CONFORMED COPY
FIVE-YEAR
COMPETITIVE ADVANCE AND
REVOLVING CREDIT FACILITY AGREEMENT
Dated as of May 5, 1995
among
KANSAS CITY SOUTHERN INDUSTRIES, INC.,
THE LENDERS NAMED HEREIN,
[EXCLUDED INFORMATION IS SUBJECT TO REQUEST FOR CONFIDENTIAL TREATMENT]
and
[EXCLUDED INFORMATION IS SUBJECT TO REQUEST FOR CONFIDENTIAL TREATMENT]
COMPETITIVE ADVANCE AND REVOLVING CREDIT FACILITY
AGREEMENT dated as of May 5, 1995, among KANSAS CITY SOUTHERN
INDUSTRIES, INC., a Delaware corporation (the "Borrower"), the
lenders listed in Schedule 2.01 (the "Lenders") [INFORMATION
SUBJECT TO REQUEST FOR CONFIDENTIAL TREATMENT] as
administrative agent for the Lenders (in such capacity, the
"Agent").
The Borrower (such term and each other capitalized term used but not
otherwise defined herein having the meaning assigned to it in Article I) has
requested the Lenders to extend credit in order to enable it to borrow on a
standby revolving credit basis on and after the date hereof and at any time and
from time to time prior to the Maturity Date a principal amount not in excess of
$300,000,000 at any time outstanding. The proceeds of such borrowings are to be
used for general corporate purposes, including to provide backup liquidity for
commercial paper. The Borrower has also requested the Lenders to provide a
procedure pursuant to which the Lenders may be invited to bid on an uncommitted
basis on short-term borrowings by the Borrower. The Lenders are willing to
extend such credit to the Borrower on the terms and subject to the conditions
herein set forth.
Accordingly, the Borrower, the Lenders and the Agent agree as
follows:
ARTICLE I. DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms shall have the meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any Standby Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"Adjusted LIBO Rate" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the product of (a) the LIBO Rate
in effect for such Interest Period and (b) Statutory Reserves.
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit B hereto.
"Affiliate" shall mean, when used with respect to a specified
person, another person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with the
person specified and in any case shall include, when used with respect to the
Borrower or any Subsidiary, any joint venture in which the Borrower or such
Subsidiary holds an equity interest.
"Agent's Fees" shall have the meaning assigned to such term in
Section 2.06(b).
"Alternate Base Rate" shall mean, 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%. For purposes hereof, "Prime Rate" shall mean the rate of
interest per annum publicly announced from time to time by the Agent as its
prime rate in effect at its principal office in New York City; the Prime Rate is
not intended to be the lowest rate of interest charged by the Agent in
connection with extensions of credit to debtors; each change in the Prime
Rate shall be effective on the date such change is publicly announced as
effective. "Base CD Rate" shall mean the sum of (a) the product of (i) the
Three-Month Secondary CD Rate and (ii) Statutory Reserves and (b) the
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 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 Agent from three New York City negotiable certificate of deposit dealers of
recognized standing selected by it. "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 Agent from three Federal funds brokers of
recognized standing selected by it. If for any reason the Agent shall have
determined (which determination shall be conclusive absent manifest error)
that it is unable to ascertain the Base CD Rate or the Federal Funds
Effective Rate or both for any reason, including the inability or failure of
the Agent to obtain sufficient quotations in accordance with the terms
thereof, the Alternate Base Rate shall be determined without regard to clause
(b) or (c), or both, of the first sentence of this definition, as
appropriate, until the circumstances giving rise to such inability no longer
exist. Any change in the Alternate Base Rate due to a change in the Prime
Rate, the Three-Month Secondary CD Rate or the Federal Funds Effective Rate
shall be effective on the effective date of such change in the Prime Rate,
the Three-Month Secondary CD Rate or the Federal Funds Effective
Rate, respectively.
"Applicable Percentage" shall mean on any date, with respect to the
Loans comprising any Eurodollar Standby Borrowing or ABR Borrowing or the
Facility Fee, as the case may be, the applicable percentage set forth in the
table below based upon the ratings applicable on such date to Index Debt:
[EXCLUDED INFORMATION IS SUBJECT TO REQUEST FOR CONFIDENTIAL TREATMENT]
For purposes of the foregoing, (i) if the ratings established or
deemed to have been established by Moody's and S&P shall fall within different
Categories, the lower rating shall be disregarded, (ii) if Moody's or S&P shall
not have in effect a rating for Index Debt (other than because such rating
agency shall no longer be in the business of rating corporate debt
obligations), such rating agency will be deemed to have established a rating
for Index Debt in Category 5 and (iii) if any rating established or deemed to
have been established by Moody's or S&P shall be changed (other than as a
result of a change in the rating system of 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. Each change in the Applicable Percentage shall apply during
the period commencing on the effective date of such change and ending on the
date immediately preceding the effective date of the next such change. If
the rating system of Moody's or S&P shall change, or if either such rating
agency shall cease to be in the business of rating corporate debt
obligations, the Borrower and the Lenders shall negotiate in good faith to
amend the references to specific ratings in this definition to reflect such
changed rating system or the nonavailability of ratings from such rating
agency, and pending the effectiveness of such amendment, the Applicable
Percentage shall be determined by reference to the rating most recently in
effect from such rating agency.
"Assessment Rate" shall mean for any date the annual rate (rounded
upwards, if necessary, to the next 1/100 of 1%) most recently estimated by the
Agent as the then current net annual assessment rate that will be employed in
determining amounts payable by the Agent to the Federal Deposit Insurance
Corporation (or any successor) for insurance by such Corporation (or such
successor) of time deposits made in dollars at the Agent's domestic offices.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an assignee, and accepted by the Agent, in the form
of Exhibit C.
"Attributable Debt" shall mean, in connection with a Sale and
Leaseback Transaction, the present value (discounted in accordance with GAAP at
the debt rate implied in the lease) of the obligations of the Lessee for rental
payments during the term of the Lease.
"Berger" shall mean Berger Associates, Inc., a Delaware corporation.
"Board" shall mean the Board of Governors of the Federal Reserve
System of the United States.
"Borrowing" shall mean a group of Loans of a single Type made by the
Lenders (or, in the case of a Competitive Borrowing, by the Lender or Lenders
whose Competitive Bids have been accepted pursuant to Section 2.03) on a single
date and as to which a single Interest Period is in effect.
"Business Day" shall mean any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of New York) on which banks are
open for business in New York City; provided, however, that, when used in
connection with a Eurodollar Loan, the term "Business Day" shall also exclude
any day on which banks are not open for dealings in dollar deposits in the
London interbank market.
"Capitalized Lease Obligations" of any person shall mean the
obligations of such person under any lease that would be capitalized on a
balance sheet of such person prepared in accordance with GAAP, and the amount
of such obligations at any time shall be the capitalized amount thereof at
such time determined in accordance with GAAP.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986.
A "Change in Control" shall be deemed to have occurred if (i) at
any time, less than 75% of the members of the board of directors of the Borrower
shall be (A) individuals who are members of such board on the date hereof or
(B) individuals whose election, or nomination for election by the Borrower's
stockholders, was approved by a vote of at least 75% of the members of the board
then still in office who are members of the board on the date hereof or (ii) at
any time, any person, or any two or more persons acting as a partnership,
limited partnership, syndicate, or other group for the purpose of acquiring,
holding or disposing of securities of the Borrower, shall become, according
to public announcement or filing, the "beneficial owner" (as defined in Rule
13d-3 issued under the Securities Exchange Act of 1934, as amended), directly
or indirectly, of securities of the Borrower representing 30% or more
(calculated in accordance with such Rule 13d-3) of the combined voting power
of the Borrower's then outstanding voting securities.
[EXCLUDED INFORMATION IS SUBJECT TO REQUEST FOR CONFIDENTIAL TREATMENT]
"Code" shall mean the Internal Revenue Code of 1986, as the same may
be amended from time to time.
"Commitment" shall mean, with respect to each Lender, the commitment
of such Lender hereunder as set forth in Schedule 2.01 hereto, as such Lender's
Commitment may be permanently terminated or reduced from time to time pursuant
to Section 2.11. The Commitments shall automatically and permanently term-
inate on the Maturity Date if not terminated earlier pursuant to Section 2.11.
"Competitive Bid" shall mean an offer by a Lender to make a
Competitive Loan pursuant to Section 2.03.
"Competitive Bid Accept/Reject Letter" shall mean a notification
made by the Borrower pursuant to Section 2.03(d) in the form of Exhibit A-4.
"Competitive Bid Rate" shall mean, as to any Competitive Bid made by
a Lender pursuant to Section 2.03(b), (i) in the case of a Eurodollar Loan, the
Margin, and (ii) in the case of a Fixed Rate Loan, the fixed rate of interest
offered by the Lender making such Competitive Bid.
"Competitive Bid Request" shall mean a request made pursuant to
Section 2.03 in the form of Exhibit A-1.
"Competitive Borrowing" shall mean a borrowing consisting of a
Competitive Loan or concurrent Competitive Loans from the Lender or Lenders
whose Competitive Bids for such Borrowing have been accepted by the Borrower
under the bidding procedure described in Section 2.03.
"Competitive Loan" shall mean a Loan from a Lender to the Borrower
pursuant to the bidding procedure described in Section 2.03. Each Competitive
Loan shall be a Eurodollar Competitive Loan or a Fixed Rate Loan.
"Confidential Memorandum" shall mean the Confidential Information
Memorandum of the Borrower dated April 1995.
"Consolidated EBITDA" shall mean, for any period, the sum for such
period of (a) Consolidated Net Income, (b) Consolidated Interest Expense,
(c) provision for income taxes and (d) any amount which in the determination of
Consolidated Net Income has been deducted for depreciation expense or
amortization expense, in each case determined in accordance with GAAP.
"Consolidated Interest Expense" shall mean, for any period, total
interest expense (including amortization of debt discount) of the Borrower and
the Consolidated Subsidiaries on a consolidated basis for such period,
determined in accordance with GAAP.
"Consolidated Net Income" shall mean, for any period, the net income
of the Borrower and the Consolidated Subsidiaries on a consolidated basis for
such period but without giving effect to any extraordinary gains and gains from
the sale of assets (other than in the ordinary course of business), determined
in accordance with GAAP.
"Consolidated Net Worth" shall mean, on any date the stockholders'
equity of the Borrower and the Consolidated Subsidiaries on such date, computed
and consolidated in accordance with GAAP.
"Consolidated Subsidiary" shall mean each Subsidiary the financial
statements of which shall be required to be consolidated with the financial
statements of the Borrower in accordance with GAAP.
"Consolidated Total Assets" shall mean the total assets of the
Borrower and the Consolidated Subsidiaries on a consolidated basis at any time,
determined in accordance with GAAP.
"Consolidated Total Indebtedness" shall mean at any date all
Indebtedness of the Borrower and the Consolidated Subsidiaries at such date,
determined on a consolidated basis in accordance with GAAP.
"Control" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting securities, by contract or
otherwise, and "Controlling" and "Controlled" shall have meanings correlative
thereto.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower or any Subsidiary, are treated
as a single employer under Section 414(b) or 414(c) of the Code or, solely for
purposes of Section 302 of ERISA and Section 412 of the Code, are treated as a
single employer under Section 414(b), (c), (m) or (o) of the Code.
"Default" shall mean any event or condition which upon notice, lapse
of time or both would constitute an Event of Default.
"dollars" or "$" shall mean lawful money of the United States of
America.
"DST Credit Agreements" shall mean the 364-Day and the Three-Year
credit agreements among DST Systems, the Lenders and Chase, as administrative
agent.
"DST Systems" shall mean DST Systems, Inc., a Missouri corporation
which shall be permitted under the DST Credit Agreements to reorganize as a
Delaware corporation.
"Environmental Lien" shall mean a Lien in favor of any governmental
entity for (a) any liability under Federal or state environmental laws or
regulations (including, without limitation, RCRA and CERCLA) or (b) damages
arising from costs incurred by such governmental entity in response to a release
of a hazardous or toxic waste, substance or constituent, or other substance into
the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Eurodollar Borrowing" shall mean a Borrowing comprised of
Eurodollar Loans.
"Eurodollar Competitive Borrowing" shall mean a Borrowing comprised
of Eurodollar Competitive Loans.
"Eurodollar Competitive Loan" shall mean any Competitive Loan
bearing interest at a rate determined by reference to the LIBO Rate in
accordance with the provisions of Article II.
"Eurodollar Loan" shall mean any Eurodollar Competitive Loan or
Eurodollar Standby Loan.
"Eurodollar Standby Borrowing" shall mean a Borrowing comprised of
Eurodollar Standby Loans.
"Eurodollar Standby Loan" shall mean any Standby Loan bearing
interest at a rate determined by reference to the Adjusted LIBO Rate in
accordance with the provisions of Article II.
"Event of Default" shall have the meaning assigned to such term in
Article VII.
"Facility A Agreement" shall mean the 364-day credit agreement dated
the date hereof among the Borrower, the Lenders and the Agent.
"Facility Fee" shall have the meaning assigned to such term in
Section 2.06(a).
"Facilities" shall mean the credit arrangements under this Agreement
and the Facility A Agreement.
"Fee Letter" shall mean the letter agreement dated as of May 2, 1995
among the Borrower, DST and the Agent.
"Fees" shall mean the Facility Fee and the Agent's Fees.
"Financial Officer" of any corporation shall mean the chief
financial officer, principal accounting officer, Treasurer or Controller of such
corporation.
"Fixed Rate Borrowing" shall mean a Borrowing comprised of Fixed
Rate Loans.
"Fixed Rate Loan" shall mean any Competitive Loan bearing interest
at a fixed percentage rate per annum (expressed in the form of a decimal to no
more than four decimal places) specified by the Lender making such Loan in its
Competitive Bid.
"GAAP" shall mean generally accepted accounting principles, applied
on a consistent basis.
"Governmental Authority" shall mean any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or regulatory
body.
"Guarantee" of a person means any agreement by which such person
assumes, guarantees, endorses, contingently agrees to purchase or provide funds
for the payment of, or otherwise becomes liable upon, the obligation of any
other person, or agrees to maintain the net worth or working capital or other
financial condition of any other person or otherwise assures any creditor of
such other person against loss, including, without limitation, any comfort
letter, operating agreement or take-or-pay contract and shall include,
without limitation, the contingent liability of such person in connection with
any application for a Letter of Credit. The term "Guarantee" used as a verb
has a corresponding meaning.
"Holding Company" shall mean a corporation which, at all times prior
to an Offering, is a direct, wholly owned Delaware subsidiary of the Borrower.
"ICC" shall mean the Interstate Commerce Commission or any successor
Federal agency charged with similar regulation of common carriers.
"Indebtedness" of any person shall mean, without duplication,
(a) all obligations of such person for borrowed money, (b) all obligations of
such person evidenced by bonds, debentures, notes, acceptances, equipment trust
certificates or similar instruments, (c) all obligations of such person issued
or assumed as the deferred purchase price of property or services other than
accounts payable arising in the ordinary course of such person's business on
terms customary in the trade, (d) all obligations of such person, whether or not
assumed, secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien or
payable out of the proceeds or production from property owned or acquired by
such person, (e) Capitalized Lease Obligations of such person, (f) all
Guarantees by such person of Indebtedness of others and (g) any other
obligations or securities (other than up to $200,000,000 stated value of the
convertible preferred stock of the Borrower which may be issued and sold to
an employee stock ownership plan for employees of the Borrower and the
Subsidiaries) which such person is directly or indirectly obligated to repay,
redeem, retire, extinguish or repurchase (i) at a fixed or determinable date,
whether by operation of a sinking fund or otherwise, (ii) at the option of
any person other than the issuer thereof or (iii) upon the occurrence of a
condition not solely within the control of the issuer thereof or obligor
thereon, such as a redemption out of future earnings. The Indebtedness
of any person shall include the Indebtedness of any partnership in which such
person is a general partner.
"Index Debt" shall mean senior, unsecured, non-credit-enhanced,
long-term indebtedness for borrowed money of the Borrower.
"Interest Payment Date" shall mean, with respect to any Loan, the
last day of the Interest Period applicable thereto and, in the case of a
Eurodollar Loan with an Interest Period of more than three months' duration or a
Fixed Rate Loan with an Interest Period of more than 90 days' duration, each day
that would have been an Interest Payment Date for such Loan had successive
Interest Periods of three months' duration or 90 days duration, as the case may
be, been applicable to such Loan and, in addition, the date of any
refinancing or conversion of such Loan with or to a Loan of a different Type.
"Interest Period" shall mean (a) as to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the last
day) in the calendar month that is 1, 2, 3 or 6 months thereafter, as the
Borrower may elect, (b) as to any ABR Borrowing, the period commencing on the
date of such Borrowing and ending on the date 90 days thereafter or, if earlier,
on the Maturity Date or the date of prepayment of such Borrowing and (c) as to
any Fixed Rate Borrowing, the period commencing on the date of such Borrowing
and ending on the date specified in the Competitive Bids in which the offer
to make the Fixed Rate Loans comprising such Borrowing were extended, which
shall not be earlier than seven days after the date of such Borrowing or
later than 360 days after the date of such Borrowing; provided, however, that
if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless,
in the case of Eurodollar Loans only, such next succeeding Business Day would
fall in the next calendar month, in which case such Interest Period shall end
on the next preceding Business Day. Interest shall accrue from and including
the first day of an Interest Period to but excluding the last day of such
Interest Period.
"Janus" shall mean Janus Capital Corporation, a Colorado
corporation.
"KCSR" shall mean The Kansas City Southern Railway Company, a
Missouri corporation.
"Letter of Credit" of a person shall mean a letter of credit or
similar instrument that is issued upon the application of such person or upon
which such person is an account party or for which such person is in any way
liable.
"LIBO Rate" shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, an interest rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to the rate at which dollar deposits approximately
equal in principal amount to (i) in the case of a Standby Borrowing the Agent's
portion of such Eurodollar Borrowing and (ii) in the case of a Competitive
Borrowing, a principal amount that would have been the Agent's portion of such
Competitive Borrowing had such Competitive Borrowing been a Standby Borrowing,
and for a maturity comparable to such Interest Period are offered to the
principal London office of the Agent in immediately available funds in the
London interbank market at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period.
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed
of trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset and
(c) in the case of securities, any purchase option, call or similar right of a
third party with respect to such securities.
"Loan" shall mean a Competitive Loan or a Standby Loan, whether made
as a Eurodollar Loan, an ABR Loan or a Fixed Rate Loan, as permitted hereby.
"Loan Documents" shall mean this Agreement, the Facility A Agreement
and the Fee Letter.
"Margin" shall mean, as to any Eurodollar Competitive Loan, the
margin (expressed as a percentage rate per annum in the form of a decimal to no
more than four decimal places) to be added to or subtracted from the LIBO Rate
in order to determine the interest rate applicable to such Loan, as
specified in the Competitive Bid relating to such Loan.
"Margin Stock" shall have the meaning given such term under
Regulation U.
"Maturity Date" shall mean May 5, 2000.
"Moody's" shall mean Moody's Investors Service, Inc.
"Multiemployer Plan" shall mean a Plan that is a "multiemployer
plan" as defined in Section 4001(a)(3) of ERISA as to which the Borrower or any
member of the Controlled Group may have any liability.
"Multiple Employer Plan" shall mean a Plan that is a single-employer
plan which has two or more contributing sponsors at least two of whom are not
under common control or who made contributions under such Plan during the
preceding five years.
"Obligations" shall mean all unpaid principal of and accrued and
unpaid interest on the Loans, all accrued and unpaid Fees and all other
obligations of the Borrower to the Lenders or to any Lender or the Agent arising
under the Loan Documents.
"Offering" shall mean (a) the closing of an initial public offering
and sale of shares of common stock of DST Systems, or (b) the closing of an
initial public offering and sale of shares of common stock of the Holding
Company and the contribution of net proceeds of such offering and sale to DST
Systems, which in the case of either (a) or (b) above results in the receipt
by DST Systems of net cash proceeds equal to at least the lower of (i) all of
the net cash proceeds of such offering and sale (which in any event shall not
be less than [EXCLUDED INFORMATION IS SUBJECT TO REQUEST FOR CONFIDENTIAL
TREATMENT]) and
(ii) [EXCLUDED INFORMATION IS SUBJECT TO REQUEST FOR CONFIDENTIAL TREATMENT].
"PBGC" shall mean the Pension Benefit Guarantee Corporation referred
to and defined in ERISA.
"person" shall mean any natural person, corporation, business trust,
joint venture, association, company, partnership or government, or any agency or
political subdivision thereof.
"Plan" shall mean any employee pension benefit plan that is covered
by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code as to which the Borrower or any member of the Controlled
Group may have any liability.
"Projections" shall have the meaning assigned to such term in
Section 3.05(b).
"RCRA" shall mean the Resources Conservation and Recovery Act, as
the same may be amended from time to time.
"Register" shall have the meaning given such term in
Section 9.04(d).
"Regulation D" shall mean Regulation D of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation G" shall mean Regulation G of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation U" shall mean Regulation U of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation X" shall mean Regulation X of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Reincorporation Transaction" shall mean a transaction prior to an
Offering in which DST Systems becomes a subsidiary of the Holding Company or
merges with or into the Holding Company or a direct, wholly owned Delaware
subsidiary of the Holding Company, and in the event of any such merger, (a) the
surviving company in such merger remains or becomes the Borrower under the DST
Credit Agreements and remains or becomes liable for all the Obligations to the
same extent as the original Borrower, (b) no person receives any consideration
other than common stock of such surviving corporation or the Holding Company,
and (c) the assets and liabilities of the surviving corporation are the same
as those of DST Systems immediately prior to such merger.
"Reportable Event" shall mean any reportable event as defined in
Section 4043 of ERISA and the regulations issued under such Section with respect
to a Plan (other than a Multiemployer Plan), excluding, however, such events as
to which the PBGC by regulation or by technical update waived the requirement of
Section 4043(a) of ERISA that it be notified within 30 days of the occurrence of
such event; provided that a failure to meet the minimum funding standard of
Section 412 of the Code and of Section 302 of ERISA shall be a reportable event
regardless of the issuance of any waiver in accordance with Section 412(d) of
the Code.
"Required Lenders" shall mean, at any time, (a)(i) the Agent and
Lenders in the aggregate holding at least 50% of the Total Commitment or (ii)
for purposes of acceleration pursuant to clause (ii) of Article VII or if the
Total Commitment has been terminated, the Agent and Lenders in the aggregate
holding at least 50% of the aggregate unpaid principal amount of the Loans or
(b)(i) Lenders in the aggregate holding at least 66-2/3% of the Total
Commitment or (ii) for purposes of acceleration pursuant to clause (ii) of
Article VII or if the Total Commitment has been terminated, Lenders in the
aggregate holding at least 66-2/3% of the aggregate unpaid principal amount
of the Loans.
"Responsible Officer" of any corporation shall mean any executive
officer or Financial Officer of such corporation and any other officer or
similar official thereof responsible for the administration of the
obligations of such corporation in respect of this Agreement.
"Sale and Leaseback Transaction" shall have the meaning assigned to
such term in Section 6.03.
"Significant Subsidiary" shall mean, on any date of determination,
each of (a) KCSR, (b) prior to an Offering, DST Systems and the Holding
Company, (c) Janus and (d) any other Subsidiary the assets of which represent
on such date more than 10% of the consolidated total assets of the Borrower
and the Consolidated Subsidiaries determined in accordance with GAAP.
"S&P" shall mean Standard and Poor's Ratings Group.
"Specified Subsidiary" shall mean, at any time, a Subsidiary, the
total assets of which exceed at such time 3% of the total assets of the Borrower
and the Consolidated Subsidiaries, determined in accordance with GAAP.
"Standby Borrowing" shall mean a borrowing consisting of
simultaneous Standby Loans from each of the Lenders.
"Standby Borrowing Request" shall mean a request made pursuant to
Section 2.04 in the form of Exhibit A-5.
"Standby Loans" shall mean the revolving loans made by the Lenders
to the Borrower pursuant to Section 2.04. Each Standby Loan shall be a
Eurodollar Standby Loan or an ABR Loan.
"Statutory Reserves" shall mean a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board and any other banking authority to which the Agent is
subject (a) with respect to the Base CD Rate (as such term is used in the
definition of "Alternate Base Rate"), for new negotiable nonpersonal time
deposits in dollars of over $100,000 with maturities approximately equal to
three months and (b) with respect to the Adjusted LIBO Rate, for Eurocurrency
Liabilities (as defined in Regulation D). Such reserve percentages shall
include any imposed pursuant to Regulation D. Eurodollar Loans shall be
deemed to constitute Eurocurrency Liabilities and to be subject to such reserve
requirements without benefits of or credit for proration, exemptions or
offsets. Statutory Reserves shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
"subsidiary" shall mean, with respect to any person, any
corporation, partnership, association or other business entity of which
securities or other ownership interests representing more than 50% of the equity
or more than 50% of the ordinary voting power or more than 50% of the general
partnership interests are, at the time any determination is being made, owned,
controlled or held.
"Subsidiary" shall mean any subsidiary of the Borrower.
"Total Commitment" shall mean at any time the aggregate amount of
the Lenders' Commitments, as in effect at such time.
"Transactions" shall have the meaning assigned to such term in
Section 3.02.
"Type", when used in respect of any Loan or Borrowing, shall refer
to the Rate by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined. For purposes hereof, "Rate" shall
include the Adjusted LIBO Rate, the LIBO Rate, the Alternate Base Rate and the
Fixed Rate.
"Unfunded Liabilities" shall mean, on any date of determination,
(a) in the case of Multiemployer Plans and Multiple Employer Plans, the
liability of the Borrower and the Subsidiaries if they were to incur a
complete withdrawal from each such plan and (b) in the case of all other
Plans, all "unfunded benefit liabilities" as defined in Section 4001(a)(18)
of ERISA .
"Withdrawal Liability" shall mean liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions in Section 1.01
shall apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
All references herein to Articles, Sections, Exhibits and Schedules shall be
deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement unless the context shall otherwise require. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; provided,
however, that, for purposes of determining compliance with any covenant set
forth in Article VI, such terms shall be construed in accordance with GAAP as
in effect on the date of this Agreement applied on a basis consistent with
the application used in preparing the Borrower's audited financial statements
referred to in Section 3.05. In the event that any change in GAAP materially
affects any provision of this Agreement, the parties hereto agree that, at
the request of the Borrower or the Required Lenders, they shall negotiate in
good faith in order to amend the affected provisions in such a way as will
restore the parties to their respective positions prior to such change, and,
following any such request, until such amendment becomes effective, the
Borrower's compliance with such provisions shall be determined on the basis
of GAAP as in effect immediately before such change in GAAP became effective.
ARTICLE II. THE CREDITS
SECTION 2.01. Commitments. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Lender
agrees, severally and not jointly, to make Standby Loans to the Borrower, at any
time and from time to time on and after the date hereof and until the earlier of
the Maturity Date and the termination of the Commitment of such Lender, in an
aggregate principal amount at any time outstanding not to exceed such Lender's
Commitment minus the amount by which the Competitive Loans outstanding at such
time shall be deemed to have used such Commitment pursuant to Section 2.16,
subject, however, to the conditions that (a) at no time shall (i) the sum of
(x) the outstanding aggregate principal amount of all Standby Loans made by all
Lenders plus (y) the outstanding aggregate principal amount of all Competitive
Loans made by all Lenders exceed (ii) the Total Commitment, and (b) at all times
the outstanding aggregate principal amount of all Standby Loans made by each
Lender shall equal the product of (i) the percentage which its Commitment
represents of the Total Commitment times (ii) the outstanding aggregate
principal amount of all Standby Loans made pursuant to Section 2.04. Each
Lender's Commitment is set forth opposite its respective name in Schedule
2.01. Such Commitments may be terminated or reduced from time to time
pursuant to Section 2.11.
Within the foregoing limits, the Borrower may borrow, pay or prepay
and reborrow hereunder, on and after the date hereof and prior to the Maturity
Date, subject to the terms, conditions and limitations set forth herein.
SECTION 2.02. Loans. (a) Each Standby Loan shall be made as part
of a Borrowing consisting of Loans made by the Lenders ratably in accordance
with their Commitments; provided, however, that the failure of any Lender to
make any Standby Loan shall not in itself relieve any other Lender of its
obligation to lend hereunder (it being understood, however, that no Lender
shall be responsible for the failure of any other Lender to make any Loan
required to be made by such other Lender). Each Competitive Loan shall be
made in accordance with the procedures set forth in Section 2.03. The Stand-
by Loans or Competitive Loans comprising any Borrowing shall be (i) in the
case of Competitive Loans, in an aggregate principal amount which is an
integral multiple of $1,000,000 and not less than $5,000,000 and (ii) in the
case of Standby Loans, in an aggregate principal amount which is an integral
multiple of $1,000,000 and not less than $5,000,000 (or an aggregate
principal amount equal to the remaining balance of the available Commitments).
(b) Each Competitive Borrowing shall be comprised entirely of
Eurodollar Competitive Loans or Fixed Rate Loans, and each Standby Borrowing
shall be comprised entirely of Eurodollar Standby Loans or ABR Loans, as the
Borrower may request pursuant to Section 2.03 or 2.04, as applicable. Each
Lender may at its option make any Eurodollar Loan by causing any domestic or
foreign branch or Affiliate of such Lender to make such Loan; provided that any
exercise of such option shall not affect the obligation of the Borrower to repay
such Loan in accordance with the terms of this Agreement. Borrowings of more
than one Type may be outstanding at the same time; provided, however, that the
Borrower shall not be entitled to request any Borrowing which, if made, would
result in an aggregate of more than thirteen separate Standby Loans of any
Lender being outstanding hereunder at any one time. For purposes of the
foregoing, Loans having different Interest Periods, regardless of whether
they commence on the same date, shall be considered separate Loans.
(c) Subject to Section 2.05, each Lender shall make each Loan to be
made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds to the Agent in New York, New York, not later
than 12:00 noon, New York City time, and the Agent shall by 3:00 p.m., New
York City time, credit the amounts so received to the general deposit account
of the Borrower with the Agent or, if a Borrowing shall not occur on such
date because any condition precedent herein specified shall not have been
met, return the amounts so received to the respective Lenders. Competitive
Loans shall be made by the Lender or Lenders whose Competitive Bids therefor
are accepted pursuant to Section 2.03 in the amounts so accepted and Standby
Loans shall be made by the Lenders pro rata in accordance with Section 2.16.
Unless the Agent shall have received notice from a Lender prior to the date
of any Borrowing that such Lender will not make available to the Agent such
Lender's portion of such Borrowing, the Agent may assume that such Lender has
made such portion available to the Agent on the date of such Borrowing in
accordance with this paragraph (c) and the Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding
amount. If and to the extent that such Lender shall not have made such
portion available to the Agent, such Lender and the Borrower severally agree
to repay to the Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is made avail-
able to the Borrower until the date such amount is repaid to the Agent
at (i) in the case of the Borrower, the interest rate applicable at the time to
the Loans comprising such Borrowing and (ii) in the case of such Lender, the
Federal Funds Effective Rate. If such Lender shall repay to the Agent such
corresponding amount, such amount shall constitute such Lender's Loan as part of
such Borrowing for purposes of this Agreement.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request any Borrowing if the Interest Period
requested with respect thereto would end after the Maturity Date.
SECTION 2.03. Competitive Bid Procedure. (a) In order to request
Competitive Bids, the Borrower shall hand deliver, telex or telecopy to the
Agent a duly completed Competitive Bid Request in the form of Exhibit A-1
hereto, to be received by the Agent (i) in the case of a Eurodollar
Competitive Borrowing, not later than 10:00 a.m., New York City time, four
Business Days before a proposed Competitive Borrowing and (ii) in the case of
a Fixed Rate Borrowing, not later than 10:00 a.m., New York City time, one
Business Day before a proposed Competitive Borrowing. No ABR Loan shall be
requested in, or made pursuant to, a Competitive Bid Request. A Competitive
Bid Request that does not conform substantially to the format of Exhibit A-1
may be rejected in the Agent's sole discretion, and the Agent shall promptly
notify the Borrower of such rejection by telex or telecopier. Such request
shall in each case refer to this Agreement and specify (x) whether the
Borrowing then being requested is to be a Eurodollar Borrowing or a Fixed
Rate Borrowing, (y) the date of such Borrowing (which shall be a Business
Day) and the aggregate principal amount thereof which shall be in a minimum
principal amount of $5,000,000 and in an integral multiple of $1,000,000,
and (z) the Interest Period with respect thereto (which may not end after the
Maturity Date). Promptly after its receipt of a Competitive Bid Request that is
not rejected as aforesaid, the Agent shall invite by telecopier (in the form set
forth in Exhibit A-2 hereto) the Lenders to bid, on the terms and conditions of
this Agreement, to make Competitive Loans pursuant to the Competitive Bid
Request.
(b) Each Lender may, in its sole discretion, make one or more
Competitive Bids to the Borrower responsive to a Competitive Bid Request. Each
Competitive Bid by a Lender must be received by the Agent via telecopier, in the
form of Exhibit A-3 hereto, (i) in the case of a Eurodollar Competitive
Borrowing, not later than 9:30 a.m., New York City time, three Business Days
before a proposed Competitive Borrowing and (ii) in the case of a Fixed Rate
Borrowing, not later than 9:30 a.m., New York City time, on the day of a
proposed Competitive Borrowing. Multiple bids will be accepted by the Agent.
Competitive Bids that do not conform substantially to the format of Exhibit
A-3 may be rejected by the Agent after conferring with, and upon the
instruction of, the Borrower, and the Agent shall notify the Lender making
such nonconforming bid of such rejection as soon as practicable. Each
Competitive Bid shall refer to this Agreement and specify (x) the principal
amount (which shall be in a minimum principal amount of $5,000,000 and in an
integral multiple of $1,000,000 and which may equal the entire principal
amount of the Competitive Borrowing requested by the Borrower) of the
Competitive Loan or Loans that the Lender is willing to make to the Borrower,
(y) the Competitive Bid Rate or Rates at which the Lender is prepared to make
the Competitive Loan or Loans and (z) the Interest Period and the last day
thereof. If any Lender shall elect not to make a Competitive Bid, such
Lender shall so notify the Agent via telecopier (I) in the case of Eurodollar
Competitive Loans, not later than 9:30 a.m., New York City time, three
Business Days before a proposed Competitive Borrowing, and (II) in the case
of Fixed Rate Loans, not later than 9:30 a.m., New York City time, on the day
of a proposed Competitive Borrowing; provided, however, that failure by any
Lender to give such notice shall not cause such Lender to be obligated to
make any Competitive Loan as part of such Competitive Borrowing. A Competitive
Bid submitted by a Lender pursuant to this paragraph (b) shall be irrevocable.
(c) The Agent shall promptly notify the Borrower by telecopier of
all the Competitive Bids made, the Competitive Bid Rate and the principal amount
of each Competitive Loan in respect of which a Competitive Bid was made and the
identity of the Lender that made each bid. The Agent shall send a copy of all
Competitive Bids to the Borrower for its records as soon as practicable after
completion of the bidding process set forth in this Section 2.03.
(d) The Borrower may in its sole and absolute discretion, subject
only to the provisions of this paragraph (d), accept or reject any Competitive
Bid referred to in paragraph (c) above. The Borrower shall notify the Agent by
telephone, confirmed by telecopier in the form of a Competitive Bid Accept/
Reject Letter, whether and to what extent it has decided to accept or reject
any of or all the bids referred to in paragraph (c) above, (x) in the case of
a Eurodollar Competitive Borrowing, not later than 10:30 a.m., New York City
time, three Business Days before a proposed Competitive Borrowing, and (y) in
the case of a Fixed Rate Borrowing, not later than 10:30 a.m., New York City
time, on the day of a proposed Competitive Borrowing; provided, however,
that (i) the failure by the Borrower to give such notice shall be deemed to
be a rejection of all the bids referred to in paragraph (c) above, (ii) the
Borrower shall not accept a bid made at a particular Competitive Bid Rate if
the Borrower has decided to reject a bid made at a lower Competitive Bid Rate,
(iii) the aggregate amount of the Competitive Bids accepted by the Borrower
shall not exceed the principal amount specified in the Competitive Bid
Request and shall be in a minimum principal amount of $5,000,000, (iv) if the
Borrower shall accept a bid or bids made at a particular Competitive Bid Rate
but the amount of such bid or bids shall cause the total amount of bids to be
accepted by the Borrower to exceed the amount specified in the Competitive
Bid Request, then the Borrower shall accept a portion of such bid or bids in
an amount equal to the amount specified in the Competitive Bid Request less
the amount of all other Competitive Bids accepted with respect to such
Competitive Bid Request, which acceptance, in the case of multiple bids at
such Competitive Bid Rate, shall be made pro rata in accordance with the
amount of each such bid at such Competitive Bid Rate, and (v) except
pursuant to clause (iv) above, no bid shall be accepted for a Competitive Loan
unless such Competitive Loan is in a minimum principal amount of $5,000,000 and
an integral multiple of $1,000,000; provided further, however, that if a
Competitive Loan must be in an amount less than $5,000,000 because of the
provisions of clause (iv) above, such Competitive Loan may be for a minimum of
$1,000,000 or any integral multiple thereof, and in calculating the pro rata
allocation of acceptances of portions of multiple bids at a particular
Competitive Bid Rate pursuant to clause (iv) the amounts shall be rounded to
integral multiples of $1,000,000 in a manner which shall be in the discretion of
the Borrower. A notice given by the Borrower pursuant to this paragraph (d)
shall be irrevocable.
(e) The Agent shall promptly notify each bidding Lender whether or
not its Competitive Bid has been accepted (and if so, in what amount and at what
Competitive Bid Rate) by telecopy sent by the Agent, and each successful bidder
will thereupon become bound, subject to the other applicable conditions hereof,
to make the Competitive Loan in respect of which its bid has been accepted.
(f) A Competitive Bid Request shall not be made within five
Business Days after the date of any previous Competitive Bid Request.
(g) If the Agent shall elect to submit a Competitive Bid in its
capacity as a Lender, it shall submit such bid directly to the Borrower one
quarter of an hour earlier than the latest time at which the other Lenders are
required to submit their bids to the Agent pursuant to paragraph (b) above.
(h) All Notices required by this Section 2.03 shall be given in
accordance with Section 9.01.
SECTION 2.04. Standby Borrowing Procedure. In order to request a
Standby Borrowing, the Borrower shall hand deliver or telecopy to the Agent in
the form of Exhibit A-5 (a) in the case of a Eurodollar Standby Borrowing, not
later than 10:30 a.m., New York City time, three Business Days before a proposed
borrowing and (b) in the case of an ABR Borrowing, not later than 10:30 a.m.,
New York City time, on the day of a proposed borrowing. No Fixed Rate Loan
shall be requested or made pursuant to a Standby Borrowing Request. Such
notice shall be irrevocable and shall in each case specify (i) whether the
Borrowing then being requested is to be a Eurodollar Standby Borrowing or an ABR
Borrowing; (ii) the date of such Standby Borrowing (which shall be a Business
Day) and the amount thereof; and (iii) if such Borrowing is to be a
Eurodollar Standby Borrowing, the Interest Period with respect thereto. If
no election as to the Type of Standby Borrowing is specified in any such
notice, then the requested Standby Borrowing shall be an ABR Borrowing. If
no Interest Period with respect to any Eurodollar Standby Borrowing is
specified in any such notice, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration. If the Borrower shall
not have given notice in accordance with this Section 2.04 of its election to
refinance a Standby Borrowing prior to the end of the Interest Period in
effect for such Borrowing, then the Borrower shall (unless such Borrowing is
repaid at the end of such Interest Period) be deemed to have given notice of an
election to refinance such Borrowing with an ABR Borrowing. The Agent shall
promptly advise the Lenders of any notice given pursuant to this Section 2.04
and of each Lender's portion of the requested Borrowing.
SECTION 2.05. Refinancings. The Borrower may refinance all or any
part of any Borrowing with a Borrowing of the same or a different Type made
pursuant to Section 2.03 or Section 2.04, subject to the conditions and
limitations set forth herein and elsewhere in this Agreement, including
refinancings of Competitive Borrowings with Standby Borrowings and Standby
Borrowings with Competitive Borrowings. Any Borrowing or part thereof so
refinanced shall be deemed to be repaid in accordance with Section 2.07 with the
proceeds of a new Borrowing hereunder and the proceeds of the new Borrowing, to
the extent they do not exceed the principal amount of the Borrowing being
refinanced, shall not be paid by the Lenders to the Agent or by the Agent to the
Borrower pursuant to Section 2.02(c); provided, however, that (i) if the
principal amount extended by a Lender in a refinancing is greater than the
principal amount extended by such Lender in the Borrowing being refinanced, then
such Lender shall pay such difference to the Agent for distribution to the
Lenders described in (ii) below, (ii) if the principal amount extended by a
Lender in the Borrowing being refinanced is greater than the principal amount
being extended by such Lender in the refinancing, the Agent shall return the
difference to such Lender out of amounts received pursuant to (i) above, and
(iii) to the extent any Lender fails to pay the Agent amounts due from it
pursuant to (i) above, any Loan or portion thereof being refinanced with such
amounts shall not be deemed repaid in accordance with Section 2.07 and shall be
payable by the Borrower.
SECTION 2.06. [EXCLUDED INFORMATION IS SUBJECT TO REQUEST FOR
CONFIDENTIAL
TREATMENT]
(b) The Borrower agrees to pay the Agent, for its own account, the
fees (the "Agent's Fees") at the times and in the amounts previously agreed by
the Borrower and the Agent.
(c) All Fees shall be paid on the dates due, in immediately
available funds, to the Agent for distribution, if and as appropriate, among the
Lenders. Once paid, none of the Fees shall be refundable under any circum-
stances absent manifest error.
SECTION 2.07. Repayment of Loans; Evidence of Debt. The
outstanding principal balance of each Competitive Loan and Standby Loan shall be
payable on the last day of the Interest Period applicable to such Loan and on
the Maturity Date. Each Competitive Loan and each Standby Loan shall bear
interest from the date thereof on the outstanding principal balance thereof as
set forth in Section 2.08. Each Lender shall maintain in accordance with its
usual practice an account or accounts evidencing the indebtedness to such Lender
resulting from each Loan made by such Lender from time to time, including the
amounts of principal and interest payable and paid such Lender from time to time
under this Agreement. The Agent shall maintain accounts in which it will record
(i) the amount of each Loan made hereunder, the Type of each Loan made and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Agent hereunder from
the Borrower and each Lender's share thereof. The entries made in the accounts
maintained pursuant to this Section 2.07 shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations therein recorded; provided, however, that the failure of any Lender
or the Agent to maintain such accounts or any error therein shall not in any
manner (i) affect the obligations of the Borrower to repay the Loans in
accordance with their terms or (ii) cause the Borrower's obligations to be
greater than they would have been absent such failure or error.
SECTION 2.08. Interest on Loans. (a) Subject to the provisions of
Section 2.09, the Loans comprising each Eurodollar Borrowing shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 360
days) at a rate per annum equal to (i) in the case of each Eurodollar Standby
Loan, the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Percentage, and (ii) in the case of each
Eurodollar Competitive Loan, the LIBO Rate for the Interest Period in effect for
such Borrowing plus the Margin offered by the Lender making such Loan and
accepted by the Borrower pursuant to Section 2.03. Interest on each Eurodollar
Borrowing shall be payable on each applicable Interest Payment Date. The
Adjusted LIBO Rate and the LIBO Rate for each Interest Period shall be
determined by the Agent, and such determination shall be conclusive absent
manifest error. The Agent shall promptly advise the Borrower and each
Lender, as appropriate, of such determination.
(b) Subject to the provisions of Section 2.09, the Loans comprising
each ABR Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 365 or 366 days, as the case may be, when
determined by reference to the Prime Rate and over a year of 360 days at all
other times) at a rate per annum equal to the Alternate Base Rate plus the
Applicable Percentage. Interest on each ABR Borrowing shall be payable on each
applicable Interest Payment Date. The Alternate Base Rate shall be determined
by the Agent, and such determination shall be conclusive absent manifest
error. The Agent shall promptly advise the Borrower and each Lender of such
determination.
(c) Subject to the provisions of Section 2.09, each Fixed Rate Loan
shall bear interest at a rate per annum (computed on the basis of the actual
number of days elapsed over a year of 360 days) equal to the fixed rate of
interest offered by the Lender making such Loan and accepted by the Borrower
pursuant to Section 2.03. Interest on each Fixed Rate Loan shall be payable on
the Interest Payment Dates applicable to such Loan except as otherwise provided
in this Agreement.
SECTION 2.09. Default Interest. If the Borrower shall default in
the payment of the principal of or interest on any Loan or any other amount
becoming due hereunder, whether by scheduled maturity, notice of prepayment,
acceleration or otherwise, the Borrower shall on demand from time to time from
the Agent pay interest, to the extent permitted by law, on such defaulted amount
up to (but not including) the date of actual payment (after as well as before
judgment) at a rate per annum (computed on the basis of the actual number of
days elapsed over a year of 360 days) equal to the Alternate Base Rate plus the
Applicable Percentage plus 2%.
SECTION 2.10. Alternate Rate of Interest. In the event, and on
each occasion, that on the day two Business Days prior to the commencement of
any Interest Period for a Eurodollar Borrowing the Agent shall have determined
that dollar deposits in the principal amounts of the Eurodollar Loans comprising
such Borrowing are not generally available in the London interbank market, or
that the rates at which such dollar deposits are being offered will not
adequately and fairly reflect the cost to any Lender of making or maintaining
its Eurodollar Loan during such Interest Period, or that reasonable means do not
exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, the Agent shall,
as soon as practicable thereafter, give written or telecopy notice of such
determination to the Borrower and the Lenders. In the event of any such
determination, until the Agent shall have advised the Borrower and the Lenders
that the circumstances giving rise to such notice no longer exist, (i) any
request by the Borrower for a Eurodollar Competitive Borrowing pursuant to
Section 2.03 shall be of no force and effect and shall be denied by the Agent
and (ii) any request by the Borrower for a Eurodollar Standby Borrowing
pursuant to Section 2.04 shall be deemed to be a request for an ABR
Borrowing. In the event of any such determination, the Lenders shall
negotiate with the Borrower, at its request, as to the interest rate which
the Loans comprising such an ABR Borrowing shall bear; provided that such
Loans shall bear interest as provided in Section 2.08(b) pending the
execution by the Borrower and the Lenders of a written agreement providing for a
different interest rate. Each determination by the Agent hereunder shall be
conclusive absent manifest error.
SECTION 2.11. Termination and Reduction of Commitments. (a) Upon
at least three Business Days' prior irrevocable written or telecopy notice to
the Agent, the Borrower may at any time in whole permanently terminate, or
from time to time in part permanently reduce, the Total Commitment; provided,
however, that (i) each partial reduction of the Total Commitment shall be in
an integral multiple of $1,000,000 and in a minimum principal amount of
$5,000,000 and (ii) no such termination or reduction shall be made which
would reduce the Total Commitment to an amount less than the aggregate
outstanding principal amount of the Competitive Loans.
(b) Each reduction in the Total Commitment hereunder shall be made
ratably among the Lenders in accordance with their respective Commitments. The
Borrower shall pay to the Agent for the account of the Lenders, on the date of
each termination or reduction, the Facility Fees on the amount of the
Commitments so terminated or reduced accrued through the date of such
termination or reduction.
SECTION 2.12. Prepayment. (a) The Borrower shall have the right
at any time and from time to time to prepay any Standby Borrowing, in whole or
in part, upon giving written or telecopy notice (or telephone notice promptly
confirmed by written or telecopy notice) to the Agent: (i) before 10:00 a.m.,
New York City time, three Business Days prior to prepayment, in the case of
Eurodollar Loans, and (ii) before 10:00 a.m., New York City time, one Business
Day prior to prepayment, in the case of ABR Loans; provided, however, that each
partial prepayment shall be in an amount which is an integral multiple of
$1,000,000 and not less than $5,000,000. The Borrower shall not have the right
to prepay any Competitive Borrowing.
(b) On the date of any termination or reduction of the Commitments
pursuant to Section 2.11, the Borrower shall pay or prepay so much of the
Standby Borrowings as shall be necessary in order that the aggregate principal
amount of the Competitive Loans and Standby Loans outstanding will not exceed
the Total Commitment after giving effect to such termination or reduction.
(c) Each notice of prepayment shall specify the prepayment date and
the principal amount of each Borrowing (or portion thereof) to be prepaid, shall
be irrevocable and shall commit the Borrower to prepay such Borrowing (or
portion thereof) by the amount stated therein on the date stated therein. All
prepayments under this Section 2.12 shall be subject to Section 2.15 but
otherwise without premium or penalty. All prepayments under this Section 2.12
shall be accompanied by accrued interest on the principal amount being prepaid
to the date of payment.
SECTION 2.13. Reserve Requirements; Change in Circumstances.
(a) Notwithstanding any other provision herein, if after the date of this
Agreement any change in applicable law or regulation or in the interpretation or
administration thereof by any governmental authority charged with the inter-
pretation or administration thereof (whether or not having the force of law)
shall change the basis of taxation of payments to any Lender of the principal of
or interest on any Eurodollar Loan or Fixed Rate Loan made by such Lender or any
Fees or other amounts payable hereunder (other than changes in respect of taxes
imposed on the overall net income of such Lender by the jurisdiction in which
such Lender has its principal or applicable lending office or by any political
subdivision or taxing authority therein), or shall impose, modify or deem
applicable any reserve, special deposit or similar requirement against assets
of, deposits with or for the account of or credit extended by such Lender
(except any such reserve requirement which is reflected in the Adjusted LIBO
Rate), or shall impose on such Lender or the London interbank market any other
condition affecting this Agreement or any Eurodollar Loan or Fixed Rate Loan
made by such Lender, and the result of any of the foregoing shall be to
increase the direct cost to such Lender of making or maintaining any
Eurodollar Loan or Fixed Rate Loan or to reduce the amount of any sum
received or receivable by such Lender hereunder or (whether of principal,
interest or otherwise) by an amount reasonably deemed by such Lender to be
material, then the Borrower will pay to such Lender upon demand such
additional amount or amounts as will compensate such Lender for such
additional costs incurred or reduction suffered. Notwithstanding
the foregoing, no Lender shall be entitled to request compensation under this
paragraph with respect to any Competitive Loan if it shall have been aware of
the change giving rise to such request at the time of submission of the Competi-
tive Bid pursuant to which such Competitive Loan shall have been made.
(b) If any Lender shall have determined that the applicability of
any law, rule, regulation or guideline adopted pursuant to or arising out of the
July 1988 report of the Basle Committee on Banking Regulations and Supervisory
Practices entitled "International Convergence of Capital Measurement and Capital
Standards", or the adoption after the date hereof of any other law, rule,
regulation or guideline regarding capital adequacy, or any change in any of the
foregoing or in the interpretation or administration of any of the foregoing by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or any
lending office of such Lender) or any Lender's holding company with any request
or directive regarding capital adequacy (whether or not having the force of law)
of any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Lender's capital or on the capital
of such Lender's holding company, if any, as a consequence of this Agreement or
the Loans made by such Lender pursuant hereto to a level below that which such
Lender or such Lender's holding company could have achieved but for such
applicability, adoption, change or compliance (taking into consideration such
Lender's policies and the policies of such Lender's holding company with respect
to capital adequacy) by an amount reasonably deemed by such Lender to be
material, then from time to time the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such Lender's
holding company for any such reduction suffered.
(c) Failure on the part of any Lender to demand compensation for
any increased costs or reduction in amounts received or receivable or reduction
in return on capital with respect to any period shall not constitute a waiver of
such Lender's right to demand compensation with respect to such period or any
other period. The protection of this Section shall be available to each Lender
regardless of any possible contention of the invalidity or inapplicability of
the law, rule, regulation, guideline or other change or condition which shall
have occurred or been imposed.
SECTION 2.14. Change in Legality. (a) Notwithstanding any other
provision herein, if any change in any law or regulation or in the inter-
pretation thereof by any governmental authority charged with the administra-
tion or interpretation thereof shall make it unlawful for any Lender to make or
maintain any Eurodollar Loan or to give effect to its obligations as contem-
plated hereby with respect to any Eurodollar Loan, then, by written notice
to the Borrower and to the Agent, such Lender may:
(i) declare that Eurodollar Loans will not thereafter be made by
such Lender hereunder, whereupon such Lender shall not submit a Competitive
Bid in response to a request for Eurodollar Competitive Loans and any
request by the Borrower for a Eurodollar Standby Borrowing shall, as to
such Lender only, be deemed a request for an ABR Loan unless such
declaration shall be subsequently withdrawn; and
(ii) require that all outstanding Eurodollar Loans made by it be
converted to ABR Loans, in which event all such Eurodollar Loans shall be
automatically converted to ABR Loans as of the effective date of such
notice as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, and
(x) all payments and prepayments of principal which would otherwise have been
applied to repay the Eurodollar Loans that would have been made by such Lender
or the converted Eurodollar Loans of such Lender shall instead be applied to
repay the ABR Loans made by such Lender in lieu of, or resulting from the
conversion of, such Eurodollar Loans and (y) such Lender shall negotiate with
the Borrower, at its request, as to the interest rate which such ABR Loans
shall bear; provided that such Loans shall bear interest as provided in
Section 2.08(b) pending the execution by the Borrower and such Lender of a
written agreement providing for a different interest rate.
(b) For purposes of this Section 2.14, a notice to the Borrower by
any Lender shall be effective as to each Eurodollar Loan, if lawful, on the last
day of the Interest Period currently applicable to such Eurodollar Loan; in all
other cases such notice shall be effective on the date of receipt by the
Borrower.
SECTION 2.15. Indemnity. The Borrower shall indemnify each Lender
against any loss or expense which such Lender may sustain or incur as a
consequence of (a) any failure by the Borrower to fulfill on the date of any
borrowing hereunder the applicable conditions set forth in Article IV, (b) any
failure by the Borrower to borrow or to refinance or continue any Loan here-
under, for any reason other than a default by such Lender, after irrevocable
notice of such borrowing, refinancing or continuation has been given pursuant to
Section 2.03 or 2.04, (c) any payment, prepayment or conversion of a Eurodollar
Loan or Fixed Rate Loan required by any other provision of this Agreement or
otherwise made or deemed made on a date other than the last day of the Interest
Period applicable thereto, (d) any default in payment or prepayment of the
principal amount of any Loan or any part thereof or interest accrued thereon, as
and when due and payable (at the due date thereof, whether by scheduled
maturity, acceleration, irrevocable notice of prepayment or otherwise) or (e)
the occurrence of any Event of Default, including, in each such case, any
loss or reasonable expense sustained or incurred or to be sustained or
incurred in liquidating or employing deposits from third parties acquired to
effect or maintain such Loan or any part thereof as a Eurodollar Loan or
Fixed Rate Loan. Such loss or reasonable expense shall include an amount
equal to the excess, if any, as reasonably determined by such Lender, of (i)
its cost of obtaining the funds for the Loan being paid, prepaid, converted
or not borrowed (assumed to be the Adjusted LIBO Rate or, in the case of a
Fixed Rate Loan, the fixed rate of interest applicable thereto) for the
period from the date of such payment, prepayment or failure to borrow to the
last day of the Interest Period for such Loan (or, in the case of a failure
to borrow, the Interest Period for such Loan which would have commenced on
the date of such failure) over (ii) the amount of interest (as reasonably
determined by such Lender) that would be realized by such Lender in reemploy-
ing the funds so paid, prepaid or not borrowed for such period or Interest
Period, as the case may be.
SECTION 2.16. Pro Rata Treatment. Except as required under Section
2.14, each Standby Borrowing, each payment or prepayment of principal of any
Standby Borrowing, each payment of interest on the Standby Loans, each payment
of the Facility Fees, each reduction of the Commitments and each refinancing
of any Borrowing with a Standby Borrowing of any Type, shall be allocated pro
rata among the Lenders in accordance with their respective Commitments (or,
if such Commitments shall have expired or been terminated, in accordance with
the respective principal amounts of their outstanding Standby Loans). Each
payment of principal of any Competitive Borrowing shall be allocated pro rata
among the Lenders participating in such Borrowing in accordance with the
respective principal amounts of their outstanding Competitive Loans compris-
ing such Borrowing. Each payment of interest on any Competitive Borrowing
shall be allocated pro rata among the Lenders participating in such Borrowing in
accordance with the respective amounts of accrued and unpaid interest on their
outstanding Competitive Loans comprising such Borrowing. For purposes of
determining the available Commitments of the Lenders at any time, each
outstanding Competitive Borrowing shall be deemed to have utilized the
Commitments of the Lenders (including those Lenders which shall not have made
Loans as part of such Competitive Borrowing) pro rata in accordance with such
respective Commitments. Each Lender agrees that in computing such Lender's
portion of any Borrowing to be made hereunder, the Agent may, in its discretion,
round each Lender's percentage of such Borrowing to the next higher or lower
whole dollar amount.
SECTION 2.17. Sharing of Setoffs. Each Lender agrees that if it
shall, through the exercise of a right of banker's lien, setoff or counterclaim
against the Borrower, or pursuant to, a secured claim under Section 506 of
Title 11 of the United States Code or other security or interest arising from,
or in lieu of, such secured claim, received by such Lender under any applicable
bankruptcy, insolvency or other similar law or otherwise, or by any other means,
obtain payment (voluntary or involuntary) in respect of any Standby Loan or
Loans as a result of which the unpaid principal portion of the Standby Loans
shall be proportionately less than the unpaid principal portion of the Standby
Loans of any other Lender, it shall be deemed simultaneously to have
purchased from such other Lender at face value, and shall promptly pay to
such other Lender the purchase price for, a participation in the Standby
Loans of such other Lender, so that the aggregate unpaid principal amount of
the Standby Loans and participations in the Standby Loans held by each Lender
shall be in the same proportion to the aggregate unpaid principal amount of all
Standby Loans then outstanding as the principal amount of its Standby Loans
prior to such exercise of banker's lien, setoff or counterclaim or other event
was to the principal amount of all Standby Loans outstanding prior to such exer-
cise of banker's lien, setoff or counterclaim or other event; provided, how-
ever, that, if any such purchase or purchases or adjustments shall be made
pursuant to this Section 2.17 and the payment giving rise thereto shall
thereafter be recovered, such purchase or purchases or adjustments shall be
rescinded to the extent of such recovery and the purchase price or prices or
adjustment restored without interest. The Borrower expressly consents to the
foregoing arrangements and agrees that any Lender holding a participation in
a Standby Loan deemed to have been so purchased may exercise any and all
rights of banker's lien, setoff or counterclaim with respect to any and all
moneys owing by the Borrower to such Lender by reason thereof as fully as if
such Lender had made a Standby Loan directly to the Borrower in the amount of
such participation.
SECTION 2.18. Payments. (a) The Borrower shall make each payment
(including principal of or interest on any Borrowing or any Fees or other
amounts) hereunder and under any other Loan Document not later than 12:00
(noon), New York City time, on the date when due in dollars to the Agent at
its offices at 270 Park Avenue, New York, New York, in immediately available
funds.
(b) Whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts) hereunder or under any other Loan
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of
interest or Fees, if applicable.
SECTION 2.19. Taxes. (a) Any and all payments by the Borrower
hereunder shall be made, in accordance with Section 2.18, free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding taxes imposed on the Agent's or any Lender's (or any transferee's or
assignee's, including a participation holder's (any such entity a "Transferee"))
net income and franchise taxes imposed on the Agent or any Lender (or
Transferee) by the United States or any jurisdiction under the laws of which
it is organized or in which its applicable lending office is located or any
political subdivision thereof (all such nonexcluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred
to as "Taxes"). If the Borrower shall be required by law to deduct any Taxes
from or in respect of any sum payable hereunder to the Lenders (or any Trans-
feree) or the Agent, (i) the sum payable shall be increased by the amount
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.19) such Lender
(or Transferee) or the Agent (as the case may be) shall receive 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 taxing authority or other Govern-
mental Authority in accordance with applicable law.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from the execu-
tion, delivery or registration of, or otherwise with respect to, this Agree-
ment or any other Loan Document (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Lender (or Transferee) and the
Agent for the full amount of Taxes and Other Taxes (including any Taxes or Other
Taxes imposed by any jurisdiction on amounts payable under this Section 2.19)
paid by such Lender (or Transferee) or the Agent, as the case may be, and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted by the relevant taxing authority or other Governmental
Authority. Such indemnification shall be made within 30 days after the date any
Lender (or Transferee) or the Agent, as the case may be, makes written demand
therefor. If a Lender (or Transferee) or the Agent shall become aware that it
is entitled to receive a refund in respect of Taxes or Other Taxes, it shall
promptly notify the Borrower of the availability of such refund and shall,
within 30 days after receipt of a request by the Borrower, apply for such refund
at the Borrower's expense. If any Lender (or Transferee) or the Agent
receives a refund in respect of any Taxes or Other Taxes for which such Lender
(or Transferee) or the Agent has received payment from the Borrower hereunder
it shall promptly notify the Borrower of such refund and shall, within 30
days after receipt of a request by the Borrower (or promptly upon receipt, if
the Borrower has requested application for such refund pursuant hereto),
repay such refund to the Borrower (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this Section
2.19 with respect to the Taxes or Other Taxes giving rise to such refund),
net of all out-of-pocket expenses of such Lender (or Transferee) or the Agent
and without interest; provided that the Borrower, upon the request of such
Lender (or Transferee) or the Agent, agrees to return such refund (plus
penalties, interest or other charges) to such Lender (or Transferee)
or the Agent in the event such Lender (or Transferee) or the Agent is required
to repay such refund.
(d) Within 30 days after the date of any payment of Taxes or Other
Taxes withheld by the Borrower in respect of any payment to any Lender (or
Transferee) or the Agent, the Borrower will furnish to the Agent, at its address
referred to in Section 9.01, the original or a certified copy of a receipt
issued by the appropriate Governmental Authority evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section 2.19
shall survive the payment in full of the principal of and interest on all Loans
made hereunder.
(f) Each Lender (or Transferee) which is organized outside the
United States shall deliver to the Borrower two copies of either Internal
Revenue Service Form 1001 or Form 4224, or, in the case of a Lender (or Trans-
feree) claiming exemption from U.S. Federal withholding tax under Section 871(h)
or 881(c) of the Code with respect to payments of "portfolio interest", a Form
W-8, or any subsequent versions thereof or successors thereto (and, if such Non-
U.S. Lender delivers a Form W-8, a certificate representing that such Non-U.S.
Lender is not a bank for purposes of Section 881(c) of the Code, is not a
10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code)
of the Borrower and is not a controlled foreign corporation related to the
Borrower (within the meaning of Section 864(d)(4) of the Code)) properly
completed and duly executed by such Lender (or Transferee) establishing that
such payment is totally exempt from, or is eligible for a reduced rate of,
United States Federal withholding tax. Such forms shall be delivered by each
Lender organized outside the United States on or before the date it becomes a
party to this Agreement (or, in the case of a Transferee that is a participa-
tion holder, on or before the date such participation holder becomes a
Transferee hereunder) and on or before the date, if any, such Lender changes
its applicable lending office by designating a different lending office (a
"New Lending Office"). In addition, each Lender organized outside the United
States shall deliver such forms promptly upon the obsolescence or invalidity
of any form previously delivered by such Lender. Notwithstanding any other
provision of this Section 2.19(f), a Lender organized outside the United
States shall not be required to deliver any form pursuant to this Section
2.19(f) that it is not legally able to deliver. Unless the Borrower
and the Agent have received forms or other documents satisfactory to them
indicating that payments hereunder are not subject to United States withholding
tax or are subject to such tax at a rate reduced by an applicable tax treaty,
the Borrower or the Agent shall withhold taxes from such payments at the
applicable statutory rate in the case of payments to or for any Lender (or
Transferee) organized under the laws of a jurisdiction outside the United
States.
(g) The Borrower shall not be required to pay any additional
amounts to any Lender (or Transferee) in respect of United States Federal
withholding tax pursuant to paragraph (a) above to the extent that the obliga-
tion to pay such additional amounts existed on the date such Lender (or Trans-
feree) became a party to this Agreement (or in the case of a Transferee that
is a participation holder, on the date such participation holder became a Trans-
feree hereunder) or would not have arisen but for a failure by such Lender (or
Transferee) to comply with the provisions of paragraph (f) above unless such
failure results from (i) a change in applicable law, regulation or official
interpretation thereof, (ii) an amendment, modification or revocation of any
applicable tax treaty or a change in official position regarding the application
or interpretation thereof, in each case after the date of the first Borrowing
(and, in the case of a Transferee, after the date of assignment or transfer) or
(iii) an assignment, participation, transfer or designation made at the request
of the Borrower; provided, however, the Borrower shall be required to pay those
amounts to any Lender (or Transferee) that it was required to pay hereunder
prior to the failure of such Lender (or Transferee) to comply with the
provisions of such paragraph (f).
(h) Any Lender (or Transferee) claiming any additional amounts
payable pursuant to this Section 2.19 shall use reasonable efforts (consistent
with legal and regulatory restrictions) to file any certificate or document
requested by the Borrower or to change the jurisdiction of its applicable lend-
ing office if the making of such a filing or change would avoid the need for or
reduce the amount of any such additional amounts which may thereafter accrue and
would not, in the sole determination of such Lender, be otherwise dis-
advantageous to such Lender (or Transferee).
SECTION 2.20. Termination or Assignment of Commitments Under
Certain Circumstances. In the event that any Lender shall fail to pay the Agent
amounts due it pursuant to Section 2.05(i) or any Lender shall have delivered a
notice or certificate pursuant to Section 2.13 or Section 2.14, or the Borrower
shall be required to make additional payments to any Lender under Section 2.19,
the Borrower shall have the right, at its own expense, upon notice to such
Lender and the Agent, to require such Lender to transfer and assign without re-
course (in accordance with and subject to the restrictions contained in
Section 9.04) all its interests, rights and obligations under this Agreement to
another financial institution which shall assume such obligations; provided that
(i) no such termination or assignment shall conflict with any law, rule or
regulation or order of any Governmental Authority and (ii) the Borrower or
the assignee, as the case may be, shall pay to the affected Lender in
immediately available funds on the date of such termination or assignment the
principal of and interest accrued to the date of payment on the Loans made by
it hereunder and all other amounts accrued for its account or owed to it
hereunder.
SECTION 2.21. Lending Offices and Lender Certificates; Survival of
Indemnity. To the extent reasonably possible, each Lender shall designate an
alternate lending office with respect to its Eurodollar Loans and Fixed Rate
Loans to reduce any liability of the Borrower to such Lender under Section 2.13
or to avoid the unavailability of Eurodollar Loans under Section 2.10 or 2.14,
so long as such designation is not disadvantageous to such Lender. A good faith
certificate of a Lender setting forth a reasonable basis of computation and
allocation of the amount due under Section 2.13 or 2.15 shall be final,
conclusive and binding on the Borrower in the absence of manifest error. The
amount specified in any such certificate shall be payable on demand after
receipt by the Borrower of such certificate. The obligations of the Borrower
under Sections 2.13 and 2.15 shall survive the payment of all amounts due under
any Loan Document and the termination of this Agreement.
ARTICLE III. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each of the Lenders that:
SECTION 3.01. Corporate Existence and Standing. Each of the
Borrower and the Subsidiaries is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of incorpora-
tion and has all requisite authority to conduct its business in each juris-
diction in which its business is conducted where the failure to so qualify
would have a material adverse effect on the Borrower or such Subsidiary.
SECTION 3.02. Authorization and Validity. The Borrower has the
corporate power and authority and legal right to execute and deliver the Loan
Documents and to perform its obligations thereunder (collectively, the
"Transactions"). The Transactions have been duly authorized by proper corporate
proceedings, and the Loan Documents constitute legal, valid and binding
obligations of the Borrower enforceable against the Borrower in accordance with
their terms, except as enforceability may be limited by bankruptcy, insolvency,
moratorium or similar laws affecting the enforcement of creditors' rights
generally.
SECTION 3.03. No Conflict; Governmental Consent. None of the
Transactions will violate any law, rule, regulation, order, writ, judgment,
injunction, decree or award binding on the Borrower or any Subsidiary or the
Borrower's or any Subsidiary's articles or certificate of incorporation or
by-laws (including, without limitation, the Interstate Commerce Act and the
regulations promulgated thereunder) or the provisions of any indenture,
instrument or agreement to which the Borrower or any Subsidiary is a party or is
subject, or by which it, or its property, is bound, or conflict therewith or
constitute a default thereunder, or result in the creation or imposition of any
Lien in, of or on the property of the Borrower or any Subsidiary pursuant to the
terms of any such indenture, instrument or agreement. No order, consent,
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, any governmental or public body or
authority, or any subdivision thereof, is required to authorize, or is required
in connection with the execution, delivery and performance of, or the legality,
validity, binding effect or enforceability of, any of the Loan Documents.
SECTION 3.04. Compliance with Laws; Environmental and Safety
Matters. (a) The Borrower and the Subsidiaries have, to the best knowledge and
belief of the Borrower, complied in all material respects with all applicable
statutes, rules, regulations, orders and restrictions of any domestic or foreign
government or any instrumentality or agency thereof, having jurisdiction over
the conduct of their respective businesses or the ownership of their respective
properties (including, without limitation, the Interstate Commerce Act and the
Railway Labor Act).
(b) The Borrower and each Subsidiary has complied in all material
respects with all Federal, state, local and other statutes, ordinances, orders,
judgments, rulings and regulations relating to environmental pollution or to
environmental regulation or control or to employee health or safety. Neither
the Borrower nor any Subsidiary has received notice of any material failure so
to comply. The Borrower's and the Subsidiaries' facilities do not manage any
hazardous wastes, hazardous substances, hazardous materials, toxic substances,
toxic pollutants or substances similarly denominated, as those terms or similar
terms are used in the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response Compensation and Liability Act, the Hazardous Materials
Transportation Act, the Toxic Substance Control Act, the Clean Air Act, the
Clean Water Act or any other applicable law relating to environmental pollution
or employee health and safety, in violation in any material respect of any law
or any regulations promulgated pursuant thereto. The Borrower is aware of no
events, conditions or circumstances involving environmental pollution or
contamination or employee health or safety that could reasonably be expected to
result in material liability on the part of the Borrower or any Subsidiary.
SECTION 3.05. Financial Statements. (a) The Borrower has
heretofore furnished to the Lenders its (i) consolidated balance sheets,
statements of income, changes in stockholders' equity and cash flows as of and
for the fiscal year ended December 31, 1994, audited by and accompanied by the
opinion of Price Waterhouse, independent public accountants, and (ii) its
unaudited consolidated balance sheets and statements of income as of and for the
fiscal quarter and the three-month period ended March 31, 1995, certified by its
chief financial officer. Such financial statements present fairly the financial
condition and results of operations of the Borrower and its consolidated
subsidiaries as of such dates and for such periods. Such balance sheets and the
notes thereto disclose all material liabilities, direct or contingent, of the
Borrower and the Consolidated Subsidiaries as of the dates thereof. Such
financial statements were prepared in accordance with GAAP applied on a
consistent basis.
(b) The Borrower has also heretofore furnished to the Lenders
certain pro forma statements and other financial information containing
estimates and projections of the future financial performance of the Borrower
as set forth in the Confidential Memorandum (such financial statements and
financial information being collectively called the "Projections"). The
Projections were prepared in good faith using due and careful consideration
and represent the Borrower's best estimates as of the date of the Projections
of the financial performance of the Borrower .
SECTION 3.06. No Material Adverse Change. No material adverse
change in the business, properties, financial condition, prospects or results of
operations of the Borrower and the Consolidated Subsidiaries has occurred since
December 31, 1994.
SECTION 3.07. Ownership of Properties. On the date hereof, each of
the Borrower and the Subsidiaries has good title, free of all Liens (other than
those permitted by Section 6.02), to all of the properties and assets reflected
in its financial statements as owned by it.
SECTION 3.08. Subsidiaries. Schedule 3.08 contains an accurate
list of all of the joint ventures and Subsidiaries of the Borrower on the date
hereof, setting forth their respective jurisdictions of organization and the
percentage of their respective ownership interest held by the Borrower or other
Subsidiaries. All of the issued and outstanding shares of capital stock of such
Subsidiaries have been duly authorized and issued and are fully paid and non-
assessable.
SECTION 3.09. Litigation; Contingent Obligations. Except as set
forth in Schedule 3.09 or as disclosed in the Borrower's Annual Report on
Form 10-K dated December 31, 1994 filed with the Securities and Exchange
Commission, (i) there is no litigation, arbitration, governmental investiga-
tion, proceeding or inquiry pending or, to the knowledge of any of their
officers, threatened against or affecting the Borrower or any Consolidated
Subsidiary that (A) is required to be disclosed in any filing with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended, or (B) might materially adversely affect the business,
properties, financial condition, prospects or results of operations of the
Borrower or the ability of the Borrower to perform its obligations under the
Loan Documents and (ii) neither the Borrower nor any Consolidated Subsidiary
has any material contingent obligations.
SECTION 3.10. Material Agreements. Neither the Borrower nor any
Subsidiary is a party to any agreement or instrument or subject to any charter
or other corporate restriction materially and adversely affecting its business,
properties or assets, operations or condition (financial or otherwise). Neither
the Borrower nor any Subsidiary is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in
(a) any agreement to which it is a party, which default might have a material
adverse effect on the consolidated business, properties, financial condition,
prospects or results of operations of the Borrower and the Consolidated
Subsidiaries or (b) any agreement or instrument evidencing or governing
Indebtedness which default would allow the holders thereof to cause such
Indebtedness to become due prior to its stated maturity, result in any mandatory
repayment, prepayment or redemption thereof, or require that any offer be made
to effect any repurchase or redemption thereof.
SECTION 3.11. Regulation U. Margin Stock constitutes less than 25%
of those assets of the Borrower and the Subsidiaries that are subject to any
limitation on sale, pledge, or other restriction hereunder.
SECTION 3.12. Investment Company Act; Public Utility Holding
Company Act. (a) Neither the Borrower nor any Subsidiary is an "investment
company" or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
(b) Neither the Borrower nor any Subsidiary is a "holding company"
or a "subsidiary company" of a "holding company", or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding company", within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
SECTION 3.13. Use of Proceeds. The Borrower will use the proceeds
of the Loans only for the purposes set forth in the recitals to this Agreement.
SECTION 3.14. Taxes. The Borrower and the Consolidated
Subsidiaries have filed all United States federal tax returns and all other tax
returns which are required to be filed and have paid all taxes due pursuant to
said returns or pursuant to any assessment received by the Borrower or any
Consolidated Subsidiary, including without limitation all federal and state
withholding taxes and all taxes required to be paid pursuant to applicable law,
except such taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided. The United States income tax returns of
the Borrower and the Consolidated Subsidiaries have been audited by the Internal
Revenue Service through the fiscal year ended December 31, 1989. No tax Liens
have been filed, and no claims are being asserted with respect to any such taxes
(other than Liens and claims which are being contested in good faith by
appropriate proceedings). The charges, accruals and reserves on the books of
the Borrower and the Consolidated Subsidiaries in respect of any taxes or other
governmental charges are adequate.
SECTION 3.15. Accuracy of Information. No information, exhibit or
report furnished by the Borrower or any Subsidiary to the Agent or to any Lender
in connection with the negotiation of the Loan Documents contained any material
misstatement of fact or omitted to state a material fact or any fact necessary
to make the statements contained therein not misleading.
SECTION 3.16. Employee Benefit Plans. The Unfunded Liabilities of
all Plans do not in the aggregate exceed $5,000,000. Each Plan complies in all
material respects with all applicable requirements of law and regulations, no
Reportable Event has occurred or is reasonably expected to occur with respect to
any Plan and neither the Borrower nor any other member of the Controlled Group
has (i) taken any steps to terminate any Plan, (ii) initiated any steps to
withdraw from any Plan or (iii) incurred any Withdrawal Liability.
SECTION 3.17. No Undisclosed Dividend Restrictions. Except as set
forth in Schedule 3.17 and except for limitations on the payment of dividends
under applicable law, none of the Subsidiaries is subject to any agreement,
amendment, covenant or understanding that directly or indirectly (through the
application of financial covenants or otherwise) prohibits the ability of such
entity to declare or pay dividends.
ARTICLE IV. CONDITIONS OF LENDING
The obligations of the Lenders to make Loans hereunder are subject
to the satisfaction of the following conditions:
SECTION 4.01. All Borrowings. On the date of each Borrowing,
including each Borrowing in which Loans are refinanced with new Loans as
contemplated by Section 2.05:
(a) The Agent shall have received a notice of such Borrowing as
required by Section 2.03 or Section 2.04, as applicable.
(b) The representations and warranties set forth in Article III
hereof (except, in the case of a refinancing of a Standby Borrowing with a
new Standby Borrowing that does not increase the aggregate principal amount
of the Loans of any Lender outstanding, the representations set forth in
Sections 3.06 and 3.09(i)) shall be true and correct on and as of the date
of such Borrowing with the same effect as though made on and as of such
date, except to the extent such representations and warranties expressly
relate to an earlier date.
(c) At the time of and immediately after such Borrowing, no Event
of Default or Default shall have occurred and be continuing.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date of such Borrowing as to the matters specified in
paragraphs (b) and (c) of this Section 4.01.
SECTION 4.02. First Borrowing. On the date hereof:
(a) The Agent shall have received a favorable written opinion of
Richard P. Bruening, Vice-President and General Counsel of the Borrower, to
the effect set forth in Exhibit D hereto, dated the date hereof and
addressed to the Lenders. The Borrower hereby instructs such counsel to
deliver such opinion to the Agent.
(b) All legal matters incident to this Agreement and the Borrowings
hereunder shall be satisfactory to the Lenders and to [EXCLUDED INFORMATION
IS SUBJECT
TO REQUEST FOR CONFIDENTIAL TREATMENT], counsel for the Agent.
(c) The Agent shall have received (i) a copy of the certificate or
articles of incorporation, including all amendments thereto, of the
Borrower, certified as of a recent date by the Secretary of State of the
State of Delaware and a certificate as to the good standing of the Borrower
as of a recent date, from such Secretary of State; (ii) a certificate of
the Secretary or an Assistant Secretary of the Borrower dated the date
hereof and certifying (A) that attached thereto is a true and complete copy
of the by-laws of the Borrower as in effect on the date hereof and at all
times since a date prior to the date of the resolutions described in
clause (B) below, (B) that attached thereto is a true and complete copy of
resolutions duly adopted by the Board of Directors of the Borrower
authorizing the execution, delivery and performance of the Loan Documents
and the borrowings hereunder, and that such resolutions have not been
modified, rescinded or amended and are in full force and effect, (C) that
the certificate or articles of incorporation of the Borrower have not been
amended since the date of the last amendment thereto shown on the
certificate of good standing furnished pursuant to clause (i) above, and
(D) as to the incumbency and specimen signature of each officer executing
any Loan Document or any other document delivered in connection herewith on
behalf of the Borrower; (iii) a certificate of another officer as to the
incumbency and specimen signature of the Secretary or Assistant Secretary
executing the certificate pursuant to (ii) above; and (iv) such other
documents as the Lenders or [EXCLUDED INFORMATION IS SUBJECT TO REQUEST FOR
CONFIDENTIAL TREATMENT], counsel for the Agent, may reasonably request.
(d) The Agent shall have received a certificate, dated the date
hereof and signed by a Financial Officer of the Borrower, confirming
compliance with the conditions precedent set forth in paragraphs (b) and
(c) of Section 4.01.
(e) The Agent shall have received all Fees and other amounts due
and payable on or prior to the date hereof.
(f) The DST Credit Agreements shall have been, or shall
simultaneously be, executed and delivered.
(g) The Borrower shall have terminated the Total Commitment under
the Credit Agreement dated as of December 8, 1992 (the "1992 Credit
Agreement"), between the Borrower, the lenders named therein and
[EXCLUDED INFORMATION IS SUBJECT TO REQUEST FOR CONFIDENTIAL TREATMENT], in
the manner provided therein and any Loans outstanding (other than any
Competitive Loans that have been made by any Lenders) thereunder (together
with accrued interest on such Loans) and all accrued fees and other amounts
due thereunder shall have been paid in full in the manner provided therein
(capitalized terms used in this clause (g) having the meanings ascribed to
them in the 1992 Credit Agreement). The Borrower shall not have requested
any additional Competitive Loans under the 1992 Credit Agreement, and each
Competitive Loan that has been made by any Lenders under the 1992 Credit
Agreement that remains outstanding after the date hereof shall be deemed to
reduce the available Commitments hereunder by the principal amount of such
Competitive Loan until the repayment of such Competitive Loan.
ARTICLE V. AFFIRMATIVE COVENANTS
The Borrower covenants and agrees with each Lender that, so long as
this Agreement shall remain in effect or the principal of or interest on any
Loan, any Fees or any other expenses or amounts payable under any Loan Document
shall be unpaid, unless the Required Lenders shall otherwise consent in writing:
SECTION 5.01. Conduct of Business and Maintenance of Properties.
(a) The Borrower will, and will cause each Significant Subsidiary to, carry on
and conduct its business in substantially the same manner and in substantially
the same fields of enterprise as it is presently conducted and to do all things
necessary to remain duly incorporated, validly existing and in good standing as
a domestic corporation in its jurisdiction of incorporation and maintain all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted; provided that at any time prior to an Offering, DST may
implement the Reincorporation Transaction, in which case, the Borrower agrees
that upon such reorganization, it will cause DST to deliver to the Agent a copy
of the certificate of incorporation of DST, certified by the Secretary of State
of the State of Delaware.
(b) The Borrower will, and will cause each Significant Subsidiary
to, do all things necessary to maintain, preserve, protect and keep their
properties material to the conduct of their business in good repair, working
order and condition, and make all necessary and proper repairs, renewals and
replacements so that their businesses carried on in connection therewith may be
properly conducted at all times.
SECTION 5.02. Insurance. The Borrower will, and will cause each
Consolidated Subsidiary to, maintain with financially sound and reputable
insurance companies insurance on all their property in such amounts and covering
such risks as is consistent with sound business practice and customary with
companies engaged in similar lines of business, and the Borrower will furnish to
any Lender upon request full information as to the insurance carried.
SECTION 5.03. Compliance with Laws and Taxes. (a) The Borrower
will, and will cause each Consolidated Subsidiary to, comply in all material
respects with all laws (including, without limitation, ERISA, the Interstate
Commerce Act and the Fair Labor Standards Act, as amended, rules, regulations,
orders, writs, judgments, injunctions, decrees or awards to which it may be
subject.
(b) The Borrower will, and will cause each Consolidated Subsidiary
to, pay when due all taxes, assessments and governmental charges and levies upon
it or its income, profits or property, except those which are being contested in
good faith by appropriate proceedings and with respect to which adequate
reserves have been set aside.
SECTION 5.04. Financial Statements, Reports, etc. The Borrower
will maintain, for itself and each Consolidated Subsidiary, a system of
accounting established and administered in accordance with GAAP and will furnish
to the Agent and each Lender:
(a) within [EXCLUDED INFORMATION IS SUBJECT TO REQUEST FOR CONFIDENTIAL
TREATMENT] after the close of each of its fiscal years, an unqualified
(except for qualifications relating to changes in accounting principles or
practices reflecting changes in GAAP and required or approved by the
Borrower's independent certified public accountants) audit report certified
by independent certified public accountants, of nationally recognized
standing, prepared in accordance with GAAP on a consolidated basis for
itself and the Consolidated Subsidiaries, including balance sheets as of
the end of such period and related statements of income and changes in
stockholders' equity and cash flows, accompanied by a certificate of said
accountants that, in the course of their examination necessary for their
certification of the foregoing, they have obtained no knowledge of any
Default or Event of Default, or if, in the opinion of such accountants, any
Default or Event of Default shall exist, stating the nature and status
thereof;
(b) within [EXCLUDED INFORMATION IS SUBJECT TO REQUEST FOR CONFIDENTIAL
TREATMENT] after the close of each of the first three quarterly periods of
each of its fiscal years, for itself and the Consolidated Subsidiaries,
unaudited consolidated balance sheets as at the close of each such period,
consolidated statements of income and a consolidated statement of cash
flows for the period from the beginning of such fiscal year to the end of
such quarter, all certified by its chief financial officer;
(c) together with the financial statements required hereunder, a
compliance certificate in substantially the form of Exhibit E signed by its
chief financial officer showing the calculations necessary to determine
compliance with this Agreement and stating that no Default or Event of
Default exists, or if any Default or Event of Default exists, stating the
nature and status thereof;
(d) as soon as possible and in any event within 10 days after any
Responsible Officer of the Borrower knows or has reason to know that
(i) any Reportable Event has occurred with respect to any Plan, (ii) any
Withdrawal Liability has been incurred with respect to any Multiemployer
Plan or (iii) the Borrower or any member of the Controlled Group has
received any notice concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization within the meaning of Title IV of ERISA, a statement,
signed by the chief financial officer of the Borrower, describing such
Reportable Event, Withdrawal Liability or notice and the action which the
Borrower proposes to take with respect thereto;
(e) as soon as possible and in any event within 10 days after
receipt by the Borrower, a copy of (i) any notice or claim to the effect
that the Borrower or any Subsidiary is or may be liable to any person as a
result of the release by the Borrower, any of the Subsidiaries, or any
other person of any toxic or hazardous waste or substance into the
environment or that all or any of its properties is subject to an
Environmental Lien and (ii) any notice alleging any violation of any
Federal, state or local environmental, health or safety law or regulation
by the Borrower or any Subsidiary, which would, in the case of either of
the preceding clauses (i) and (ii), have a material adverse effect upon the
operations of the Borrower and the Consolidated Subsidiaries, taken as a
whole;
(f) promptly upon the furnishing thereof to the shareholders of the
Borrower, copies of all financial statements, reports and proxy statements
so furnished;
(g) promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular reports which
the Borrower or any Consolidated Subsidiary files with the Securities and
Exchange Commission or financial reports material to the interests of the
Lenders or to the ability of the Borrower to perform its obligations under
the Loan Documents and filed by any of them with the ICC; and
(h) such other information (including financial information) as the
Agent or any Lender may from time to time reasonably request.
SECTION 5.05. Other Notices. The Borrower will, and will cause
each Subsidiary to, give prompt notice in writing to the Lenders of the
occurrence of any Default or Event of Default and of any other development,
financial or otherwise, which might materially adversely affect its business,
properties or affairs or the ability of the Borrower to repay the Obligations.
SECTION 5.06. Access to Properties and Inspections. The Borrower
will, and will cause each Consolidated Subsidiary to, permit the Agent and the
Lenders to make reasonable inspections of the properties, corporate books and
financial records of the Borrower and each Consolidated Subsidiary, to make
reasonable examinations and copies of the books of accounts and other financial
records of the Borrower and each Consolidated Subsidiary, and to discuss the
affairs, finances and accounts of the Borrower and each Consolidated Subsidiary
with, and to be advised as to the same by, their respective officers at such
reasonable times and intervals as the Lenders may designate; provided that
(a) any inspection by any Lender shall be at such Lender's own expense and
(b) the Lenders shall coordinate the timing of their inspections through the
Agent.
SECTION 5.07. Use of Proceeds. The Borrower will, and will cause
each of the Subsidiaries to, use the proceeds of the Loans only for the purposes
set forth in the recitals to this Agreement. The Borrower will not, nor will it
permit any Subsidiary to, use any of the proceeds of the Loans (a) for any
purpose that entails a violation of, or that is inconsistent with, the provi-
sions of the Regulations of the Board including Regulation G, U or X or (b) to
make any acquisition for which the board of directors of the target company has
not given its consent or approval.
SECTION 5.08. Ratings. The Borrower will use commercially
reasonable efforts to obtain and maintain ratings of Index Debt at all times
from Moody's and S&P (unless, in either case, such rating agency shall cease to
rate corporate debt obligations) and will promptly notify the Lenders upon
obtaining knowledge of any change (or prospective change) in, or cessation (or
prospective cessation) of, such ratings.
ARTICLE VI. NEGATIVE COVENANTS
The Borrower covenants and agrees with each Lender and the Agent
that, so long as this Agreement shall remain in effect or the principal of or
interest on any Loan, any Fees or any other expenses or amounts payable under
any Loan Document shall be unpaid, unless the Required Lenders shall otherwise
consent in writing:
SECTION 6.01. Indebtedness. (a) The Borrower will not permit any
Subsidiary to incur, create or suffer to exist any Indebtedness, except:
(i) Indebtedness (secured by Liens) existing on the date hereof and
described in Schedule 6.01;
(ii) Indebtedness of the Subsidiaries incurred to finance all or a
portion of the purchase price of assets acquired in the ordinary course of
their railroad transportation or financial services businesses which
Indebtedness is secured solely by a Lien on the assets being acquired
provided that such Indebtedness would not cause a Default or an Event of
Default under any other Section of this Agreement;
(iii) Attributable Debt permitted under Section 6.03;
(iv) other Indebtedness of the Subsidiaries not secured by any Liens
and incurred in the ordinary course of business and refinancings thereof,
in an aggregate principal amount at any one time outstanding not to exceed
[EXCLUDED INFORMATION IS SUBJECT TO REQUEST FOR CONFIDENTIAL TREATMENT] of
Consolidated Net Worth at such time, provided that such Indebtedness would
not cause a Default or an Event of Default under any other Section of this
Agreement; and
(v) Guarantees of the Obligations by any Subsidiary in favor of the
Agent and the Lenders as required under paragraph (c) below.
(b) The Borrower shall not incur, create or suffer to exist any
Indebtedness ("Subordinated Indebtedness") that by its terms is subordinated in
right of payment to any other indebtedness, unless the Obligations constitute
senior indebtedness that is entitled, to the satisfaction of the Required
Lenders, to the benefits of the subordination provisions of such Subordinated
Indebtedness.
(c) The Borrower will not permit (i) any Significant Subsidiary to
Guarantee any Indebtedness of the Borrower or (ii) any Significant Subsidiary to
Guarantee any Indebtedness Guaranteed by the Borrower, unless, in the case of
each of the preceding clauses (i) and (ii), prior thereto such Significant
Subsidiary shall have executed and delivered to the Agent, for the benefit of
the Lenders, an unconditional Guarantee with respect to the Obligations satis-
factory in form and substance to the Agent.
SECTION 6.02. Liens. The Borrower will not, nor will it permit any
Subsidiary to, create, incur, or suffer to exist any Environmental Lien securing
clean-up costs or fines in excess of [EXCLUDED INFORMATION IS SUBJECT TO REQUEST
FOR CONFIDENTIAL TREATMENT] in aggregate principal amount except for
Environmental Liens that are being contested in good faith by appropriate
proceedings and the enforcement of which is stayed. The Borrower shall at all
times assure that any Liens on its assets (other than Liens permitted under
clauses (a) through (f) and those specified in clause (g) below) shall be for
the equal and ratable benefit of the Lenders and the Agent. The Borrower will
not, nor will it permit any Subsidiary to, create, incur, or suffer to exist any
other Lien in, of or on the property (now or hereafter acquired), or on any
income or revenues or rights in respect of any thereof, of the Borrower or any
Subsidiary, except:
(a) Liens for taxes, assessments or governmental charges or levies
on its property if the same shall not at the time be delinquent or
thereafter can be paid without penalty, or are being contested in good
faith and by appropriate proceedings;
(b) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the ordinary course of
business that secure payment of obligations not more than 60 days past due
except for such Liens as are being contested in good faith by appropriate
proceedings;
(c) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar legislation;
(d) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature generally
existing with respect to properties of a similar character and that do not
in any material way affect the marketability of the same or interfere with
the use thereof in the business of the Borrower or the Consolidated
Subsidiaries;
(e) Liens existing on the date hereof and described in Schedule 6.02
hereto; provided that such Liens shall secure only those obligations that
they secure on the date hereof;
(f) Liens, granted on property or assets solely to secure
Indebtedness evidencing all or a portion of the purchase price of property
or assets or any refinancing thereof provided that such Lien attaches only
to the property or assets being acquired and that any such refinancing does
not increase the aggregate principal amount of such Indebtedness but only
to the extent that such Indebtedness would not result in a Default or an
Event of Default under any other Section of this Agreement; and
(g) Liens, in addition to Liens permitted under the above
clauses (a) through (f), on property or assets having on the date of
determination an aggregate depreciated book value (determined in accordance
with GAAP) that, when taken together with the aggregate amount of all
Attributable Debt in connection with all Sale and Leaseback Transactions of
the Borrower and the Subsidiaries (other than Sale and Leaseback
Transactions consummated prior to the date hereof), does not exceed
[EXCLUDED INFORMATION IS SUBJECT TO REQUEST FOR CONFIDENTIAL TREATMENT] of
Consolidated Net Worth, so long as any such Liens on property or assets of
the Borrower (as opposed to assets solely of the Subsidiaries) shall also
be for the pari passu benefit of the Lenders as provided above.
SECTION 6.03. Sale and Lease-Back Transactions. The Borrower will
not, and will not permit any Subsidiary to, enter into any arrangement, directly
or indirectly, with any person whereby it shall sell or transfer any property,
real or personal, used or useful in its business, whether now owned or hereafter
acquired, and thereafter rent or lease such property or other property which it
intends to use for substantially the same purpose or purposes as the property
being sold or transferred (a "Sale and Leaseback Transaction"); provided that
the Borrower or any Subsidiary may enter into any Sale and Leaseback Transaction
if (a) at the time of such Transaction no Default or Event of Default shall have
occurred and be continuing, (b) the proceeds from the sale of the subject
property shall be at least equal to its fair market value on the date of such
sale and (c) the aggregate amount of all Attributable Debt in connection with
all Sale and Leaseback Transactions of the Borrower and the Subsidiaries (other
than Sale and Leaseback Transactions consummated prior to the date hereof),
when taken together with the depreciated book value (determined in accordance
with GAAP) of all assets or property on which there shall exist any Liens pursu-
ant to Section 6.02(g), does not exceed [EXCLUDED INFORMATION IS SUBJECT TO
REQUEST FOR CONFIDENTIAL TREATMENT] of Consolidated Net Worth on any date of
determination.
SECTION 6.04. Mergers, Consolidations and Transfers of Assets. The
Borrower will not, and will not permit any Subsidiary to, merge into or
consolidate with any other person, or permit any other person to merge into or
consolidate with it, or sell, transfer, lease or otherwise dispose of (in one
transaction or in a series of transactions) all or any substantial part of its
assets (whether now owned or hereafter acquired) or any capital stock of any
Subsidiary, except that (a) the Borrower and any Subsidiary may sell assets in
the ordinary course of business, (b) the Borrower may permit DST Systems to
implement the Reincorporation Transaction; (c) the Borrower may sell the real
property listed in Schedule 6.04, (d) the Borrower may sell Berger to DST,
(e) the Borrower may complete an Offering and transfer capital stock of
DST Systems (or of the Holding Company) after an Offering as consideration for
acquisitions of capital stock or assets (other than cash or cash equivalents)
and (f) if at the time thereof and immediately after giving effect thereto no
Event of Default or Default shall have occurred and be continuing (i) any wholly
owned Subsidiary may merge into the Borrower in a transaction in which the
Borrower is the surviving corporation, (ii) any wholly owned Subsidiary may
merge into or consolidate with any other wholly owned Subsidiary in a trans-
action in which the surviving entity is a wholly owned Subsidiary and no
person other than the Borrower or a wholly owned Subsidiary receives any
consideration and (iii) the Borrower and the Subsidiaries may sell, transfer,
lease or dispose of assets out of the ordinary course of business having
depreciated book values (determined in accordance with GAAP) that in the
aggregate for all assets so disposed of during the term of this Agreement do
not exceed [EXCLUDED INFORMATION IS SUBJECT TO REQUEST FOR CONFIDENTIAL
TREATMENT] of Consolidated Net Worth on any date of determination to any other
person.
SECTION 6.05. Transactions with Affiliates. The Borrower will not,
and will not permit any Subsidiary to, sell or transfer any property or assets
to, or purchase or acquire any property or assets from, or otherwise engage in
any other transactions with, any of its Affiliates (other than any Subsidiary),
except that the Borrower or any Subsidiary may engage in any of the foregoing
transactions in the ordinary course of business at prices and on terms and
conditions which, taken as a whole, are not less favorable to the Borrower or
such Subsidiary than would prevail in an arm's-length transaction with unrelated
third parties.
SECTION 6.06. Certain Other Agreements. The Borrower will not, and
will not permit any Subsidiary to (i) be bound by or enter into any agreement,
amendment, covenant, understanding or revision to any agreement which directly
or indirectly (through the application of financial covenants or otherwise)
prohibits or restricts the ability of such Subsidiary to declare and pay
dividends or make any loans or advances or any other distribution to the
Borrower (except for limitations on the payment of dividends set forth in
Schedule 3.17 or imposed by applicable law); or (ii) be bound by or enter
into any agreement, indenture, contract, instrument, amendment or lease
containing any covenant restricting the incurrence of Indebtedness or
governing the Borrower's and the Subsidiaries' financial condition if such
covenant is more restrictive than the analogous provision of this Agreement
unless (A) the Borrower has delivered a copy of such document to the Agent
not less than 10 Business Days prior to executing the same and (B) the
Borrower enters into an amendment to this Agreement to add the more
restrictive covenant or to conform the analogous provision of this Agreement
to such more restrictive covenant.
SECTION 6.07. Certain Financial Covenants. The Borrower will not:
(a) permit the ratio of Consolidated Total Indebtedness to the sum
of Consolidated Total Indebtedness and Consolidated Net Worth to exceed
(I)[EXCLUDED INFORMATION IS SUBJECT TO REQUEST FOR CONFIDENTIAL TREATMENT] at
any time from the date hereof through December 31, 1995 and (ii)[EXCLUDED
INFORMATION IS SUBJECT TO REQUEST FOR CONFIDENTIAL TREATMENT] at any time there-
after; or
(b) permit the assets of the Subsidiaries, other than the
Significant Subsidiaries, to represent in the aggregate at any time more than
[EXCLUDED INFORMATION IS SUBJECT TO REQUEST FOR CONFIDENTIAL TREATMENT] of
Consolidated Total Assets.
SECTION 6.08 Margin Stock. The Borrower will not, nor will it
permit any Subsidiary to, own or acquire Margin Stock such that at any time
Margin Stock of the Borrower and its Subsidiaries represents more than
[EXCLUDED INFORMATION IS SUBJECT TO REQUEST FOR CONFIDENTIAL TREATMENT] of the
value of the assets of the Borrower and its Subsidiaries on a consolidated basis
that are subject to Section 6.02 or Section 6.04.
ARTICLE VII. EVENTS OF DEFAULT
In case of the happening of any of the following events ("Events of
Default"):
(a) any representation or warranty made or deemed made by or on
behalf of the Borrower or any Subsidiary to the Lenders or the Agent under
or in connection with this Agreement, any Loan, or any certificate or
information delivered in connection with this Agreement or any other Loan
Document shall be materially false on the date as of which made;
(b) nonpayment of principal of any Loan when due;
(c) nonpayment of interest upon any Loan or of any Fee or other
Obligations (other than an amount referred to in (b) above) under any of
the Loan Documents within five days after the same becomes due;
(d) the breach by the Borrower of any of the terms or provisions of
Section 5.07 or in Article VI;
(e) the breach by the Borrower (other than a breach which
constitutes an Event of Default under (a), (b), (c) or (d) above) of any of
the terms or provisions of this Agreement which is not remedied within
fifteen days after written notice from the Agent or any Lender;
(f) failure of the Borrower or any Subsidiary to pay any
Indebtedness in excess of $10,000,000 in aggregate principal amount when
due; or the default by the Borrower or any Subsidiary in the performance of
any term, provision or condition contained in any agreement under which any
Indebtedness in excess of $10,000,000 in aggregate principal amount was
created or is governed, the effect of which is to permit the holder or
holders of such Indebtedness to cause such Indebtedness to become due prior
to its stated maturity; or the default by the Borrower or any Subsidiary in
the performance of any term, provision or condition contained in any
agreement under which any Indebtedness in excess of $10,000,000 in
aggregate principal amount was created or is governed, the effect of which
is to cause the holder or holders of such Indebtedness or a trustee or
other representative of such holders to cause such Indebtedness to become
due prior to its stated maturity; or any Indebtedness in excess of
$10,000,000 in aggregate principal amount shall be declared to be due and
payable or required to be prepaid (other than by a regularly scheduled
payment) prior to the stated maturity thereof;
(g) the Borrower or any Specified Subsidiary shall (i) have an order
for relief entered with respect to it under the Federal Bankruptcy Code,
(ii) not pay, or admit in writing its inability to pay, its debts generally
as they become due, (iii) make a general assignment for the benefit of
creditors, (iv) apply for, seek, consent to, or acquiesce in, the
appointment of a receiver, custodian, trustee, examiner, liquidator or
similar official for it or any substantial part of its property,
(v) institute any proceeding seeking an order for relief under the Federal
Bankruptcy Code or seeking to adjudicate it a bankrupt or insolvent, or
seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail to
file an answer or other pleading denying the material allegations of any
such proceeding filed against it, (vi) take any corporate action to
authorize or effect any of the foregoing actions set forth in this
paragraph (g) or (vii) fail to contest in good faith any appointment or
proceeding described in the following paragraph (h);
(h) without the application, approval or consent of the Borrower or
any Subsidiary, a receiver, trustee, examiner, liquidator or similar
official shall be appointed for the Borrower or any Specified Subsidiary or
any substantial part of its property, or a proceeding described in
clause (v) of the preceding paragraph (g) shall be instituted against the
Borrower or any Specified Subsidiary and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for a
period of 60 consecutive days;
(i) any court, government or governmental agency shall condemn,
seize or otherwise appropriate, or take custody or control of all of the
property of the Borrower or any Subsidiary or an amount of such property or
assets having depreciated book values (determined in accordance with GAAP)
that in the aggregate for all properties and assets so appropriated or
taken during the term of this Agreement exceed [EXCLUDED INFORMATION IS
SUBJECT TO REQUEST FOR CONFIDENTIAL TREATMENT] of Consolidated Net Worth
on any date of determination;
(j) the Borrower or any Subsidiary shall fail within 30 days to pay,
bond or otherwise discharge any judgment or order for the payment of money
in excess of $5,000,000 that is not stayed on appeal or otherwise being
appropriately contested in good faith;
(k) the Unfunded Liabilities of all Plans shall exceed in the
aggregate $5,000,000, or any Reportable Event shall occur in connection
with any Plan or any Withdrawal Liability in excess of $2,500,000 shall be
incurred with respect to any Multiemployer Plan or the Borrower or any
member of the Controlled Group has received any notice concerning the
imposition of Withdrawal Liability in excess of $2,500,000 or a
determination that a Multiemployer Plan with respect to which the potential
Withdrawal Liability of the Borrower or any member of the Controlled Group
would exceed $2,500,000 is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA;
(l) a Change in Control shall have occurred; or
(m) the Borrower shall cease to own beneficially at least 90% of the
outstanding voting securities of KCSR or at least 80% of the outstanding
voting securities of Janus or, prior to an Offering, DST Systems;
then, and in every such event (other than an event with respect to the Borrower
described in paragraph (g) or (h) above), and at any time thereafter during the
continuance of such event, the Agent, at the request of the Required Lenders,
shall, by notice to the Borrower, take either or both of the following actions,
at the same or different times: (i) terminate forthwith the Commitments and
(ii) declare the Loans then outstanding to be forthwith due and payable in whole
or in part, whereupon the principal of the Loans so declared to be due and
payable, together with accrued interest thereon and any unpaid accrued Fees and
all other liabilities of the Borrower accrued hereunder and under any other Loan
Document, shall become forthwith due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived by the Borrower, anything contained herein or in any other Loan Document
to the contrary notwithstanding; and in any event with respect to the Borrower
described in paragraph (g) or (h) above, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with accrued
interest thereon and any unpaid accrued Fees and all other liabilities of the
Borrower accrued hereunder and under any other Loan Document, shall auto-
matically become due and payable, without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly waived by the
Borrower, anything contained herein or in any other Loan Document to the
contrary notwithstanding.
ARTICLE VIII. THE AGENT
In order to expedite the transactions contemplated by this
Agreement, [EXCLUDED INFORMATION IS SUBJECT TO REQUEST FOR CONFIDENTIAL
TREATMENT] is hereby appointed to act as Agent on behalf of the Lenders.
Each of the Lenders hereby irrevocably authorizes the Agent to take such
actions on behalf of such Lender or holder and to exercise such powers as are
specifically delegated to the Agent by the terms and provisions hereof and of
the other Loan Documents, together with such actions and powers as are
reasonably incidental thereto. The Agent is hereby expressly authorized by the
Lenders, without hereby limiting any implied authority, (a) to receive on behalf
of the Lenders all payments of principal of and interest on the Loans and all
other amounts due to the Lenders hereunder, and promptly to distribute to each
Lender its proper share of each payment so received; (b) to give notice on
behalf of each of the Lenders to the Borrower of any Event of Default specified
in this Agreement of which the Agent has actual knowledge acquired in connection
with its agency hereunder; and (c) to distribute to each Lender copies of all
notices, financial statements and other materials delivered by the Borrower
pursuant to this Agreement as received by the Agent.
Neither the Agent nor any of its directors, officers, employees or
agents shall be liable as such for any action taken or omitted by any of them
except for its or his own gross negligence or wilful misconduct, or be
responsible for any statement, warranty or representation herein or the contents
of any document delivered in connection herewith, or be required to ascertain or
to make any inquiry concerning the performance or observance by the Borrower of
any of the terms, conditions, covenants or agreements contained in any Loan
Document. The Agent shall not be responsible to the Lenders for the due
execution, genuineness, validity, enforceability or effectiveness of this
Agreement or any other Loan Documents or other instruments or agreements. The
Agent shall in all cases be fully protected in acting, or refraining from
acting, in accordance with written instructions signed by the Required
Lenders and, except as otherwise specifically provided herein, such instruc-
tions and any action or inaction pursuant thereto shall be binding on all the
Lenders. The Agent shall, in the absence of knowledge to the contrary, be
entitled to rely on any instrument or document believed by it in good faith
to be genuine and correct and to have been signed or sent by the proper
person or persons. Neither the Agent nor any of its directors, officers,
employees or agents shall have any responsibility to the Borrower on account
of the failure of or delay in performance or breach by any Lender of any of
its obligations hereunder or to any Lender on account of the failure of or
delay in performance or breach by any other Lender or the Borrower of any of
their respective obligations hereunder or under any other Loan Document or in
connection herewith or therewith. The Agent may execute any and all duties
hereunder by or through agents or employees and shall be entitled to rely
upon the advice of legal counsel selected by it with respect to all matters
arising hereunder and shall not be liable for any action taken or suffered in
good faith by it in accordance with the advice of such counsel.
The Lenders hereby acknowledge that the Agent shall be under no duty
to take any discretionary action permitted to be taken by it pursuant to the
provisions of this Agreement unless it shall be requested in writing to do so by
the Required Lenders.
Subject to the appointment and acceptance of a successor Agent as
provided below, the Agent may resign at any time by notifying the Lenders and
the Borrower. Upon any such resignation, the Required Lenders shall have the
right, after consultation with the Borrower, to appoint a successor. If no
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Agent gives
notice of its resignation, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent which shall be a bank with an office in
New York, New York, having a combined capital and surplus of at least
$50,000,000 or an Affiliate of any such bank. Upon the acceptance of any
appointment as Agent hereunder by a successor bank, such successor shall
succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Agent and the retiring Agent shall be discharged from
its duties and obligations hereunder. After the Agent's resignation here-
under, the provisions of this Article and Section 9.05 shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken
by it while it was acting as Agent.
With respect to the Loans made by it hereunder, the Agent in its
individual capacity and not as Agent shall have the same rights and powers as
any other Lender and may exercise the same as though it were not the Agent,
and the Agent and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower or any Subsidiary or
other Affiliate thereof as if it were not the Agent.
Each Lender agrees (i) to reimburse the Agent, on demand, in the
amount of its pro rata share (based on its Commitment hereunder or, if the Total
Commitment shall be terminated, the percentage it holds of the aggregate
outstanding principal amount of the Loans) of any expenses incurred for the
benefit of the Lenders by the Agent, including counsel fees and compensation of
agents and employees paid for services rendered on behalf of the Lenders, which
shall not have been reimbursed by the Borrower and (ii) to indemnify and hold
harmless the Agent and any of its directors, officers, employees or agents, on
demand, in the amount of such pro rata share, from and against any and all
liabilities, taxes, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by or asserted against it in its capacity as the
Agent or any of them in any way relating to or arising out of this Agreement or
any other Loan Document or any action taken or omitted by it or any of them
under this Agreement or any other Loan Document, to the extent the same shall
not have been reimbursed by the Borrower; provided that no Lender shall be
liable to the Agent for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the gross negligence or wilful misconduct of the Agent or any of
its directors, officers, employees or agents.
Each Lender acknowledges that it has, independently and without
reliance upon the Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agent or any other Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement or any other Loan Document, any related
agreement or any document furnished hereunder or thereunder.
ARTICLE IX. MISCELLANEOUS
SECTION 9.01. Notices. Notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed or sent by graphic scanning or other telegraphic
communications equipment of the sending party, as follows:
(a) if to the Borrower, to it at 114 West 11th Street, Kansas City,
Missouri 64105-1808, Attention of the Vice President and Chief Financial
Officer (Telecopy No. (816) 556-0192), with a copy to the Senior Vice
President and General Counsel (Telecopy No. (816) 556-0227);
(b) [EXCLUDED INFORMATION IS SUBJECT TO REQUEST FOR CONFIDENTIAL
TREATMENT]
(c) if to a Lender, to it at its address (or telecopy number) set
forth in Schedule 2.01 or in the Assignment and Acceptance pursuant to
which such Lender shall have become a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy or other telegraphic communications equipment of the sender, or on the
date five Business Days after dispatch by certified or registered mail if
mailed, in each case delivered, sent or mailed (properly addressed) to such
party as provided in this Section 9.01 or in accordance with the latest un-
revoked direction from such party given in accordance with this Section 9.01.
SECTION 9.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and shall survive the making by the Lenders
of the Loans, regardless of any investigation made by the Lenders or on their
behalf, and shall continue in full force and effect as long as the principal of
or any accrued interest on any Loan or any Fee or any other amount payable under
this Agreement or any other Loan Document is outstanding and unpaid and so long
as the Commitments have not been terminated.
SECTION 9.03. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower and the Agent and
when the Agent shall have received copies hereof which, when taken together,
bear the signatures of each Lender, and thereafter shall be binding upon and
inure to the benefit of the Borrower, the Agent and each Lender and their
respective successors and assigns, except that the Borrower shall not have the
right to assign its rights hereunder or any interest herein without the prior
consent of all the Lenders.
SECTION 9.04. Successors and Assigns. (a) Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of the Borrower, the Agent or the
Lenders that are contained in this Agreement shall bind and inure to the
benefit of their respective successors and assigns.
(b) Each Lender may assign to one or more assignees all or a
portion of its interests, rights and obligations under this Agreement (including
all or a portion of its Commitment and the Standby Loans at the time owing to
it); provided, however, that (i) except in the case of an assignment to a Lender
or an Affiliate of such Lender, the Borrower and the Agent must give their
prior written consent to such assignment (which consent shall not be un-
reasonably withheld), (ii) each such assignment shall be of a constant, and not
a varying, percentage of all the assigning Lender's rights and obligations under
this Agreement, (iii) the amount of the Commitment of the assigning Lender sub-
ject to each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Agent) shall not
be less than $10,000,000 (and shall be an integral multiple of $1,000,000),
(iv) the assigning Lender shall not assign any percentage of its rights and
obligations under this Agreement without assigning the same percentage of its
rights and obligations under the Facility A Agreement, in each case to the
same assignee, (v) the parties to each such assignment shall execute and de-
liver to the Agent an Assignment and Acceptance and a processing and
recordation fee of $3,000 and (vi) the assignee, if it shall not be a Lender,
shall deliver to the Agent an Administrative Questionnaire. Upon acceptance
and recording pursuant to paragraph (e) of this Section 9.04, from and after
the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five Business Days after the execution
thereof, (A) the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Acceptance, have the
rights and obligations of a Lender under this Agreement and (B) the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this Agree-
ment (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto (but shall continue to
be entitled to the benefits of Sections 2.13, 2.15, 2.19 and 9.05, as well as to
any Fees accrued for its account hereunder and not yet paid)). Notwithstand-
ing the foregoing, any Lender assigning its rights and obligations under this
Agreement may retain any Competitive Loans made by it outstanding at such
time, and in such case shall retain its rights hereunder in respect of any
Loans so retained until such Loans have been repaid in full in accordance
with this Agreement.
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its Commitment, and the outstanding balances of its Standby Loans and
Competitive Loans, in each case without giving effect to assignments thereof
which have not become effective, are as set forth in such Assignment and
Acceptance, (ii) except as set forth in (i) above, such assigning Lender
makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, any
other Loan Document or any other instrument or document furnished pursuant
hereto or the financial condition of the Borrower or any Subsidiary or the
performance or observance by the Borrower or any Subsidiary of any of its
obligations under this Agreement, any other Loan Document or any other instru-
ment or document furnished pursuant hereto; (iii) such assignee represents
and warrants that it is legally authorized to enter into such Assignment and
Acceptance; (iv) such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 5.04 and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to
enter into such Assignment and Acceptance; (v) such assignee will inde-
pendently and without reliance upon the Agent, such assigning Lender or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking
or not taking action under this Agreement; (vi) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exer-
cise such powers under this Agreement as are delegated to the Agent by the
terms hereof, together with such powers as are reasonably incidental thereto;
and (vii) such assignee agrees that it will perform in accordance with their
terms all the obligations which by the terms of this Agreement are required
to be performed by it as a Lender.
(d) The Agent shall maintain at one of its offices in The City of
New York a copy of each Assignment and Acceptance delivered to it and a register
for the recordation of the names and addresses of the Lenders, and the Commit-
ment of, and principal amount of the Loans owing to, each Lender 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 Agent and the Lenders may treat each person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder
for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower and any Lender, at any reasonable time and from
time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, an Administrative Questionnaire
completed in respect of the assignee (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in
paragraph (b) above and, if required, the written consent of the Borrower and
the Agent to such assignment, the Agent shall (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Lenders.
(f) Each Lender may without the consent of the Borrower or the
Agent sell participations to one or more banks or other entities in all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans owing to it); provided, however, that
(i) such Lender's obligations under this Agreement shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the participating banks or other entities
shall be entitled to the benefit of the cost protection provisions contained in
Sections 2.13, 2.15 and 2.19 to the same extent as if they were Lenders,
provided that the participating banks or other entities shall not be entitled to
receive any more than the selling Lender would have received had it not sold the
participation and (iv) the Borrower, the Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement, and such Lender shall
retain the sole right to enforce the obligations of the Borrower relating to the
Loans and to approve any amendment, modification or waiver of any provision of
this Agreement (other than amendments, modifications or waivers decreasing any
fees payable hereunder or the amount of principal of or the rate at which
interest is payable on the Loans, extending any scheduled principal payment date
or date fixed for the payment of interest on the Loans or changing or extending
the Commitments).
(g) Any Lender or participant may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section 9.04, disclose to the assignee or participant or proposed assignee
or participant any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower; provided that, prior to any such disclosure of
information designated by the Borrower as confidential, each such proposed
assignee or participant shall execute a confidentiality agreement in the form of
Exhibit F hereto.
(h) Any Lender may at any time assign all or any portion of its
rights under this Agreement issued to it to a Federal Reserve Bank; provided
that no such assignment shall release a Lender from any of its obligations here-
under. In order to facilitate such an assignment to a Federal Reserve Bank, the
Borrower, shall, at the request of the assigning Lender, duly execute and
deliver to the assigning Lender a promissory note or notes evidencing the Loans
made to the Borrower by the assigning Lender hereunder.
(i) The Borrower shall not assign or delegate any of its rights or
duties hereunder.
SECTION 9.05. Expenses; Indemnity. (a) The Borrower agrees to pay
all reasonable out-of-pocket expenses incurred by the Agent in connection with
the preparation of this Agreement and the other Loan Documents or in connection
with any amendments, modifications or waivers of the provisions hereof or there-
of (whether or not the transactions hereby contemplated shall be consummated) or
incurred by the Agent or any Lender in connection with the enforcement or
protection of their rights in connection with this Agreement and the other Loan
Documents or in connection with the Loans made, including the reasonable fees,
charges and disbursements of [EXCLUDED INFORMATION IS SUBJECT TO REQUEST FOR
CONFIDENTIAL
TREATMENT], counsel for the Agent, and, in connection with any such amendment,
modification or waiver or any such enforcement or protection, the fees, charges
and disbursements of any other counsel for the Agent or any Lender. The
Borrower further agrees that it shall indemnify the Lenders from and hold them
harmless against any documentary taxes, assessments or charges made by any
Governmental Authority by reason of the execution and delivery of this Agreement
or any of the other Loan Documents.
(b) The Borrower agrees to indemnify the Agent, each Lender and
each of their respective directors, officers, employees and agents (each such
person being called an "Indemnitee") against, and to hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including reasonable counsel fees, charges and disbursements, incurred
by or asserted against any Indemnitee arising out of, in any way connected with,
or as a result of (i) the execution or delivery of this Agreement or any other
Loan Document or any agreement or instrument contemplated thereby, the
performance by the parties thereto of their respective obligations thereunder or
the consummation of the Transactions and the other transactions contemplated
thereby, (ii) the use of the proceeds of the Loans or (iii) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses (i) are determined by a court
of competent jurisdiction by final and nonappealable judgment to have resulted
from the negligence or wilful misconduct of such Indemnitee and (ii) have not,
in whole or in part, arisen out of or resulted from any act, or omission to act,
of the Borrower or any of its Affiliates.
(c) The provisions of this Section 9.05 shall remain operative and
in full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document, or any investigation
made by or on behalf of the Agent or any Lender. All amounts due under this
Section 9.05 shall be payable on written demand therefor.
SECTION 9.06. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of the Borrower against any of and all the obliga-
tions of the Borrower now or hereafter existing under this Agreement and other
Loan Documents held by such Lender, irrespective of whether or not such Lender
shall have made any demand under this Agreement or such other Loan Document and
although such obligations may be unmatured. The rights of each Lender under
this Section are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have.
SECTION 9.07. Applicable Law. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK.
SECTION 9.08. Waivers; Amendment. (a) No failure or delay of the
Agent or any Lender in exercising any power or right hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Agent and the Lenders
hereunder and under the other Loan Documents are cumulative and are not exclu-
sive of any rights or remedies which they would otherwise have. No waiver of
any provision of this Agreement or any other Loan Document or consent to any
departure by the Borrower therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) below, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice or demand on the Borrower in any case shall entitle the
Borrower to any other or further notice or demand in similar or other
circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders; provided, however, that
no such agreement shall (i) decrease the principal amount of, or extend the
maturity of or any scheduled principal payment date or date for the payment of
any interest on any Loan, or waive or excuse any such payment or any part there-
of, or decrease the rate of interest on any Loan, without the prior written con-
sent of each Lender affected thereby, (ii) change or extend the Commitment or
decrease the Facility Fees of any Lender without the prior written consent of
such Lender, or (iii) amend or modify the provisions of Section 2.16, the provi-
sions of this Section or the definition of "Required Lenders", without the prior
written consent of each Lender; provided further that no such agreement shall
amend, modify or otherwise affect the rights or duties of the Agent hereunder
without the prior written consent of the Agent. Each Lender shall be bound by
any waiver, amendment or modification authorized by this Section and any con-
sent by any Lender pursuant to this Section shall bind any person subsequently
acquiring a Loan from it.
SECTION 9.09. Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the applicable interest rate, together
with all fees and charges which are treated as interest under applicable law
(collectively the "Charges"), as provided for herein or in any other document
executed in connection herewith, or otherwise contracted for, charged, received,
taken or reserved by any Lender, shall exceed the maximum lawful rate (the
"Maximum Rate") which may be contracted for, charged, taken, received or re-
served by such Lender in accordance with applicable law, the rate of interest
payable on the Loans made by such Lender, together with all Charges payable to
such Lender, shall be limited to the Maximum Rate.
SECTION 9.10. Entire Agreement. This Agreement and the other Loan
Documents constitute the entire contract between the parties relative to the
subject matter hereof. Any previous agreement among the parties with respect to
the subject matter hereof is superseded by this Agreement and the other Loan
Documents. Nothing in this Agreement or in the other Loan Documents, expressed
or implied, is intended to confer upon any party other than the parties hereto
and thereto any rights, remedies, obligations or liabilities under or by reason
of this Agreement or the other Loan Documents.
SECTION 9.11. Waiver of Jury Trial. Each party hereto hereby
waives, to the fullest extent permitted by applicable law, any right it may have
to a trial by jury in respect of any litigation directly or indirectly arising
out of, under or in connection with this Agreement or any of the other Loan
Documents. Each party hereto (a) certifies that no representative, agent or
attorney of any other party has represented, expressly or otherwise, that such
other party would not, in the event of litigation, seek to enforce the foregoing
waiver and (b) acknowledges that it and the other parties hereto have been
induced to enter into this Agreement and the other Loan Documents, as appli-
cable, by, among other things, the mutual waivers and certifications in this
Section 9.11.
SECTION 9.12. Severability. In the event any one or more of the
provisions contained in this Agreement or in any other Loan Document should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby. The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 9.13. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one contract, and shall become
effective as provided in Section 9.03.
SECTION 9.14. Headings. Article and Section headings and the Table
of Contents used herein are for convenience of reference only, are not part of
this Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 9.15. Jurisdiction; Consent to Service of Process.
(a) The Borrower hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that any
party may otherwise have to bring any action or proceeding relating to this
Agreement or the other Loan Documents against any other party or its properties
in the courts of any jurisdiction.
(b) The Borrower hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this agreement or the other Loan
Documents in any New York State or Federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 9.16. Confidentiality. (a) Each Lender agrees to keep
confidential and not to disclose (and to cause its officers, directors,
employees, agents, Affiliates and representatives to keep confidential and not
to disclose) all Information (as defined below), except that such Lender shall
be permitted to disclose Information (i) to such of its officers, directors,
employees, advisors, agents, Affiliates and representatives as need to know such
Information in connection with the servicing and protection of its interests in
respect of its Loans and Commitments, the Loan Documents and the Transactions;
(ii) to the extent required by applicable laws and regulations or by any
subpoena or similar legal process or requested by any Governmental Authority
having jurisdiction over such Lender; (iii) to the extent such Information (A)
becomes publicly available other than as a result of a breach by such Lender of
this Agreement, (B) is generated by such Lender or becomes available to such
Lender on a non-confidential basis from a source other than the Borrower or its
Affiliates or the Agent, or (C) was available to such Lender on a non-confi-
dential basis prior to its disclosure to such Lender by the Borrower or its
Affiliates or the Agent; (iv) as provided in Section 9.04(g); or (v) to the
extent the Borrower shall have consented to such disclosure in writing. As
used in this Section 9.16, "Information" shall mean the Confidential Memorandum
and any other confidential materials, documents and information relating to
the Borrower that the Borrower or any of its Affiliates may have furnished or
made available or may hereafter furnish or make available to the Agent or any
Lender in connection with this Agreement.
(b) Each Transferee shall be deemed, by accepting any assignment or
participation hereunder, to have agreed to be bound by this Section 9.16.
IN WITNESS WHEREOF, the Borrower, the Agent and the Lenders have
caused this Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
KANSAS CITY SOUTHERN INDUSTRIES, INC.,
by /s/ Joseph D. Monello, Jr.
Name: Joseph D. Monello, Jr.
Title: Vice President and Chief
Financial Officer
SIGNATURES AND PARTICIPATING BANK GROUP
[EXCLUDED INFORMATION IS SUBJECT TO
REQUEST FOR CONFIDENTIAL TREATMENT]