CONFORMED COPY
$150,000,000
CREDIT AGREEMENT
dated as of
March 29, 1996
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 17
SECTION 1.03 Types of Borrowings 17
ARTICLE II
THE CREDITS
SECTION 2.01 Commitments to Lend 18
SECTION 2.02 Notice of Committed Borrowing 18
SECTION 2.03 Money Market Borrowings 19
SECTION 2.04 Notice to Banks; Funding of Loans 23
SECTION 2.05 Euro-Currency Loans in an
Alternative Currency 24
SECTION 2.06 Notes 25
SECTION 2.07 Maturity of Loans 25
SECTION 2.08 Interest Rates 26
SECTION 2.09 Facility Fees 31
SECTION 2.10 Optional Termination or Reduction of
Commitments 32
SECTION 2.11 Mandatory Termination of Commitments 32
SECTION 2.12 Mandatory and Optional Prepayments 32
SECTION 2.13 General Provisions as to Payments 33
SECTION 2.14 Funding Losses 34
SECTION 2.15 Computation of Interest and Fees 35
SECTION 2.16 Judgment Currency. 35
SECTION 2.17 Extension of Termination Date 36
ARTICLE III
CONDITIONS
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*The Table of Contents is not a part of this Agreement.
SECTION 3.01 Closing 37
SECTION 3.02 Borrowings 38
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Corporate Existence and Power 39
SECTION 4.02 Corporate and Governmental
Authorization; No Contravention 39
SECTION 4.03 Binding Effect 40
SECTION 4.04 Financial Information 40
SECTION 4.05 Litigation 41
SECTION 4.06 Compliance with ERISA 41
SECTION 4.07 Environmental Matters 41
SECTION 4.08 Taxes 42
SECTION 4.09 Subsidiaries 42
SECTION 4.10 Not an Investment Company 42
SECTION 4.11 Full Disclosure 42
ARTICLE V
COVENANTS
SECTION 5.01 Information 43
SECTION 5.02 Payment of Obligations 45
SECTION 5.03 Maintenance of Property; Books and
Records; Insurance 46
SECTION 5.04 Conduct of Business and Maintenance
of Existence 46
SECTION 5.05 Compliance with Laws 47
SECTION 5.06 Negative Pledge 47
SECTION 5.07 Consolidations, Mergers and Sales of
Assets; Ownership by USF&G
Corporation 48
SECTION 5.08 Use of Proceeds 49
SECTION 5.09 Ratio of Debt to Adjusted
Consolidated Tangible Net Worth 49
SECTION 5.10 Minimum Consolidated Tangible Net Worth 49
SECTION 5.11 Transactions with Affiliates 49
ARTICLE VI
DEFAULTS
SECTION 6.01 Events of Default 50
SECTION 6.02 Notice of Default 53
ARTICLE VII
THE AGENT
SECTION 7.01 Appointment and Authorization 53
SECTION 7.02 Agent and Affiliates 53
SECTION 7.03 Action by Agent 53
SECTION 7.04 Consultation with Experts 53
SECTION 7.05 Liability of Agent 53
SECTION 7.06 Indemnification 54
SECTION 7.07 Credit Decision 54
SECTION 7.08 Successor Agent 54
SECTION 7.09 Agent's Fee 55
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01 Basis for Determining Interest Rate
Inadequate or Unfair 55
SECTION 8.02 Illegality 56
SECTION 8.03 Increased Cost and Reduced Return 57
SECTION 8.04 Taxes 59
SECTION 8.05 Base Rate Loans Substituted for
Affected Fixed Rate Loans 61
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Notices 61
SECTION 9.02 No Waivers 62
SECTION 9.03 Expenses; Indemnification 62
SECTION 9.04 Sharing of Set-Offs 63
SECTION 9.05 Amendments and Waivers 63
SECTION 9.06 Successors and Assigns 64
SECTION 9.07 Collateral 66
SECTION 9.08 Governing Law; Submission to Jurisdiction 66
SECTION 9.09 Counterparts; Integration; Effectiveness 66
SECTION 9.10 WAIVER OF JURY TRIAL 67
SECTION 9.11 Existing Credit Agreement 67
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 March 29, 1996 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:
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), in each case 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) plus up to $210,000,000 of Qualified
Deferrable Securities Obligations and (3) 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) or 2.08(f), as the case may be.
"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, Pounds 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 1994 Form 10-K" means the Borrower's annual report on Form 10-K
for 1994, 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, 1995, 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, Swiss Bank
Corporation, 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.
"Dollar Equivalent" means, on any date, the amount of Dollars converted
from an Alternative Currency at the Agent's spot buying rate (based on the
London Interbank Market rate then prevailing) for such Alternative Currency
against Dollars as of approximately 9:00 A.M. (New York time) three
Euro-Currency Business Days before such date.
"Dollars", "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, Swiss Bank Corporation, 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, Swiss Bank Corporation, 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(w)).
"Existing Credit Agreement" means the Credit Agreement dated as of December
1, 1994 among USF&G Corporation, the banks party thereto and Deutsche Bank AG,
New York and/or Cayman Island Branches, as agent.
"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, three
or six (or, subject to availability, 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; and
(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 30 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; and
(6) with respect to each Euro-Currency Borrowing, the period commencing on
the date of such Euro-Currency Borrowing and ending one, two, three or six (or,
subject to availability, 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) or 2.08(f), as the case may be.
"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 $50,000,000.
"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 $50,000,000.
"Material Plan" means at any time a Plan or Plans having aggregate Unfunded
Liabilities in excess of $15,000,000.
"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)).
"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 limited liability company, 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.
"Qualified Debt Securities" means Debt securities of the Borrower, provided
that the terms of any such Debt security (i) permit the deferral of principal
and interest payments (other than Tax Interest) for a period of up to five years
(but not beyond the maturity date), as elected by the Borrower, (ii) have a
maturity for payment of principal of not less than 19 years after the date of
issuance, and (iii) contain subordination terms substantially consistent with
(or more favorable to the Banks than) the subordination terms contained in the
form of Indenture for Subordinated Debt Securities filed as an exhibit to the
Borrower's Registration Statement on Form S-3 (File No. 33-65471) declared
effective by the Securities and Exchange Commission on February 20, 1996.
"Qualified Deferrable Securities Obligations" means at any date, without
duplication, the obligations recorded on the consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries in respect of Qualified Debt
Securities and Qualified Preferred Securities issued by the Borrower or any
Subsidiary.
"Qualified Preferred Securities" means preferred securities issued by a
Subsidiary, the sole purpose of which is to issue such securities and invest the
proceeds thereof in Qualified Debt Securities, and which preferred securities
are payable solely out of the proceeds of payments on account of such Qualified
Debt Securities.
"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.
"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.
"Tax Interest" means any additional amounts payable in respect of Qualified
Debt Securities to reimburse a Subsidiary issuing any related Qualified
Preferred Securities for any taxes or impositions payable by such Subsidiary in
respect of such Qualified Debt Securities during any period in which interest
payments otherwise have been deferred.
"Termination Date" means the fifth 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).
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.ss.
327.4(a) (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.
The following definitions in this subsection (c) apply to Euro-Dollar
Loans.
"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.
The following definitions in this subsection (f) apply to Euro-Currency
Loans.
"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, commencing on June 30, 1996, 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. Upon receipt of any notice pursuant to this Section 2.10, the Agent shall
promptly notify each Bank of the contents thereof.
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 except with the consent of the Bank which made such
Loan.
(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 2.07(g), 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 each anniversary of the Effective
Date (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 9.06(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),
provided that all the outstanding Loans of each Bank which did not respond
affirmatively shall be purchased at par plus accrued interest by such other bank
or banks, such other bank or banks shall pay to such Bank all accrued fees and
Borrower shall pay all other amounts then owing to such Bank, 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.
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 Deputy 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) evidence satisfactory to it that the commitments under the
Existing Credit Agreement shall have been terminated and all of the
obligations of the Borrower thereunder shall have been paid in full; and
(f) 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
April 30, 1996;
(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 the representations and warranties set
forth in Sections 4.04(c) or 4.05) 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.
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, 1994
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 1994 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, 1995 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, 1994 there has been no Material Adverse Effect.
(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, 1995 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) and (b), 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.
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 $75,000,000 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 (1) Non-Recourse Debt, (2) up to
$210,000,000 in Qualified Deferrable Securities Obligations, unless an event of
default exists under, or with respect to, any of such Qualified Deferrable
Securities Obligations and any of such Qualified Deferrable Securities
Obligations have been accelerated or may, with the giving of notice or the lapse
of time, or both, be accelerated, and (3) any subordinated Guarantee of payment
of the Qualified Preferred Securities, but only if such Guarantee is a guarantee
of payment (but not of collection) and guarantees payment only to the extent
that the Subsidiary issuing the Qualified Preferred Securities has funds on hand
available for payment) 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)
$1,150,000,000 plus (ii) 50% of the consolidated net income of the Borrower and
its Consolidated Subsidiaries for the period commencing on January 1, 1996 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.
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 $15,000,000 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
$15,000,000;
(j) enforceable judgments or orders for the payment of money in excess
of $30,000,000 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 (together with accrued interest
thereon) 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.
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.
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.
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 (other than a Bank) 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 or (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 of the Borrower 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 (other than an
assignment made pursuant to Section 2.17), the transferor Bank or, in the case
of an assignment pursuant to subsection (f) below, the Borrower 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.
(f) The Borrower shall have the right to require that any Bank assign all
of its rights and obligations under this Agreement and its Notes (including any
outstanding Money Market Loans) to a new bank or an existing Bank if (i) in the
case of a new bank, such new bank shall be acceptable to the Required Banks and
(ii) such new bank or Bank, as the case may be, shall enter into an Assignment
and Assumption Agreement therefor with such assigning Bank subject to the
provisions of subsection (c) above, pursuant to which such new bank or Bank, as
the case may be, shall purchase the outstanding Loans of the assigning Bank at
par plus accrued interest and shall pay to assigning Bank all accrued fees and
the Borrower shall pay to the assigning Bank all other amounts then owing to it
under this Agreement.
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.
SECTION 9.11. Existing Credit Agreement. Each Bank which is a party hereto
and to the Existing Credit Agreement hereby waives the notice required to be
given pursuant to Section 2.10 thereof in order to terminate the "Commitments"
(as defined therein).
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
$30,000,000 DEUTSCHE BANK AG, NEW YORK AND/OR
CAYMAN ISLAND BRANCHES
By: /s/ Eckhard Osenberg
Title: Assistant Vice President
By: /s/ Cynthia A. Gavenda
Title: Associate
$15,000,000 THE BANK OF NEW YORK
By: /s/ Lizanne T. Eberle
Title: Vice President
$15,000,000 CITIBANK, N.A.
By: /s/ Stephen P. Zwick
Title: Vice President
$15,000,000 MELLON BANK, N.A.
By: /s/ Robert E. Brandenstein
Title: Vice President
$15,000,000 MORGAN GUARANTY TRUST COMPANY OF
NEW YORK
By: /s/ Ann E. Darby
Title: Vice President
$10,000,000 ABN AMRO BANK N.V., NEW YORK BRANCH
By: /s/ Victor J. Fennon
Title: Vice President
By: /s/ Eisso P.W. VanderMeulen
Title: Assistant Vice President
$10,000,000 CIBC INC.
By: /s/ Lu Ann Bowers
Title: As Agent
$10,000,000 CREDIT LYONNAIS, NEW YORK BRANCH
By: /s/ Renaud d'Herbes
Title: Senior Vice President
CREDIT LYONNAIS, CAYMAN ISLAND
BRANCH
By: /s/ Renaud d'Herbes
Title: Authorized Signer
$10,000,000 FIRST INTERSTATE BANK OF CALIFORNIA
By: /s/ Thomas J. Helotes
Title: Vice President
$10,000,000 NATIONSBANK, N.A. (SOUTH)
By: /s/ William Herrell
Title: Officer
$10,000,000 SWISS BANK CORPORATION
By: /s/ Darryl M. Monasebian
Title: Director
By: /s/ Donna L. Burton
Title: Associate Director
- -----------------
Total Commitments
$150,000,000
=================
DEUTSCHE BANK AG, NEW YORK
AND/OR CAYMAN ISLAND BRANCHES,
as Agent
By: /s/ Eckhard Osenberg
Title: Assistant Vice President
By: /s/ Cynthia A. Gavenda
Title: Associate
31 West 52nd Street
New York, New York 10019
Attention: Susan A. Maros
Telex number: 429166
Facsimile number: (212) 469-8366
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 Level II Level III Level IV Level Level
I V VI
=================== ------ ---------- ----------- ---------- ------- =======
Euro-Currency and
Euro-Dollar Margin .225% .25% .2625% .3% .35% .5%
=================== ------ ---------- ----------- ---------- ------- =======
Base Rate Margin 0 0 0 0 0 0
- ------------------- ------ ---------- ----------- ---------- ------- =======
CD Margin .35% .375% .3875% .425% .475% .625%
- ------------------- ------ ---------- ----------- ---------- ------- =======
Facility Fee Rate .1% .125% .1375% .15% .2% .25%
=================== ====== ========== =========== ========== ======= =======
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 senior
unsecured long-term debt is rated at least A- by S&P and A3 by Moody's.
"Level II Status" exists at any date if, at such date, (i) the Borrower's
senior unsecured long-term debt is rated at least BBB+ by S&P and Baa1 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
senior unsecured long-term debt is rated at least BBB by S&P and Baa2 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
senior unsecured long-term debt is rated at least BBB by S&P or Baa2 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, (i) the Borrower's
senior unsecured long-term debt is rated at least BBB- by S&P and Baa3 by
Moody's and (ii) none of Level I Status, Level II Status, Level III Status and
Level IV Status exists.
"Level VI 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, Level V Status or Level VI 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.
SCHEDULE I
The following amounts of debt are outstanding and such debt is secured by
various liens:
Amount Transaction
$45,000,000 Miscellaneous
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 March 29, 1996 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
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
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- -------------------------------------------------------------------------
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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 March 29, 1996 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 March 29, 1996
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
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.
*** 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%).
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 March 29, 1996 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
EXHIBIT E
OPINION OF THE
DEPUTY 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 Deputy 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 March 29, 1996 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
my 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 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 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.
3. 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 articles of
incorporation or by-laws of the Borrower.
4. 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.
5. There is no action, suit or proceeding pending or, to the best of my
knowledge, 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 materially adversely affect the business,
consolidated financial position or consolidated results of operations of the
Borrower and its Consolidated Subsidiaries, considered as a whole, 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) and (b) of the Credit Agreement.
6. Each of the Borrower and the Borrower's corporate Subsidiaries named
below 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. The
Subsidiaries referred to in this paragraph are United States Fidelity and
Guaranty Company and Fidelity and Guaranty Life Insurance Company.
Davis Polk & Wardwell may rely on this opinion in connection with the
rendering by such firm of an opinion to you dated the date hereof with respect
to the Agreement.
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 March
29, 1996 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. In rendering this opinion, we have assumed that all documents submitted
to us as originals are authentic, all documents submitted to us as certified or
photostatic copies conform to the original document, all signatures on all
documents submitted to us for examination are genuine, and all public records
received are accurate and complete.
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 (including public policy limitations on the
indemnification provisions thereof).
Davis Polk & Wardwell may rely on this opinion in connection with the
rendering by such firm of an opinion to you dated the date hereof with respect
to the Agreement.
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 March 29, 1996 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 opinions of J. Kendall Huber, Deputy General
Counsel of the Borrower, and of Piper & Marbury, counsel for the Borrower, a
copy of each 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 March 29, 1996 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 in respect of the Assigned Amount 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
- ----------
*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.
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 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
By__________________________
Title:
By__________________________
Title: