be paid when due (whether at the stated maturity,
by acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum which is (x) in the case of overdue principal to the last day of any
Interest Period then applicable thereto, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this subsection plus
2% or (y) otherwise, the rate described in paragraph (b) of this subsection plus
2%, in each case from the date of such non-payment until such amount is paid in
full (as well after as before judgment).
24
(e) Interest on each LIBOR Loan and Alternate Base Rate Loan shall be
payable in arrears on each Interest Payment Date, provided in each case that
interest accruing pursuant to paragraph (d) of this subsection shall be payable
on demand.
2.11 COMPUTATION OF INTEREST AND FEES. (a) Interest on Alternate Base Rate
Loans, facility fees and utilization fees shall be calculated on the basis of a
360 day year for the actual days elapsed, PROVIDED that interest on Alternate
Base Rate Loans the rate of interest on which are based on the Prime Rate shall
be calculated on the basis of a 365- (or 366-, as the case may be) day year for
the actual days elapsed. Interest on LIBOR Loans and Bid Loans shall be
calculated on the basis of a 360-day year for the actual days elapsed. The
Administrative Agent shall as soon as practicable notify the Borrower and the
Banks of each determination of a LIBOR Adjusted Rate. Any change in the interest
rate on a Loan resulting from a change in the Alternate Base Rate or the LIBOR
Reserve Requirements shall become effective as of the opening of business on the
day on which such change in the Alternate Base Rate is announced or such change
in the LIBOR Reserve Requirements becomes effective, as the case may be. The
Administrative Agent shall as soon as practicable notify the Borrower and the
Banks of the effective date and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Banks in the absence of manifest error. The Administrative
Agent shall, at the request of the Borrower deliver to the Borrower a statement
showing the quotations used by the Administrative Agent in determining any
interest rate pursuant to subsection 2.10(a) and the calculations made by the
Administrative Agent in determining any interest rate pursuant to subsection
2.10(b).
(c) If any Reference Bank's Commitment shall terminate or all its Loans
shall be assigned for any reason whatsoever, such Reference Bank shall thereupon
cease to be a Reference Bank, and if, as a result of the foregoing, there shall
only be one Reference Bank remaining, the Administrative Agent (after
consultation with the Borrower and the Banks) shall, by notice to the Borrower
and the Banks, designate another Bank as a Reference Bank so that there shall at
all times be at least two Reference Banks.
(d) Each Reference Bank shall use its best efforts to furnish quotations of
rates to the Administrative Agent as contemplated hereby. If any of the
Reference Banks shall be unable or shall otherwise fail to supply such rates to
the Administrative Agent upon its request, the rate of interest shall, subject
to the provisions of subsection 2.12, be determined on the basis of the
quotations of the remaining Reference Banks or Reference Bank.
2.12 INABILITY TO DETERMINE INTEREST RATE. In the event that prior to the
first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by
reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the LIBOR Adjusted Rate for
such Interest Period, or
25
(b) the Administrative Agent shall have received notice from the
Majority Banks that the LIBOR Adjusted Rate determined or to be determined
for such Interest Period will not adequately and fairly reflect the cost to
such Banks (as conclusively certified by such Banks) of making or
maintaining their affected Loans during such Interest Period,
the Administrative Agent shall give telex, telecopy or telephonic notice thereof
to the Borrower and the Banks as soon as practicable thereafter. If such notice
is given (x) any LIBOR Loans requested to be made on the first day of such
Interest Period shall be made as Alternate Base Rate Loans, (y) any Revolving
Credit Loans that were to have been converted on the first day of such Interest
Period to LIBOR Loans shall be converted to or continued as Alternate Base Rate
Loans and (z) any outstanding LIBOR Loans shall be converted, on the first day
of such Interest Period, to Alternate Base Rate Loans. Until such notice has
been withdrawn by the Administrative Agent no further LIBOR Loans shall be made
or continued as such, nor shall the Borrower have the right to convert Alternate
Base Rate Loans to LIBOR Loans.
2.13 PRO RATA TREATMENT AND PAYMENTS. Each borrowing of Revolving Credit
Loans by the Borrower from the Banks hereunder, each payment by the Borrower of
any facility, utilization or other fee hereunder, and any reduction of the
Commitments of the Banks shall be made pro rata according to the respective
Commitment Percentages of the Banks. Each payment (including each prepayment) by
the Borrower on account of principal of and interest on the Revolving Credit
Loans shall be made pro rata according to the respective outstanding principal
amounts of the Revolving Credit Loans then held by the Banks. All payments
(including prepayments) to be made by the Borrower hereunder and under the
Notes, whether on account of principal, interest, fees or otherwise, shall be
made without set off or counterclaim and shall be made prior to 12:00 Noon, New
York City time, on the due date thereof to the Administrative Agent for the
account of the appropriate Banks, at the Administrative Agent's office specified
in subsection 9.2, in Dollars and in immediately available funds. The
Administrative Agent shall distribute such payments to such Banks promptly upon
receipt in like funds as received. If any payment hereunder (other than payments
on the LIBOR Loans or LIBOR Bid Loans) becomes due and payable on a day other
than a Business Day, such payment shall be extended to the next succeeding
Business Day, and, with respect to payments of principal, interest thereon shall
be payable at the then applicable rate during such extension. If any payment on
a LIBOR Loan or LIBOR Bid Loan becomes due and payable on a day other than a
Working Day, the maturity thereof shall be extended to the next succeeding
Working Day unless the result of such extension would be to extend such payment
into another calendar month, in which event such payment shall be made on the
immediately preceding Working Day.
2.14 ILLEGALITY. Notwithstanding any other provision herein, if any change
in any Requirement of Law or in the interpretation or application thereof shall
make it unlawful for any Bank or Lending Office to make or maintain LIBOR Loans
as contemplated by this Agreement, (a) the commitment of such Bank hereunder to
make LIBOR Loans, continue LIBOR Loans as such and convert Alternate Base Rate
Loans to LIBOR Loans shall forthwith be cancelled and (b) the Loans of such Bank
or Lending Office then outstanding as LIBOR Loans, if any, shall be converted
automatically to Alternate Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a LIBOR Loan occurs on a
day which is not
26
the last day of the then current Interest Period with respect thereto, the
Borrower shall pay to such Bank such amounts, if any, as may be required
pursuant to subsection 2.17.
2.15 REQUIREMENTS OF LAW. (a) In the event that any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Bank with any request or directive (whether or not having the force of
law but, if not having the force of law, generally applicable to and complied
with by banks of the same general type as such Bank in the relevant
jurisdiction) from any central bank or other Governmental Authority made
subsequent to the Effective Date:
(i) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Bank or Lending Office which is not otherwise included in
the determination of the LIBOR Adjusted Rate hereunder; or
(ii) shall impose on such Bank or Lending Office any other condition;
and the result of any of the foregoing is to increase the cost to such Bank or
Lending Office, by an amount which such Bank deems to be material, of making,
converting into, continuing or maintaining LIBOR Loans or Bid Loans or to reduce
any amount receivable hereunder in respect thereof then, in any such case, the
Borrower shall promptly pay such Bank or Lending Office, upon its demand, any
additional amounts necessary to compensate such Bank for such increased cost or
reduced amount receivable. If any Bank or any Lending Office becomes entitled to
claim any additional amounts pursuant to this subsection, it shall promptly
notify the Borrower, through the Administrative Agent of the event by reason of
which it has become so entitled. A certificate as to any additional amounts
payable pursuant to this subsection submitted by such Bank or Lending Office,
through the Administrative Agent to the Borrower shall be prima facie evidence
of the accuracy of the information so recorded. This covenant shall survive the
termination of this Agreement and the payment of the Notes and all other amounts
payable hereunder for one year.
(b) If, after the date of this Agreement, the introduction of any
applicable law, rule, regulation or guideline regarding capital adequacy, or any
change therein or any change in the interpretation or administration thereof by
any Governmental Authority charged with the interpretation or administration
thereof, affects the amount of capital required or expected to be maintained by
any Bank or any corporation controlling any Bank, and such Bank or such
corporation (taking into consideration such Bank's or such corporation's
policies with respect to capital adequacy) determines that the amount of capital
maintained by such Bank or such corporation which is attributable to or based
upon the Loans, the Commitments or this Agreement must be increased as a
consequence of such introduction or change, then, upon demand of the
Administrative Agent at the request of such Bank, the Borrower shall immediately
pay to the Administrative Agent on behalf of such Bank, additional amounts
sufficient to compensate such Bank or such corporation for the increased costs
to such Bank or corporation of such increased capital. Any such demand shall be
accompanied by a certificate of such Bank setting forth in reasonable detail the
computation of any such increased costs. This covenant
27
shall survive the termination of this Agreement and the payment of the Notes and
all other amounts payable hereunder for one year.
(c) Each Bank will promptly notify the Borrower, through the Administrative
Agent of any event of which it has knowledge that will entitle such Bank to
compensation pursuant to subsection 2.15(a) or (b) above. No failure by any Bank
to give (or delay in giving) such notice shall adversely affect such Bank's
rights to such compensation, except that the Borrower shall have no obligation
to compensate any Bank for any cost or reduction incurred or accrued by it more
than one year before such Bank gives notice of the event giving rise to such
cost or reduction as required by the preceding sentence.
2.16 TAXES. (a) Any and all payments by or on account of any obligation of
the Borrower hereunder or under any Note shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; provided that if the
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this subsection) the Administrative Agent or Bank
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 Governmental
Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent and each Bank,
within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent or such Bank,
on or with respect to any payment by or on account of any obligation of the
Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to the
Borrower by a Bank, or by the Administrative Agent on its own behalf or on
behalf of a Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to
the Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.
(e) Each Foreign Bank hereby agrees that it shall deliver to the
Administrative Agent and the Borrower:
(i) two copies of Internal Revenue Service Form W-8-BEN or Form
W-8-ECI (or appropriate successor form), properly completed and duly
executed by such Foreign Bank claiming complete exemption from U.S. Federal
withholding tax on payments by
28
the Borrower or the Administrative Agent under this Agreement and the other
Loan Documents;
(ii) any other documentation as may be required under applicable U.S.
tax law and regulations to evidence complete exemption from U.S. Federal
withholding tax on all payments by the Borrower or the Administrative Agent
under this Agreement and the Loan Documents.
Such forms and other documentation shall be delivered by each Foreign Bank on or
before the Initial Date (as defined below) and on or before the date, if any,
such Foreign Bank changes its applicable Lending Office by designating a
different Lending Office or selecting an additional office. In addition, each
Foreign Bank shall deliver appropriate replacements to such forms previously
delivered by it promptly upon the obsolescence or invalidity of any form or
other documentation previously delivered by such Foreign Bank unless an event
beyond the control of such Foreign Bank (including, without limitation, any
change in treaty, law or regulation) has occurred prior to the date on which any
such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Foreign Bank from duly completing and
delivering any such form with respect to it and such Foreign Bank so advises the
Borrower and the Administrative Agent.
(f) For purposes of subsection (e), the term "Initial Date" shall mean (i)
with respect to each Foreign Bank that is a party hereto on the date hereof, the
date hereof, (ii) with respect to each Participant, the date of the grant of a
participation to such Participant, and (ii) with respect to each transferee, the
effective date of such transfer or assignment of an interest hereunder to such
transferee.
2.17 INDEMNITY. The Borrower agrees to indemnify each Bank and to hold each
Bank harmless from any loss or expense which such Bank may sustain or incur as a
consequence of (a) default by the Borrower in payment when due of the principal
amount of or interest on any LIBOR Loan or Bid Loan, (b) default by the Borrower
in making a borrowing of, conversion into or continuation of Bid Loans or LIBOR
Loans after the Borrower has given a notice requesting the same in accordance
with the provisions of this Agreement (and, in the case of Bid Loans, so long as
the Borrower has accepted a Bid Loan offered in connection with any such
notice), (c) default by the Borrower in making any prepayment after the Borrower
has given a notice thereof in accordance with the provisions of this Agreement
or (d) the making by the Borrower of a prepayment of LIBOR Loans or (without
prejudice to the last sentence of subsection 2.3(c)) Bid Loans on a day which is
not the last day of an Interest Period with respect thereto, including, without
limitation, in each case, any such loss or expense arising from the reemployment
of funds obtained by it or from fees payable to terminate the deposits from
which such funds were obtained. This covenant shall survive the termination of
this Agreement and the payment of the Notes and all other amounts payable
hereunder for one year.
2.18 FACILITY AND UTILIZATION FEES. (a) During the Commitment Period, the
Borrower agrees to pay to the Administrative Agent for the account of each Bank
a facility fee equal to the product of (i) 0.090% per annum at any time the
Applicable Margin is based on Rating 1, (ii) 0.125% per annum at any time the
Applicable Margin is based on Rating 2, (iii) 0.150% per annum at any time the
Applicable Margin is based on Rating 3, (iv) 0.175% at any
29
time the Applicable Margin is based on Rating 4 or (v) 0.225% at any time the
Applicable Margin is based on Rating 5, and the average Commitment of such Bank
(without regard to the principal amount of Loans from time to time made by such
Bank) during the quarter in which the facility fee is paid. Such facility fee
shall be payable quarterly in arrears on the last day of each March, June,
September and December, commencing June 30, 2002 and on the Termination Date
(or, in any case, any earlier date on which all amounts outstanding hereunder
shall become due and payable by acceleration or otherwise).
(b) During the Commitment Period, the Borrower agrees to pay to the
Administrative Agent for the account of each Bank a utilization fee computed at
the rate of 0.125% per annum on the aggregate average amount of the Revolving
Credit Loans under this Agreement and the 364 Day Facility outstanding during
the quarter for which such fee is to be paid; provided, that no such fee shall
be required to be paid with respect to any quarter in which the aggregate
average amount of the Revolving Credit Loans and Bid Loans then outstanding
under this Agreement and the 364 Day Facility does not exceed 50% of the
aggregate Commitments of the Banks under this Agreement and the 364 Day
Facility. Such utilization fee, to the extent payable, shall be payable
quarterly in arrears on the last day of each March, June, September and
December, commencing on June 30, 2002 and on the Termination Date (or, in any
case, any earlier date on which all amounts outstanding hereunder shall become
due and payable by acceleration or otherwise).
Sample computations of the facility fee and the utilization fee are given
in Schedule II hereto.
2.19 MITIGATION OF COSTS; REPLACEMENT OF BANKS. (a) If any Bank, by
changing its Lending Office or taking any other reasonable action, so long as
making such change or taking such other action is not, in the reasonable
judgment of such Bank, disadvantageous to it in any financial, regulatory or
other respect, can mitigate any adverse effect on the Borrower under subsections
2.14, 2.15 or 2.16, such Bank shall take such action.
(b) Within fifteen (15) days after Borrower receives a notice and/or a
demand from any Bank (or from another Person on account of such Bank) (an
"AFFECTED BANK") for payment of additional amounts or increased costs as
provided in subsection 2.15 or 2.16, Borrower may, at its option, notify
Administrative Agent and such Affected Bank of its intention to replace the
Affected Bank; PROVIDED, however, Borrower shall promptly pay such amounts upon
demand in accordance with subsection 2.15 or subsection 2.16 as applicable. So
long as no Default or Event of Default shall have occurred and be continuing,
and the Borrower shall have received the prior written consent of the
Administrative Agent (not to be unreasonably withheld) for such assignment,
Borrower may obtain, at Borrower's expense (including, but not limited to, with
respect to any processing and recordation fee charged pursuant to subsection
9.6(b)(ii)(C)), a replacement bank ("REPLACEMENT BANK") for the Affected Bank.
If Borrower obtains a Replacement Bank within one hundred eighty (180) days
following notice of its intention to do so, then, notwithstanding anything to
the contrary in Section 9.6 (other than subsections 9.6(b)(ii)(C),
9.6(b)(ii)(D), 9.6(b)(iii), 9.6(iv) and 9.6(b)(v)), Affected Bank must sell and
assign its Loans and Commitments to such Replacement Bank for an amount equal to
the principal balance of all Loans held by the Affected Bank and all accrued
interest and fees with respect thereto through the date of such sale, PROVIDED
that Borrower shall have reimbursed such
30
Affected Bank for the additional amounts or increased costs that it is entitled
to receive under this Agreement through the date of such sale and assignment.
Notwithstanding the foregoing, Borrower shall not have the right to obtain a
Replacement Bank if the Affected Bank rescinds its demand for increased costs or
additional amounts within fifteen (15) days following its receipt of Borrower's
notice of intention to replace such Affected Bank. Furthermore, if Borrower
gives a notice of intention to replace and does not so replace such Affected
Bank within one hundred eighty (180) days thereafter, Borrower's rights under
this subsection 2.19(b) shall terminate and Borrower shall promptly pay, to the
extent not previously paid in accordance with the proviso to the first sentence
of this subsection 2.19(b), all increased costs or additional amounts demanded
by such Affected Bank pursuant to subsections 2.15 and 2.16.
2.20 NEW BANKS; EXITING BANKS. (a) As of the Closing Date, the New Banks
shall become Banks parties to this Agreement, and the terms "Bank" and "Banks"
as used in this Agreement shall be deemed to include each New Bank. Each New
Bank (i) hereby appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
and the other Loan Documents as provided by the terms thereof and in accordance
with Section 8 hereof and (ii) agrees that as of the Closing Date it will
perform in accordance with their terms all of the obligations which by the terms
of this Agreement and the other Loan Documents are required to be performed by
it as a Bank. As of the Closing Date, each New Bank shall have all the rights of
a Bank under this Agreement.
(b) As of the Closing Date, the Commitments of each of the Exiting Banks
shall be terminated, and the Exiting Banks shall no longer be parties to this
Agreement, PROVIDED that any indemnities or other agreements under this
Agreement or any other Loan Document which by their terms survive repayment of
amounts payable thereunder shall survive repayment pursuant hereto with respect
to the Exiting Banks.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Banks to enter into this Agreement, and to make the Loans the
Borrower hereby represents and warrants to the Administrative Agent, and each
Bank that:
3.1 FINANCIAL CONDITION. The consolidated balance sheets of the Borrower
and its consolidated Subsidiaries as at September 30, 2000, and September 30,
2001, and the related consolidated statements of income and of cash flows for
the fiscal year ended on such date, reported on by PricewaterhouseCoopers LLP,
copies of which have heretofore been furnished to each Bank, present fairly the
consolidated financial condition of the Borrower and its consolidated
Subsidiaries as at such dates, and the consolidated results of their operations
and their consolidated cash flows for the fiscal year then ended. The unaudited
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
at March 31, 2002 and the related unaudited consolidated statements of income
and of cash flows for the six-month period ended on such date, certified to the
best of their knowledge by a Responsible Officer of the Borrower, copies of
which have heretofore been furnished to each Bank, present fairly the
consolidated financial condition of the Borrower and its consolidated
Subsidiaries as at such date, and the consolidated results of their operations
and their consolidated cash flows for the six-month period then ended (subject
to normal year-end audit adjustments). All such financial statements, including
the related schedules and notes thereto, have been prepared in accordance with
GAAP
31
applied consistently throughout the periods involved (except as approved by
such accountants or Responsible Officer, as the case may be, and as disclosed
therein). Neither the Borrower nor any of its consolidated Subsidiaries had, at
the date of the most recent balance sheet referred to above, any material
Guarantee Obligation, contingent liability or liability for taxes, or any
long-term lease or unusual forward or long-term commitment, including, without
limitation, any interest rate or foreign currency swap or exchange transaction,
which is not reflected in the foregoing statements or in the notes thereto and
which is material in relation to the consolidated financial condition of the
Borrower and its consolidated Subsidiaries at such date. During the period from
March 31, 2002 to and including the Closing Date there has been no sale,
transfer or other disposition by the Borrower or any of its consolidated
Subsidiaries of any material part of its business or property and no purchase or
other acquisition of any business or property (including any capital stock of
any other Person) material in relation to the consolidated financial condition
of the Borrower and its consolidated Subsidiaries at March 31, 2002.
3.2 NO CHANGE. Since March 31, 2002 there has been no Material Adverse
Effect.
3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each of the Borrower and its
Subsidiaries (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (b) has the corporate power
and authority, and the legal right, to own and operate its property, to lease
the property it operates as lessee and to conduct the business in which it is
currently engaged and in which it proposes to be engaged after the Closing Date,
(c) is duly qualified as a foreign corporation and in good standing under the
laws of each jurisdiction where its ownership, lease or operation of property or
the conduct of its business requires such qualification and (d) is in compliance
with all Requirements of Law except to the extent that the failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The Borrower
has the corporate power and authority, and the legal right, to make, deliver and
perform the Loan Documents and to borrow hereunder and has taken all necessary
corporate action to authorize (i) the borrowings on the terms and conditions of
this Agreement and the Notes and (ii) the execution, delivery and performance of
the Loan Documents. Except as set forth on Schedule III hereto, no consent or
authorization of, filing with or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the borrowings
hereunder or with the execution, delivery, performance, validity or
enforceability of this Agreement or the Notes. This Agreement has been, and each
of the Notes will be, duly executed and delivered. This Agreement constitutes,
and each of the Notes when executed and delivered will constitute, a legal,
valid and binding obligation of the Borrower enforceable against the Borrower in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
3.5 NO LEGAL BAR. The execution, delivery and performance of this Agreement
and the Notes, the borrowings hereunder and the use of the proceeds thereof will
not (a) violate, to the knowledge of the Borrower, any Requirement of Law or
Contractual
32
Obligation of the Borrower, any of its Subsidiaries or any of the
Funds, or (b) violate any Requirement of Law or Contractual Obligation of the
Borrower, any of its Subsidiaries or any of the Funds which could reasonably be
expected to have a Material Adverse Effect and will not result in, or require,
the creation or imposition of any Lien on any of its or their respective
properties or revenues pursuant to any such Requirement of Law or Contractual
Obligation.
3.6 NO MATERIAL LITIGATION. No litigation, investigation or proceeding of
or before any arbitrator or Governmental Authority is pending or, to the
knowledge of the Borrower, threatened by or against the Borrower or any of its
Subsidiaries or against any of its or their respective properties or revenues or
by or against any "affiliated person" of the Borrower or any of its
Subsidiaries, within the meaning of the Investment Company Act, (a) with respect
to this Agreement or the Notes or any of the transactions contemplated hereby or
thereby, or (b) which could reasonably be expected to have a Material Adverse
Effect.
3.7 OWNERSHIP OF PROPERTY; LIENS. Each of the Borrower and its Subsidiaries
has good record and marketable title in fee simple to, or a valid leasehold
interest in, all its real property, and good title to all its other property
which is material to its business, and none of such property, and none of the
investment advisory agreements to which the Borrower or any of its Subsidiaries
is a party or any of the revenues thereunder, is subject to any Lien except as
permitted by subsection 6.3.
3.8 INTELLECTUAL PROPERTY. The Borrower and each of its Subsidiaries owns,
or is licensed to use, all trademarks, tradenames, copyrights, technology,
know-how and processes necessary for the conduct of its business as currently
conducted except for those the failure to own or license which could not
reasonably be expected to have a Material Adverse Effect (the "Intellectual
Property"). To the knowledge of the Borrower, no claim which could reasonably be
expected to have a Material Adverse Effect has been asserted and is pending by
any Person challenging or questioning the use of any such Intellectual Property
or the validity or effectiveness of any such Intellectual Property, nor does the
Borrower know of any valid basis for any such claim. To the knowledge of the
Borrower, the use of such Intellectual Property by the Borrower and its
Subsidiaries does not infringe on the rights of any Person, except for such
claims and infringements that, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
3.9 TAXES. Each of the Borrower and its Subsidiaries has filed or caused to
be filed all material tax returns which, to the knowledge of the Borrower, are
required to be filed and has paid all taxes shown to be due and payable on said
returns or on any assessments made against it or any of its property and all
other taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the Borrower or its Subsidiaries, as the case may be); to the knowledge
of Borrower, no tax Lien has been filed, and no claim is being asserted with
respect to any such tax, fee or other charge which could reasonably be expected
to have a Material Adverse Effect.
3.10 FEDERAL REGULATIONS. No part of the proceeds of any Loans are intended
to be or will be used for "purchasing" or "carrying" any "margin stock" within
the respective
33
meanings of each of the quoted terms under Regulations U and X, or for any
purpose which violates the provisions of the Regulations of the Board of
Governors of the Federal Reserve System. If requested by any Bank or the
Administrative Agent, the Borrower will furnish to the Administrative Agent and
each Bank a statement to the foregoing effect in conformity with the
requirements of FR Form U-1 referred to in said Regulation U.
3.11 ERISA. No Reportable Event has occurred during the five-year period
prior to the date on which this representation is made or deemed made with
respect to any Plan, and each Plan has complied in all material respects with
the applicable provisions of ERISA and the Code. The present value of all
accrued benefits under each Single Employer Plan maintained by the Borrower or
any Commonly Controlled Entity (based on those assumptions used to fund the
Plans) did not, as of the last annual valuation date prior to the date on which
this representation is made or deemed made, exceed the value of the assets of
such Plan allocable to such accrued benefits. There are no Multiemployer Plans.
Neither the Borrower nor any Commonly Controlled Entity has had a complete or
partial withdrawal from any Multiemployer Plan. The present value (determined
using actuarial and other assumptions which are reasonable in respect of the
benefits provided and the employees participating) of the liability of the
Borrower and each Commonly Controlled Entity for post retirement benefits to be
provided to their current and former employees under Plans which are welfare
benefit plans (as defined in Section 3(1) of ERISA) does not, in the aggregate,
exceed the assets under all such Plans allocable to such benefits by an amount
in excess of $0.
3.12 INVESTMENT COMPANY ACT; OTHER REGULATIONS. (a) 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 (the
"Investment Company Act").
(b) Each of the Subsidiaries of the Borrower listed on Schedule IV hereto
is duly registered as an investment adviser under the Investment Advisers Act of
1940 (the "Advisers Act"). None of the other Subsidiaries of the Borrower or the
Borrower is an "investment adviser" within the meaning of the Advisers Act and
the rules and regulations promulgated thereunder. Each entity for which any
Subsidiary of the Borrower acts as an investment adviser and which is required
to be registered as an "investment company" under the Investment Company Act is
duly registered as such thereunder.
(c) Except for the Subsidiaries of the Borrower listed on Schedule V
hereto, neither the Borrower nor any of its Subsidiaries is required to be duly
registered as a broker-dealer under the Securities and Exchange Act of 1934, as
amended, and such Subsidiaries so listed are duly registered as such.
(d) Each of the Borrower and its Subsidiaries is duly registered, licensed
or qualified as an investment adviser or broker-dealer in each State of the
United States where the conduct of its business requires such registration,
licensing or qualification and is in compliance in all material respects with
all Federal and State laws requiring such registration, licensing or
qualification, except to the extent where the failure to be so registered,
licensed or qualified or to be in such compliance will not have a Material
Adverse Effect.
34
3.13 INVESTMENT ADVISORY AGREEMENTS. Each of the investment advisory
agreements, distribution agreements and shareholder servicing contracts to which
the Borrower or any of its Subsidiaries is a party is a legal, valid and binding
obligation of the parties thereto enforceable against such parties in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law); and neither
the Borrower nor any of its Subsidiaries is in breach or violation of or in
default under any such agreement or contract in any material respect which would
individually or in the aggregate have a Material Adverse Effect.
3.14 SUBSIDIARIES. The Subsidiaries listed on Schedule VI hereto constitute
all the Subsidiaries of the Borrower at the Closing Date, other than any
Subsidiary having a net worth of less than $5,000,000; provided, that the
aggregate net worth of all Subsidiaries not listed on Schedule VI may not exceed
$25,000,000.
3.15 PURPOSE OF LOANS. The proceeds of the Revolving Credit Loans and the
Bid Loans, if any, shall be used for general corporate purposes, including
commercial paper backup.
3.16 ENVIRONMENTAL MATTERS. To the best knowledge of the Borrower:
(a) The Properties and all operations at the Properties are in
compliance in all material respects with all applicable Environmental Laws,
and there is no contamination at, under or about the Properties, or
violation of any Environmental Law with respect to the Properties or the
business conducted at the Properties which could materially interfere with
the continued operation of the Properties.
(b) Neither the Borrower nor any of its Subsidiaries has received any
notice of violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the business
conducted at the Properties, nor does the Borrower have knowledge or reason
to believe that any such notice will be received or is being threatened
except insofar as such notice or threatened notice, or any aggregation
thereof, does not involve a matter or matters that is or are reasonably
likely to cause a Material Adverse Effect.
(c) No judicial proceedings or governmental or administrative action
is pending, or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any of its Subsidiaries is or
will be named as a party with respect to the Properties or the business
conducted at the Properties, nor are there any consent decrees or other
decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental
Law with respect to the Properties or such business except insofar as such
proceeding, action, decree, order or other requirement, or any aggregation
thereof, is not reasonably likely to cause a Material Adverse Effect.
35
3.17 ACCURACY AND COMPLETENESS OF INFORMATION. To the best of the
Borrower's knowledge, the documents furnished and the statements made in writing
to the Banks by the Borrower in connection with the negotiation, preparation or
execution of this Agreement taken as a whole do not contain any untrue statement
of fact material to the credit worthiness of the Borrower or omit to state any
such material fact necessary in order to make the statements contained therein
not misleading, in either case which has not been corrected, supplemented or
remedied by subsequent documents furnished or statements made in writing to the
Banks prior to the date hereof.
SECTION 4. CONDITIONS PRECEDENT
4.1 CONDITIONS TO EXECUTION. The parties acknowledge that the execution,
delivery and effectiveness of this Agreement is subject to the satisfaction of
the following conditions precedent:
(a) CREDIT AGREEMENT. The Administrative Agent shall have received
this Agreement, executed and delivered by a Responsible Officer of the
Borrower with a counterpart for each Bank, and such officer shall be
covered by an incumbency certificate which has been executed and delivered
to the Administrative Agent.
(b) INCUMBENCY CERTIFICATES. The Administrative Agent shall have
received an Incumbency Certificate of the Borrower as of the Closing Date,
dated the Closing Date, executed by one of its Responsible Officers and its
Secretary or Assistant Secretary.
(c) CORPORATE PROCEEDINGS. The Administrative Agent shall have
received a copy of the resolutions of the Board of Directors of the
Borrower as of the Closing Date authorizing (i) the execution, delivery and
performance of this Agreement and (ii) the borrowings contemplated
hereunder, certified by the Secretary or an Assistant Secretary as of the
Closing Date, which certificate states that the resolutions thereby
certified have not been amended, modified, revoked or rescinded.
(d) CORPORATE DOCUMENTS. The Administrative Agent shall have received
copies of the certificate of incorporation and by-laws of the Borrower as
of the Closing Date, certified as of the Closing Date as complete and
correct copies thereof by the Secretary or an Assistant Secretary of the
Borrower.
(e) FEES. The Banks, the Administrative Agent and J.P. Morgan
Securities Inc. shall have received all fees required to be paid, and all
expenses for which invoices have been presented.
(f) LEGAL OPINIONS. The Administrative Agent shall have received the
executed legal opinions of (i) Morrison & Foerster, counsel to the Borrower
and (ii) Murray L. Simpson, General Counsel to the Borrower, and each such
legal opinion shall be satisfactory in form and substance to the
Administrative Agent and its counsel.
(g) NO DEFAULT. No Default or Event of Default shall have occurred and
be continuing as of the Closing Date.
36
(h) REPRESENTATIONS AND WARRANTIES. All representations and warranties
contained in Section 3 shall be true and correct in all material respects
on the Closing Date as if made on the Closing Date.
(i) EXISTING CREDIT AGREEMENT. The Administrative Agent shall have
received evidence reasonably satisfactory to it that all amounts
outstanding, if any, under the Existing Credit Agreement have been repaid
in full as of the Closing Date.
(j) REVOLVING CREDIT NOTES. The Administrative Agent shall have
received, for the account of each Bank that has requested a Revolving
Credit Note pursuant to subsection 2.4(e), a Revolving Credit Note
conforming to the requirements of this Agreement, and executed by a duly
authorized officer of the Borrower.
4.2 CONDITIONS TO EACH LOAN. The agreement of each Bank to make any Loan
requested to be made by it on any date is subject to the satisfaction of the
following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties made by the Borrower in or pursuant to the Loan Documents (or,
in the case of any Loan requested to be made hereunder the proceeds of
which are solely to be used to repay any then outstanding Loans, solely the
representation contained in subsection 3.2), shall be true and correct in
all material respects on and as of such date as if made on and as of such
date, except to the extent such representations and warranties expressly
relate to an earlier date, in which case such representations and
warranties shall be true and correct in all material respects as of such
earlier date.
(b) NO DEFAULT. No Default or Event of Default shall have occurred and
be continuing on such date or after giving effect to the Loans requested to
be made on such date.
(c) BID LOAN CONFIRMATION. With respect to any Bid Loan, a Bid Loan
Confirmation shall have been delivered in accordance with subsection
2.3(b)(iv).
Each borrowing by the Borrower hereunder shall constitute a representation
and warranty by the Borrower as of the date of such Loan that the conditions
contained in this subsection 4.2 have been satisfied.
SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that from and after the Closing Date, so long as
the Commitments remain in effect, any Loan remains outstanding or any other
amount is owing to any Bank or the Administrative Agent hereunder:
5.1 FINANCIAL STATEMENTS. The Borrower shall furnish to the Administrative
Agent (for distribution to each Bank):
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of the Borrower, a copy of the consolidated balance
sheet of the Borrower and
37
its consolidated Subsidiaries as at the end of such year and the related
consolidated statements of income and retained earnings and of cash flows
for such year, setting forth in each case in comparative form the figures
for the previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope of
the audit, by PricewaterhouseCoopers LLP or other independent certified
public accountants of nationally recognized standing; and
(b) as soon as available, but in any event within 10 days after
delivery of the financial statements described in paragraph (a) above, the
corresponding consolidating balance sheet as at the end of such year and
the related consolidating statements of income and retained earnings and of
cash flows for such year, all showing separately the principal lines of
business conducted by separate Subsidiaries or groups of Subsidiaries to
the extent requested by the Administrative Agent, certified by a
Responsible Officer of the Borrower as being fairly stated in all material
respects when considered in relation to the consolidated financial
statements of the Borrower and its consolidated Subsidiaries, taken as a
whole;
(c) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, the unaudited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such quarter
and the related unaudited consolidated statements of income and retained
earnings and of cash flows of the Borrower and its consolidated
Subsidiaries for such quarter and the portion of the fiscal year through
the end of such quarter, setting forth in each case in comparative form the
figures for the previous year, certified by a Responsible Officer as being
fairly stated in all material respects when considered in relation to the
consolidated financial statements of the Borrower and its consolidated
Subsidiaries (subject to normal year-end audit adjustments); and
(d) as soon as available, but in any event within 10 days after
delivery of the financial statements described in paragraph (c) above, the
corresponding consolidating balance sheet as at the end of such quarter and
the related consolidating statements of income and retained earnings and of
cash flows for the portion of the fiscal year through such date, all
showing separately the entities described in paragraph (b) above, certified
by a Responsible Officer of the Borrower as being fairly stated in all
material respects when considered in relation to the consolidated financial
statements of the Borrower for such quarter taken as a whole;
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
Any delivery required to be made pursuant to subsections 5.1(a), (b), (c)
or (d) shall be deemed to have been made on the date on which the Borrower posts
such delivery on the Internet at the website of the Borrower or when such
delivery is posted on the SEC's website on the Internet at www.sec.gov; PROVIDED
that the Borrower shall have given notice of any such posting to the Banks,
which notice shall include a link to the applicable website to which such
38
posting was made; PROVIDED, FURTHER, that the Borrower shall deliver paper
copies of any delivery referred to in subsections 5.1(a), (b), (c) or (d) to any
Bank that requests the Borrower to deliver such paper copies until notice to
cease delivering such paper copies is given by such Bank.
5.2 CERTIFICATES; OTHER INFORMATION. The Borrower shall furnish to the
Administrative Agent (for distribution to each Bank):
(a) concurrently with the delivery of the financial statements
referred to in subsections 5.1(a) and 5.1(c), a certificate of a
Responsible Officer of the Borrower stating that, to the best of such
officer's knowledge, the Borrower during such period has observed or
performed all of its covenants and other agreements, and satisfied every
condition, contained in this Agreement to be observed, performed or
satisfied by it, and that such officer has obtained no knowledge of any
Default or Event of Default except as specified in such certificate and
(ii) with respect to the covenants contained in subsection 6.1, setting
forth such calculations as are necessary to demonstrate compliance with
such covenants;
(b) within five days after the same are sent, copies of all financial
statements and reports which the Borrower sends to its stockholders, and
within five days after the same are filed, copies of all financial
statements and reports which the Borrower may make to, or file with, the
SEC or any successor or analogous Governmental Authority; and
(c) promptly, such additional financial and other information as any
Bank may from time to time reasonably request.
5.3 PAYMENT OF OBLIGATIONS. The Borrower shall, and shall cause each of its
Subsidiaries to, pay, discharge or otherwise satisfy at or before maturity or
before they become delinquent, as the case may be, all its obligations of
whatever nature, except where the amount or validity thereof is currently being
contested in good faith by appropriate proceedings and reserves in conformity
with GAAP with respect thereto have been provided on the books of the Borrower
or its Subsidiaries, as the case may be.
5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. The Borrower shall,
and shall cause each of its Subsidiaries to, continue to engage in business of
the same general type as now conducted by the Borrower and its Subsidiaries and
preserve, renew and keep in full force and effect its corporate existence and
take all reasonable action to maintain all rights, registrations, licenses,
privileges and franchises necessary or desirable in the normal conduct of its
business (including, without limitation, all such registrations under the
Advisers Act and all material investment advisory agreements, distribution
agreements and shareholder servicing contracts), except as otherwise permitted
pursuant to subsection 6.5; comply, and to the extent reasonably within its
control cause each Fund to comply, with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply therewith could
not, in the aggregate, have a Material Adverse Effect.
5.5 MAINTENANCE OF PROPERTY; INSURANCE. The Borrower shall, and shall cause
each of its Subsidiaries to, keep all property useful and necessary in its
business in good working
39
order and condition; maintain with financially sound and reputable insurance
companies insurance on all its property in at least such amounts and against at
least such risks as are usually insured against in the same general area by
companies engaged in the same or a similar business; and furnish to the
Administrative Agent, upon written request, full information as to the insurance
carried.
5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. The Borrower
shall, and shall cause each of its Subsidiaries to, keep proper books of records
and account in which full, true and correct entries in conformity with GAAP or
with respect to foreign Subsidiaries in conformity with appropriate local
accounting practices, and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and permit
representatives of any Bank to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any reasonable
time and as often as may reasonably be desired and to discuss the business,
operations, properties and financial and other condition of the Borrower and its
Subsidiaries with officers and employees of the Borrower and its Subsidiaries
and with its independent certified public accountants.
5.7 NOTICES. The Borrower shall promptly give notice to the Administrative
Agent, which shall promptly give notice to each Bank, of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries, which default or
event of default could reasonably be expected to have a Material Adverse
Effect, or (ii) litigation, investigation or proceeding which may exist at
any time between the Borrower or any of its Subsidiaries and any
Governmental Authority or any Fund, which in either case, if not cured or
if adversely determined, as the case may be, would have a Material Adverse
Effect;
(c) any litigation or proceeding affecting the Borrower or any of its
Subsidiaries or any "affiliated person" of the Borrower or any of its
Subsidiaries, within the meaning of the Investment Company Act, in which
the amount involved is $10,000,000 or more and not covered by insurance or
in which injunctive or similar relief is sought or which could reasonably
be expected to have a Material Adverse Effect;
(d) the following events, as soon as possible and in any event within
30 days after the Borrower knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect to
any Plan, or any withdrawal from, or the termination, Reorganization or
Insolvency of any Multiemployer Plan or (ii) the institution of proceedings
or the taking of any other action by the PBGC or the Borrower or any
Commonly Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the terminating, Reorganization or Insolvency of, any
Plan;
(e) any suspension or termination of the registration of any
Subsidiary of the Borrower as an investment adviser under the Advisers Act
or any cancellation or expiration without renewal of any investment
advisory agreement, distribution agreement or shareholder servicing
contract to which the Borrower or any of its Subsidiaries is a party
40
the revenues under which have exceeded in the most recent fiscal year of
the Borrower $25,000,000; and
(f) a development or event which could reasonably be expected to have
a Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower proposes to take with
respect thereto.
5.8 ENVIRONMENTAL LAWS. The Borrower shall, and shall cause each of its
Subsidiaries to:
(a) Comply with, and ensure compliance by all tenants and subtenants,
if any, with, all applicable Environmental Laws and obtain and comply in
all material respects with and maintain, and ensure that all tenants and
subtenants obtain and comply with and maintain, any and all licenses,
approvals, notifications, registrations or permits required by applicable
Environmental Laws except to the extent that failure to do so could not be
reasonably expected to have a Material Adverse Effect;
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all
lawful orders and directives of all Governmental Authorities regarding
Environmental Laws except to the extent that the same are being contested
in good faith by appropriate proceedings and the pendency of such
proceedings could not be reasonably expected to have a Material Adverse
Effect; and
(c) Defend, indemnify and hold harmless the Administrative Agent and
the Banks, and their respective employees, agents, officers and directors,
from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature known
or unknown, contingent or otherwise, arising out of, or in any way relating
to the violation of, noncompliance with or liability under any
Environmental Laws applicable to the operations of the Borrower or the
Properties, or any orders, requirements or demands of Governmental
Authorities related thereto, including, without limitation, attorney's and
consultant's fees, investigation and laboratory fees, response costs, court
costs and litigation expenses, except to the extent that any of the
foregoing arise out of the gross negligence or willful misconduct of the
party seeking indemnification therefor. This indemnity shall continue in
full force and effect regardless of the termination of this Agreement.
SECTION 6. NEGATIVE COVENANTS
The Borrower hereby agrees that from and after the Closing Date, so long as
the Commitments remain in effect, any Loan remains outstanding or any other
amount is owing to any Bank or the Administrative Agent hereunder:
6.1 FINANCIAL CONDITION COVENANTS. The Borrower shall not:
41
(a) INTEREST COVERAGE. Permit for any period of four consecutive
fiscal quarters of the Borrower commencing on or after the Closing Date (or
for any of the periods of one, two and three consecutive fiscal quarters of
the Borrower commencing on or immediately after the Closing Date) the ratio
of (i) the sum of Consolidated Net Income for such period plus income taxes
deducted in determining such Consolidated Net Income plus Consolidated
Interest Expense for such period to (ii) Consolidated Interest Expense for
such period to be less than 4.0 to 1.
(b) MAINTENANCE OF CONSOLIDATED WORKING CAPITAL. Permit Consolidated
Working Capital on any date on or after the Closing Date to be less than
$100,000,000.
(c) MAXIMUM CAPITALIZATION RATIO. Permit the Capitalization Ratio at
any time to be greater than 55%.
6.2 LIMITATION ON INDEBTEDNESS. The Borrower shall not create, incur,
assume or suffer to exist any secured Indebtedness, and shall not permit any of
its Included Subsidiaries to create, incur, assume or suffer to exist any
Indebtedness, except for:
(a) Indebtedness of the Borrower or any of its Subsidiaries in an
aggregate principal amount not exceeding as to the Borrower and its
Included Subsidiaries $50,000,000 at any time outstanding;
(b) Indebtedness outstanding on the Closing Date and listed on
Schedule VII or reflected in the financial statements referred to in
subsection 3.1;
(c) Indebtedness of a corporation which becomes a Subsidiary after the
date hereof, PROVIDED that (i) such Indebtedness existed at the time such
corporation became a Subsidiary and was not created in anticipation thereof
and (ii) immediately after giving effect to the acquisition of such
corporation by the Borrower or any existing Subsidiary no Default or Event
of Default shall have occurred and be continuing;
(d) unsecured Indebtedness of any Subsidiary owing to the Borrower or
any other Subsidiary or secured Indebtedness of any Subsidiary owing to the
Borrower;
(e) Indebtedness created by this Agreement and by the 364 Day
Facility; and
(f) Indebtedness consisting of the obligations of the Borrower and FTC
under any Lease Financing Arrangement.
6.3 LIMITATION ON LIENS. The Borrower shall not, and shall not permit any
of its Included Subsidiaries to, create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested in good faith
by appropriate proceedings, PROVIDED that adequate reserves with respect thereto
are maintained on the books of the Borrower or its Subsidiaries, as the case may
be, in conformity with GAAP;
42
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's or
other like Liens arising in the ordinary course of business which are not
overdue for a period of more than 60 days or which are being contested in good
faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(d) deposits to secure the performance of bids, trade contracts (other than
for borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate, are not
substantial in amount and which do not in any case materially detract from the
value of the property subject thereto or materially interfere with the ordinary
conduct of the business of the Borrower or such Subsidiary;
(f) Liens in existence on the Closing Date listed on Schedule VIII or
described in the financial statements referred to in subsection 3.1 or in any
notes thereto, securing Indebtedness permitted by subsection 6.2(b), provided
that no such Lien is spread to cover any additional property after the Closing
Date and that the amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Borrower and its Subsidiaries
permitted by subsection 6.2(a) incurred to finance the acquisition of fixed or
capital assets, provided that (i) such Liens shall be created substantially
simultaneously with the acquisition of such fixed or capital assets, (ii) such
Liens do not at any time encumber any property other than the property financed
by such Indebtedness, (iii) the amount of Indebtedness secured thereby is not
increased and (iv) the principal amount of Indebtedness secured by any such Lien
shall at no time exceed the purchase price of such property;
(h) Liens on the property or assets of a corporation which becomes a
Subsidiary after the date hereof securing Indebtedness permitted by subsection
6.2(c), provided that (i) such Liens existed at the time such corporation became
a Subsidiary and were not created in anticipation thereof, (ii) any such Lien is
not spread to cover any property or assets of such corporation after the time
such corporation becomes a Subsidiary, and (iii) the amount of Indebtedness
secured thereby is not increased;
(i) Liens (not otherwise permitted hereunder) which secure obligations in
an aggregate amount at any one time outstanding not exceeding as to the Borrower
and its Included Subsidiaries an amount equal to 5% of the Consolidated Net
Worth, measured at the time of the creation, incurrence or assumption of any
such Lien and based upon the Consolidated Net Worth as at the end of the most
recently completed fiscal quarter of the Borrower for which financial statements
have been furnished to the Administrative Agent pursuant to subsection 5.1;
43
(j) Liens on "margin stock" within the meaning of Regulation U to the
extent that margin stock would, but for this paragraph (j), represent more than
25% of the value of the assets subject to this subsection 6.3;
(k) Liens on cash or cash equivalents to secure obligations of the Borrower
and its Subsidiaries in respect of any interest rate and currency hedging
agreements entered into in the ordinary course of business and not for
speculative purposes, and Liens with respect to hedging accounts maintained with
dealers of NYMEX or similar contracts which require the maintenance of cash
margin account balances; and
(l) Liens provided for or required to be granted by the Borrower or FTC
under any Lease Financing Arrangement, which Liens shall not limit or apply
against the right of the Borrower and its Included Subsidiaries to create,
incur, assume or permit to exist Liens that comply with the provisions of
paragraphs (a) through (k) of this subsection 6.3.
6.4 LIMITATIONS ON FUNDAMENTAL CHANGES. The Borrower shall not, and shall
not permit any of its Subsidiaries to, enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, assign, transfer or
otherwise dispose of, all or substantially all of its property, business or
assets, except, so long as no Default or Event of Default has occurred and is
continuing or would result therefrom:
(a) that the Borrower may enter into any merger, consolidation or
amalgamation for the purpose of effecting any corporate or tax
reorganization of the Borrower and the Subsidiaries or for the purpose of
effecting any investment permitted under subsection 6.6, PROVIDED that such
merger, consolidation or amalgamation is not with any Banking Subsidiary,
Insurance Subsidiary or Real Estate Subsidiary (or with any other Person
which is principally engaged in the banking or trust, insurance or real
estate business), that the ownership of the Borrower (or its successor) is
not materially different after such transaction from what it was prior
thereto, that the Borrower (or its successor) remains the holding company
for the Subsidiaries of the Borrower prior thereto, and that, if the
Borrower is not the successor corporation in such transaction, such
successor corporation is a corporation organized and validly existing under
the laws of the United States or any state thereof and, by operation of law
or otherwise, assumes the obligations of the Borrower hereunder and such
organization and assumption are evidenced by an opinion of counsel to such
successor satisfactory in form and substance to the Administrative Agent;
and
(b) that any Subsidiary of the Borrower may enter into any such
transaction for the purpose of effecting any corporate or tax
reorganization of the Borrower and its Subsidiaries or for the purpose of
effecting any sale or other disposition of any of its property, business or
assets permitted under subsection 6.5 or any investment permitted under
subsection 6.6, PROVIDED that such merger, consolidation or amalgamation is
not with any Banking Subsidiary, Insurance Subsidiary or Real Estate
Subsidiary (or with any other Person which is principally engaged in the
banking or trust, insurance or real estate business), unless such
Subsidiary is also a Banking Subsidiary, Insurance Subsidiary or Real
Estate Subsidiary, as the case may be.
44
6.5 LIMITATION ON SALE OF ASSETS. The Borrower shall not, and shall not
permit any of its Included Subsidiaries to, make any Asset Disposition, unless
the Revolving Credit Loans are reduced to the extent required pursuant to
subsection 2.7 and the Borrower makes the mandatory prepayment, if any, required
in connection therewith pursuant to subsection 2.7.
6.6 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. The Borrower shall not,
and shall not permit any of its Included Subsidiaries to, make any advance,
loan, extension of credit or capital contribution to, or purchase any stock,
bonds, notes, debentures or other securities of or any assets constituting a
business unit of, or make any other investment in (any of the foregoing, an
"investment"), any Person, except for:
(a) investments in marketable securities, liquid investments and other
financial instruments that are acquired for investment purposes and that
have a value which may be readily established, including any such
investment that may be readily sold or otherwise liquidated in any Fund or
in any investment company managed by any Joint Venture pursuant to an
investment advisory agreement;
(b) any investment in any Included Subsidiary of the Borrower or in
any other Person principally engaged in the business of providing
investment advisory services and related (including distribution and
shareholder servicing) services, PROVIDED that, after giving effect to any
such investment in any such other Person, such other Person is a Subsidiary
or a Joint Venture;
(c) any investment in any Banking Subsidiary or in any other Person
which, after giving effect to any such investment, is a Banking Subsidiary;
(d) extensions of trade credit in the ordinary course of business;
(e) loans to officers of the Borrower or any of its Subsidiaries
consistent with past practices of the Borrower and its Subsidiaries, and
advances to employees of the Borrower or its Subsidiaries for travel,
entertainment and relocation expenses in the ordinary course of business;
(f) investments in the Finance Subsidiary;
(g) investments constituting non-cash consideration received in
connection with an Asset Disposition, PROVIDED that such non-cash
consideration shall not exceed 25% of the aggregate consideration received
for such Asset Disposition; and PROVIDED FURTHER that the aggregate amount
of any such non-cash consideration with respect to Asset Dispositions shall
not exceed $10,000,000 at any one time outstanding; and
(h) other investments in an aggregate amount as to the Borrower and
its Subsidiaries (other than the Banking Subsidiaries and the Finance
Subsidiary) not exceeding $125,000,000 for the period since the Closing
Date.
6.7 TRANSACTIONS WITH AFFILIATES. The Borrower shall not, and shall not
permit any of its Subsidiaries to, enter into any transaction, including,
without limitation, any purchase, sale, lease or exchange of property or the
rendering of any service, with any Affiliate or any
45
Subsidiary less than 80% owned, directly or indirectly, by the Borrower, unless
such transaction is otherwise permitted under this Agreement, is in the ordinary
course of the Borrower's or such Subsidiary's business and is upon fair and
reasonable terms no less favorable to the Borrower or such Subsidiary, as the
case may be, than it would obtain in a comparable arm's length transaction with
a Person not an Affiliate.
6.8 FISCAL YEAR. The Borrower shall not permit the fiscal year of the
Borrower to end on a day other than September 30, except with the consent of the
Majority Banks (which consent shall not be unreasonably withheld and which
consent may be conditioned upon adjusting the covenants in a manner to give each
of the parties hereto substantially the same protection and benefits as were in
effect prior to any such change in the fiscal year of the Borrower).
6.9 RESTRICTIONS AFFECTING SUBSIDIARIES. The Borrower shall not, and shall
not permit any of its Included Subsidiaries to, enter into, or suffer to exist,
any agreement with any Person other than the Banks which prohibits or limits the
ability of any Included Subsidiary to (a) pay dividends or make other
distributions or pay any Indebtedness owed to the Borrower or any other Included
Subsidiary, (b) make loans or advances to the Borrower or any other Included
Subsidiary or (c) transfer any of its properties or assets to the Borrower or
any other Included Subsidiary. Notwithstanding the foregoing, the provisions of
this subsection shall not apply to the obligations of the Borrower and FTC under
any Lease Financing Arrangement.
SECTION 7. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan when due
in accordance with the terms hereof; or the Borrower shall fail to pay any
interest on any Loan, or any other amount payable hereunder, within five
days after any such interest or other amount becomes due in accordance with
the terms hereof; or
(b) Any representation or warranty made or deemed made by the Borrower
herein or in any other Loan Document or which is contained in any
certificate, document or financial or other statement furnished at any time
under or in connection with this Agreement shall prove to have been
incorrect in any material respect on or as of the date made or deemed made;
or
(c) The Borrower shall default in the observance or performance of any
agreement contained in subsection 6.1 or 6.4; or
(d) The Borrower shall default in the observance or performance of any
other agreement contained in this Agreement (other than as provided in
paragraphs (a) through (c) of this Section), and such default shall
continue unremedied for a period of 30 days or, if longer, a period ending
15 days after the giving of notice of such default by the Administrative
Agent to the Borrower (or, in the case of any such default in the
observance or performance of subsection 5.7(a), for a period of 30 days
after a Responsible Officer has knowledge of a Default or Event of Default
as to which notice is required by said subsection); or
46
(e) The Borrower or any of its Subsidiaries shall (i) default in any
payment of principal of or interest, regardless of the amount, due in
respect of any Indebtedness other than amounts due hereunder, including all
of the Indebtedness issued under the same indenture or other agreement, of
$75,000,000 or greater or in the payment of any Guarantee Obligation with
respect to an amount of $75,000,000 or greater, beyond the period of grace,
if any, provided in the instrument or agreement under which such
Indebtedness or Guarantee Obligation was created; or (ii) default in the
observance or performance of any other agreement or condition relating to
any such Indebtedness or Guarantee Obligation or contained in any
instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or
other event or condition is to cause, or to permit the holder or holders of
such Indebtedness or beneficiary or beneficiaries of such Guarantee
Obligation (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity or
such Guarantee Obligation to become payable; or
(f) (i) The Borrower or any of its Subsidiaries, except for
Non-Material Subsidiaries, shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts,
or (B) seeking appointment of a receiver, trustee, custodian or other
similar official for it or for all or any substantial part of its assets,
or the Borrower or any of its Subsidiaries, except for Non-Material
Subsidiaries, shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against the Borrower or any of
its Subsidiaries, except for Non-Material Subsidiaries, any case,
proceeding or other action of a nature referred to in clause (i) above
which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced against
the Borrower or any of its Subsidiaries, except for Non-Material
Subsidiaries, any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against all
or any substantial part of its assets which results in the entry of an
order for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof; or
(iv) the Borrower or any of its Subsidiaries, except for Non-Material
Subsidiaries, shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in
clause (i), (ii), or (iii) above; or (v) the Borrower or any of its
Subsidiaries, except for Non-Material Subsidiaries, shall generally not, or
shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan,
(iii) a Reportable Event shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall
47
be appointed, to administer or to terminate, any Single Employer Plan,
which Reportable Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Majority Banks, likely to
result in the termination of such Plan for purposes of Title IV of ERISA,
(iv) any Single Employer Plan shall terminate for purposes of Title IV of
ERISA, (v) the Borrower or any Commonly Controlled Entity shall, or in the
reasonable opinion of the Majority Banks is likely to, incur any liability
in connection with a withdrawal from, or the Insolvency or Reorganization
of, a Multiemployer Plan or (vi) any other event or condition shall occur
or exist, with respect to a Plan; and in each case in clauses (i) through
(vi) above, such event or condition, together with all other such events or
conditions, if any, could subject the Borrower or any of its Subsidiaries
to any tax, penalty or other liabilities in the aggregate material in
relation to the business, operations, property or financial or other
condition of the Borrower and its Subsidiaries taken as a whole; or
(h) One or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving in the aggregate a liability
(not paid or fully covered by insurance) of $75,000,000 or more and all
such judgments or decrees shall not have been vacated, discharged, stayed
or bonded pending appeal within 60 days from the entry thereof;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments to the Borrower shall immediately terminate and
the Loans made to such Borrower hereunder (with accrued interest thereon) and
all other amounts owing by the Borrower under this Agreement and the Notes shall
immediately and automatically become due and payable, and (B) if such event is
any other Event of Default, either or both of the following actions may be
taken: (i) with the consent of the Majority Banks, the Administrative Agent may,
or upon the request of the Majority Banks, the Administrative Agent shall, by
notice to the Borrower declare the Commitments of the Borrower to be terminated
forthwith, whereupon such Commitments shall immediately terminate; and (ii) with
the consent of the Majority Banks, the Administrative Agent may, or upon the
request of the Majority Banks, the Administrative Agent shall, by notice of
default to the Borrower, declare the Loans hereunder made (with accrued interest
thereon) and all other amounts owing by the Borrower under this Agreement and
the Notes to be due and payable forthwith, whereupon the same shall immediately
become due and payable. Except as expressly provided above in this Section,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived.
SECTION 8. THE AGENTS
8.1 APPOINTMENT. Each Bank hereby irrevocably designates and appoints JPMCB
as Administrative Agent, Bank of America, N.A. and The Bank of New York, as
Co-Syndication Agents and Citicorp USA Inc. and BNP Paribas, as Co-Documentation
Agents for such Bank under this Agreement, and each such Bank irrevocably
authorizes JPMCB, as the Administrative Agent, Bank of America, N.A. and The
Bank of New York, as Co-Syndication Agents and Citicorp USA Inc. and BNP Paribas
as Co-Documentation Agents for such Bank, to take such action on its behalf
under the provisions of this Agreement and to exercise such powers and perform
such duties as are expressly delegated to the Administrative Agent, the
Co-
48
Syndication Agents or the Co-Documentation Agents, as the case may be, by the
terms of this Agreement, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement, neither the Administrative Agent, the Co-Syndication Agents nor
the Co-Documentation Agents shall have any duties or responsibilities, except
those expressly set forth herein, or any fiduciary relationship with any Bank,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent, the Co-Syndication Agents or
the Co-Documentation Agents in such respective capacities.
8.2 DELEGATION OF DUTIES. The Administrative Agent, the Co-Syndication
Agents or the Co-Documentation Agents may execute any of their respective duties
under this Agreement by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
Neither the Administrative Agent, the Co-Syndication Agents nor the
Co-Documentation Agents shall be responsible for the negligence or misconduct of
any agents or attorneys-in-fact selected by it with reasonable care.
8.3 EXCULPATORY PROVISIONS. Neither the Administrative Agent, the
Co-Syndication Agents, the Co-Documentation Agents nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or any other Loan Document
(except for its or such Person's own gross negligence or willful misconduct) or
(ii) responsible in any manner to any of the Banks for any recitals, statements,
representations or warranties made by the Borrower or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Administrative Agent, the Co-Syndication Agents or the Co-Documentation
Agents under or in connection with, this Agreement or any other Loan Document or
for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or for any failure of the Borrower to perform its
obligations hereunder or thereunder. Neither the Administrative Agent, the
Co-Syndication Agents nor the Co-Documentation Agents shall be under any
obligation to any Bank to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of the Borrower.
8.4 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation believed by any of them to be genuine and correct and
to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including, without limitation, counsel
to the Borrower), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Majority Banks as it deems appropriate or it shall first be indemnified to its
satisfaction by the Banks against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully
49
protected in acting, or in refraining from acting, under this Agreement in
accordance with a request of the Majority Banks, and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the Banks.
8.5 NOTICE OF DEFAULT. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Bank or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof to the Banks. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Majority Banks; provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Banks.
8.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER BANKS. Each Bank
expressly acknowledges that none of the Administrative Agent or any of its
respective officers, directors, employees, agents, attorneys-in-fact or
Affiliates has made any representations or warranties to it and that no act by
the Administrative Agent hereinafter taken, including any review of the affairs
of the Borrower, shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Bank. Each Bank represents to the Administrative
Agent that it has, independently and without reliance upon the Administrative
Agent or any other Bank, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Borrower and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Bank also represents that it will,
independently and without reliance upon the Administrative Agent or any other
Bank, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action under this Agreement or its Note(s), and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrower. Except for notices, reports and other documents expressly required to
be furnished to the Banks by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
the Borrower which may come into the possession of the Administrative Agent or
any of its respective officers, directors, employees, agents, attorneys-in-fact
or Affiliates.
8.7 INDEMNIFICATION. The Banks agree to indemnify the Administrative Agent
in its respective capacities as such (to the extent not reimbursed by the
Borrower and without limiting the obligation of the Borrower to do so), ratably
according to the respective amounts of their original Commitments, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs (including, without limitation, the allocated
cost of internal counsel), expenses or disbursements of any kind whatsoever
which may at any time (including, without limitation, at any time following the
repayment of the Loans) be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or
50
arising out of this Agreement, the Notes or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by the Administrative Agent under or in
connection with any of the foregoing; provided that no Bank shall be liable for
the payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements to the
extent resulting from the Administrative Agent's gross negligence or willful
misconduct. The agreements in this subsection shall survive the repayment of the
Loans and all other amounts payable hereunder.
8.8 THE ADMINISTRATIVE AGENT, THE CO-SYNDICATION AGENTS AND THE
CO-DOCUMENTATION AGENTS IN THEIR INDIVIDUAL CAPACITIES. The Administrative
Agent, the Co-Syndication Agents, the Co-Documentation Agents and their
respective Affiliates may make loans to, accept deposits from and generally
engage in any kind of business with the Borrower as though the Administrative
Agent, the Co-Syndication Agents and the Co-Documentation Agents were not the
Administrative Agent, the Co-Syndication Agents and the Co-Documentation Agents,
respectively, hereunder. With respect to the Administrative Agent, the
Co-Syndication Agents or the Co-Documentation Agents, such Loans made or renewed
by the Administrative Agent, the Co-Syndication Agents or the Co-Documentation
Agents, the Administrative Agent, the Co-Syndication Agents or the
Co-Documentation Agents, as the case may be, shall have the same rights and
powers under this Agreement as any Bank and may exercise the same as though it
were not the Administrative Agent, the Co-Syndication Agents or the
Co-Documentation Agents, as the case may be, and the terms "Bank" and "Banks"
shall include the Administrative Agent, the Co-Syndication Agents and the
Co-Documentation Agents in their individual capacities.
8.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may resign as
Administrative Agent upon 30 days' notice to the Banks. If the Administrative
Agent shall resign as Administrative Agent under this Agreement, then the
Majority Banks shall appoint from among the Banks a successor administrative
agent for the Banks, which successor administrative agent shall be approved by
the Borrower, whereupon such successor administrative agent shall succeed to the
rights, powers and duties of the Administrative Agent and the term
"Administrative Agent" shall mean such successor administrative agent effective
upon its appointment, and the former Administrative Agent's rights, powers and
duties as Administrative Agent shall be terminated, without any other or further
act or deed on the part of such former Administrative Agent or any of the
parties to this Agreement. After any retiring Administrative Agent's resignation
as Administrative Agent, the provisions of this subsection shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
8.10 CO-SYNDICATION AGENTS AND CO-DOCUMENTATION AGENTS. Without limiting
any provision contained in this Section 8, none of the Banks identified in this
Agreement as the Co-Syndication Agents or the Co-Documentation Agents shall
have, except as and to the limited extent expressly provided herein, any
obligation, responsibility or duty under this Agreement other than those
applicable to all Banks as such. Each Bank acknowledges that it has not relied,
and will not rely, on any of the Banks so identified in deciding to enter into
this Agreement or in taking or not taking action hereunder.
51
SECTION 9. MISCELLANEOUS
9.1 AMENDMENTS AND WAIVERS. Neither this Agreement, any Note, nor any terms
hereof or thereof may be amended, supplemented or modified except in accordance
with the provisions of this subsection. With the written consent of the Majority
Banks, the Administrative Agent and the Borrower may, from time to time, enter
into written amendments, supplements or modifications hereto and to the Notes
for the purpose of adding any provisions to this Agreement or the Notes or
changing in any manner the rights of the Banks or the Borrower hereunder or
thereunder or waiving, on such terms and conditions as the Administrative Agent
may specify in such instrument, any of the requirements of this Agreement or the
Notes or any Default or Event of Default and its consequences; PROVIDED,
HOWEVER, that no such waiver and no such amendment, supplement or modification
shall (a) reduce the amount or extend the maturity of any Loan, or reduce the
rate or extend the time of payment of interest thereon, or reduce or extend the
time of payment of any fee payable to any Bank hereunder, or change the amount
of any Bank's Commitment, in each case without the written consent of the Bank
affected thereby, or (b) amend, modify or waive any provision of this subsection
or reduce the percentage specified in the definition of Majority Banks, or
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement, in each case without the written consent of
all the Banks, or (c) amend, modify or waive any provision of Section 8 without
the written consent of the then Administrative Agent. Any such waiver and any
such amendment, supplement or modification shall apply equally to each of the
Banks and shall be binding upon the Borrower, the Banks and the Administrative
Agent. In the case of any waiver, the Borrower, the Banks and the Administrative
Agent shall be restored to their former position and rights hereunder, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.
9.2 NOTICES. All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by telecopy or
other electronic transmission), and, unless otherwise expressly provided herein,
shall be deemed to have been duly given or made when delivered by hand, or 3
days after being deposited in the mail, postage prepaid, or, in the case of
telecopy or other electronic notice, when received, addressed as follows in the
case of the Borrower, the Co-Syndication Agents, the Co-Documentation Agents and
the Administrative Agent, and as set forth in Schedule I in the case of the
other parties hereto, or to such other address as may be hereafter notified by
the respective parties hereto:
The Borrower: Franklin Resources, Inc.
One Franklin Parkway
San Mateo, California 94403-1906
Attention: Martin L. Flanagan
President, Member Office of the President
Telecopy: 650-312-3528
With a copy to:
Attention: Leslie M. Kratter
Senior Vice President
52
Telecopy: 650-312-2804
The Chase Manhattan Bank, as
Administrative Agent and a
Co-Agent:
JPMorgan Chase Bank
270 Park Avenue
New York, New York 10017
Attention: Elisabeth Schabe
Telecopy: 212-270-1511
With a copy to:
JPMorgan Chase Bank Agency
Services Corporation
One Chase Manhattan Plaza
Eighth Floor
New York, New York 10081
Attention: Laura Rebecca or Maxeen Pinnock
Telecopy: 212-552-7490
Bank of America, N.A.,
as Co-Syndication Agent:
The Bank of New York,
as Co-Syndication Agent:
Citicorp USA Inc.,
as Co-Documentation Agent:
BNP Paribas, as Co-Documentation Agent:
PROVIDED that any notice, request or demand to or upon the Administrative Agent,
the Co-Syndication Agents or Co-Documentation Agents or the Banks pursuant to
subsection 2.2, 2.6, 2.7 or 2.8 or any notice to the Borrower pursuant to
Section 7 shall not be effective until received.
9.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no delay in
exercising, on the part of the Administrative Agent, the Co-Syndication Agents,
the Co-Documentation Agents or any Bank, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
53
9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement.
9.5 PAYMENT OF EXPENSES AND TAXES. The Borrower agrees (a) to pay or
reimburse the Administrative Agent, the Co-Syndication Agents and the
Co-Documentation Agents for all their reasonable costs and out-of-pocket
expenses incurred in connection with the development, preparation and execution
of, and any amendment, supplement or modification to, this Agreement and any
other documents prepared in connection herewith or therewith, and the
consummation and administration of the transactions contemplated hereby and
thereby, including, without limitation, the reasonable fees and disbursements of
one external counsel to the Administrative Agent, the Co-Syndication Agents, the
Co-Documentation Agents and the Banks, (b) after the occurrence of an Event of
Default, to pay or reimburse each Bank, the Co-Syndication Agents, the
Co-Documentation Agents and the Administrative Agent for all its costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, and any such other documents, including, without
limitation, fees and disbursements of counsel to the Administrative Agent, the
Co-Syndication Agents, the Co-Documentation Agents and to the several Banks and
the allocated cost of internal counsel to the Administrative Agent, (c) to pay,
indemnify, and hold each Bank, the Co-Syndication Agents, the Co-Documentation
Agents and the Administrative Agent harmless from, any and all recording and
filing fees and any and all liabilities with respect to, or resulting from any
delay in paying, stamp, excise and other taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement and any such other documents, and (d) to pay,
indemnify, and hold each Bank, the Co-Syndication Agents, the Co-Documentation
Agents and the Administrative Agent harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement and any such other documents (all the foregoing, collectively, the
"indemnified liabilities"), provided, that the Borrower shall have no obligation
hereunder to the Administrative Agent, the Co-Syndication Agents, the
Co-Documentation Agents or any Bank with respect to indemnified liabilities
arising from (i) the negligence or willful misconduct of the Administrative
Agent or any such Bank or their agents or attorneys-in-fact, (ii) legal
proceedings commenced against the Administrative Agent or any such Bank by any
security holder or creditor thereof arising out of and based upon rights
afforded any such security holder or creditor solely in its capacity as such or
(iii) legal proceedings commenced against any such Bank, the Administrative
Agent, the Co-Syndication Agents or the Co-Documentation Agents by any other
Bank or the Administrative Agent with respect to fee arrangements and other
payment obligations between the Administrative Agent, the Co-Syndication Agents,
the Co-Documentation Agents and the Banks. The agreements in this subsection
shall survive repayment of all amounts payable hereunder. The Administrative
Agent and the Banks agree to provide reasonable details and supporting
information concerning any costs and expenses required to be paid by the
Borrower pursuant to the terms hereof.
9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING BANKS. (a) This
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Banks, the Co-
54
Syndication Agents, the Co-Documentation Agents and the Administrative Agent,
all future holders of Loans or Commitments and their respective successors and
assigns, except that the Borrower may not assign or transfer any of its rights
or obligations under this Agreement without the prior written consent of each
Bank.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any
Bank may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans at the time owing to it) with the prior written consent (any such
consent not to be unreasonably withheld or delayed) of:
(A) the Borrower, provided that no consent of the Borrower shall be
required for an assignment to an assignee that is a Bank immediately prior
to giving effect to such assignment, an Affiliate of a Bank, an Approved
Fund (as defined below) or, if an Event of Default has occurred and is
continuing, any other assignee; and
(B) the Administrative Agent, provided that no consent of the
Administrative Agent shall be required for an assignment to an assignee
that is a Bank immediately prior to giving effect to such assignment.
(ii) Assignments shall be subject to the following additional
conditions:
(A) except in the case of an assignment to a Bank or an Affiliate of a
Bank or an assignment of the entire remaining amount of the assigning
Bank's Commitment, the amount of the Commitment of the assigning Bank
subject to each such assignment (determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 unless each of the
Borrower and the Administrative Agent otherwise consent, provided that no
such consent of the Borrower shall be required if an Event of Default has
occurred and is continuing;
(B) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Bank's rights and obligations under
this Agreement, provided that this clause shall not apply to rights in
respect of outstanding Bid Loans;
(C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500;
(D) the assignee, if it shall not be a Bank prior to such assignment,
shall deliver to the Administrative Agent an Administrative Questionnaire;
and
(E) in the case of an assignment to a CLO (as defined below), the
assigning Bank shall retain the sole right to approve any amendment,
modification or waiver of any provision of this Agreement, PROVIDED that
the Assignment and Assumption between such Bank and such CLO may provide
that such Bank will
55
not, without the consent of such CLO, agree to any amendment, modification
or waiver described in clause (a) or (b) of the proviso to subsection 9.1
that affects such CLO, PROVIDED FURTHER that nothing in this subsection 9.6
shall be construed to waive the requirement that mutual consent of the
appropriate parties in accordance with subsection 9.1 is required in order
to amend or modify the terms of this Agreement.
For the purposes of this subsection 9.6, the terms "Approved Fund" and
"CLO" have the following meanings:
"APPROVED FUND" means (a) a CLO and (b) with respect to any Bank that is a
fund which invests in bank loans and similar extensions of credit, any other
fund that invests in bank loans and similar extensions of credit and is managed
by the same investment advisor as such Bank or by an Affiliate of such
investment advisor.
"CLO" means any entity (whether a corporation, partnership, trust or
otherwise) that is engaged in making, purchasing, holding or otherwise investing
in bank loans and similar extensions of credit in the ordinary course of its
business and is administered or managed by a Bank or an Affiliate of such Bank.
(iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) of this subsection, from and after the effective date
specified in each Assignment and Assumption the assignee thereunder shall
be a party hereto and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Bank under
this Agreement, and the assigning Bank thereunder shall, to the extent of
the interest assigned by such Assignment and Assumption, be released from
its obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Bank's rights and obligations
under this Agreement, such Bank shall cease to be a party hereto but shall
continue to be entitled to the benefits of subsections 2.15, 2.16, 2.17 and
9.5). Any assignment or transfer by a Bank of rights or obligations under
this Agreement that does not comply with this subsection 9.6 shall be
treated for purposes of this Agreement as a sale by such Bank of a
participation in such rights and obligations in accordance with paragraph
(c) of this Section.
(iv) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices a copy of each
Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Banks, and the Commitment of,
and principal amount of the Loans owing to, each Bank pursuant to the terms
hereof from time to time (the "REGISTER"). The entries in the Register
shall be conclusive, in the absence of manifest error, and the Borrower,
the Administrative Agent and the Banks may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Bank hereunder
for all purposes of this Agreement, notwithstanding notice to the contrary.
The Register shall be available for inspection by the Borrower and any
Bank, at any reasonable time and from time to time upon reasonable prior
notice.
56
(v) Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Bank and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Bank
hereunder), the processing and recordation fee referred to in paragraph (b)
of this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall promptly
accept such Assignment and Assumption and record the information contained
therein in the Register. No assignment shall be effective for purposes of
this Agreement unless it has been recorded in the Register as provided in
this paragraph.
(c) (i) Any Bank may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
(a "PARTICIPANT") in all or a portion of such Bank's rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loans
owing to it); PROVIDED that (A) such Bank's obligations under this Agreement
shall remain unchanged, (B) such Bank shall remain solely responsible to the
other parties hereto for the performance of such obligations and (C) the
Borrower, the Administrative Agent and the other Banks shall continue to deal
solely and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Bank sells such a participation shall provide that such Bank shall retain the
sole right to enforce this Agreement and to approve any amendment, modification
or waiver of any provision of this Agreement; PROVIDED that such agreement or
instrument may provide that such Bank will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in clause
(a) or (b) of subsection 9.1 that affects such Participant. Subject to paragraph
(c)(ii) of this subsection, the Borrower agrees that each Participant shall be
entitled to the benefits of subsections 2.15, 2.16 and 2.17 to the same extent
as if it were a Bank and had acquired its interest by assignment pursuant to
paragraph (b) of this subsection. To the extent permitted by law, each
Participant also shall be entitled to the benefits of subsection 9.7(b) as
though it were a Bank, provided such Participant agrees to be subject to
subsection 9.7(a) as though it were a Bank.
(ii) A Participant shall not be entitled to receive any greater
payment under subsection 2.15, 2.16 or 2.17 than the applicable Bank would
have been entitled to receive with respect to the participation sold to
such Participant, unless the sale of the participation to such Participant
is made with the Borrower's prior written consent. Subject to the preceding
sentence, a Participant that would be a Foreign Bank if it were a Bank
shall not be entitled to the benefits of subsection 2.16 unless the
Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with
subsection 2.16(e) as though it were a Bank and for purposes of claiming
any benefit under subsection 2.16, any reference to a Foreign Bank shall be
deemed to refer to such Participant.
(d) Any Bank may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement including any Note to secure
obligations of such Bank, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Bank from any of its
obligations hereunder or substitute any such pledgee or assignee for such Bank
as a party hereto.
57
9.7 ADJUSTMENTS; SET-OFF. (a) If any Bank (a "Benefitted Bank") shall at
any time receive any payment of all or part of its Loans, or interest thereon,
or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 7(g), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Bank, if any, in respect of
such other Bank's Loans, or interest thereon, such Benefitted Bank shall
purchase for cash from the other Banks such portion of each such other Bank's
Loans, or shall provide such other Banks with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
Benefitted Bank to share the excess payment or benefits of such collateral or
proceeds ratably with each of the Banks; PROVIDED, HOWEVER, that if all or any
portion of such excess payment or benefits is thereafter recovered from such
Benefitted Bank, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest. The
Borrower agrees that each Bank so purchasing a portion of another Bank's Loan
may exercise all rights of payment (including, without limitation, rights of
set-off) with respect to such portion as fully as if such Bank were the direct
holder of such portion.
(b) In addition to any rights and remedies of the Banks provided by law,
each Bank shall have the right, exercisable upon the occurrence of an Event of
Default and acceleration of the obligations of the Borrower owing in connection
with this Agreement, without prior notice to the Borrower, any such notice being
expressly waived by the Borrower to the extent permitted by applicable law, to
set-off and appropriate and apply against any such obligations any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Bank or any branch or agency
thereof to or for the credit or the account of the Borrower (except for any such
deposits, credits, indebtedness or claims held in any accounts maintained at any
Bank as to which such Bank has waived its right of set-off). Each Bank agrees
promptly to notify the Borrower, and the Administrative Agent after any such
set-off and application made by such Bank, PROVIDED that the failure to give
such notice shall not affect the validity of such set-off and application.
9.8 COUNTERPARTS. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Borrower and the Administrative Agent.
9.9 SEVERABILITY. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
9.10 INTEGRATION. This Agreement represents the agreement of the Borrower,
the Administrative Agent and the Banks with respect to the subject matter
hereof, and there are no promises, undertakings, representations or warranties
by the Administrative Agent, the Co-
58
Syndication Agents, the Co-Documentation Agents or any Bank relative to subject
matter hereof not expressly set forth or referred to herein.
9.11 GOVERNING LAW. THIS AGREEMENT (INCLUDING SECTION 9) AND THE NOTES AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS BUT OTHERWISE
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES).
9.12 SUBMISSION TO JURISDICTION; WAIVERS; APPOINTMENT OF PROCESS AGENT. (a)
The Borrower, to the extent permitted by applicable law, hereby irrevocably and
unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any Note to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to
the non-exclusive general jurisdiction of the Courts of the State of New
York, the courts of the United States of America for the Southern District
of New York, and appellate courts from any thereof;
(ii) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(iii) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in subsection 9.2 or at such other
address of which the Administrative Agent shall have been notified pursuant
thereto; and
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction.
9.13 ACKNOWLEDGEMENTS. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement;
(b) neither the Administrative Agent, the Co-Syndication Agents, the
Co-Documentation Agents nor any Bank has any fiduciary relationship to the
Borrower, solely by virtue of any of the Loan Documents, and the relationship
pursuant to the Loan Documents between the Administrative Agent, the
Co-Syndication Agents, the Co-Documentation Agents and the Banks, on one hand,
and the Borrower, on the other hand, is solely that of creditor and debtor; and
59
(c) no joint venture exists among the Banks or among the Borrower and the
Banks.
9.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT, THE
CO-SYNDICATION AGENTS, THE CO-DOCUMENTATION AGENTS AND THE BANKS HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
9.15 CONFIDENTIALITY. Each of the Administrative Agent and the Banks agree
to maintain the confidentiality of the Information (as defined below), except
that Information may be disclosed (a) to its and its Affiliates' directors,
officers, employees and agents, including accountants, legal counsel and other
advisors (it being understood that the Persons to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed
to keep such Information confidential), (b) to the extent requested by any
regulatory authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrower and its obligations, (g) with the consent of the Borrower or (h) to
the extent such Information (i) becomes publicly available other than as a
result of a known breach of this Section or (ii) becomes available to the
Administrative Agent or any Bank on a nonconfidential basis from a source other
than the Borrower. For the purposes of this Section, "INFORMATION" means all
information received whether on or prior to the date hereof or hereafter from
the Borrower relating to the Borrower or its business, other than any such
information that is available to the Administrative Agent or any Bank on a
nonconfidential basis prior to disclosure by the Borrower.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in New York, New York by their proper and duly
authorized officers as of the day and year first above written.
FRANKLIN RESOURCES, INC.
By: /s/ Leslie M. Kratter
---------------------
Name: Leslie M. Kratter
Title: Senior Vice President and Secretary
JPMORGAN CHASE BANK,
as Administrative Agent and a Bank
By: /s/ Marybeth Mullen
-------------------
Name: Marybeth Mullen
Title: Vice President
CITICORP USA INC.,
as Co-Documentation Agent and a Bank
By: /s/ Alex Duka
-------------
Name: Alex Duka
Title: Director
BNP PARIBAS,
as Co-Documentation Agent and a Bank
By: /s/ Marguerite L. Lebon
-----------------------
Name: Marguerite L. Lebon
Title: Vice President
BNP PARIBAS,
as Co-Documentation Agent and a Bank
By: /s/ Barry K. Chung
------------------
Name: Barry K. Chung
Title: V.P.
THE BANK OF NEW YORK,
as Co-Syndication Agent and a Bank
By: /s/ Scott Buitekant
-------------------
Name: Scott Buitekant
Title: Vice President
BANK OF AMERICA, N.A.,
as Co-Syndication Agent and a Bank
By: /s/ Elizabeth W. F. Bishop
--------------------------
Name: Elizabeth W. F. Bishop
Title: Managing Director
DEUTSCHE BANK AG, NEW YORK BRANCH
By: /s/ Gayma Z. Shivnarain
-----------------------
Name: Gayma Z. Shivnarain
Title: Director
By: /s/ Elizabeth Zieglmeier
------------------------
Name: Elizabeth Zieglmeier
Title: Managing Director
ROYAL BANK OF CANADA
By: /s/ Gabriella King
------------------
Name: Gabriella King
Title: Senior Manager
TORONTO DOMINION (TEXAS), INC.
By: /s/ Alva J. Jones
-----------------
Name: Alva J. Jones
Title: Vice President
HSBC BANK USA
By: /s/ L. Sue Lomax
----------------
Name: L. Sue Lomax
Title: Senior Vice President
BAYERISCHE HYPO-UND VEREINSBANK AG
NEW YORK BRANCH
By: /s/ David A. Lefkovits
----------------------
Name: David A. Lefkovits
Title: Managing Director
By: /s/ Sessa von Richthofen
------------------------
Name: Sessa von Richthofen
Title: Associate
STATE STREET BANK AND TRUST
COMPANY
By: /s/ Steven G. Caron
-------------------
Name: Steven G. Caron
Title: Vice President
BANCA DI ROMA
By: /s/ Luca Belestra
Name: Luca Belestra (#25050)
Title: Senior Vice President and Manager
By: /s/ Richard G. Dietz
---------------------
Name: Richard G. Dietz (#97271)
Title: Vice President
SCHEDULE I - COMMITMENTS
Name and Address of Lender Commitment Amount
- -------------------------- -----------------
JPMorgan Chase Bank $21,000,000
270 Park Avenue
New York, New York 10017
Attn: Elisabeth Schwabe
Facsimile: (212) 270-1511
Citicorp USA Inc $21,000,000
399 Park Avenue, 12th Floor
New York, New York 10043
Attn: Alexander Duka
Facsimile: (212) 371-6309
BNP Paribas $21,000,000
499 Park Avenue, 3rd Floor
New York, New York 10022-1278
Attn: Laurent Vanderzyppe
Facsimile: (212) 841-2299
The Bank of New York . $21,000,000
One Wall Street, 17th Floor
New York, New York 10286
Attn: Scott Buitekant
Facsimile: (212) 635-6348
Bank of America, N.A. $21,000,000
231 South LaSalle Street, Suite 1044
Chicago, IL 60697
Attn: Elizabeth Bishop
Facsimile: (312) 987-0889
Deutsche Bank AG $17,500,000
31 West 52nd Street, 20th Floor
New York, New York 10019
Attn: Gayma Z. Shivnarain
Facsimile: (212) 469-8108
Royal Bank of Canada $17,500,000
New York Branch
1 Liberty Plaza, 3rd Floor
New York, New York 10006-1404
Attn: Karim Amr
Facsimile: (212) 428-2372
with a copy to:
Royal Bank of Canada
1 Liberty Plaza, 3rd Floor
New York, New York 10006-1404
Attn: G. King
Facsimile: (212) 428-6201
Toronto Dominion (Texas), Inc. $17,500,000
909 Fannin
Houston, TX 77010
Attn: Alva Jones
Facsimile: (713) 951-9921
HSBC Bank USA $17,500,000
Corporate and Institutional Banking
452 Fifth Avenue
New York, New York 10018
Attn: Padma Rao
Facsimile: (212) 525-8937
Bayerische Hypo-Und Vereinsbank AG $15,000,000
150 East 42nd Street
New York, New York 10017-4679
Attn: Sessa von Richthofen
Facsimile: (212) 672-5517
State Street Bank and Trust Company $10,000,000
2 Avenue de Lafayette
Boston, MA 02111
Attn: Steven Caron
Facsimile: (617) 662-2325
Banca Di Roma $10,000,000
One Market, Steuart Tower, Suite 1000
San Francisco, CA 94105
Attn: Rick Dietz
Facsimile: (415) 357-9869
SCHEDULE II
SAMPLE COMPUTATIONS OF
FACILITY AND UTILIZATION FEES
Example 1:
Average Aggregate Commitment of All Banks: $210,000,000
Facility Fee: $210,000,000 x .00090 (Rating 1) = $189,000
Average Aggregate Loans Over Quarter
(under this Agreement and the 364 Day Facility): $0
---
Utilization Fee: $0
Example 2:
Average Aggregate Commitment of All Banks: $210,000,000
Facility Fee: $210,000,000 x .00090 (Rating 1) = $189,000
Average Aggregate Loans Over Quarter
(under this Agreement and the 364 Day Facility): $300,000,000
---
Utilization Fee: $300,000,000 x .00125 = $375,000
SCHEDULE III - CONSENTS AND AUTHORIZATIONS
None.
SCHEDULE IV - U.S. INVESTMENT ADVISORS
Fiduciary International, Inc.
Fiduciary Investment Management International, Inc.
Fiduciary Trust International Limited
Franklin Advisers, Inc.
Franklin Advisory Services, LLC
Franklin Investment Advisory Services, Inc.
Franklin Private Client Group, Inc.
Franklin Mutual Advisers, LLC
Franklin Templeton Asset Strategies, LLC
Franklin Templeton Investment Management Limited
Franklin Templeton Investments (Asia) Limited
Franklin Templeton Investments Corporation
FTI Institutional, LLC
Templeton Asset Management Limited Templeton
Global Advisors Limited
Templeton Investment Counsel, LLC
Templeton/Franklin Investment Services, Inc.
Schedule V - U.S. Broker/Dealers
Fiduciary Financial Services Corp.
Franklin/Templeton Distributors, Inc.
Templeton/Franklin Investment Services, Inc.
SCHEDULE VI - SUBSIDIARIES
Closed Joint-Stock Company Templeton Franklin Templeton Management Luxembourg SA
Continental Property Management Company Franklin Templeton NIB Asset Management
FCC Receivables Corporation (Proprietary) Limited
Fiduciary Financial Services Corp. Franklin Templeton NIB Investments Limited
Fiduciary International Holding, Inc. Franklin Templeton NIB Management Company
Fiduciary International Ireland Limited Limited
Fiduciary International, Inc. Franklin Templeton Services Limited
Fiduciary Investment Corporation Franklin Templeton Services, LLC
Fiduciary Investment Management International, Inc. Franklin/Templeton Distributors, Inc.
Fiduciary Tax Services, Inc. Franklin/Templeton Travel, Inc.
Fiduciary Trust (International) S.A. FS Capital Group
Fiduciary Trust Company International FS Properties, Inc.
Fiduciary Trust International Asia Limited FTCI (Cayman) Ltd.
Fiduciary Trust International Australia Limited FTI - Banque Fiduciary Trust
Fiduciary Trust International Investment FTI Institutional, LLC
Management, Inc. Happy Dragon Holdings Limited
Fiduciary Trust International Limited Property Resources, Inc.
Fiduciary Trust International of California Templeton (Switzerland) Ltd.
Fiduciary Trust International of Delaware Templeton Asian Direct Investments Limited
Fiduciary Trust International of the South Templeton Asset Management (India)Private
Franklin Advisers, Inc. Limited
Franklin Advisory Services, LLC Templeton Asset Management (Labuan) Limited
Franklin Agency, Inc. Templeton Asset Management Ltd.
Franklin Capital Corporation Templeton Capital Advisors Ltd.
Franklin Investment Advisory Services, Inc. Templeton China Research Limited
Franklin Private Client Group, Inc. Templeton do Brasil Ltda.
Franklin Mutual Advisers, LLC Templeton Franklin Global Distributors Ltd.
Franklin Properties, Inc. Templeton Funds Annuity Company
Franklin Receivables LLC Templeton Global Advisors Limited
Franklin Resources, Inc. Templeton Global Holdings Ltd.
Franklin Templeton Asset Management S.A. Templeton Heritage Limited
Franklin Templeton Asset Strategies, LLC Templeton International, Inc.
Franklin Templeton Bank & Trust, F.S.B. Templeton Investment Counsel, LLC
Franklin Templeton Companies, LLC Templeton Investment Holdings (Cyprus) Limited
Franklin Templeton Credit Corporation Templeton Research and Management Venezuela,
Franklin Templeton France S.A. C.A.
Franklin Templeton Global Investors Limited Templeton Research Poland SP.z.o.o.
Franklin Templeton Holding Limited Templeton Restuctered Investments, L.L.C.
Franklin Templeton International Services S.A. Templeton Trust Services Private Limited
Franklin Templeton Investment Management Limited Templeton Worldwide, Inc.
Franklin Templeton Investment Services GmbH Templeton/Franklin Investment Services, Inc.
Franklin Templeton Investment Trust Management TRFI Investments Limited
Company Ltd.
Franklin Templeton Investments (Asia) Limited
Franklin Templeton Investments Australia Limited
Franklin Templeton Investments Corp.
Franklin Templeton Investments Japan Limited
Franklin Templeton Investor Services, LLC
Franklin Templeton Italia Sim S.p.A.
SCHEDULE VII - OUTSTANDING INDEBTEDNESS
$877,000,000.00 Face Value Franklin Resources, Inc. Liquid Yield Option Notes
due 2031 (Zero Coupon-Senior)
Outstanding Indebtedness under the Amended and Restated 364 Day Facility Credit
Agreement dated as of June 12, 2001 among the Company, the several banks parties
thereto, Bank of America, N.A., as Syndication Agent, The Bank of New York, as
Documentation Agent and The Chase Manhattan Bank, as Administrative Agent.
SCHEDULE VIII - EXISTING LIENS
None.
EXHIBIT A TO
CREDIT AGREEMENT
[FORM OF BID LOAN CONFIRMATION]
_____, 200_
JPMorgan Chase Bank,
as Administrative Agent
270 Park Avenue
New York, New York 10017
Dear Sirs:
Reference is made to the Amended and Restated Five Year Facility Credit
Agreement, dated as of June 5, 2002 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among the Borrower, the
Banks parties thereto, Bank of America, N.A. and The Bank of New York, as
Co-Syndication Agents, Citicorp USA Inc. and BNP Paribas as Co-Documentation
Agents and JPMorgan Chase Bank, as Administrative Agent. Capitalized terms used
but not defined herein shall have the meanings assigned to such terms in the
Credit Agreement.
In accordance with subsection 2.3(b) of the Credit Agreement, the
undersigned accepts and confirms on behalf of Franklin Resources, Inc. the
offers by Bid Loan Bank(s) to make Bid Loans to Franklin Resources, Inc. on
_____, 200 [Bid Loan Date] under subsection 2.3 of the Credit Agreement in the
[respective] amount(s) set forth on the attached list of Bid Loans offered.
Very truly yours,
FRANKLIN RESOURCES, INC.
By:_________________________
Name:
Title:
[Borrower to attach Bid Loan offer list prepared by Administrative Agent with
accepted amount entered by the Borrower to right of each Bid Loan offer].
EXHIBIT B TO
CREDIT AGREEMENT
[FORM OF BID LOAN OFFER]
_______, 200_
JPMorgan Chase Bank,
as Administrative Agent
270 Park Avenue
New York, New York 10017
Dear Sirs:
Reference is made to the Amended and Restated Five Year Facility Credit
Agreement, dated as of June 5, 2002 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among the Borrower, the
Banks parties thereto, Bank of America, N.A. and The Bank of New York, as
Co-Syndication Agents, Citicorp USA Inc. and BNP Paribas as Co-Documentation
Agents and JPMorgan Chase Bank, as Administrative Agent. Capitalized terms used
but not defined herein shall have the meanings assigned to such terms in the
Credit Agreement.
In accordance with subsection 2.3(b) of the Credit Agreement, the
undersigned Bank offers to make Bid Loans thereunder in the following amounts to
Franklin Resources, Inc. the following maturity dates:
Bid Loan Date: _____, 200
Aggregate Maximum Amount: $_____
Maturity Date 1 _____: Maturity Date 2 _____: Maturity Date 3 _____:
Maximum Amount $___ Maximum Amount $___ Maximum Amount $___
Rate * Amount $___ Rate * Amount $___ Rate * Amount $___
- - -
Rate * Amount $___ Rate * Amount $___ Rate * Amount $___
- - -
Borrower: ______ Borrower: ______ Borrower: ______
[The undersigned Bank hereby waives the requirement, set forth in
subsection 2.3(b)(iv)(B) of the Credit Agreement, that the Bid Loans made to the
Borrower by any Bid Loan Bank be in a minimum amount of $5,000,000.]
Very truly yours,
[NAME OF BIDDING BANK]
By:_________________________
Name:
Title:
Tel.:
Fax:
- ------------
* In the case of LIBOR Bid Loans, insert margin bid. In the case of Absolute
Rate Bid Loans, insert fixed rate bid.
EXHIBIT C TO
CREDIT AGREEMENT
[FORM OF BID LOAN REQUEST]
_________, 200_
JPMorgan Chase Bank,
as Administrative Agent
270 Park Avenue
New York, New York 10017
Dear Sirs:
Reference is made to the Amended and Restated Five Year Facility Credit
Agreement, dated as of June 5, 2002 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among the Borrower, the
Banks parties thereto, Bank of America, N.A. and The Bank of New York, as
Co-Syndication Agents, Citicorp USA Inc. and BNP Paribas as Co-Documentation
Agents and JPMorgan Chase Bank, as Administrative Agent. Capitalized terms used
but not defined herein shall have the meanings assigned to such terms in the
Credit Agreement.
This is a[n] [LIBOR] [Absolute Rate] Bid Loan Request pursuant to
subsection 2.3(b) of the Credit Agreement requesting quotes for the following
Bid Loans:
Aggregate Principal Amount: $_____ $_____ $___
Bid Loan Date: _____ ___ ___
[Interest Period:]* _____ ___ ___
Maturity Date:** _____ ___ ___
Interest Payment Dates: _____ ___ ___
Borrower: _____ ___ ___
- ------------------------------
* Insert only in a LIBOR Bid Loan Request.
** In a LIBOR Bid Loan Request, insert last day of Interest Period.
- ------------
Note:Pursuant to the Credit Agreement, a Bid Loan Request may be transmitted in
writing, by telex or by facsimile transmission, or by telephone,
immediately confirmed by telex or facsimile transmission. In any case, a
Bid Loan Request shall contain the information specified in the second
paragraph of this form.
Very truly yours,
FRANKLIN RESOURCES, INC.
By:_________________________
Name:
Title:
EXHIBIT D TO
CREDIT AGREEMENT
[ASSIGNMENT AND ASSUMPTION]
Reference is made to the Amended and Restated Five Year Facility Credit
Agreement, dated as of June 5, 2002 (as amended, supplemented or otherwise
modified from time to time, the "CREDIT AGREEMENT"), among the Borrower, the
Banks parties thereto, Bank of America, N.A. and The Bank of New York, as
Co-Syndication Agents, Citicorp USA Inc. and BNP Paribas as Co-Documentation
Agents and JPMorgan Chase Bank, as Administrative Agent. Capitalized terms used
but not defined herein shall have the meanings assigned to such terms in the
Credit Agreement.
The Assignor named below hereby sells and assigns, without recourse, to the
Assignee named below, and the Assignee hereby purchases and assumes, without
recourse, from the Assignor, effective as of the Assignment Date set forth
below, the interests set forth below (the "Assigned Interest") in the Assignor's
rights and obligations under the Credit Agreement, including, without
limitation, the interests set forth below in the Commitment of the Assignor on
the Assignment Date and Bid Loans and Revolving Loans owing to the Assignor
which are outstanding on the Assignment Date, but excluding accrued interest and
fees to and excluding the Assignment Date. The Assignee hereby acknowledges
receipt of a copy of the Credit Agreement. From and after the Assignment Date
(i) the Assignee shall be a party to and be bound by the provisions of the
Credit Agreement and, to the extent of the Assigned Interest, have the rights
and obligations of a Bank thereunder and (ii) the Assignor shall, to the extent
of the Assigned Interest, relinquish its rights and be released from its
obligations under the Credit Agreement.
The Assignor (a) 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 with respect to execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Credit Agreement, any other Loan Document or any other instrument or document
furnished pursuant thereto, other than that the Assignor has not created any
adverse claim upon the interest being assigned by it hereunder and that such
interest is free and clear of any such adverse claim and (b) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower, any of its Affiliates or any other obligor
or the performance or observance by the Borrower, any of its Affiliates or any
other obligor of any of their respective obligations under the Credit Agreement
or any other Loan Document or any other instrument or document furnished
pursuant hereto or thereto.
This Assignment and Assumption is being delivered to the Administrative
Agent together with (i) if the Assignee is a Foreign Lender, any documentation
required to be delivered by the Assignee pursuant to Section 2.16(e) of the
Credit Agreement, duly completed and executed by the Assignee, and (ii) if the
Assignee is not already a Lender under the Credit Agreement, an Administrative
Questionnaire in the form supplied by the Administrative Agent,
duly completed by the Assignee. The [Assignee/Assignor] shall pay the fee
payable to the Administrative Agent pursuant to Section 9.6(b) of the Credit
Agreement.
This Assignment and Assumption shall be governed by and construed in
accordance with the laws of the State of New York.
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment
("Assignment Date"):
=========================== ======================= ===========================
Percentage Assigned of
Facility/Commitment (set
Principal Amount forth, to at least 8
Assigned (and decimals, as a percentage
identifying information of the Facility and the
as to individual BID aggregate Commitments of
Facility LOANS) all Lenders THEREUNDER)
- -------- ------ -------------------------
Commitment Assigned: $ %
Revolving Loans:
Competitive Loans:
============================ ======================= ===========================
The terms set forth above and on the reverse side hereof are hereby agreed
to:
[Name of Assignor] , as Assignor
By:______________________________
Name:
Title:
[Name of Assignee] , as Assignee
By: ______________________________
Name:
Title:
The undersigned hereby consent to the within assignment:
Franklin Resources, Inc., JPMorgan Chase Bank,
(if required) as Administrative Agent,
(if required)
By: ______________________
Name: By: __________________________
Title: Name:
Title:
EXHIBIT E-1 TO
CREDIT AGREEMENT
[FORM OF REVOLVING CREDIT NOTE]
$__________ New York, New York
________ __, 200_
FOR VALUE RECEIVED, the undersigned, Franklin Resources, Inc., a Delaware
corporation (the "BORROWER"), hereby unconditionally promises to pay on the
Termination Date to the order of ____________________________________________
(the "BANK") at the office of JPMORGAN CHASE BANK, located at 270 Park Avenue,
New York, New York 10017, in lawful money of the United States of America and in
immediately available funds, the principal amount of the lesser of (a)
______________________ DOLLARS ($__________) and (b) the aggregate unpaid
principal amount of all Revolving Credit Loans made by the Bank to the
undersigned pursuant to subsection 2.1 of the Credit Agreement referred to
below.
The undersigned further agrees to pay interest in like money at such office
on the unpaid principal amount hereof from time to time from the Effective Date
at the applicable rates per annum set forth in subsection 2.10 of the Credit
Agreement referred to below until any such amount shall become due and payable
(whether at the stated maturity, by acceleration or otherwise), and thereafter
on such overdue amount at the rate per annum set forth in subsection 2.10(d) of
the Credit Agreement until paid in full (both before and after judgment).
Interest shall be payable in arrears on each applicable Interest Payment Date,
commencing on the first such date to occur after the date hereof and terminating
upon payment (including prepayment) in full of the unpaid principal amount
hereof; provided that interest accruing on any overdue amount shall be payable
on demand.
The holder of this Note is authorized to record the date and amount of each
Revolving Credit Loan made pursuant to subsection 2.1 of the Credit Agreement,
its character as an Alternate Base Rate Loan or LIBOR Loan, the date and amount
of each payment or prepayment of principal with respect thereto, the length of
each Interest Period with respect to the portion of such Revolving Credit Loan
made and/or maintained as a LIBOR Loan, and the LIBOR Adjusted Rate with respect
thereto and each conversion made pursuant to subsection 2.8 of the Credit
Agreement, on the schedules annexed hereto and made a part hereof, or on a
continuation thereof which shall be attached hereto and made a part hereof,
which recordation shall constitute prima facie evidence of the accuracy of the
information so recorded; provided that failure by the Bank to make any such
recordation on this Note shall not affect the obligations of the Borrower under
this Note or under the Credit Agreement.
This Note is one of the Revolving Credit Notes referred to in the Amended
and Restated Five Year Facility Credit Agreement, dated as of June 5, 2002 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among the Borrower, the Banks parties thereto, Bank of America,
N.A. and The Bank of New York, as Co-Syndication Agents, Citicorp USA Inc. and
BNP Paribas, as Co-Documentation Agents and JPMorgan Chase Bank, as
Administrative Agent, is entitled to the benefits thereof and is subject to
optional and mandatory prepayment in whole or in part as provided therein.
Capitalized terms used but not defined herein shall have the meanings assigned
to such terms in the Credit Agreement.
Upon the occurrence of any one or more of the Events of Default specified
in the Credit Agreement, all amounts then remaining unpaid on this Note shall
become, or may be declared to be, immediately due and payable, all as provided
therein.
THIS REVOLVING CREDIT NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
FRANKLIN RESOURCES, INC.
By:_________________________
Name:
Title:
SCHEDULE A to
Revolving Credit Note
LOANS, CONVERSIONS AND PAYMENTS
OF ALTERNATE BASE RATE LOANS
- ------------- ----------- ------------------ ----------------- ---------------- ---------------- ------------
Amount of Amount of Unpaid
LIBOR Loans Alternate Base Principal
Converted into Rate Loans Amount of Balance of
Amount of Alternate Base Converted into Principal Alternate Base Notation
Date Loan Rate Loans LIBOR Loans Repaid Rate Loans Made by
---- ---- --------------- ----------- ------ ---------- -------
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SCHEDULE B to
Revolving Credit Note
LOANS, CONVERSIONS AND
PAYMENTS OF LIBOR LOANS
- ------------- ---------- --------------- ---------------- --------------- -------------- ------------- ------------
Amount of
Amount of LIBOR
Alternate Loans
Base Rate Interest Period Converted Unpaid
Loans and LIBOR into Principal
Converted Adjusted Rate Alternate Amount of Balance of
Amount into LIBOR with Respect Base Rate Principal LIBOR Notation
Date of Loan Loans Thereto Loans Repaid Loans Made by
---- ------- ----- ------- ----- ------ ----- -------
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EXHIBIT E-2 TO
CREDIT AGREEMENT
[FORM OF GRID BID LOAN NOTE]
PROMISSORY NOTE
$______ New York, New York
_______, 200_
FOR VALUE RECEIVED, the undersigned, Franklin Resources, Inc. , a Delaware
corporation, (the "Borrower"), hereby unconditionally promises to pay to the
order of _________________ (the "Bank") at the office of JPMorgan Chase Bank
located at 270 Park Avenue, New York, New York 10017, in lawful money of the
United States of America and in immediately available funds, the principal
amount of (a) ________DOLLARS ($____), or, if less, (b) the aggregate unpaid
principal amount of each Bid Loan which is (i) made by the Bank to the Borrower
pursuant to subsection 2.3 of the Credit Agreement hereinafter referred to and
(ii) not evidenced by an Individual Bid Loan Note executed and delivered by the
Borrower pursuant to subsection 2.4(e) of the Credit Agreement. The principal
amount of each Bid Loan evidenced hereby shall be payable on the maturity date
therefor set forth on the schedule annexed hereto and made a part hereof or on a
continuation thereof which shall be attached hereto and made a part hereof (the
"Grid"). The Borrower further agrees to pay interest in like money at such
office on the unpaid principal amount of each Bid Loan evidenced hereby, at the
rate per annum set forth in respect of such Bid Loan on the Grid, calculated on
the basis of a year of 360 days and actual days elapsed from the date of such
Bid Loan until the due date thereof (whether at the stated maturity, by
acceleration or otherwise) and thereafter at the rates determined in accordance
with subsection 2.3(d) of the Credit Agreement. Interest on each Bid Loan
evidenced hereby shall be payable on the date or dates set forth in respect of
such Bid Loan on the Grid. Bid Loans evidenced by this Note may not be
optionally prepaid.
The holder of this Note is authorized to endorse on the Grid the date,
amount, interest rate, interest payment dates and maturity date in respect of
each Bid Loan made pursuant to subsection 2.3 of the Credit Agreement, each
payment of principal with respect thereto and any transfer of such Bid Loan from
this Note to an Individual Bid Loan Note delivered to the Bank pursuant to
subsection 2.4(e) of the Credit Agreement, which endorsement shall constitute
prima facie evidence of the accuracy of the information endorsed; provided,
however, that the failure to make any such endorsement shall not affect the
obligations of the Borrower in respect of such Bid Loan.
This Note is one of the Grid Bid Loan Notes referred to in the Amended and
Restated Five Year Facility Credit Agreement, dated as of June 5, 2002 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among the Borrower, the Banks parties thereto, Bank of America,
N.A. and The Bank of New York, as Co-Syndication Agents, Citicorp USA Inc. and
BNP Paribas, as Co-Documentation Agents and
JPMorgan Chase Bank, as Administrative Agent, is entitled to the benefits
thereof and is subject to optional and mandatory prepayment in whole or in part
as provided therein.
Upon the occurrence of any one or more of the Events of Default specified
in the Credit Agreement, all amounts then remaining unpaid on this Note shall
become, or may be declared to be, immediately due and payable, all as provided
therein.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Capitalized terms used but not defined herein shall have the meanings
assigned to such terms in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
Very truly yours,
FRANKLIN RESOURCES, INC.
By:_________________________
Name:
Title:
SCHEDULE OF BID LOANS
Date of
Transfer
Date Amount Interest to Individ- Loan
of of Interest Payment Maturity Payment ual Bid Author-
Bid Loan Rate Dates Date Date Loan Note ization
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EXHIBIT E-3 TO
CREDIT AGREEMENT
[FORM OF INDIVIDUAL BID LOAN NOTE]
NON-NEGOTIABLE BID NOTE
$_____ New York, New York
___________, 200_
FOR VALUE RECEIVED, the undersigned, Franklin Resources, Inc., a Delaware
corporation (the "Borrower"), promises to pay on _____, 200 to the order of
___________(the "Bank") at the office of JPMorgan Chase Bank located at 270 Park
Avenue, New York, New York 10017, in lawful money of the United States of
America and in immediately available funds, the principal sum of _____DOLLARS
($______). The Borrower further agrees to pay interest in like money at such
office on the unpaid principal amount hereof from time to time from the date
hereof at the rate of _% per annum (calculated on the basis of a year of 360
days and actual days elapsed) until the due date hereof (whether at the stated
maturity, by acceleration, or otherwise) and thereafter at the rates determined
in accordance with subsection 2.4(e) of the Amended and Restated Five Year
Facility Credit Agreement, dated as of June 5, 2002 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among the
Borrower, the Banks parties thereto, Bank of America, N.A. and The Bank of New
York, as Co-Syndication Agents, Citicorp USA Inc. and BNP Paribas, as
Co-Documentation Agents and JPMorgan Chase Bank, as Administrative Agent.
Interest shall be payable on ________. This Note may not be optionally prepaid.
This Note is one of the Individual Bid Loan Notes referred to in, is
subject to and is entitled to the benefits of, the Credit Agreement, which
Credit Agreement, among other things, contains provisions for acceleration of
the maturity and mandatory prepayments hereof upon the happening of certain
stated events.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Capitalized terms used but not defined herein shall have the meanings
assigned to such terms in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
FRANKLIN RESOURCES, INC.
By:_________________________
Name:
Title: