Exhibit 4D
USF&G CORPORATION
TO
SIGNET TRUST COMPANY,
TRUSTEE
INDENTURE
Dated as of January 28, 1994
Senior Debt Securities
USF&G CORPORATION
Reconciliation and tie between certain Sections of
this Indenture, dated as of January 28, 1994, and
Sections 310 through 318, inclusive, of
the Trust Indenture Act of 1939:
Trust Indenture Indenture
Act Section Section
Section 310(a)(1) . . . . . . . . . . . . . . . . . . 609
(a)(2) . . . . . . . . . . . . . . . . . . 609
(a)(3) . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . 608
610
Section 311(a) . . . . . . . . . . . . . . . . . . 613
(b) . . . . . . . . . . . . . . . . . . 613
Section 312(a) . . . . . . . . . . . . . . . . . . 701
. . . . . . . . . . . . . . . . . . 702(a)
(b) . . . . . . . . . . . . . . . . . . 702(b)
(c) . . . . . . . . . . . . . . . . . . 702(c)
Section 313(a) . . . . . . . . . . . . . . . . . . 703(a)
(b) . . . . . . . . . . . . . . . . . . 703(a)
(c) . . . . . . . . . . . . . . . . . . 703(a)
(d) . . . . . . . . . . . . . . . . . . 703(b)
Section 314(a) . . . . . . . . . . . . . . . . . . 704
(a)(4) . . . . . . . . . . . . . . . . . . 101
1004
(b) . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . 102
Section 315(a) . . . . . . . . . . . . . . . . . . 601
(b) . . . . . . . . . . . . . . . . . . 602
(c) . . . . . . . . . . . . . . . . . . 601
(d) . . . . . . . . . . . . . . . . . . 601
(e) . . . . . . . . . . . . . . . . . . 514
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
Section 316(a) . . . . . . . . . . . . . . . . . . 101
(a)(1)(A) . . . . . . . . . . . . . . . . . . 502
512
(a)(1)(B) . . . . . . . . . . . . . . . . . . 513
(a)(2) . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . 508
(c) . . . . . . . . . . . . . . . . . . 104(c)
Section 317(a)(1) . . . . . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . . . . . 1003
Section 318(a) . . . . . . . . . . . . . . . . . . 107
TABLE OF CONTENTS
PAGE
PARTIES. . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS OF THE COMPANY. . . . . . . . . . . . . . . . . 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions. . . . . . . . . . . . . . . . . 1
Act. . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . 2
Commission . . . . . . . . . . . . . . . . . 3
Common Stock . . . . . . . . . . . . . . . . 3
Company. . . . . . . . . . . . . . . . . . . 3
Company Request; Company Order . . . . . . . 3
Conversion Price . . . . . . . . . . . . . . 3
Corporate Trust Office . . . . . . . . . . . 3
Corporation. . . . . . . . . . . . . . . . . 3
Covenant Defeasance. . . . . . . . . . . . . 4
Defaulted Interest . . . . . . . . . . . . . 4
Defeasance . . . . . . . . . . . . . . . . . 4
Depositary . . . . . . . . . . . . . . . . . 4
Event of Default . . . . . . . . . . . . . . 4
Exchange Act . . . . . . . . . . . . . . . . 4
Floating or Adjustable Rate Provision. . . . 4
Floating or Adjustable Rate Security . . . . 4
Foreign Government Obligations . . . . . . . 4
Global Security. . . . . . . . . . . . . . . 4
Holder . . . . . . . . . . . . . . . . . . . 4
Indenture. . . . . . . . . . . . . . . . . . 4
Interest . . . . . . . . . . . . . . . . . . 5
NOTE: This table of contents shall not, for any purpose, be deemed to
be a part of the Indenture.
Interest Payment Date. . . . . . . . . . . . 5
Maturity . . . . . . . . . . . . . . . . . . 5
Notice of Default. . . . . . . . . . . . . . 5
Officers' Certificate. . . . . . . . . . . . 5
Opinion of Counsel . . . . . . . . . . . . . 5
Original Issue Discount Security . . . . . . 5
Outstanding. . . . . . . . . . . . . . . . . 5
Paying Agent . . . . . . . . . . . . . . . . 7
Person . . . . . . . . . . . . . . . . . . . 7
Place of Payment . . . . . . . . . . . . . . 7
Predecessor Security . . . . . . . . . . . . 7
Principal Insurance Subsidiary . . . . . . . 7
Redempton Date . . . . . . . . . . . . . . . 7
Redemption Price . . . . . . . . . . . . . . 8
Regular Record Date. . . . . . . . . . . . . 8
Responsible Officer. . . . . . . . . . . . . 8
Securities . . . . . . . . . . . . . . . . . 8
Security Register and Security Registrar . . 8
Special Record Date. . . . . . . . . . . . . 8
Stated Maturity. . . . . . . . . . . . . . . 8
Subsidiary . . . . . . . . . . . . . . . . . 8
Trustee. . . . . . . . . . . . . . . . . . . 9
Trust Indenture Act. . . . . . . . . . . . . 9
U.S. Government Obligations. . . . . . . . . 9
Vice President . . . . . . . . . . . . . . . 9
Section 102. Compliance Certificates and Opinions . . . . 9
Section 103. Form of Documents Delivered to Trustee . . . 10
Section 104. Acts of Holders; Record Dates. . . . . . . . 11
Section 105. Notices, Etc., to Trustee and Company. . . . 12
Section 106. Notice to Holders; Waiver. . . . . . . . . . 13
Section 107. Conflict with Trust Indenture Act. . . . . . 13
Section 108. Effect of Headings and Table of Contents . . 14
Section 109. Successors and Assigns . . . . . . . . . . . 14
Section 110. Separability Clause. . . . . . . . . . . . . 14
Section 111. Benefits of Indenture. . . . . . . . . . . . 14
Section 112. Governing Law. . . . . . . . . . . . . . . . 14
Section 113. Legal Holidays . . . . . . . . . . . . . . . 14
Section 114. Personal Immunity from Liability for
Incorporators, Stockholders, Etc . . . . . . 15
ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally. . . . . . . . . . . . . . . 15
Section 202. Form of Face of Security . . . . . . . . . . 16
Section 203. Form of Reverse of Security. . . . . . . . . 18
Section 204. Form of Legend for Global Securities . . . . 24
Section 205. Form of Trustee's Certificate of
Authentication . . . . . . . . . . . . . . . 24
Section 206. Form of Conversion Notice. . . . . . . . . . 24
ARTICLE THREE
THE SECURITIES
Section 301. Amount Unlimited; Issuable in Series . . . . 26
Section 302. Denominations. . . . . . . . . . . . . . . . 29
Section 303. Execution, Authentication, Delivery
and Dating . . . . . . . . . . . . . . . . . 30
Section 304. Temporary Securities . . . . . . . . . . . . 32
Section 305. Registration, Registration of Transfer
and Exchange . . . . . . . . . . . . . . . . 32
Section 306. Mutilated, Destroyed, Lost and Stolen
Securities . . . . . . . . . . . . . . . . . 34
Section 307. Payment of Interest; Interest Rights
Preserved . . . . . . . . . . . . . . . . . 35
Section 308. Persons Deemed Owners. . . . . . . . . . . . 37
Section 309. Cancellation . . . . . . . . . . . . . . . . 37
Section 310. Computation of Interest. . . . . . . . . . . 38
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of Indenture. . . 38
Section 402. Application of Trust Fund. . . . . . . . . . 40
ARTICLE FIVE
REMEDIES
Section 501. Events of Default. . . . . . . . . . . . . . 40
Section 502. Acceleration of Maturity; Rescission
and Annulment. . . . . . . . . . . . . . . . 43
Section 503. Collection of Indebtedness and Suits
for Enforcement by Trustee . . . . . . . . . 45
Section 504. Trustee May File Proofs of Claim . . . . . . 46
Section 505. Trustee May Enforce Claims Without
Possession of Securities . . . . . . . . . . 46
Section 506. Application of Money Collected . . . . . . . 47
Section 507. Limitation on Suits. . . . . . . . . . . . . 47
Section 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest
and to Convert . . . . . . . . . . . . . . . 48
Section 509. Restoration of Rights and Remedies . . . . . 48
Section 510. Rights and Remedies Cumulative . . . . . . . 49
Section 511. Delay or Omission Not Waiver . . . . . . . . 49
Section 512. Control by Holders . . . . . . . . . . . . . 49
Section 513. Waiver of Past Defaults. . . . . . . . . . . 50
Section 514. Undertaking for Costs. . . . . . . . . . . . 51
ARTICLE SIX
THE TRUSTEE
Section 601. Certain Duties and Responsibilities. . . . . 51
Section 602. Notice of Defaults . . . . . . . . . . . . . 51
Section 603. Certain Rights of Trustee. . . . . . . . . . 52
Section 604. Not Responsible for Recitals or
Issuance of Securities . . . . . . . . . . . 53
Section 605. May Hold Securities. . . . . . . . . . . . . 53
Section 606. Money Held in Trust. . . . . . . . . . . . . 54
Section 607. Compensation and Reimbursement . . . . . . . 54
Section 608. Disqualification; Conflicting
Interests. . . . . . . . . . . . . . . . . . 55
Section 609. Corporate Trustee Required; Eligibility. . . 55
Section 610. Resignation and Removal; Appointment
of Successor . . . . . . . . . . . . . . . . 55
Section 611. Acceptance of Appointment by Successor . . . 57
Section 612. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . . 59
Section 613. Preferential Collection of Claims
Against Company. . . . . . . . . . . . . . . 59
Section 614. Appointment of Authenticating Agent. . . . . 59
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and
Addresses of Holders . . . . . . . . . . . . 61
Section 702. Preservation of Information;
Communications to Holders. . . . . . . . . . 62
Section 703. Reports by Trustee . . . . . . . . . . . . . 62
Section 704. Reports by Company . . . . . . . . . . . . . 62
ARTICLE EIGHT
CONSOLIDATION, MERGER OR SALE OF ASSETS
Section 801. Company May Consolidate, Etc., Only on
Certain Terms. . . . . . . . . . . . . . . . 63
Section 802. Successor Substituted. . . . . . . . . . . . 64
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures Without Consent
of Holders . . . . . . . . . . . . . . . . . 65
Section 902. Supplemental Indentures with Consent
of Holders . . . . . . . . . . . . . . . . . 66
Section 903. Execution of Supplemental Indentures . . . . 68
Section 904. Effect of Supplemental Indentures. . . . . . 68
Section 905. Conformity with Trust Indenture Act. . . . . 69
Section 906. Reference in Securities to Supplemental
Indentures . . . . . . . . . . . . . . . . . 69
Section 907. Waiver of Compliance by Holders. . . . . . . 69
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and Interest. 69
Section 1002. Maintenance of Office or Agency . . . . . . 69
Section 1003. Money for Securities Payments to be
Held in Trust . . . . . . . . . . . . . . . 69
Section 1004. Statement by Officers as to Default . . . . 72
Section 1005. Limitations on Liens on Common Stock of
Principal Insurance Subsidiaries. . . . . . 72
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. Applicability of Article. . . . . . . . . . 72
Section 1102. Election to Redeem, Notice to Trustee . . . 72
Section 1103. Selection by Trustee of Securities
to Be Redeemed. . . . . . . . . . . . . . . 73
Section 1104. Notice of Redemption. . . . . . . . . . . . 74
Section 1105. Deposit of Redemption Price . . . . . . . . 75
Section 1106. Securities Payable on Redemption Date . . . 75
Section 1107. Securities Redeemed in Part . . . . . . . . 75
ARTICLE TWELVE
CONVERSION OF SECURITIES
Section 1201. Applicability of Article . . . . . . . . . 76
Section 1202. Exercise of Conversion Privilege . . . . . 76
Section 1203. No Fractional Shares . . . . . . . . . . . 78
Section 1204. Adjustment of Conversion Price . . . . . . 78
Section 1205. Notice of Certain Corporate Actions. . . . 79
Section 1206. Reservation of Shares of Common Stock. . . 80
Section 1207. Payment of Certain Taxes Upon Conversion . 80
Section 1208. Nonassessability . . . . . . . . . . . . . 80
Section 1209. Effect of Consolidation or Merger on
Conversion Privilege . . . . . . . . . . . 81
Section 1210. Duties of Trustee Regarding Conversion . . 82
Section 1211. Repayment of Certain Funds Upon Conversion 83
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
Section 1301. Company's Option to Effect Defeasance
or Covenant Defeasance . . . . . . . . . . 83
Section 1302. Defeasance and Discharge . . . . . . . . . 83
Section 1303. Covenant Defeasance. . . . . . . . . . . . 84
Section 1304. Conditions to Defeasance or Covenant
Defeasance . . . . . . . . . . . . . . . . 84
Section 1305. Deposited Money and U.S. Government
Obligations or Foreign Government
Obligations to be Held in Trust;
Other Miscellaneous Provisions . . . . . . 88
Section 1306. Reinstatement. . . . . . . . . . . . . . . 89
ARTICLE FOURTEEN
SINKING FUNDS
Section 1401. Applicability of Article . . . . . . . . . 89
Section 1402. Satisfaction of Sinking Fund Payments
with Securities. . . . . . . . . . . . . . 90
Section 1403. Redemption of Securities for Sinking Fund. 90
TESTIMONIUM. . . . . . . . . . . . . . . . . . . . . . . 91
SIGNATURES AND SEALS . . . . . . . . . . . . . . . . . . 91
ACKNOWLEDGMENTS. . . . . . . . . . . . . . . . . . . . . 92
INDENTURE, dated as of January 28, 1994, between USF&G
CORPORATION, a Maryland corporation (herein called the "Company"),
having its principal office at 100 Light Street, Baltimore, Maryland 21202,
and SIGNET TRUST COMPANY, a banking association incorporated and existing
under the laws of the
Commonwealth of Virginia, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its debentures,
notes or other evidences of indebtedness (herein called the "Securities"),
to be issued in one or more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of
the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series
thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 101. Definitions.
For all purposes of this Indenture and of any indenture supplemental
hereto, except as otherwise expressly provided or unless the context otherwise
requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act or the Securities Act of 1933, as amended, either
directly or by reference therein, have the meanings assigned to them
therein;
(3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the
term "generally accepted accounting principles" with respect to any
computation required or permitted hereunder shall mean such accounting
principles as are generally accepted at the date of such computation;
(4) the words "Article" and "Section" refer to an Article and Section,
respectively, of this Indenture; and
(5) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole
and not to any particular Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning specified in
Section 104.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Board of Directors" means either (i) the board of directors of the
Company, the executive committee of such board of directors or any
other duly authorized committee of directors and/or officers appointed by such
board of directors or executive committee, or (ii) one or more duly authorized
officers of the Company to whom the board of directors of the Company or
a committee thereof has delegated the authority to act with respect to the
matters contemplated by this Indenture.
"Board Resolution" means (i) a copy of a resolution certified by
the Corporate Secretary or an Assistant Corporate Secretary of the Company to
have been duly adopted by the Board of Directors or a committee thereof and to
be in full force and effect on the date of such certification or (ii) a
certificate signed by the authorized officer or officers of the Company to
whom the board of directors of the Company or a committee thereof has delegated
its authority (as described in the definition of Board of Directors), and in
each case, delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment,
means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a
day on which banking institutions in that Place of Payment are authorized or
obligated by law, regulation or executive order to close.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this instrument such Commission is not existing and performing
the duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Stock" means, with respect to the Company, its common stock,
$2.50 par value per share, or any other shares of capital stock of the Company
into which the Common Stock shall be reclassified or changed and with
respect to any Principal Insurance Subsidiary, stock of any class, however
designated, except stock which is non-participating beyond fixed dividend and
liquidation preferences and the holders of which have either no voting rights
or limited voting rights entitling them, only in the case of certain
contingencies, to elect less than a majority of the directors (or persons
performing similar functions) of such Principal Insurance Subsidiary, and
shall include securities of any class, however designated, which are convertible
into such Common Stock.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by (i) any two of the following individuals:
the Chairman, the President, an Executive Vice President or a Vice President
or (ii) by one of the foregoing individuals and by any other Vice
President, the Treasurer, an Assistant Treasurer, the Corporate Secretary or
an Assistant Corporate Secretary or any other individual authorized by the
Board of Directors for such purpose, and delivered to the Trustee.
"conversion price" means the amount of Common Stock issuable upon
conversion of any Securities and, in the case of any specific series of
Securities may be expressed in terms of either a conversion price or a
conversion rate.
"Corporate Trust Office" means the principal office of the Trustee
currently located at 7 St. Paul Street, Baltimore, Maryland 21202 at
which at any particular time its corporate trust business shall be
administered.
"Corporation" means a corporation, association, company, joint-stock
company, partnership or business trust.
"Covenant Defeasance" has the meaning specified in Section 1303.
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" has the meaning specified in Section 1302.
"Depositary" means, with respect to Securities of any series issuable in
whole or in part in the form of one or more Global Securities, a clearing
agency registered under the Exchange Act that is designated to act as
Depositary for such Securities as contemplated by Section 301.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor statute thereto.
"Floating or Adjustable Rate Provision" means a formula or provision,
specified in or pursuant to a Board Resolution or an indenture supplemental
hereto, providing for the determination, whether pursuant to objective factors
or pursuant to the sole discretion of any Person (including the Company),
and periodic adjustment of the interest rate borne by a Floating or Adjustable
Rate Security.
"Floating or Adjustable Rate Security" means any Security which
provides for interest thereon at a periodic rate that may vary from time to
time over the term thereof in accordance with a Floating or Adjustable Rate
Provision.
"Foreign Government Obligations" has the meaning specified in Section
1304.
"Global Security" means a Security that evidences all or part of the
Securities of any series and is authenticated and delivered to, and registered
in the name of, the Depositary for such Securities or a nominee thereof.
"Holder" means a Person in whose name a Security is registered in
the Security Register.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument, and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Securities established as contemplated by Section 301.
"interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"Interest Payment Date", when used with respect to any Security,
means the Stated Maturity of an instalment of interest on such Security.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an instalment of principal becomes
due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption or otherwise.
"Notice of Default" means a written notice of the kind specified in
Section 501(4).
"Officers' Certificate" means a certificate signed by (i)
any two of the following individuals: the Chairman, the President, an
Executive Vice President or a Vice President, or (ii) by one of the foregoing
individuals and by any other Vice President, the Treasurer, an Assistant
Treasurer, the Corporate Secretary or an Assistant Corporate Secretary, of the
Company, or any other individual authorized by the Board of Directors for
such purpose, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel to the Company or other counsel, and who is reasonably
satisfactory to the Trustee.
"Original Issue Discount Security" means any Security which provides for
an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying
Agent (other than the Company) in trust or set aside and segregated in
trust by the Company (if the Company shall act as its own Paying Agent)
for the
Holders of such Securities; provided that, if such Securities are
to be redeemed, notice of such redemption has been duly given pursuant
to this Indenture or provision therefor satisfactory to the Trustee has
been made;
(iii) Securities as to which Defeasance has been effected pursuant to
Section 1302; and
(iv) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such
Securities in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands such Securities are valid obligations of
the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, (A)
the principal amount of an Original Issue Discount Security that shall be
deemed to be Outstanding shall be the amount of the principal thereof that
would be due and payable as of the date of such determination upon
acceleration of the Maturity thereof pursuant to Section 502, (B) the
principal amount of a Security denominated in one or more foreign currencies
or currency units shall be the U.S. dollar equivalent, determined in
the manner provided as contemplated by Section 301 on the date of original
issuance of such Security, of the principal amount (or, in the case of an
Original Issue Discount Security, the U.S. dollar equivalent on the date of
original issuance of such Security of the amount determined as provided in
(A) above) of such Security, and (C) Securities owned by the Company or any
other obligor upon the Securities or any Subsidiary of the Company or of
such other obligor shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities
which the Trustee knows to be so owned shall be so disregarded. Securities
so owned which have been pledged in good faith may be regarded as Outstanding
if the pledgee establishes to the satisfaction of the Trustee the pledgee's
right so to act with respect to such Securities and that the pledgee is not
the Company or any other obligor upon the Securities or any Subsidiary
of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.
"Person" means any individual, corporation, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of and any premium and
interest on the Securities of that series are payable as specified as
contemplated by Section 301.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 306 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security
shall be deemed to evidence the same debt as the mutilated, destroyed,
lost or stolen Security.
"Principal Insurance Subsidiary" means only United States Fidelity and
Guaranty Company and Fidelity and Guaranty Life Insurance Company, and any
other Subsidiary of the Company which shall hereafter succeed by merger or
otherwise to a major part of
the business of one or more of the Principal Insurance Subsidiaries.
The decision as to whether a Subsidiary shall have succeeded to a major part of
the business of one or more of the Principal Insurance Subsidiaries shall be
made in good faith by the board of directors of the Company or a committee
thereof by the adoption of a resolution so stating, and the Company shall
within 30 days of the date of the adoption of such resolution deliver to the
Trustee a copy thereof, certified by the Corporate Secretary or an Assistant
Corporate Secretary of the Company.
"Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Securities of any series means the date specified for that
purpose as contemplated by Section 301.
"Responsible Officer", when used with respect to the Trustee, means
the chairman or any vice-chairman of the board of directors, the chairman or
any vice-chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any vice president, the
secretary, any assistant secretary, the treasurer, any assistant treasurer,
the cashier, any assistant cashier, any trust officer or assistant trust
officer, the controller or any assistant controller or any other officer of
the Trustee customarily performing functions similar to those performed by
any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his or her knowledge of and familiarity with the
particular subject.
"Securities" has the meaning stated in the first recital of
this Indenture and more particularly means any Securities authenticated
and delivered under this Indenture.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
instalment of principal thereof or interest thereon, means the date
specified in such Security as the fixed date on which the principal of such
Security or such instalment of principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the voting power of
which is controlled, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting power" means the
power to vote for the election of directors, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder,
and if at any time there is more than one such Person, "Trustee" as used
with respect to the Securities of any series shall mean the Trustee with
respect to Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"U.S. Government Obligations" has the meaning specified in Section 1304.
"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
Section 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall
furnish to the Trustee such certificates and
opinions as may be required under the Trust Indenture Act. Each such
certificate or opinion shall be given in the form of an Officers'
Certificate, if to be given by an officer of the Company, or an Opinion of
Counsel, if to be given by counsel, and shall comply with the requirements of
the Trust Indenture Act and any other requirements set forth in this Indenture.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (excluding certificates provided for in
Section 1004) shall include
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
such individual has made such examination or investigation as is
necessary to enable such individual to express an informed opinion as
to whether or not such covenant or condition has been complied with;
and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
Section 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise
of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which its certificate or
opinion is based are erroneous. Any such certificate or opinion of counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company
stating that the information with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Any certificate, statement or opinion of an officer of the Company or
of counsel may be based, insofar as it relates to accounting matters, upon a
certificate, opinion or representation by an accountant or firm of accountants
in the employ of the Company, unless such officer or counsel, as the case
may be, knows, or in the exercise of reasonable care should know, that the
certificate, opinion or representation with respect to such accounting matters
upon which its certificate, statement or opinion may be based is erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Indenture to be given or
taken by Holders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Holders in person or by agent
duly appointed in writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is hereby
expressly required, to the Company. Such instrument or instruments
(and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 601)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him or her the execution thereof.
Where such execution is by a signer acting in a capacity other than such
signer's individual capacity, such certificate or affidavit
shall also constitute sufficient proof of such signer's
authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be
proved in any other manner which the Trustee deems sufficient.
(c) The Company may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give or take any request, demand,
authorization, direction, notice, consent, waiver or other action, or to
vote on any action, authorized or permitted to be given or taken by
Holders of Outstanding Securities of such
series. If not set by the Company prior to the first solicitation
of a Holder of Securities of such series made by any Person in respect of any
such action, or, in the case of any such vote, prior to such vote, the record
date for any such action or vote shall be the 30th day (or, if later, the date
of the most recent list of Holders required to be provided pursuant to
Section 701) prior to such first solicitation or vote, as the case may be.
With regard to any record date for action to be taken by the Holders of one
or more series of Securities, only the Holders of Securities of such series on
such date (or their duly designated proxies) shall be entitled to give or
take, or vote on, the relevant action.
(d) The ownership of Securities shall be proved by the Security
Register or by a certificate of the Security Registrar.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is
made upon such Security.
(f) Without limiting the foregoing, a Holder entitled hereunder to
give or take any action hereunder with regard to any particular Security may do
so with regard to all or any part of the principal amount of such Security
or by one or more duly appointed agents each of which may do so
pursuant to such appointment with regard to all or any different part of
such principal amount.
Section 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in
writing to or with the Trustee at its
Corporate Trust Office, Attention: Corporate Trust Department, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in
the first paragraph of this instrument, Attention: Treasurer, (until
another address is furnished in writing to the Trustee by the Company).
Section 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at its address as it appears in the Security Register, not
later than the latest date (if any), and not earlier than the earliest date
(if any), prescribed for the giving of such notice; provided, however, that
the Company or the Trustee, upon a good faith determination that mailing is
in the circumstances impractical, may give such notice by any other method
which, in the reasonable belief of the Company or, in the case of the
Trustee, of the Company and the Trustee, is likely to be received by the
Holders. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed
with the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
Section 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act that is required under such Act to be a part of
and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall
be deemed to apply to this Indenture as so modified or to be excluded, as
the case may be.
Section 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
Section 110. Separability Clause.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
Section 112. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York, but without regard to
principles of conflicts of laws.
Section 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security or the last day on which a Holder has the right
to convert a Security at a particular conversion price shall not be a
Business Day at any Place of Payment, then (notwithstanding any other
provision of this Indenture or of the Securities (other than a provision of
the Securities of any series which specifically states that such provision
shall apply in lieu of this Section)) payment of interest or principal
(and premium, if any) or conversion need not be made at such Place of Payment
on such date, but may be made on the next succeeding Business Day at such
Place of Payment with the same force and effect as if made on the Interest
Payment Date or Redemption Date, or at the Stated Maturity, provided that no
interest shall accrue with respect to such payment for the period from and
after such Interest Payment Date, Redemption Date or Stated Maturity, as the
case may be.
Section 114. Personal Immunity from Liability for Incorporators,
Stockholders, Etc.
No recourse shall be had for the payment of the principal of or premium,
if any, or interest, if any, on any Security, or for any claim based thereon, or
otherwise in respect of any Security, or based on or in respect of this
Indenture or any indenture supplemental hereto, against any incorporator, or
against any past, present or future stockholder, director or officer, as
such, of the Company or of any successor corporation, whether by virtue of
any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being expressly waived
and released as a condition of, and as consideration for, the execution of this
Indenture and the issue of the Securities.
ARTICLE TWO
Security Forms
Section 201. Forms Generally.
The Securities of each series shall be in substantially the form set forth
in this Article, or in such other form as shall be established by or pursuant
to a Board Resolution or in one or more indentures supplemental hereto, in
each case with such
appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture, and may have such letters,
numbers or other marks of identification and such legends or endorsements
placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistent herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the
Securities. If the form of Securities of any series is established
by action taken pursuant to a Board Resolution, a copy of an appropriate
record of such action shall be certified by the Corporate Secretary or an
Assistant Corporate Secretary of the Company and delivered to the Trustee at
or prior to the delivery of the Company Order contemplated by Section 303 for
the authentication and delivery of such Securities.
The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
Section 202. Form of Face of Security.
[Insert any legend required by the Internal Revenue Code and the
regulations thereunder.]
USF&G CORPORATION
No. $
USF&G CORPORATION, a Maryland corporation (herein called the "Company",
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby
promises to pay to , or
registered assigns, the principal sum of
dollars. If other than Dollars, substitute other currency or
currency unit. If the Security is to bear interest prior to
Maturity, insert -- , and to pay interest thereon from or from the
most recent Interest Payment Date to which interest has been paid or
duly provided for,] semi-annually on ............ and ............ in
each year. [If other than semi-annual payments, insert frequency of
payments and payment dates,
commencing , at] if the Security is to bear interest at a fixed
rate, insert - the rate of ....% per annum if the Security is a Floating or
Adjustable Rate Security, insert -- a rate per annum computed-determined in
accordance with, -- insert defined name of Floating or Adjustable Rate
Provision set forth below. If the security is to bear interest at a rate
determined with reference to an index, refer to description of index below]
until the principal hereof is paid or made available for payment if applicable,
insert -- , and (to the extent that the payment of
such interest shall be legally enforceable) at the rate of % per annum on
any overdue principal and premium and on any overdue instalment of interest.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name
this Security (or one or more Predecessor Securities) is registered at
the close of business on the Regular Record Date
for such interest, which shall be the or (whether or
not a Business Day), as the case may be, next preceding such Interest
Payment Date. Any such interest not so punctually paid or duly provided for
will forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Record Date, or be paid at
any time in any other lawful manner not inconsistent with the requirements
of any securities exchange on which the Securities of this series may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in said Indenture.
[If the Securities are Floating or Adjustable Rate Securities
with respect to which the principal of or any premium or interest may be
determined with reference to an index, insert the text of the Floating or
Adjustable Rate Provision.]
[If the Security is not to bear interest prior to Maturity, insert -- The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at
Stated Maturity and in such case the overdue principal of this Security
shall bear interest
at the rate of % per annum compounded semi-annually (to the extent that
the payment of such interest shall be legally enforceable), which shall
accrue from the date of such default in payment to the date payment of such
principal, including interest thereon, has been made or duly provided for. All
interest on any overdue principal shall be payable on demand. Any such
interest on any overdue principal that is not so paid on demand shall bear
interest at the rate of ......% per annum (to the extent that the payment of
such interest shall be legally enforceable), which shall accrue from the date
of such demand for payment to the date payment of such interest has been made or
duly provided for, and such interest shall also be payable on demand.]
Payment of the principal of (and premium, if any) and [if applicable,
insert -- any such interest on this Security will be made at the office or
agency of the Company maintained for that
purpose in , in such coin or currency of the United States of
America. If the Security is denominated in a currency other than U.S. dollars,
specify other currency or currency unit in which payment of the principal of
and any premium or interest may be made as at the time of payment is legal
tender for payment of public and private debts, if applicable, insert -- ;
provided, however, that at the option of the Company payment of interest may
be made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register.]
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions
shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
USF&G CORPORATION
By
Attest:
Section 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of
the Company (herein called the "Securities"), issued and to be issued in one
or more series under an Indenture,
dated as of (herein called the "Indenture"),
between the Company and , as Trustee (herein called the
"Trustee", which term includes any successor trustee under the Indenture),
to which Indenture and all indentures supplemental thereto reference is
hereby made for a statement of the respective rights, limitations of rights,
obligations, duties and immunities thereunder of the Company, the Trustee and
the Holders of the Securities and of the terms upon which the Securities
are, and are to be, authenticated and delivered. This Security is one of the
series designated on the face hereof[,
limited in aggregate principal amount to $ ].
[If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' nor more than 60 days' notice by
mail, [if applicable, insert -- (1) on in any year commencing with the
year ...... and ending
with the year through operation of the sinking fund for this series
at a Redemption Price equal to 100% of the principal
amount, and (2) at any time [on or after , 19.., as a whole or in
part, at the election of the Company, at the following Redemption Prices
(expressed as percentages of the
principal amount): If redeemed [on or before , %, and if
redeemed] during the 12-month period beginning of the years indicated,
Redemption Redemption
Year Price Year Price
and thereafter at a Redemption Price equal to % of the principal
amount, together in the case of any such redemption. If applicable, insert
- -- (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption
Date, but interest installments whose Stated Maturity is on or prior to such
Redemption Date will be payable to the
Holders of such Securities, or one or more Predecessor Securities,
of record at the close of business on the relevant Record Dates referred to
on the face hereof, all as provided in the Indenture.]
[If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' nor more than
60 days' notice by mail, (1) on in any year
commencing with the year and ending with the year through
operation of the sinking fund for this series at the Redemption Prices for
redemption through operation of the sinking fund (expressed as percentages of
the principal amount) set forth
in the table below, and (2) at any time on or after , as a whole
or in part, at the election of the Company, at the Redemption
Prices for redemption otherwise than through operation of the
sinking fund (expressed as percentages
of the principal amount) set forth in the table below: If
redeemed during the 12-month period beginning of the years
indicated.
Redemption Price
For Redemption Redemption Price For
Through Operation Redemption Otherwise
of the Than Through Operation
Year Sinking Fund of the Sinking Fund
and thereafter at a Redemption Price equal to % of the principal
amount, together in the case of any such redemption (whether through
operation of the sinking fund or otherwise) with
accrued interest to the Redemption Date, but interest installments
whose Stated Maturity is on or prior to such
Redemption Date will be payable to the Holders of such Securities, or
one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture. The sinking
fund for this series provides for the redemption on
in each year beginning with the year
and ending with the year of not
less than $ ("mandatory sinking fund") and not more
than $ aggregate principal amount of Securities of this
series. Securities of this series acquired or redeemed by the Company
otherwise than through mandatory sinking fund payments
may be credited against subsequent mandatory sinking fund payments
otherwise required to be made in the inverse order in which they become due.
[If the Security is subject to redemption, insert -- In the event of
redemption of this Security in part only, a new Security or Securities of this
series and of like tenor for the unredeemed portion hereof will be issued in
the name of the Holder hereof upon the cancellation hereof.]
The Indenture contains provisions for defeasance at any time of (1) the
entire indebtedness of this Security or (2) certain restrictive covenants and
Events of Default with respect to this Security, in each case upon compliance
with certain conditions set forth in the Indenture.
[If the Security is convertible into Common Stock of the Company,
insert -- Subject to the provisions of the Indenture, the Holder of this
Security is entitled, at its option, at any
time on or before (except that, in case this Security or
any portion hereof shall be called for redemption, such right shall
terminate with respect to this Security or portion hereof, as the case may
be, so called for redemption at the close of business on the date fixed
for redemption as provided in the Indenture unless the Company defaults in
making the payment due upon redemption), to convert the principal amount of
this Security (or any portion hereof which is $1,000 or an integral multiple
thereof), into fully paid and non-assessable shares (calculated as to each
conversion to the nearest 1/100th of a share) of the Common Stock of the
Company, as said shares shall be constituted at the date of conversion, at the
conversion price of $_____ principal amount of Securities for each share of
Common Stock, or at the adjusted conversion price in effect at the date of
conversion determined as provided in the Indenture, upon surrender of this
Security, together with the conversion notice hereon duly executed, to the
Company at the designated
office or agency of the Company in __________________, accompanied
(if so required by the Company) by instruments of transfer, in form
satisfactory to the Company and to the Trustee, duly executed by the Holder or
by its duly authorized attorney in
writing. Such surrender shall, if made during any period beginning at
the close of business on a Regular Record Date and ending at the opening of
business on the Interest Payment Date next following such Regular Record Date
(unless this Security or the portion being converted shall have been called for
redemption on a Redemption Date during such period), also be accompanied by
payment in funds acceptable to the Company of an amount equal to the interest
payable on such Interest Payment Date on the
principal amount of this Security then being converted. Subject to the
aforesaid requirement for payment and, in the case of a conversion after the
Regular Record Date next preceding any Interest Payment Date and on or
before such Interest Payment Date, to the right of the Holder of this
Security (or any Predecessor Security) of record at such Regular Record Date
to receive an installment of interest (with certain exceptions provided
in the Indenture), no adjustment is to be made on conversion for interest
accrued hereon or for dividends on shares
of Common Stock issued on conversion. The Company is not required to
issue fractional shares upon any such conversion, but shall make adjustment
therefor in cash on the basis of the current market value of such
fractional interest as provided in the Indenture. The conversion price is
subject to adjustment as provided in the Indenture. In addition, the
Indenture provides
that in case of certain consolidations, mergers or share exchanges to
which the Company is a party or the sale of substantially all of the
assets of the Company, the Indenture
shall be amended, without the consent of any Holders of securities, so
that this Security, if then outstanding, will be convertible thereafter,
during the period this Security shall be convertible as specified above, only
into the kind and amount of
securities, cash and other property receivable upon the consolidation,
merger, share exchange or sale by a holder of the number of shares of Common
Stock into which this Security might have been converted immediately prior
to such consolidation, merger, share exchange or sale (assuming such holder
of Common Stock failed to exercise any rights of election and received per
share the kind and amount received per share by a plurality of non-electing
shares) [, assuming if such consolidation, merger,
share exchange or sale is prior to , 19 , that this Security were
convertible at the time of such consolidation, merger, share exchange or
sale at the initial conversion price
specified above as adjusted from , 19 to such time pursuant
to the Indenture. In the event of conversion of this Security in part only, a
new Security or Securities for the unconverted portion hereof shall be issued
in the name of the Holder hereof upon the cancellation hereof.
[If the Security is convertible into other securities of the Company,
specify the conversion features.]
[If the Security is not an Original Issue Discount Security, insert -- If
an Event of Default with respect to Securities of this series shall occur and
be continuing, the principal of the Securities of this series may be declared
due and payable in the manner and with the effect provided in the Indenture.]
[If the Security is an Original Issue Discount Security, insert -- If
an Event of Default with respect to Securities of this series shall occur and
be continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- insert formula for determining
the amount. Upon payment (i) of the amount of principal so declared due
and payable and (ii) of interest on any overdue principal and overdue
interest (in each case to the extent that the payment of such interest shall
be legally enforceable), all of the Company's obligations in respect of the
payment of the principal of and interest, if any, on the Securities of
this series shall terminate.]
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of
the Company and the rights of the Holders of the Securities of each series
to be affected under the Indenture at any time by the Company and the Trustee
with the consent of the Holders of a majority in principal amount of the
Securities at the time Outstanding of each series to be affected. The Indenture
also contains provisions permitting the Holders of specified percentages in
principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and any premium
and interest on this Security at the times, place and rates, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registerable in the
Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the
principal of and any premium and interest on this Security are payable, duly
endorsed by, or
accompanied by a written instrument of transfer in form satisfactory
to the Company and the Security Registrar duly executed by, the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more new
Securities of this series and of like tenor, of authorized denominations and
for the same aggregate principal amount, will be issued to the designated
transferee or transferees.
The Securities of this series are issuable only in
registered form without coupons in denominations of $ and any integral
multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, Securities of this series are exchangeable
for a like aggregate principal amount of Securities of this series and of
like tenor of a different authorized denomination, as requested by the
Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security is overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
No recourse shall be had for the payment of the principal of (and premium,
if any) or interest on this Security, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture or
any indenture supplemental
thereto, against any incorporator, stockholder, officer or director, as
such, past, present or future, of the Company or of any successor corporation,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the
issue hereof, expressly waived and released.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
Section 204. Form of Legend for Global Securities.
Every Global Security authenticated and delivered hereunder shall bear a
legend in substantially the following form or such other legends as may be
required:
This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary
or a nominee thereof. This Security may not be transferred to, or
registered or exchanged for Securities registered in the name of, any
Person other than the Depositary or a nominee thereof and no such transfer
may be registered, except in the limited circumstances described in the
Indenture. Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, this Security shall be a
Global Security subject to the foregoing, except in such limited
circumstances.
Section 205. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be in substantially the
following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
As Trustee
By
Authorized Officer
Section 206. Form of Conversion Notice.
To USF&G Corporation
The undersigned owner of this Security hereby irrevocably exercises the
option to convert this Security, or portion hereof
(which is $1,000 or an integral multiple thereof) below designated,
into shares of Common Stock of the Company in accordance with the terms
of the Indenture referred to in this Security, and directs that the shares
issuable and deliverable upon the conversion, together with any check in
payment for fractional shares and any Securities representing any unconverted
principal amount hereof, be issued and delivered to the registered
holder hereof unless a different name has been indicated below. If this
Notice is being delivered on a date after the close of business on a Regular
Record Date and prior to the opening of business on the related Interest
Payment Date (unless this Security or the portion thereof being converted has
been called for redemption on a Redemption Date within such
period), this Notice is accompanied by payment, in funds acceptable to
the Company, of an amount equal to the interest payable on such Interest
Payment Date of the principal of this Security to be converted. If shares are
to be issued in the name of a person other than the undersigned, the
undersigned will pay
all transfer taxes payable with respect hereto. Any amount
required to be paid by the undersigned on account of interest accompanies
this Security.
Principal Amount to be Converted
(in an integral multiple of
$1,000, if less than all):
$____________
Dated
Signature
Signature(s) must be
guaranteed by a commercial bank or trust company
or a member firm of a national stock exchange
if shares of Common Stock are to be
delivered, or Securities to be issued, other
than to and in the name of the registered
holder.
Signature Guarantee
Fill in for registration of shares of Common Stock and Security if to
be issued otherwise than to the registered holder.
Social Security or other Taxpayer
(Name) Identifying Number
(Address)
Please print Name and
Address (including zip
code number)
ARTICLE THREE
THE SECURITIES
Section 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution or established in one or
more indentures supplemental hereto, prior to the issuance of Securities of any
series,
(1) the title of the Securities of the series (which
shall distinguish the Securities of the series from Securities of
any other series);
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and
delivered under this Indenture (except for Securities authenticated
and delivered upon registration of transfer of, or in exchange for, or
in lieu of, other Securities of the series pursuant to Sections 304, 305,
306, 906 or 1107 and except for any Securities which, pursuant to
Section 303, are deemed never to have been authenticated and
delivered hereunder);
(3) the Person to whom any interest on a Security of the series
shall be payable, if other than the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest;
(4) the date or dates on which the principal of the Securities of
the series is payable;
(5) the rate or rates at which the Securities of the series shall
bear interest, if any, or the Floating or Adjustable Rate Provision
pursuant to which such rates shall be determined, the date or dates from
which such interest shall accrue, the Interest Payment Dates on which
any such interest shall be payable and the Regular Record Date for any
interest payable on any Interest Payment Date;
(6) whether the Securities of the series would be secured
pursuant to Section 901(6);
(7) the place or places where the principal of and any premium and
interest on Securities of the series shall be payable;
(8) the period or periods within which, the price or prices at
which (including premium, if any) and the terms and conditions upon which
Securities of the series may be redeemed, in whole or in part, at the
option of the Company pursuant to a sinking fund or otherwise;
(9) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods
within which, the price or prices at which and the terms and conditions
upon which Securities of the series shall be redeemed or purchased, in
whole or in part, pursuant to such obligation;
(10) the terms of any right to convert Securities of the series
into shares of Common Stock of the Company or other securities or
property;
(11) if other than denominations of $1,000 and any
integral multiple thereof, the denominations in which Securities of
the series shall be issuable;
(12) the currency or currencies, including composite currencies,
or currency units in which payment of the principal of and any
premium and interest on any Securities of the series shall be payable if
other than the currency of the United States of America and the manner of
determining the equivalent thereof in the currency of the United States of
America for purposes of the definition of "Outstanding" in Section 101;
(13) if the amount of payments of principal of or any premium or
interest on any Securities of the series may be determined with reference
to one or more indices, the manner in which such amounts shall be
determined;
(14) if the principal of or any premium or interest on any
Securities of the series is to be payable, at the election of the
Company or a Holder thereof, in one or more currencies, including
composite currencies, or currency units other than that or those in
which the Securities are stated to be payable, the currency, currencies,
including composite currencies, or currency units in which payment of the
principal of and any premium and interest on Securities of such series as
to which such election is made shall be payable, and the periods within
which and the terms and conditions upon which such election is to be
made;
(15) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section
502 or provable under any applicable federal or state bankruptcy or
similar law pursuant to Section 503;
(16) if and as applicable, that the Securities of the series shall
be issuable in whole or in part in the form of one or more Global
Securities and, in such case, the Depositary or Depositaries for
such Global Security or Global Securities and any circumstance other
than those set forth in Section 305 in which any such Global Security
may
be transferred to, and registered and exchanged for Securities
registered in the name of, a Person other than the Depositary for such
Global Security or a nominee thereof and in which any such transfer may be
registered;
(17) any other event or events of default applicable with respect
to the Securities of the series in addition to those provided in Section
501(1) through (7);
(18) any other covenant or warranty included for the benefit of
Securities of the series in addition to (and not inconsistent with) those
included in this Indenture for the benefit of Securities of all series,
or any other covenant or warranty included for the benefit of Securities
of the series in lieu of any covenant or warranty included in this
Indenture for the benefit of Securities of all series, or any provision
that any covenant or warranty included in this Indenture for the benefit of
Securities of all series shall not be for the benefit of Securities of
the series, or any combination of such covenants, warranties or
provisions;
(19) any restriction or condition on the
transferability of the Securities of the series;
(20) any authenticating or paying agents, registrars, conversion
agents or any other agents with respect to the Securities of the series;
and
(21) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 901(5)).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or
pursuant to the Board Resolution referred to above or in any such indenture
supplemental hereto.
If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of such action shall be delivered to the Trustee.
Section 302. Denominations.
The Securities of each series shall be issuable in registered
form without coupons in such denominations as shall be specified as contemplated
by Section 301. In the absence of any such provisions with respect to the
Securities of any series, the Securities of such series shall be issuable in
denominations of $1,000 and any integral multiple thereof.
Section 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman,
its President, any Executive Vice President, any Vice President, its Treasurer
or Assistant Treasurer, under its corporate seal reproduced thereon attested
by its Corporate
Secretary or one of its Assistant Corporate Secretaries. The signature of
any of these officers on the Securities may be manual or facsimile.
The seal of the Company may be in the form of a facsimile thereof and
may be impressed, affixed, imprinted or otherwise reproduced on the
Securities. Securities bearing the manual or facsimile signatures of
individuals who were at any time the
proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such
Securities. Minor typographical and other minor errors in the text of any
Security or minor defects in the seal or facsimile signature on any Security
shall not affect the validity or enforceability of such Security if it has
been duly authenticated and delivered by the Trustee.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of
any series executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication
and delivery of such Securities, and the Trustee in accordance with the
Company Order shall authenticate and deliver such Securities. If the form or
terms of the Securities of the series have been established in or pursuant to
one or more Board Resolutions as permitted by Sections 201 and 301, in
authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and (subject to Section 601)
shall be fully protected in relying upon, an Opinion of Counsel stating,
(a) if the form of such Securities has been
established by or pursuant to a Board Resolution as
permitted by Section 201, that such form has been established
in conformity with the provisions of this Indenture;
(b) if the terms of such Securities have been
established by or pursuant to a Board Resolution as
permitted by Section 301, that such terms have been established
in conformity with the provisions of this Indenture; and
(c) that such Securities, when authenticated and delivered by
the Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute
valid and legally binding obligations of the Company enforceable in
accordance
with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium, rehabilitation
and similar laws of general applicability relating to or affecting
creditors' rights generally or the rights of creditors of insurance
companies or insurance
holding companies generally and to general equity principles.
The Trustee shall have the right to decline to authenticate and deliver
any Securities under this Section if the Trustee, being advised by counsel,
determines that such action may not lawfully be taken or if the Trustee in
good faith by its board of directors, executive committee, or a trust committee
of directors or responsible officers of the Trustee shall determine that such
action would expose the Trustee to personal liability to existing Holders of
Securities.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at
one time, it shall not be necessary to deliver the Board Resolution
otherwise required pursuant to Section 301 or the Company Order and Opinion
of Counsel otherwise required pursuant to such preceding paragraph at or prior
to the time of authentication of each Security of such series if such
documents are delivered at or prior to the authentication upon original
issuance of the first Security of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there
appears on such Security a certificate of authentication substantially
in the form provided for herein executed by the Trustee by manual
signature, and such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder. Notwithstanding the foregoing, if any
Security shall have been authenticated and delivered hereunder but never
issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancellation as provided in Section 309, for all
purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
Section 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate
and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such
Securities. Every temporary Security shall be executed by the Company and
authenticated by the Trustee upon the same conditions and in substantially the
same manner, and with like effect, as the definitive Securities.
If temporary Securities of any series are issued, the Company will
cause definitive Securities of that series to be prepared without
unreasonable delay. After the preparation of definitive Securities of such
series, the temporary Securities of such series shall be exchangeable for
definitive Securities of such series upon surrender of the temporary
Securities of such series at the office or agency of the Company in a
Place of
Payment for that series, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Securities of
any series, the Company shall execute and the Trustee shall authenticate
and deliver in exchange therefor one or more definitive Securities of the
same series, of any authorized denominations and of a like aggregate
principal amount and tenor. Until so exchanged the temporary Securities of
any series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of such series and tenor.
Section 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it or the Trustee may prescribe, the Company shall
provide for the registration of Securities and of transfers of Securities.
The Trustee is hereby appointed "Security Registrar" for the purpose of
registering Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of any series
at the office or agency in a Place of Payment for that series, the Company
shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of the same series, of any authorized
denominations and of a like aggregate principal amount and tenor.
At the option of the Holder, Securities of any series may be exchanged for
other Securities of the same series, of any authorized denominations and
of a like aggregate principal amount and tenor, upon surrender of the
Securities to be exchanged at
such office or agency. Whenever any Securities are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate
and deliver, the Securities which the Holder making the exchange is entitled
to receive and bearing numbers not contemporaneously outstanding.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer,
exchange, redemption or payment shall (if so required
by the Company or the Trustee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory
to the Company and the Security Registrar duly executed, by the Holder
thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company
or the Trustee may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Securities, other than exchanges
pursuant to Section 304, 906 or 1107 not involving any transfer.
Neither the Company nor the Trustee shall be required (i) to issue,
register the transfer of or exchange Securities of any series during a
period beginning at the opening of business 15 days before the day of the
mailing of a notice of redemption of Securities of that series selected for
redemption under Section 1103 and ending at the close of business on the
day of such mailing, or (ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.
Notwithstanding any other provision in this Indenture, no Global
Security may be transferred to, or registered or exchanged for Securities
registered in the name of, any Person other than the Depositary for such
Global Security or any nominee thereof,
and no such transfer may be registered, unless (1) such Depositary
(A) notifies the Company and the Trustee that it is unwilling or unable to
continue as Depositary for such Global Security or (B) ceases to be a
clearing agency registered under the Exchange Act, (2) the Company executes
and delivers to the Trustee a Company Order that such Global Security shall
be so transferable, registrable and exchangeable, and such transfers shall
be registrable, (3) there shall have occurred and be continuing an Event
of Default with respect to the Securities evidenced by such Global Security
or (4) there shall exist such other circumstances, if any, as have been
specified for this purpose as contemplated by Section 301. Notwithstanding any
other provision in this Indenture, a Global Security to which the
restriction set forth in the preceding sentence shall have ceased to apply may
be transferred only to, and may be registered and exchanged for Securities
registered only in the name or names of, such Person or Persons as the
Depositary for such Global Security shall have directed and no transfer
thereof other than such a transfer may be registered.
Every Security authenticated and delivered upon registration of transfer
of, or in exchange for or in lieu of, a Global Security to which the
restriction set forth in the first sentence of the preceding paragraph shall
apply, whether pursuant to this Section, Section 304, 306, 906 or 1107 or
otherwise, shall be authenticated and delivered in the form of, and shall
be, a Global Security.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
If there shall be delivered to the Company and the Trustee (i) a
mutilated Security, or (ii) evidence to their satisfaction of the destruction,
loss or theft of any Security and in either case such security or indemnity as
may be required by either of them to save each of them and any agent of
either of them harmless, then, in the absence of notice to the Company or
the Trustee that such Security has been acquired by a bona fide purchaser,
the Company shall execute and the Trustee shall
authenticate and deliver, in lieu of any such mutilated, destroyed,
lost or stolen Security, a new Security of the same series and of like
tenor and principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
or the Trustee may require the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of (but shall be subject to
all the limitations of rights set forth in) this Indenture equally and
proportionately with any and all other Securities of that series duly issued
hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies
with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities.
Section 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise provided as contemplated by Section 301 with respect
to any series of Securities, interest on any Security which is payable,
and is punctually paid or duly provided for, on any Interest Payment Date
shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest.
Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in
each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such
series (or their respective Predecessor Securities) are registered at the
close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security of such series and the date
of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such Defaulted Interest
as in this Clause provided. Thereupon the Trustee shall fix a Special
Record Date for the payment of such Defaulted Interest which shall be not
more than 15 days and not less than 10 days prior to the date of the
proposed payment and not less than 15 days after the receipt by the
Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of
such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first-
class postage prepaid, to each Holder of Securities of such series at its
address as it appears in the Security Register, not less than 10 days
prior to such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having
been so mailed, such Defaulted Interest shall be paid to the Persons
in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on
such Special Record Date and shall no longer be payable pursuant to the
following Clause (2).
(2) The Company may make payment of any Defaulted Interest on
the Securities of any series in any other lawful
manner not inconsistent with the requirements of any securities
exchange on which such Securities may be listed, and upon such notice as
may be required by such exchange, if, after notice given by the Company
to the Trustee of the proposed payment pursuant to this Clause, such
manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
Subject to the provisions of Section 1202, in the case of any Security
which is converted after any Regular Record Date and on or prior to the next
succeeding Interest Payment Date (other than any Security the principal of (or
premium, if any, on) which shall become due and payable, whether at a Stated
Maturity or by declaration of acceleration, call for redemption, or
otherwise, prior to such Interest Payment Date), interest whose Stated
Maturity is on such Interest Payment Date shall be payable on such Interest
Payment Date notwithstanding such conversion and such interest (whether or
not punctually paid or duly provided for) shall be paid to the Person in whose
name that Security (or any one or more Predecessor Securities) is registered
at the
close of business on such Regular Record Date. Except as
otherwise expressly provided in the immediately preceding sentence, in
the case of any Security which is converted, interest whose Stated
Maturity is after the date of conversion of such Security shall not be payable.
Section 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and any premium
and (subject to Section 307) any interest on such Security and for all
other purposes whatsoever, whether or not such Security be overdue, and neither
the Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
Section 309. Cancellation.
All Securities surrendered for payment, redemption, registration
of transfer or exchange or for credit against any sinking fund or analogous
payment or for conversion shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly cancelled by it.
The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and may deliver to the Trustee
(or to any other Person for delivery to
the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold, and all Securities so
delivered shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as
provided in this
Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be disposed of as directed by a Company
Order. Acquisition by the Company of any Security shall not operate as a
redemption or satisfaction of the indebtedness represented by such Security
unless and until the same is delivered to the Trustee for cancellation.
Section 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further
effect (except as to any surviving rights of conversion, registration of
transfer or exchange of Securities of a series herein expressly provided for)
with respect to Securities of any series, and the Trustee, at the expense of
the Company, shall
execute proper instruments acknowledging satisfaction and discharge of
this Indenture with respect to a series, when
(1) either
(A) all Securities of such series theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 306 and (ii)
Securities of such
series for whose payment money has theretofore been deposited in
trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee for cancellation; or
(B) all such Securities of such series not theretofore delivered to
the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year under
arrangements reasonably satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be deposited with the Trustee in trust
for the purpose (A) money (either in United States dollars or such other
currency or currency unit in which the Securities of any series may be
payable) in an amount, or (B) U.S. Government Obligations (or
Foreign Government Obligations if the Securities are denominated in a
foreign currency or currencies) that through the scheduled payment of
principal and interest in respect thereof in accordance with their terms
will provide, not later than one day before the due date of any payment,
money in an amount,
or (C) a combination thereof, sufficient to pay and discharge the
entire indebtedness on such Securities of such
series not theretofore delivered to the Trustee for cancellation,
for principal of (and premium, if any) and interest to the date of
such deposit (in the case of Securities of such series which have
become due and payable) or to the Stated Maturity or Redemption Date, as
the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture with respect to such series have been complied with.
In the event there are Securities of two or more series outstanding
hereunder, the Trustee shall be required to execute an instrument
acknowledging satisfaction and discharge of this Indenture only if requested
to do so with respect to Securities of a particular series as to which it is
Trustee and if the other conditions thereto are met. In the event that there
are two or more Trustees hereunder, then the effectiveness of any such
instrument shall be conditioned upon receipt of such instruments from all
Trustees hereunder.
Notwithstanding the satisfaction and discharge of this Indenture with
respect to a particular series, the obligations of the Company to the Trustee
under Section 607, the obligations of the Trustee to any Authenticating Agent
under Section 614 and, if money shall have been deposited with the Trustee
pursuant to subclause (B) of Clause (1) of this Section, the obligations of
the Trustee under Section 402 and the last paragraph of Section 1003 shall
survive until there are no Securities Outstanding with respect to a particular
series and the obligations of the Company and the Trustee with respect to all
other series of Securities shall survive.
Section 402. Application of Trust Fund.
Subject to provisions of the last paragraph of Section 1003, all amounts
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee
may determine, to the Persons entitled thereto, of the principal and any
premium and interest for whose payment such funds have been deposited with the
Trustee.
ARTICLE FIVE
REMEDIES
Section 501. Events of Default.
"Event of Default" whenever used with respect to Securities of a series
means any one of the following events and such other events as may be
established with respect to the Securities of such series as contemplated by
Section 301 hereof:
(1) Default in the payment of any instalment of interest upon any of
the Securities of such series as and when the same shall become due and
payable, and continuance of such default for a period of 30 days; or
(2) Default in the payment of the principal of or premium, if any, on
any of the Securities of such series as and when the same shall become
due and payable either at maturity, upon redemption, by declaration or
otherwise; or
(3) Default in the making of any sinking fund payment, whether
mandatory or optional, as and when the same shall become due and
payable by the terms of the Securities of such series; or
(4) Failure on the part of the Company duly to observe or perform in
any material respect any other of the covenants or agreements on the part
of the Company contained in this Indenture or in the Securities (other
than those set forth exclusively in the terms of any other particular
series of Securities established as contemplated by this Indenture for the
benefit of such other series) and written notice of such failure, stating
that such notice is a "Notice of Default" hereunder, and requiring the
Company to remedy the same, shall have been given by registered or
certified mail, return receipt requested, to the Company by the Trustee,
or to the Company and the Trustee by the holders of at least
25% in aggregate principal amount of the Outstanding Securities of
that series, and such failure shall have continued unremedied for a
period of 90 days after the date of the Company's receipt of such Notice
of Default; or
(5) An event of default, as defined in any indenture or instrument
evidencing or under which the Company or any
Principal Insurance Subsidiary shall have outstanding indebtedness
for borrowed money in a principal amount in excess of $50,000,000,
shall happen and be continuing and such indebtedness shall have been
accelerated so that the same shall be or become due and payable prior to
the date on which the same would otherwise have become due and payable or
the Company or any Principal Insurance Subsidiary shall default in the
payment at final maturity of outstanding indebtedness for borrowed
money in a principal amount in excess of $50,000,000, and such
acceleration or default at maturity shall not be waived, rescinded or
annulled within 30 days after written notice thereof, stating that
such notice is a "Notice of Default" hereunder, shall have been given to
the Company by the Trustee (if such event be known to it), or to the
Company and the Trustee by the holders of
at least 25% in aggregate principal amount of the Outstanding
Securities of that series; provided, however, that if such acceleration
under such indenture or instrument or default at maturity shall be
remedied or cured by the
Company or Principal Insurance Subsidiary, or waived, rescinded or
annulled by the requisite holders of such indebtedness, then the Event
of Default hereunder by reason thereof shall be deemed likewise to have
been thereupon remedied, cured or waived without further action upon
the part of either the Trustee or any of the Holders; and
provided further, that, subject to the provisions of Sections 601
and 602, the Trustee shall not be charged with knowledge of any such
default unless written notice thereof shall have been given to the Trustee
by the Company, by the holder of any such indebtedness or an agent of the
holder of any such indebtedness, by the trustee then acting under any such
indenture or other instrument under which such default shall have
occurred, or by the holders of at least 25% in aggregate principal amount
of the Outstanding Securities of that series; or
(6) A decree or order by a court having jurisdiction in the premises
shall have been entered adjudging the Company or any Principal Insurance
Subsidiary a bankrupt or insolvent,
or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of the Company
or any Principal Insurance Subsidiary under any applicable Federal or State
bankruptcy or similar law, and such decree or order shall have continued
undischarged and unstayed for a period of 90 days; or a decree or order of
a
court having jurisdiction in the premises for the appointment
of a receiver, liquidator, trustee, assignee, sequestrator or similar
official in bankruptcy or insolvency of the Company or any Principal
Insurance Subsidiary or of all or substantially all of its property, or
for the winding up or liquidation of its affairs, shall have been
entered, and such decree or order shall have continued undischarged and
unstayed for a period of 90 days; or
(7) The Company or any Principal Insurance Subsidiary shall
institute proceedings to be adjudicated a voluntary bankrupt, or
shall consent to the filing of a bankruptcy proceeding against it, or
shall file a petition or answer or consent seeking reorganization,
arrangement, adjustment or composition under any applicable Federal or
State bankruptcy or similar law, or shall consent to the filing of any
such petition, or shall consent to the appointment of a receiver,
liquidator, trustee, assignee, sequestrator or similar official in
bankruptcy or insolvency of the Company or any Principal Insurance
Subsidiary or of all or substantially all of its property, or shall
make an assignment for the
benefit of creditors, or shall admit in writing its inability to
pay its debts generally as they become due and its willingness to be
adjudged a bankrupt, or corporate action shall be taken by the
Company or any Principal Insurance Subsidiary in furtherance of any of
the aforesaid purposes.
Section 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then in every such case the Trustee
or the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if any of the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount of such Securities as may be specified in the terms
thereof) of all of the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if
given by Holders), and upon any such declaration such principal amount (or
specified amount) shall become immediately due and payable; provided, however,
that if an Event of Default specified in Section 501(6) or (7) occurs and is
continuing, such principal amount of all such Securities shall ipso facto
become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Holders; provided, further, that except
in the case of a default in the payment of the principal of (or premium, if
any) or interest on any Security or in the payment of any sinking fund payment,
the Trustee shall be protected in withholding such notice if and so long
as the board of directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interests of the
Holders of such Securities.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in
this Article provided, the Holders of a majority in principal amount of
the Outstanding Securities of that series, by written notice to the Company
and the Trustee, may waive all defaults and may rescind and annul such
declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum sufficient
to pay
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any
Securities of that series which have become due otherwise than by
such declaration of acceleration and any interest thereon at the
rate or rates prescribed therefor in such Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed
therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel due the Trustee under Section
607;
and
(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of and interest, if any, on
the Securities of that series which have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any Security when
such interest becomes due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof,
the Company will, upon written demand of the Trustee, pay to it, for the
benefit of the Holders of such Securities, the whole amount then due and
payable on such Securities for principal and any premium and interest and, to
the extent that payment of such interest shall be legally enforceable, interest
on any overdue principal and premium and on any overdue interest, at the rate
or rates prescribed therefor in such Securities, and, in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses
of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, except such costs and expenses as are a result of
negligence or bad faith on the part of the
Trustee. Until such demand is made by the Trustee, the Company may pay the
principal of and premium, if any, and interest, if any, on the Securities of
any series to the registered holders, whether or not the Securities of such
series are overdue.
If an Event of Default with respect to Securities of any
series occurs and is continuing, the Trustee may in its discretion
proceed to protect and enforce its rights and the rights of the Holders
of Securities of such series by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in
this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy.
Section 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or any other
obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any
such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such
claims and to distribute the same; and
any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly
to the Holders, to pay to the Trustee any amount due it for the
reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel due the Trustee under Section 607.
No provision of this Indenture shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any
plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee
to vote in respect of the claim of any Holder in any such proceeding;
provided, however, that the Trustee may, on behalf of the Holders, vote
for the election of a trustee in bankruptcy or similar official and be a
member of a creditors' or other similar committee.
Section 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel due the
Trustee under Section 607, be for the ratable benefit of the Holders of the
Securities in respect of which such judgment has been recovered.
Section 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal or
any premium or interest, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof
if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607;
SECOND: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Securities in respect of
which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal and any premium
and interest, respectively; and
THIRD: To the payment of the remainder, if any, to the Company or
any other Person lawfully entitled thereto.
Section 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of
the Outstanding Securities of that series shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee indemnity
reasonably satisfactory in form and substance to the Trustee against the
costs, expenses and liabilities to be incurred in compliance with such
request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other of such Holders, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right
under this Indenture, except in the manner herein provided and for the equal
and ratable benefit of all of such Holders.
Section 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest and to Convert.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and any premium and (subject to Section
307) any interest on such Security on the Stated Maturity or Maturities
expressed in such Security (or, in the case of redemption, on the Redemption
Date) and to convert such Securities in accordance with Article Twelve and to
institute suit for the enforcement of any such payment or such right of
conversion, and such rights shall not be impaired without the consent of such
Holder.
Section 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders
shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the
Holders shall continue as though no such proceeding had been instituted.
Section 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law,
be cumulative and in addition to every other right and remedy given hereunder
or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities to
exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence
therein. Subject to Section 507, every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time
to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
Section 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with respect
to the Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction, and
(3) the Trustee need not take any action which might involve it in
personal liability or be unduly prejudicial to the Holders of such series
not joining therein.
Upon receipt by the Trustee of any such direction with respect to
Securities of any series, a record date shall be set for determining the
Holders of Outstanding Securities of such series entitled to join in such
direction, which record date shall be the close of business on the day the
Trustee receives such direction. The Holders of Outstanding Securities of
such series on such record date (or their duly appointed agents), and only
such Persons, shall be entitled to join in such direction, whether or not
such Holders remain Holders after such record date; provided that, unless
such direction shall have become effective by virtue of Holders of at
least a majority in principal amount of Outstanding Securities of such series
on such record date (or their duly appointed agents) having joined
therein on or prior to the 90th day after such record date, such direction
shall automatically and without any action by any Person be cancelled and
of no further effect. Nothing in this paragraph shall prevent a Holder (or
a duly appointed agent thereof) from giving, before or after the expiration
of such 90-day period, a direction contrary to or different from, or, after
the expiration of such period, identical to, a direction that has been cancelled
pursuant to the proviso to the preceding sentence, in which event a new record
date in respect thereof shall be set pursuant to this paragraph.
Section 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past
default hereunder with respect to such series and its consequences,
except a default
(1) in the payment of the principal of or any premium or interest on
any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent
or other default or impair any right consequent thereon.
Section 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the
Trust Indenture Act; provided that neither this Section nor the Trust
Indenture Act shall be deemed to authorize any court to require such an
undertaking or to make such an assessment in any suit instituted by the
Company.
ARTICLE SIX
THE TRUSTEE
Section 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as
provided by the Trust Indenture Act. Notwithstanding the foregoing, no
provision of this Indenture shall require the Trustee to expend or risk its
own funds or otherwise incur any financial liability in the performance of
any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability
is not reasonably assured to it. Whether or not therein expressly so
provided, every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
Section 602. Notice of Defaults.
If a default occurs hereunder with respect to Securities of any series,
the Trustee shall give the Holders of Securities of such series notice of such
default as and to the extent provided by the Trust Indenture Act; provided,
however, that in the case of any default of the character specified in Section
501(4) with respect to Securities of such series, no such notice to Holders
shall be given until at least 30 days after the occurrence
thereof. For the purpose of this Section, the term "default" means any
event which is, or after notice or lapse of time or both would become, an
Event of Default with respect to Securities of such series.
Section 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee security or indemnity
reasonably satisfactory in form and substance to the Trustee against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may make
such further inquiry or investigation into such facts or matters as it
may see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall upon reasonable notice to the Company
be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney at a time and place
reasonably acceptable to the Company; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
Except as otherwise required by the Trust Indenture Act, the
Trustee undertakes to perform only such duties as are
specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee.
Section 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the
Company, and neither the Trustee nor any
Authenticating Agent assumes any responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. Neither the Trustee nor
any Authenticating Agent shall be accountable for the use or
application by the Company of Securities or the proceeds thereof.
Section 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
Section 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except
as otherwise agreed with the Company.
Section 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its written request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance
with any provision of this
Indenture (including the reasonable compensation, and reasonable
expenses and disbursements of its agents and outside counsel), except
any such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder,
including the reasonable costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder.
As security for the performance of the obligations of the Company under
this Section, the Trustee shall have a lien prior to the Securities upon all
property and funds held or collected by the Trustee, in its capacity as Trustee
(but not in any other capacity), except funds held in trust for the
payment of principal of (or premium, if any) or interest on particular
Securities or any coupons. The provisions of this Section shall survive the
termination of this Identure.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(6) or (7), the expenses
(including reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy,
insolvency or other similar law.
Section 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject
to the provisions of, the Trust Indenture Act and this Indenture.
Section 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $50,000,000 or is a subsidiary of a
corporation which shall be a Person that has a combined capital and surplus
of at least $50,000,000 and which unconditionally guarantees the obligations
of the Trustee hereunder. If such Person publishes reports of
condition at least annually, pursuant to law or to the requirements
of said supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Person shall be deemed to
be its combined capital and surplus as set forth in its most recent report
of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article.
Section 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court
of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Company or by any Holder who has been a bona
fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written request therefor by the Company or
by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee
or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 514,
any Holder who has been a bona fide Holder of a Security for at least six
months may, on behalf of itself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee with
respect to all Securities and the appointment of a successor Trustee or
Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that
any such successor Trustee may be appointed with respect to the Securities
of one or more or all of such series and that at any time there shall be
only one Trustee with respect to the Securities of any particular series)
and shall comply with the
applicable requirements of Section 611. If, within one year
after such resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee with respect to the Securities of any Series
shall be appointed by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series delivered to the Company
and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 611, become the successor Trustee with
respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by
the Company. If no successor Trustee with respect to the Securities of
any Series shall have been so appointed by the Company or the Holders and
accepted appointment in the manner required by Section 611, any Holder who
has been a bona fide Holder of a Security of such series for at least six
months may, on behalf of itself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Securities of such series.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any
series to all Holders of Securities of such series in the manner provided in
Section 106. Each notice shall include the name of the successor Trustee with
respect to the Securities of such series and the address of its Corporate
Trust Office.
Section 611. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested
with all the rights, powers, trusts and duties of the retiring Trustee; but,
on the request of the Company or the successor Trustee, such retiring Trustee
shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of
the retiring Trustee and shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee
hereunder, subject nevertheless to its claim, if any, provided for in Section
607.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company,
the retiring Trustee and each successor Trustee with respect to the
Securities of such series shall execute and deliver an indenture supplemental
hereto wherein each successor Trustee shall accept such appointment and which
(1) shall contain such provisions as shall be necessary or desirable to
transfer the rights, powers, trust and duties of the retiring Trustee with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates, (2) if the retiring Trustee is not
retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring Trustee is
not retiring shall continue to be vested in the retiring Trustee, and (3)
shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustee co-trustees of
the same trust and that each such Trustee shall be trustee of a trust or
trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee; and upon the execution and delivery of
such supplemental indenture the resignation or removal of the retiring
Trustee shall become effective to the extent provided therein and each
such successor Trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to
which the appointment of such successor Trustee relates; but, on request of the
Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or
those series to which the appointment of such successor Trustee relates,
subject nevertheless to its claim, if any, provided for in Section 607.
(c) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraphs (a) and (b) of this Section, as the case may be.
(d) No successor shall accept its appointment unless at the time of such
acceptance such successor Trustee shall be qualified and eligible under this
Article.
Section 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation
to which the Trustee shall be a party, or any corporation succeeding to all
or substantially all the corporate trust business of the Trustee, shall be
the successor of the Trustee hereunder, provided such corporation shall be
otherwise qualified and eligible under this Article, without the execution or
filing of any paper or any further act on the part of any of
the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
Section 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
Section 614. Appointment of Authenticating Agent.
The Trustee may with the consent of the Company appoint an Authenticating
Agent or Agents with respect to one or more series of Securities which shall be
authorized to act on behalf of the Trustee to authenticate Securities of such
series issued upon original issue and upon exchange, registration of
transfer, partial conversion or partial redemption thereof or pursuant to
Section 306, and Securities so authenticated shall be entitled to the benefits
of this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the authentication
and delivery of Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the
Trustee by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to
the Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, any State thereof or the
District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State
authority. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or to the requirements
of said supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Authenticating Agent shall be
deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time an Authenticating
Agent shall cease to be eligible in accordance with the provisions of this
Section, such Authenticating Agent shall resign immediately in the manner and
with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation
to which such Authenticating Agent shall be a party, or any corporation
succeeding to the corporate agency or corporate trust business of an
Authenticating Agent, shall continue to be an Authenticating Agent, provided
such corporation shall be otherwise eligible under this Section, without
the execution or filing of any paper or any further act on the part of the
Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The Trustee or the
Company may at any time terminate the agency of an Authenticating Agent by
giving written notice thereof to such Authenticating Agent and to the
Company or the Trustee, as the case may be. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating
Agent shall cease to be eligible in accordance with the provisions of
this Section, the Trustee may appoint a successor Authenticating Agent which
shall be acceptable to the Company and shall mail written notice of such
appointment by first-class mail, postage prepaid, to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve, as
their names and addresses appear in the Security Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder,
with like effect as if
originally named as an Authenticating Agent. No successor Authenticating
Agent shall be appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
SIGNET TRUST COMPANY,
As Trustee
By: , As
Authenticating Agent
By: , Authorized
Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS
BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not later than 10 days after each Regular Record
Date in each year, a list for each series of Securities, in such form
as the Trustee may reasonably require, of the names and addresses of
the Holders of Securities of such series as of the preceding Regular
Record Date, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days prior
to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
Section 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 701 and the names
and addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of the Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
any disclosure of information as to names and addresses of Holders made
pursuant to the Trust Indenture Act.
Section 703. Reports by Trustee.
(a) The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to
the Trust Indenture Act at the times and in the manner provided pursuant
thereto. To the extent that any such report is required by the Trust
Indenture Act with respect to any 12 month period, such report shall cover
the 12 month period ending May 15 and shall be transmitted by the next
succeeding July 15.
(b) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock
exchange upon which any Securities are listed, with the Commission
and with the Company. The Company will notify the Trustee when any
Securities are listed on any stock exchange.
Section 704. Reports by Company.
The Company shall file with the Trustee and the Commission, and transmit
to Holders, such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times
and in the manner
provided pursuant to such Act; provided that any such information,
documents or reports required to be filed with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within
15 days after the same is so required to be filed with the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, OR SALE OR ASSETS
Section 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person
or convey, transfer, lease or sell its properties and assets as, or
substantially as, an entirety to any Person, and the Company shall not permit
any Person to consolidate with or merge into the Company, unless:
(1) in case the Company shall consolidate with or merge into
another Person or sell its properties and assets as, or substantially as,
an entirety to any Person, the Person formed by such consolidation
or into which the
Company is merged or the Person which acquires by conveyance,
transfer, lease or sale of the properties and assets of the Company as,
or substantially as, an entirety shall be a corporation, partnership or
trust, shall be organized and validly existing under the laws of the
United States of America, any State thereof or the District of
Columbia and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form satisfactory to
the Trustee, all of the obligations of the Company under the
Securities, including without limitation, the due and punctual payment of
the principal of and any premium and interest on all the Securities and
the
performance or observance of every covenant of this Indenture on
the part of the Company to be performed or observed and the
conversion rights, if any, shall be
provided for in accordance with Article Twelve, by supplemental
indenture satisfactory in form to the Trustee, executed and delivered to
the Trustee, by the Person (if other than the Company) formed by such
consolidation or into
which the Company shall have been merged or by the
corporation which shall have acquired or leased the Company's
assets;
(2) immediately after giving effect to such transaction,
no Event of Default shall have happened and be continuing; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each
stating that such consolidation, merger, conveyance, transfer,
lease or sale and, if a supplemental indenture is
required in connection with such transaction, such supplemental
indenture comply with this Article and that all conditions precedent
herein provided for relating to such transaction have been complied with.
For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise) of the properties and assets of United States Fidelity and
Guaranty Company (other than to the Company or another Subsidiary), which, if
such assets were owned by the Company, would constitute all or substantially
all of the properties and assets of the Company, shall be deemed to be the
transfer of all or substantially all of the properties and assets of the
Company.
Section 802. Successor Substituted.
Upon any consolidation of the Company with, or merger of the Company into,
any other Person or any sale of the properties and assets of the Company as,
or substantially as, an entirety in accordance with Section 801, the successor
Person formed by such consolidation or into which the Company is merged or
to which such sale is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein,
and thereafter, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by
a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form satisfactory to
the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants of the Company
herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of
the Holders of all or any series of Securities (and if such covenants
are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included solely for the
benefit of such series) or to surrender any right or power herein
conferred upon the Company; or
(3) to add any additional Events of Default; or
(4) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the issuance
of Securities in bearer form, registrable or not registrable as to
principal, and with or without interest coupons, or to permit or
facilitate the issuance of Securities in uncertificated form, or to
permit or facilitate the issuance of Original Issue Discount
Securities; or
(5) to add to, change or eliminate any of the provisions of
this Indenture in respect of one or more series of Securities,
provided that any such addition, change or elimination (i) shall
neither (A) apply to any Security of any series created prior to the
execution of such supplemental indenture and entitled to the benefit of
such provision nor (B) modify the rights of the Holder of any such
Security with respect to such provision or (ii) shall become effective
only when there is no such Security Outstanding; or
(6) to secure the Securities pursuant to the requirements
of Section 1005, or to otherwise secure the Securities of any series; or
(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, pursuant
to the requirements of Section 611(b); or
(9) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to
make any other provisions with
respect to matters or questions arising under this Indenture,
provided that such action pursuant to this clause (9) shall not adversely
affect the interests of the Holders of Securities of any series in any
material respect; or
(10) to make provision with respect to the conversion rights of
Holders pursuant to the requirements of Article Twelve, including
providing for the conversion of the securities into any security
(other than the Common Stock of the Company) or property of the Company; or
(11) to conform to any mandatory provisions of law.
Section 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority of principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and
the Trustee, the Company, when authorized by a Board Resolution, and the
Trustee may enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of modifying in any manner the rights
of the Holders of Securities of such series
under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding
Security affected thereby,
(1) change the Stated Maturity of the principal of, or any instalment
of principal of or interest on, any Security, or reduce the principal
amount thereof or the rate of interest thereon (including any change
in the Floating or Adjustable Rate Provision pursuant to which such
rate is determined that would reduce such rate for any period) or any
premium payable upon the redemption thereof, or reduce the amount of the
principal of an Original Issue Discount Security that would be due and
payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 502, or change any Place of Payment where, or the
coin or currency in which, any Security or any premium or interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof
(or, in the case of redemption, on or after the Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for
any such supplemental indenture, or the consent of whose Holders is
required for any waiver (of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences) provided
for in this Indenture, or
(3) if applicable, make any change that adversely affects the
right to convert any security to which the provisions of Article
Twelve are applicable or, except as provided in this Indenture, decrease
the conversion rate or increase the conversion price of any such security,
or
(4) modify any of the provisions of this Section, Section 513
or Section 907, except to increase any such percentage or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security
affected thereby, provided, however, that this clause shall not be
deemed to require the consent of any Holder with respect to changes in
the references to "the Trustee" and concomitant changes in this Section and
Section 907, or the deletion of
this proviso, in accordance with the requirements of Sections
611(b) and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
Section 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 601) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.
Section 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and
such supplemental indenture shall form a part of this Indenture for all
purposes; and every Holder of Securities theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby.
Section 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
Section 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution
of any supplemental indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee
as to any matter
provided for in such supplemental indenture. If the Company shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by
the Trustee in exchange for Outstanding Securities of such series.
Section 907. Waiver of Compliance by Holders.
Anything in this Indenture to the contrary notwithstanding, any of the
acts which the Company is required to do, or is prohibited from doing, by
any of the provisions of this Indenture may, to the extent that such
provisions might be changed or eliminated by a supplemental indenture
pursuant to Section 902 upon consent of holders of not less than a majority
in aggregate principal amount of the then Outstanding Securities of the series
affected, be omitted or done by the Company, if there is obtained the prior
consent or waiver of the holders of at least a majority in aggregate principal
amount of the then Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay or cause to be paid the
principal of and any premium and interest on the Securities of that series in
accordance with the terms of the Securities and this Indenture.
Section 1002. Maintenance of Office or Agency.
So long as any Securities are Outstanding, the Company will maintain in
each Place of Payment for any series of Securities an office or agency where
Securities of that series may be presented or surrendered for payment, where
Securities of that series may be surrendered for registration of transfer or
exchange, where Securities of that series may be surrendered for conversion
and where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and any change in
the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, and the Company
hereby appoints the
Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in each Place of Payment for Securities of any
series for such purposes. The Company will give prompt written notice to
the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.
Section 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of or any premium or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal and any premium and interest so
becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any series
of Securities, it will, prior to each due date of the principal of or any
premium or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay such amount, such sum to be held as provided
by the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will (i) comply with the provisions of
the Trust Indenture Act applicable to it as a Paying Agent and (ii) during the
continuance of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment in respect of the
Securities of that series, and upon the written request of the Trustee,
forthwith pay to the Trustee all sums held in trust by such Paying Agent for
payment in respect of the Securities of that series.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to
the Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of or any premium
or interest on any Security of any
series and remaining unclaimed for two years after such principal,
premium or interest has become due and payable shall be paid to the Company
on Company Request, or (if then held by the Company) shall be discharged from
such trust; and the Holder of such Security shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such
trust money, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general
circulation in the Borough of Manhattan, the City of New York, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
Section 1004. Statement by Officers as to Default.
The Company will deliver to the Trustee within 120 days after the end
of each fiscal year of the Company ending after the date hereof, a
certificate signed by the Company's principal executive officer, principal
financial officer or principal accounting officer stating whether or not to
the best knowledge of the signer thereof the Company is in compliance with
all terms, conditions and covenants of this Indenture (without regard to any
period of grace or requirement of notice provided hereunder) and if
the signer has obtained knowledge of any continuing default by the Company
in the performance, observation
or fulfillment of any such term, condition or covenant, specifying
each such default and the nature thereof.
Section 1005. Limitations on Liens on Common Stock of Principal Insurance
Subsidiaries.
As long as any of the Securities remains outstanding, the Company will
not, and will not permit any Principal Insurance Subsidiary to, issue, assume,
incur or guarantee any indebtedness for borrowed money secured by a mortgage,
pledge, lien or other encumbrance, directly or indirectly, on any of the
Common Stock of a Principal Insurance Subsidiary, which Common Stock is owned
by the Company or by any Principal Insurance Subsidiary, unless
the Securities and, if the Company so elects, any other indebtedness
of the Company ranking on a parity with the Securities, shall be secured
equally and ratably with, or prior to, such secured indebtedness for borrowed
money so long as it is outstanding.
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except
as otherwise specified as contemplated by Section 301 for Securities of any
series) in accordance with this Article.
Section 1102. Election to Redeem; Notice to Trustee.
In case of any redemption at the election of the Company of less than all
the Securities of any series, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date, of
the principal amount of Securities of such series to be redeemed and, if
applicable, of the tenor of the Securities to be redeemed. In the case of
any redemption of Securities prior to the expiration of any restriction on
such redemption provided in the terms of such Securities or elsewhere in this
Indenture, the Company shall furnish the Trustee with an Officers'
Certificate evidencing compliance with such restriction.
Section 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed
(unless all of the Securities of such series and of a specified tenor are to
be redeemed), the particular Securities to be redeemed shall be selected not
more than 45 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series not previously called for redemption,
by such method as the Trustee shall deem fair and appropriate and which may
provide for the selection for redemption of portions (equal to the minimum
authorized denomination for Securities of that series or any integral
multiple thereof) of the principal amount of Securities of such series of a
denomination larger than the minimum authorized denomination for Securities of
that series. If less than all of the Securities of such series and of a
specified tenor are to be redeemed, the particular Securities to be
redeemed shall be selected not more than 45 days prior to the Redemption
Date by the Trustee, from the Outstanding Securities of such series and
specified tenor not previously called for redemption in accordance with the
preceding sentence.
If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be deemed
(so far as may be) to be the portion selected for redemption. Securities
which have been converted during a selection of Securities to be redeemed
shall be treated by the Trustee as Outstanding for the purpose of such
selection.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall
relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.
Section 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at its address appearing in
the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series are to
be redeemed, the identification (and, in the case of partial redemption
of any Securities, the principal amounts) of the particular Securities to
be redeemed,
(4) that on the Redemption Date the Redemption Price will become
due and payable upon each such Security to be redeemed and, if
applicable, that interest thereon will cease to accrue on and after said
date,
(5) if applicable, the conversion price, and that the date on
which the right to convert the principal of the Securities or the
portions thereof to be redeemed will terminate will be the Redemption
Date and the place or
places where such Securities may be surrendered for conversion,
(6) the place or places where such Securities are to be surrendered
for payment of the Redemption Price, and
(7) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
Section 1105. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the Trustee
or with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1003) an amount of money
sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date, other than any Securities called for
redemption on that date which have been converted prior to the date of such
deposit.
If any Security or portion thereof called for redemption is converted,
any money deposited with the Trustee or with any Paying Agent or so
segregated and held in trust for the redemption of such Security or
portion thereof shall (subject to any right of the Holder of such Security
or any Predecessor Security to receive interest as provided in the last
paragraph of Section 307) be paid to the Company upon Company Request or, if
then held by the Company, shall be discharged from such trust.
Section 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of
any such Security for redemption in accordance with said notice, such Security
shall be paid by the Company at the Redemption Price, together with accrued
interest to the Redemption Date; provided, however, that, unless otherwise
specified as contemplated by Section 301, installments of interest whose
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Security.
Section 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at
a Place of Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory
to the Company and the Trustee duly executed by, the Holder thereof or his
attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities of the same series and of like
tenor, of any authorized denomination as requested by such Holder, in aggregate
principal amount equal to and in exchange for the unredeemed portion of the
principal of the Security so surrendered.
ARTICLE TWELVE
CONVERSION OF SECURITIES
Section 1201. Applicability of Article.
The provisions of this Article shall be applicable to the Securities of
any series which are convertible into shares of Common Stock of the Company,
and the issuance of such shares of Common Stock upon the conversion of such
Securities, except as otherwise specified as contemplated by Section 301
for the Securities of such series.
Section 1202. Exercise of Conversion Privilege.
In order to exercise a conversion privilege, the Holder of a Security of a
series with such a privilege shall surrender such Security to the Company at
the office or agency maintained for that purpose pursuant to Section 1002,
accompanied by written notice to the Company that the Holder elects to
convert such Security or a specified portion thereof. Such notice shall also
state, if different from the name and address of such Holder, the name or
names (with address) in which the certificate or certificates for shares
of Common Stock which shall be issuable on such conversion shall be issued.
Securities surrendered for conversion shall (if so required by the Company or
the Trustee) be duly endorsed by or accompanied by instruments of transfer in
forms satisfactory to the Company and the Trustee duly executed by the
registered Holder or its attorney duly authorized in writing; and Securities
so surrendered for conversion during the period from the close of business on
any Regular Record Date to the opening of business on the next succeeding
Interest Payment
Date (excluding Securities or portions thereof called for redemption
during such period) shall also be accompanied by payment in funds
acceptable to the Company of an amount equal to the interest payable on
such Interest Payment Date on the principal amount of such Security then
being converted, and such
interest shall be payable to such registered Holder
notwithstanding the conversion of such Security, subject to the provisions of
Section 307 relating to the payment of Defaulted Interest by the Company. As
promptly as practicable after the receipt of such notice and of any payment
required pursuant to a Board Resolution and, subject to Section 303, set
forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto setting forth
the terms of such series of Security, and the surrender of such Security
in accordance with such reasonable regulations as the Company may prescribe,
the Company shall issue and shall deliver, at the office or agency at which such
Security is surrendered, to such Holder or on its written order, a
certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such Security (or specified portion thereof),
in accordance with the provisions of such Board Resolution, Officers'
Certificate or supplemental indenture, and cash as provided therein in
respect of any fractional share of such Common Stock otherwise issuable
upon such conversion. Such conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which such notice
and such payment, if required, shall have been received in proper order for
conversion by the Company and such Security shall have been surrendered as
aforesaid (unless such Holder shall have so surrendered such Security and
shall have instructed the Company to effect the conversion on a
particular date following such surrender and such Holder shall be entitled to
convert such Security on such date, in which case such conversion shall be
deemed to be effected immediately prior to the close of business on such
date) and at such time the rights of the Holder of such Security as such
Security Holder shall cease and the person or persons in whose name or names
any certificate or certificates for shares of Common Stock of the Company
shall be issuable upon such conversion shall be deemed to have become the
Holder or Holders of record of the shares represented thereby. Except as
set forth above and subject to the final paragraph of Section 307, no
payment or adjustment shall be made upon any conversion on account of any
interest accrued on the Securities surrendered for conversion or on
account of any dividends on the Common Stock of the Company issued upon
such conversion.
In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to or on the order of the Holder thereof, at the expense of the
Company, a new Security or Securities of the same series, of authorized
denominations, in aggregate principal amount equal to the unconverted portion
of such Security.
Section 1203. No Fractional Shares.
No fractional share of Common Stock of the Company shall be
issued upon conversions of Securities of any series. If more than one
Security shall be surrendered for conversion at one time by the same Holder,
the number of full shares which shall be issuable upon conversion shall be
computed on the basis of the aggregate principal amount of the Securities
(or specified portions thereof to the extent permitted hereby) so surrendered.
If, except for the provisions of this Section 1203, any Holder of a Security or
Securities would be entitled to a fractional share of Common Stock of the
Company upon the conversion of such Security or Securities, or specified
portions thereof, the Company shall pay to such Holder an amount in cash equal
to the current market value of such fractional share computed, (i) if such
Common Stock is listed or admitted to unlisted trading privileges on a
national securities exchange, on the basis of the last reported sale price
regular way on such exchange on the last trading day prior to the date of
conversion upon which such a sale shall have been effected, or (ii) if such
Common Stock is not at the time so listed or admitted to unlisted
trading privileges on a national securities exchange, on the basis of the
average of the bid and asked prices of such Common Stock in the over-the-
counter market, on the last trading day prior to the date of conversion,
as reported by the National Association of Securities Dealers Automated
Quotation System, or if not so available, the fair market price as
determined by the Board of
Directors. For purposes of this Section, "trading day" shall mean each
Monday, Tuesday, Wednesday, Thursday and Friday other than any day on which
the Common Stock is not traded on the New York Stock Exchange, or if the Common
Stock is not traded on the New York Stock Exchange, on the principal exchange
or market on which the Common Stock is traded or quoted.
Section 1204. Adjustment of Conversion Price.
The conversion price of Securities of any series that is convertible
into Common Stock of the Company shall be adjusted
for any stock dividends, stock splits, reclassification, combinations
or similar transactions in accordance with the terms of the supplemental
indenture or Board Resolutions setting forth the terms of the Securities of such
series.
Whenever the conversion price is adjusted, the Company shall compute the
adjusted conversion price in accordance with terms of the applicable Board
Resolution or supplemental indenture and shall prepare an Officers'
Certificate setting forth the adjusted conversion price and showing in
reasonable detail the facts upon which such adjustment is based, and such
certificate shall forthwith be filed at each office or agency maintained for
the purpose of conversion of Securities pursuant to Section 1002 and, if
different, with the Trustee. The Company shall forthwith cause a notice
setting forth the adjusted conversion price to be mailed, first class postage
prepaid, to each Holder of Securities of such series at its address appearing
on the Security Register and to any conversion agent other than the Trustee.
Section 1205. Notice of Certain Corporate Actions.
In Case:
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock (other than dividends or distributions which will
not require an adjustment of the conversion price of Securities of any
series pursuant to Section 1204); or
(b) the Company shall authorize the granting to the holders of
its Common Stock of rights, options or warrants to subscribe for or
purchase any shares of capital stock of any class or of any other rights
(other than any such grant for which approval of any shareholders of the
Company is required or which will not require an adjustment of the
conversion price of Securities of any series pursuant to Section 1204);
or
(c) of any reclassification of the Common Stock of the Company
(other than a subdivision or combination of its outstanding shares of
Common Stock, or of any consolidation, merger or share exchange to which
the Company is a party and for which approval of any shareholders of the
Company is required or which will not require an adjustment of the
conversion price of Securities of any series pursuant to Section 1204),
or of the sale of all or substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall cause to be filed with the Trustee, and shall cause
to be mailed to all Holders at their last addresses as they shall appear in the
Securities Register, at least 20 days (or 10 days in any case specified in
clause (a) or (b) above) prior to the applicable record date hereinafter
specified, a notice stating (i) the date on which a record is to be taken for
the purpose of such dividend, distribution, rights, options or warrants, or,
if a record is not to be taken, the date as of which the holders of Common
Stock of record to be entitled to such dividend, distribution, rights,
options or warrants are to be determined, or (ii) the date on which such
reclassification,
consolidation, merger, share exchange, sale, dissolution, liquidation
or winding up is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, share
exchange, sale, dissolution, liquidation or winding up. If at any time the
Trustee shall not be the conversion agent, a copy of such notice shall also
forthwith be filed by the Company with the conversion agent.
Section 1206. Reservation of Shares of Common Stock.
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock, for the
purpose of effecting the conversion of Securities, the full number of shares
of Common Stock of the Company then issuable upon the conversion of all
outstanding Securities of any series that have conversion rights.
Section 1207. Payment of Certain Taxes Upon Conversion.
The Company will pay any and all taxes that may be payable in respect of
the issue or delivery of shares of its Common Stock on conversion of Securities
pursuant hereto. The Company shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in the issue and
delivery of shares of its Common Stock in a name other than that of the
Holder of the Security or Securities to be converted, and no such issue or
delivery shall be made unless and until the person requesting such issue has
paid to the Company the amount of any such tax, or has established, to the
satisfaction of the Company, that such tax has been paid.
Section 1208. Nonassessability.
The Company covenants that all shares of its Common Stock which may be
issued upon conversion of Securities will upon issue in accordance with the
terms hereof be duly and validly issued and fully paid and nonassessable.
Section 1209. Effect of Consolidation or Merger on Conversion Privilege.
In case of any consolidation of the Company with, or merger of the Company
into or with any other Person, or in the case of a statutory share exchange to
which the Company is a party or in case of any sale or conveyance of all or
substantially all of the properties or assets of the Company (including cash),
the Company or the Person formed by such consolidation or the Person into
which the Company shall have been merged or the Person which shall have
acquired such assets, or the surviving entity in such share exchange, as the
case may be, shall execute and deliver to the Trustee a supplemental indenture
providing that the Holder of each Security then outstanding of any series that
is convertible into Common Stock of the Company shall have the right, which
right shall be the exclusive conversion right thereafter available to
said Holder (until the expiration of the conversion right of such Security), to
convert such Security into the kind and amount of shares of stock or other
securities or property (including cash) receivable upon such
consolidation, merger, share exchange, conveyance or sale by a holder of the
number of shares of Common Stock of the Company into which such Security
might have been converted immediately prior to such
consolidation, merger, share exchange, conveyance or sale,
subject to compliance with the other provisions of this
Indenture, such Security and such supplemental indenture. Such supplemental
indenture shall provide for adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided for in such Security. The
above provisions of this Section shall similarly apply to successive
consolidations, mergers, share exchanges, conveyances or sales. It is
expressly agreed and understood that anything in this Indenture to the
contrary notwithstanding, if, pursuant to such merger, consolidation,
share exchange, conveyance or sale, holders of outstanding shares of Common
Stock of the Company do not receive shares of common stock of the surviving
corporation but receive other securities, cash or other property or any
combination thereof, Holders of Securities shall not have the right to
thereafter convert their Securities into common stock of the
surviving corporation or the corporation which shall have acquired such
assets, but rather, shall have the right upon such conversion to receive the
other securities, cash or other property receivable by a holder of the
number of shares of Common Stock of the Company into which the Securities
held by such holder might have been converted immediately prior to such
consolidation, merger, share exchange, conveyance or sale, all as more fully
provided in the first sentence of this Section 1209. Anything in this
Section 1209 to the contrary notwithstanding, the provisions of this Section
1209 shall not apply to a merger or consolidation of another corporation with
or into the Company or any share exchange to which the Company is a party
pursuant to which both of the following conditions are applicable: (i) the
Company is the surviving or successor corporation and (ii) the outstanding
shares of Common Stock of the Company are not changed or converted into any
other securities or property (including cash) or changed in number or
character or reclassified pursuant to the terms of such merger, consolidation or
share exchange.
As evidence of the kind and amount of shares of stock or
other securities or property (including cash) into which
Securities may properly be convertible after any such consolidation,
merger, share exchange, conveyance or sale, or as
to the appropriate adjustments of the conversion prices applicable
with respect thereto, the Trustee shall be furnished with and may accept the
certificate or opinion of an independent certified public accountant with
respect thereto; and, in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely thereon, and shall not be responsible
or accountable to any Holder of Securities for any provision in conformity
therewith or approved by such independent certified accountant which may be
contained in said supplemental indenture.
Section 1210. Duties of Trustee Regarding Conversion.
Neither the Trustee nor any conversion agent shall at any time be
under any duty or responsibility to any Holder of Securities of any series
that is convertible into Common Stock of the Company to determine whether any
facts exist which may require any adjustment of the conversion price, or
with respect to the nature or extent of any such adjustment when made, or with
respect to the method employed, whether herein or in any supplemental
indenture, any resolutions of the Board of Directors or written instrument
executed by one or more officers of the Company provided to be employed in
making the same. Neither the Trustee nor any conversion agent shall be
accountable with respect to the validity or value (or the kind or amount) of
any shares of Common Stock of the Company, or of any securities or property,
which may at any time be issued or delivered upon the conversion of any
Securities and neither the Trustee nor any conversion agent makes any
representation with respect thereto. Subject to the provisions of Section 601,
neither the Trustee nor any conversion agent shall be responsible for any
failure of the Company to issue, transfer or deliver any shares of its Common
Stock or stock certificates or other securities or property upon the surrender
of any Security for the purpose of conversion or to comply with any of the
covenants of the Company contained in this Article Twelve or in the
applicable supplemental indenture, resolutions of the Board of Directors
or written instrument executed by one or more duly authorized officers of the
Company.
Section 1211. Repayment of Certain Funds Upon Conversion.
Any funds which at any time shall have been deposited by the Company or
on its behalf with the Trustee or any other paying agent for the purpose of
paying the principal of, and premium, if any, and interest, if any, on any of
the Securities (including funds deposited for the sinking fund referred to in
Article Three hereof) and which shall not be required for such purposes because
of the conversion of such Securities as provided in this Article Twelve shall
after such conversion be repaid to the Company by the Trustee upon the
Company's written request.
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
Section 1301. Company's Option to Effect Defeasance or Covenant Defeasance.
The Company may elect, at any time, to have either Section 1302 or
Section 1303 applied to the Outstanding Securities of any series, upon
compliance with the conditions set forth below in this Article Thirteen.
Section 1302. Defeasance and Discharge.
Upon the Company's exercise of the option provided in Section 1301
to have this Section 1302 applied to the Outstanding Securities of any series,
the Company shall be deemed to have
been discharged from its obligations with respect to the Outstanding
Securities of such series as provided in this Section on and after the date
the conditions set forth in Section 1304
are satisfied (hereinafter called "Defeasance"). For this purpose, such
Defeasance means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented by the Outstanding Securities of such
series and to have satisfied all its other obligations under the Securities
of such series and this Indenture insofar as the Securities of such
series are concerned (and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging the same), subject to the
following which shall survive until otherwise terminated or discharged
hereunder: (1) the rights of Holders of Securities of such series to receive,
solely from the trust fund described in Section 1304 and as more fully set
forth in such Section, payments in respect of the principal of and any premium
and interest on such Securities of such series when payments are due, (2)
the Company's obligations with respect to the Securities of such series under
Sections 304, 305, 306, 1002 and 1003, (3) the rights, powers, trusts, duties
and immunities of the Trustee hereunder, including, without limitation, its
rights under Section 607 and (4) this Article Thirteen. Subject to compliance
with this Article Thirteen, the Company may exercise its option provided
in Section 1301 to have this Section
1302 applied to the Outstanding Securities of any series
notwithstanding the prior exercise of its option provided in Section 1301
to have Section 1303 applied to the Outstanding Securities of such series.
Section 1303. Covenant Defeasance.
Upon the Company's exercise of the option provided in Section 1301
to have this Section 1303 applied to the outstanding Securities of any series,
(1) the Company shall be released from its obligations under Section 1005
and Section 801 and any provision of a supplemental indenture specified
for release pursuant to the terms thereof and (2) the occurrence of any event
specified in Sections 501(3), 501(4) (with respect to Section 1005 and
Section 801) and 501(5) shall be deemed not to be or result in an Event of
Default, in each case with respect to the Outstanding Securities of such series
as provided in this Section on and after the date the conditions set forth in
Section 1304
are satisfied (hereinafter called "Covenant Defeasance"). For this purpose,
such Covenant Defeasance means that the Company may omit to comply with and
shall have no liability in respect of any term, condition or limitation set
forth in any such specified Section (to the extent so specified in the
case of Section
501(4)), whether directly or indirectly by reason of any reference
elsewhere herein to any such Section or by reason of any reference in any
such Section to any other provision herein or in any other document, but the
remainder of this Indenture and the Securities of such series shall be
unaffected thereby.
Section 1304. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either Section
1302 or Section 1303 to the Outstanding Securities of any series:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee that satisfies the
requirements contemplated by Section 609 and agrees to comply with the
provisions of this Article Thirteen applicable to it) as trust funds in
trust for the purpose of making the following payments,
specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of Outstanding Securities of such series, (A)
in the case of Securities of such series denominated in U.S. dollars,
(i) money in an amount, or (ii) U.S. Government Obligations that
through the scheduled payment of principal and interest in respect
thereof in accordance with their terms will provide, not later than one
day before the due date of any payment, money in an amount, or (iii) a
combination thereof, in each case sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or any such
other qualifying trustee) to pay and discharge, the principal of and any
premium and interest on the Securities of such series on the
respective Stated Maturities, in accordance with the terms of this
Indenture and the Securities of such series. As used herein, "U.S.
Government Obligation" means (x) any security that is (i) a direct
obligation of the United States of America for the payment of which full
faith and credit of the United States of America is pledged or (ii) an
obligation of a Person controlled or supervised by and acting as an
agency or instrumentality for the United States of America the payment
of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case (i) or
(ii), is not callable or redeemable at the option of the issuer thereof,
and (y) any depositary receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act of 1933, as amended) as custodian with
respect to any specific payment of principal of or interest on any such
U.S. Government
Obligation specified in Clause (x) and held by such custodian for
the account of the holder of such depositary
receipt, or with respect to any specific payment of principal of
or interest on any such U.S. Government Obligation, provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the Holder of such depositary
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of principal or interest
evidenced by such depositary receipt; or (B) in the case of Securities
of such series denominated in a currency other than the U.S. dollar,
(i) money in such
currency in an amount, or (ii) Foreign Government Obligations
that through the scheduled payment of principal and interest in respect
thereof in accordance with their terms will provide, not later than one
day before the due date of any payment, money in such currency in an
amount, or (iii) a combination thereof, in each case sufficient, in the
opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to
the Trustee, to pay and discharge, and which shall be applied by the
Trustee (or any such other qualifying trustee) to pay and discharge, the
principal of and any premium and interest on the Securities of such
series on the respective Stated Maturities, in accordance with the
terms of this Indenture and the Securities of such
series. As used herein, "Foreign Government Obligation" means (x)
any security that is (i) a direct obligation of the government that issued
such currency for the payment of which full faith and credit of such
government is pledged or (ii) an obligation of a Person controlled or
supervised by
and acting as an agency or instrumentality for such
government the payment of which is unconditionally guaranteed as
a full faith and credit obligation by such government, which, in either
case (i) or (ii), is not callable or redeemable at the option of the
issuer thereof, and (y) any depositary receipt issued by a bank (as
defined in Section 3(a)(2) of the Securities Act of 1933, as
amended) as custodian with respect to any specific payment of principal
of or interest on any such Foreign Government
Obligation specified in Clause (x) and held by such custodian for
the account of the holder of such depositary
receipt, or with respect to any specific payment of principal of
or interest on any such Foreign Government Obligation, provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the Holder of such depositary
receipt from any amount received by the custodian in respect of the
Foreign Government Obligation or the specific payment of principal or
interest evidenced by such depositary receipt.
(2) In the case of an election under Section 1302, the Company shall
have delivered to the Trustee an Opinion of
Counsel stating that the Holders of the Outstanding Securities of
such series will not recognize gain or loss for Federal income tax
purposes as a result of the deposit, Defeasance and discharge to be
effected with respect to the Securities of such series and will be
subject to Federal income tax on the same amount, in the same manner and
at the same times as would be the case if such deposit, Defeasance and
discharge were not to occur.
(3) In the case of an election under Section 1303, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that
the Holder of the Outstanding Securities of such series will not
recognize gain or loss for Federal income tax purposes as result of the
deposit and Covenant Defeasance to be effected with respect to the
Securities of such series and will be subject to Federal income tax on
the same amount, in the same manner and at the same times as would be the
case if such deposit and Covenant Defeasance were not to occur.
(4) The Company shall have delivered to the Trustee an Officers'
Certificate to the effect that the Securities of such series, if then
listed on any securities exchange, will not be delisted as a result of such
deposit.
(5) No Event of Default or event that (after notice or lapse of
time or both) would become an Event of Default shall have occurred and
be continuing at the time of such deposit or, with regard to any Event of
Default or any such event specified in Sections 501(6) and 501(7), at any
time on or prior to the 90th day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until after
such 90th day).
(6) The Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all
conditions precedent with respect to such Defeasance or Covenant
Defeasance have been complied with.
(7) Such Defeasance or Covenant Defeasance shall not result in
the trust arising from such deposit constituting an investment company
within the meaning of the Investment Company Act of 1940, as amended,
unless such trust shall be
qualified under such Act or exempt from regulation thereunder.
Section 1305. Deposited Money and U.S. Government Obligations or Foreign
Government Obligations to be Held In Trust; Other
Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003, all
money and U.S. Government Obligations or Foreign Government Obligations
(including the proceeds thereof) deposited with the Trustee or other qualifying
trustee (solely for purposes of this Section and Section 1306, the Trustee and
any such other trustee are referred to collectively as the "Trustee") pursuant
to Section 1304 in respect of the Securities of any Defeasible Series shall
be held in trust and applied by the Trustee, in accordance with the
provisions of the Securities of such series and this Indenture, to the
payment, either directly or through any such Paying Agent (including the
Company acting as its own Paying Agent) as the Trustee may determine, to the
Holders of Securities of such series, of all sums due and to become due
thereon in respect of principal and any premium and interest, but money so
held in trust need not be segregated from other funds except to the extent
required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S.
Government Obligations or Foreign Government Obligations deposited
pursuant to Section 1304 or the principal and interest received in respect
thereof other than any such tax, fee or other charge that by law is for
the account of the Holders of Outstanding Securities.
Anything in this Article Thirteen to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to
time upon Company Request any money or U.S. Government Obligations or
Foreign Government Obligations held by it as provided in Section 1304 with
respect to Securities of any Defeasible Series that, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount thereof that would then be required to be deposited to effect an
equivalent Defeasancseries.
series.
Section 1306. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article Thirteen with respect to the Securities of any
series by reason of any order or judgment of any court or governmental
authority enjoining, restraining or
otherwise prohibiting such application, then the Company's obligations
under this Indenture and the Securities of such series shall be revived
and reinstated as though no deposit had occurred pursuant to this Article
Thirteen with respect to Securities of such series until such time as the
Trustee or Paying Agent is permitted to apply all money held in trust
pursuant to Section 1305 with respect to Securities of such series in
accordance with this Article Thirteen; provided, however, that if the
Company makes any payment of principal of or any premium or interest on any
Security of such series following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of Securities of
such series to receive such payment from the money so held in trust.
ARTICLE FOURTEEN
SINKING FUNDS
Section 1401. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified
as contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms
of Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional
sinking fund
payment". If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as
provided in Section 1402. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series.
Section 1402. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a series (other
than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been converted pursuant to Article Twelve
or Securities of a series which have been acquired or redeemed either at the
election of the Company pursuant to the terms of such Securities or through
the application of permitted optional sinking fund payments pursuant to
the terms of such Securities or otherwise, in each case in satisfaction of
all or any part of any sinking fund payment with respect to the Securities
of such series required to be made pursuant to the terms of such Securities as
provided for by the terms of such series; provided that such Securities have
not been previously so credited. Such Securities shall be received and
credited for such purpose by the Trustee at the Redemption Price specified
in such Securities for redemption through operation of the sinking fund and
the amount of such sinking fund payment shall be reduced accordingly.
Section 1403. Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that
series pursuant to Section 1402 and will also deliver to the Trustee any
Securities to be so delivered. Not less than 15 nor more than 45 days before
each such sinking fund payment date the Trustee shall select the Securities to
be redeemed upon such sinking fund payment date in the manner specified in
Section 1103 and cause notice of the redemption thereof to be given in the
name of and at the expense of the Company in the manner provided
in Section 1104. Such notice having been duly given, the redemption of
such Securities shall be made upon the terms and in the manner stated in
Sections 1106 and 1107.
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
USF&G CORPORATION
By:
Name:
Title:
Attest::
SIGNET TRUST COMPANY
By:
Name:
Title:
Attest:
STATE OF )
) ss.:
COUNTY OF )
On the day of January, 1994, before me personally
came , to me known, who, being by me duly
sworn, did depose and say that (s)he is of USF&G
CORPORATION, one of the corporations described in and which executed the
foregoing instrument; that (s)he knows the seal of said corporation; that
the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation, and that
(s)he signed her/his name thereto by like authority.
Notary Public
My Commission expires:
STATE OF )
) ss.:
COUNTY OF )
On the day of January, 1994, before me personally
came , to me known, who, being by me duly
sworn, did depose and say that (s)he is of SIGNET
TRUST COMPANY, one of the corporations described in and which executed the
foregoing instrument; that (s)he knows the
seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that (s)he signed her/his name thereto by
like authority.
Notary Public
My Commission expires:
Exhibit 4H
$100,000,000
CREDIT AGREEMENT
dated as of
December 1, 1994
among
USF&G Corporation
The Banks Listed Herein
and
Deutsche Bank AG,
New York and/or Cayman Island Branches,
as Agent
TABLE OF CONTENTS(*)
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions..................................... 1
SECTION 1.02. Accounting Terms and Determinations............. 16
SECTION 1.03. Types of Borrowings............................. 16
ARTICLE II
THE CREDITS
(*)The Table of Contents is not a part of this Agreement.
SECTION 2.01. Commitments to Lend............................. 17
SECTION 2.02. Notice of Committed Borrowing................... 17
SECTION 2.03. Money Market Borrowings......................... 18
SECTION 2.04. Notice to Banks; Funding of Loans............... 22
SECTION 2.05. Euro-Currency Loans in an Alternative Currency.. 23
SECTION 2.06. Notes........................................... 24
SECTION 2.07. Maturity of Loans............................... 24
SECTION 2.08. Interest Rates.................................. 25
SECTION 2.09. Facility Fees................................... 30
SECTION 2.10. Optional Termination or Reduction of Commitments 31
SECTION 2.11. Mandatory Termination of Commitments............ 31
SECTION 2.12. Mandatory and Optional Prepayments.............. 31
SECTION 2.13. General Provisions as to Payments............... 32
SECTION 2.14. Funding Losses.................................. 33
SECTION 2.15. Computation of Interest and Fees................ 33
SECTION 2.16. Judgment Currency............................... 34
SECTION 2.17. Extension of Termination Date................... 34
ARTICLE III
CONDITIONS
SECTION 3.01. Closing......................................... 36
SECTION 3.02. Borrowings...................................... 37
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Corporate Existence and Power................... 38
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention................................. 38
SECTION 4.03. Binding Effect.................................. 38
SECTION 4.04. Financial Information........................... 38
SECTION 4.05. Litigation...................................... 40
SECTION 4.06. Compliance with ERISA........................... 40
SECTION 4.07. Environmental Matters........................... 40
SECTION 4.08. Taxes........................................... 41
SECTION 4.09. Subsidiaries.................................... 41
SECTION 4.10. Not an Investment Company....................... 41
SECTION 4.11. Full Disclosure................................. 41
ARTICLE V
COVENANTS
SECTION 5.01. Information..................................... 42
SECTION 5.02. Payment of Obligations.......................... 44
SECTION 5.03. Maintenance of Property; Books and Records;
Insurance..................................... 45
SECTION 5.04. Conduct of Business and Maintenance of
Existence..................................... 45
SECTION 5.05. Compliance with Laws............................ 46
SECTION 5.06. Negative Pledge................................. 46
SECTION 5.07. Consolidations, Mergers and Sales of Assets;
Ownership by USF&G Corporation................ 47
SECTION 5.08. Use of Proceeds................................. 48
SECTION 5.09. Ratio of Debt to Adjusted Consolidated Tangible
Net Worth..................................... 48
SECTION 5.10. Minimum Consolidated Tangible Net Worth......... 48
SECTION 5.11. Transactions with Affiliates.................... 48
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default............................... 49
SECTION 6.02. Notice of Default............................... 51
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization................... 52
SECTION 7.02. Agent and Affiliates............................ 52
SECTION 7.03. Action by Agent................................. 52
SECTION 7.04. Consultation with Experts....................... 52
SECTION 7.05. Liability of Agent.............................. 52
SECTION 7.06. Indemnification................................. 53
SECTION 7.07. Credit Decision................................. 53
SECTION 7.08. Successor Agent................................. 53
SECTION 7.09. Agent's Fee..................................... 54
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate
or Unfair..................................... 54
SECTION 8.02. Illegality...................................... 55
SECTION 8.03. Increased Cost and Reduced Return............... 55
SECTION 8.04. Taxes........................................... 57
SECTION 8.05. Base Rate Loans Substituted for Affected Fixed
Rate Loans.................................... 59
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices......................................... 60
SECTION 9.02. No Waivers...................................... 61
SECTION 9.03. Expenses; Indemnification....................... 61
SECTION 9.04. Sharing of Set-Offs............................. 61
SECTION 9.05. Amendments and Waivers.......................... 62
SECTION 9.06. Successors and Assigns.......................... 62
SECTION 9.07. Collateral...................................... 64
SECTION 9.08. Governing Law; Submission to Jurisdiction....... 64
SECTION 9.09. Counterparts; Integration; Effectiveness........ 65
SECTION 9.10. WAIVER OF JURY TRIAL............................ 65
Pricing Schedule
Schedule I
Exhibit A - Note
Exhibit B - Money Market Quote Request
Exhibit C - Invitation for Money Market Quotes
Exhibit D - Money Market Quote
Exhibit E - Opinion of the General Counsel of the Borrower
Exhibit F - Opinion of Counsel to the Borrower
Exhibit G - Opinion of Special Counsel for the Agent
Exhibit H - Assignment and Assumption Agreement
CREDIT AGREEMENT
AGREEMENT dated as of December 1, 1994 among USF&G CORPORATION,
the BANKS listed on the signature pages hereof and DEUTSCHE BANK AG, NEW YORK
AND/OR CAYMAN ISLAND BRANCHES, as Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used
herein, have the following meanings:
"Absolute Rate Auction" means a solicitation of Money Market
Quotes setting forth Money Market Absolute Rates pursuant to Section 2.03.
"Adjusted CD Rate" has the meaning set forth in Section 2.08(b).
"Adjusted Consolidated Tangible Net Worth" means at any date
the consolidated stockholders' equity of the Borrower and its Consolidated
Subsidiaries (1) plus any unrealized holding losses (or less any unrealized
holding gains, net of relevant adjustments for deferred policy acquisition
costs) on account of available-for-sale debt securities to the extent
reflected therein (together with other adjustments, all as determined in
accordance with Statement of Financial Accounting Standards No. 115 of the
Financial Accounting Standards Board, as amended from time to time, or any
successor provision thereto) and (2) less their consolidated Intangible
Assets, all determined as of such date. For purposes of this definition
"Intangible Assets" means the amount (to the extent reflected in determining
such consolidated stockholders' equity) of (i) all write-ups (other than
write-ups resulting from foreign currency translations, write-ups of assets of
a going concern business made within twelve months after the acquisition of
such business and changes made in accordance with generally accepted
accounting principles in the book value of any Investments in Persons other
than the Borrower and its Consolidated Subsidiaries) subsequent to December
31, 1993 in the book value of any asset owned by the Borrower or a
Consolidated Subsidiary and (ii) all unamortized debt discount and expense,
unamortized deferred charges, goodwill, patents, trademarks, service marks,
trade names, copyrights, organization or developmental expenses and other
intangible assets (other than deferred policy acquisition costs and net
deferred tax assets).
"Adjusted London Interbank Offered Rate" has the meaning set
forth in Section 2.08(c).
"Administrative Questionnaire" means, with respect to each
Bank, an administrative questionnaire in the form prepared by the Agent and
submitted to the Agent (with a copy to the Borrower) duly completed by such
Bank.
"Affiliate" means (i) any Person that directly, or indirectly
through one or more intermediaries, controls the Borrower (a "Controlling
Person") or (ii) any Person (other than the Borrower or a Subsidiary) which is
controlled by or is under common control with a Controlling Person. As used
herein, the term "control" means 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.
"Agent" means Deutsche Bank AG, New York and/or Cayman Island
Branches in its capacity as agent for the Banks hereunder, and its successors
in such capacity.
"Alternative Currency" means each of Canadian Dollars, Deutsche
Marks, French Francs, Japanese Yen, Pound Sterling and Swiss Francs so long as
it is freely transferable and convertible into United States Dollars, and any
other currency (other than United States Dollars) designated as such by the
Borrower and, pursuant to Section 9.05(iv), the Banks.
"Applicable Lending Office" means, with respect to any Bank,
(i) in the case of its Domestic Loans, its Domestic Lending Office, (ii) in
the case of its Euro-Dollar Loans, its Euro-Dollar Lending Office, (iii) in
the case of its Money Market Loans, its Money Market Lending Office and (iv)
in the case of its Euro-Currency Loans, its Euro-Currency Lending Office.
"Assessment Rate" has the meaning set forth in Section 2.08(b).
"Assignee" has the meaning set forth in Section 9.06(c).
"Bank" means each bank listed on the signature pages hereof,
each Assignee which becomes a Bank pursuant to Section 9.06(c), and their
respective successors.
"Base Rate" means, for any day, a rate per annum equal to the
higher of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus
the Federal Funds Rate for such day.
"Base Rate Loan" means a Committed Loan to be made by a Bank as
a Base Rate Loan in accordance with the applicable Notice of Committed
Borrowing or pursuant to Article VIII.
"Benefit Arrangement" means at any time an employee benefit
plan within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"Borrower" means USF&G Corporation, a Maryland corporation, and
its successors.
"Borrower's 1993 Form 10-K" means the Borrower's annual report
on Form 10-K for 1993, as filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934.
"Borrower's Latest Form 10-Q" means the Borrower's quarterly
report on Form 10-Q for the quarter ended September 30, 1994, as filed with
the Securities and Exchange Commission pursuant to the Securities Exchange Act
of 1934.
"Borrowing" has the meaning set forth in Section 1.03.
"CD Base Rate" has the meaning set forth in Section 2.08(b).
"CD Loan" means a Committed Loan to be made by a Bank as a CD
Loan in accordance with the applicable Notice of Committed Borrowing.
"CD Margin" has the meaning set forth in Section 2.08(b).
"CD Reference Banks" means Deutsche Bank AG, New York Branch,
Credit Lyonnais, New York Branch, and Morgan Guaranty Trust Company of New
York.
"Closing Date" means the date on or after the Effective Date on
which the Agent shall have received the documents specified in or pursuant to
Section 3.01.
"Commitment" means, with respect to each Bank, the amount set
forth opposite the name of such Bank on the signature pages hereof, as such
amount may be increased from time to time as contemplated by Section 2.17 or
reduced from time to time pursuant to Sections 2.10 and 2.11.
"Committed Loan" means a loan made by a Bank pursuant to
Section 2.01.
"Consolidated Subsidiary" means at any date any Subsidiary or
other entity the accounts of which would be consolidated with those of the
Borrower in its consolidated financial statements if such statements were
prepared as of such date.
"Debt" of any Person means at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) all obligations of such Person to pay the deferred purchase
price of property or services, except trade accounts payable, agents'
commissions and other similar charges and expenses arising in the ordinary
course of business, (iv) all obligations of such Person as lessee which are
capitalized in accordance with generally accepted accounting principles, (v)
all non-contingent obligations (and, for purposes of Section 5.06 and the
definitions of Material Debt and Material Financial Obligations, all contingent
obligations) of such Person to reimburse any bank or other Person in respect
of amounts paid under a letter of credit or similar instrument, (vi) all Debt
secured by a Lien on any asset of such Person, whether or not such Debt is
otherwise an obligation of such Person (but excluding any such Debt to the
extent such Debt exceeds the fair market value of such assets (such fair
market value to be established by the Borrower to the reasonable satisfaction
of the Required Banks), unless such Debt is assumed), (vii) all obligations of
such Person to purchase securities (or other property) which arise out of or
in connection with the sale of the same or substantially similar securities or
property and (viii) all Debt of others Guaranteed by such Person, provided
that obligations of any Person referred to only in clauses (i) through (iii),
inclusive, above shall constitute Debt of such Person only to the extent that
they are, or are required to be, recorded on the financial statements of such
Person as a liability under generally accepted accounting principles.
"Default" means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.
"Derivatives Obligations" of any Person means all obligations
(other than obligations incurred as a result of writing futures, options,
swaps or other derivative transactions in respect of, or based upon, insurance
products or risks, including the futures and options contracts relating to
catastrophic losses traded on the Chicago Board of Trade or otherwise) of such
Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency
option or any other similar transaction (including any option with respect to
any of the foregoing transactions) or any combination of the foregoing
transactions.
"Dollar Amount" means in relation to any Euro-Currency
Borrowing denominated in an Alternative Currency, the amount designated by the
Borrower as the Dollar Amount of such Euro-Currency Borrowing in the related
Notice of Committed Borrowing. Each Euro-Currency Borrowing denominated in an
Alternative Currency shall be deemed a utilization of the Commitments in an
amount equal to the Dollar Amount thereof.
"Dollars" and the sign "$" mean lawful money of the United
States of America.
"Domestic Business Day" means any day except a Saturday, Sunday
or other day on which commercial banks in New York City are authorized by law
to close.
"Domestic Lending Office" means, as to each Bank, its office
located at its address set forth in its Administrative Questionnaire (or
identified in its Administrative Questionnaire as its Domestic Lending Office)
or such other office as such Bank may hereafter designate as its Domestic
Lending Office by notice to the Borrower and the Agent; provided that any Bank
may so designate separate Domestic Lending Offices for its Base Rate Loans, on
the one hand, and its CD Loans, on the other hand, in which case all
references herein to the Domestic Lending Office of such Bank shall be deemed
to refer to either or both of such offices, as the context may require.
"Domestic Loans" means CD Loans or Base Rate Loans or both.
"Domestic Reserve Percentage" has the meaning set forth in
Section 2.08(b).
"Effective Date" means the date this Agreement becomes
effective in accordance with Section 9.09.
"Environmental Laws" means any and all federal, state, local
and foreign statutes, laws, judicial decisions, regulations, ordinances,
rules, judgments, orders, decrees, plans, injunctions, permits, concessions,
grants, franchises, licenses, agreements and other governmental restrictions
relating to the environment, the effect of the environment on human health or
to emissions, discharges or releases of pollutants, contaminants, Hazardous
Substances or wastes into the environment including, without limitation,
ambient air, surface water, ground water, or land, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, Hazardous Substances or
wastes or the clean-up or other remediation thereof.
"Equivalent Amount" means, on any date, the amount of
Alternative Currency converted from Dollars at the Agent's spot buying rate
(based on the London interbank market rate then prevailing) for Dollars
against such Alternative Currency as of approximately 9:00 A.M. (New York
time) three Euro-Currency Business Days before such date.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary and 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
of the Internal Revenue Code.
"Euro-Currency Business Day" means any Domestic Business Day on
which commercial banks are open for international business (including dealings
in Dollar deposits) in London, and, where funds are to be paid or made
available in an Alternative Currency, on which commercial banks are open for
domestic and international business (including dealings in deposits in such
Alternative Currency) in both London and the place where such funds are paid
or made available.
"Euro-Currency Lending Office" means, as to each Bank, its
office, branch or affiliate located at its address set forth in its
Administrative Questionnaire (or identified in its Administrative
Questionnaire as its Euro-Currency Lending Office) or such other office,
branch or affiliate of such Bank as it may hereafter designate as its
Euro-Currency Lending Office by notice to the Borrower and the Agent.
"Euro-Currency Loan" means a Loan to be made by a Bank as a
Euro-Currency Loan pursuant to the applicable Notice of Committed Borrowing.
"Euro-Currency Margin" has the meaning set forth in Section
2.08(f).
"Euro-Currency Reference Banks" means the principal London
offices of Deutsche Bank AG, Credit Lyonnais, and Morgan Guaranty Trust
Company of New York.
"Euro-Currency Reserve Percentage" has the meaning set forth in
Section 2.08(f).
"Euro-Dollar Business Day" means any Domestic Business Day on
which commercial banks are open for international business (including dealings
in dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to
each Bank, its office, branch or affiliate located at
its address set forth in its Administrative Questionnaire (or identified in
its Administrative Questionnaire as its Euro-Dollar Lending Office) or such
other office, branch or affiliate of such Bank as it may hereafter designate
as its Euro-Dollar Lending Office by notice to the Borrower and the Agent.
"Euro-Dollar Loan" means a Committed Loan to be made by a Bank
as a Euro-Dollar Loan in accordance with the applicable Notice of Committed
Borrowing.
"Euro-Dollar Margin" has the meaning set forth in Section
2.08(c).
"Euro-Dollar Reference Banks" means the principal London
offices of Deutsche Bank AG, Credit Lyonnais, and Morgan Guaranty Trust
Company of New York.
"Euro-Dollar Reserve Percentage" has the meaning set forth in
Section 2.08(c).
"Event of Default" has the meaning set forth in Section 6.01.
"Excluded Subsidiary" means any Subsidiary other than any (i)
Insurance Company Subsidiary and (ii) "Significant Subsidiary", as defined in
Section 210.1-02(v) of Regulation S-X, as amended from time to time,
promulgated by the Securities and Exchange Commission (17 C.F.R. Section
210.1-02(v)).
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on
such day, as published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if such day is not a
Domestic Business Day, the Federal Funds Rate for such day shall be such rate
on such transactions on the next preceding Domestic Business Day as so
published on the next succeeding Domestic Business Day, and (ii) if no such
rate is so published on such next succeeding Domestic Business Day, the
Federal Funds Rate for such day shall be the average rate quoted to Deutsche
Bank AG, New York Branch on such day on such transactions as determined by the
Agent.
"Fixed Rate Loans" means CD Loans or Euro-Currency Loans or
Euro-Dollar Loans or Money Market Loans (excluding Money Market LIBOR Loans
bearing interest at the Base Rate pursuant to Section 8.01(a)) or any
combination of the foregoing.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or
other obligation of any other Person and, without limiting the generality of
the foregoing, any obligation, direct or indirect, contingent or otherwise, of
such Person (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or other obligation (whether arising by
virtue of partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for the
purpose of assuring in any other manner the obligee of such Debt or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part), provided that the term Guarantee shall
not include (i) endorsements for collection or deposit in the ordinary course
of business or (ii) if such Person is an insurance company, surety bonds and
insurance contracts (including financial guarantee insurance policies) in each
case issued in the ordinary course of such Person's business. The term
"Guarantee" used as a verb has a corresponding meaning.
"Hazardous Substances" means any toxic, radioactive, caustic or
otherwise hazardous substance, including petroleum, its derivatives,
by-products and other hydrocarbons, or any substance having any constituent
elements displaying any of the foregoing characteristics.
"Indemnitee" has the meaning set forth in Section 9.03(b).
"Initial Banks" has the meaning set forth in Section 2.17.
"Insurance Company Subsidiary" means any Subsidiary domiciled
in the United States of America (including the District of Columbia) and its
territories and possessions or any State thereof and licensed or authorized
to do an insurance business in any of the foregoing.
"Interest Period" means: (1) with respect to each Euro-Dollar
Borrowing, the period commencing on the date of such Borrowing and ending one,
two or three (or, subject to availability, six or nine months) thereafter, as
the Borrower may elect in the applicable Notice of Borrowing; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business
Day falls in another calendar month, in which case such Interest
Period shall end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of
such Interest Period) shall, subject to clause (c) below, end on the
last Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(2) with respect to each CD Borrowing, the period commencing on the date
of such Borrowing and ending 30, 60, 90 or 180 days thereafter, as the
Borrower may elect in the applicable Notice of Borrowing; provided that:
(a) any Interest Period (other than an Interest Period
determined pursuant to clause (b) below) which would otherwise end on
a day which is not a Euro-Dollar Business Day shall be extended to
the next succeeding Euro-Dollar Business Day;
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(3) with respect to each Base Rate Borrowing, the period
commencing on the date of such Borrowing and ending 90 days
thereafter; provided that:
(a) any Interest Period (other than an Interest Period
determined pursuant to clause (b) below) which would otherwise end on
a day which is not a Euro-Dollar Business Day shall be extended to
the next succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(4) with respect to each Money Market LIBOR Borrowing, the period commencing
on the date of such Borrowing and ending such whole number of months
thereafter as the Borrower may elect in accordance with Section 2.03; provided
that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business
Day falls in another calendar month, in which case such Interest
Period shall end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of
such Interest Period) shall, subject to clause (c) below, end on the
last Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(5) with respect to each Money Market Absolute Rate Borrowing, the period
commencing on the date of such Borrowing and ending such number of days
thereafter (but not less than seven days) as the Borrower may elect in
accordance with Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(6) with respect to each Euro-Currency Borrowing, the period commencing on the
date of such Euro-Currency Borrowing and ending one, two or three (or, subject
to availability, six or nine) months thereafter, as the Borrower may elect in
the applicable Notice of Borrowing; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Currency Business Day shall be extended to the
next succeeding Euro-Currency Business Day unless such Euro-Currency
Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Euro-Currency
Business Day;
(b) any Interest Period which begins on the last Euro-Currency
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of
such Interest Period) shall, subject to clause (c) below, end on the
last Euro-Currency Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended, or any successor statute.
"Investment" means any investment in any Person, whether by
means of share purchase, capital contribution, loan, time deposit or otherwise.
"LIBOR Auction" means a solicitation of Money Market Quotes
setting forth Money Market Margins based on the London Interbank Offered Rate
pursuant to Section 2.03.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind, or any other
type of preferential arrangement that has the practical effect of creating a
security interest, in respect of such asset. For the purposes of this
Agreement, the Borrower or any Subsidiary shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement relating to such asset.
"Loan" means a Domestic Loan or a Euro-Currency Loan or a
Euro-Dollar Loan or a Money Market Loan and "Loans" means Domestic Loans or
Euro-Currency Loans or Euro-Dollar Loans or Money Market Loans or any
combination of the foregoing.
"London Interbank Offered Rate" has the meaning set forth in
Section 2.08(c).
"Material Adverse Effect" means a material adverse effect on
the business, financial position, results of operations or prospects of the
Borrower and its Consolidated Subsidiaries, considered as a whole.
"Material Debt" means Debt (other than the Notes) of the
Borrower and/or one or more of its Subsidiaries (other than an Excluded
Subsidiary), arising in one or more related or unrelated transactions, in an
aggregate principal or face amount exceeding $30,000,000.
"Material Financial Obligations" means a principal or face
amount of Debt and/or the then-owed payment obligations in respect of
Derivatives Obligations of the Borrower and/or one or more of its Subsidiaries
(other than an Excluded Subsidiary), arising in one or more related or
unrelated transactions, exceeding in the aggregate $30,000,000.
"Material Plan" means at any time a Plan or Plans having
aggregate Unfunded Liabilities in excess of $5,000,000.
"Money Market Absolute Rate" has the meaning set forth in
Section 2.03(d).
"Money Market Absolute Rate Loan" means a loan to be made by a
Bank pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each Bank, its
Domestic Lending Office or such other office, branch or affiliate of such Bank
as it may hereafter designate as its Money Market Lending Office by notice to
the Borrower and the Agent; provided that any Bank may from time to time by
notice to the Borrower and the Agent designate separate Money Market Lending
Offices for its Money Market LIBOR Loans, on the one hand, and its Money
Market Absolute Rate Loans, on the other hand, in which case all references
herein to the Money Market Lending Office of such Bank shall be deemed to
refer to either or both of such offices, as the context may require.
"Money Market LIBOR Loan" means a loan to be made by a Bank
pursuant to a LIBOR Auction (including such a loan bearing interest at the
Base Rate pursuant to Section 8.01(a)).
"Money Market Loan" means a Money Market LIBOR Loan or a Money
Market Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in Section
2.03(d).
"Money Market Quote" means an offer by a Bank to make a Money
Market Loan in accordance with Section 2.03.
"Multiemployer Plan" means at any time an employee pension
benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any
member of the ERISA Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made contributions,
including for these purposes any Person which ceased to be a member of the
ERISA Group during such five year period.
"Non-Recourse Debt" means Debt, secured only by real property
(including fixtures and personal property used therein or thereon and the
rents, profits and proceeds arising therefrom), in respect of which the holder
of such Debt has no recourse against the Borrower or any Subsidiary (other
than a Subsidiary the only assets of which consist of such real property
(including fixtures and personal property used therein or thereon and the
rents, profits and proceeds therefrom) or any asset of the Borrower or any
Subsidiary (except such real property (including fixtures and personal
property used therein or thereon and the rents, profits and proceeds arising
therefrom)), provided that if, at any time, the aggregate amount of gross
equity real estate Investments of the Borrower and its Subsidiaries shall
exceed $826,657,000, the amount of such excess shall constitute Debt other
than Non-Recourse Debt to the extent that the then existing aggregate
principal amount of Non-Recourse Debt shall exceed the sum of (i) $100,000,000
and (ii) the amount of such Non-Recourse Debt, but not to exceed $50,000,000,
outstanding as of the date hereof.
"Notes" means promissory notes of the Borrower, substantially
in the form of Exhibit A hereto, evidencing the obligation of the Borrower to
repay the Loans, and "Note" means any one of such promissory notes issued
hereunder.
"Notice of Borrowing" means a Notice of Committed Borrowing (as
defined in Section 2.02) or a Notice of Money Market Borrowing (as defined in
Section 2.03(f)).
"Officer's Certificate" means a certificate signed by the
President, any Vice-President responsible for financial matters, the Treasurer
or the Controller of the Borrower.
"Parent" means, with respect to any Bank, any Person
controlling such Bank.
"Participant" has the meaning set forth in Section 9.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan
(other than a Multiemployer Plan) which is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Internal
Revenue Code and either (i) is maintained, or contributed to, by any member of
the ERISA Group for employees of any member of the ERISA Group or (ii) has at
any time within the preceding five years been maintained, or contributed to,
by any Person which was at such time a member of the ERISA Group for employees
of any Person which was at such time a member of the ERISA Group.
"Pricing Schedule" means the Schedule attached hereto
identified as such.
"Prime Rate" means the rate of interest publicly announced by
Deutsche Bank AG, New York Branch from time to time as its Prime Rate.
"Reference Banks" means the CD Reference Banks or the
Euro-Currency Reference Banks or the Euro-Dollar Reference Banks, as the
context may require, and "Reference Bank" means any one of such Reference
Banks.
"Refunding Borrowing" means a Committed Borrowing which, after
application of the proceeds thereof, results in no net increase in the
outstanding principal amount of Committed Loans made by any Bank.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"Required Banks" means at any time Banks having at least 60% of
the aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding Notes evidencing at least 60% of the aggregate unpaid
principal amount of the Loans.
"Revolving Credit Period" means the period from and including
the Effective Date to and including the Termination Date.
"Subsidiary" means, as to any Person, any corporation or other
entity of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other persons
performing similar functions are at the time directly or indirectly owned by
such Person; unless otherwise specified, "Subsidiary" means a Subsidiary of
the Borrower.
"Termination Date" means the third anniversary of the
Effective Date or, if such day is not a Euro-Dollar Business Day, the next
preceding Euro-Dollar Business Day, subject to extension as provided in
Section 2.17.
"Unfunded Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the value of all benefit liabilities
under such Plan, determined on a plan termination basis using the assumptions
prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the
fair market value of all Plan assets allocable to such liabilities under Title
IV of ERISA (excluding any accrued but unpaid contributions), all determined
as of the then most recent valuation date for such Plan, but only to the
extent that such excess represents a potential liability of a member of the
ERISA Group to the PBGC or any other Person under Title IV of ERISA.
"United States" means the United States of America, including
the States and the District of Columbia, but excluding its territories and
possessions.
SECTION 1.02. Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as in effect from
time to time, applied on a basis consistent (except for changes concurred in
by the Borrower's independent public accountants) with the most recent audited
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries delivered to the Banks; provided that, if the Borrower notifies
the Agent that the Borrower wishes to amend any covenant in Article V to
eliminate the effect of any change in generally accepted accounting principles
on the operation of such covenant (or if the Agent notifies the Borrower that
the Required Banks wish to amend Article V for such purpose), then the
Borrower's compliance with such covenant shall be determined on the basis of
generally accepted accounting principles in effect immediately before the
relevant change in generally accepted accounting principles became effective,
until either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Borrower and the Required Banks.
SECTION 1.03. Types of Borrowings. The term "Borrowing"
denotes the aggregation of Loans of one or more Banks to be made to the
Borrower pursuant to Article II on a single date and for a single Interest
Period. Borrowings are classified for purposes of this Agreement either by
reference to the pricing of Loans comprising such Borrowing (e.g., a
"Euro-Dollar Borrowing" is a Borrowing comprised of Euro-Dollar Loans) or by
reference to the provisions of Article II under which participation therein is
determined (i.e., a "Committed Borrowing" is a Borrowing under Section 2.01
or 2.05 in which all Banks participate in proportion to their Commitments,
while a "Money Market Borrowing" is a Borrowing under Section 2.03 in which
the Bank participants are determined on the basis of their bids in accordance
therewith).
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend. During the Revolving
Credit Period, each Bank severally agrees, on the terms and conditions set
forth in this Agreement, to make loans to the Borrower pursuant to this
Section from time to time in amounts such that the aggregate principal amount
of Committed Loans by such Bank at any one time outstanding shall not exceed
the amount of its Commitment. Each Borrowing under this Section 2.01 shall be
in an aggregate principal amount of $5,000,000 or any larger multiple of
$1,000,000 (except that any such Borrowing may be in the aggregate amount
available in accordance with Section 3.02(c)) and shall be made from the
several Banks ratably in proportion to their respective Commitments. Within
the foregoing limits, the Borrower may borrow under this Section 2.01, repay,
or to the extent permitted by Section 2.11, prepay Loans and reborrow at any
time during the Revolving Credit Period under this Section 2.01.
SECTION 2.02. Notice of Committed Borrowing. The Borrower
shall give the Agent notice (a "Notice of Committed Borrowing") not later than
10:30 A.M. (New York City time) on (w) the Domestic Business Day before each
Base Rate Borrowing, (x) the second Domestic Business Day before each CD
Borrowing, (y) the fourth Euro-Currency Business Day before each Euro-Currency
Borrowing and (z) the third Euro-Dollar Business Day before each Euro-Dollar
Borrowing, specifying:
(a) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Domestic Borrowing or a Euro-Currency
Business Day in the case of a Euro-Currency Borrowing or a
Euro-Dollar Business Day in the case of a Euro-Dollar Borrowing,
(b) the aggregate amount (in Dollars) of such Borrowing,
(c) whether the Loans comprising such Borrowing are to be CD
Loans, Base Rate Loans or Euro-Currency Loans or Euro-Dollar Loans,
and, if Euro-Currency Loans, the currency thereof in accordance with
the provisions of Section 2.05, and
(d) in the case of a Fixed Rate Borrowing, the duration of
the Interest Period applicable thereto, subject to the provisions of
the definition of Interest Period.
SECTION 2.03. Money Market Borrowings.
(a) The Money Market Option. In addition to Committed
Borrowings pursuant to Section 2.01, the Borrower may, as set forth in this
Section, request the Banks during the Revolving Credit Period to make offers
to make Money Market Loans in United States Dollars only to the Borrower. The
Banks may, but shall have no obligation to, make such offers and the Borrower
may, but shall have no obligation to, accept any such offers in the manner set
forth in this Section.
(b) Money Market Quote Request. When the Borrower wishes to
request offers to make Money Market Loans under this Section, it shall
transmit to the Agent by telex or facsimile transmission a Money Market Quote
Request substantially in the form of Exhibit B hereto so as to be received no
later than 10:30 A.M. (New York City time) on (x) the fifth Euro-Dollar
Business Day prior to the date of Borrowing proposed therein, in the case of a
LIBOR Auction or (y) the Domestic Business Day next preceding the date of
Borrowing proposed therein, in the case of an Absolute Rate Auction (or, in
either case, such other time or date as the Borrower and the Agent shall have
mutually agreed and shall have notified to the Banks not later than the date
of the Money Market Quote Request for the first LIBOR Auction or Absolute Rate
Auction for which such change is to be effective) specifying:
(i) the proposed date of Borrowing, which shall be a
Euro-Dollar Business Day in the case of a LIBOR Auction or a Domestic
Business Day in the case of an Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which shall be
$5,000,000 or a larger multiple of $1,000,000,
(iii) the duration of the Interest Period applicable thereto,
subject to the provisions of the definition of Interest Period, and
(iv) whether the Money Market Quotes requested are to set
forth a Money Market Margin or a Money Market Absolute Rate.
The Borrower may request offers to make Money Market Loans for more than one
Interest Period in a single Money Market Quote Request. No Money Market Quote
Request shall be given within five Euro-Dollar Business Days (or such other
number of days as the Borrower and the Agent may agree) of any other Money
Market Quote Request.
(c) Invitation for Money Market Quotes. Promptly upon
receipt of a Money Market Quote Request, the Agent shall send to the Banks by
telex or facsimile transmission an Invitation for Money Market Quotes
substantially in the form of Exhibit C hereto, which shall constitute an
invitation by the Borrower to each Bank to submit Money Market Quotes offering
to make the Money Market Loans to which such Money Market Quote Request
relates in accordance with this Section.
(d) Submission and Contents of Money Market Quotes. (i)
Each Bank may submit a Money Market Quote containing an offer or offers to
make Money Market Loans in response to any Invitation for Money Market Quotes.
Each Money Market Quote must comply with the requirements of this subsection
(d) and must be submitted to the Agent by telex or facsimile transmission at
its offices specified in or pursuant to Section 9.01 not later than (x) 2:00
P.M. (New York City time) on the fourth Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction or (y) 9:30 A.M.
(New York City time) on the proposed date of Borrowing, in the case of an
Absolute Rate Auction (or, in either case, such other time or date as the
Borrower and the Agent shall have mutually agreed and shall have notified to
the Banks not later than the date of the Money Market Quote Request for the
first LIBOR Auction or Absolute Rate Auction for which such change is to be
effective); provided that Money Market Quotes submitted by the Agent (or any
affiliate of the Agent) in the capacity of a Bank may be submitted, and may
only be submitted, if the Agent or such affiliate notifies the Borrower of the
terms of the offer or offers contained therein not later than (x) one hour
prior to the deadline for the other Banks, in the case of a LIBOR Auction or
(y) 15 minutes prior to the deadline for the other Banks, in the case of an
Absolute Rate Auction. Subject to Articles III and VI, any Money Market Quote
so made shall be irrevocable except with the written consent of the Agent
given on the instructions of the Borrower.
(ii) Each Money Market Quote shall be in substantially the
form of Exhibit D hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan for which
each such offer is being made, which principal amount (w) may be
greater than or less than the Commitment of the quoting Bank, (x)
must be $5,000,000 or a larger multiple of $1,000,000, (y) may not
exceed the principal amount of Money Market Loans for which offers
were requested and (z) may be subject to an aggregate limitation as
to the principal amount of Money Market Loans for which offers being
made by such quoting Bank may be accepted,
(C) in the case of a LIBOR Auction, the margin above or below
the applicable London Interbank Offered Rate (the "Money Market
Margin") offered for each such Money Market Loan, expressed as a
percentage (specified to the nearest 1/10,000th of 1%) to be added to
or subtracted from such base rate,
(D) in the case of an Absolute Rate Auction, the rate of
interest per annum (specified to the nearest 1/10,000th of 1%) (the
"Money Market Absolute Rate") offered for each such Money Market
Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the quoting
Bank with respect to each Interest Period specified in the related Invitation
for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(A) is not substantially in conformity with Exhibit D hereto
or does not specify all of the information required by subsection
(d)(ii);
(B) contains qualifying, conditional or similar language;
(C) proposes terms other than or in addition to those set
forth in the applicable Invitation for Money Market Quotes; or
(D) arrives after the time set forth in subsection (d)(i).
(e) Notice to Borrower. The Agent shall promptly notify the
Borrower of the terms (x) of any Money Market Quote submitted by a Bank that
is in accordance with subsection (d) and (y) of any Money Market Quote that
amends, modifies or is otherwise inconsistent with a previous Money Market
Quote submitted by such Bank with respect to the same Money Market Quote
Request. Any such subsequent Money Market Quote shall be disregarded by the
Agent unless such subsequent Money Market Quote is submitted solely to correct
a manifest error in such former Money Market Quote. The Agent's notice to the
Borrower shall specify (A) the aggregate principal amount of Money Market
Loans for which offers have been received for each Interest Period specified
in the related Money Market Quote Request, (B) the respective principal
amounts and Money Market Margins or Money Market Absolute Rates, as the case
may be, so offered and (C) if applicable, limitations on the aggregate
principal amount of Money Market Loans for which offers in any single Money
Market Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later than 10:30
A.M. (New York City time) on (x) the third Euro-Dollar Business Day prior to
the proposed date of Borrowing, in the case of a LIBOR Auction or (y) the
proposed date of Borrowing, in the case of an Absolute Rate Auction (or, in
either case, such other time or date as the Borrower and the Agent shall have
mutually agreed and shall have notified to the Banks not later than the date
of the Money Market Quote Request for the first LIBOR Auction or Absolute Rate
Auction for which such change is to be effective), the Borrower shall notify
the Agent of its acceptance or non-acceptance of the offers so notified to it
pursuant to subsection (e). In the case of acceptance, such notice (a "Notice
of Money Market Borrowing") shall specify the aggregate principal amount of
offers for each Interest Period that are accepted. The Borrower may accept
any Money Market Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Money Market
Borrowing may not exceed the applicable amount set forth in the
related Money Market Quote Request,
(ii) the principal amount of each Money Market Borrowing must
be $5,000,000 or a larger multiple of $1,000,000,
(iii) acceptance of offers may only be made on the basis of
ascending Money Market Margins or Money Market Absolute Rates, as the
case may be, and
(iv) the Borrower may not accept any offer that is described
in subsection (d)(iii) or that otherwise fails to comply with the
requirements of this Agreement.
(g) Allocation by Agent. If offers are made by two or more
Banks with the same Money Market Margins or Money Market Absolute Rates, as
the case may be, for a greater aggregate principal amount than the amount in
respect of which such offers are accepted for the related Interest Period, the
principal amount of Money Market Loans in respect of which such offers are
accepted shall be allocated by the Agent among such Banks as nearly as
possible (in multiples of $1,000,000, as the Agent may deem appropriate) in
proportion to the aggregate principal amounts of such offers. Determinations
by the Agent of the amounts of Money Market Loans shall be conclusive in the
absence of manifest error.
SECTION 2.04. Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Borrowing, the Agent shall
promptly notify each Bank of the contents thereof and of such Bank's share (if
any) of such Borrowing and such Notice of Borrowing shall not thereafter be
revocable by the Borrower.
(b) Not later than 12:00 Noon (New York City time) on the
date of each Borrowing, each Bank participating therein shall (except as
provided in subsection (c) of this Section) make available its share of such
Borrowing, in Federal or other funds immediately available in New York City,
to the Agent at its address referred to in Section 9.01 or, subject to the
provisions of Section 2.05, if such Borrowing is to be made in an Alternative
Currency, make available the Equivalent Amount of such Alternative Currency
on that day (in such funds as may then be customary for the settlement of
international transactions in such Alternative Currency) to the account of the
Agent at such place in the country whose currency is the relevant Alternative
Currency or such other country as is mutually agreed to by the Borrower and
the Agent as shall have been notified by the Agent to the Banks by not less
than four Domestic Business Days' notice. Unless the Agent determines that any
applicable condition specified in Article III has not been satisfied, the
Agent will make the funds so received from the Banks available to the Borrower
at the Agent's aforesaid address.
(c) If any Bank makes a new Loan hereunder on a day on which
the Borrower is to repay all or any part of an outstanding Loan denominated in
the same currency from such Bank, such Bank shall apply the proceeds of its
new Loan to make such repayment and only an amount equal to the difference (if
any) between the amount being borrowed and the amount being repaid shall be
made available by such Bank to the Agent as provided in subsection (b), or
remitted by the Borrower to the Agent as provided in Section 2.12, as the case
may be.
(d) Unless the Agent shall have received notice from a Bank
prior to the date of any Borrowing that such Bank will not make available to
the Agent such Bank's share of such Borrowing, the Agent may assume that such
Bank has made such share available to the Agent on the date of such Borrowing
in accordance with subsections (b) and (c) of this Section 2.04 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 Bank shall not
have so made such share available to the Agent, such Bank and the Borrower
severally agree to repay to the Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date such amount
is made available to the Borrower until the date such amount is repaid to the
Agent, at (i) in the case of the Borrower, a rate per annum equal to the
interest rate applicable thereto pursuant to Section 2.08 and (ii) in the case
of such Bank, the Federal Funds Rate. If such Bank shall repay to the Agent
such corresponding amount, such amount so repaid shall constitute such Bank's
Loan included in such Borrowing for purposes of this Agreement. Nothing in
this subsection (d) shall be deemed to relieve any Bank from its obligation to
extend Loans hereunder or to prejudice any rights which the Borrower may have
against any Bank as a result of any default by such Bank hereunder. The
failure of any Bank to make Loans hereunder shall not relieve any other Bank
from its obligation to make the Loans required to be made by it hereunder.
SECTION 2.05. Euro-Currency Loans in an Alternative Currency.
(a) Each Bank severally agrees to make Euro-Currency Loans
pursuant to Section 2.01 in an Alternative Currency upon receipt by the Agent
of a notice from the Borrower, such receipt to be not less than four
Euro-Currency Business Days prior to the date of Borrowing, requesting that
such Euro-Currency Loan be denominated in the Alternative Currency specified
in such notice for the Interest Period specified in such notice.
(b) Any Borrowing pursuant to Section 2.01 which is to be made
in an Alternative Currency shall be advanced in the Equivalent Amount of the
Dollar Amount thereof and shall be repaid or prepaid in such Alternative
Currency in the amount of the Alternative Currency borrowed. Interest payable
on any Loan denominated in an Alternative Currency shall be paid in such
Alternative Currency.
(c) Notwithstanding the satisfaction of all conditions
referred to in subsection (a) above with respect to any Borrowing, if there
shall occur on or prior to the date of such Borrowing any material change in
political conditions or change in exchange controls which would make it
impracticable for the Euro-Currency Loans comprising such Borrowing to be
denominated in the Alternative Currency specified by the Borrower, then the
Agent shall forthwith give notice thereof to the Borrower and the Banks, and
such Loans shall not be denominated in such Alternative Currency but shall be
made on the date of such Borrowing in Dollars as Base Rate Loans, unless the
Borrower notifies the Agent forthwith that it elects not to borrow on such
date.
SECTION 2.06. Notes. (a) The Loans of each Bank shall be
evidenced by a single Note payable to the order of such Bank for the account
of its Applicable Lending Office in an amount equal to the aggregate unpaid
principal amount of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the Agent,
request that its Loans of a particular type be evidenced by a separate Note in
an amount equal to the aggregate unpaid principal amount of such Loans. Each
such Note shall be in substantially the form of Exhibit A hereto with
appropriate modifications to reflect the fact that it evidences solely Loans
of the relevant type. Each reference in this Agreement to the "Note" of such
Bank shall be deemed to refer to and include any or all of such Notes, as the
context may require.
(c) Upon receipt of each Bank's Note pursuant to Section
3.01(a), the Agent shall forward such Note to such Bank. Each Bank shall
record the date, amount, type and maturity of each Loan made by it and the
date and amount of each payment of principal made by the Borrower with respect
thereto and, in the case of Euro-Currency Loans denominated in an Alternative
Currency, the currency, amount and Dollar Amount of such Loans, and may, if
such Bank so elects in connection with any transfer or enforcement of its Note,
endorse on the schedule forming a part thereof appropriate notations to
evidence the foregoing information with respect to each such Loan then
outstanding; provided that the failure of any Bank to make any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Notes. Each Bank is hereby irrevocably authorized by
the Borrower so to endorse its Note and to attach to and make a part of its
Note a continuation of any such schedule as and when required.
SECTION 2.07. Maturity of Loans. Each Loan included in any
Borrowing shall mature, and the principal amount thereof shall be due and
payable, on the last day of the Interest Period applicable to such Borrowing.
SECTION 2.08. Interest Rates. (a) Each Base Rate Loan shall
bear interest on the outstanding principal amount thereof, for each day from
the date such Loan is made until it becomes due, at a rate per annum equal to
the Base Rate for such day. Such interest shall be payable for each Interest
Period on the last day thereof. Any overdue principal of or interest on any
Base Rate Loan shall bear interest, payable on demand, for each day until paid
at a rate per annum equal to the sum of 2% plus the rate otherwise applicable
to Base Rate Loans for such day.
(b) Each CD Loan shall bear interest on the outstanding
principal amount thereof, for each day during the Interest Period applicable
thereto, at a rate per annum equal to the sum of the CD Margin for such day
plus the Adjusted CD Rate applicable to such Interest Period; provided that if
any CD Loan or any portion thereof shall, as a result of clause (2)(b) of the
definition of Interest Period, have an Interest Period of less than 30 days,
such portion shall bear interest during such Interest Period at the rate
applicable to Base Rate Loans during such period. Such interest shall be
payable for each Interest Period on the last day thereof and, if such Interest
Period is longer than 90 days, at intervals of 90 days after the first day
thereof. Any overdue principal of or interest on any CD Loan shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the sum of 2% plus the higher of (i) the sum of the CD Margin for such day
plus the Adjusted CD Rate applicable to the Interest Period for such Loan and
(ii) the rate applicable to Base Rate Loans for such day.
"CD Margin" means a rate per annum determined in accordance
with the Pricing Schedule.
The "Adjusted CD Rate" applicable to any Interest Period means
a rate per annum determined pursuant to the following formula:
[ CDBR ]*
ACDR = [ ---------- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
__________
* The amount in brackets being rounded upward, if
necessary, to the next higher 1/100 of 1%
The "CD Base Rate" applicable to any Interest Period is the
rate of interest determined by the Agent to be the average (rounded upward, if
necessary, to the next higher 1/100 of 1%) of the prevailing rates per annum
bid at 10:00 A.M. (New York City time) (or as soon thereafter as practicable)
on the first day of such Interest Period by two or more New York certificate
of deposit dealers of recognized standing for the purchase at face value from
each CD Reference Bank of its certificates of deposit in an amount comparable
to the principal amount of the CD Loan of such CD Reference Bank to which such
Interest Period applies and having a maturity comparable to such Interest
Period.
"Domestic Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including without limitation any
basic, supplemental or emergency reserves) for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars
in respect of new non-personal time deposits in dollars in New York City
having a maturity comparable to the related Interest Period and in an amount
of $100,000 or more. The Adjusted CD Rate shall be adjusted automatically on
and as of the effective date of any change in the Domestic Reserve Percentage.
"Assessment Rate" means for any day the annual assessment rate
in effect on such day which is payable by a member of the Bank Insurance Fund
classified as adequately capitalized and within supervisory subgroup "A" (or a
comparable successor assessment risk classification) within the meaning of 12
C.F.R. Section 327.3(e) (or any successor provision) to the Federal Deposit
Insurance Corporation (or any successor) for such Corporation's (or such
successor's) insuring time deposits at offices of such institution in the
United States. The Adjusted CD Rate shall be adjusted automatically on and as
of the effective date of any change in the Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on the
outstanding principal amount thereof, for each day during the Interest Period
applicable thereto, at a rate per annum equal to the sum of the Euro-Dollar
Margin for such day plus the Adjusted London Interbank Offered Rate applicable
to such Interest Period. Such interest shall be payable for each Interest
Period on the last day thereof and, if such Interest Period is longer than
three months, at intervals of three months after the first day thereof.
"Euro-Dollar Margin" means a rate per annum determined in
accordance with the Pricing Schedule.
The "Adjusted London Interbank Offered Rate" applicable to any
Interest Period means a rate per annum equal to the quotient obtained (rounded
upward, if necessary, to the next higher 1/100 of 1%) by dividing (i) the
applicable London Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar
Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Interest
Period means the average (rounded upward, if necessary, to the next higher
1/16 of 1%) of the respective rates per annum at which deposits in dollars are
offered to each of the Euro-Dollar Reference Banks in the London interbank
market at approximately 11:00 A.M. (London time) two Euro-Dollar Business Days
before the first day of such Interest Period in an amount approximately equal
to the principal amount of the Euro-Dollar Loan of such Euro-Dollar Reference
Bank to which such Interest Period is to apply and for a period of time
comparable to such Interest Period.
"Euro-Dollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for a member bank
of the Federal Reserve System in New York City with deposits exceeding five
billion dollars in respect of "Eurocurrency liabilities" (or in respect of any
other category of liabilities which includes deposits by reference to which
the interest rate on Euro-Dollar Loans is determined or any category of
extensions of credit or other assets which includes loans by a non-United
States office of any Bank to United States residents). The Adjusted London
Interbank Offered Rate shall be adjusted automatically on and as of the
effective date of any change in the Euro-Dollar Reserve Percentage.
(d) Any overdue principal of or interest on any Euro-Dollar
Loan shall bear interest, payable on demand, for each day until paid at a rate
per annum equal to the higher of (i) the sum of 2% plus the Euro-Dollar Margin
for such day plus the Adjusted London Interbank Offered Rate applicable to the
Interest Period for such Loan and (ii) the sum of 2% plus the Euro-Dollar
Margin for such day plus the quotient obtained (rounded upward, if necessary,
to the next higher 1/100 of 1%) by dividing (x) the average (rounded upward,
if necessary, to the next higher 1/16 of 1%) of the respective rates per annum
at which one day (or, if such amount due remains unpaid more than three
Euro-Dollar Business Days, then for such other period of time not longer than
six months as the Agent may select) deposits in Dollars in an amount
approximately equal to such overdue payment due to each of the Euro-Dollar
Reference Banks are offered to such Euro-Dollar Reference Bank in the London
interbank market for the applicable period determined as provided above by (y)
1.00 minus the Euro-Dollar Reserve Percentage (or, if the circumstances
described in clause (a) or (b) of Section 8.01 shall exist, at a rate per
annum equal to the sum of 2% plus the rate applicable to Base Rate Loans for
such day).
(e) Subject to Section 8.01(a), each Money Market LIBOR Loan
shall bear interest on the outstanding principal amount thereof, for the
Interest Period applicable thereto, at a rate per annum equal to the sum of
the London Interbank Offered Rate for such Interest Period (determined in
accordance with Section 2.08(c) as if the related Money Market LIBOR Borrowing
were a Committed Euro-Dollar Borrowing) plus (or minus) the Money Market
Margin quoted by the Bank making such Loan in accordance with Section 2.03.
Each Money Market Absolute Rate Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a
rate per annum equal to the Money Market Absolute Rate quoted by the Bank
making such Loan in accordance with Section 2.03. Such interest shall be
payable for each Interest Period on the last day thereof and, if such Interest
Period is longer than three months, at intervals of three months after the
first day thereof. Any overdue principal of or interest on any Money Market
Loan shall bear interest, payable on demand, for each day until paid at a rate
per annum equal to the sum of 2% plus the Base Rate for such day.
(f) Each Euro-Currency Loan shall bear interest on the
outstanding principal amount thereof, for each day during the Interest Period
applicable thereto, at a rate per annum equal to the sum of the Euro-Currency
Margin for such day plus the Adjusted London Interbank Offered Rate applicable
to such Interest Period. Such interest shall be payable for each Interest
Period on the last day thereof and, if such Interest Period is longer than
three months, at intervals of three months after the first day thereof.
"Euro-Currency Margin" means a rate per annum determined in
accordance with the Pricing Schedule.
The "Adjusted London Interbank Offered Rate" applicable to any
Interest Period means a rate per annum equal to the quotient obtained (rounded
upward, if necessary, to the next higher 1/100 of 1%) by dividing (i) the
applicable London Interbank Offered Rate by (ii) 1.00 minus the Euro-Currency
Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Interest
Period means the average (rounded upward, if necessary, to the next higher
1/16 of 1%) of the respective rates per annum at which deposits in the relevant
Alternative Currency are offered to each of the Euro-Currency Reference Banks
in the London interbank market at approximately 11:00 A.M. (London time) two
Euro-Currency Business Days before the first day of such Interest Period in an
amount approximately equal to the principal amount of the Euro-Currency Loan
of such Euro-Currency Reference Bank to which such Interest Period is to apply
and for a period of time comparable to such Interest Period.
"Euro-Currency Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for a member bank
of the Federal Reserve System in New York City with deposits exceeding five
billion dollars in respect of "Eurocurrency liabilities" (or in respect of any
other category of liabilities which includes deposits by reference to which
the interest rate on Euro-Currency Loans is determined or any category of
extensions of credit or other assets which includes loans by a non-United
States office of any Bank to United States residents). The Adjusted London
Interbank Offered Rate shall be adjusted automatically on and as of the
effective date of any change in the Euro-Currency Reserve Percentage.
(g) Any overdue principal of or interest on any Euro-Currency
Loan shall bear interest, payable on demand, for each day until paid at a rate
per annum equal to the higher of (i) the sum of 2% plus the Euro-Currency
Margin for such day plus the Adjusted London Interbank Offered Rate applicable
to the Interest Period for such Loan and (ii) the sum of 2% plus the
Euro-Currency Margin for such day plus the quotient obtained (rounded upward,
if necessary, to the next higher of 1/100 of 1%) by dividing (x) the average
(rounded upward, if necessary, to the next higher 1/16 of 1%) of the
respective rates per annum at which one day (or, if such amount due remains
unpaid more than three Euro-Currency Business Days, then for such other period
of time not longer than six months as the Agent may select) deposits in the
relevant Alternative Currency in an amount approximately equal to such overdue
payment due to each of the Euro-Currency Reference Banks are offered to such
Euro-Currency Reference Bank in the London interbank market for the applicable
period determined as provided above by (y) 1.00 minus the Euro-Currency
Reserve Percentage (or, if the circumstances described in clause (a) or (b) of
Section 8.01 shall exist, at a rate per annum equal to the sum of 2% plus the
rate applicable to Base Rate Loans for such day).
(h) The Agent shall determine each interest rate applicable
to the Loans hereunder. The Agent shall give prompt notice to the Borrower
and the participating Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.
(i) Each Reference Bank agrees to use its best efforts to
furnish quotations to the Agent as contemplated by this Section. If any
Reference Bank does not furnish a timely quotation, the Agent shall determine
the relevant interest rate on the basis of the quotation or quotations
furnished by the remaining Reference Bank or Banks or, if none of such
quotations is available on a timely basis, the provisions of Section 8.01
shall apply.
SECTION 2.09. Facility Fees. The Borrower shall pay to the
Agent for the account of the Banks ratably a facility fee at the Facility Fee
Rate (determined daily in accordance with the Pricing Schedule). Such
facility fee shall accrue (i) from and including the Closing Date to but
excluding the Termination Date (or earlier date of termination of the
Commitments in their entirety), on the daily aggregate amount of the
Commitments (whether used or unused) and (ii) from and including the
Termination Date or such earlier date of termination to but excluding the date
the Loans shall be repaid in their entirety, on the daily aggregate
outstanding principal amount of the Loans. Accrued fees under this Section
shall be payable quarterly on each March 31, June 30, September 30 and
December 31 and upon the date of termination of the Commitments in their
entirety (and, if later, the date the Loans shall be repaid in their entirety).
SECTION 2.10. Optional Termination or Reduction of
Commitments. The Borrower may, upon at least three Domestic Business Days'
notice to the Agent, (i) terminate the Commitments at any time, if no Loans
are outstanding at such time or (ii) ratably reduce from time to time by an
aggregate amount of $5,000,000 or any larger multiple of $1,000,000, the
aggregate amount of the Commitments in excess of the aggregate outstanding
principal amount of the Loans.
SECTION 2.11. Mandatory Termination of Commitments. The
Commitments shall terminate on the Termination Date, and any Loans then
outstanding (together with accrued interest thereon) shall be due and payable
on such date.
SECTION 2.12. Mandatory and Optional Prepayments. (a) If, on
any March 31, June 30, September 30 or December 31, the sum of (i) the
aggregate outstanding principal amount of the Loans (except Euro-Currency
Loans) and (ii) the aggregate Dollar Equivalent of all outstanding
Euro-Currency Borrowings exceeds 105% of the aggregate amount of the
Commitments, then the Borrower shall prepay, first, any Borrowing bearing
interest at the Base Rate and, second, any other Borrowing or Borrowings, in
each case as the Borrower may elect in a notice to the Agent, to an extent
such that the sum of (i) and (ii) above does not exceed 100% of the aggregate
amount of the Commitments.
(b) Subject in the case of any Fixed Rate Borrowing to Section
2.14, the Borrower may, upon at least three Domestic Business Days' notice to
the Agent, prepay any Domestic Borrowing (or any Money Market Borrowing
bearing interest at the Base Rate pursuant to Section 8.01(a)) or upon at
least three Euro-Currency Business Days' or Euro-Dollar Business Days' notice
to the Agent, prepay any Euro-Currency Borrowing or Euro-Dollar Borrowing, as
the case may be, in each case in whole at any time, or from time to time in
part in amounts aggregating $5,000,000 or any larger multiple of $1,000,000,
by paying the principal amount to be prepaid together with accrued interest
thereon to the date of prepayment. Each such optional prepayment shall be
applied to prepay ratably the Loans of the several Banks included in such
Borrowing.
(c) Except as provided in Section 2.12(a) or (b), the
Borrower may not prepay all or any portion of the principal amount of any
Money Market Loan prior to the maturity thereof.
(d) Upon receipt of a notice of prepayment pursuant to this
Section, the Agent shall promptly notify each Bank of the contents thereof and
of such Bank's ratable share (if any) of such prepayment and such notice shall
not thereafter be revocable by the Borrower.
SECTION 2.13. General Provisions as to Payments. (a) The
Borrower shall make each payment of principal of, and interest on, the Loans
and of fees hereunder, not later than 12:00 Noon (New York City time) on the
date when due, in Federal or other funds immediately available in New York
City, to the Agent at its address referred to in Section 9.01. The Agent will
promptly distribute to each Bank its ratable share of each such payment
received by the Agent for the account of the Banks. Whenever any payment of
principal of, or interest on, the Domestic Loans or of fees shall be due on a
day which is not a Domestic Business Day, the date for payment thereof shall
be extended to the next succeeding Domestic Business Day. Whenever any
payment of principal of, or interest on, the Euro-Currency Loans or the
Euro-Dollar Loans shall be due on a day which is not a Euro-Currency Business
Day or a Euro-Dollar Business Day, as the case may be, the date for payment
thereof shall be extended to the next succeeding Euro-Currency Business Day
or Euro-Dollar Business Day, as the case may be, unless such Euro-Currency
Business Day or Euro-Dollar Business Day, as the case may be, falls in another
calendar month, in which case the date for payment thereof shall be the next
preceding Euro-Currency Business Day or Euro-Dollar Business Day, as the case
may be. Whenever any payment of principal of, or interest on, the Money
Market Loans shall be due on a day which is not a Euro-Dollar Business Day,
the date for payment thereof shall be extended to the next succeeding
Euro-Dollar Business Day. If the date for any payment of principal is
extended by operation of law or otherwise, interest thereon shall be payable
for such extended time.
(b) All payments to be made by the Borrower hereunder or under
the Notes in an Alternative Currency pursuant to Section 2.05 shall be made in
such Alternative Currency in such funds as may then be customary for the
settlement of international transactions in such Alternative Currency for the
account of the Agent, at such time and either in London, England or at such
other place as shall have been agreed upon by the Agent and the Borrower and
notified by the Agent to the Borrower and the Banks by not less than four
Euro-Currency Business Days' notice. The Agent will promptly cause such
payments to be distributed to each Bank in like funds.
(c) Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Banks hereunder
that the Borrower will not make such payment in full, the Agent may assume
that the Borrower has made such payment in full to the Agent on such date and
the Agent may, in reliance upon such assumption, cause to be distributed to
each Bank on such due date an amount equal to the amount then due such Bank.
If and to the extent that the Borrower shall not have so made such payment,
each Bank shall repay to the Agent forthwith on demand such amount distributed
to such Bank together with interest thereon, for each day from the date such
amount is distributed to such Bank until the date such Bank repays such amount
to the Agent, at the Federal Funds Rate.
SECTION 2.14. Funding Losses. If the Borrower makes any
payment of principal with respect to any Fixed Rate Loan (pursuant to Article
II, VI or VIII or otherwise) on any day other than the last day of the
Interest Period applicable thereto, or the last day of an applicable period
fixed pursuant to Section 2.07(d), or if the Borrower fails to borrow or
prepay any Fixed Rate Loans (including a failure to borrow in a specified
Alternative Currency due to the occurrence of any event described in Section
2.05(c), unless the Borrower elects not to make any such Borrowing in
accordance with the provisions of Section 2.05(c)) after notice has been given
to any Bank in accordance with Section 2.04(a) or 2.11(c), the Borrower shall
reimburse each Bank within 15 days after demand for any resulting loss or
expense incurred by it (or by an existing or prospective Participant in the
related Loan), including (without limitation) any loss incurred in obtaining,
liquidating or employing deposits from third parties, but excluding loss of
margin for the period after any such payment or failure to borrow or prepay,
provided that such Bank shall have delivered to the Borrower a certificate as
to the amount of such loss or expense, which certificate shall specify in
reasonable detail the nature and calculation of the amount claimed and shall
be conclusive in the absence of manifest error.
SECTION 2.15. Computation of Interest and Fees. Interest
based on the Prime Rate hereunder shall be computed on the basis of a year of
365 days (or 366 days in a leap year) and paid for the actual number of days
elapsed (including the first day but excluding the last day). All other
interest and fees shall be computed on the basis of a year of 360 days and
paid for the actual number of days elapsed (including the first day but
excluding the last day).
SECTION 2.16. Judgment Currency. If for the purposes of
obtaining judgment in any court it is necessary to convert a sum due from the
Borrower hereunder or under any of the Notes in the currency expressed to be
payable herein or under the Notes (the "specified currency") into another
currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Agent could purchase the
specified currency with such other currency at the Agent's New York office on
the Euro-Currency Business Day preceding that on which final judgment is
given. The obligations of the Borrower in respect of any sum due to any Bank
or the Agent hereunder or under any Note shall, notwithstanding any judgment
in a currency other than the specified currency, be discharged only to the
extent that on the Euro-Currency Business Day following receipt by such Bank
or the Agent (as the case may be) of any sum adjudged to be so due in such
other currency such Bank or the Agent (as the case may be) may in accordance
with normal banking procedures purchase the specified currency with such other
currency; if the amount of the specified currency so purchased is less than
the sum originally due to such Bank or the Agent, as the case may be, in the
specified currency, the Borrower agrees, to the fullest extent that it may
effectively do so, as a separate obligation and notwithstanding any such
judgment, to indemnify such Bank or the Agent, as the case may be, against
such loss, and if the amount of the specified currency so purchased exceeds
(a) the sum originally due to any Bank or the Agent, as the case may be, in
the specified currency and (b) any amounts shared with other Banks as a result
of allocations of such excess as a disproportionate payment to such Bank under
Section 9.04, such Bank or the Agent, as the case may be, agrees to remit such
excess to the Borrower.
SECTION 2.17. Extension of Termination Date. The Termination
Date may be extended, in the manner set forth below, on the last day of the
Revolving Credit Period (determined without regard to the last clause in the
definition thereof) and on each anniversary thereof (such day and each such
anniversary thereof being hereinafter referred to as an "Extension Date") for
a period of one year after the date on which the Termination Date would
otherwise have occurred. If the Borrower wishes to request an extension of
the Termination Date as of any Extension Date, it shall give notice to that
effect to the Agent not less than 90 nor more than 120 days prior to such
Extension Date, whereupon the Agent shall notify each of the Banks of such
request. Each Bank will use its best efforts to respond to such request,
whether affirmatively or negatively, within 15 days. If all of the Banks
respond affirmatively, then, subject to receipt by the Agent prior to such
Extension Date of counterparts of an extension agreement in form and substance
satisfactory to the parties hereto, the Termination Date shall be extended,
effective on such Extension Date, for a period of one year. If less than all
of the Banks respond affirmatively, then, subject to the affirmative response
of Deutsche Bank AG, New York and/or Cayman Island Branches, (1) the Borrower
may replace any or all of the Banks which did not respond affirmatively with
one or more other banks (including any of the Banks (an "Existing Bank")) so
long as each such bank (other than an Existing Bank) is reasonably acceptable
to the Agent and the aggregate commitment of such banks (including the increase
in the Commitment of each Existing Bank) equals the aggregate Commitments of
the Banks which did not respond affirmatively, at which time (I) the Borrower,
the Agent, the Banks which did respond affirmatively and such other bank or
banks shall execute and deliver an extension agreement, in form and substance
satisfactory to the parties thereto, pursuant to which the Termination Date
shall be so extended for a period of one year, and (II) the Borrower, the
Agent, the Banks which did not respond affirmatively and such other bank or
banks (including each Existing Bank which has agreed to increase its
Commitment) shall execute and deliver one or more Assignment and Assumption
Agreements as contemplated by Section 9.05(c) with respect to the Commitments
of the Banks which did not respond affirmatively which are being assumed by
such other bank or banks (including each Existing Bank which has agreed to
increase its Commitment) or, if the provisions of clause (1) are not
operative, (2) the Agent will promptly notify each of the Banks which did so
respond affirmatively of the names of the other Banks which so responded
affirmatively and of the aggregate amount of their then existing Commitments.
In the event that clause (2) is operative, each Bank (including Deutsche Bank
AG, New York and/or Cayman Island Branches, the "Initial Banks") which
initially responded affirmatively and subsequently receives such a notice from
the Agent will use its best efforts to respond to the Agent, whether
affirmatively or negatively, within 15 days as to whether it will agree to
extend the Termination Date for a period of one year for its then existing
Commitment, but with an aggregate Commitment equal to the sum of the then
existing Commitment of each Initial Bank. If each Initial Bank responds
affirmatively, then, subject to receipt by the Agent prior to such Extension
Date of counterparts of an extension agreement in form and substance
satisfactory to the parties thereto, the Termination Date shall be extended,
effective on such Extension Date, for a period of one year, but with an
aggregate Commitment equal to the sum of the Commitment of each Initial Bank,
provided that such extension shall be effective only if all amounts owing
hereunder to the Banks are paid in full on such Extension Date. If any
Initial Bank does not so respond affirmatively within such 15 days, then the
Termination Date shall not be so extended. No Bank shall incur any liability
or responsibility as a result of the failure of it or any other Bank or the
Agent to respond to any request made by the Agent pursuant to this Section
2.17 or otherwise to comply with any provision of this Section 2.17 and the
Agent shall not be liable or responsible for any failure by it or any Bank to
use its best efforts or otherwise comply with any provision of this Section
2.17.
ARTICLE III
CONDITIONS
SECTION 3.01. Closing. The closing hereunder shall occur upon
receipt by the Agent of the following documents, each dated the Closing Date
unless otherwise indicated:
(a) a duly executed Note for the account of each Bank dated
on or before the Closing Date complying with the provisions of
Section 2.06;
(b) an opinion of the General Counsel of the Borrower,
substantially in the form of Exhibit E hereto and covering such
additional matters relating to the transactions contemplated hereby
as the Required Banks may reasonably request;
(c) an opinion of Piper & Marbury, counsel for the Borrower,
substantially in the form of Exhibit F hereto and covering such
additional matters relating to the transactions contemplated hereby
as the Required Banks may reasonably request;
(d) an opinion of Davis Polk & Wardwell, special counsel for
the Agent, substantially in the form of Exhibit G hereto and covering
such additional matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request;
(e) all documents the Agent may reasonably request relating
to the existence of the Borrower, the corporate authority for and the
validity of this Agreement and the Notes, and any other matters
relevant hereto, all in form and substance satisfactory to the Agent.
The Agent shall promptly notify the Borrower and the Banks of the Closing
Date, and such notice shall be conclusive and binding on all parties hereto.
SECTION 3.02. Borrowings. The obligation of any Bank to make
a Loan on the occasion of any Borrowing is subject to the satisfaction of the
following conditions:
(a) the fact that the Closing Date shall have
occurred on or prior to December 31, 1994;
(b) receipt by the Agent of a Notice of Borrowing as required
by Section 2.02 or 2.03, as the case may be;
(c) the fact that, immediately after such Borrowing, the sum
of (i) the aggregate outstanding principal amount of the Loans (other
than Euro-Currency Loans) and (ii) the aggregate Dollar Amount of all
Euro-Currency Loans (on such date in each case after taking into
account such Borrowing and the use of the proceeds thereof) will not
exceed the aggregate amount of the Commitments;
(d) the fact that, immediately before and after such
Borrowing, no Default shall have occurred and be continuing;
(e) the fact that, immediately after such Borrowing, the sum
of (i) the aggregate outstanding principal amount of the Loans (other
than Euro-Currency Loans) and (ii) the aggregate Dollar Equivalent of
all Euro-Currency Loans (on such date in each case after taking into
account such Borrowing and the use of the proceeds thereof) will not
exceed 105% of the aggregate amount of the Commitments; and
(f) the fact that the representations and warranties of the
Borrower contained in this Agreement (except, in the case of a
Refunding Borrowing, the representations and warranties set forth in
Sections 4.04(c) and 4.05, as to any matter which has theretofore
been disclosed in writing by the Borrower to the Banks, including
items disclosed in writing by the Borrower to the Banks by virtue of
any information provided pursuant to Section 5.01 of this Agreement)
shall be true on and as of the date of such Borrowing.
Each Borrowing hereunder shall be deemed to be a representation and warranty
by the Borrower on the date of such Borrowing as to the facts specified in
clauses (c), (d), (e) and (f) of this Section.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The Borrower is
a corporation duly incorporated, validly existing and in good standing under
the laws of the State of Maryland, and has all corporate powers and all
governmental licenses, authorizations, consents and approvals required to
carry on its business as now conducted, other than such licenses,
authorizations, consents and approvals which, if not held or obtained by the
Borrower, do not, in the aggregate, have a Material Adverse Effect.
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower of
this Agreement and the Notes are within the Borrower's corporate powers, have
been duly authorized by all necessary corporate action, require no action by
or in respect of, or filing with, any governmental body, agency or official
and do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the articles of incorporation or by-laws of
the Borrower or of any agreement, judgment, injunction, order, decree or other
instrument binding upon the Borrower or any of its Subsidiaries or result in
the creation or imposition of any Lien on any asset of the Borrower or any of
its Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement constitutes a
valid and binding agreement of the Borrower and each Note, when executed and
delivered in accordance with this Agreement, will constitute a valid and
binding obligation of the Borrower, in each case enforceable in accordance
with its terms.
SECTION 4.04. Financial Information.
(a) The consolidated statement of financial position and
shareholders' equity of the Borrower and its Consolidated Subsidiaries as of
December 31, 1993 and the related consolidated statements of operations and
cash flows for the fiscal year then ended, reported on by Ernst & Young and
set forth in the Borrower's 1993 Form 10-K, a copy of which has been delivered
to each of the Banks, fairly present, in conformity with generally accepted
accounting principles, the consolidated financial position of the Borrower and
its Consolidated Subsidiaries as of such date and their consolidated results
of operations and cash flows for such fiscal year.
(b) The unaudited consolidated statement of financial
position and shareholders' equity of the Borrower and its Consolidated
Subsidiaries as of September 30, 1994 and the related unaudited consolidated
statements of operations and cash flows for the nine months then ended, set
forth in the Borrower's Latest Form 10-Q, a copy of which has been delivered
to each of the Banks, fairly present, in conformity with generally accepted
accounting principles applied on a basis consistent with the financial
statements referred to in subsection (a) of this Section, the consolidated
financial position of the Borrower and its Consolidated Subsidiaries as of
such date and their consolidated results of operations and cash flows for such
nine month period (subject to normal year-end adjustments).
(c) Except as disclosed in the Borrower's latest Form 10-Q or
in any Form 8-K filed by the Borrower under the Securities Exchange Act of
1934 after the Borrower's latest Form 10-Q and provided to the Banks prior to
the date of this Agreement, since December 31, 1993 there has been no material
adverse change in the business, financial position, results of operations or
prospects of the Borrower and its Consolidated Subsidiaries, considered as a
whole.
(d) A copy of a duly completed and signed Annual Statement or
other similar report of or for each Insurance Company Subsidiary in the form
filed with the governmental body, agency or official which regulates insurance
companies in the jurisdiction in which such Insurance Company Subsidiary is
domiciled for the year ended December 31, 1993 has been delivered to the Agent
on behalf of each of the Banks and fairly presents, in accordance with
statutory accounting principles, the information contained therein.
(e) A copy of a duly completed and signed Quarterly Statement
or other similar report of or for United States Fidelity and Guaranty Company
and Fidelity and Guaranty Life Insurance Company in the form filed with the
governmental body, agency or official which regulates insurance companies in
the jurisdiction in which such companies are respectively domiciled for the
quarter ended September 30, 1994 has been delivered to the Agent on behalf of
each of the Banks and fairly presents, in accordance with statutory accounting
principles, the information contained therein.
SECTION 4.05. Litigation. Subject to matters disclosed in the
financial statements referred to in Section 4.04(a), (b) and (c), there is no
action, suit or proceeding pending against, or to the knowledge of the Borrower
threatened against or affecting, the Borrower or any of its Subsidiaries
before any court or arbitrator or any governmental body, agency or official in
which there is a reasonable expectation of an adverse decision which
reasonably could be expected to have a Material Adverse Effect or which in any
manner draws into question the validity of this Agreement or the Notes.
SECTION 4.06. Compliance with ERISA. Each member of the ERISA
Group has fulfilled its obligations under the minimum funding standards of
ERISA and the Internal Revenue Code with respect to each Plan and is in
compliance in all material respects with the presently applicable provisions
of ERISA and the Internal Revenue Code with respect to each Plan. No member
of the ERISA Group has (i) sought a waiver of the minimum funding standard
under Section 412 of the Internal Revenue Code in respect of any Plan, (ii)
failed to make any contribution or payment to any Plan or Multiemployer Plan
or in respect of any Benefit Arrangement, or made any amendment to any Plan or
Benefit Arrangement, which in either case would trigger the provisions of
Section 412(n) or 401(a)(29) of the Internal Revenue Code (or any
corresponding provisions of ERISA) or (iii) incurred any liability under Title
IV of ERISA other than a liability to the PBGC for premiums under Section 4007
of ERISA.
SECTION 4.07. Environmental Matters. In the ordinary course
of its business, the Borrower conducts an ongoing review of the effect of
Environmental Laws on the business, operations and properties of the Borrower
and its Subsidiaries, in the course of which it identifies and evaluates
associated liabilities and costs (including, without limitation, any capital
or operating expenditures required for clean-up or closure of properties
presently or previously owned, any capital or operating expenditures required
to achieve or maintain compliance with environmental protection standards
imposed by law or as a condition of any license, permit or contract, any
related constraints on operating activities, including any periodic or
permanent shutdown of any facility or reduction in the level of or change in
the nature of operations conducted thereat, any costs or liabilities in
connection with off-site disposal of wastes or Hazardous Substances, and any
actual or potential liabilities to third parties, including employees, and any
related costs and expenses). On the basis of this review, the Borrower has
reasonably concluded that such associated liabilities and costs, including the
costs of compliance with Environmental Laws, are unlikely to have a Material
Adverse Effect.
SECTION 4.08. Taxes. The Borrower and its Subsidiaries have
filed all United States Federal income tax returns and all other material tax
returns which are required to be filed by them and have paid all taxes due
pursuant to such returns or pursuant to any assessment received by the
Borrower or any Subsidiary, other than any such assessments being contested in
good faith by appropriate proceedings and for which any reserves required
under generally accepted accounting principles have been established. The
charges, accruals and reserves on the books of the Borrower and its
Subsidiaries in respect of taxes or other governmental charges are, in the
opinion of the Borrower, adequate in all material respects.
SECTION 4.09. Subsidiaries. Each of the Borrower's corporate
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
SECTION 4.10. Not an Investment Company. The Borrower is not
an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
SECTION 4.11. Full Disclosure. All information heretofore
furnished by the Borrower to the Agent or any Bank for purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all such information hereafter furnished by the Borrower to the Agent or any
Bank will be, true and accurate in all material respects on the date as of
which such information is stated or certified. The Borrower has disclosed to
the Banks in writing any and all facts which materially and adversely affect
or may affect (to the extent the Borrower can now reasonably foresee), the
business, operations or financial condition of the Borrower and its
Consolidated Subsidiaries, taken as a whole, or the ability of the Borrower to
perform its obligations under this Agreement.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Bank has any
Commitment hereunder or any amount payable under any Note remains unpaid:
SECTION 5.01. Information. The Borrower will deliver to each
of the Banks:
(a) as soon as available and in any event within 95 days
after the end of each fiscal year of the Borrower, a consolidated
statement of financial position and shareholders' equity of the
Borrower and its Consolidated Subsidiaries as of the end of such
fiscal year and the related consolidated statements of operations and
cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all
reported on in a manner acceptable to the Securities and Exchange
Commission by Ernst & Young or other independent public accountants
of nationally recognized standing;
(b) as soon as available and in any event within 60 days
after the end of each of the first three quarters of each fiscal year
of the Borrower, a consolidated statement of financial position and
shareholders' equity of the Borrower and its Consolidated
Subsidiaries as of the end of such quarter and the related
consolidated statements of operations and cash flows for such quarter
and for the portion of the Borrower's fiscal year ended at the end of
such quarter, setting forth in the case of such consolidated
statements of operations and cash flows in comparative form the
figures for the corresponding quarter and the corresponding portion
of the Borrower's previous fiscal year, all certified (subject to
normal year-end adjustments) as to fairness of presentation, generally
accepted accounting principles and consistency by the chief financial
officer or the chief accounting officer of the Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, an Officer's
Certificate (i) setting forth in reasonable detail the calculations
required to establish whether the Borrower was in compliance with the
requirements of Sections 5.09 and 5.10 on the date of such financial
statements and (ii) stating whether any Default exists on the date of
such certificate and, if any Default then exists, setting forth the
details thereof and the action which the Borrower is taking or
proposes to take with respect thereto;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm
of independent public accountants which reported on such statements
(i) whether anything has come to their attention in the course of
their examination of the financial statements of the Borrower and its
Subsidiaries to cause them to believe that any Default existed on the
date of such statements and (ii) confirming the calculations set
forth in the officer's certificate delivered simultaneously therewith
pursuant to clause (c) above;
(e) within five days after any officer of the Borrower
obtains knowledge of any Default, if such Default is then continuing,
an Officer's Certificate setting forth the details thereof and the
action which the Borrower is taking or proposes to take with respect
thereto;
(f) within 120 days after the end of each fiscal year of each
Insurance Company Subsidiary, a copy of a duly completed and signed
Annual Statement (or any successor form thereto) required to be filed
by such Insurance Company Subsidiary with the governmental body,
agency or official which regulates insurance companies in the
jurisdiction in which such Insurance Company Subsidiary is domiciled,
in the form submitted to such governmental body, agency or official;
(g) within 60 days after the end of the second fiscal quarter
of United States Fidelity and Guaranty Company and Fidelity and
Guaranty Life Insurance Company, respectively, a copy of a duly
completed and signed Quarterly Statement (or any successor form
thereto) required to be filed by each such company with the
governmental body, agency or official which regulates insurance
companies in the jurisdiction in which such company is domiciled, in
the form submitted to such governmental body, agency or official;
(h) promptly upon the mailing thereof to the shareholders of
the Borrower generally, copies of all financial statements, reports
and proxy statements so mailed;
(i) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and reports on
Forms 10-K, 10-Q and 8-K (or their equivalents) which the Borrower
shall have filed with the Securities and Exchange Commission;
(j) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as
defined in Section 4043 of ERISA) with respect to any Plan, other
than a reportable event for which 30-day notice to the PBGC has been
waived, or knows that the plan administrator of any Plan has given or
is required to give notice of any such reportable event, a copy of
the notice of such reportable event given or required to be given to
the PBGC; (ii) receives notice of complete or partial withdrawal
liability under Title IV of ERISA or notice that any Multiemployer
Plan is in reorganization, is insolvent or has been terminated, a
copy of such notice; (iii) receives notice from the PBGC under Title
IV of ERISA of an intent to terminate, impose liability (other than
for premiums under Section 4007 of ERISA) in respect of, or appoint a
trustee to administer any Plan, a copy of such notice; (iv) applies
for a waiver of the minimum funding standard under Section 412 of the
Internal Revenue Code, a copy of such application; (v) gives notice
of intent to terminate any Plan under Section 4041(c) of ERISA, a
copy of such notice and other information filed with the PBGC; (vi)
gives notice of withdrawal from any Plan pursuant to Section 4063 of
ERISA, a copy of such notice; or (vii) fails to make any payment or
contribution to any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement or makes any amendment to any Plan or Benefit
Arrangement which in either case would trigger the provisions of
Section 412(n) or 401(a)(29) of the Internal Revenue Code (or any
corresponding provisions of ERISA), a certificate of the chief
financial officer or the chief accounting officer of the Borrower
setting forth details as to such occurrence and action, if any, which
the Borrower or applicable member of the ERISA Group is required or
proposes to take; and
(k) from time to time such additional information regarding
the financial position or business of the Borrower and its
Subsidiaries as the Agent, at the request of any Bank, may reasonably
request.
SECTION 5.02. Payment of Obligations. The Borrower will pay
and discharge, and will cause each Subsidiary (other than an Excluded
Subsidiary) to pay and discharge, at or before maturity, all their respective
material obligations and liabilities, including, without limitation, tax
liabilities, except where the same may be contested in good faith by
appropriate proceedings, and will maintain, and will cause each Subsidiary to
maintain, in accordance with generally accepted accounting principles,
appropriate reserves for the accrual of any of the same.
SECTION 5.03. Maintenance of Property; Books and Records;
Insurance.
(a) The Borrower will keep, and will cause each Subsidiary to
keep, all property useful and necessary in its business in good working order
and condition, ordinary wear and tear excepted.
(b) The Borrower will keep, and will cause each Subsidiary to
keep, proper books of record and account in which full, true and correct
entries shall be made of all dealings and transactions in relation to its
business and activities.
(c) The Borrower will maintain or cause to be maintained with
financially sound and reputable insurers or through self-insurance programs
appropriate to the type and amount of the risk insured, insurance with respect
to its properties and business, and the properties and business of its
Subsidiaries, against loss or damage of the kinds customarily insured against
by reputable companies in the same or similar businesses, such insurance to be
of such types and in such amounts (with such deductible amounts) as is
customary for such companies under similar circumstances. The Borrower will
furnish to the Banks, upon request from the Agent, information presented in
reasonable detail as to the insurance so carried.
SECTION 5.04. Conduct of Business and Maintenance of
Existence. The Borrower will continue, and will cause each Subsidiary (other
than any Excluded Subsidiary) to continue, to engage in all material respects
in business of the same general type as now conducted by the Borrower and its
Subsidiaries, and will preserve, renew and keep in full force and effect, and
will cause each Subsidiary (other than any Excluded Subsidiary) to preserve,
renew and keep in full force and effect, their respective corporate existence
and their respective rights, privileges and franchises necessary or desirable
in the normal conduct of business, other than such corporate existences,
rights, privileges and franchises which, if not preserved, renewed or kept in
force, will not have, in the aggregate, a Material Adverse Effect.
SECTION 5.05. Compliance with Laws. The Borrower will comply,
and cause each Subsidiary to comply, with all applicable laws, ordinances,
rules, regulations, and requirements of governmental authorities (including,
without limitation, Environmental Laws and ERISA and the rules and regulations
thereunder) except where the necessity of compliance therewith is contested in
good faith by appropriate proceedings or where the failure to comply with such
laws, ordinances, rules, regulations and requirements will not, in the
aggregate, have a Material Adverse Effect.
SECTION 5.06. Negative Pledge. Neither the Borrower nor any
Subsidiary will create, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement securing
Debt outstanding on the date of this Agreement in an aggregate
principal or face amount not exceeding $100,000,000 and identified on
Schedule I hereto;
(b) any Lien existing on any asset of any corporation at the
time such corporation becomes a Subsidiary and not created in
contemplation of such event;
(c) any Lien on any asset securing Debt incurred or assumed
for the purpose of financing all or any part of the cost of acquiring
such asset, provided that such Lien attaches to such asset
concurrently with or within 90 days after the acquisition thereof;
(d) any Lien on any asset of any corporation existing at the
time such corporation is merged or consolidated with or into the
Borrower or a Subsidiary and not created in contemplation of such
event;
(e) any Lien existing on any asset prior to the acquisition
thereof by the Borrower or a Subsidiary and not created in
contemplation of such acquisition;
(f) any Lien arising out of the refinancing, extension,
renewal or refunding of any Debt secured by any Lien permitted by any
of the foregoing clauses or clause (j) below of this Section,
provided that such Debt is not increased and is not secured by any
additional assets;
(g) Liens arising in the ordinary course of its business
(including Liens arising in the ordinary course of its insurance
business) which (i) do not secure Debt or Derivatives Obligations,
(ii) do not secure any obligation (except obligations arising in the
ordinary course of its insurance business) in an amount exceeding
$50,000,000 and (iii) do not in the aggregate materially detract from
or impair the use or value of the asset or assets subject thereto in
the operation of its business;
(h) Liens on cash and cash equivalents securing Derivatives
Obligations, provided that the aggregate amount of cash and cash
equivalents subject to such Liens may at no time exceed $25,000,000;
(i) Liens securing obligations of the type referred to in
clause (vii) of the definition of Debt as long as such Liens arise in
the ordinary course of the Borrower's or the Subsidiary's, as the
case may be, business and such Liens are in amounts and otherwise are
on terms consistent with then existing practices in the repurchase
business;
(j) Liens securing Non-Recourse Debt (including Non-Recourse
Debt constituting Debt (other than Non-Recourse Debt) as provided in
the proviso to the definition of Non-Recourse Debt);
(k) Liens on securities or cash of any Insurance Company
Subsidiary which secure its obligations as a reinsurer (as opposed to
a ceding insurance company) under reinsurance contracts entered into
with Persons which are licensed or authorized to do an insurance
business in any jurisdiction; and
(l) Liens not otherwise permitted by the foregoing clauses of
this Section securing Debt in an aggregate principal or face amount
at any date not to exceed 5% of Adjusted Consolidated Tangible Net
Worth.
SECTION 5.07. Consolidations, Mergers and Sales of Assets;
Ownership by USF&G Corporation. The Borrower will not (i) consolidate or
merge with or into any other Person, other than a merger in which the Borrower
is the surviving corporation or a merger solely for the purpose of
reincorporating the Borrower in another jurisdiction, in each case provided no
Default shall exist at, or immediately after, such merger, or (ii) sell, lease
or otherwise transfer, directly or indirectly, all or substantially all of the
assets of the Borrower and its Subsidiaries, taken as a whole, to any other
Person. The Borrower will at all times own all of the outstanding voting
securities of United States Fidelity and Guaranty Company.
SECTION 5.08. Use of Proceeds. The proceeds of the Loans made
under this Agreement will be used by the Borrower for general corporate
purposes. None of such proceeds will be used, directly or indirectly, for the
purpose, whether immediate, incidental or ultimate, of buying or carrying any
"margin stock" within the meaning of Regulation U.
SECTION 5.09. Ratio of Debt to Adjusted Consolidated Tangible
Net Worth. The aggregate amount of Debt (other than Non-Recourse Debt) of the
Borrower and its Subsidiaries shall at no time exceed 55% of Adjusted
Consolidated Tangible Net Worth.
SECTION 5.10. Minimum Consolidated Tangible Net Worth.
Adjusted Consolidated Tangible Net Worth will at no time be less than the sum
of (i) $1,050,000,000 plus (ii) 50% of the consolidated net income of the
Borrower and its Consolidated Subsidiaries for the period commencing on
October 1, 1994 and ending at the end of the Borrower's then most recent
fiscal quarter (treated for this purpose as a single accounting period). For
purposes of this Section, if consolidated net income of the Borrower and its
Consolidated Subsidiaries for any period shall be less than zero, the amount
calculated pursuant to clause (ii) above for such period shall be zero.
SECTION 5.11. Transactions with Affiliates. The Borrower will
not, and will not permit any Subsidiary to, directly or indirectly, pay any
funds to or for the account of, make any investment (whether by acquisition of
stock or indebtedness, by loan, advance, transfer of property, guarantee or
other agreement to pay, purchase or service, directly or indirectly, any Debt,
or otherwise) in, lease, sell, transfer or otherwise dispose of any assets,
tangible or intangible, to, or participate in, or effect any transaction in
connection with any joint enterprise or other joint arrangement with, any
Affiliate unless such payment, investment, lease, sale, transfer, disposition,
participation or transaction is on terms and conditions at least as favorable
to the Borrower or such Subsidiary as the terms and conditions which would
apply in a similar transaction with a Person not an Affiliate; provided,
however, that the foregoing provisions of this Section shall not prohibit the
Borrower from declaring or paying any lawful dividend or distribution so long
as, after giving effect thereto, no Default shall have occurred and be
continuing.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the
following events ("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of
any Loan or shall fail to pay within five days of the due date
thereof any interest on any Loan or any fees or any other amount
(other than the principal of any Loan) payable hereunder;
(b) the Borrower shall fail to observe or perform any
covenant contained in Sections 5.06 to 5.11, inclusive;
(c) the Borrower shall fail to observe or perform any
covenant or agreement contained in this Agreement (other than those
covered by clause (a) or (b) above) for 30 days after notice thereof
has been given to the Borrower by the Agent at the request of any
Bank;
(d) any representation, warranty, certification or statement
made by the Borrower in this Agreement or in any certificate,
financial statement or other document delivered pursuant to this
Agreement shall prove to have been incorrect in any material respect
when made (or deemed made);
(e) the Borrower or any Subsidiary shall fail to make any
payment owed by it in respect of any Material Financial Obligations
when due or within any applicable grace period;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Debt or enables (or,
with the giving of notice or lapse of time or both, would enable) the
holder of such Debt or any Person acting on such holder's behalf to
accelerate the maturity thereof;
(g) the Borrower or any Subsidiary (other than an Excluded
Subsidiary) shall commence a voluntary case or other proceeding
seeking rehabilitation, dissolution, conservation, liquidation,
reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, rehabilitator, dissolver, conservator,
custodian or other similar official of it or any substantial part of
its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against it, or shall
make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall take any
corporate action to authorize any of the foregoing;
(h) an involuntary case or other proceeding shall be
commenced against the Borrower or any Subsidiary (other than an
Excluded Subsidiary) seeking rehabilitation, dissolution,
conservation, liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of
a trustee, receiver, liquidator, rehabilitator, dissolver,
conservator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of 60
days; or an order for relief shall be entered against the Borrower or
any Subsidiary (other than an Excluded Subsidiary) under the federal
bankruptcy laws as now or hereafter in effect; or any governmental
body, agency or official shall apply for, or commence a case or other
proceeding to seek, an order for the rehabilitation, conservation,
dissolution or other liquidation of the Borrower or any Subsidiary
(other than an Excluded Subsidiary) or of the assets or any
substantial part thereof of the Borrower or any such Subsidiary or
any other similar remedy;
(i) any member of the ERISA Group shall fail to pay when due
an amount or amounts aggregating in excess of $5,000,000 which it
shall have become liable to pay under Title IV of ERISA; or notice of
intent to terminate a Material Plan shall be filed under Title IV of
ERISA by any member of the ERISA Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute proceedings
under Title IV of ERISA to terminate, to impose liability (other than
for premiums under Section 4007 of ERISA) in respect of, or to cause
a trustee to be appointed to administer any Material Plan; or a
condition shall exist by reason of which the PBGC would be entitled
to obtain a decree adjudicating that any Material Plan must be
terminated; or there shall occur a complete or partial withdrawal
from, or a default, within the meaning of Section 4219(c)(5) of
ERISA, with respect to, one or more Multiemployer Plans which could
cause one or more members of the ERISA Group to incur a current
payment obligation in excess of $5,000,000;
(j) enforceable judgments or orders for the payment of money
in excess of $10,000,000 in the aggregate shall be rendered and
entered against the Borrower or any Subsidiary (other than an Excluded
Subsidiary) and such judgments or orders shall continue unsatisfied
and unstayed for a period of 30 days; or
(k) any person or group of persons (within the meaning of
Section 13 or 14 of the Securities Exchange Act of 1934, as amended)
shall have acquired beneficial ownership (within the meaning of Rule
13d-3 promulgated by the Securities and Exchange Commission under said
Act) of 30% or more of the outstanding shares of common stock of the
Borrower; or, during any period of twelve consecutive calendar
months, individuals who were directors of the Borrower on the first
day of such period shall cease to constitute a majority of the board
of directors of the Borrower;
then, and in every such event, the Agent shall (i) if requested by Banks
having more than 50% in aggregate amount of the Commitments, by notice to the
Borrower terminate the Commitments and they shall thereupon terminate, and
(ii) if requested by Banks holding Notes evidencing more than 50% in aggregate
principal amount of the Loans, by notice to the Borrower declare the Notes
(together with accrued interest thereon) to be, and the Notes shall thereupon
become, immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower;
provided that, in the case of any of the Events of Default specified in clause
(g) or (h) above with respect to the Borrower, without any notice to the
Borrower or any other act by the Agent or the Banks, the Commitments shall
thereupon terminate and the Notes (together with accrued interest thereon)
shall become immediately due and payable without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower.
SECTION 6.02. Notice of Default. The Agent shall give notice
to the Borrower under Section 6.01(c) promptly upon being requested to do so
by any Bank and shall thereupon notify all the Banks thereof.
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization. Each Bank
irrevocably appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement and the Notes as
are delegated to the Agent by the terms hereof or thereof, together with all
such powers as are reasonably incidental thereto.
SECTION 7.02. Agent and Affiliates. Deutsche Bank AG, New
York and/or Cayman Island Branches shall have the same rights and powers under
this Agreement as any other Bank and may exercise or refrain from exercising
the same as though it were not the Agent, and Deutsche Bank AG, New York
and/or Cayman Island Branches 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 affiliate of the Borrower as if it were not the Agent
hereunder.
SECTION 7.03. Action by Agent. The obligations of the Agent
hereunder are only those expressly set forth herein. Without limiting the
generality of the foregoing, the Agent shall not be required to take any
action with respect to any Default, except as expressly provided in Article VI.
SECTION 7.04. Consultation with Experts. The Agent may
consult with legal counsel (who may be counsel for the Borrower), independent
public accountants and other experts selected by it and shall not be liable
for any action taken or omitted to be taken by it in good faith in accordance
with the advice of such counsel, accountants or experts.
SECTION 7.05. Liability of Agent. Neither the Agent nor any
of its affiliates nor any of their respective directors, officers, agents or
employees shall be liable for any action taken or not taken by it in
connection herewith (i) with the consent or at the request of the Required
Banks or (ii) in the absence of its own gross negligence or willful
misconduct. Neither the Agent nor any of its affiliates nor any of their
respective directors, officers, agents or employees shall be responsible for
or have any duty to ascertain, inquire into or verify (i) any statement,
warranty or representation made in connection with this Agreement or any
borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of the Borrower; (iii) the satisfaction of any
condition specified in Article III, except receipt of items required to be
delivered to the Agent; or (iv) the validity, effectiveness or genuineness of
this Agreement, the Notes or any other instrument or writing furnished in
connection herewith. The Agent shall not incur any liability by acting in
reliance upon any notice, consent, certificate, statement, or other writing
(which may be a bank wire, telex, facsimile transmission or similar writing)
believed by it to be genuine or to be signed by the proper party or parties.
SECTION 7.06. Indemnification. Each Bank shall, ratably in
accordance with its Commitment, indemnify the Agent, its affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrower) against any cost, expense (including counsel fees
and disbursements), claim, demand, action, loss or liability (except such as
result from such indemnitees' gross negligence or willful misconduct) that such
indemnitees may suffer or incur in connection with this Agreement or any
action taken or omitted by such indemnitees hereunder.
SECTION 7.07. Credit Decision. Each Bank acknowledges that it
has, independently and without reliance upon the Agent or any other Bank, 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 Bank also
acknowledges that it will, independently and without reliance upon the Agent
or any other Bank, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking any action under this Agreement.
SECTION 7.08. Successor Agent. The Agent may resign at any
time by giving notice thereof to the Banks and the Borrower. Upon any such
resignation, the Required Banks shall have the right to appoint a successor
Agent, subject, provided that no Default shall have occurred and be
continuing, to the Borrower's approval, not to be unreasonably withheld or
delayed. If no successor Agent shall have been so appointed by the Required
Banks, and shall have accepted such appointment, within 30 days after the
retiring Agent gives notice of resignation, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent, which shall be a commercial
bank organized or licensed under the laws of the United States of America or
of any State thereof and having a combined capital and surplus of at least
$50,000,000. Upon the acceptance of its appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After
any retiring Agent's resignation hereunder as Agent, the provisions of this
Article shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent.
SECTION 7.09. Agent's Fee. The Borrower shall pay to the
Agent for its own account fees in the amounts and at the times previously
agreed upon between the Borrower and the Agent.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate
or Unfair. If on or prior to the first day of any Interest Period for any
Fixed Rate Borrowing:
(a) the Agent is advised by the Reference Banks that deposits
in the applicable currency and amounts are not being offered to the
Reference Banks in the relevant market for such Interest Period, or
(b) in the case of a Committed Borrowing, Banks having 50% or
more of the aggregate amount of the Commitments advise the Agent that
the Adjusted CD Rate or the Adjusted London Interbank Offered Rate,
as the case may be, as determined by the Agent will not adequately
and fairly reflect the cost to such Banks of funding their CD Loans
or Euro-Currency Loans or Euro-Dollar Loans, as the case may be, for
such Interest Period,
the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, the obligations of the Banks to make
CD Loans or Euro-Currency Loans or Euro-Dollar Loans, as the case may be,
shall be suspended. Unless the Borrower notifies the Agent at least two
Domestic Business Days before the date of any Fixed Rate Borrowing for which a
Notice of Borrowing has previously been given that it elects not to borrow on
such date, (i) if such Fixed Rate Borrowing is a Committed Borrowing, such
Borrowing shall instead be made as a Base Rate Borrowing and (ii) if such
Fixed Rate Borrowing is a Money Market LIBOR Borrowing, the Money Market LIBOR
Loans comprising such Borrowing shall bear interest for each day from and
including the first day to but excluding the last day of the Interest Period
applicable thereto at the Base Rate for such day.
SECTION 8.02. Illegality. If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Euro-Currency
Lending Office or Euro-Dollar Lending Office) with any request or directive
after the date of this Agreement (whether or not having the force of law) of
any such authority, central bank or comparable agency shall make it unlawful
or impossible for any Bank (or its Euro-Currency Lending Office or Euro-Dollar
Lending Office) to make, maintain or fund its Euro-Currency Loans or
Euro-Dollar Loans and such Bank shall so notify the Agent, the Agent shall
forthwith give notice thereof to the other Banks and the Borrower, whereupon
until such Bank notifies the Borrower and the Agent that the circumstances
giving rise to such suspension no longer exist, the obligation of such Bank to
make Euro-Currency Loans or Euro-Dollar Loans shall be suspended. Before
giving any notice to the Agent pursuant to this Section, such Bank shall
designate a different Euro-Currency Lending Office or Euro-Dollar Lending
Office if such designation will avoid the need for giving such notice and will
not, in the judgment of such Bank, be otherwise disadvantageous to such Bank.
If such Bank shall determine in good faith that it may not lawfully continue
to maintain and fund any of its outstanding Euro-Currency Loans or Euro-Dollar
Loans to maturity and shall so specify in such notice, the Borrower shall
immediately prepay in full the then outstanding principal amount of each such
Euro-Currency Loan or Euro-Dollar Loan, together with accrued interest
thereon. Concurrently with prepaying each such Euro-Currency Loan or
Euro-Dollar Loan, the Borrower shall borrow a Base Rate Loan in an equal
principal amount from such Bank (on which interest and principal shall be
payable contemporaneously with the related Euro-Currency Loans or Euro-Dollar
Loans of the other Banks), and such Bank shall make such a Base Rate Loan.
SECTION 8.03. Increased Cost and Reduced Return. (a) If on or
after (x) the date hereof, in the case of any Committed Loan or any obligation
to make Committed Loans or (y) the date of the related Money Market Quote, in
the case of any Money Market Loan, the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation
or administration thereof, or compliance by any Bank (or its Applicable
Lending Office) with any request or directive after such date (whether or not
having the force of law) of any such authority, central bank or comparable
agency shall impose, modify or deem applicable any reserve (including, without
limitation, any such requirement imposed by the Board of Governors of the
Federal Reserve System, but excluding (i) with respect to any CD Loan any such
requirement included in an applicable Domestic Reserve Percentage and (ii)
with respect to any Euro-Currency Loan or Euro-Dollar Loan any such requirement
included in an applicable Euro-Currency Reserve Percentage or Euro-Dollar
Reserve Percentage, as the case may be), special deposit, insurance assessment
(excluding, with respect to any CD Loan, any such requirement reflected in an
applicable Assessment Rate) or similar requirement against assets of, deposits
with or for the account of, or credit extended by, any Bank (or its Applicable
Lending Office) or shall impose on any Bank (or its Applicable Lending Office)
or on the United States market for certificates of deposit or the London
interbank market any other condition affecting its Fixed Rate Loans, its Note
or its obligation to make Fixed Rate Loans and the result of any of the
foregoing is to increase the cost to such Bank (or its Applicable Lending
Office) of making or maintaining any Fixed Rate Loan, or to reduce the amount
of any sum received or receivable by such Bank (or its Applicable Lending
Office) under this Agreement or under its Note with respect thereto, by an
amount deemed by such Bank to be material, then, within 15 days after demand
by such Bank (with a copy to the Agent), the Borrower shall pay to such Bank
such additional amount or amounts as will compensate such Bank for such
increased cost or reduction.
(b) If any Bank shall have determined in good faith that,
after the date hereof, the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change in any such law, rule or regulation,
or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or any request or directive after
the date hereof regarding capital adequacy (whether or not having the force of
law) of any such authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on capital of such Bank (or its
Parent) as a consequence of such Bank's obligations hereunder to a level below
that which such Bank (or its Parent) could have achieved but for such
adoption, change, request or directive (taking into consideration its policies
with respect to capital adequacy) by an amount deemed by such Bank to be
material, then from time to time, within 15 days after demand by such Bank
(with a copy to the Agent), the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank (or its Parent) for
such reduction.
(c) Each Bank will promptly notify the Borrower and the Agent
of any event of which it has knowledge, occurring after the date hereof, which
will entitle such Bank to compensation pursuant to this Section and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. A
certificate of any Bank claiming compensation under this Section and setting
forth the additional amount or amounts to be paid to it hereunder shall, if
submitted in good faith, be conclusive in the absence of manifest error;
provided that any certificate delivered pursuant to this Section 8.03(c) shall
(i) in the case of a certificate in respect of amounts payable pursuant to
Section 8.03(a), set forth in reasonable detail the basis for and the
calculation of such amounts, and (ii) in the case of a certificate in respect
of amounts payable pursuant to Section 8.03(b), set forth at least the same
amount of detail in respect of the calculation of such amounts as such Bank
provides in similar circumstances to other similarly situated borrowers and
also include a statement by such Bank that it has allocated to its Commitment
or outstanding Loans no greater than a substantially proportionate amount of
any reduction of the rate of return on such Bank's capital due to the matters
described in Section 8.03(b) as it has allocated to each of its other
commitments to lend or any outstanding loans to similarly situated borrowers
that are affected similarly by such adoption or change. Subject to the
foregoing, in determining such amount, such Bank may use any reasonable
averaging and attribution methods.
SECTION 8.04. Taxes. (a) For purposes of this Section 8.04,
the following terms have the following meanings:
"Taxes" means any and all present or future taxes, duties,
levies, imposts, deductions, charges or withholdings with respect to any
payment by the Borrower pursuant to this Agreement or under any Note, and all
liabilities with respect thereto, excluding (i) in the case of each Bank and
the Agent, taxes imposed on its income, and franchise or similar taxes imposed
on it, by a jurisdiction under the laws of which such Bank or the Agent (as
the case may be) is organized or in which its principal executive office is
located or, in the case of each Bank, in which its Applicable Lending Office
is located, or, in the case of the Agent and each Bank, such taxes which would
not have been imposed on the Agent or such Bank but for any present or former
connection between the Agent or such Bank and the jurisdiction imposing such
tax (other than any such connection arising from the Agent or the Bank having
executed, delivered or performed its obligations or received a payment under,
or enforced, this Agreement or the Notes) and (ii) in the case of each Bank,
any United States withholding tax imposed on such payments but only to the
extent that such Bank (a) is subject to United States withholding tax at the
time such Bank first becomes a party to this Agreement or (b) subsequently
becomes subject to United States withholding tax solely by reason of the change
of its Applicable Lending Office by such Bank.
"Other Taxes" means any present or future stamp or documentary
taxes and any other excise or property taxes, or similar charges or levies
(other than franchise taxes or taxes imposed on the net income of a Bank or
the Agent), which arise from any payment made pursuant to this Agreement or
under any Note or from the execution or delivery of, or otherwise with respect
to, this Agreement or any Note.
(b) Any and all payments by the Borrower to or for the
account of any Bank or the Agent hereunder or under any Note shall be made
without deduction for any Taxes or Other Taxes; provided that, if the Borrower
shall be required by law to deduct any Taxes or Other Taxes from any such
payments, (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 8.04) such Bank or the Agent (as the case may
be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law and (iv) the Borrower
shall furnish to the Agent, at its address referred to in Section 9.01, the
original or a certified copy of a receipt evidencing payment thereof.
(c) The Borrower agrees to indemnify each Bank and the Agent
for the full amount of Taxes or Other Taxes (including, without limitation,
any Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts
payable under this Section 8.04) paid by such Bank or the Agent (as the case
may be) and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto. This indemnification shall be paid within
15 days after such Bank or the Agent (as the case may be) makes demand
therefor.
(d) Each Bank organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution and
delivery of this Agreement in the case of each Bank listed on the signature
pages hereof and on or prior to the date on which it becomes a Bank in the
case of each other Bank, and from time to time thereafter if requested in
writing by the Borrower (but only so long as such Bank remains lawfully able
to do so), shall provide the Borrower with Internal Revenue Service form 1001
or 4224, as appropriate, or any successor form prescribed by the Internal
Revenue Service, certifying that such Bank is entitled to benefits under an
income tax treaty to which the United States is a party which exempts the Bank
from United States withholding tax or reduces the rate of withholding tax on
payments of interest for the account of such Bank or certifying that the
income receivable pursuant to this Agreement is effectively connected with the
conduct of a trade or business in the United States.
(e) For any period with respect to which a Bank has failed to
provide the Borrower with the appropriate form pursuant to Section 8.04(d)
(unless such failure is due to a change in treaty, law or regulation occurring
subsequent to the date on which such form originally was required to be
provided), such Bank shall not be entitled to indemnification under Section
8.04(b) or (c) with respect to Taxes imposed by the United States; provided
that if a Bank, which is otherwise exempt from or subject to a reduced rate
of withholding tax, becomes subject to Taxes because of its failure to deliver
a form required hereunder, the Borrower shall take such steps as such Bank
shall reasonably request to assist such Bank to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to
or for the account of any Bank pursuant to this Section 8.04, then such Bank
will change the jurisdiction of its Applicable Lending Office if, in the
judgment of such Bank, such change (i) will eliminate or reduce any such
additional payment which may thereafter accrue and (ii) is not otherwise
disadvantageous to such Bank.
SECTION 8.05. Base Rate Loans Substituted for Affected Fixed
Rate Loans. If (i) the obligation of any Bank to make Euro-Currency Loans or
Euro-Dollar Loans has been suspended pursuant to Section 8.02 or (ii) any Bank
has demanded compensation under Section 8.03 or 8.04 with respect to any of
its CD Loans or Euro-Currency Loans or Euro-Dollar Loans and the Borrower
shall, by at least five Euro-Currency Business Days' (in the case of
Euro-Currency Loans) or Euro-Dollar Business Days' (in all other cases) prior
notice to such Bank through the Agent, have elected that the provisions of
this Section shall apply to such Bank, then, unless and until such Bank
notifies the Borrower that the circumstances giving rise to such suspension or
demand for compensation no longer exist:
(a) all Loans which would otherwise be made by such Bank as
CD Loans or Euro-Currency Loans or Euro-Dollar Loans, as the case may
be, shall be made instead as Base Rate Loans (on which interest and
principal shall be payable contemporaneously with the related Fixed
Rate Loans of the other Banks), and
(b) after each of its CD Loans or Euro-Currency Loans or
Euro-Dollar Loans, as the case may be, has been repaid, all payments
of principal which would otherwise be applied to repay such Fixed
Rate Loans shall be applied to repay its Base Rate Loans instead.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including bank
wire, telex, facsimile transmission or similar writing) and shall be given to
such party: (x) in the case of the Borrower or the Agent, at its address,
facsimile number or telex number set forth on the signature pages hereof, (y)
in the case of any Bank, at its address, facsimile number or telex number set
forth in its Administrative Questionnaire or (z) in the case of any party,
such other address, facsimile number or telex number as such party may
hereafter specify for the purpose by notice to the Agent and the Borrower.
Each such notice, request or other communication shall be effective (i) if
given by telex, when such telex is transmitted to the telex number specified
in this Section and the appropriate answerback is received, (ii) if given by
facsimile transmission, when transmitted to the facsimile number specified in
this Section and confirmation of receipt is received, (iii) if given by mail,
72 hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (iv) if given by any other means,
when delivered at the address specified in this Section; provided that notices
to the Agent under Article II or Article VIII shall not be effective until
received.
SECTION 9.02. No Waivers. No failure or delay by the Agent or
any Bank in exercising any right, power or privilege hereunder or under any
Note shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by
law.
SECTION 9.03. Expenses; Indemnification. (a) The Borrower
shall pay (i) all out-of-pocket expenses of the Agent, including the
reasonable fees and disbursements of special counsel for the Agent, in
connection with the preparation and administration of this Agreement, any
waiver or consent hereunder or any amendment hereof or any Default or alleged
Default hereunder and (ii) if an Event of Default occurs, all out-of-pocket
expenses incurred by the Agent and each Bank, including (without duplication)
the reasonable fees and disbursements of outside counsel in connection with
such Event of Default and collection, bankruptcy, insolvency and other
enforcement proceedings resulting therefrom.
(b) The Borrower agrees to indemnify the Agent and each Bank,
their respective affiliates and the respective directors, officers, agents and
employees of the foregoing (each an "Indemnitee") and hold each Indemnitee
harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by such Indemnitee in
connection with any investigative, administrative or judicial proceeding
(whether or not such Indemnitee shall be designated a party thereto) brought
or threatened relating to or arising out of this Agreement or any actual or
proposed use of proceeds of Loans hereunder; provided that no Indemnitee shall
have the right to be indemnified hereunder for such Indemnitee's own gross
negligence or willful misconduct as determined by a court of competent
jurisdiction and provided, further, that no Bank shall have the right to be
indemnified hereunder in any such proceeding wherein the parties thereto are
only such Bank and any other Person to whom such Bank shall have granted a
participation in, or assigned all or a proportionate part of, its Commitment
or its Loans or Notes or its rights or obligations hereunder or under its
Notes.
SECTION 9.04. Sharing of Set-Offs. Each Bank agrees that if
it shall, by exercising any right of set-off or counterclaim or otherwise,
receive payment of a proportion of the aggregate amount of principal and
interest due with respect to any Note held by it which is greater than the
proportion received by any other Bank in respect of the aggregate amount of
principal and interest due with respect to any Note held by such other Bank,
the Bank receiving such proportionately greater payment shall purchase such
participations in the Notes held by the other Banks, and such other
adjustments shall be made, as may be required so that all such payments of
principal and interest with respect to the Notes held by the Banks shall be
shared by the Banks pro rata; provided that nothing in this Section shall
impair the right of any Bank to exercise any right of set-off or counterclaim
it may have and to apply the amount subject to such exercise to the payment of
indebtedness of the Borrower other than its indebtedness hereunder. The
Borrower agrees, to the fullest extent it may effectively do so under
applicable law, that any holder of a participation in a Note, whether or not
acquired pursuant to the foregoing arrangements, may exercise rights of
set-off or counterclaim and other rights with respect to such participation as
fully as if such holder of a participation were a direct creditor of the
Borrower in the amount of such participation.
SECTION 9.05. Amendments and Waivers. Any provision of this
Agreement or the Notes may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Borrower and the
Required Banks (and, if the rights or duties of the Agent are affected
thereby, by the Agent); provided that no such amendment or waiver shall,
unless signed by all the Banks, (i) increase or decrease the Commitment of any
Bank (except for a ratable decrease in the Commitments of all Banks) or
subject any Bank to any additional obligation, (ii) reduce the principal of or
rate of interest on any Loan or any fees hereunder, except as provided below,
(iii) postpone the date fixed for any payment of principal of or interest on
any Loan or any fees hereunder or for any reduction or termination of any
Commitment, (iv) designate any currency as an Alternative Currency pursuant to
the last clause of the definition thereof and (v) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Notes, or the
number of Banks (including, without limitation, the Initial Banks), which
shall be required for the Banks or any of them to take any action under this
Section or any other provision of this Agreement.
SECTION 9.06. Successors and Assigns. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, except that the Borrower
may not assign or otherwise transfer any of its rights under this Agreement
without the prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or
other institutions (each a "Participant") participating interests in its
Commitment or any or all of its Loans. In the event of any such grant by a
Bank of a participating interest to a Participant, whether or not upon notice
to the Borrower and the Agent, such Bank shall remain responsible for the
performance of its obligations hereunder, and the Borrower and the Agent shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement. Any agreement pursuant to
which any Bank may grant such a participating interest shall provide that such
Bank shall retain the sole right and responsibility to enforce the obligations
of the Borrower hereunder including, without limitation, the right to approve
any amendment, modification or waiver of any provision of this Agreement;
provided that such participation agreement may provide that such Bank will not
agree to any modification, amendment or waiver of this Agreement described in
clause (i), (ii), (iii) or (iv) of Section 9.05 without the consent of the
Participant. The Borrower agrees that each Participant shall, to the extent
provided in its participation agreement, but subject to Section 9.06(e) below,
be entitled to the benefits of Article VIII with respect to its participating
interest. An assignment or other transfer which is not permitted by
subsection (c) or (d) below shall be given effect for purposes of this
Agreement only to the extent of a participating interest granted in accordance
with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or
other financial institutions (each an "Assignee") all, or a proportionate part
(equivalent to an initial Commitment of not less than $10,000,000, and
provided that after giving effect thereto the Commitment of the assigning Bank
is equivalent to an initial Commitment of not less than $10,000,000) of all,
of its rights and obligations under this Agreement and the Notes, and such
Assignee shall assume such rights and obligations, pursuant to an Assignment
and Assumption Agreement in substantially the form of Exhibit H hereto
executed by such Assignee and such transferor Bank, with (and subject to) the
subscribed consent of the Borrower, which shall not be unreasonably withheld,
and the Agent, which shall not be unreasonably withheld; provided that if an
Assignee is an affiliate of such transferor Bank or was a Bank immediately
prior to such assignment, no such consent shall be required; and provided
further that such assignment may, but need not, include rights of the
transferor Bank in respect of outstanding Money Market Loans. Upon execution
and delivery of such instrument and payment by such Assignee to such transferor
Bank of an amount equal to the purchase price agreed between such transferor
Bank and such Assignee, such Assignee shall be a Bank party to this Agreement
and shall have all the rights and obligations of a Bank with a Commitment as
set forth in such instrument of assumption, and the transferor Bank shall be
released from its obligations hereunder to a corresponding extent, and no
further consent or action by any party shall be required. Upon the
consummation of any assignment pursuant to this subsection (c), the transferor
Bank, the Agent and the Borrower shall make appropriate arrangements so that,
if required, a new Note is issued to the Assignee. In connection with any
such assignment, the transferor Bank shall pay to the Agent an administrative
fee for processing such assignment in the amount of $2,500. If the Assignee
is not incorporated under the laws of the United States of America or a state
thereof, it shall deliver to the Borrower and the Agent certification as to
exemption from deduction or withholding of any United States federal income
taxes in accordance with Section 8.04.
(d) Any Bank may at any time assign all or any portion of its
rights under this Agreement and its Note to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any
Bank's rights shall be entitled to receive any greater payment under Section
8.03 or 8.04 than such Bank would have been entitled to receive with respect
to the rights transferred, unless such transfer is made with the Borrower's
prior written consent or by reason of the provisions of Section 8.02, 8.03 or
8.04 requiring such Bank to designate a different Applicable Lending Office
under certain circumstances or at a time when the circumstances giving rise to
such greater payment did not exist.
SECTION 9.07. Collateral. Each of the Banks represents to the
Agent and each of the other Banks that it in good faith is not relying upon
any "margin stock" (as defined in Regulation U) as collateral in the extension
or maintenance of the credit provided for in this Agreement.
SECTION 9.08. Governing Law; Submission to Jurisdiction. This
Agreement and each Note shall be governed by and construed in accordance with
the laws of the State of New York. The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York State court sitting in New York City
for purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. The Borrower irrevocably
waives, to the fullest extent permitted by law, any objection which it may now
or hereafter have to the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought in such a court
has been brought in an inconvenient forum.
SECTION 9.09. Counterparts; Integration; Effectiveness. This
Agreement may be signed in any number of counterparts, each of which shall be
an original, with the same effect as if the signatures thereto and hereto were
upon the same instrument. This Agreement constitutes the entire agreement and
understanding among the parties hereto and supersedes any and all prior
agreements and understandings, oral or written, relating to the subject matter
hereof. This Agreement shall become effective upon receipt by the Agent of
counterparts hereof signed by each of the parties hereto (or, in the case of
any party as to which an executed counterpart shall not have been received,
receipt by the Agent in form satisfactory to it of telegraphic, telex,
facsimile or other written confirmation from such party of execution of a
counterpart hereof by such party).
SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of
the day and year first above written.
USF&G CORPORATION
By /s/ Dan L. Hale
Title: Executive Vice
President & Chief
Financial Officer
100 Light Street
Baltimore, MD 21202
Facsimile number: (410) 234-2056
Commitments
$20,000,000 DEUTSCHE BANK AG, NEW YORK AND/OR
CAYMAN ISLAND BRANCHES
By: /s/ Johnston deF. Whitman
Title: Director
By: /s/ Clinton M. Johnson
Title: Vice President
$15,000,000 CIBC INC.
By: /s/ Gail M. Golightly
Title: Vice President
$15,000,000 CREDIT LYONNAIS, NEW YORK BRANCH
By: /s/ Renaud D'Herbes
Title: First Vice President
CREDIT LYONNAIS, CAYMAN ISLAND
BRANCH
By: /s/ Renaud D'Herbes
Title: Authorized Signer
$15,000,000 MORGAN GUARANTY TRUST COMPANY OF
NEW YORK
By: /s/ Patricia Merritt
Title: Vice President
$15,000,000 NATIONSBANK OF NORTH CAROLINA, N.A.
By: /s/ Katie Howland
Title: Vice President
$10,000,000 THE BANK OF NEW YORK
By: /s/ Stratton R. Heath
Title: Vice President
$10,000,000 CITIBANK, N.A.
By: /s/ Daniel J. Brill
Title: Managing Director
_________________
Total Commitments
$100,000,000
=================
DEUTSCHE BANK AG, NEW YORK AND/OR
CAYMAN ISLAND BRANCHES, as Agent
By: /s/ Johnston deF. Whitman
Title: Director
By: /s/ Clinton M. Johnson
Title: Vice President
31 West 52nd Street
New York, New York 10019
Attention: Susan A. Maros
Telex number: 429166
Facsimile number: (212) 474-8108
PRICING SCHEDULE
The "Euro-Currency Margin" and "Euro-Dollar Margin", "Base Rate
Margin", "CD Margin", and "Facility Fee Rate" for any day are the respective
percentages set forth below in the applicable row under the column
corresponding to the Status that exists on such day:
Status Level I Level II Level III Level IV Level V
Euro-Currency 0.35% 0.35% 0.40% 0.55% 1.375%
Margin and
Euro-Dollar
Margin
Base Rate 0.0% 0.0% 0.0% 0.0% 1.00%
Margin
CD Margin 0.475% 0.475% 0.525% 0.675% 1.50%
Facility Fee 0.20% 0.25% 0.25% 0.45% 0.625%
Rate
For purposes of this Schedule, the following terms have the
following meanings:
"Level I Status" exists at any date if, at such date, the
Borrower's long-term debt is rated BBB or higher by S&P and Baa2 or higher by
Moody's.
"Level II Status" exists at any date if, at such date, (i) the
Borrower's long-term debt is rated BBB- or higher by S&P and Baa3 or higher by
Moody's and (ii) Level I Status does not exist.
"Level III Status" exists at any date if, at such date, (i) the
Borrower's long-term debt is rated BBB- or higher by S&P or Baa3 or higher by
Moody's and (ii) neither Level I Status nor Level II Status exists.
"Level IV Status" exists at any date if, at such date, (i) the
Borrower's long-term debt is rated BB or higher by S&P and Ba2 or higher by
Moody's and (ii) none of Level I Status, Level II Status and Level III Status
exists.
"Level V Status" exists at any date if, at such date, no other
Status exists.
"Moody's" means Moody's Investors Service, Inc.
"S&P" means Standard & Poor's Ratings Group.
"Status" refers to the determination of which of Level I
Status, Level II Status, Level III Status, Level IV Status or Level V Status
exists at any date.
The credit ratings to be utilized for purposes of this Schedule
are those assigned to the senior unsecured long-term debt securities of the
Borrower without third-party credit enhancement (the "Long-Term Securities"),
and any rating assigned to any other debt security of the Borrower shall be
disregarded. The rating in effect at any date is that in effect at the close
of business on such date. For purposes of determining Status: (i) if at any
date the rating of the Long-Term Securities by Moody's shall be higher or
lower than the comparable rating by S&P by one rating level (it being
understood that for these purposes an S&P rating of A+ is comparable to a
Moody's rating of A1, an S&P rating of A is comparable to a Moody's rating of
A2, and so forth), then the rating of the Long-Term Securities by each of
Moody's and S&P shall be deemed to be the higher of the two ratings; and (ii)
if at any date the rating of the Long-Term Securities by Moody's shall be
higher or lower than the comparable rating by S&P by two or more rating levels
(it being understood that for these purposes an S&P rating of A+ is comparable
to a Moody's rating of A1, an S&P rating of A is comparable to a Moody's
rating of A2, and so forth), then the rating of the Long-Term Securities by
each of Moody's and S&P shall be deemed to be the comparable S&P and Moody's
ratings at the midpoint between the two actual ratings, or, if there shall be
no rating at the midpoint, the next higher rating from the midpoint between
the two actual ratings. For example, if the Long-Term Securities are rated
BBB by S&P and Ba1 by Moody's, the Long-Term Securities shall be deemed to be
rated BBB- by S&P and Baa3 by Moody's; and if the Long-Term Securities are
rated BBB+ by S&P and Ba1 by Moody's, the Long-Term Securities shall be deemed
to be rated BBB by S&P and Baa2 by Moody's.
EXHIBIT A
NOTE
New York, New York
, 19
For value received, USF&G CORPORATION, a Maryland corporation
(the "Borrower"), promises to pay to the order of
(the "Bank"), for the account of its Applicable Lending Office, the unpaid
principal amount of each Loan made by the Bank to the Borrower pursuant to the
Credit Agreement referred to below on the last day of the Interest Period
relating to such Loan. The Borrower promises to pay interest on the unpaid
principal amount of each such Loan on the dates and at the rate or rates and
in the currencies provided for in the Credit Agreement. All such payments of
principal and interest shall be made (i) in lawful money of the United States
in Federal or other immediately available funds at the office of Deutsche Bank
AG, New York Branch, New York, New York or (ii) if in an Alternative Currency,
in such funds as may then be customary for the settlement of international
transactions in such Alternative Currency at the place specified for payment
thereof pursuant to the Credit Agreement.
All Loans made by the Bank, the respective types and maturities
thereof and, in the case of Euro-Currency Loans, the currency and Dollar
Amounts thereof, and all repayments of the principal thereof shall be recorded
by the Bank and, if the Bank so elects in connection with any transfer or
enforcement hereof, appropriate notations to evidence the foregoing
information with respect to each such Loan then outstanding may be endorsed by
the Bank on the schedule attached hereto, or on a continuation of such
schedule attached to and made a part hereof; provided that the failure of the
Bank to make any such recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Credit Agreement.
This note is one of the Notes referred to in the Credit
Agreement dated as of December 1, 1994 among the Borrower, the banks listed on
the signature pages thereof and Deutsche Bank AG, New York and/or Cayman Island
Branches, as Agent (as the same may be amended from time to time, the "Credit
Agreement"). Terms defined in the Credit Agreement are used herein with the
same meanings. Reference is made to the Credit Agreement for provisions for
the prepayment hereof and the acceleration of the maturity hereof.
USF&G CORPORATION
By________________________
Title:
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
_________________________________________________________________________
Type, If
Currency Alternative
and Currency, Amount of
Amount of Dollar Principal Maturity Notation
Date Loan Amount Repaid Date Made By
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
EXHIBIT B
Form of Money Market Quote Request
[Date]
To: Deutsche Bank AG, New York and/or
Cayman Island Branches
(the "Agent")
From: USF&G Corporation
Re: Credit Agreement (the "Credit Agreement") dated as of December
1, 1994 among the Borrower, the Banks listed on the signature
pages thereof and the Agent
We hereby give notice pursuant to Section 2.03 of the Credit
Agreement that we request Money Market Quotes for the following proposed Money
Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount(*) Interest Period(**)
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
(*)Amount must be $5,000,000 or a larger multiple of $1,000,000.
(**)Not less than one month (LIBOR Auction) or not less than 7 days (Absolute
Rate Auction), subject to the provisions of the definition of Interest Period.
Terms used herein have the meanings assigned to them in the
Credit Agreement.
USF&G CORPORATION
By________________________
Title:
EXHIBIT C
Form of Invitation for Money Market Quotes
To: [Name of Bank]
Re: Invitation for Money Market Quotes to
USF&G Corporation (the "Borrower")
Pursuant to Section 2.03 of the Credit Agreement dated as of
December 1, 1994 among the Borrower, the Banks parties thereto and the
undersigned, as Agent, we are pleased on behalf of the Borrower to invite you
to submit Money Market Quotes to the Borrower for the following proposed Money
Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount Interest Period
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
Please respond to this invitation by no later than [2:00 P.M.]
[9:30 A.M.] [other time agreed upon by the Borrower and the Agent] (New York
City time) on [date].
DEUTSCHE BANK AG, NEW YORK
AND/OR CAYMAN ISLAND
BRANCHES
By______________________
Authorized Officer
EXHIBIT D
Form of Money Market Quote
To: Deutsche Bank AG, New York and/or Cayman Island Branches
as Agent
Re: Money Market Quote to USF&G Corporation (the "Borrower")
In response to your invitation on behalf of the Borrower dated
__________ __, 199_, we hereby make the following Money Market Quote on the
following terms:
1. Quoting Bank: ________________________________
2. Person to contact at Quoting Bank:
_____________________________
3. Date of Borrowing: ____________________*
4. We hereby offer to make Money Market Loan(s) in the following
principal amounts, for the following Interest Periods and at the
following rates:
Principal Interest Money Market
Amount** Period*** [Margin****] [Absolute Rate*****]
$
$
[Provided, that the aggregate principal amount of Money Market Loans
for which the above offers may be accepted shall not exceed
$____________.]**
__________
* As specified in the related Invitation.
** Principal amount bid for each Interest Period may not exceed principal
amount requested. Specify aggregate limitation if the sum of the individual
offers exceeds the amount the Bank is willing to lend. Bids must be made for
$5,000,000 or a larger multiple of $1,000,000.
(notes continued on following page)
We understand and agree that the offer(s) set forth above,
subject to the satisfaction of the applicable conditions set forth in the
Credit Agreement dated as of December 1, 1994 among the Borrower, the Banks
listed on the signature pages thereof and yourselves, as Agent, irrevocably
obligates us to make the Money Market Loan(s) for which any offer(s) are
accepted, in whole or in part.
Very truly yours,
[NAME OF BANK]
Dated:_______________ By:__________________________
Authorized Officer
__________
*** Not less than one month or not less than 7 days, as specified in the
related Invitation. No more than five bids are permitted for each Interest
Period.
**** Margin over or under the London Interbank Offered Rate determined for the
applicable Interest Period. Specify percentage (to the nearest 1/10,000 of
1%) and specify whether "PLUS" or "MINUS".
***** Specify rate of interest per annum (to the nearest 1/10,000th of 1%).
EXHIBIT E
OPINION OF THE
GENERAL COUNSEL OF THE BORROWER
To the Banks and the Agent
Referred to Below
c/o Deutsche Bank AG, New York and/or
Cayman Island Branches, as Agent
31 West 52nd Street
New York, New York 10019
Dear Sirs:
I am General Counsel for USF&G Corporation (the "Borrower") and
have acted in such capacity in connection with the Credit Agreement (the
"Credit Agreement") dated as of December 1, 1994 among the Borrower, the banks
listed on the signature pages thereof and Deutsche Bank AG, New York and/or
Cayman Island Branches, as Agent. Terms defined in the Credit Agreement are
used herein as therein defined. This opinion is being rendered to you at the
request of my client pursuant to Section 3.01(b) of the Credit Agreement.
I have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as I have deemed necessary or advisable
for purposes of this opinion.
Upon the basis of the foregoing, I am of the opinion that:
1. The Borrower has all governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted,
other than such licenses, authorizations, consents and approvals which, if not
held or obtained by the Borrower, do not, in the aggregate, have a Material
Adverse Effect.
2. To the best of my knowledge after responsible inquiry, the
execution, delivery and performance by the Borrower of the Credit Agreement
and the Notes do not contravene, or constitute a default under, any provision
of any material agreement, judgment, injunction, order, decree or other
instrument binding upon the Borrower or any of its Subsidiaries or result in
the creation or imposition of any material Lien on any asset of the Borrower
or any of its Subsidiaries.
3. To the best of my knowledge after responsible inquiry,
there is no action, suit or proceeding pending or threatened against or
affecting the Borrower or any of its Subsidiaries before any court or
arbitrator or any governmental body, agency or official, in which there is a
reasonable possibility of an adverse decision which could have a Material
Adverse Effect or which in any manner draws into question the validity of the
Credit Agreement or the Notes, except as may have been disclosed in the
financial statements referred to in Section 4.04(a), (b) or (c) of the Credit
Agreement.
4. Each of the Borrower's corporate Subsidiaries is a
corporation validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to
carry on its business as now conducted, other than such licenses,
authorizations, consents and approvals which, if not held or obtained by the
Borrower or such Subsidiary, do not, in the aggregate, have a Material Adverse
Effect.
Very truly yours,
EXHIBIT F
OPINION OF PIPER & MARBURY,
COUNSEL FOR THE BORROWER
To the Banks and the Agent
Referred to Below
c/o Deutsche Bank AG, New York and/or
Cayman Island Branches, as Agent
31 West 52nd Street
New York, New York 10019
Dear Sirs:
We have acted as counsel for USF&G Corporation (the "Borrower")
in connection with the Credit Agreement (the "Credit Agreement") dated as of
December 1, 1994 among the Borrower, the banks listed on the signature pages
thereof and Deutsche Bank AG, New York and/or Cayman Island Branches, as
Agent. Terms defined in the Credit Agreement are used herein as therein
defined. This opinion is being rendered to you at the request of our client
pursuant to Section 3.01(c) of the Credit Agreement.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that:
1. The Borrower is a corporation duly incorporated, validly
existing and in good standing under the laws of Maryland, and has all
corporate powers required to carry on its business as now conducted.
2. The execution, delivery and performance by the Borrower of
the Credit Agreement and the Notes are within the Borrower's corporate powers,
have been duly authorized by all necessary corporate action, require no action
by the Borrower by or in respect of, or filing by the Borrower with, any
governmental body, agency or official and do not contravene, or constitute a
default under, any provision of applicable law or regulation or of the
certificate of incorporation or by-laws of the Borrower.
3. The Credit Agreement constitutes a valid and binding
agreement of the Borrower and each Note constitutes a valid and binding
obligation of the Borrower, in each case enforceable in accordance with its
terms, except as the same may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and by general principles of equity
(including public policy limitations on the indemnification provisions
thereof).
Very truly yours,
EXHIBIT G
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL COUNSEL
FOR THE AGENT
To the Banks and the Agent
Referred to Below
c/o Deutsche Bank AG, New York and/or
Cayman Island Branches, as Agent
31 West 52nd Street
New York, New York 10019
Dear Sirs:
We have participated in the preparation of the Credit Agreement
(the "Credit Agreement") dated as of December 1, 1994 among USF&G Corporation,
a Maryland corporation (the "Borrower"), the banks listed on the signature
pages thereof (the "Banks") and Deutsche Bank AG, New York and/or Cayman
Island Branches, as Agent (the "Agent"), and have acted as special counsel for
the Agent for the purpose of rendering this opinion pursuant to Section
3.01(d) of the Credit Agreement. Terms defined in the Credit Agreement are
used herein as therein defined.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that the
Credit Agreement constitutes a valid and binding agreement of the Borrower and
each Note constitutes a valid and binding obligation of the Borrower, in each
case enforceable in accordance with its terms, except as the same may be
limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and by general principles of equity.
We are members of the Bar of the State of New York and the
foregoing opinion is limited to the laws of the State of New York and the
federal laws of the United States of America. In giving the foregoing
opinion, we express no opinion as to the effect (if any) of any law of any
jurisdiction (except the State of New York) in which any Bank is located which
limits the rate of interest that such Bank may charge or collect. Insofar as
the foregoing opinion involves matters governed by the laws of Maryland, we
have relied, without independent investigation, upon the opinion of Piper &
Marbury, counsel for the Borrower, a copy of which has been delivered to you.
This opinion is rendered solely to you in connection with the
above matter. This opinion may not be relied upon by you for any other
purpose or relied upon by any other person without our prior written consent.
Very truly yours,
EXHIBIT H
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 19__ among [ASSIGNOR] (the
"Assignor"), [ASSIGNEE] (the "Assignee"), USF&G CORPORATION (the "Borrower")
and DEUTSCHE BANK AG, NEW YORK AND/OR CAYMAN ISLAND BRANCHES, as Agent (the
"Agent").
W I T N E S E T H
WHEREAS, this Assignment and Assumption Agreement (the
"Agreement") relates to the Credit Agreement dated as of December 1, 1994
among the Borrower, the Assignor and the other Banks party thereto, as Banks,
and the Agent (the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor
has a Commitment to make Loans to the Borrower in an aggregate principal
amount at any time outstanding not to exceed $__________;
WHEREAS, Committed Loans made to the Borrower by the Assignor
under the Credit Agreement in the aggregate principal amount of $__________
are outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all of
the rights of the Assignor under the Credit Agreement in respect of a portion
of its Commitment thereunder in an amount equal to $__________ (the "Assigned
Amount"), together with a corresponding portion of its outstanding Committed
Loans, and the Assignee proposes to accept assignment of such rights and
assume the corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise
defined herein shall have the respective meanings set forth in the Credit
Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells
to the Assignee all of the rights of the Assignor under the Credit Agreement
to the extent of the Assigned Amount, and the Assignee hereby accepts such
assignment from the Assignor and assumes all of the obligations of the
Assignor under the Credit Agreement to the extent of the Assigned Amount,
including the purchase from the Assignor of the corresponding portion of the
principal amount of the Committed Loans made by the Assignor outstanding at
the date hereof. Upon the execution and delivery hereof by the Assignor, the
Assignee[, the Borrower and the Agent] and the payment of the amounts
specified in Section 3 required to be paid on the date hereof (i) the Assignee
shall, as of the date hereof, succeed to the rights and be obligated to
perform the obligations of a Bank under the Credit Agreement with a Commitment
in an amount equal to the Assigned Amount, and (ii) the Commitment of the
Assignor shall, as of the date hereof, be reduced by a like amount and the
Assignor released from its obligations under the Credit Agreement to the
extent such obligations have been assumed by the Assignee. The assignment
provided for herein shall be without recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and
sale contemplated in Section 2 hereof, the Assignee shall pay to the Assignor
on the date hereof in Federal funds the amount heretofore agreed between
them.(*) It is understood that commitment and/or facility fees accrued to the
date hereof are for the account of the Assignor and such fees accruing from
and including the date hereof are for the account of the Assignee. Each of
the Assignor and the Assignee hereby agrees that if it receives any amount
under the Credit Agreement which is for the account of the other party hereto,
it shall receive the same for the account of such other party to the extent of
such other party's interest therein and shall promptly pay the same to such
other party.
[SECTION 4. Consent of the Borrower and the Agent. This
Agreement is conditioned upon the consent of the Borrower and the Agent
pursuant to Section 9.06(c) of the Credit Agreement. The execution of this
(*) Amount should combine principal together with accrued interest and
breakage compensation, if any, to be paid by the Assignee, net of any portion
of any upfront fee to be paid by the Assignor to the Assignee. It may be
preferable in an appropriate case to specify these amounts generically or by
formula rather than as a fixed sum.
Agreement by the Borrower and the Agent is evidence of this consent. Pursuant
to Section 9.06(c) the Borrower agrees to execute and deliver a Note payable
to the order of the Assignee to evidence the assignment and assumption
provided for herein.]
SECTION 5. Non-Reliance on Assignor. The Assignor makes no
representation or warranty in connection with, and shall have no
responsibility with respect to, the solvency, financial condition, or
statements of the Borrower, or the validity and enforceability of the
obligations of the Borrower in respect of the Credit Agreement or any Note.
The Assignee acknowledges that it has, independently and without reliance on
the Assignor, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement and will continue to be responsible for making its own independent
appraisal of the business, affairs and financial condition of the Borrower.
SECTION 6. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
SECTION 7. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date
first above written.
[ASSIGNOR]
By_________________________
Title:
[ASSIGNEE]
By__________________________
Title:
USF&G CORPORATION
By__________________________
Title:
DEUTSCHE BANK AG, NEW YORK
AND/OR CAYMAN ISLAND
BRANCHES
By__________________________
Title:
By__________________________
Title:
Exhibit 4I
LETTER OF CREDIT AGREEMENT
by and among
USF&G CORPORATION,
THE BANKS PARTY HERETO,
AND
THE BANK OF NEW YORK,
AS AGENT AND AS ISSUING BANK
________________
$100,000,000
________________
Dated as of October 25, 1994
TABLE OF CONTENTS
1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION 1
1.1. Definitions 1
1.2. Principles of Construction 11
2. AMOUNT AND TERMS OF LETTERS OF CREDIT 12
2.1. Issuance of Letters of Credit 12
2.2. Letter of Credit Participation and Funding
Commitments 14
2.3. Interest Rate 15
2.4. Termination or Reduction of Commitment 15
2.5. Amendments to Each Letter of Credit 16
2.6. Extension of Commitment and Termination Date 16
2.7. Extension of the Stated Expiration Date of Each
Letter of Credit 17
2.8. Obligations Absolute 17
2.9. No Liability of the Issuing Bank 18
2.10. Increased Costs; Capital Adequacy 19
2.11. Taxes 20
2.12. Agent's Records 22
2.13. Use of Proceeds 23
2.14. Cash Collateralization 23
2.15. Replacement of Banks 23
3. FEES; PAYMENTS 24
3.1. Commitment Fee 24
3.2. Letter of Credit Commissions 24
4. REPRESENTATIONS AND WARRANTIES 25
4.1. Corporate Existence and Power 25
4.2. Corporate and Governmental Authorization; No
Contravention 25
4.3. Binding Effect 26
4.4. Financial Information 26
4.5. Litigation 27
4.6. Compliance with ERISA 27
4.7. Environmental Matters 28
4.8. Taxes 28
4.9. Subsidiaries 28
4.10. Not an Investment Company 29
4.11. Full Disclosure 29
5. CONDITIONS TO THE ISSUANCE OF FIRST LETTERS OF CREDIT 29
5.1. Evidence of Action 29
5.2. This Agreement 29
- - -
5.3. Litigation 30
5.4. Approvals 30
5.5. Opinion of Counsel to the Applicant 30
5.6. Opinion of Special Counsel 30
5.7. Fees 31
5.8. Fees and Expenses of Special Counsel 31
6. CONDITIONS FOR ISSUANCE OF ALL LETTERS OF CREDIT 31
6.1. Compliance 31
6.2. Documents 31
6.3. Letter of Credit Request 31
7. AFFIRMATIVE COVENANTS 32
7.1. Information 32
7.2. Payment of Obligations 34
7.3. Maintenance of Property; Insurance 35
7.4. Conduct of Business and Maintenance of
Existence 35
7.5. Compliance with Laws 35
8. NEGATIVE COVENANTS 36
8.1. Negative Pledge 36
8.2. Consolidations, Mergers and Sales of Assets;
Ownership by USF&G Corporation 37
8.3. Ratio of Debt to Adjusted Consolidated Tangible
Net Worth 38
8.4. Minimum Consolidated Tangible Net Worth 38
8.5. Transactions with Affiliates 38
9. DEFAULT 38
9.1. Events of Default 38
10. THE AGENT 42
10.1. Appointment 42
10.2. Delegation of Duties 43
10.3. Exculpatory Provisions 43
10.4. Reliance by Agent 43
10.5. Notice of Default 44
10.6. Non-Reliance on Agent and Other Banks 44
10.7. Indemnification 45
10.8. Agent in Its Individual Capacity 46
10.9. Successor Agent 46
11. OTHER PROVISIONS 47
11.1. Amendments and Waivers 47
11.2. Notices 48
11.3. No Waiver; Cumulative Remedies 49
11.4. Survival of Representations and Warranties 49
11.5. Payment of Expenses and Taxes 50
11.6. Assignments and Participations 51
11.7. Counterparts 52
11.8. Adjustments; Set-off 53
11.9. Construction 54
11.10. Indemnity 54
11.11. Governing Law 55
11.12. Headings Descriptive 55
11.13. Severability 55
11.14. Integration 55
11.15. Consent to Jurisdiction 56
11.16. Service of Process 56
11.17. No Limitation on Service or Suit 56
11.18. WAIVER OF TRIAL BY JURY 56
EXHIBITS
Exhibit A - Commitment Percentages
Exhibit B - Form of Assignment and Acceptance Agreement
Exhibit C - Form of Letter of Credit Request
Exhibit D - Form of Letter of Credit
Exhibit E -Form of Opinion of General Counsel to the Applicant
Exhibit F - Form of Opinion of Counsel to the Applicant
Exhibit G - Form of Opinion of Special Counsel
SCHEDULES
Schedule 1.1 - List of Addresses for Notices
Schedule 8.1 - List of Existing Liens
LETTER OF CREDIT AGREEMENT, dated as of October 24, 1994, by and
among USF&G CORPORATION, a Maryland corporation (the "Applicant"), each
subsidiary of the Applicant which is or may become a party hereto (each a
"Co-Applicant"), each of the banks or other lending institutions party
hereto (together with their respective assigns, the "Banks", each a
"Bank") and THE BANK OF NEW YORK, as agent for itself and the other
Banks (in such capacity, the "Agent"), and as issuing bank (in such
capacity, the "Issuing Bank") for the Letters of Credit (as defined in
Article 1).
1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION
1.1. Definitions
As used in this Agreement, terms defined in the preamble
have the meanings therein indicated, and the following terms have the
following meanings:
"Adjusted Consolidated Tangible Net Worth": means at any date
the consolidated stockholders' equity of the Applicant and
its Consolidated Subsidiaries (1) plus any unrealized holding losses (or
less any unrealized holding gains, net of relevant adjustments, for
deferred policy acquisition costs) on account of available-for-sale debt
securities to the extent reflected therein (together with other
adjustments, all as determined in accordance with Statement of Financial
Accounting Standards No. 115 of the Financial Accounting Standards
Board, as amended from time to time, or any successor provision thereto)
and (2) less their consolidated Intangible Assets, all determined as of
such date. For purposes of this definition "Intangible Assets" means
the amount (to the extent reflected in determining such consolidated
stockholders' equity) of (i) all write-ups (other than write-ups
resulting from foreign currency translations, write-ups of assets of a
going concern business made within twelve months after the acquisition of
such business and changes made in accordance with generally accepted
accounting principles in the book value of any Investments in Persons
other than the Applicant and its Consolidated Subsidiaries) subsequent
to December 31, 1993 in the book value of any asset owned by the
Applicant or a Consolidated Subsidiary and (ii) all unamortized debt dis-
count and expense, unamortized deferred charges, goodwill, patents,
trademarks, service marks, trade names, copyrights, organization or
developmental expenses and other intangible assets (other than deferred
policy acquisition costs and net deferred tax assets).
"Affected Bank": as defined in Section 2.15.
- - - "Affiliate": means (i) any Person that directly, or
indirectly through one or more intermediaries, controls the Applicant (a
"Controlling Person") or (ii) any Person (other than the Applicant or a
Subsidiary) which is controlled by or is under common control with a
Controlling Person. As used herein, the term "control" means 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.
"Agent" means BNY in its capacity as agent for the Banks
hereunder, and its successors in such capacity.
"Agreement": this Letter of Credit Agreement, as the same may
be amended, supplemented or otherwise modified from time to time.
"Alternate Base Rate": on any date, a rate of interest per
annum equal to the higher of (i) the Federal Funds Rate in effect on such
date plus 1/2 of 1% or (ii) the BNY Rate in effect on such date.
"Applicant": means USF&G Corporation, a Maryland corporation,
and its successors.
"Applicant's 1993 Form 10-K": means the Applicant's annual
report on Form 10-K for 1993, as filed with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934.
"Applicant's Latest Form 10-Q": means the Applicant's
quarterly report on Form 10-Q for the quarter ended June 30, 1994, as
filed with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934.
"Assignment and Acceptance Agreement": an assignment and
acceptance agreement executed by a Bank and an Eligible Assignee
substantially in the form of Exhibit B.
"Assignment Fee": as defined in Section 11.6(b).
"Authorized Signatory": as to (i) any Person which is a
corporation, the chairman of the board, the president, any vice presi-
dent, the chief financial officer or any other duly authorized officer
(acceptable to the Agent) of such Person and (ii) any Person which is
not a corporation, the general partner or other managing Person thereof.
"Available Amount": at any time shall mean the amount of the
Commitment less the Letter of Credit Exposure.
"Bank": means each bank listed on the signature pages hereof,
and each assignee which becomes a Bank pursuant to Section 11.6, and
their respective assigns, each of which shall meet the criteria of
"Eligible Assignee" hereunder.
"Benefit Arrangement": means at any time an employee benefit
plan within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by
any member of the ERISA Group.
"Benefited Bank": as defined in Section 11.8.
"BNY": The Bank of New York.
"BNY Rate": a rate of interest per annum equal to the rate of
interest publicly announced in New York City by BNY from time to time as
its prime commercial lending rate, such rate to be adjusted automatically
(without notice) on the effective date of any change in such publicly
announced rate.
"Business Day": any day other than a Saturday, a Sunday or a
day on which commercial banks located in New York City and Baltimore,
Maryland are authorized or required by law or other governmental action
to close.
"Cash Collateral Account": shall have the meaning set forth
in Section 2.14 hereof.
"Co-Applicant": means each Subsidiary of the Applicant which
is or becomes a party hereto.
"Code": the Internal Revenue Code of 1986, as the same may be
amended from time to time, or any successor thereto, and the rules and
regulations issued thereunder, as from time to time in effect.
"Commitment": the commitment of BNY, as Issuing Bank, to
issue Letters of Credit having an aggregate outstanding face amount up
to $100,000,000, and with respect to each of the Banks shall mean their
commitment to participate in the Letter of Credit Exposure in an amount
equal to their respective Commitment Percentages as set forth in Sec-
tion 2.2.
"Commitment Fee": as defined in Section 3.1.
"Commitment Percentage": as to any Bank, the percentage set
forth opposite the name of such Bank in Exhibit A under the heading
"Commitment Percentage".
"Commitment Period": the period from the Effective Date
through the day preceding the Termination Date.
"Consolidated": the Applicant and its Subsidiaries which are
consolidated for financial reporting purposes.
"Consolidated Subsidiary": means at any date any Subsidiary
or other entity the accounts of which would be consolidated with those
of the Applicant in its consolidated financial statements if such
statements were prepared as of such date.
"Credit Documents": collectively, this Agreement, the Fee
Letter and each Letter of Credit Request.
"Credit Party": the Applicant, each Co-Applicant and each
other party (other than the Agent, the Issuing Bank and the Banks) that
is a signatory to a Credit Document.
"Date of Issuance": any Business Day specified in a Letter of
Credit Request as a date on which the Applicant and, if applicable, a
Co-Applicant, requests the issuance by the Issuing Bank of a Letter of
Credit.
"Debt": of any Person means at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all obligations of such Person to pay the
deferred purchase price of property or services, except trade accounts
payable, agents' commissions and other similar charges and expenses
arising in the ordinary course of business, (iv) all obligations of such
Person as lessee which are capitalized in accordance with generally
accepted accounting principles, (v) all non-contingent obligations (and,
for purposes of Section 8.1 and the definitions of Material Debt and
Material Financial Obligations, all contingent obligations) of such
Person to reimburse any bank or other Person in respect of amounts paid
under a letter of credit or similar instrument, (vi) all Debt secured by
a Lien on any asset of such Person, whether or not such Debt is oth-
erwise an obligation of such Person (but excluding any such Debt to the
extent such Debt exceeds the fair market value of such assets (such fair
market value to be established by the Applicant to the reasonable
satisfaction of the Required Banks), unless such Debt is assumed), (vii)
all obligations of such Person to purchase securities (or other property)
which arise out of or in connection with the sale of the same or
substantially similar securities or property and (viii) all Debt of
others Guaranteed by such Person, provided that obligations of any
Person referred to only in clauses (i) through (iii), inclusive, above
shall constitute Debt of such Person only to the extent that they are, or
are required to be, recorded on the financial statements of such Person
as a liability under generally accepted accounting principles.
"Default": means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of time or
both would, unless cured or waived, become an Event of Default.
"Derivatives Obligations": of any Person means all
obligations (other than obligations incurred as a result of writing
futures, options, swaps or other derivative transactions in respect of,
or based upon, insurance products or risks, including the futures and
options contracts relating to catastrophic losses traded on the Chicago
Board of Trade or otherwise) of such Person in respect of any rate swap
transaction, basis swap, forward rate transaction, commodity swap,
commodity option, equity or equity index swap, equity or equity index
option, bond option, interest rate option, foreign exchange transaction,
cap transaction, floor transaction, collar transaction, currency swap
transaction, cross-currency rate swap transaction, currency option or any
other similar transaction (including any option with respect to any of
the foregoing transactions) or any combination of the foregoing
transactions.
"Dollars" and "$": lawful currency of the United States of
America.
"Effective Date": October 25, 1994.
"Eligible Assignee": shall mean and include a commercial
bank or other financial institution with a minimum long-term deposit
rating or long-term unsecured debt rating from Standard & Poor's Ratings
Group or Moody's Investors Service, Inc. of not less than A- or A3, re-
spectively, and acceptable to the Issuing Bank and the Agent.
"Environmental Laws": means any and all federal, state, local
and foreign statutes, laws, judicial decisions, regulations, ordinances,
rules, judgments, orders, decrees, plans, injunctions, permits,
concessions, grants, franchises, licenses, agreements and other
governmental restrictions relating to the environment, the effect of the
environment on human health or to emissions, discharges or releases of
pollutants, contaminants, Hazardous Substances or wastes into the
environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, Hazardous Substances or wastes or
the clean-up or other remediation thereof.
"ERISA": means the Employee Retirement Income Security Act
of 1974, as amended, or any successor statute.
"ERISA Group": means the Applicant, any Subsidiary and all
members of a controlled group of corporations and all trades or
businesses (whether or not incorporated) under common control which,
together with the Applicant or any Subsidiary, are treated as a single
employer under Section 414 of the Internal Revenue Code
"Event of Default" has the meaning set forth in Section 9.1.
"Excluded Subsidiary": means any Subsidiary other than any
(i) Insurance Company Subsidiary and (ii) "Significant Subsidiary", as
defined in Section 210.1-02(v) of Regulation S-X, as amended from time
to time, promulgated by the Securities and Exchange Commission (17 C.F.R.
Section 210.1-02(v)).
"Extension Consent Period": the period beginning on the 44th
day after the receipt by the Agent of an Extension Request and ending on
the 45th day thereafter, provided that if such day is not a Business Day,
such date shall be extended to the immediately succeeding Business Day.
"Extension Request": as defined in Section 2.6.
"Federal Funds Rate": for any day, a rate per annum
(expressed as a decimal, rounded upwards, if necessary, to the next
higher 1/100 of 1%), equal to the weighted average of the rates on
overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding
such day, provided that (i) if the day for which such rate is to be
determined is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business
Day as so published on the next succeeding Business Day, and (ii) if such
rate is not so published for any day, the Federal Funds Rate for such day
shall be the average of the quotations for such day on such transactions
received by BNY as determined by BNY and reported to the Agent.
"Fee Letter": means the fee letter, dated the Effective
Date, from BNY, as Agent and Issuing Bank to, and accepted by, the
Applicant.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government and any court or arbitrator.
"Guarantee": by any Person means any obligation, contingent
or otherwise, of such Person directly or indirectly guaranteeing any Debt
or other obligation of any other Person and, without limiting the
generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt or
other obligation (whether arising by virtue of partnership arrangements,
by agreement to keep-well, to purchase assets, goods, securities or
services, to take-or-pay, or to maintain financial statement conditions
or otherwise) or (ii) entered into for the purpose of assuring in any
other manner the obligee of such Debt or other obligation of the payment
thereof or to protect such obligee against loss in respect thereof (in
whole or in part), provided that the term Guarantee shall not include (i)
endorsements for collection or deposit in the ordinary course of business
or (ii) if such Person is an insurance company, surety bonds and
insurance contracts (including financial guarantee insurance policies) in
each case issued in the ordinary course of such Person's business. The
term "Guarantee" used as a verb has a corresponding meaning.
"Hazardous Substances" means any toxic, radioactive, caustic
or otherwise hazardous substance, including petroleum, its derivatives,
by-products and other hydrocarbons, or any substance having any
constituent elements displaying any of the foregoing characteristics.
"Indemnified Person": as defined in Section 11.10.
"Insurance Company Subsidiary": means any Subsidiary
domiciled in the United States of America (including the District of
Columbia) and its territories and possessions or any State thereof and
licensed or authorized to do an insurance business in any of the
foregoing.
"Internal Revenue Code": means the Internal Revenue Code of
1986, as amended, or any successor statute.
"Investment": means any investment in any Person, whether by
means of share purchase, capital contribution, loan, time deposit or
otherwise.
"Issuing Bank": means BNY in its capacity as issuing bank
hereunder, and its successors in such capacity.
"Letters of Credit": shall mean letters of credit issued by
the Issuing Bank for the account of the Applicant and any Co-Applicant as
defined in Section 2.1.
"Letter of Credit Commissions": as defined in Section 3.2.
"Letter of Credit Exposure": at any date, (i) in respect of
all the Banks, the sum, without duplication, of (x) the aggregate undrawn
face amount of the outstanding Letters of Credit at such date, (y) the
aggregate amount of unpaid drafts drawn on all Letters of Credit at such
date, and (z) the aggregate unpaid reimbursement obligations in respect
of the Letters of Credit at such date, and (ii) in respect of any Bank,
an amount equal to such Bank's Commitment Percentage multiplied by the
amount determined under clause (i) of this definition.
"Letter of Credit Request": a request from the Applicant, or
from the Applicant and a Co-Applicant, for the issuance of a Letter of
Credit, substantially in the form of Exhibit C.
"Letter of Credit Obligations": any and all obligations of
every description of the Applicant and Co-Applicants in connection with
the Letters of Credit, including, without limitation, the reimbursement
obligations (whether absolute or contingent) under any Letter of Credit
or Credit Document, and all obligations in respect of related fees or
expenses then due and owing.
"Lien": means, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind, or
any other type of preferential arrangement that has the practical effect
of creating a security interest, in respect of such asset. For the
purposes of this Agreement, the Applicant or any Subsidiary shall be
deemed to own subject to a Lien any asset which it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to
such asset.
"Material Adverse Effect": means a material adverse effect on
the business, financial position, results of operations or prospects of
the Applicant and its Consolidated Subsidiaries, considered as a whole.
"Material Debt": means Debt of the Applicant and/or one or
more of its subsidiaries (other than an Excluded Subsidiary), arising in
one or more related or unrelated transactions, in an aggregate principal
or face amount exceeding $30,000,000.
"Material Financial Obligations": means a principal or face
amount of Debt and/or the then owed payment obligations in respect of
Derivatives Obligations of the Applicant and/or one or more of its
Subsidiaries (other than an Excluded
Subsidiary), arising in one or more
related or unrelated transactions, exceeding in the aggregate
$30,000,000.
"Material Plan": means at any time a Plan or Plans having
aggregate Unfunded Liabilities in excess of $5,000,000.
"Multiemployer Plan": means at any time an employee pension
benefit plan within the meaning of Section 4001(a)(3) of ERISA to which
any member of the ERISA Group is then making or accruing an obligation to
make contributions or has within the preceding five plan years made
contributions, including for these purposes any Person which ceased to be
a member of the ERISA Group during such five year period.
"Non-Recourse Debt": means Debt, secured only by real
property (including fixtures and personal property used therein or
thereon and the rents, profits and proceeds arising therefrom), in
respect of which the holder of such Debt has no recourse against the
Applicant or any Subsidiary (other than a Subsidiary the only assets of
which consist of such real property (including fixtures and personal
property used therein or thereon and the rents, profits and proceeds
therefrom)) or any asset of the Applicant or any Subsidiary (except such
real property (including fixtures and personal property used therein or
thereon and the rents, profits and proceeds arising therefrom)), provided
that if, at any time, the aggregate amount of gross equity real estate
Investments of the Applicant and its Subsidiaries shall exceed
$826,657,000, the amount of such excess shall constitute Debt other than
Non-Recourse Debt to the extent that the then existing aggregate
principal amount of Non-Recourse Debt shall exceed the sum of (i)
$100,000,000 and (ii) the amount of such Non-Recourse Debt, but not to
exceed $50,000,000, outstanding as of the date hereof.
"Officer's Certificate": means a certificate signed by the
President, any Vice-President responsible for financial matters, the
Treasurer or the Controller of the Applicant.
"Other Taxes": as defined in Section 2.11.
"Outstanding Letters of Credit": shall mean at any time the
Letters of Credit outstanding at such time.
"PBGC": means the Pension Benefit Guaranty corporation or
any entity succeeding to any or all of its functions under ERISA.
"Person": means an individual, a corporation, a partnership,
an association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality
thereof.
"Plan": means at any time an employee pension benefit plan
(other than a Multiemployer Plan) which is covered by Title IV of ERISA
or subject to the minimum funding standards under Section 412 of the
Internal Revenue Code and either (i) is maintained, or contributed to,
by any member of the ERISA Group for employees of any member of the ERISA
Group or (ii) has at any time within the preceding five years been
maintained, or contributed to, by any Person which was at such time a
member of the ERISA Group for employees of any Person which was at such
time a member of the ERISA Group.
"Property": all types of real, personal, tangible, intan-
gible or mixed property.
"Regulation U": means Regulation U of the Board of Governors
of the Federal Reserve System, as in effect from time to time.
"Replaced Bank": as defined in Section 2.15.
"Required Banks": at any time Banks representing at least 51%
of the Commitment or, if the Commitment shall have been terminated, at
least 51% of the Letter of Credit Exposure at such time.
"SEC": the Securities and Exchange Commission or any
Governmental Authority succeeding to the functions thereof.
"Special Counsel": Emmet, Marvin & Martin, special counsel to
the Agent.
"Stated Expiration Date": means, with respect to each Letter
of Credit, the date occurring one year after the date of issuance, as
such date may be extended in accordance with the terms of this Agreement.
"Subsidiary": means, as to any Person, any corporation or
other entity of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions are at the time directly or
indirectly owned by such Person; unless otherwise specified, "Subsidiary"
means a Subsidiary of the Applicant.
"Taxes": as defined in Section 2.11.
"Termination Date": the date which is 364 days after the
Effective Date, or such earlier date on which the Commitment is
terminated, or if the Commitment is extended with the consent of the
Banks pursuant to Section 2.6, such later date.
"Unfunded Liabilities": means, with respect to any Plan at
any time, the amount (if any) by which (i) the value of all benefit
liabilities under such Plan, determined on a plan termination basis using
the assumptions prescribed by the PBGC for purposes of Section 4044 of
ERISA, exceeds (ii) the fair market value of all Plan assets allocable to
such liabilities under Title IV of ERISA (excluding any accrued but
unpaid contributions), all determined as of the then most recent
valuation date for such Plan, but only to the extent that such excess
represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.
"United States": means the United States of America,
including the States and the District of Columbia, but excluding its
territories and possessions.
1.2. Principles of Construction
(a) All terms defined in a Credit Document shall have the
meanings given such terms therein when used in the other Credit Documents
or any certificate, opinion or other document made or delivered
pursuant thereto, unless otherwise defined therein.
(b) Unless otherwise specified herein, all accounting
terms used herein shall be interpreted, all accounting determinations
hereunder shall be made, and all financial statements required to be
delivered hereunder shall be prepared in accordance with generally
accepted accounting principles as in effect from time to time, applied
on a basis consistent (except for changes concurred in by the
Applicant's independent public accountants) with the most recent audited
consolidated financial statements of the Applicant and its Consolidated
Subsidiaries delivered to the Banks; provided that, if the Applicant
notifies the Agent that the Applicant wishes to amend any covenant in
Section 7 or 8 to eliminate the effect of any change in generally
accepted accounting principles on the operation of such covenant (or if
the Agent notifies the Applicant that the Required Banks wish to amend
Section 7 or 8 for such purpose), then the Applicant's compliance with
such covenant shall be determined on the basis of generally accepted
accounting principles in effect immediately before the relevant change
in generally accepted accounting principles became effective, until
either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Applicant and the Required Banks.
(c) The words "hereof", "herein", "hereto" and "hereunder"
and similar words when used in a Credit Document shall refer to such
Credit Document as a whole and not to any
particular provision thereof,
and Section, schedule and exhibit references contained therein shall
refer to Sections thereof or schedules or exhibits thereto unless
otherwise expressly provided therein.
(d) The phrase "may not" is prohibitive and not permissive.
(e) Unless the context otherwise requires, words in the
singular number include the plural, and words in the plural include the
singular.
(f) Unless specifically provided in a Credit Document to
the contrary, references to a time shall refer to New York City time.
(g) Unless specifically provided in a Credit Document to
the contrary, in the computation of periods of time from a specified date
to a later specified date, the word "from" means "from and including" and
the words "to" and "until" each means "to but excluding".
(h) References in any Credit Document to a fiscal period
shall refer to that fiscal period of the Applicant.
2. AMOUNT AND TERMS OF LETTERS OF CREDIT
2.1. Issuance of Letters of Credit
(a) Subject to the terms and conditions of this Agreement,
the Issuing Bank agrees, in reliance on the agreement of the other
Banks set forth in Section 2.2, to issue standby letters of credit (the
"Letters of Credit"; each, individually, a "Letter of Credit") during
the Commitment Period for the account of the Applicant, or jointly and
severally for the account of the Applicant and each Co-Applicant
delivering a Letter of Credit Request. The aggregate face amount of
Outstanding Letters of Credit issued during the Commitment Period shall
not at any time exceed the amount of the Commitment. Each Letter of
Credit issued pursuant to this Section shall have a Stated Expiration
Date. No Letter of Credit shall be issued if the conditions set forth
in Section 6 have not been satisfied.
(b) Each Letter of Credit shall be issued for the account
of the Applicant, individually, or for the account of the Applicant and a
Co-Applicant, jointly and severally, in support of an obligation of the
Applicant or of the Applicant and a Co-Applicant in favor of a
beneficiary which has requested the issuance of such Letter of Credit
as a condition to a transaction entered into in connection with the
Applicant's or the Co-Applicant's reinsurance business. The Applicant,
and any Co-Applicant, as the case may be, shall give the Agent a Letter
of Credit Request for the issuance of each Letter of Credit by 11:00
A.M., three Business Days prior to the requested Date of Issuance.
Each Letter of Credit Request executed by a Co-Applicant shall provide
that such Co-Applicant shall be, from and after the Date of Issuance of
the Letter of Credit which is requested, a party hereto and shall have
all the rights and obligations of a Co-Applicant under this Agreement
and under the other Credit Documents to which it is a party. Such Letter
of Credit Request shall specify (i) the beneficiary of such Letter of
Credit and the obligations of the Applicant and/or Co-Applicant in
respect of which such Letter of Credit is to be issued, (ii) the
Applicant's proposal as to the conditions under which a drawing may be
made under such Letter of Credit and the documentation to be required
in respect thereof, (iii) the maximum amount to be available under such
Letter of Credit, and (iv) the requested Date of Issuance. Upon receipt
of such Letter of Credit Request, the Agent shall promptly notify the
Issuing Bank and each other Bank thereof. The Issuing Bank shall, on
the proposed Date of Issuance and subject to the other terms and con-
ditions of this Agreement, issue the requested Letter of Credit. Each
Letter of Credit shall be in form and substance reasonably satisfactory
to the Issuing Bank, with such provisions with respect to the condi-
tions under which a drawing may be made thereunder and the documen-
tation required in respect of such drawing as the Issuing Bank shall
reasonably require. The parties agree that a Letter of Credit
substantially in the form of Exhibit D shall be deemed to be in form and
substance reasonably satisfactory to the Issuing Bank; provided, how-
ever, that Letters of Credit issued pursuant hereto need not be in the
form of said Exhibit D. Each Letter of Credit shall be used solely for
the purposes described therein.
(c) Each payment by the Issuing Bank of a draft drawn under
a Letter of Credit shall give rise to an immediate obligation on the part
of the Applicant, or to an immediate joint and several obligation on the
part of the Applicant and the Co-Applicant, as the case may be, to
reimburse the Issuing Bank for the amount thereof on the Business Day on
which the Issuing Bank shall have notified the Applicant that payment
of such draft has been made to the beneficiary, provided that a failure
to reimburse the Issuing Bank shall not constitute an Event of Default
hereunder until the date occurring two Business Days after the Issuing
Bank's giving notice to Applicant of demand for payment of such draft,
provided that the Applicant shall by such date have paid the full
amount of such draft, together with interest thereon for each day elapsed
from the date of payment of such draft, calculated at the rate set forth
in Section 2.3.
2.2. Letter of Credit Participation and Funding Commitments
(a) Each Bank hereby unconditionally and ir-
revocably, severally for itself only and without any notice to or the
taking of any action by such Bank, takes an undivided participating
interest in the obligations of the Issuing Bank under and in connection
with each Letter of Credit in an amount equal to such Bank's Commitment
Percentage of the amount of such Letter of Credit. Each Bank shall be
liable to the Issuing Bank for its Commitment Percentage of the
unreimbursed amount of any draft drawn and honored under each Letter of
Credit. Each Bank shall also be liable for an amount equal to the
product of its Commitment Percentage and any amounts paid by the
Applicant or any Co-Applicant that are subsequently rescinded or
avoided, or must otherwise be restored or returned. Such liabilities
shall be unconditional and without regard to the occurrence of any
Default or Event of Default or the compliance by the Applicant or any
Co-Applicant with any of their obligations under the Credit Documents.
(b) The Agent will promptly notify each Bank (which notice
shall be promptly confirmed in writing) of the date and the amount of any
draft presented under any Letter of Credit with respect to which full
reimbursement of payment is not made by the Applicant or any Co-Applicant
immediately, and forthwith upon receipt of such notice, such Bank (other
than the Issuing Bank) shall make available to the Agent for the account
of the Issuing Bank its Commitment Percentage of the amount of such
unreimbursed draft at the office of the Agent specified in Section 11.2,
in lawful money of the United States and in immediately available
funds, before 4:00 P.M., on the day such notice was given by the Agent,
if the relevant notice was given by the Agent at or prior to 1:00 P.M.,
on such day, and before 12:00 Noon, on the next Business Day, if the
relevant notice was given by the Agent after 1:00 P.M., on such day. The
Agent shall distribute the payments made by each Bank (other than the
Issuing Bank) pursuant to the immediately preceding sentence to the
Issuing Bank promptly upon receipt thereof in like funds as received.
Each Bank shall indemnify and hold harmless the Agent and the Issuing
Bank from and against any and all losses, liabilities (including li-
abilities for penalties), actions, suits, judgments, demands, costs
and expenses (including, without limitation, reasonable attorneys'
fees and expenses) resulting from any failure on the part of such Bank
to provide, or from any delay in providing, the Agent with such Bank's
Commitment Percentage of the amount of any payment made by the Issuing
Bank under a Letter of Credit in accordance with this clause (b) above
(except in respect of losses, liabilities or other obligations
suffered
by the Issuing Bank resulting from the gross negligence or willful mis-
conduct of the Issuing Bank). If a Bank does not make available to the
Agent when due such Bank's Commitment Percentage of any unreimbursed
payment made by the Issuing Bank under a Letter of Credit (other than
payments made by the Issuing Bank by reason of its gross negligence
or willful misconduct), such Bank shall be required to pay interest to
the Agent for the account of the Issuing Bank on such Bank's Commitment
Percentage of such payment at a rate of interest per annum equal to the
Federal Funds Rate plus 1% from the date such Bank's payment is due
until the date such payment is received by the Agent. The Agent shall
distribute such interest payments to the Issuing Bank upon receipt
thereof in like funds as received.
(c) Whenever the Agent is reimbursed by the Applicant or
any Co-Applicant, for the account of the Issuing Bank, for any payment
under a Letter of Credit and such payment relates to an amount
previously paid by a Bank in respect of its Commitment Percentage of the
amount of such payment under such Letter of Credit, the Agent will pay
over such payment to such Bank (i) before 4:00 P.M. on the day such pay-
ment from the Applicant or the Co-Applicant is received, if such payment
is received at or prior to 1:00 P.M. on such day, or (ii) before 12:00
Noon on the next succeeding Business Day, if such payment from the
Applicant or the Co-Applicant is received after 1:00 P.M. on such day.
2.3. Interest Rate
If all or any portion of any reimbursement obligation in
respect of a Letter of Credit shall not be paid on the Business Day on
which the Issuing Bank shall have notified the Applicant that payment of
such draft has been made, such overdue amount shall bear interest at a
rate per annum equal to the Alternate Base Rate plus 2% from the date of
such nonpayment until paid in full (whether before or after the entry of
a judgment thereon). All such interest shall be payable on demand.
Interest computed with reference to the Federal Funds Rate shall be
calculated on the basis of a 360 day year for the actual number of days
elapsed, and interest computed with reference to the BNY Rate shall be
computed on the basis of a 365 or 366 day year, as applicable, for the
actual number of days elapsed.
2.4. Termination or Reduction of Commitment
The Applicant shall have the right, upon at least three
Business Days' prior written notice to the Agent, at any time to
terminate or reduce the amount of the Commitment in an amount of
$10,000,000 or such amount plus multiples of
$5,000,000 in excess
thereof, provided that after giving effect thereto, the Commitment
shall not be less than the Letter of Credit Exposure at such time. Any
reduction of the Commitment shall be applied pro rata according to the
Commitment Percentage of each Bank. Simultaneously with any reduction
of the Commitment the Applicant shall pay the Commitment Fee accrued on
the amount by which the Commitment has been reduced.
2.5. Amendments to Each Letter of Credit
(a) At any time during the Commitment Period, upon at
least three Business Days' prior written notice to the Agent, the
Applicant, together with the Co-Applicant, if any, and the beneficiary of
an Outstanding Letter of Credit, shall have the right to request that
such Letter of Credit be amended, including an amendment to increase or
reduce the undrawn face amount thereof and/or to extend for up to one
year from the date of such amendment the then Stated Expiration Date.
Provided that no Default or Event of Default shall exist and be
continuing, the Agent shall request that the Issuing Bank amend such
Letter of Credit to give effect to such increase, reduction and/or ex-
tension, and the Issuing Bank shall, upon presentation of the Letter of
Credit, either amend such Letter of Credit or issue a substitute Letter
of Credit containing such amended terms.
(b) Following the Termination Date, upon at least three
Business Days' prior written notice to the Agent, the Applicant,
together with the Co-Applicant, if any, and the beneficiary of an
Outstanding Letter of Credit, may request that such Outstanding Letter of
Credit be amended, including an amendment to increase or reduce the
undrawn face amount thereof, provided that any such increase in the face
amount, after giving effect to any reductions requested to take effect on
the same date as such increase, shall not cause an increase in the
aggregate undrawn face amount of Outstanding Letters of Credit at such
date. Provided that no Default or Event of Default shall exist and be
continuing, the Agent shall request that the Issuing Bank amend such
Letter of Credit to give effect to such amendment, and the Issuing Bank,
shall upon presentation of the Letter of Credit, either amend such
Letter of Credit or issue a substitute Letter of Credit containing such
amended terms.
2.6. Extension of Commitment and Termination Date
Provided that no Default or Event of Default shall exist and
be continuing, the Applicant may request that the Commitment be extended
for an additional period of 364 days by giving written notice of such
request (an "Extension Request") to the Agent during the period not more
than 180 days but not less than 60 days prior to the then Termination
Date, and upon
the receipt of such notice, the Agent shall promptly no-
tify each Bank of such request. If each Bank consents to such Ex-
tension Request during the Extension Consent Period by giving written
notice thereof to the Applicant and the Agent, then effective on the
first day of the Extension Consent Period, the then applicable
Termination Date shall be extended by 364 days. If all of the Banks have
not consented to such Extension Request during the Extension Consent
Period and such non-consenting Bank or Banks have not been replaced
pursuant to Section 2.16 during the Extension Consent Period, the Termina-
tion Date shall not be extended.
2.7. Extension of the Stated Expiration Date of Each Letter of Credit
The Stated Expiration Date of each Letter of Credit shall be
one year from its Date of Issuance hereunder, or, if extended during the
Commitment Period as provided in Section 2.5, such later date. In
addition, if each Bank so consents, the Stated Expiration Date of each
Letter of Credit may be extended for one additional year from the then
Stated Expiration Date. The Agent will notify each Bank not less than 80
days prior to the then Stated Expiration Date with respect to each
Outstanding Letter of Credit that such Letter of Credit will be
automatically extended for one year unless any Bank shall notify the
Agent not less than 71 days prior to the then Stated Expiration Date that
such Bank does not consent to such extension. If any Bank shall so
notify the Agent that it does not so consent, the Agent shall notify the
Applicant not less than 70 days prior to the then Stated Expiration Date
that such Letter of Credit shall not be extended. Upon receipt of
such notification, the Applicant may obtain a replacement Bank for each
such non-consenting Bank pursuant to Section 2.16. If each such
non-consenting Bank has not been replaced pursuant to Section 2.16 on or
prior to 46 days prior to the Stated Expiration Date, the Agent shall
notify the beneficiary of the Letter of Credit not less than 45 days
prior to the Stated Expiration Date that the Stated Expiration Date will
not be extended. If no Bank notifies the Agent that it does not con-
sent to such extension of the Letter of Credit, the Stated Expiration
Date of the Letter of Credit will be automatically extended for one
year, without further action. Each Letter of Credit may be extended in
the manner set forth an unlimited number of times.
2.8. Obligations Absolute
(a) The obligations of the Applicant and each Co-Applicant under
this Agreement and the Credit Documents to which it is a party shall be
absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with
the terms of this Agreement, irrespective of
any circumstances, including, without limitation, the
following:
(i) any lack of validity or enforceability of any
Letter of Credit;
(ii) any amendment or waiver of, or consent to
departure from, all or any of the other Credit Documents;
(iii) the existence of any claim, set-off, defense or
other right which the Applicant, any Co-Applicant, or any other
Person may have at any time against any beneficiary or any trans-
feree of a Letter of Credit (or any Person or entity for whom any
such beneficiary or any such transferee may be acting), the Issu-
ing Bank, the Agent, any Bank, any participant or assignee, or
any other Person or entity, whether in connection with this
Agreement, any other Credit Document or any unrelated transaction;
(iv) any statement or any other document presented
under a Letter of Credit proving to be forged, fraudulent or
invalid in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever;
(v) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or certificate which does
not comply with the terms of the Letter of Credit; or
(vi) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing.
2.9. No Liability of the Issuing Bank
It is understood that in making any payment under a Letter of
Credit (a) the Issuing Bank's exclusive reliance on the documents
presented to it under such Letter of Credit as to any and all matters set
forth therein, including reliance on the amount of any draft presented
under such Letter of Credit, whether or not the amount due to the
beneficiary equals the amount of such draft and whether or not any docu-
ment presented pursuant to such Letter of Credit proves to be
insufficient in any respect, if such document on its face appears to be
in order, and whether or not any other statement or any other document
presented pursuant to such Letter of Credit proves to be forged or
invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever; and (b) any noncompliance of the documents presented
in an immaterial respect under a Letter of Credit with the terms
thereof
shall in each case not be deemed wilful misconduct or gross negligence of
the Issuing Bank.
2.10. Increased Costs; Capital Adequacy
(a) If on or after the date hereof the adoption of any
applicable law, rule or regulation, or any change in any applicable law,
rule or regulation, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or
comparable agency charged with the interpretation or administration
thereof, or compliance by the Issuing Bank or any Bank with any request
or directive after such date (whether or not having the force of law) of
any such authority, central bank or comparable agency shall impose,
modify or deem applicable any reserve (including, without limitation, any
such requirement imposed by the Board of Governors of the Federal
Reserve System), special deposit, insurance assessment or similar
requirement against assets of, deposits with or for the account of, or
credit extended by, the Issuing Bank or any Bank or shall impose on any
Bank any other condition affecting its Commitment or the term thereof or
its obligation to issue or participate in Letters of Credit and the
result of any of the foregoing is to increase the cost to the Issuing
Bank or such Bank of issuing or maintaining the Letters of Credit or its
obligations pursuant to Section 2.2, or to reduce the amount of any sum
received or receivable by the Issuing Bank or such Bank under this
Agreement with respect thereto, by an amount deemed by the Issuing Bank
or such Bank to be material, then, within 15 days after demand by such
Issuing Bank or Bank (with a copy to the Agent), the Applicant shall pay
to the Issuing Bank or such Bank such additional amount or amounts as
will compensate the Issuing Bank or such Bank for such increased cost or
reduction.
(b) If the Issuing Bank or any Bank shall have determined
in good faith that, after the date hereof, the adoption of any
applicable law, rule or regulation regarding capital adequacy, or any
change in any such law, rule or regulation, or any change in the
interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive after the date hereof
regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, has or would have
the effect of reducing the rate of return on capital of the Issuing Bank
or such Bank (or its parent) as a consequence of such Issuing Bank's or
Bank's obligations hereunder to a level below that which the Issuing
Bank or such Bank (or its parent) could have achieved but for such adop-
tion, change, request or directive (taking into consideration its
policies with respect to capital adequacy) by an amount deemed by such
Issuing Bank or Bank to be material, then from time to time, within 15
days after demand by such Issuing Bank or Bank (with a copy to the
Agent), the Applicant shall pay to the Issuing Bank or such Bank such
additional amount or amounts as will compensate the Issuing Bank or such
Bank (or its parent) for such reduction.
(c) The Issuing Bank and each Bank will promptly notify the
Applicant and the Agent of any event of which it has knowledge, occurring
after the date hereof, which will entitle the Issuing Bank or such Bank
to compensation pursuant to this Section. A certificate of the Issuing
Bank or any Bank claiming compensation under this Section and setting
forth the additional amount or amounts to be paid to it hereunder shall,
if submitted in good faith, be conclusive in the absence of manifest
error; provided that any certificate delivered pursuant to this Section
2.10(c) shall (i) in the case of a certificate in respect of amounts
payable pursuant to Section 2.10(a), set forth in reasonable detail the
basis for and the calculation of such amounts, and (ii) in the case of a
certificate in respect of amounts payable pursuant to Section 2.10(b),
set forth at least the same amount of detail in respect of the
calculation of such amounts as Issuing Bank or Bank provides in similar
circumstances to other similarly situated applicants for letters of
credit and also include a statement by the Issuing Bank or such Bank that
it has allocated to its Commitment hereunder no greater than a substan-
tially proportionate amount of any reduction of the rate of return on
such Issuing Bank's or Bank's capital due to the matters described in
Section 2.10(b) as it has allocated to its other commitments to issue or
participate in letters of credit to similarly situated applicants for
letters of credit that are affected similarly by such adoption or change.
Subject to the foregoing, in determining such amount, the Issuing Bank
or such Bank may use any reasonable averaging and attribution methods.
2.11. Taxes
(a) For purposes of this Section 2.11, the following terms
have the following meanings:
"Taxes" means any and all present or future taxes, duties,
levies, imposts, deductions, charges or withholdings with respect to any
payment by the Applicant or any Co-Applicant pursuant to this Agreement,
and all liabilities with respect thereto, excluding (i) in the case of
the Issuing Bank, each Bank and the Agent, taxes imposed on its income,
and franchise or similar taxes imposed on it, by a jurisdiction under
the laws of which the Issuing Bank, such Bank or the Agent (as the case
may be) is organized or in which its principal executive office is
located or, in the case of the Issuing Bank, the Agent and each Bank,
such taxes which would
not have been imposed on the Issuing Bank, the
Agent or such Bank but for any present or former connection between the
Issuing Bank, the Agent or such Bank and the jurisdiction imposing such
tax (other than any such connection arising from the Agent, the Issuing
Bank or the Bank having executed, delivered or performed its obligations
or received a payment under, or enforced, this Agreement) and (ii) in the
case of the Issuing Bank and each Bank, any United States withholding tax
imposed on such payments but only to the extent that the Issuing Bank or
such Bank (a) is subject to United States withholding tax at the time
such Issuing Bank or Bank first becomes a party to this Agreement or (b)
subsequently becomes subject to United States withholding tax solely by
reason of the change of any lending office by such Bank.
"Other Taxes" means any present or future stamp or
documentary taxes and any other excise or property taxes, or similar
charges or levies (other than franchise taxes or taxes imposed on the net
income of the Issuing Bank, the Agent or a Bank), which arise from any
payment made pursuant to this Agreement or from the execution or delivery
of, or otherwise with respect to, this Agreement.
(b) Any and all payments by the Applicant or any
Co-Applicant to or for the account of the Issuing Bank, any Bank or the
Agent hereunder shall be made without deduction for any Taxes or Other
Taxes; provided that, if the Applicant or Co-Applicant shall be required
by law to deduct any Taxes or Other Taxes from any such payments, (i) the
sum payable shall be increased as necessary so that after making all re-
quired deductions (including deductions applicable to additional sums
payable under this Section 2.11) such Issuing Bank, Bank or the Agent (as
the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Applicant or
Co-Applicant shall make such deductions, (iii) the Applicant or
Co-Applicant shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law and (iv)
the Applicant or Co-Applicant shall furnish to the Agent, at its address
referred to in Section 11.2, the original or a certified copy of a re-
ceipt evidencing payment thereof.
(c) The Applicant and any Co-Applicant agrees to indemnify
the Issuing Bank, each Bank and the Agent for the full amount of Taxes or
Other Taxes (including, without limitation, any Taxes or Other Taxes
imposed or asserted by any jurisdiction on amounts payable under this
Section 2.11) paid by such Issuing Bank, Bank or the Agent (as the case
may be) and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto. This indemnification shall
be paid within 15 days after such Issuing Bank, Bank or the Agent (as the
case may be) makes demand therefor.
(d) Each Bank organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution and
delivery of this Agreement in the case of each Bank listed on the
signature pages hereof and on or prior to the date on which it becomes a
Bank in the case of each other Bank, and from time to time thereafter if
requested in writing by the Applicant (but only so long as such Bank re-
mains lawfully able to do so), shall provide the Applicant with Internal
Revenue Service form 1001 or 4224, as appropriate, or any successor form
prescribed by the Internal Revenue Service, certifying that such Bank is
entitled to benefits under an income tax treaty to which the United
States is a party which exempts the Bank from United States withholding
tax or reduces the rate of withholding tax on payments of interest for
the account of such Bank or certifying that the income receivable
pursuant to this Agreement is effectively connected with the conduct of a
trade or business in the United States.
(e) For any period with respect to which a Bank has failed
to provide the Applicant with the appropriate form pursuant to Section
2.11(d) (unless such failure is due to a change in treaty, law or
regulation occurring subsequent to the date on which such form originally
was required to be provided), such Bank shall not be entitled to
indemnification under Section 2.11(b) or (c) with respect to Taxes
imposed by the United States; provided that if a Bank, which is otherwise
exempt from or subject to a reduced rate of withholding tax, becomes
subject to Taxes because of its failure to deliver a form required
hereunder, the Applicant shall take such steps as such Bank shall
reasonably request to assist such Bank to recover such Taxes.
(f) If the Applicant is required to pay additional amounts
to or for the account of any Bank pursuant to this Section 2.11, then
such Bank will change the jurisdiction of its lending office if, in the
judgment of such Bank, such change (i) will eliminate or reduce any such
additional payment which may thereafter accrue and (ii) is not otherwise
disadvantageous to such Bank.
2.12. Agent's Records
The Agent's records regarding the amount of each Letter of
Credit, each payment by the Applicant or any Co-Applicant of
reimbursement obligations in respect of Letters of Credit and other
information relating to the Letters of Credit shall be presumptively
correct absent manifest error.
2.13. Use of Proceeds
The Applicant and Co-Applicants will use the Letters of
Credit only to collateralize reinsurance liabilities assumed by direct
and indirect Subsidiaries of the Applicant. Notwithstanding anything to
the contrary contained in any Credit Document, the Applicant and each
Co-Applicant agrees that no part of the proceeds of any Letters of
Credit will be used, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of buying or carrying any "margin
stock" within the meaning of Regulation U.
2.14. Cash Collateralization
If any Event of Default shall occur and be continuing, the
Applicant shall on the Business Day it receives notice from the Agent,
deposit in an account with the Agent, for the benefit of the Issuing Bank
and the Banks, an amount in cash equal to the Letter of Credit Exposure
as of such date. Such deposit shall be held by the Agent as collateral
for the payment and performance of all obligations of the Applicant and
Co-Applicants hereunder and under the other Credit Documents. The Agent
shall have exclusive domain and control over such account. Moneys in
such account shall (a) automatically be applied by the Agent to reimburse
the Issuing Bank for Letter of Credit payments and disbursements, and
(b) be held for the satisfaction of the reimbursement obligations of the
Applicant and Co-Applicants for the then outstanding Letter of Credit
Exposure. If the Applicant is required to provide an amount of cash col-
lateral hereunder as a result of an Event of Default, such amount (to the
extent not applied as aforesaid) shall be returned to the Applicant
within five Business Days after all Events of Default have been cured or
waived.
2.15. Replacement of Banks
(a) If any Bank refuses to consent to an Extension Request
pursuant to Section 2.6 or notifies the Agent that it refuses to consent
to the extension of any Stated Expiration Date with respect to any
Outstanding Letter of Credit pursuant to Section 2.7, the Borrower shall
have the right, if no Default or Event of Default then exists, to
replace such Bank (any such Bank being referred to herein as a "Replaced
Bank") with one or more Eligible Assignee or Assignees, each of which
shall be acceptable to the Agent and the Issuing Bank, and such Replaced
Bank shall assign to such Eligible Assignee or Assignees who are willing
to so purchase the same for such Replaced Bank, all (but not less than
all) of such Replaced Bank's rights and obligations under this Agreement,
provided that such Eligible Assignee or Assignees shall pay to such
Replaced Bank, an amount equal to all interest, fees and other
amounts
owing or accrued to such Replaced Bank to the date of such assignment,
but without any premium.
(b) In the event that any Bank no longer meets the criteria
contained in the definition of "Eligible Assignee" (any such Bank being
referred to herein as an "Affected Bank"), the Agent shall have the
right, upon notice to such Affected Bank, to require such Affected Bank,
pursuant to Section 11.6 hereof, to assign to one or more Eligible
Assignee or Assignees who are willing to so purchase the same from such
Affected Bank, all (but not less than all) of such Affected Bank's rights
and obligations under this Agreement, provided that such Eligible
Assignee or Assignees shall pay to such Affected Bank, an amount equal to
all interest, fees and other amounts owing or accrued to such Affected
Bank to the date of such assignment, but without any premium. The fact
that any Bank no longer meets the definition of an Eligible Assignee does
not affect the Issuing Bank's obligation to issue Letters of Credit
hereunder.
(c) For each assignment, the parties shall execute and
deliver to the Agent an Assignment and Acceptance Agreement. Upon such
execution and delivery, from and after the effective date specified in
such Assignment and Acceptance Agreement, the assignee thereunder shall
be a party hereto and the assignor Bank released from its obligations
hereunder to the extent provided therein.
3. FEES; PAYMENTS
3.1. Commitment Fee
The Applicant agrees to pay to the Agent, for the account of
the Banks in accordance with each Bank's Commitment Percentage, a fee
(the "Commitment Fee"), during the Commitment Period, equal to 0.20% per
annum on the average daily Available Amount. The Commitment Fee shall be
payable quarterly in arrears on the last day of each March, June,
September and December of each year, commencing on the first such day
following the Effective Date, and ending on the Termination Date or
other date on which the Commitment shall expire or otherwise terminate,
and upon each reduction of the Available Amount. The Commitment Fee
shall be calculated on the basis of a 360-day year for the actual number
of days elapsed.
3.2. Letter of Credit Commissions
The Applicant agrees to pay to the Agent, for the account of
the Banks in accordance with each Bank's Commitment Percentage,
commissions (the "Letter of Credit Commissions") with respect to each
Letter of Credit for the period from and
including the Date of Issuance
thereof to and including the expiration date thereof (including any
expiration or cancellation prior to the Stated Expiration Date), at a
rate per annum equal to 0.65% per annum on the average daily amount
available to be drawn under such Letter of Credit. The Letter of
Credit Commissions shall be (i) calculated on the basis of a 360-day
year for the actual number of days elapsed, (ii) payable quarterly in
arrears on the last day of each March, June, September and December of
each year and on the date that the Commitment shall expire and (iii)
nonrefundable. In addition to the Letter of Credit Commissions, the
Applicant agrees to pay to the Issuing Bank, for its own account, its
standard fees and charges customarily charged to customers similar to
the Applicant with respect to any Letter of Credit.
4. REPRESENTATIONS AND WARRANTIES
In order to induce the Agent and the Banks to enter into this
Agreement and the Issuing Bank to issue the Letters of Credit and the
Banks to participate therein, the Applicant makes the following
representations and warranties to the Agent, each Bank and the Issuing
Agent:
4.1. Corporate Existence and Power
The Applicant is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Maryland,
and has all corporate powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business
as now conducted, other than such licenses, authorizations, consents and
approvals which, if not held or obtained by the Applicant, do not, in the
aggregate, have a Material Adverse Effect.
4.2. Corporate and Governmental Authorization; No Contravention
The execution, delivery and performance by the Applicant of
this Agreement and the other Credit Documents to which it is or will be a
party are within the Applicant's corporate powers, have been duly
authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or official
and do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the articles of incorporation or by-
laws of the Applicant or of any agreement, judgment, injunction, order,
decree or other instrument binding upon the Applicant or any of its
Subsidiaries or result in the creation or imposition of any Lien on any
asset of the Applicant or any of its Subsidiaries.
4.3. Binding Effect
This Agreement constitutes a valid and binding agreement of
the Applicant and each Credit Document, when executed and delivered in
accordance with this Agreement, will constitute a valid and binding
obligation of the Applicant and each Co-Applicant party thereto, in each
case enforceable in accordance with its terms.
4.4. Financial Information
(a) The consolidated statement of financial position and
shareholders' equity of the Applicant and its Consolidated Subsidiaries
as of December 31, 1993 and the related consolidated statements of
operations and cash flows for the fiscal year then ended, reported on by
Ernst & Young and set forth in the Applicant's 1993 Form 10-K, a copy of
which has been delivered to each of the Banks, fairly present, in con-
formity with generally accepted accounting principles, the consolidated
financial position of the Applicant and its Consolidated Subsidiaries as
of such date and their consolidated results of operations and cash flows
for such fiscal year.
(b) The unaudited consolidated statement of financial
position and shareholders' equity of the Applicant and its Consolidated
Subsidiaries as of June 30, 1994 and the related unaudited consolidated
statements of operations and cash flows for the six months then ended,
set forth in the Applicant's Latest Form 10-Q, a copy of which has been
delivered to each of the Banks, fairly present, in conformity with
generally accepted accounting principles applied on a basis consistent
with the financial statements referred to in subsection (a) of this
Section, the consolidated financial position of the Applicant and its
Consolidated Subsidiaries as of such date and their consolidated results
of operations and cash flows for such six month period (subject to normal
year-end adjustments).
(c) Except as disclosed in the Applicant's Latest Form 10-Q
or in any Form 8-K filed by the Applicant under the Securities Exchange
Act of 1934 after the Applicant's Latest Form 10-Q and provided to the
Banks prior to the date of this Agreement, since December 31, 1993 there
has been no material adverse change in the business, financial position,
results of operations or prospects of the Applicant and its Consolidated
Subsidiaries, considered as a whole.
(d) A copy of a duly completed and signed Annual Statement
or other similar report of or for each Insurance Company Subsidiary in
the form filed with the governmental body, agency or official which
regulates insurance companies in the jurisdiction in which such Insurance
Company Subsidiary
is domiciled for the year ended December 31, 1993 has
been delivered to the Agent on behalf of each of the Banks and fairly
presents, in accordance with statutory accounting principles, the
information contained therein.
(e) A copy of a duly completed and signed Quarterly
Statement or other similar report of or for United States Fidelity and
Guaranty Company and Fidelity and Guaranty Life Insurance Company in the
form filed with the governmental body, agency or official which regulates
insurance companies in the jurisdiction in which such companies are
respectively domiciled for the quarter ended June 30, 1994 has been de-
livered to the Agent on behalf of each of the Banks and fairly presents,
in accordance with statutory accounting principles, the information
contained therein.
4.5. Litigation
Subject to matters disclosed in the financial statements
referred to in Section 4.04(a), there is no action, suit or proceeding
pending against, or to the knowledge of the Applicant threatened against
or affecting, the Applicant or any of its Subsidiaries before any court
or arbitrator or any governmental body, agency or official in which
there is a reasonable expectation of an adverse decision which
reasonably could be expected to have a Material Adverse Effect or which
in any manner draws into question the validity of this Agreement or the
Credit Documents.
4.6. Compliance with ERISA
Each member of the ERISA Group has fulfilled its obligations
under the minimum funding standards of ERISA and the Internal Revenue
Code with respect to each Plan and is in compliance in all material
respects with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan. No member of the ERISA
Group has (i) sought a waiver of the minimum funding standard under Sec-
tion 412 of the Internal Revenue Code in respect of any Plan, (ii) failed
to make any contribution or payment to any Plan or Multiemployer Plan or
in respect of any Benefit Arrangement, or made any amendment to any Plan
or Benefit Arrangement, which in either case would trigger the provisions
of Section 412(n) or 401(a)(29) of the Internal Revenue Code (or any cor-
responding provisions of ERISA) or (iii) incurred any liability
under Title IV of ERISA other than a liability to the PBGC for premiums
under Section 4007 of ERISA.
4.7. Environmental Matters
In the ordinary course of its business, the Ap-
plicant conducts an ongoing review of the effect of Environmental Laws
on the business, operations and properties of the Applicant and its
Subsidiaries, in the course of which it identifies and evaluates
associated liabilities and costs (including, without limitation, any
capital or operating expenditures required for clean-up or closure of
properties presently or previously owned, any capital or operating
expenditures required to achieve or maintain compliance with
environmental protection standards imposed by law or as a condition of
any license, permit or contract, any related constraints on operating
activities, including any periodic or permanent shutdown of any facility
or reduction in the level of or change in the nature of operations
conducted thereat, any costs or liabilities in connection
with off-site disposal of wastes or Hazardous Substances, and any actual
or potential liabilities to third parties, including employees, and any
related costs and expenses). On the basis of this review, the Applicant
has reasonably concluded that such associated liabilities and costs,
including the costs of compliance with Environmental Laws, are unlikely
to have a Material Adverse Effect.
4.8. Taxes
The Applicant and its Subsidiaries have filed all United
States Federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all taxes due
pursuant to such returns or pursuant to any assessment received by the
Applicant or any Subsidiary, other than any such assessments being
contested in good faith by appropriate proceedings and for which any
reserves required under generally accepted accounting principles have
been established. The charges, accruals and reserves on the books of
the Applicant and its Subsidiaries in respect of taxes or other
governmental charges are, in the opinion of the Applicant,
adequate in all material respects.
4.9. Subsidiaries
Each of the Applicant's corporate Subsidiaries, including
without limitation, each Co-Applicant which is a corporation, is a
corporation duly incorporated, validly existing and in good standing
under the laws of its jurisdiction of incorporation, and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now
conducted.
4.10. Not an Investment Company
Neither the Applicant nor any Co-Applicant is an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended.
4.11. Full Disclosure
All information heretofore furnished by the Ap-
plicant to the Agent or any Bank for purposes of or in connection with
this Agreement or any transaction contemplated hereby is, and all such
information hereafter furnished by the Applicant to the Agent or any Bank
will be, true and accurate in all material respects on the date as of
which such information is stated or certified. The Applicant has
disclosed to the Banks in writing any and all facts which materially and
adversely affect or may affect (to the extent the Applicant can now
reasonably foresee), the business, operations or financial condition of
the Applicant and its Consolidated Subsidiaries, taken as a whole, or
the ability of the Applicant to perform its obligations under this
Agreement.
5. CONDITIONS TO THE ISSUANCE OF FIRST LETTERS OF CREDIT
In addition to the conditions precedent set forth in Section
6, the obligation of the Issuing Bank to issue the first Letter of
Credit on its Date of Issuance and the Banks to participate therein shall
be subject to the fulfillment of the following conditions precedent:
5.1. Evidence of Action
The Agent shall have received a certificate, dated the first
Date of Issuance, of the Secretary or Assistant Secretary of the
Applicant (i) attaching a true and complete copy of the resolutions of
its Board of Directors and of all documents evidencing other necessary
corporate action (in form and substance satisfactory to the Agent)
taken by it to authorize the Credit Documents to which it is a party and
the transactions contemplated thereby, (ii) attaching a true and com-
plete copy of its Certificate of Incorporation and By-Laws, (iii)
setting forth the incumbency of its officer or officers who may sign
such Documents, including therein a signature specimen of such of-
ficer or officers and (iv) attaching a certificate of good standing of
the Applicant from the Maryland Department of Assessments and Taxation.
5.2. This Agreement
The Agent shall have received counterparts of this Agreement
signed by each of the parties hereto (or receipt by
the Agent from a
party hereto of a fax signature page signed by such party which shall
have agreed to promptly provide the Agent with originally executed
counterparts hereof).
5.3. Litigation
There shall be no injunction, writ, preliminary restraining
order or other order of any nature issued by any Governmental Authority
in any respect affecting the transactions provided for herein and no
action or proceeding by or before any Governmental Authority shall have
been commenced and be pending or, to the knowledge of the Applicant,
threatened, seeking to prevent or delay the transactions contemplated
by the Credit Documents or challenging any other terms and provisions
hereof or thereof or seeking any damages in connection therewith, and the
Agent shall have received a certificate of an Authorized Signatory of
the Applicant to the foregoing effects.
5.4. Approvals
The Agent shall have received a certificate of an Authorized
Signatory of the Applicant to the effect that all approvals and consents
of all Persons required to be obtained in connection with the consumma-
tion of the transactions contemplated by the Credit Documents have been
duly obtained and are in full force and effect, and that all required
notices have been given and all required waiting periods have expired.
5.5. Opinion of Counsel to the Applicant
The Agent shall have received an opinion of John A. MacColl,
general counsel to the Applicant, addressed to the Agent, the Banks and
Special Counsel, and dated the first Date of Issuance, substantially in
the form of Exhibit E and an opinion of Piper & Marbury, counsel to the
Applicant, addressed to the Agent, the Banks and Special Counsel, and
dated the first Date of Issuance, substantially in the form of Exhibit
F, and covering such additional matters as the Required Banks may rea-
sonably request. It is understood that such opinions are being deliv-
ered to the Agent and the Banks upon the direction of the Applicant and
that the Agent and the Banks may and will rely upon such opinion.
5.6. Opinion of Special Counsel
The Agent shall have received an opinion of Special Counsel,
addressed to the Agent and the Banks and dated the first Date of Issuance
substantially in the form of Exhibit G.
5.7. Fees
All fees payable to the Agent on the Effective Date shall
have been paid.
5.8. Fees and Expenses of Special Counsel
The fees and expenses of Special Counsel in connection with
the preparation, negotiation and closing of this Agreement and the other
the Credit Documents shall have been paid.
6. CONDITIONS FOR ISSUANCE OF ALL LETTERS OF CREDIT
The obligation of the Issuing Bank to issue any Letter of Credit on
a Date of Issuance and each Bank to participate therein is subject to the
satisfaction of the following conditions precedent as of such Date of
Issuance :
6.1. Compliance
On each Date of Issuance and after giving effect to the
Letters of Credit to be issued thereon, (a) there shall exist no Default
or Event of Default, (b) the representations and warranties contained
in this Agreement shall be true and correct with the same effect as
though such representations and warranties had been made on such Date of
Issuance and (c) the aggregate outstanding face amount of the Letters of
Credit will not exceed the Commitment. Each request by the Applicant
for the issuance of a Letter of Credit shall constitute a certifica-
tion by the Applicant as of such Borrowing Date that each of the
foregoing matters is true and correct in all respects.
6.2. Documents
All documents required by the provisions of the Credit
Documents to be executed or delivered to the Agent on or before the
applicable Date of Issuance shall have been executed and shall have been
delivered at the office of the Agent set forth in Section 11.2 on or
before such Date of Issuance.
6.3. Letter of Credit Request
With respect to the issuance of each Letter of Credit, the
Agent shall have received a Letter of Credit Request duly executed by
an Authorized Signatory of the Applicant and, if
applicable, the Co-Applicant.
7. AFFIRMATIVE COVENANTS
The Applicant agrees that, so long as this Agreement is in effect,
any reimbursement obligations (contingent or otherwise) in respect of
any Letter of Credit remain outstanding and unpaid, or any other amount
is owing under any Credit Document to the Issuing Bank, any Bank or the
Agent:
7.1. Information
The Applicant will deliver to each of the Banks:
(a) as soon as available and in any event within 95 days
after the end of each fiscal year of the Applicant, a consolidated
statement of financial position and shareholders' equity of the
Applicant and its Consolidated Subsidiaries as of the end of such
fiscal year and the related consolidated statements of operations
and cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all
reported on in a manner acceptable to the Securities and Exchange
commission by Ernst & Young or other independent public accountants
of nationally recognized standing;
(b) as soon as available and in any event within 60 days
after the end of each of the first three quarters of each fiscal
year of the Applicant, a consolidated statement of financial
position and shareholders' equity of the Applicant and its
Consolidated Subsidiaries as of the end of such quarter and the
related consolidated statements of operations and cash flows for
such quarter and for the portion of the Applicant's fiscal year
ended at the end of such quarter, setting forth in the case of such
consolidated statements of operations and cash flows in comparative
form the figures for the corresponding quarter and the
corresponding portion of the Applicant's previous fiscal year, all
certified (subject to normal year-end adjustments) as to fairness
of presentation, generally accepted accounting principles and
consistency by the chief financial officer or the chief accounting
officer of the Applicant;
(c) simultaneously with the delivery of each set of
financial statements referred to in clauses (a) and (b) above, an
Officer's Certificate (i) setting forth in reasonable detail the
calculations required to establish whether the Applicant was in
compliance with the requirements of Sections 8.3 and 8.4 on the
date of such financial statements and (ii) stating whether any
Default exists on the date of such certificate and, if any Default
then exists, setting forth the details thereof and
the action which
the Applicant is taking or proposes to take with respect thereto;
(d) simultaneously with the delivery of each set of
financial statements referred to in clause (a) above, a statement
of the firm of independent public accountants which reported on
such statements (i) whether anything has come to their attention in
the course of their examination of the financial statements of the
Applicant and its Subsidiaries to cause them to believe that any De-
fault existed on the date of such statements and (ii) confirming
the calculations set forth in the Officer's Certificate delivered
simultaneously therewith pursuant to clause (c) above;
(e) within five days after any officer of the Applicant
obtains knowledge of any Default, if such Default is then
continuing, an Officer's Certificate setting forth the details
thereof and the action which the Applicant is taking or proposes
to take with respect thereto;
(f) within 120 days after the end of each fiscal year of
each Insurance Company Subsidiary, a copy of a duly completed and
signed Annual Statement (or any successor form thereto) required
to be filed by such Insurance Company Subsidiary with the
governmental body, agency or official which regulates insurance
companies in the jurisdiction in which such Insurance Company
Subsidiary is domiciled, in the form submitted to such govern-
mental body, agency or official;
(g) within 60 days after the end of the first, second and
third fiscal quarters of United States Fidelity and Guaranty Com-
pany and Fidelity and Guaranty Life Insurance Company,
respectively, a copy of a duly completed and signed Quarterly
Statement (or any successor form thereto) required to be filed by
each such company with the governmental body, agency or official
which regulates insurance companies in the jurisdiction in which
such company is domiciled, in the form submitted to such gov-
ernmental body, agency or official;
(h) promptly upon the mailing thereof to the shareholders
of the Applicant generally, copies of all financial statements,
reports and proxy statements so mailed;
(i) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and reports
on Forms 10-K, 10-Q and 8-K (or
their equivalents) which the
Applicant shall have filed with the Securities and Exchange
Commission;
(j) if and when any member of the ERISA Group (i) gives or
is required to give notice to the PBGC of any "reportable event"
(as defined in Section 4043 of ERISA) with respect to any Plan,
other than a reportable event for which 30-day notice to the PBGC
has been waived, or knows that the plan administrator of any Plan
has given or is required to give notice of any such reportable
event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete
or partial withdrawal liability under Title IV of ERISA or notice
that any Multiemployer Plan is in reorganization, is insolvent or
has been terminated, a copy of such notice; (iii) receives notice
from the PBGC under Title IV of ERISA of an intent to terminate,
impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or appoint a trustee to administer any Plan,
a copy of such notice; (iv) applies for a waiver of the minimum
funding standard under Section 412 of the Internal Revenue Code, a
copy of such application; (v) gives notice of intent to terminate
any Plan under Section 4041(c) of ERISA, a copy of such notice and
other information filed with the PBGC; (vi) gives notice of
withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy
of such notice; or (vii) fails to make any payment or contribution
to any Plan or Multiemployer Plan or in respect of any Benefit
Arrangement or makes any amendment to any Plan or Benefit Ar-
rangement which in either case would trigger the provisions of
Section 412(n) or 401(a)(29) of the Internal Revenue Code (or any
corresponding provisions of ERISA), a certificate of the chief
financial officer or the chief accounting officer of the Applicant
setting forth details as to such occurrence and action, if any,
which the Applicant or applicable member of the ERISA Group is re-
quired or proposes to take; and
(k) from time to time such additional information regarding
the financial position or business of the Applicant and its
Subsidiaries as the Agent, at the request of any Bank, may
reasonably request.
7.2. Payment of Obligations
The Applicant will pay and discharge, and will cause each
Subsidiary (other than any Excluded Subsidiary) to pay and discharge, at
or before maturity, all their respective material obligations and li-
abilities, including, without limitation, tax liabilities, except where
the same may be contested in good faith by appropriate proceedings, and
will
maintain, and will cause each Subsidiary (other than an Excluded
Subsidiary) to maintain, in accordance with generally accepted accounting
principles, appropriate reserves for the accrual of any of the same.
7.3. Maintenance of Property; Insurance
(a) The Applicant will keep, and will cause each Subsidiary
to keep, all property useful and necessary in its business in good
working order and condition, ordinary wear and tear excepted.
(b) The Applicant will maintain or cause to be maintained
with financially sound and reputable insurers or through self-insurance
programs appropriate to the type and amount of the risk insured,
insurance with respect to its properties and business, and the properties
and business of its Subsidiaries, against loss or damage of the kinds
customarily insured against by reputable companies in the same or
similar businesses, such insurance to be of such types and in such
amounts (with such deductible amounts) as is customary for such companies
under similar circumstances. The Applicant will furnish to the Banks,
upon request from the Agent, information presented in reasonable detail
as to the insurance so carried.
7.4. Conduct of Business and Maintenance of Existence
The Applicant will continue, and will cause each Subsidiary
(other than any Excluded Subsidiary) to continue, to engage in all
material respects in business of the same general type as now conducted
by the Applicant and its subsidiaries, and will preserve, renew and keep
in full force and effect, and will cause each Subsidiary (other than any
Excluded Subsidiary) to preserve, renew and keep in full force and ef-
fect, their respective corporate existence and their respective rights,
privileges and franchises necessary or desirable in the normal conduct
of business, other than such corporate existences, rights, privileges and
franchises which, if not preserved, renewed or kept in force, will not
have, in the aggregate, a Material Adverse Effect.
7.5. Compliance with Laws
The Applicant will comply, and cause each Subsidiary to
comply, with all applicable laws, ordinances, rules, regulations, and
requirements of governmental authorities (including, without limitation,
Environmental Laws and ERISA and the rules and regulations thereunder)
except where the necessity of compliance therewith is contested in good
faith by appropriate proceedings or where the failure to
comply with such
laws, ordinances, rules, regulations and requirements
will not, in the aggregate, have a Material Adverse Effect.
8. NEGATIVE COVENANTS
The Applicant agrees that, so long as this Agreement is in effect,
any reimbursement obligations (contingent or otherwise) in respect of
any Letter of Credit remain outstanding and unpaid, or any other amount
is owing under any Credit Document to the Issuing Bank, any Bank or the
Agent:
8.1. Negative Pledge
Neither the Applicant nor any Subsidiary will create, assume
or suffer to exist any Lien on any asset now owned or hereafter acquired
by it, except:
(a) Liens existing on the date of this Agreement securing
Debt outstanding on the date of this Agreement in an aggregate
principal or face amount not exceeding $100,000,000 and identified
on Schedule 8.1 hereto;
(b) any Lien existing on any asset of any corporation at
the time such corporation becomes a Subsidiary and not created in
contemplation of such event;
(c) any Lien on any asset securing Debt incurred or assumed
for the purpose of financing all or any part of the cost of
acquiring such asset, provided that such Lien attaches to such
asset concurrently with or within 90 days after the acquisition
thereof;
(d) any Lien on any asset of any corporation existing at
the time such corporation is merged or consolidated with or into
the Applicant or a Subsidiary and not created in contemplation of
such event;
(e) any Lien existing on any asset prior to the acquisition
thereof by the Applicant or a Subsidiary and not created in
contemplation of such acquisition;
(f) any Lien arising out of the refinancing, extension,
renewal or refunding of any Debt secured by any Lien permitted by
any of the foregoing clauses or clause (j) below of this Section,
provided that such Debt is not increased and is not secured by
any additional assets;
(g) Liens arising in the ordinary course of its business
(including Liens arising in the ordinary course of its insurance
business) which (i) do not secure Debt
or Derivatives Obligations,
(ii) do not secure any obligation (except obligations arising in
the ordinary course of its insurance business) in an amount
exceeding $50,000,000 and (iii) do not in the aggregate materially
detract from or impair the use or value of the asset or assets
subject thereto in the operation of its business;
(h) Liens on cash and cash equivalents securing Derivatives
Obligations, provided that the aggregate amount of cash and cash
equivalents subject to such Liens may at no time exceed
$25,000,000;
(i) Liens securing obligations of the type referred to in
clause (vii) of the definition of Debt as long as such Liens arise
in the ordinary course of the Applicant's or the Subsidiary's, as
the case may be, business and such Liens are in amounts and
otherwise are on terms consistent with then existing practices in
the repurchase business;
(j) Liens securing Non-Recourse Debt (including Non-
Recourse Debt constituting Debt (other than Non-Recourse Debt) as
provided in the proviso to the definition of Non-Recourse Debt);
(k) Liens on securities or cash of any Insurance Company
Subsidiary which secure its obligations as a reinsurer (as opposed
to a ceding insurance company) under reinsurance contracts entered
into with Persons which are licensed or authorized to do an
insurance business in any jurisdiction; and
(l) Liens not otherwise permitted by the foregoing clauses
of this Section securing Debt in an aggregate principal or face
amount at any date not to exceed 5% of Adjusted Consolidated
Tangible Net Worth.
8.2. Consolidations, Mergers and Sales of Assets; Ownership by USF&G
Corporation
The Applicant will not (i) consolidate or merge with or into
any other Person, other than a merger in which the Applicant is the
surviving corporation or a merger solely for the purpose of
reincorporating the Applicant in another jurisdiction, in each case
provided no Default shall exist at, or immediately after, such merger,
or (ii) sell, lease or otherwise transfer, directly or indirectly, all
or substantially all of the assets of the Applicant and its Subsidiaries,
taken as a whole, to any other Person. The Applicant will at all times
own all of the outstanding voting securities of United States Fidelity
and Guaranty Company.
8.3. Ratio of Debt to Adjusted Consolidated Tangible Net Worth
The aggregate amount of Debt (other than Non-Recourse Debt)
of the Applicant and its Subsidiaries shall at no time exceed 55% of
Adjusted Consolidated Tangible Net Worth.
8.4. Minimum Consolidated Tangible Net Worth
Adjusted Consolidated Tangible Net Worth will at no time be
less than the sum of (i) $1,050,000,000 plus (ii) 50% of the consolidated
net income of the Applicant and its Consolidated Subsidiaries for the
period commencing on July 1, 1994 and ending at the end of the
Applicant's then most recent fiscal quarter (treated for this purpose as
a single accounting period). For purposes of this Section, if
consolidated net income of the Applicant and its Consolidated
Subsidiaries for any period shall be less than zero, the amount
calculated pursuant to clause (ii) above for such period shall be zero.
8.5. Transactions with Affiliates
The Applicant will not, and will not permit any Subsidiary
to, directly or indirectly, pay any funds to or for the account of, make
any investment (whether by acquisition of stock or indebtedness, by loan,
advance, transfer of property, guarantee or other agreement to pay,
purchase or service, directly or indirectly, any Debt, or otherwise) in,
lease, sell, transfer or otherwise dispose of any assets, tangible or in-
tangible, to, or participate in, or effect any transaction in connection
with any joint enterprise or other joint arrangement with, any Affiliate
unless such payment, investment, lease, sale, transfer, disposition,
participation or transaction is on terms and conditions at least as
favorable to the Applicant or such Subsidiary as the terms and conditions
which would apply in a similar transaction with a Person not an Af-
filiate; provided, however, that the foregoing provisions of this Section
shall not prohibit the Applicant from declaring or paying any lawful
dividend or distribution so long as, after giving effect thereto, no
Default shall have occurred and be continuing.
9. DEFAULT
9.1. Events of Default
If one or more of the following events ("Events of Default")
shall have occurred and be continuing:
(a) The failure of the Applicant or any Co-Applicant to pay
any reimbursement obligations in respect of any Letter of Credit
within two Business Days after demand; or
(b) The failure of the Applicant or any Co-Applicant to pay
any interest or any other fees or expenses payable under any
Credit Document to the Agent with respect to the credit facilities
established hereunder within three Business Days of the date
when due and payable; or
(c) The issuance of any Letter of Credit for a purpose
inconsistent with or in violation of Section 2.1(b) or the use of
the proceeds of any Letter of Credit in a manner inconsistent
with or in violation of Section 2.13; or
(d) The Applicant shall fail to observe or perform any
covenant contained in Sections 8.1 to 8.5, inclusive;
(e) The Applicant or any Co-Applicant shall fail to observe
or perform any covenant or agreement contained in this Agreement or
any Credit Document (other than those covered by clauses (a), (b),
(c) or (d) above) for 30 days after notice thereof has been given
to the Applicant by the Agent at the request of any Bank;
(f) Any representation, warranty, certification or
statement made by the Applicant or any Co-Applicant in this
Agreement or in any Credit Document or any certificate, financial
statement or other document delivered pursuant to this Agreement
shall prove to have been incorrect in any material respect when
made (or deemed made);
(g) The Applicant or any Subsidiary shall fail to make any
payment owed by it in respect of any Material Financial Obligations
when due or within any applicable grace period;
(h) Any event or condition shall occur which results in
the acceleration of the maturity of any Material Debt or enables
(or, with the giving of notice or lapse of time or both, would
enable) the holder of such Debt or any Person acting on such
holder's behalf to accelerate the maturity thereof;
(i) The Applicant, any Co-Applicant (other than an Excluded
Subsidiary) or any Subsidiary (other than an Excluded Subsidiary)
shall commence a voluntary case or other proceeding seeking
rehabilitation, dissolution,
conservation, liquidation,
reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, rehabilitator, dissolver, conservator, custo-
dian or other similar official of it or any substantial part of its
property, or shall consent to any such relief or to the appointment
of or taking possession by any such official in an involuntary
case or other proceeding commenced against it, or shall make a
general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall take any
corporate action to authorize any of the foregoing;
(j) An involuntary case or other proceeding shall be
commenced against the Applicant, any Co-Applicant (other than an
Excluded Subsidiary) or any Subsidiary (other than an Excluded
Subsidiary) seeking rehabilitation, dissolution, conservation,
liquidation, reorganization or other relief with respect to it or
its debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, rehabilitator, dissolver, conservator,
custodian or other similar official of it or any substantial part
of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or
an order for relief shall be entered against the Applicant, any
Co-Applicant (other than an Excluded Subsidiary) or any Subsidiary
(other than an Excluded Subsidiary) under the federal bankruptcy
laws as now or hereafter in effect; or any governmental body,
agency or official shall apply for, or commence a case or other
proceeding to seek, an order for the rehabilitation,
conservation, dissolution or other liquidation of the Applicant,
any Co-Applicant (other than an Excluded Subsidiary) or any
Subsidiary (other than an Excluded Subsidiary) or of the assets or
any substantial part thereof of the Applicant, any Co-Applicant
(other than an Excluded Subsidiary) or any such Subsidiary (other
than an Excluded Subsidiary) or any other similar remedy;
(k) Any member of the ERISA Group shall fail to pay when
due an amount or amounts aggregating in excess of $5,000,000 which
it shall have become liable to pay under Title IV of ERISA; or
notice of intent to terminate a Material Plan shall be filed under
Title IV of ERISA by any member of the ERISA Group, any plan
administrator or any combination of the foregoing; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate,
to impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or to cause a trustee to be appointed to
administer any Material Plan; or a condition shall exist by reason
of which the PBGC would be entitled to obtain a decree adjudicating
that any Material Plan must be terminated; or there shall occur a
complete or partial withdrawal from, or a default, within the
meaning of Section 4219(c)(5) of ERISA, with respect to, one or
more Multiemployer Plans which could cause one or more members of
the ERISA Group to incur a current payment obligation in excess of
$5,000,000;
(l) Enforceable judgments or orders for the payment of
money in excess of $10,000,000 in the aggregate shall be rendered
and entered against the Applicant, any Co-Applicant (other than an
Excluded Subsidiary) or any Subsidiary (other than an Excluded Sub-
sidiary) and such judgments or orders shall continue unsatisfied
and unstayed for a period of 30 days; or
(m) Any person or group of persons (within the meaning of
Section 13 or 14 of the Securities Exchange Act of 1934, as
amended) shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 promulgated by the Securities and Exchange
Commission under said Act) of 30% or more of the outstanding shares
of common stock of the Applicant; or, during any period of twelve
consecutive calendar months, individuals who were directors of the
Applicant on the first day of such period shall cease to constitute
a majority of the board of directors of the Applicant.
Upon the occurrence of an Event of Default or at any time
thereafter during the continuance thereof, (a) if such event is an Event
of Default specified in clause (i) or (j) above, the Commitment shall
immediately and automatically terminate and any reimbursement
obligations owing or contingently owing in respect of all Outstanding
Letters of Credit and all other amounts owing under the Credit Documents
shall immediately become due and payable, and if not
previously deposited, the Applicant shall forthwith deposit pursuant to
Section 2.14 an amount equal to the Letter of Credit Exposure in the
Cash Collateral Account with and under the exclusive control of the
Agent, and the Agent may, and, upon the direction of the Required Banks
shall, exercise any and all remedies and other rights provided in the
Credit Documents, and (b) if such event is any other Event of Default,
any or all of the following actions may be taken: (i) with the consent
of the Required Banks, the Agent may, and upon the direction of the
Required Banks shall, by notice to the Applicant, declare the Commitment
to be terminated forthwith, whereupon the Commitment shall im-
mediately terminate, and (ii) with the consent of the Required Banks, the
Agent may, and upon the direction of the Required Banks shall, by notice
of default to the Applicant, declare any reimbursement obligations
owing or contingently owing in respect of all Outstanding Letters of
Credit and all other amounts owing under the Credit Documents to be due
and payable forthwith, whereupon the same shall im-
mediately become due and payable, and if not previously deposited, the
Applicant shall forthwith deposit pursuant to Section 2.14 an amount
equal to the Letter of Credit Exposure in the Cash Collateral Account
with and under the exclusive control of the Agent, and the Agent may,
and upon the direction of the Required Banks shall, exercise any and all
remedies and other rights provided pursuant to the Credit Documents.
Except as otherwise provided in this Section, presentment, demand,
protest and all other notices of any kind are hereby expressly waived.
Each Credit Party hereby further expressly waives and covenants not to
assert any appraisement, valuation, stay, extension, redemption or simi-
lar laws, now or at any time hereafter in force which might delay,
prevent or otherwise impede the performance or enforcement of any
Credit Document.
In the event that the Commitment shall have been terminated
pursuant to the provisions of this Section, any funds received by the
Agent and the Banks from or on behalf of the Applicant shall be applied
by the Agent and the Banks in liquidation of the obligations of the Ap-
plicant under the Credit Documents in such manner and order as the Agent
shall in its discretion determine and any funds received by the Agent and
the Banks from and or behalf of any Co-Applicant shall be applied by the
Agent and the Banks in liquidation of the obligations of such
Co-Applicant with respect to Letters of Credit requested by such
Co-Applicant in such manner and order as the Agent in its discretion
shall determine.
10. THE AGENT
10.1. Appointment
Each Bank and the Issuing Bank hereby irrevocably desig-
nates and appoints BNY as Agent hereunder and under the other Credit
Documents and each such Bank and the Issuing Bank hereby irrevocably
authorizes the Agent to take such action on its behalf under the
provisions of the Credit Documents and to exercise such powers and
perform such duties as are expressly delegated to the Agent by the terms
of the Credit Documents, together with such other powers as are rea-
sonably incidental thereto. Notwithstanding any provision to the
contrary elsewhere in any Credit Document, the Agent shall not have any
duties or responsibilities other than those expressly set forth
therein, or any fiduciary relationship with any Bank or the Issuing
Bank, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read
into the Credit Documents or
otherwise exist against the Agent.
10.2. Delegation of Duties
The Agent may execute any of its duties under the Credit
Documents by or through agents or attorneys-in-fact and shall be entitled
to rely upon the advice of counsel concerning all matters pertaining to
such duties.
10.3. Exculpatory Provisions
Neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (i) liable
for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with the Credit Documents (except the Agent
for its own gross negligence or willful misconduct), or (ii) responsible
in any manner to any of the Banks for any recitals, statements, rep-
resentations or warranties made by any Credit Party or any of-
ficer thereof contained in the Credit Documents or in any certificate,
report, statement or other document referred to or provided for in, or
received by the Agent under or in connection with, the Credit Documents
or for the value, validity, effectiveness, genuineness, perfection,
enforceability or sufficiency of any of the Credit Documents or for
any failure of any Credit Party or any other Person to perform its obli-
gations thereunder. The Agent shall not be under any obligation to any
Bank or the Issuing Bank to ascertain or to inquire as to the observance
or performance of any of the agreements contained in, or conditions
of, the Credit Documents, or to inspect the properties, books or
records of any Credit Party. The Agent shall not be under any liability
or responsibility whatsoever, as Agent, to any Credit Party or any
other Person as a consequence of any failure or delay in performance,
or any breach, by any Bank or the Issuing Bank of any of its obliga-
tions under any of the Credit Documents.
10.4. Reliance by Agent
The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, opinion, letter, cablegram, telegram, fax, telex
or teletype message, statement, order or other document or conversa-
tion believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to
any Credit Party), independent accountants and other experts se-
lected by the Agent. The Agent may treat each Bank and the Issuing Bank,
or the Person designated in the last notice filed with it under this
Section, as the holder of all of the interests of such Bank or Issuing
Bank hereunder until written notice of transfer, signed by such Bank or
Issuing Bank (or the Person designated in the last notice filed with the
Agent) and by the Person designated in such written notice of transfer,
in form and substance satisfactory to the Agent, shall have been filed
with the Agent. The Agent shall not be under any duty to examine or
pass upon the validity, effectiveness, enforceability, perfection or
genuineness of the Credit Documents or any instrument, document or com-
munication furnished pursuant thereto or in connection therewith, and
the Agent shall be entitled to assume that the same are valid, effective
and genuine, have been signed or sent by the proper parties and are what
they purport to be. The Agent shall be fully justified in failing or
refusing to take any action under the Credit Documents unless it shall
first receive such advice or concurrence of the Required Banks as it
deems appropriate. The Agent shall in all cases be fully protected in
acting, or in refraining from acting, under the Credit Documents in ac-
cordance with a request or direction of the Required Banks, and such
request or direction and any action taken or failure to act pursuant
thereto shall be binding upon all the Banks, including all future Banks
and the Issuing Bank.
10.5. Notice of Default
The Agent shall not be deemed to have knowledge or notice of
the occurrence of any Default or Event of Default unless the Agent has
received written notice thereof from the Issuing Bank, a Bank or the
Applicant or any Co-Applicant. In the event that the Agent receives such
a notice, the Agent shall promptly give notice thereof to the Issuing
Bank, the Banks and the Applicant. The Agent shall take such action
with respect to such Default or Event of Default as shall be directed
by the Required Banks, provided, however, that unless and until the
Agent shall have received such directions, the Agent may (but shall not
be obligated to) take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem to be
in the best interests of the Banks.
10.6. Non-Reliance on Agent and Other Banks
Each Bank and the Issuing Bank expressly acknowledges that
neither the Agent nor any of its respective officers, directors, employ-
ees, agents, attorneys-in-fact or affiliates has made any rep-
resentations or warranties to it and that no act by the Agent
hereinafter, including any review of the affairs of any Credit Party,
shall be deemed to constitute any representation or warranty by the
Agent to any Bank or the Issuing Bank. Each Bank and the Issuing Bank
represents to the Agent that it has, independently and without re-
liance upon the Agent or any other Bank or the Issuing Bank, and based on
such documents and information as it has deemed appropriate, made its
own evaluation of and investigation into the business, operations,
Property, financial and other condition and creditworthiness of the
Credit Parties and made its own decision to enter into this Agreement.
Each Bank and the Issuing Bank also represents that it will,
independently and without reliance upon the Agent or any other Bank, and
based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit analysis, evaluations and
decisions in taking or not taking action under any Credit Document, and
to make such investigation as it deems necessary to inform itself as
to the business, operations, Property, financial and other condition
and creditworthiness of the Credit Parties. Each Bank further
represents that it meets the criteria contained in the definition of a
"Eligible Assignee" hereunder. Except for notices, reports and other
documents expressly required to be furnished to the Banks by the Agent
hereunder, the Agent shall not have any duty or responsibility to
provide any Bank or the Issuing Bank with any credit or other information
concerning the business, operations, Property, financial and other
condition or creditworthiness of the Credit Parties which may come into
the possession of the Agent or any of its officers, directors, employ-
ees, agents, attorneys-in-fact or affiliates.
10.7. Indemnification
Each Bank agrees to indemnify and reimburse the Agent in its
capacity as such (to the extent not promptly reimbursed by the Applicant
and without limiting the obligation of any Credit Party to do so), in the
amount of its pro rata share (based on its Commitment Percentage
hereunder), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever including, without limitation,
any amounts paid to the Banks (through the Agent) by the Applicant or any
Co-Applicant pursuant to the terms of the Credit Documents, that are
subsequently rescinded or avoided, or must otherwise be restored or
returned) which may at any time be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of the Credit
Documents or any other documents contemplated by or referred to therein
or the transactions contemplated thereby or any action taken or omitted
to be taken by the Agent under or in connection with any of the
foregoing; provided, however, that no Bank shall be liable for the pay-
ment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
to the extent resulting solely from the finally adjudicated gross neg-
ligence or willful misconduct of the Agent. Without limitation of the
foregoing, each Bank agrees to reimburse the Agent promptly upon demand
for its pro rata share of any unpaid fees owing to the Agent, and any
costs and expenses (including, without limitation, reasonable fees and
expenses of counsel) payable by the Applicant under Section 11.5, to the
extent that the Agent has not been paid such fees or has not be reim-
bursed for such costs and expenses, by the Applicant or any other Credit
Party. The failure of any Bank to reimburse the Agent promptly upon
demand for its pro rata share of any amount required to be by the Banks
to the Agent as provided in this Section shall not relieve any other
Bank of its obligation hereunder to reimburse the Agent for its pro
rata share of such amount, but no Bank shall be responsible for the fail-
ure of another Bank to reimburse the Agent for such other Bank's pro rata
share of such amount. The agreements in this Section shall survive the
payment of all amounts payable under the Credit Documents.
10.8. Agent in Its Individual Capacity
The Agent and its respective affiliates may make loans to,
accept deposits from, issue letters of credit for the account of, and
generally engage in any kind of business with, any Credit Party as
though the Agent were not Agent hereunder. With respect to its
commitment and participation as Bank with respect to Letters of Credit,
the Agent, in its individual capacity and not as Agent, shall have the
same rights and powers under the Credit Documents as any Bank and may
exercise the same as though it were not the Agent, and the terms "Bank"
and "Banks" shall in each case include the Agent in its individual
capacity and not as Agent.
10.9. Successor Agent
If at any time the Agent deems it advisable, in its sole
discretion, it may submit to each of the Banks and the Issuing Bank a
written notice of its resignation as Agent under the Credit Documents,
such resignation to be effective upon the earlier of (i) the written
acceptance of the duties of the Agent under the Credit Documents by a
successor Agent and (ii) on the 30th day after the date of such notice.
Upon any such resignation, the Required Banks shall have the right to ap-
point from among the Banks a successor Agent. If no successor Agent
shall have been so appointed by the Required Banks and accepted such ap-
pointment in writing within 30 days after the retiring Agent's giving of
notice of resignation, then the retiring Agent may, on behalf of the
Banks, appoint a successor Agent, which successor Agent shall be a com-
mercial bank organized under the laws of the United States of America
or any State thereof and having a combined capital, surplus, and
undivided profits of at least $100,000,000. Upon the ac-
ceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Agent, and
the retiring Agent's rights, powers, privileges and duties as Agent under
the Credit Documents shall be terminated. The Applicant, Co-Applicant,
Issuing Bank and the Banks shall execute such documents as shall be
necessary to effect such appointment. After any retiring Agent's
resignation as Agent, the provisions of the Credit Documents shall inure
to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under the Credit Documents. If at any time there
shall not be a duly appointed and acting Agent, the Applicant agrees to
make each payment due under the Credit Documents directly to the Issuing
Bank and the Banks entitled thereto during such time.
11. OTHER PROVISIONS
11.1. Amendments and Waivers
With the written consent of the Required Banks, the Agent and
the appropriate Credit Parties may, from time to time, enter into writ-
ten amendments, supplements or modifications of the Credit Documents
and, with the consent of the Required Banks, the Agent on behalf of the
Banks may execute and deliver to any such parties a written instrument
waiving or a consent to a departure from, on such terms and conditions
as the Agent may specify in such instrument, any of the requirements of
the Credit Documents or any Default or Event of Default and its con-
sequences; provided, however, that:
(a) no such amendment, supplement, modification, waiver or
consent shall, without the consent of all of the Banks, (i) increase the
Commitment Percentage of any Bank or the Commitment, (ii) extend the
Termination Date or, subject to Section 2.5, the Stated Expiration Date
of any Letter of Credit, (iii) reduce interest, any fees or other amounts
payable hereunder, (iv) postpone any date fixed for payment of
reimbursement obligations, interest or any fees or other amounts payable
hereunder, (v) change the provisions of Sections 2.11, 2.12, 11.1 or
11.6(a) or (vi) change the definition of Required Banks;
(b) without the written consent of the Issuing Bank, no
such amendment, supplement, modification or waiver shall change the
Commitment, change the amount or the time of payment of the Letter of
Credit Commissions or change any other term or provision which relates
to the Commitment or the Letters of Credit; and
(c) without the written consent of the Agent, no such
amendment, supplement, modification or waiver shall
amend, modify or
waive any provision of Section 10 or otherwise change any of the rights
or obligations of the Agent hereunder or under the Credit Documents.
Any such amendment, supplement, modification or waiver shall
apply equally to each of the Banks and shall be binding upon the parties
to the applicable Credit Document, the Banks, the Agent, the Issuing
Bank and all future Banks. In the case of any waiver, the parties to the
applicable Credit Document, the Banks and the Agent shall be restored
to their former position and rights hereunder and under the other Credit
Documents to the extent provided for in such waiver, and any Default or
Event of Default waived shall not extend to any subsequent or other
Default or Event of Default, or impair any right consequent thereon.
The Credit Documents may not be amended orally or by any course of
conduct.
11.2. Notices
All notices, requests and demands to or upon the respective
parties to the Credit Documents to be effective shall be in writing and,
unless otherwise expressly provided therein, shall be deemed to have been
duly given or made when delivered by hand, or, in the case of notice by
fax, when sent, addressed as follows in the case of the Applicant, the
Issuing Bank, the Agent and to the address of a Bank designated as such
on Schedule 1.1 hereto and to the address of a Credit Party set forth in
a Credit Document, or to such other addresses as to which the Agent may
be hereafter notified by the respective parties thereto:
The Applicant:
USF&G Corporation
100 Light Street
Baltimore, MD 21202
Attention: Treasurer
Telephone: (410) 547-3328
Fax: (410) 234-2056
with a copy to:
Corporate Secretary
Fax: (410) 547-3914
The Agent:
The Bank of New York
One Wall Street
Agency Function Administration
18th Floor
New York, New York 10286
Attention: Torry Berntsen,
Vice President
Telephone: (212) 635-7887
Fax: (212) 635-8268
The Issuing Bank:
The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Manager,
Standby Letter of Credit Department
Telephone: (212) 815-4346
Fax: (212) 815-3955,
except that any notice, request or demand by the Applicant to or upon the
Agent, the Issuing Bank or the Banks pursuant to Sections 2.1, 2.5 or 2.6
shall not be effective until received, and any notice of
payment or demand for payment under Section 2.1(c) shall not be effective
until received at the fax number designated above for the Applicant. Any
party to a Credit Document may rely on signatures of the parties thereto
which are transmitted by fax or other electronic means as fully as if
originally signed.
11.3. No Waiver; Cumulative Remedies
No failure to exercise and no delay in exercising, on the
part of the Agent, the Issuing Bank or any Bank, any right, remedy, power
or privilege under any Credit Document shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege under any Credit Document preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges under the Credit
Documents are cumulative and not exclusive of any rights, remedies, pow-
ers and privileges provided by law.
11.4. Survival of Representations and Warranties
All representations and warranties made under the Credit
Documents and in any document, certificate or statement delivered pursu-
ant thereto or in connection therewith shall survive the execution and
delivery of the Credit Documents.
11.5. Payment of Expenses and Taxes
The Applicant agrees, promptly upon presentation of a
statement or invoice therefor, and whether any Letter of Credit is issued
(i) to pay or reimburse the Agent for all its out-of-pocket costs and ex-
penses reasonably incurred in connection with the development, prepara-
tion and execution of, the Credit Documents and any amendment,
supplement or modification thereto (whether or not executed), any
documents prepared in connection therewith and the consummation of
the transactions contemplated thereby, including syndication, and,
including, without limitation, the reasonable fees and disbursements
of Special Counsel, (ii) to pay or reimburse the Agent, the Issuing Bank
and the Banks for all of their respective costs and expenses, in-
cluding, without limitation, reasonable fees and disbursements of
counsel, incurred in connection with (A) any Default or Event of Default
and any enforcement or collection proceedings resulting therefrom or
in connection with the negotiation of any restructuring or "work-out"
(whether consummated or not) of the obligations of the Credit Parties un-
der any of the Credit Documents, (B) the enforcement of this Section,
(iii) to pay, indemnify, and hold each Bank, the Issuing Bank and the
Agent harmless from and against, any and all recording and filing fees
and any and all liabilities with respect to, or resulting from any delay
in paying, stamp, excise and other similar taxes, if any, which may be
payable or determined to be payable in connection with the execution
and delivery of, or consummation of any of the transactions con-
templated by, or any amendment, supplement or modification of, or any
waiver or consent under or in respect of, the Credit Documents and any
such other documents, and (iv) to pay, indemnify and hold each Bank,
the Issuing Bank and the Agent and each of their respective officers,
directors and employees harmless from and against any and all other li-
abilities, obligations, claims, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever (including, without limitation, reasonable counsel fees and
disbursements) with respect to the enforcement and performance of
the Credit Documents, the use of the proceeds of the Letter of Credit
(all the foregoing, collectively, the "indemnified li-
abilities") and, if and to the extent that the foregoing indemnity may
be unenforceable for any reason, the Applicant agrees to make the
maximum payment permitted or not prohibited under applicable law; pro-
vided, however, that the Applicant shall have no obligation hereunder to
pay indemnified liabilities to the Agent, the Issuing Bank or any Bank
arising from the finally adjudicated gross negligence or willful
misconduct of the Agent, the Issuing Bank or such Bank or claims between
one indemnified party and another indemnified party. The agreements in
this Section shall survive the termination of the Commitment and the
payment of all amounts payable under the Credit Documents.
11.6. Assignments and Participations
(a) The Credit Documents shall be binding upon and inure to
the benefit of the Applicant, the Co-Applicants, the Banks, the Issuing
Bank, the Agent, all future Banks and their respective successors and
assigns, except that no Credit Party may assign, delegate or transfer
any of its rights or obligations under the Credit Documents without the
prior written consent of the Agent and each Bank.
(b) Each Bank shall have the right at any time, upon
written notice to the Agent of its intent to do so, to sell, assign,
transfer or negotiate all or any part of such Bank's rights under the
Credit Documents to one or more of its affiliates which would otherwise
be Eligible Assignees, to one or more of the other Banks (or to affili-
ates of such other Banks which would be an Eligible Assignee) or, with
the prior written consent of the Applicant, the Issuing Bank and the
Agent (which consent shall not be unreasonably withheld and shall not be
required upon the occurrence and during the continuance of an Event of
Default), to sell, assign, transfer or negotiate all or any part of
such Bank's rights and obligations under the Credit Documents to any
other bank, insurance company, pension fund, mutual fund or other finan-
cial institution which meets the criteria of Eligible Assignee,
provided that (i) each such sale, assignment, transfer or negotiation
(other than sales, assignments, transfers or negotiations to affiliates
of such Bank shall be in a minimum amount of $3,000,000, provided that
the assigning Bank retains a Commitment Percentage equivalent to
$5,000,000 following such assignment, and (ii) there shall be paid to
the Agent by the assigning Bank a fee (the "Assignment Fee") of $3,000.
For each assignment, the parties to such assignment shall execute and
deliver to the Agent for its acceptance and recording an Assignment and
Acceptance Agreement. Upon such execution, delivery, acceptance and
recording by the Agent, from and after the effective date specified in
such Assignment and Acceptance Agreement, the assignee thereunder
shall be a party hereto and, to the extent provided in such Assignment
and Acceptance Agreement, the assignor Bank thereunder shall be re-
leased from its obligations under the Credit Documents. Upon any such
sale, assignment or other transfer, the Commitment Percentages set
forth in Exhibit A shall be adjusted accordingly by the Agent and a new
Exhibit A shall be distributed by the Agent to the Applicant and each
Bank.
(c) Each Bank may grant participations in all or any part
of its Commitment Percentage to one or more banks, insurance companies,
financial institutions, pension funds or mutual funds, provided that
(i) such Bank's obligations under the Credit Documents shall remain
unchanged, (ii) such Bank
shall remain solely responsible to the other
parties to the Credit Documents for the performance of such obligations,
(iii) the Applicant, the Issuing Bank, the Agent and the other Banks
shall continue to deal solely and directly with such Bank in connection
with such Bank's rights and obligations under the Credit Documents, (v)
no sub-participations shall be permitted and (vi) the voting rights of
any holder of any participation shall be limited to decisions that only
do any of the following: (A) subject the participant to any additional
obligation, (B) reduce interest, any fees or other amounts payable
hereunder, or (C) postpone any date fixed for the payment of
reimbursement obligations, interest or any fees or other amounts payable
hereunder. The Applicant acknowledges and agrees that any such
participant shall for purposes of Sections 2.11 and 2.12 be deemed to
be a "Bank"; provided, however, the Applicant shall not, at any
time, be obligated to pay any participant in any interest of any Bank
hereunder any sum in excess of the sum which the Applicant would have
been obligated to pay to such Bank in respect of such interest had such
Bank not sold such participation.
(d) No Bank shall, as between and among the Applicant, any
Co-Applicant, the Issuing Bank, the Agent and such Bank, be relieved of
any of its obligations under the Credit Documents as a result of any
sale, assignment, transfer or negotiation of, or granting of par-
ticipations in, all or any part of its Commitment Percentage, except that
a Bank shall be relieved of its obligations to the extent of any such
sale, assignment, transfer, or negotiation of any part of its Com-
mitment Percentage.
(e) Notwithstanding anything to the contrary contained in
this Section, any Bank may at any time or from time to time assign all or
any portion of its rights under the Credit Documents to a Federal Reserve
Bank, provided that any such assignment shall not release such assignor
from its obligations thereunder.
11.7. Counterparts
Each Credit Document may be executed by one or more of the
parties thereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the
same document. It shall not be necessary in making proof of any Credit
Document to produce or account for more than one counterpart signed by
the party to be charged. A counterpart of any Credit Document or to any
document evidencing, and of any an amendment, modification, consent or
waiver to or of any Credit Document transmitted by fax shall be deemed to
be an originally executed counterpart. A set of the copies of the
Credit Documents signed by all the parties thereto shall be deposited
with each of the Applicant
and the Agent. Any party to a Credit Document
may rely upon the signatures of any other party thereto which are
transmitted by fax or other electronic means to the same extent as if
originally signed.
11.8. Adjustments; Set-off
(a) If any Bank (a "Benefited Bank") shall at any time
receive any payment or collateral in respect of the Letter of Credit
Obligations in excess of its pro rata share (based on its Commitment
Percentage) (whether voluntarily or involuntarily, by set-off, pursuant
to events or proceedings of the nature referred to in Section 9.1 (i) or
(j), or otherwise), such Benefited Bank shall purchase from each of the
other Banks such portion of each such other Bank's participation in the
Letter of Credit Obligations, and shall provide each of such other Banks
with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such Benefited Bank to share the excess pay-
ment or benefits of such collateral or proceeds ratably with each of
the Banks, provided, however, that if all or any portion of such excess
payment or benefits is thereafter recovered from such Benefited Bank,
such purchase shall be rescinded, and the purchase price and benefits
returned, to the extent of such recovery, but without interest. The Ap-
plicant and Co-Applicants agree that each Bank so purchasing a portion
of another Bank's percentage of Letter of Credit Obligations may exercise
all rights of payment (including, without limitation, rights of set-off,
to the extent not prohibited by law) with respect to such portion as
fully as if such Bank were the direct holder of such portion.
(b) In addition to any rights and remedies of the Banks
provided by law, upon the occurrence of and during the continuance of an
Event of Default, under Section 9.1(a) or (b), each Bank shall have the
right, without prior notice to the Applicant, any such notice being
expressly waived by each Credit Party to the extent not prohibited by
applicable law, to set-off and apply against any indebtedness, whether
contingent, matured or unmatured, of such Credit Party to such Bank, any
amount owing from such Bank to such Credit Party, at, or at any time af-
ter, the happening of any of the above-mentioned events. To the extent
not prohibited by applicable law, the aforesaid right of set-off may be
exercised by such Bank against such Credit Party or against any trustee
in bankruptcy, custodian, debtor in possession, assignee
for the benefit of creditors, receiver, or execution, judgment or attach-
ment creditor of such Credit Party, or against anyone else claiming
through or against such Credit Party or such trustee in bankruptcy,
custodian, debtor in possession, assignee for the
benefit of creditors, receiver, or execution, judgment or attachment
creditor, notwithstanding the fact that such right
of set-off shall not
have been exercised by such Bank prior to the making, filing or issu-
ance, or service upon such Bank of, or of notice of, any such petition,
assignment for the benefit of creditors, appointment or application for
the appointment of a receiver, or issuance of execution, subpoena,
order or warrant. Each Bank agrees promptly to notify the applicable
Credit Party, the Issuing Bank and the Agent after any such set-off and
application made by such Bank, provided that the failure to give such
notice shall not affect the validity of such set-off and application.
11.9. Construction
Each Credit Party represents that it has been represented by
counsel in connection with the Credit Documents and the transactions
contemplated thereby and that the principle that agreements are to be
construed against the draftsman shall be inapplicable.
11.10. Indemnity
The Applicant agrees to indemnify and hold harmless the
Agent, the Issuing Bank and each Bank and their respective affiliates,
directors, officers, employees, attorneys and agents (each an
"Indemnified Person") from and against any loss, cost, liability, dam-
age or expense (including the reasonable fees and disbursements of
counsel of such Indemnified Person, including all local counsel hired by
any such counsel) incurred by such Indemnified Person in investigating,
preparing for, defending against, or providing evidence, producing
documents or taking any other action in respect of, any commenced or
threatened litigation, administrative proceeding or investigation under
any federal securities law or any other statute of any jurisdiction, or
any regulation, or at common law or otherwise, which is alleged to
arise out of or is based upon (i) any untrue statement or alleged
untrue statement of any material fact by any Credit Party in any document
or schedule executed or filed with any Governmental Authority by or on
behalf of any Credit Party; (ii) any omission or alleged omission to
state any material fact required to be stated in such document or sched-
ule, or necessary to make the statements made therein, in light of the
circumstances under which made, not misleading; or (iii) any acts,
practices or omissions or alleged acts, practices or omissions of any
Credit Party or its agents relating to the use of the proceeds of any
or all Letters of Credit made by the Applicant which are alleged to be
in violation of Section 2.13, or in violation of any federal securities
law or of any other statute, regulation or other law of any jurisdic-
tion applicable thereto. The indemnity set
forth herein shall be in addition to any other obligations or li-
abilities of the Applicant and/or Co-Applicant to each Indemnified Person
under the Credit Documents or at common law or otherwise, and shall
survive any termination of the Credit Documents, the expiration of the
Commitment and the payment of all obligations of the Applicant and
Co-Applicants under the Credit Documents, provided that the Applicant
shall have no obligation under this Section to an Indemnified Person
with respect to any of the foregoing to the extent found in a final
judgment of a court having jurisdiction to have resulted primarily out
of the gross negligence or wilful misconduct of such Indemnified Person
or arising solely from claims between one such Indemnified Person and
another such Indemnified Person.
11.11. Governing Law
The Credit Documents and the rights and obligations of the
parties thereunder shall be governed by, and construed and interpreted in
accordance with, the internal laws of the State of New York, without
regard to principles of conflict of laws.
11.12. Headings Descriptive
Section headings have been inserted in the Credit Documents
for convenience only and shall not be construed to be a part thereof.
11.13. Severability
Every provision of the Credit Documents is intended to be
severable, and if any term or provision thereof shall be invalid, il-
legal or unenforceable for any reason, the validity, legality and
enforceability of the remaining provisions thereof shall not be affected
or impaired thereby, and any invalidity, illegality or unenforceability
in any jurisdiction shall not affect the validity, legality or en-
forceability of any such term or provision in any other jurisdiction.
11.14. Integration
All exhibits to a Credit Document shall be deemed to be a
part thereof. The Credit Documents embody the entire agreement and
understanding among the Credit Parties, the Agent, the Issuing Bank and
the Banks with respect to the subject matter thereof and supersede all
prior agreements and understandings among the Credit Parties, the Agent,
the Issuing Bank and the Banks with respect to the subject matter
thereof.
11.15. Consent to Jurisdiction
Each Credit Party hereby irrevocably submits to the
jurisdiction of any New York State or Federal court sitting in the City
of New York over any suit, action or proceeding arising out of or
relating to the Credit Documents. Each Credit Party hereby irrevocably
waives, to the fullest extent permitted or not prohibited by law, any
objection which it may now or hereafter have to the laying of the venue
of any such suit, action or proceeding brought in such a court and any
claim that any such suit, action or proceeding brought in such a court
has been brought in an inconvenient forum. Each Credit Party hereby
agrees that a final judgment in any such suit, action or proceeding
brought in such a court, after all appropriate appeals, shall be
conclusive and binding upon it.
11.16. Service of Process
Each Credit Party hereby irrevocably consents to the service
of process in any suit, action or proceeding by sending the same by
first class mail, return receipt requested or by overnight courier ser-
vice, to the address of such Credit Party set forth in or referred to in
Section 11.2 or in the applicable Credit Document executed by such Credit
Party. Each Credit Party hereby agrees that any such service (i) shall
be deemed in every respect effective service of process upon it in any
such suit, action, or proceeding, and (ii) shall to the fullest extent
enforceable by law, be taken and held to be valid personal service upon
and personal delivery to it.
11.17. No Limitation on Service or Suit
Nothing in the Credit Documents or any modification, waiver,
consent or amendment thereto shall affect the right of the Agent or any
Bank to serve process in any manner permitted by law or limit the right
of the Agent, the Issuing Bank or any Bank to bring proceedings against
any Credit Party in the courts of any jurisdiction or jurisdic-
tions in which such Credit Party may be served.
11.18. WAIVER OF TRIAL BY JURY
THE AGENT, THE ISSUING BANK, THE BANKS AND EACH CREDIT PARTY
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF,
UNDER OR IN CONNECTION WITH THE CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED THEREIN. FURTHER, EACH CREDIT PARTY HEREBY CERTIFIES THAT
NO REPRESENTATIVE OR AGENT OF THE AGENT, THE ISSUING BANK, OR THE BANKS,
OR COUNSEL TO THE AGENT OR THE BANKS, HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT THE AGENT, THE ISSUING BANK OR THE BANKS WOULD NOT, IN
THE EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO
JURY TRIAL PROVISION. EACH CREDIT PARTY ACKNOWLEDGES THAT THE AGENT, THE
ISSUING BANK AND THE BANKS HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
BY, INTER ALIA, THE PROVISIONS OF THIS SECTION.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly
authorized officers as of the day and year first above written.
USF&G CORPORATION
By: ___________________________
Name: _________________________
Title: ________________________
THE BANK OF NEW YORK,
Individually, and as Agent
and Issuing Bank
By: ___________________________
Name: _________________________
Title: ________________________
CIBC INC.
By: ___________________________
Name: _________________________
Title: ________________________
CORESTATES BANK, N.A.
By: ___________________________
Name: _________________________
Title: ________________________
CREDIT LYONNAIS NEW YORK BRANCH
By: ___________________________
Name: _________________________
Title: ________________________
CREDIT SUISSE
By: ___________________________
Name: _________________________
Title: ________________________
By: ___________________________
Name: _________________________
Title: ________________________
DEUTSCHE BANK AG, NEW YORK BRANCH
and/or CAYMAN ISLAND BRANCH
By: ___________________________
Name: _________________________
Title: ________________________
FIRST INTERSTATE BANK OF
CALIFORNIA
By: ___________________________
Name: _________________________
Title: ________________________
THE FUJI BANK, LIMITED
NEW YORK BRANCH
By: ___________________________
Name: _________________________
Title: ________________________
MELLON BANK, N.A.
By: ___________________________
Name: _________________________
Title: ________________________
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: ___________________________
Name: _________________________
Title: ________________________
THE FIRST NATIONAL BANK OF
MARYLAND
By: ___________________________
Name: _________________________
Title: ________________________
USF&G EXHIBIT A
COMMITMENT PERCENTAGES
Bank Commitment Percentage
The Bank of New York 14%
Canadian Imperial Bank of Commerce 9%
CoreStates Bank, N.A. 9%
Credit Lyonnais New York Branch 9%
Credit Suisse 9%
Deutsche Bank AG, New York Branch 9%
and/or Cayman Island Branch
First Interstate Bank of California 9%
The Fuji Bank, Limited, New York Branch 9%
Mellon Bank, N.A. 9%
Morgan Guaranty Trust Company of New York 9%
The First National Bank of Maryland 5%
USF&G EXHIBIT B
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
This Assignment and Acceptance Agreement is made and entered into
as of _____ __, 19__, by and between ____________ (the "Assignor") and
____________ (the "Assignee").
R E C I T A L S
A. The Assignor, certain other banks (together with any prior
assignees, the "Banks") and The Bank of New York, as agent (the "Agent")
and as issuing bank (the "Issuing Bank"), are parties to that certain
Letter of Credit Agreement dated as of October 25, 1994 (the "Agreement")
with USF&G Corporation, a Maryland corporation (the "Applicant") and
certain subsidiaries of the Applicant party thereto. Pursuant to the
Agreement, the Banks agreed to participate in Letters of Credit issued by
the Issuing Bank under the Agreement in accordance with their Commitment
Percentage. The Assignor's Commitment (without giving effect to the
assignment effected hereby or to other assignments thereof which have
not yet become effective) is specified in Item 1 of Schedule 1 hereto.
The Assignor's percentage of the Letter of Credit Exposure (without giv-
ing effect to the assignment effected hereby or to other assignments
thereof which have not yet become effective) is specified in Item 2 of
Schedule 1 hereto. All capitalized terms not otherwise defined herein
are used herein as defined in the Agreement.
B. The Assignor wishes to sell and assign to the Assignee, and
the Assignee wishes to purchase and assume from the Assignor, the portion
of the Assignor's Commitment specified in Item 3 of Schedule 1 hereto
(the "Assigned Commitment").
The parties agree as follows:
1. Assignment. Subject to the terms and conditions set forth
herein and in the Agreement, the Assignor hereby sells and assigns to the
Assignee, and the Assignee hereby purchases and assumes from the
Assignor, without recourse, on the date set forth above (the "Assignment
Date") all obligations of the Assignor under the Agreement with respect
to the Assigned Commitment. As consideration for the assignment and sale
contemplated hereby, the Assignee shall pay to the Assignor on the date
hereof the amount heretofore agreed between them.
2. Representation and Warranties. Each of the Assignor and the
Assignee represents and warrants to the other that (a) it has full power
and legal right to execute and deliver this Agreement and to perform the
provisions of this Agreement; (b) the execution, delivery and performance
of this Agreement have been authorized by all action, corporate or
otherwise, and do not violate any provisions of its charter or by-laws or
any contractual obligations or requirement of law binding on it; and (c)
this Agreement constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms. The Assignor
further represents that it is the legal and beneficial owner of the
interest being assigned by it hereunder and that such interest is free
and clear of any adverse claim created by the Assignor. The Assignee
further represents that it is an "Eligible Assignee" as said term is
defined in the Agreement.
3. Condition Precedent. The obligations of the Assignor and the
Assignee hereunder shall be subject to the fulfillment of the condition
that the Assignor shall have complied with the other applicable
provisions of Section 11.6 of the Agreement.
4. Notice of Assignment. The Assignor agrees to give notice of
the assignment and assumption of the Assigned Commitment to the Agent,
the Issuing Bank and the Applicant and hereby instructs the Agent, the
Issuing Bank and the Applicant to make all payments with respect to the
Assigned Commitment directly to the Assignee at the applicable office
specified on Schedule 2 hereto; provided, however, that the Applicant,
the Agent and the Issuing Bank all shall be entitled to continue to deal
solely and directly with the Assignor in connection with the interests so
assigned until the Agent, the Issuing Bank and the Applicant, to the
extent required by Section 11.6 of the Agreement, shall have received
notice of the assignment, the Applicant (and if required, the Agent and
the Issuing Bank) shall have consented in writing thereto, and the Agent
shall have recorded and accepted this Agreement and received the
Assignment Fee required to be paid pursuant to Section 11.6 of the
Agreement. From and after the date (the "Effective Date") on which the
Agent shall notify the Applicant and the Assignor that the requirements
set forth in the foregoing sentence shall have occurred and all consents
(if any) required shall have been given, (i) the Assignee shall be deemed
to be a party to the Agreement and, to the extent that rights and
obligations thereunder shall have been assigned to Assignee as provided
in such notice of assignment to the Agent, shall have the rights and
obligations of a Bank under the Agreement, and (ii) the Assignee shall be
deemed to have appointed the Agent to take such action as agent on its
behalf and to exercise such powers under the Credit Documents as are
delegated to the Agent by the terms thereof, together with such powers as
are reasonably incidental thereto. After the Effective Date, the Agent
shall make all payments in respect of the interest assigned hereby
(including payments of interest, fees and other amounts) to the
Assignee. The Assignor and Assignee shall make all ap-
propriate adjustment in payments under the Assigned Commitment for
periods prior to the Effective Date hereof directly between themselves.
If the Assignee is not a United States Person as defined in Section
7701(a)(30) of the Code, the Assignee shall deliver herewith the forms
required by Section 2.11(d) of the Agreement to evidence the Assignee's
complete exemption from United States withholding taxes with respect to
payments under the Credit Documents.
5. Independent Investigation. The Assignee acknowledges that it
is purchasing the Assigned Commitment from the Assignor totally without
recourse and, except as provided in Section 2 hereof, without represen-
tation or warranty. The Assignee further acknowledges that it has made
its own independent investigation and credit evaluation of the Applicant
and any Co-Applicant in connection with its purchase of the Assigned
Commitment. Except for the representations or warranties set forth in
Section 2, the Assignee acknowledges that it is not relying on any
representation or warranty of the Assignor, expressed or implied, in-
cluding without limitation, any representation or warranty relating to
the legality, validity, genuineness, enforceability,
collectibility, interest rate, repayment schedule or status of the
Assigned Commitment, the legality, validity, genuineness or
enforceability of the Agreement, or any other Credit Document referred to
in or delivered pursuant to the Agreement, or financial condition or
creditworthiness of the Applicant, any Co-Applicant or any other Person.
The Assignor has not and will not be acting as either the
representative, agent or trustee of the Assignee with respect to matters
arising out of or relating to the Agreement or this Agreement. From and
after the Effective Date, except as set forth in Section 4 above, the
Assignor shall have no rights or obligations with respect to the Assigned
Commitment.
6. Consent of the Applicant.
Pursuant to the provisions of Section 11.6 of the Agreement,
and to the extent required thereby, the Applicant, by signing below,
consents to this Agreement and to the assignment contemplated herein.
7. Method of Payment. Any payments to be made by either party
hereunder shall be in funds available at the place of payment on the same
day and shall be made by wire transfer to the account designated by the
party to receive payment.
8. Integration. This Agreement shall supersede any prior
agreement or understanding between the parties (other than the Agreement)
as to the subject matter hereof.
9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and shall
be binding upon both parties, their successors and assigns.
10. Headings. Section headings have been inserted herein for
convenience only and shall not be construed to be a part hereof.
11. Amendments; Waivers. This Agreement may not be amended,
changed, waived or modified except by a writing executed by the parties
hereto, and may not be amended, changed, waived or modified in any manner
inconsistent with Section 11.7 of the Agreement without the prior written
consent of the Agent.
12. Governing Law. This Agreement shall be governed by, and
construed in accordance with the laws of, the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
and Acceptance Agreement to be duly executed and delivered by their
proper and duly authorized officers as of the day and year first above
written.
________________, as Assignor
By: _________________________
Name: _______________________
Title: ______________________
________________, as Assignee
By: _________________________
Name: _______________________
Title: ______________________
Consented to:
USF&G CORPORATION
By: _________________________
Name: _______________________
Title: ______________________
Accepted:
THE BANK OF NEW YORK, as Agent
By: _________________________
Name: _______________________
Title: ______________________
THE BANK OF NEW YORK, as Issuing Bank
By: _________________________
Name: _______________________
Title: ______________________
SCHEDULE 1
TO
ASSIGNMENT AND ACCEPTANCE AGREEMENT
between
_____________________, as Assignor
and
_____________________, as Assignee
relating to
Agreement among
USF&G Corporation,
the Banks party thereto,
and
The Bank of New York, as Agent,
dated as of October 25, 1994
Item 1. (a) Assignor's Commitment
Percentage: %
(b) Assignor's Commitment: $
Item 2. Assignor's Letter of
Credit Exposure: $
(the Assignor's Commitment Percentage
times the Letter of Credit Exposure)
Item 3. Assigned Commitment:
SCHEDULE 2
TO
ASSIGNMENT AND ACCEPTANCE AGREEMENT
between
_____________________, as Assignor
and
_____________________, as Assignee
relating to
Agreement among
USF&G Corporation,
the Banks party thereto,
and
The Bank of New York, as Agent,
dated as of October 25, 1994
Address for Notices
______________________
______________________
Attention: ___________
___________
Telephone: (___) ___-____
Fax: (___) ___-____
USF&G EXHIBIT C
FORM OF LETTER OF CREDIT REQUEST
_____________, 19__
The Bank of New York, as Agent
One Wall Street
New York, New York 10286
Attention: Agency Function Administration
The Bank of New York, as Issuing Bank
101 Barclay Street
New York, New York 10286
Attention: Manager,
Standby Letter of Credit Department
Re:Letter of Credit Agreement, dated as of October 25, 1994, by
and among USF&G CORPORATION (the "Applicant"), each
Subsidiary of the Applicant which is a party thereto (each,
a "Co-Applicant"), the Banks party thereto, and THE BANK OF
NEW YORK, as Agent and Issuing Bank (the "Agreement")
Capitalized terms used herein that are defined in the Agreement
shall have the meanings therein defined.
1. Pursuant to Section 2.1 and 6.4 of the Agreement, the
undersigned Applicant [and, if applicable, ______________ (the
"Co-Applicant")] hereby requests that the Issuing Bank issue the
Letter(s) of Credit in accordance with the information annexed hereto as
Annex A, which contains the verbatim text of the proposed letter(s) of
credit including the proposed terms and conditions and a precise
description of the documentation required to be complied with and
submitted by the beneficiary, which, if complied with by the beneficiary
on or prior to the Stated Expiration Date, would require the Issuing
Agent to make payment under the Letter of Credit.
2. The Applicant hereby certifies that on the date hereof and
on the Date of Issuance set forth in Annex A, and
after giving effect to
the Letter(s) of Credit requested hereby:
(a) The Applicant is and shall be in compliance with all
of the terms, covenants and conditions of the Credit Documents.
(b) There exists and there shall exist no Default or Event
of Default under the Agreement.
(c) Each of the representations and warranties contained
in the Agreement which is required to be made on such Date of Issuance
is and shall be true and correct.
(d) After giving effect to the Letters of Credit requested
to be issued hereby, the aggregate outstanding principal balance of
the Letter of Credit Exposure does not exceed the Commitment.
[(e) The undersigned Co-Applicant acknowledges that it has
received a copy of the Agreement and acknowledges and agrees that from
and after the Date of Issuance of the Letter(s) of Credit requested
hereby, the undersigned shall be jointly and severally liable with the
Applicant for all obligations with respect to the Letter(s) of Credit
requested hereby and that the undersigned shall be a party to the
Agreement and the other Credit Documents as a Co-Applicant with all the
rights and obligations of a Co-Applicant under the Agreement and Credit
Documents with respect to the Letter(s) of Credit requested hereby, and
each and every reference in the Agreement and in any other Credit
Document to "Co-Applicant" shall mean and be a reference to include the
undersigned. The undersigned will at the request of the Agent execute a
copy of the Agreement and such other Credit Documents as may be
required.]
[(f) The undersigned Co-Applicant represents and warrants
that the Agreement and each Credit Document executed by the undersigned
Co-Applicant constitutes a legal, valid and binding obligation of the
undersigned Co-Applicant in each case enforceable in accordance with its
terms.]
[(g) The undersigned Co-Applicant specifically acknowledges
that certain provisions of the Agreement, including, without limitation,
Section 11.6 (Amendments and Waivers), 11.3 (No Waiver; Cumulative
Remedies), 11.6 (Assignments and Participation), 11.7 (Counterparts),
11.11 (Governing Law), 11.13 (Severability), 11.14 (Integration, 11.15
(Consent to Jurisdiction), 11.16 (Service of Process), 11.17 (No
Limitation on Service or Suit) and 11.18 (Waiver of Trial by Jury)
thereof, are made applicable to the Co-Applicant.]
IN WITNESS WHEREOF, the Applicant [and Co-Applicant, if
applicable] has caused this certificate to be executed by its duly
authorized officer(s) as of the date and year first written above.
USF&G CORPORATION
By: __________________________
Name: ________________________
Title: _______________________
[CO-APPLICANT]
By: __________________________
Name: ________________________
Title: _______________________
Annex A
LETTER OF CREDIT INFORMATION
1. Name of Beneficiary: __________________________________.
2. Address of Beneficiary to which Letter of Credit will be sent:
_________________________________________
______________________________________________________________.
3. Conditions under which a drawing may be made (specify the required
documentation): _____________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
_____________________________________________________________.
4. Maximum amount to be available under such Letter of Credit:
$___________.
5. Requested Date of Issuance: ___________ __, 199_.
6. Stated Expiration Date: ___________ __, 199_.
7. Text of Letter of Credit: _______________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
_____________________________________________________________.
8. Name and address of Co-Applicant, if any.
USF&G Exhibit D
The Bank of New York
Letter of Credit Department
Church St. Station
P.O.Box 11238
New York, N.Y. 10286-1238
Our Ref. No. Date
Beneficiary Applicant
(address) USF&G Corporation on behalf
of (address)
Gentlemen/Ladies:
Our reference No.
Account of:
USF&G Corporation on behalf of
(address)
Available with: Ourselves by payment
Drafts at sight drawn on the Bank of New York, New York, New York, as indicated
below.
To the extent of: ***USD ***
Expiry date:
Place of expiry: our counters
Additional details:
We hereby establish this irrevocable letter of credit in your favor for
drawings up to US$____________________, effective (date) and expiring at our
office at 101 Barclay Street, New York, New York 10007, with our close of
business on (date).
We hereby undertake to promptly honor your sight draft(s), marked "drawn under
letter of credit no.____", for all or any part of this letter of credit if
presented at our 101 Barclay Street office, New York, New York 10007 on or
before the expiry date or any automatically extended date.
Except as stated herein, this undertaking is not subject to any condition
or qualification. The obligation of the Bank of New York under this letter of
credit is the individual obligation of our letter of credit ____________ USF&G
Corporation on behalf of
The Bank of New York, and is in no way contingent upon reimbursement with
respect thereto. It is a condition of this letter of credit that it is
deemed to be automatically extended, without amendment, for one year from
the expiry date or any future expiration date, unless at least forty-five
days prior to any expiration date we notify you by registered mail that we
elect not to consider this letter of credit renewed for any such additional
period.
This letter of credit is subject to the Uniform Customs and Practice for
Documentary Credits (1993 revision), International Chamber of Commerce,
Publication No. 500.
Yours very truly,
USF&G EXHIBIT E
FORM OF OPINION OF
GENERAL COUNSEL OF THE APPLICANT
______________, 1994
To the Parties Listed
On Schedule A Hereto
Re:Letter of Credit Agreement, dated as of October 25, 1994, by
and among USF&G CORPORATION (the "Applicant"), each
Subsidiary of the Applicant which is a party thereto (each,
a "Co-Applicant"), the Banks party thereto, and THE BANK OF
NEW YORK, as Agent and Issuing Bank (the "Agreement")
Dear Sirs:
I am General Counsel for USF&G Corporation (the "Applicant")
and have acted in such capacity in connection with the Letter of Credit
Agreement (the "Agreement") dated as of October 25, 1994 among the
Applicant, the Co-Applicants, if any, listed on the signature pages
thereof, the banks listed on the signature pages thereof and The Bank of
New York, as Agent and Issuing Bank. Terms defined in the Credit
Agreement are used herein as therein defined. This opinion is being
rendered to you at the request of my client pursuant to Section 5.5 of
the Agreement.
I have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have
conducted such other investigations of fact and law as I have deemed
necessary or advisable for purposes of this opinion.
Upon the basis of the foregoing, I am of the opinion that:
1. The Applicant has all governmental licenses,
authorizations, consents and approvals required to carry on its business
as now conducted, other than such licenses, authorizations, consents and
approvals which, if not held or obtained by the Applicant, do not, in
the aggregate, have a Material Adverse Effect.
2. To the best of my knowledge after responsible inquiry,
the execution, delivery and performance by the Applicant of the
Agreement and each other Credit Document to which it is a party do not
contravene, or constitute a default under, any provision of any material
agreement, judgment, injunction, order, decree or other instrument
binding upon the Applicant or any of its Subsidiaries or result in the
creation or imposition of any material Lien on any asset of the
Applicant or any of its Subsidiaries.
3. To the best of my knowledge after responsible inquiry,
there is no action, suit or proceeding pending or threatened against or
affecting the Applicant or any of its Subsidiaries before any court or
arbitrator or any governmental body, agency or official, in which there
is a reasonable possibility of an adverse decision which could
materially adversely affect the business, consolidated financial
position or consolidated results of operations of the Applicant and its
Consolidated Subsidiaries, considered as a whole or which in any manner
draws into question the validity of the Agreement except as may have
been disclosed in the financial statements referred to in Section 4.4(a)
of the Agreement.
4. Each of the Applicant's corporate Subsidiaries is a
corporation validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all corporate powers and all
material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted, other than such
licenses, authorizations, consents and approvals which, if not held or
obtained by the Applicant, do not, in the aggregate, have a Material
Adverse Effect.
Very truly yours,
USF&G EXHIBIT F
FORM OF OPINION OF
COUNSEL FOR THE APPLICANT
__________________,1994
To the Parties Listed
on Schedule A Hereto
Re:Letter of Credit Agreement, dated as of October 25, 1994, by
and among USF&G CORPORATION (the "Applicant"), each
Subsidiary of the Applicant which is a party thereto (each,
a "Co-Applicant"), the Banks party thereto, and THE BANK OF
NEW YORK, as Agent and Issuing Bank (the "Agreement")
Dear Sirs:
We have acted as counsel for USF&G Corporation (the
"Applicant") in connection with the Letter of Credit Agreement (the
"Agreement") dated as of October 25, 1994 among the Applicant, the
Co-Applicants, if any, listed on the signature pages thereof, the banks
listed on the signature pages thereof and The Bank of New York, as Agent
and as Issuing Bank. Terms defined in the Agreement are used herein as
therein defined. This opinion is being rendered to you at the request
of our client pursuant to Section 5.5 of the Agreement.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have
conducted such other investigations of fact and law as we have deemed
necessary or advisable for purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that:
1. The Applicant is a corporation validly existing and in
good standing under the laws of Maryland, and has all corporate powers
required to carry on its business as now conducted.
2. The execution, delivery and performance by the
Applicant of the Agreement and each other Credit Document to which it is
a party are within the Applicant's corporate powers, have been duly
authorized by all necessary corporate action, require no action by the
Applicant by or in respect of, or filing by the Applicant with, any
governmental body, agency or official and do not contravene, or
constitute a default under, any provision of applicable law or
regulation or of the certificate of incorporation or by-laws of the
Applicant.
3. The Agreement constitutes a valid and binding
agreement of the Applicant and each other Credit Document delivered on
the Effective Date constitutes a valid and binding obligation of the
Applicant, in each case enforceable in accordance with its terms, except
as the same may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and by general principles of
equity (including public policy limitations on the indemnification
provisions thereof).
Very truly yours,
USF&G EXHIBIT G
FORM OF OPINION OF SPECIAL COUNSEL
_____________, 1994
To the Parties Listed
on Schedule A Hereto
Re:Letter of Credit Agreement, dated as of October 25, 1994, by
and among USF&G CORPORATION (the "Applicant"), each
Subsidiary of the Applicant which is a party thereto (each, a
"Co-Applicant"), the Banks party thereto, and THE BANK OF NEW
YORK, as Agent and Issuing Bank (the "Agreement")
We have acted as Special Counsel to the Agent in connection with
the Agreement. Capitalized terms used herein which are defined in the
Agreement shall have the meanings therein defined, unless the context
hereof otherwise requires.
We have examined originals or copies certified to our satisfaction
of the documents required to be delivered pursuant to the provisions of
Sections 5 and 6 of the Agreement. In conducting such examination, we
have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, and the conformity to originals
of all documents submitted to us as copies.
Based upon the foregoing examination, and relying with your
permission upon the opinions of John Lummis, general counsel to the
Applicant and Piper & Marbury, counsel to the Applicant, we are of the
opinion that all legal preconditions to the issuance of the first Letter
of Credit have been satisfactorily met.
This opinion is rendered solely for your benefit in
connection with the transactions referred to herein and may not be relied
upon by any other Person.
In rendering the foregoing opinion, we express no opinion as
to laws other than the laws of the State of New York and the federal laws
of the United States of America.
Very truly yours,
EMMET, MARVIN & MARTIN
- - -
SCHEDULE A
The Bank of New York
One Wall Street
New York, NY 10286
Canadian Imperial Bank of Commerce
425 Lexington Avenue
New York, NY 10017
CoreStates Bank N.A.
P.O. Box 7618
1339 Chestnut Street
Philadelphia, PA 19101-7618
Credit Lyonnais New York Branch
1301 Avenue of the Americas
New York, NY 10019
Credit Suisse
12 E. 49th Street
42nd Floor
New York, NY 10017
Deutsche Bank AG,
New York and/or Cayman Islands Branches
31 West 52nd Street
New York, NY 10019
First Interstate Bank of California
707 Wilshire Boulevard, W16-14
Los Angeles, CA 90017
The First National Bank of Maryland
25 South Charles Street
Baltimore, MD 21201
The Fuji Bank, Limited, New York Branch
Two World Trade Center
New York, NY 10048
Mellon Bank, N.A.
One Mellon Bank Center
Room 370
Pittsburgh, PA 15256
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, NY 10260-0060
USF&G SCHEDULE 1.1
TO LETTER OF CREDIT AGREEMENT DATED OCTOBER 25, 1994
LIST OF ADDRESSES FOR NOTICES
1. The Bank of New York
One Wall Street
New York, NY 10286
Attention: Stratton R. Heath, III,
Vice President
Telephone: (212) 635-6466
Telecopier: (212) 809-9520
2.Canadian Imperial Bank of Commerce
425 Lexington Avenue
New York, NY 10017
Attention: Gail M. Golightly
Financial Institutions
Telephone: (212) 856-3512
Telecopier: (212) 856-3613
3.CoreStates Bank N.A.
P.O. Box 7618
1339 Chestnut Street
Philadelphia, PA 19101-7618
Attention: Kathleen Petrelli
Telephone: (215) 973-3632
Telecopier: (215) 786-4114
4.Credit Lyonnais New York Branch
1301 Avenue of the Americas
New York, NY 10019
Attention: Peter Rasmussen
Financial Institutions
Telephone: (212) 261-7718
Telecopier (212) 261-3401
5.Credit Suisse
12 E. 49th Street
42nd Floor
New York, NY 10017
Attention: Dawn K. Rubinstein
Telephone: (212) 238-5364
Telecopier: (212) 238-5389
- - -
6.Deutsche Bank AG,
New York and/or Cayman Islands Branches
31 West 52nd Street
New York, NY 10019
Attention: Susan A. Maros
Vice President
Financial Institutions
Telephone: (212) 474-8104
Telecopier: (212) 474-8108
7.First Interstate Bank of California
707 Wilshire Boulevard, W16-14
Los Angeles, CA 90017
Attention: Tim Helotes
Vice President
U.S. Banking Division -
Financial Institutions Area
Telephone: (213) 614-4122
Telecopier: (213) 614-2569
8.The First National Bank of Maryland
25 South Charles Street
Baltimore, MD 21201
Attention: Kimberly Cantwell
Corporate Banking
Telephone: (410) 244-4979
Telecopier: (410) 244-4294
9.The Fuji Bank, Limited, New York Branch
Two World Trade Center
New York, NY 10048
Attention: W. Scott Harwood
Assistant Vice President
U.S. Corporate Finance
Telephone: (212) 898-2138
Telecopier: (212) 912-0516
10.Mellon Bank, N.A.
One Mellon Bank Center
Room 151-350
Pittsburgh, PA 15258
Attention: Robert E. Brandenstein
Institutional Banking
Telephone: (412) 234-1158
Telecopier: (412) 234-8087
11.Morgan Guaranty Trust Company of New York
60 Wall Street
New York, NY 10260-0060
Attention: Patricia Merritt
Vice President
Telephone: (212) 648-6744
Telecopier: (212) 648-5249
Schedule 8.1
The following amounts of debt are outstanding and such debt is secured by
various liens:
Amount Transaction
$13,000,000 Chancellor Capital Holdings
10,995,000 Norwest
1,445,000 Oklahoma Mortgage
7,585,000 Orangewood
6,685,000 Northmark
4,979,000 Breezewood Mews
460,000 Charleston
9,800,000 Laurel Village
45,000,000 Others