$500,000,000
CREDIT AGREEMENT
dated as of
December 13, 1994
among
UNUM CORPORATION
The BANKS Listed Herein
and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Agent
TABLE OF CONTENTS*
Page
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ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions. . . . . . . . . . . . . . . . . . 1
1.02 Accounting Terms and Determinations. . . . . . 15
1.03 Types of Borrowings. . . . . . . . . . . . . . 15
1.04 Basis for Ratings. . . . . . . . . . . . . . . 16
ARTICLE II
THE CREDITS
SECTION 2.01 Commitments to Lend. . . . . . . . . . . . . . 16
2.02 Notice of Committed Borrowing. . . . . . . . . 16
2.03 Money Market Borrowings. . . . . . . . . . . . 17
2.04 Notice to Banks; Funding of Loans. . . . . . . 21
2.05 Notes. . . . . . . . . . . . . . . . . . . . . 22
2.06 Maturity of Loans. . . . . . . . . . . . . . . 23
2.07 Interest Rates . . . . . . . . . . . . . . . . 23
2.08 Fees . . . . . . . . . . . . . . . . . . . . . 27
2.09 Optional Termination or
Reduction of Commitments . . . . . . . . . . . 28
2.10 Mandatory Termination of Commitments . . . . . 28
2.11 Optional Prepayments . . . . . . . . . . . . . 28
2.12 General Provisions as to Payments. . . . . . . 29
2.13 Funding Losses . . . . . . . . . . . . . . . . 29
2.14 Computation of Interest and Fees . . . . . . . 30
2.15 Withholding Tax Exemption. . . . . . . . . . . 30
ARTICLE III
CONDITIONS
SECTION 3.01 Effectiveness. . . . . . . . . . . . . . . . . 31
3.02 Borrowings . . . . . . . . . . . . . . . . . . 32
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* The Table of Contents is not a part of this Agreement.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Corporate Existence and Power. . . . . . . . . 33
4.02 Corporate and Governmental
Authorization; No Contravention. . . . . . . . 33
4.03 Binding Effect . . . . . . . . . . . . . . . . 33
4.04 Financial Information. . . . . . . . . . . . . 33
4.05 Litigation.. . . . . . . . . . . . . . . . . . 35
4.06 Compliance with ERISA. . . . . . . . . . . . . 36
4.07 Taxes. . . . . . . . . . . . . . . . . . . . . 36
4.08 Subsidiaries.. . . . . . . . . . . . . . . . . 36
4.09 Not an Investment Company. . . . . . . . . . . 37
4.10 Full Disclosure. . . . . . . . . . . . . . . . 37
ARTICLE V
COVENANTS
SECTION 5.01 Financial Statements . . . . . . . . . . . . . 37
5.02 Litigation . . . . . . . . . . . . . . . . . . 42
5.03 Corporate Existence, Etc.. . . . . . . . . . . 42
5.04 Use of Proceeds. . . . . . . . . . . . . . . . 43
5.05 Prohibition of Fundamental Changes . . . . . . 43
5.06 Limitation on Liens. . . . . . . . . . . . . . 46
5.07 Transactions with Affiliates . . . . . . . . . 47
5.08 Minimum Total Stockholders' Equity . . . . . . 47
5.09 Ratio of Funded Indebtedness to
Total Capital. . . . . . . . . . . . . . . . . 47
5.10 Restricted and Unrestricted
Subsidiaries . . . . . . . . . . . . . . . . . 47
ARTICLE VI
DEFAULTS
SECTION 6.01 Events of Default. . . . . . . . . . . . . . . 48
6.02 Notice of Default. . . . . . . . . . . . . . . 51
ARTICLE VII
THE AGENT
SECTION 7.01 Appointment and Authorization. . . . . . . . . 51
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7.02 Agent and Affiliates.. . . . . . . . . . . . . 51
7.03 Action by Agent. . . . . . . . . . . . . . . . 51
7.04 Consultation with Experts. . . . . . . . . . . 51
7.05 Liability of Agent . . . . . . . . . . . . . . 52
7.06 Indemnification. . . . . . . . . . . . . . . . 52
7.07 Credit Decision. . . . . . . . . . . . . . . . 52
7.08 Successor Agent. . . . . . . . . . . . . . . . 53
7.09 Agent's Fee. . . . . . . . . . . . . . . . . . 53
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01 Basis for Determining Interest
Rate Inadequate or Unfair. . . . . . . . . . . 53
8.02 Illegality . . . . . . . . . . . . . . . . . . 54
8.03 Increased Cost and Reduced Return. . . . . . . 55
8.04 Base Rate Loans Substituted for
Affected Fixed Rate Loans. . . . . . . . . . . 57
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Notices. . . . . . . . . . . . . . . . . . . . 57
9.02 No Waivers . . . . . . . . . . . . . . . . . . 58
9.03 Expenses; Documentary Taxes;
Indemnification. . . . . . . . . . . . . . . . 58
9.04 Sharing of Set-Offs. . . . . . . . . . . . . . 59
9.05 Amendments and Waivers . . . . . . . . . . . . 59
9.06 Successors and Assigns . . . . . . . . . . . . 59
9.07 Collateral . . . . . . . . . . . . . . . . . . 61
9.08 Governing Law; Submission to Jurisdiction. . . 61
9.09 Counterparts; Integration. . . . . . . . . . . 62
9.10 Confidentiality. . . . . . . . . . . . . . . . 62
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CREDIT AGREEMENT
AGREEMENT dated as of December 13, 1994 among UNUM CORPORATION, the
BANKS listed on the signature pages hereof and MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, as Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. The following terms, as used herein, have
the following meanings:
"Absolute Rate Auction" means a solicitation of Money Market Quotes
setting forth Money Market Absolute Rates pursuant to Section 2.03.
"Adjusted CD Rate" has the meaning set forth in Section 2.07(b).
"Adjusted London Interbank Offered Rate" has the meaning set forth in
Section 2.07(c).
"Administrative Questionnaire" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Agent and submitted to
the Agent (with a copy to the Borrower) duly completed by such Bank.
"Affiliate" means any Person which directly or indirectly controls, or
is under common control with, or is controlled by, the Borrower. As used in
this definition, "control" (including, with its correlative meanings,
"controlled by" and "under common control with") means possession, directly or
indirectly, of power to direct or cause the direction of management or policies
(whether through ownership of securities or partnership or other ownership
interests, by contract or otherwise), PROVIDED that, in any event, any Person
which owns directly or indirectly 15% or more of the securities having ordinary
voting power for the election of directors or other governing body of a
corporation or 15% or more of the partnership or other ownership interests of
any other Person (other than as a limited partner of such other Person) will
be rebuttably presumed to control such corporation or other Person, such
presumption to be rebutted only if the Required Banks agree in writing that such
Person does not control such corporation or other Person. Notwithstanding the
foregoing, (i) no individual shall be deemed to be an Affiliate of any Person
solely by reason of his or her being an officer of such Person and (ii) the
Borrower and the Restricted Subsidiaries shall not be deemed to be Affiliates of
each other.
"Agent" means Morgan Guaranty Trust Company of New York in its
capacity as agent for the Banks hereunder, and its successors in such capacity.
"Applicable Insurance Regulatory Authority" means, when used with
respect to any Restricted Insurance Subsidiary, the insurance commission,
department or similar regulatory authority or agency located in the jurisdiction
in which such Restricted Insurance Subsidiary is domiciled.
"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 and (iii) in the case of
its Money Market Loans, its Money Market Lending Office.
"Applicable Margin" has the meaning set forth in Section 2.07(h).
"Assessment Rate" has the meaning set forth in Section 2.07(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
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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 UNUM Corporation, a Delaware corporation, and its
successors.
"Borrower's 1993 Form 10-K" means the Borrower's annual report on Form
10-K for 1993, as filed with the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934.
"Borrowing" has the meaning set forth in Section 1.03.
"Capitalized Lease Obligations" means, as to any Person, the
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) real and/or personal property, which
obligations are required to be classified and accounted for as a capital lease
on the balance sheet of such Person under generally accepted accounting
principles (including Statement of Financial Accounting Standards No. 13 of the
Financial Accounting Standards Board) and, for purposes of this Agreement, the
amount of such obligations shall be the capitalized amount thereof, determined
in accordance with generally accepted accounting principles (including such
Statement No. 13).
"CD Base Rate" has the meaning set forth in Section 2.07(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 Reference Banks" means Credit Suisse, NationsBank of Georgia, N.A.
and Morgan Guaranty Trust Company of New York.
"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 reduced from time to time pursuant to Sections 2.09 and 2.10.
"Committed Loan" means a loan made by a Bank pursuant to Section 2.01.
"Confidential Information" has the meaning set forth in Section 9.10.
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"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.
"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.
"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
2.07(b).
"Effective Date" means the date this Agreement becomes effective in
accordance with Section 3.01.
"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-Dollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
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"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 Reference Banks" means the principal London offices of
Credit Suisse, NationsBank of Georgia, N.A. and Morgan Guaranty Trust Company of
New York.
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section
2.07(c).
"Event of Default" has the meaning set forth in Section 6.01.
"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 Morgan Guaranty Trust Company of New
York on such day on such transactions as determined by the Agent.
"Fixed Rate Loans" means CD 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.
"Funded Indebtedness" means, for the Borrower and the Restricted
Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles, Indebtedness that (i) matures more than one year
from the date of its creation or (ii) matures on or within
5
one year from the date of its creation but is renewable or extendable at the
option of the obligor thereof to a date more than one year from the date of its
creation, PROVIDED that, for purposes of this definition, Indebtedness shall be
deemed to be renewable or extendable at the option of the obligor thereof if it
arises under a credit or other similar agreement that obligates the lender or
lenders thereunder to extend credit to such obligor notwithstanding that the
ability of such obligor to renew or extend such Indebtedness is subject to the
satisfaction of conditions precedent.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Indebtedness
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
Indebtedness (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
Indebtedness 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 endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Home Office Properties" means any building in which the principal
office of the Borrower or any Restricted Subsidiary of the Borrower is located.
"Indebtedness" 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 arising in the ordinary
course of business, (iv) all Capitalized Lease Obligations of such Person, (v)
all Indebtedness secured by a Lien on any asset of such Person, whether or not
such Indebtedness is otherwise an obligation of such Person, (vi) 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, (vii) all non-contingent obligations of such Person to
reimburse any bank or other Person in respect of amounts paid under a
6
letter of credit or similar instrument and (viii) all Indebtedness of others
Guaranteed by such Person.
"Indemnitee" has the meaning set forth in Section 9.03(b).
"Insurance Subsidiary" means a Subsidiary that is a Restricted
Insurance Subsidiary or would be a Restricted Insurance Subsidiary if it were a
Restricted Subsidiary.
"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 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 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
7
thereafter; 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;
(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; and
(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 30 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.
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"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, PROVIDED
that, in the case of any investment in any Unrestricted Subsidiary, the
definition of "Investment" shall not include investments resulting from (i) the
provision of administrative services by the Borrower or any Restricted
Subsidiary to such Unrestricted Subsidiary, which services are provided in the
ordinary course of the business of the Borrower or such Restricted Subsidiary,
as the case may be, and of such Unrestricted Subsidiary, (ii) the operation of
the cash management system of the Borrower and its Subsidiaries so long as it is
operated in the ordinary course of their business or (iii) transfers made, or
accounts created, in connection with any tax sharing agreement to which the
Borrower or any Restricted Subsidiary, as the case may be, and such Unrestricted
Subsidiary is a party.
"Level I Status" exists on any date (1) if, on such date, the Borrower
has outstanding senior unsecured long-term Indebtedness which is rated at least
A+ from S&P and at least A1 from Moody's or (2) in the case that no such
Indebtedness is outstanding, if the Borrower provides written evidence from S&P
and Moody's to the Banks, such evidence to be satisfactory to the Required
Banks, to the effect that if the Borrower had any such Indebtedness outstanding
on such date, such Indebtedness would be rated at least A+ from S&P and at least
A1 from Moody's. For purposes of this definition, the provisions in clause (2)
in the preceding sentence shall not apply for more than 365 consecutive days
after the first date of the written evidence most recently provided by the
Borrower from S&P and Moody's to the Banks, which evidence was relied on by the
Required Banks to establish that the provisions of such clause (2) were then
operative.
"Level II Status" exists on any date (1) if, on such date, the
Borrower has outstanding senior unsecured long-term Indebtedness which is rated
at least A from S&P or at least A2 from Moody's or (2) in the case that no such
Indebtedness is outstanding, if the Borrower provides written evidence from S&P
and Moody's to the Banks, such evidence to be satisfactory to the Required
Banks, to the effect that if the Borrower had any such Indebtedness outstanding
on such date, such Indebtedness would be rated at least A from S&P or at least
A2 from Moody's. For purposes of this definition, the provisions in clause (2)
in the preceding sentence shall not apply for more than 365
9
consecutive days after the first date of the written evidence most recently
provided by the Borrower from S&P and Moody's to the Banks, which evidence was
relied on by the Required Banks to establish that the provisions of such clause
(2) were then operative.
"Level III Status" exists on any date (1) if, on such date, the
Borrower has outstanding senior unsecured long-term Indebtedness which is rated
at least A- from S&P and at least A3 from Moody's or (2) in the case that no
such Indebtedness is outstanding, if the Borrower provides written evidence from
S&P and Moody's to the Banks, such evidence to be satisfactory to the Required
Banks, to the effect that if the Borrower had any such Indebtedness outstanding
on such date, such Indebtedness would be rated at least A- from S&P and at least
A3 from Moody's. For purposes of this definition, the provisions in clause (2)
in the preceding sentence shall not apply for more than 365 consecutive days
after the first date of the written evidence most recently provided by the
Borrower from S&P and Moody's to the Banks, which evidence was relied on by the
Required Banks to establish that the provisions of such clause (2) were then
operative.
"Level IV Status" exists on any date if neither Level I Status nor
Level II Status nor Level III Status exists on such date.
"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 owned by any Person, any
mortgage, lien, pledge, charge, security interest or encumbrance of any kind in
respect of such asset. For the purposes of this Agreement, any Person 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-Dollar Loan or a Money Market
Loan and "Loans" means Domestic 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
2.07(c).
"Material Indebtedness" means Indebtedness (other than the Notes) of
the Borrower and/or one or more of its
10
Subsidiaries, arising in one or more related or unrelated transactions, in an
aggregate principal amount exceeding $10,000,000.
"Material Plan" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $20,000,000.
"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.
"Moody's" means Moody's Investors Service, Inc.
"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.
11
"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)).
"Parent" means, with respect to any Bank, any Person controlling such
Bank.
"Participant" has the meaning set forth in Section 9.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan (other than
a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.
"Prime Rate" means the rate of interest publicly announced by Morgan
Guaranty Trust Company of New York in New York City from time to time as its
Prime Rate.
"Reference Banks" means the CD Reference Banks or the Euro-Dollar
Reference Banks, as the context may require, and "Reference Bank" means any one
of such Reference Banks.
"Refunding Borrowing" means a Committed Borrowing which, after
application of the proceeds thereof, results in no net increase in the
outstanding principal amount of Committed Loans made by any Bank.
12
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Regulation X" means Regulation X 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 a majority of
the aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding Notes evidencing at least a majority of the aggregate unpaid
principal amount of the Loans.
"Restricted Insurance Subsidiary" means a Restricted Subsidiary that
is licensed, authorized or admitted to carry on or transact the business of
insurance.
"Restricted Subsidiary" means: (i) the Subsidiaries listed as such on
Schedule I hereto and (ii) any Subsidiary acquired or organized after the
Effective Date and any Unrestricted Subsidiary in each case that is duly
designated by the Borrower, pursuant to Section 5.10, to be a Restricted
Subsidiary; PROVIDED that any such Subsidiary included solely within clause (ii)
shall cease being a Restricted Subsidiary if and when it is duly designated by
the Borrower, pursuant to Section 5.10, as an Unrestricted Subsidiary.
"S&P" means Standard & Poor's Corporation.
"Status" means, at any date, whichever of Level I Status, Level II
Status, Level III Status or Level IV Status exists at such date.
"Subsidiary" means 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 the Borrower.
"Termination Date" means October 1, 1999, or, if such day is not a
Euro-Dollar Business Day, the next succeeding Euro-Dollar Business Day unless
such Euro-Dollar Business Day falls in another calendar month, in which case the
Termination Date shall be on the next preceding Euro-Dollar Business Day.
"Total Assets" means the total assets of the Borrower and the
Restricted Subsidiaries determined on a consolidated basis in accordance with
generally accepted
13
accounting principles, LESS the excess (if any) of (i) any Investment of the
Borrower or any Restricted Subsidiary in any Unrestricted Subsidiary to the
extent that such Investment appears on the consolidated balance sheet of the
Borrower and the Restricted Subsidiaries used in the calculation of Total Assets
over (ii) the amount of such Investment in such Unrestricted Subsidiary which
constitutes Indebtedness of, or other amounts receivable from, such Unrestricted
Subsidiary to the extent that the amount referred to above in this clause (ii)
does not exceed the consolidated stockholders' equity of such Unrestricted
Subsidiary and its consolidated subsidiaries.
"Total Capital" means the sum of Funded Indebtedness and Total
Stockholders' Equity.
"Total Stockholders' Equity" means the total stockholders' equity of
the Borrower and the Restricted Subsidiaries determined on a consolidated basis
in accordance with generally accepted accounting principles, LESS the excess (if
any) of (i) any Investment of the Borrower or any Restricted Subsidiary in any
Unrestricted Subsidiary to the extent that such Investment appears on the
consolidated balance sheet of the Borrower and the Restricted Subsidiaries used
in the calculation of Total Stockholders' Equity over (ii) the amount of such
Investment in such Unrestricted Subsidiary which constitutes Indebtedness of, or
other amounts receivable from, such Unrestricted Subsidiary to the extent that
the amount referred to above in this clause (ii) does not exceed the
consolidated stockholders' equity of such Unrestricted Subsidiary and its
consolidated subsidiaries.
"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.
"Unrestricted Subsidiary" means: (i) the Subsidiaries listed on
Schedule I hereto which are not listed therein as Restricted Subsidiaries and
(ii) any Subsidiary acquired or organized after the Effective Date that has not
been duly designated by the Borrower as a
14
Restricted Subsidiary; PROVIDED that any such Subsidiary shall cease being an
Unrestricted Subsidiary if and when it is duly designated by the Borrower,
pursuant to Section 5.10 hereof, as a Restricted Subsidiary.
"Utilization" means at any date the percentage equivalent of a
fraction (i) the numerator of which is the aggregate outstanding principal
amount of the Loans at such date, after giving effect to any borrowing or
payment on such date, and (ii) the denominator of which is the aggregate amount
of the Commitments at such date, after giving effect to any reduction of the
Commitments on such date. For purposes of Section 2.07(h), if for any reason
any Loans remain outstanding after termination of the Commitments, the
Utilization for each date on or after the date of such termination shall be
deemed to be greater than 50%.
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
15
Article II under which participation therein is determined (I.E., a "Committed
Borrowing" is a Borrowing under Section 2.01 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).
SECTION 1.04. BASIS FOR RATINGS. The credit ratings to be utilized
in the determination of a Status and for purposes of Section 5.05(c) are the
ratings assigned to senior unsecured long-term Indebtedness of the Borrower
without third party credit support; ratings assigned to any such Indebtedness
which is secured or which has the benefit of third party credit support shall be
disregarded.
ARTICLE II
THE CREDITS
SECTION 2.01. COMMITMENTS TO LEND. During the period from and
including the Effective Date to but excluding the Termination Date, 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 shall be in an aggregate principal amount of
$10,000,000 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(b)) 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, repay, or to the extent permitted by Section 2.11, prepay Loans and
reborrow at any time prior to the Termination Date under this Section.
SECTION 2.02. NOTICE OF COMMITTED BORROWING. The Borrower shall give
the Agent notice (a "Notice of Committed Borrowing") not later than 10:00 A.M.
(New York City time) on (x) the date of each Base Rate Borrowing, (y) the second
Domestic Business Day before each CD 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
16
Borrowing or a Euro-Dollar Business Day in the case of a Euro-Dollar
Borrowing,
(b) the aggregate amount of such Borrowing,
(c) whether the Loans comprising such Borrowing are to be CD Loans,
Base Rate Loans or Euro-Dollar Loans, 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 at any time prior to the Termination Date to make offers to
make Money Market Loans 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
10:00 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
$10,000,000 or a larger multiple of $1,000,000,
17
(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) 9:15 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
18
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;
19
(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 10:00 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,
20
(ii) the principal amount of each Money Market Borrowing must be
$10,000,000 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. 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 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
21
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 higher of the
Federal Funds Rate and the interest rate applicable thereto pursuant to Section
2.07 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.
SECTION 2.05. 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(b), the
Agent shall mail 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 prior
to any transfer of its Note shall endorse
22
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 2.06. 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 2.07. 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 the Interest Period applicable thereto, at a rate per annum
equal to the sum of the Applicable Margin plus the applicable Adjusted CD Rate;
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 Applicable Margin plus
the Adjusted CD Rate applicable to such Loan and (ii) the rate applicable to
Base Rate Loans for such day.
The "Adjusted CD Rate" applicable to any Interest Period means a rate
per annum determined pursuant to the following formula:
23
[ CDBR ]*
ACDR = [ ---------- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
__________
* The amount in brackets being rounded upward, if necessary, to the next
higher 1/100 of 1%
The "CD Base Rate" applicable to any Interest Period is the rate of
interest determined by the Agent to be the average (rounded upward, if
necessary, to the next higher 1/100 of 1%) of the prevailing rates per annum bid
at 10:00 A.M. (New York City time) (or as soon thereafter as practicable) on the
first day of such Interest Period by two or more New York certificate of deposit
dealers of recognized standing for the purchase at face value from each CD
Reference Bank of its certificates of deposit in an amount comparable to the
principal amount of the CD Loan of such CD Reference Bank to which such Interest
Period applies and having a maturity comparable to such Interest Period.
"Domestic Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including without limitation any
basic, supplemental or emergency reserves) for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of new non-personal time deposits in dollars in New York City having a
maturity comparable to the related Interest Period and in an amount of $100,000
or more. The Adjusted CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Domestic Reserve Percentage.
"Assessment Rate" means for any day the annual assessment rate in
effect on such day which is payable by a member of the Bank Insurance Fund
classified as adequately capitalized and within supervisory subgroup "A" (or a
comparable successor assessment risk classification) within the meaning of 12
C.F.R. Section 327.3(e) (or any successor provision) to the Federal Deposit
Insurance Corporation (or any successor) for such Corporation's (or such
successor's) insuring time deposits at offices of such institution in the
24
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 the Interest Period applicable thereto, at a rate
per annum equal to the sum of the Applicable Margin plus the applicable Adjusted
London Interbank Offered Rate. 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 "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
25
each day from and including the date payment thereof was due to but excluding
the date of actual payment, at a rate per annum equal to the sum of 2% plus the
higher of (i) the sum of the Applicable Margin plus the Adjusted London
Interbank Offered Rate applicable to such Loan and (ii) the Applicable Margin
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 2.07(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) 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.
26
(g) 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.
(h) The "Applicable Margin" with respect to any Euro-Dollar Loan or
CD Loan at any date is the applicable percentage amount set forth in the table
below based on the Utilization and Status on such day:
Level I Level II Level III Level IV
Status Status Status Status
------- -------- --------- --------
If Utilization is
equal to or less
than 50%:
Euro-Dollar Loans 0.2000% 0.2500% 0.2750% 0.2750%
CD Loans 0.3250% 0.3750% 0.4000% 0.4000%
If Utilization is
greater than 50%:
Euro-Dollar Loans 0.2750% 0.3000% 0.3250% 0.3750%
CD Loans 0.4000% 0.4250% 0.4500% 0.5000%
SECTION 2.08. FEES.
(a) FACILITY FEE. The Borrower shall pay to the Agent for the
account of the Banks ratably a facility fee at the rate of (i) 0.1000% per annum
for each day on which Level I Status shall exist, (ii) 0.1250% per annum for
each day on which Level II Status shall exist, (iii) 0.1500% per annum for each
day on which Level III Status shall exist and (iv) 0.2000% per annum for each
day on which Level IV Status shall exist. Such facility fee shall accrue for
each day (i) from and including the Effective Date to but excluding the
Termination Date (or earlier date of termination of the Commitments in their
entirety), on the aggregate amount of the Commitments (whether used or unused)
and (ii) from and including the Termination Date (or earlier date of termination
of the Commitments in their entirety) to but excluding the date the Loans shall
be repaid in their
27
entirety, on the aggregate outstanding principal amount of the Loans.
(b) PAYMENTS. Accrued fees under this Section shall be payable
quarterly on each March 1, June 1, September 1 and December 1 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 2.09. 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
$10,000,000 or any larger multiple of $1,000,000, the aggregate amount of the
Commitments in excess of the aggregate outstanding principal amount of the
Loans.
SECTION 2.10. 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 2.11. OPTIONAL PREPAYMENTS. (a) The Borrower may (i) upon
at least one Domestic Business Days' notice to the Agent, prepay any Base Rate
Borrowing (or any Money Market Borrowing bearing interest at the Base Rate
pursuant to Section 8.01(a)) or, subject to Section 2.13, any CD Borrowing and
(ii) upon at least three Euro-Dollar Business Days' notice to the Agent, subject
to Section 2.13, prepay any Euro-Dollar Borrowing, in whole at any time, or from
time to time in part in amounts aggregating $10,000,000 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.
(b) Except as provided in clause (i) of subsection (a) above, the
Borrower may not prepay all or any portion of the principal amount of any Money
Market Loan prior to the maturity thereof.
(c) 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.
28
SECTION 2.12. 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-Dollar 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 unless such Euro-Dollar Business Day
falls in another calendar month, in which case the date for payment thereof
shall be the next preceding Euro-Dollar Business Day. 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) 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 2.13. FUNDING LOSSES. If the Borrower makes any payment of
principal with respect to any Fixed Rate Loan (pursuant to Section 2.11 or
Article VI or VIII or otherwise) on any day other than the last day of the
Interest Period applicable thereto, or the last day of an applicable period
fixed pursuant to Section 2.07(d), or if the Borrower fails to borrow any Fixed
Rate Loans after notice has been given to any Bank in accordance with Section
2.04(a), or if the Borrower fails to prepay after giving
29
notice thereof under Section 2.11, 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, PROVIDED that such Bank shall have delivered to
the Borrower a certificate as to the amount of such loss or expense, which
certificate shall be conclusive in the absence of manifest error.
SECTION 2.14. COMPUTATION OF INTEREST AND FEES. Interest based on
the Prime Rate hereunder and fees 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 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 2.15. WITHHOLDING TAX EXEMPTION. At least five Domestic
Business Days prior to the first date on which interest or fees are payable
hereunder for the account of any Bank, each Bank that is not incorporated under
the laws of the United States of America or a state thereof agrees that it will
deliver to each of the Borrower and the Agent two duly completed copies of
United States Internal Revenue Service Form 1001 or 4224, certifying in either
case that such Bank is entitled to receive payments under this Agreement and the
Notes without deduction or withholding of any United States federal income
taxes. Each Bank which so delivers a Form 1001 or 4224 further undertakes to
deliver to each of the Borrower and the Agent two additional copies of such form
(or a successor form) on or before the date that such form expires or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent form so delivered by it, and such amendments thereto or extensions or
renewals thereof as may be reasonably requested by the Borrower or the Agent, in
each case certifying that such Bank is entitled to receive payments under this
Agreement and the Notes without deduction or withholding of any United States
federal income taxes, unless an event (including without limitation any change
in treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Bank from duly completing and delivering any such
form with respect to it and such Bank advises the Borrower and the Agent that it
is not capable of receiving payments
30
without any deduction or withholding of United States federal income tax.
ARTICLE III
CONDITIONS
SECTION 3.01. EFFECTIVENESS. This Agreement shall become effective
on the date that each of the following conditions shall have been satisfied (or
waived in accordance with Section 9.05):
(a) 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 or other written confirmation from
such party of execution of a counterpart hereof by such party);
(b) receipt by the Agent for the account of each Bank of a duly
executed Note dated on or before the Effective Date complying with the
provisions of Section 2.05;
(c) receipt by the Agent of an opinion of Kevin J. Tierney, Esq.,
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;
(d) receipt by the Agent of an opinion of Davis Polk & Wardwell,
special counsel for the Agent, 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;
(e) receipt by the Agent of evidence satisfactory to it that each of
the Credit Agreements dated as of April 1, 1993 among the Borrower, the
banks listed on the signature pages thereof and Morgan Guaranty Trust
Company of New York, as agent, has been terminated and that all amounts
owing thereunder as of the Effective Date by the Borrower have been paid in
full; and
(f) receipt by the Agent of all documents it may reasonably request
relating to the existence of the
31
Borrower, the corporate authority for and the validity and enforceability
of this Agreement and the Notes, and any other matters relevant hereto, all
in form and substance satisfactory to the Agent;
PROVIDED that this Agreement shall not become effective or be binding on any
party hereto unless all of the foregoing conditions are satisfied not later than
December 31, 1994. The Agent shall promptly notify the Borrower and the Banks
of the Effective 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) receipt by the Agent of a Notice of Borrowing as required by
Section 2.02 or 2.03, as the case may be;
(b) the fact that, immediately after such Borrowing, the aggregate
outstanding principal amount of the Loans will not exceed the aggregate
amount of the Commitments;
(c) the fact that, immediately before and after such Borrowing, no
Default shall have occurred and be continuing; and
(d) the fact that the representations and warranties of the Borrower
contained in this Agreement (except, in the case of a Refunding Borrowing,
the representations and warranties set forth in Sections 4.04(g) and 4.05
as to any matter which has theretofore been disclosed in writing by the
Borrower to the Banks) 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
(b), (c) and (d) of this Section.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
32
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 Delaware, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted.
SECTION 4.02. CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO
CONTRAVENTION. The execution, delivery and performance by the Borrower of this
Agreement and the Notes (1) 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, (2) do
not contravene, or constitute a default under, any provision of applicable law
or regulation or of the certificate of incorporation or by-laws of the Borrower
or any Restricted Subsidiary or of any agreement, judgment, injunction, order,
decree or other instrument binding upon the Borrower or any Restricted
Subsidiary or result in the creation or imposition of any Lien on any asset of
the Borrower or any Restricted Subsidiary and (3) do not contravene, or
constitute a default under, any provision of applicable law or regulation or of
the certificate of incorporation or by-laws of any Unrestricted Subsidiary or of
any agreement, judgment, injunction, order, decree or other instrument binding
upon any Unrestricted Subsidiary or result in the creation or imposition of any
Lien on any asset of any Unrestricted Subsidiary, where there is a reasonable
possibility that such contravention or default or creation or imposition of a
Lien, together with any contraventions and/or defaults and/or Liens so created
or imposed and in each case referred to in clauses (1) through (3), inclusive,
above, could materially adversely affect the business, consolidated financial
position or consolidated results of operations of the Borrower and the
Restricted Subsidiaries, taken as a whole.
SECTION 4.03. BINDING EFFECT. This Agreement constitutes a valid and
binding agreement of the Borrower and the Notes, when executed and delivered in
accordance with this Agreement, will constitute valid and binding obligations of
the Borrower.
SECTION 4.04. FINANCIAL INFORMATION.
(a) The consolidated statements of income, stockholders' equity and
of cash flows of the Borrower and the Restricted Subsidiaries for the fiscal
year ended December 31, 1993 and the related consolidated balance
33
sheets as at the end of such period, a copy of which has been delivered to each
of the Banks, fairly present, in all material respects and in conformity with
generally accepted accounting principles, the consolidated financial condition
of the Borrower and the Restricted Subsidiaries as of such date and their
consolidated results of operations and cash flows for such period.
(b) The consolidated statements of income and of cash flows of the
Borrower and the Restricted Subsidiaries for the nine months ended September 30,
1994 and the related consolidated balance sheets as at the end of such period, a
copy of which has been delivered to each of the Banks, fairly present, in all
material respects and in conformity with generally accepted accounting
principles applied on a basis consistent with the financial statements referred
to in subsection (a) above, the consolidated financial condition of the Borrower
and the Restricted 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) The consolidated statements of income, stockholders' equity and
of cash flows of the Borrower and the Consolidated Subsidiaries for the fiscal
year ended December 31, 1993 and the related consolidated balance sheets as at
the end of such period, reported on by Ernst & Young and set forth in the
Borrower's 1993 Form 10-K, a copy of which has been delivered to each of the
Banks, fairly present, in all material respects and in conformity with generally
accepted accounting principles, the consolidated financial condition of the
Borrower and the Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such period.
(d) The consolidated statements of income and of cash flows of the
Borrower and the Consolidated Subsidiaries for the nine months ended September
30, 1994 and the related consolidated balance sheets as at the end of such
period, set forth in the Borrower's quarterly report for the fiscal quarter
ended September 30, 1994 as filed with the Securities and Exchange Commission on
Form 10-Q, a copy of which has been delivered to each of the Banks, fairly
present, in all material respects and in conformity with generally accepted
accounting principles applied on a basis consistent with the financial
statements referred to in subsection (c) above, the consolidated financial
condition of the Borrower and the 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).
34
(e) The Annual Statement of each Restricted Insurance Subsidiary for
the fiscal year ended December 31, 1993, as filed with the Applicable Insurance
Regulatory Authority of such Restricted Insurance Subsidiary, a copy of which
has been delivered to each of the Banks, presents the statutory financial
condition of such Restricted Insurance Subsidiary in accordance with statutory
accounting practices required or permitted by such Applicable Insurance
Regulatory Authority, and the amounts carried in the balance sheet referred to
therein on account of the actuarial items referred to in clauses (1) through
(5), inclusive, of the statement of the Corporate Actuary contained therein (i)
are computed in accordance with commonly accepted actuarial standards
consistently applied and are fairly stated in accordance with sound actuarial
principles, (ii) are based on actuarial assumptions that produce reserves at
least as great as those called for in any contract provision and are in
accordance with all other contract provisions, (iii) meet the requirements of
the insurance laws and regulations of the State in which such Restricted
Insurance Subsidiary is domiciled, (iv) make a good and sufficient provision for
all unmatured obligations of such Restricted Insurance Subsidiary guaranteed
under the terms of its policies, (v) are computed on the basis of assumptions
consistent with those used in computing the corresponding items in the Annual
Statement of such Restricted Insurance Subsidiary for the fiscal year ended
December 31, 1990, except as noted in the notes thereto and (vi) include
provisions for all actuarial reserves and related statement items that ought to
be established, and such actuarial methods, considerations and analyses conform
to the appropriate Standards of Practice as promulgated by the Actuarial
Standards Board, which standards form the basis of this statement of opinion.
(f) The Quarterly Statement of each Restricted Insurance Subsidiary
for the nine months ended September 30, 1994, as filed with the Applicable
Insurance Regulatory Authority of such Restricted Insurance Subsidiary, a copy
of which has been delivered to each of the Banks, presents the statutory
financial condition of such Restricted Insurance Subsidiary in accordance with
statutory accounting practices required or permitted by such Applicable
Insurance Regulatory Authority.
(g) Since September 30, 1994 there has been no material adverse
change in the business, financial position, results of operations or prospects
of the Borrower and the Restricted Subsidiaries, considered as a whole.
SECTION 4.05. LITIGATION. There is no action, suit or proceeding
pending against, or to the knowledge of
35
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 possibility of an adverse decision which
could materially adversely affect the business, consolidated financial position
or consolidated results of operations of the Borrower and the Restricted
Subsidiaries, taken as a whole, or which in any manner draws into question the
validity or enforceability 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 has resulted or could result in the imposition of a Lien or the posting of
a bond or other security under ERISA or the Internal Revenue Code 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. TAXES. United States Federal income tax returns of the
Borrower and its Subsidiaries have been examined and closed through the fiscal
year ended December 31, 1986. The Borrower and the Restricted 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 Restricted Subsidiary. The charges, accruals and reserves on the books
of the Borrower and the Restricted Subsidiaries in respect of taxes or other
governmental charges are, in the opinion of the Borrower, adequate. There has
been no failure by any Unrestricted Subsidiary to file any tax return required
to be filed by it or to pay any tax when due which failure, together with any
other failures referred to in this Section 4.07, could materially adversely
affect the business, consolidated financial position or consolidated results of
operations of the Borrower and the Restricted Subsidiaries, taken as a whole.
SECTION 4.08. SUBSIDIARIES. Each of the Restricted Subsidiaries is a
corporation duly incorporated,
36
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 4.09. NOT AN INVESTMENT COMPANY. Neither the Borrower nor
any Restricted Subsidiary is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
SECTION 4.10. 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 known to it 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 the Restricted
Subsidiaries, taken as a whole, or the ability of the Borrower to perform its
obligations under this Agreement.
ARTICLE V
COVENANTS
The Borrower agrees that so long as any Bank has any Commitment
hereunder or any amount payable under any Note remains unpaid:
SECTION 5.01. FINANCIAL STATEMENTS. The Borrower shall deliver to
each of the Banks:
(a) as soon as available and in any event within 60 days after the end
of each of the first three fiscal quarterly periods of each fiscal year of
the Borrower, consolidated statements of income and of cash flows of the
Borrower and the Restricted Subsidiaries for such period and for the period
from the beginning of the respective fiscal year to the end of such period,
and the related consolidated balance sheets as at the end of such period,
setting forth in each case in comparative form the corresponding figures
for the corresponding periods in the preceding fiscal year, accompanied by
a certificate of a senior financial
37
officer of the Borrower, which certificate shall state that said financial
statements fairly present, in all material respects, the consolidated
financial condition and results of operations and cash flows of the
Borrower and the Restricted Subsidiaries in accordance with generally
accepted accounting principles, consistently applied, as at the end of, and
for, such periods (subject to normal year-end audit adjustments);
(b) as soon as available and in any event within 100 days after the
end of each fiscal year of the Borrower, consolidated statements of income,
stockholders' equity and of cash flows of the Borrower and the Restricted
Subsidiaries for such year and the related consolidated balance sheets as
at the end of such year, setting forth in each case in comparative form the
corresponding figures for the preceding fiscal year, and accompanied by an
opinion thereon of independent certified public accountants of recognized
national standing, which opinion shall state that said financial statements
fairly present, in all material respects, the consolidated financial
condition and results of operations and cash flows of the Borrower and the
Restricted Subsidiaries as at the end of, and for, such fiscal year, and a
certificate of such accountants stating that, in making the audit necessary
for their opinion, they obtained no knowledge, except as specifically
stated, of any Default;
(c) as soon as available and in any event within 60 days after the end
of each of the first three fiscal quarterly periods of each fiscal year of
the Borrower, consolidated statements of income and of cash flows of the
Borrower and the Consolidated Subsidiaries for such period and for the
period from the beginning of the respective fiscal year to the end of such
period, and the related consolidated balance sheets as at the end of such
period, setting forth in each case in comparative form the corresponding
figures for the corresponding periods in the preceding fiscal year,
accompanied by a certificate of a senior financial officer of the Borrower,
which certificate shall state that said financial statements fairly
present, in all material respects, the consolidated financial condition and
results of operations and cash flows of the Borrower and the Consolidated
Subsidiaries in accordance with generally accepted accounting principles,
consistently applied, as at the end of, and for, such periods (subject to
normal year-end audit adjustments);
38
(d) as soon as available and in any event within 100 days after the
end of each fiscal year of the Borrower, consolidated statements of income,
stockholders' equity and of cash flows of the Borrower and the Consolidated
Subsidiaries for such year and the related consolidated balance sheets as
at the end of such year, setting forth in each case in comparative form the
corresponding figures for the preceding fiscal year, and accompanied by an
opinion thereon of independent certified public accountants of recognized
national standing, which opinion shall state that said financial statements
fairly present, in all material respects, the consolidated financial
condition and results of operations and cash flows of the Borrower and the
Consolidated Subsidiaries as at the end of, and for, such fiscal year;
(e) as soon as available and in any event not later than 90 days after
the end of each fiscal year of each Restricted Insurance Subsidiary, (i)
the Annual Statements of such Restricted Insurance Subsidiary (prepared in
accordance with the statutory accounting practices required or permitted by
its Applicable Insurance Regulatory Authority) for such fiscal year as
filed with such Applicable Insurance Regulatory Authority, together with
the opinion thereon of a senior financial officer of such Restricted
Insurance Subsidiary stating that such Annual Statements present the
statutory financial condition of such Restricted Insurance Subsidiary in
accordance with statutory accounting practices required or permitted by
such Applicable Insurance Regulatory Authority, and (ii) a certificate of
the Corporate Actuary of such Restricted Insurance Subsidiary affirming
that the amounts carried in the balance sheet referred to therein on
account of the actuarial items referred to in clauses (1) through (5),
inclusive, of such certificate (i) are computed in accordance with commonly
accepted actuarial standards consistently applied and are fairly stated in
accordance with sound actuarial principles, (ii) are based on actuarial
assumptions that produce reserves at least as great as those called for in
any contract provision and are in accordance with all other contract
provisions, (iii) meet the requirements of the insurance laws and
regulations of the State in which such Restricted Insurance Subsidiary is
domiciled, (iv) make a good and sufficient provision for all unmatured
obligations of such Restricted Insurance Subsidiary guaranteed under the
terms of its policies, (v) are computed on the basis of assumptions
consistent with those used in computing the corresponding items in the
39
Annual Statement of such Restricted Insurance Subsidiary for the preceding
fiscal year, except as noted in the notes thereto and (vi) include
provisions for all actuarial reserves and related statement items that
ought to be established, and affirming that such actuarial methods,
considerations and analyses conform to the appropriate Standards of
Practice as promulgated by the Actuarial Standards Board, which Standards
of Practice form the basis of this certification;
(f) as soon as available and in any event within 60 days after the end
of each fiscal quarter of each Restricted Insurance Subsidiary (except for
the fourth fiscal quarter of any fiscal year), (i) quarterly statutory
financial statements of such Restricted Insurance Subsidiary (prepared in
accordance with statutory accounting practices required or permitted by its
Applicable Insurance Regulatory Authority) for such fiscal quarter as filed
with such Applicable Insurance Regulatory Authority, together with the
opinion thereon of a senior financial officer of such Restricted Insurance
Subsidiary stating that such statutory financial statements present the
statutory financial condition of such Restricted Insurance Subsidiary in
accordance with statutory accounting practices required or permitted by
such Applicable Insurance Regulatory Authority;
(g) promptly upon their becoming available, copies of all registration
statements and regular periodic reports (including, without limitation,
Form 8-K), if any, which the Borrower shall have filed with the Securities
and Exchange Commission (or any governmental agency substituted therefor)
or any national securities exchange;
(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) 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 which might constitute grounds for
a termination of such Plan under Title IV of ERISA, 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
40
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 has resulted or could
result in the imposition of a Lien or the posting of a bond or other
security, 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;
(j) promptly after the Borrower knows that any Default has occurred, a
notice of such Default describing the same in reasonable detail and,
together with such notice or as soon thereafter as possible, a description
of the action that the Borrower as taken and proposes to take with respect
thereto;
(k) promptly upon the occurrence of any change in the rating of any
obligation of the Borrower by either Moody's or S&P, a notice setting forth
the details thereof; and
(l) from time to time such other information regarding the business,
affairs or financial condition of the Borrower or any of the Subsidiaries
as the Agent, at the request of any Bank, may reasonably request, if the
requesting Bank in good faith determines that such information is or may be
necessary or useful to it to determine or monitor the Borrower's compliance
with the provisions of this Agreement.
The Borrower will furnish to each Bank, at the time it furnishes each set of
financial statements pursuant to paragraph (a), (b), (c) or (d) above, a
certificate of a senior financial officer of the Borrower (i) to the effect
41
that no Default has occurred and is continuing (or, if any Default has occurred
and is continuing, describing the same in reasonable detail and describing the
action that the Borrower has taken and proposes to take with respect thereto)
and (ii) setting forth in reasonable detail the computations necessary to
determine whether the Borrower is in compliance with Sections 5.08 and 5.09 as
of the end of the respective fiscal quarter or fiscal year.
SECTION 5.02. LITIGATION. The Borrower shall promptly give to each
Bank notice of all legal or arbitral actions, suits and proceedings, and of all
actions, suits and proceedings by or before any governmental or regulatory
authority or agency, affecting the Borrower or any Subsidiary, except actions,
suits and proceedings which in the aggregate, if adversely determined, would
not, in the judgment of the Borrower, have a material adverse effect on the
business, consolidated financial condition or consolidated results of operations
of the Borrower and the Restricted Subsidiaries, taken as a whole.
SECTION 5.03. CORPORATE EXISTENCE, ETC. Except as provided in
Section 5.05, the Borrower shall, and shall cause each Restricted Subsidiary to:
preserve and maintain its corporate existence and all of its material rights,
privileges and franchises; comply with the requirements of all applicable laws,
rules, regulations and orders of governmental or regulatory authorities if
failure to comply with such requirements would materially and adversely affect
the consolidated financial condition or operations, or the business taken as a
whole, of the Borrower and the Restricted Subsidiaries; pay and discharge all
taxes, assessments and governmental charges or levies imposed on it or on its
income or profits or on any of its property prior to the date on which penalties
attach thereto, except for any such tax, assessment, charge or levy the payment
of which is being contested in good faith and by proper proceedings and against
which adequate reserves are being maintained; maintain all of its properties
used or useful in its business in good working order and condition, ordinary
wear and tear excepted; permit one or more representatives acting on behalf of
all of the Banks, during normal business hours, to examine, copy and make
extracts from its books and records, to inspect its properties, and to discuss
its business and affairs with its officers, all to the extent reasonably
requested by the Required Banks for the purposes described in Section 5.01(l),
PROVIDED that such representatives shall have the right to copy and make
extracts from such books and records only after the occurrence and during the
continuance of a Default; and keep insured by financially sound and reputable
insurers all
42
property of a character usually insured by corporations engaged in the same or
similar business similarly situated against loss or damage of the kinds and in
the amounts customarily insured against by such corporations and carry such
other insurance as is usually carried by such corporations and/or self insure
all property, in a manner and in amounts, in accordance with generally accepted
actuarial and accounting principles.
SECTION 5.04. USE OF PROCEEDS. The Borrower shall use the proceeds
of the Loans hereunder to finance general corporate activities (including,
without limitation, the repurchase of stock of the Borrower and the purchase of
stock of other companies) in compliance with all applicable legal and regulatory
requirements, including, without limitation, the Securities Exchange Act of
1934, as amended, and the regulations promulgated thereunder, including, without
limitation, Regulations U and X.
SECTION 5.05. PROHIBITION OF FUNDAMENTAL CHANGES. The Borrower shall
not, nor shall it permit any Restricted Subsidiary to, enter into any
transaction of merger or consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), convey, sell, lease,
transfer or otherwise dispose of, in one transaction or a series of
transactions, all or a substantial part of its business or assets, whether now
owned or hereafter acquired (including, without limitation, receivables and
leasehold interests, but excluding (i) any inventory or other assets sold or
disposed of in the ordinary course of business according to ordinary business
terms and (ii) obsolete or worn-out property) or make any material change in its
present method of conducting business except that:
(a) any Restricted Subsidiary may merge with or consolidate into (i)
the Borrower if the Borrower shall be the surviving corporation or (ii) any
other Restricted Subsidiary;
(b) any Restricted Subsidiary may sell, lease, transfer or otherwise
dispose of any or all of its assets (upon voluntary liquidation or
otherwise) to the Borrower or another Restricted Subsidiary;
(c) (I) the Borrower may merge with or consolidate into any other
Person if the Borrower is the surviving corporation; (II) the Borrower may
merge with or consolidate into any other Person where the Borrower is not
the surviving corporation and may transfer substantially all its assets as
an entirety to any
43
other Person, if, but only if (i) the corporation into which the Borrower
is merged or formed by such consolidation or the Person which acquires
substantially all the Borrower's assets as an entirety is a corporation
organized and existing under the laws of the United States or any State
thereof, and shall expressly assume, by an agreement executed and delivered
to the Agent and the Banks and in form and substance satisfactory to the
Agent and the Banks, the due and punctual payment of the principal of, and
interest on, all Loans then outstanding or thereafter made hereunder and
the due and punctual payment of all other amounts then outstanding or
thereafter required to be paid hereunder and the performance of every
covenant and agreement contained herein, (ii) after giving effect to such
merger, consolidation or transfer, no Default shall exist hereunder, (iii)
the corporation referred to in clause (i) above shall have outstanding
senior unsecured long-term Indebtedness rated at least A- by S&P and at
least A3 by Moody's or, if no such Indebtedness is outstanding, the
Borrower shall have provided written evidence from S&P and Moody's to the
Banks, such evidence to be satisfactory to the Required Banks, that, if
such corporation had such Indebtedness outstanding, such Indebtedness would
be rated at least A- by S&P and at least A3 by Moody's and (iv) at the time
of such merger, consolidation or transfer the Borrower and the Restricted
Subsidiaries would be permitted to incur at least $1.00 of additional
Funded Indebtedness under Section 5.09, PROVIDED that no such transfer
shall have the effect of releasing the Borrower from any of its obligations
hereunder or under the Notes; and (III) a Restricted Subsidiary may merge
or consolidate with or into or transfer substantially all its assets as an
entirety to any other Person if the surviving or transferee corporation is
or contemporaneously therewith becomes a Restricted Subsidiary; PROVIDED
that in each case, after giving effect to such merger, consolidation or
transfer, (i) no Default shall exist hereunder, (ii) the Borrower's
outstanding senior unsecured long-term Indebtedness shall be rated at least
A- by S&P and at least A3 by Moody's or, if no such Indebtedness is
outstanding, if the Borrower provides written evidence from S&P and Moody's
to the Banks, such evidence to be satisfactory to the Required Banks, to
the effect that, if the Borrower had any such Indebtedness outstanding at
such time, such Indebtedness would be rated at least A- by S&P and at least
A3 by Moody's and (iii) the Borrower and the Restricted Subsidiaries would
be
44
permitted to incur at least $1.00 of additional Funded Indebtedness under
Section 5.09;
(d) the Borrower or any Restricted Subsidiary may change its present
lines of business or, in connection therewith, may abandon or otherwise
dispose of any material rights, privileges and franchises, or its present
method of conducting business if such change, abandonment or disposition
will not, in the Borrower's Board of Directors' good faith judgment, have a
material adverse effect on the business, operations, property, financial or
other condition of the Borrower and the Restricted Subsidiaries, taken as a
whole;
(e) the Borrower or any Restricted Subsidiary may, in any fiscal
quarter of the Borrower, convey, sell, lease, transfer or otherwise dispose
of assets (not otherwise permitted under this Section 5.05 to be disposed
of) which, together with all other assets (not otherwise permitted under
this Section 5.05 to be disposed of) theretofore so disposed of in such
fiscal quarter and in the immediately preceding three consecutive fiscal
quarters of the Borrower, have a book value not exceeding in the aggregate
20% of Total Assets as at the first day of such period of three consecutive
fiscal quarters so long as (i) any such conveyance, sale, lease, transfer
or other disposition, together with all such conveyances, sales, leases,
transfers or other dispositions since the first day of such period of three
consecutive fiscal quarters, will not, in the Borrower's Board of
Directors' good faith judgment, have a material adverse effect on the
business, operations, property or financial or other condition of the
Borrower and the Restricted Subsidiaries, taken as a whole and (ii) after
giving effect to such conveyance, sale, lease, transfer or other
disposition, no Default exists and the Borrower and the Restricted
Subsidiaries would be permitted to incur at least $1.00 of additional
Funded Indebtedness under Section 5.09; PROVIDED that the aggregate book
value of all assets conveyed, sold, leased, transferred or otherwise
disposed of during such fiscal quarter and the immediately preceding three
consecutive fiscal quarters shall not exceed 10% of Total Assets as at such
first day except to the extent that such assets were first acquired by the
Borrower or any Restricted Subsidiary, taken together, not earlier than one
year prior to such conveyance, sale, lease, transfer or other disposition;
and
45
(f) the Borrower or any Restricted Subsidiary may sell, lease,
transfer or otherwise dispose of real property (and personal property
necessary to the use thereof) acquired by the Borrower or such Restricted
Subsidiary, as the case may be, pursuant to foreclosure proceedings or by
deed in lieu of foreclosure;
PROVIDED that none of the foregoing shall prevent the Borrower or any Restricted
Subsidiary from conveying, selling, leasing, transferring or otherwise disposing
of any Home Office Properties the fair market value of which in the aggregate
does not exceed $100,000,000.
SECTION 5.06. LIMITATION ON LIENS. The Borrower shall not, nor shall
it permit any Restricted Subsidiary to, create, incur, assume or suffer to
exist, any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, except:
(a) Liens, not otherwise excepted hereunder, existing on the date of
this Agreement, which Liens do not secure Indebtedness in an aggregate
principal amount in excess of $20,000,000;
(b) Liens arising in the ordinary course of its business which (i) do
not secure Indebtedness, (ii) in the case of any judgment or order for the
payment of money, do not secure any judgment or order for the payment of
money in an amount exceeding $10,000,000 and (iii) do not in the aggregate
materially detract from the value of its assets or materially impair the
use thereof in the operation of its business;
(c) Liens on assets of corporations which become Restricted
Subsidiaries after the date of this Agreement, PROVIDED that such Liens are
in existence at the time the respective corporations become Restricted
Subsidiaries and were not created in anticipation thereof;
(d) Liens upon real and/or tangible personal property acquired after
the date hereof (by purchase, construction or otherwise) by the Borrower or
any Restricted Subsidiary, each of which Liens either (A) existed on such
property before the time of its acquisition and was not created in
anticipation thereof, or (B) was created solely for the purpose of securing
Indebtedness representing, or incurred to finance, refinance or refund, the
cost (including the cost of construction) of the respective property;
PROVIDED that no such Lien shall extend to or cover any
46
property of the Borrower or such Restricted Subsidiary other than the
respective property so acquired and improvements thereon and no such Lien
shall secure any additional Indebtedness; and PROVIDED FURTHER that the
principal amount of Indebtedness secured by any such Lien shall at no time
exceed the cost of the respective property at the time it was acquired (by
purchase, construction or otherwise);
(e) Liens created after the Effective Date upon real and/or personal
property securing Indebtedness incurred after the Effective Date, PROVIDED
that the aggregate Indebtedness secured thereby shall not at any time
exceed 7.5% of Total Stockholders' Equity; and
(f) any extension, renewal or replacement of the foregoing, PROVIDED,
HOWEVER, that the Liens permitted hereunder shall not secure any additional
Indebtedness (if applicable) or cover any additional property.
SECTION 5.07. TRANSACTIONS WITH AFFILIATES. The Borrower will not,
nor will it permit any Restricted Subsidiary to, directly or indirectly, enter
into any transaction with or for the benefit of any Affiliate (including,
without limitation, transfers of assets to or from an Affiliate and guarantees
and assumptions of obligations of an Affiliate) other than transactions with
Affiliates (i) otherwise permitted by this Agreement or (ii) (x) entered into on
an arm's length basis, on terms no more favorable to such Affiliate than would
be available to unrelated Persons and (y) after giving effect to which the
Borrower and the Restricted Subsidiaries would be permitted to incur at least
$1.00 of additional Funded Indebtedness under Section 5.09.
SECTION 5.08. MINIMUM TOTAL STOCKHOLDERS' EQUITY. The Borrower shall
not permit at any time Total Stockholders' Equity to be less than 10% of Total
Assets.
SECTION 5.09. RATIO OF FUNDED INDEBTEDNESS TO TOTAL CAPITAL. The
Borrower shall not, nor shall it permit any Restricted Subsidiary to, incur or
otherwise become liable in respect of any Funded Indebtedness (including,
without limitation the borrowing of Loans hereunder) unless, after giving effect
thereto, the ratio of (i) the aggregate principal amount of Funded Indebtedness
to (ii) Total Capital will not exceed 0.3 to 1.
SECTION 5.10. RESTRICTED AND UNRESTRICTED SUBSIDIARIES. The Borrower
may at any time by resolution of its Board of Directors designate any Subsidiary
47
prospectively as a Restricted Subsidiary or as an Unrestricted Subsidiary if,
after giving effect to such designation, no Default would exist and the Borrower
and the Restricted Subsidiaries would be permitted to incur at least $1.00 of
additional Funded Indebtedness under Section 5.09; PROVIDED HOWEVER, that no
Subsidiary designated by an asterisk on Schedule I hereof as a Restricted
Subsidiary may be designated as an Unrestricted Subsidiary; PROVIDED FURTHER
that, if any Unrestricted Subsidiary listed on Schedule I hereof is duly
designated pursuant to this Section 5.10 as a Restricted Subsidiary, it may not
at any time thereafter be designated as an Unrestricted Subsidiary; and PROVIDED
further that any designation under this Section 5.10 must remain unchanged over
the last day of at least two consecutive fiscal quarters of the Borrower. A
certified copy of such resolution, together with a pro forma consolidated
balance sheet of the Borrower and the Restricted Subsidiaries as at a date not
more than 30 days prior to the effective date of (but giving effect to) such
designation, shall be delivered to each Bank no later than five Domestic
Business Days prior to the effective date of such designation.
ARTICLE VI
DEFAULTS
SECTION 6.01. EVENTS OF DEFAULT. If one or more of the following
events ("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of any
Loan, or the Borrower shall fail to pay within five days of the due date
thereof any interest on any Loan, any fees or any other amount payable
hereunder;
(b) the Borrower shall fail to observe or perform any covenant
contained in Sections 5.04 to 5.10, inclusive, PROVIDED that, if a failure
to observe the covenant contained in Section 5.08 occurs and, but only so
long as, Total Stockholders' Equity is at least 7% of Total Assets, then
the failure to observe such covenant shall not be an Event of Default
unless such failure continues for 30 days;
(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)
48
for 30 days after written 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 Restricted Subsidiary or any Insurance
Subsidiary shall fail to make any payment in respect of any Material
Indebtedness 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 Indebtedness of the Borrower
or any Restricted Subsidiary or any Insurance Subsidiary or enables the
holder of such Material Indebtedness or any Person acting on such holder's
behalf to accelerate the maturity thereof;
(g) the Borrower or any Restricted Subsidiary or any Insurance
Subsidiary shall commence a voluntary case or other proceeding seeking
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, 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 Restricted Subsidiary or any Insurance
Subsidiary seeking 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, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other
proceeding shall
49
remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against the Borrower or any Restricted Subsidiary
or any Insurance Subsidiary under the federal bankruptcy laws as now or
hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $10,000,000 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 $10,000,000;
(j) a judgment or order for the payment of money in excess of
$10,000,000 shall be rendered against the Borrower or any Restricted
Subsidiary or any Insurance Subsidiary and such judgment or order 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 25% 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
50
Borrower declare the Notes (together with accrued interest thereon) to be, and
the Notes shall thereupon become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; PROVIDED that in the case of any of the Events of
Default specified in clause (g) or (h) above with respect to the Borrower,
without any notice to the Borrower or any other act by the Agent or the Banks,
the Commitments shall thereupon terminate and the Notes (together with accrued
interest thereon) shall become immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower.
SECTION 6.02. NOTICE OF DEFAULT. The Agent shall give notice to the
Borrower under Section 6.01(c) promptly upon being requested to do so by any
Bank and shall thereupon notify all the Banks thereof.
ARTICLE VII
THE AGENT
SECTION 7.01. APPOINTMENT AND AUTHORIZATION. Each Bank irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement and the Notes as are delegated to
the Agent by the terms hereof or thereof, together with all such powers as are
reasonably incidental thereto.
SECTION 7.02. AGENT AND AFFILIATES. Morgan Guaranty Trust Company of
New York 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 Morgan Guaranty Trust Company of New York 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
51
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 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 initial 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
52
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, and such notice shall be
effective on the date specified therein (unless otherwise stated therein)
whether or not a successor Agent is appointed and accepts such appointment as
provided below. Upon any such resignation, the Required Banks shall have the
right to appoint a successor Agent with the consent of the Borrower. If no such
successor Agent shall have been so appointed, and shall have accepted such
appointment, within 30 days after the retiring Agent gives notice of
resignation, then the retiring Agent may, on behalf of the Banks, appoint a
successor Agent, which shall be a commercial bank organized or licensed under
the laws of the United States of America or of any State thereof and having a
combined capital and surplus of at least $50,000,000. Upon the acceptance of
its appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights and duties of
the retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent.
SECTION 7.09. AGENT'S FEE. The Borrower shall pay to the Agent for
its own account fees in the amounts and at the times previously agreed upon
between the Borrower and the Agent.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR
UNFAIR. If on or prior to the first day of any Interest Period for any Fixed
Rate Borrowing:
(a) the Agent is advised by the Reference Banks that deposits in
dollars (in the applicable 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
53
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-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-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-Dollar Lending Office) with any request or
directive (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-Dollar Lending Office) to make, maintain or fund its
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-Dollar Loans shall be suspended. Before giving any notice to the
Agent pursuant to this Section, such Bank shall designate a different
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 that it may not
lawfully continue to maintain and fund any of its outstanding Euro-Dollar Loans
to maturity and shall so specify in such notice, the Borrower shall immediately
prepay in full the
54
then outstanding principal amount of each such Euro-Dollar Loan, together with
accrued interest thereon. Concurrently with prepaying each such 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-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 (whether or not having the force of law)
of any such authority, central bank or comparable agency:
(i) shall subject any Bank (or its Applicable Lending Office) to any
tax, duty or other charge with respect to its Fixed Rate Loans, its Note or
its obligation to make Fixed Rate Loans, or shall change the basis of
taxation of payments to any Bank (or its Applicable Lending Office) of the
principal of or interest on its Fixed Rate Loans or any other amounts due
under this Agreement in respect of its Fixed Rate Loans or its obligation
to make Fixed Rate Loans (except for changes in the rate of tax on the
overall net income of such Bank or its Applicable Lending Office imposed by
the jurisdiction in which such Bank's principal executive office or
Applicable Lending Office is located); or
(ii) 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 (A) with respect to any CD
Loan any such requirement included in an applicable Domestic Reserve
Percentage and (B) with respect to any Euro-Dollar Loan any such
requirement included in an applicable Euro-Dollar Reserve Percentage),
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
55
(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 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 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 (and, to the extent deemed
56
feasible by such Bank, setting forth the calculation thereof) shall be
conclusive in the absence of manifest error. In determining such amount, such
Bank may use any reasonable averaging and attribution methods.
SECTION 8.04. BASE RATE LOANS SUBSTITUTED FOR AFFECTED FIXED RATE
LOANS. If (i) the obligation of any Bank to make Euro-Dollar Loans has been
suspended pursuant to Section 8.02 or (ii) any Bank has demanded compensation
under Section 8.03(a) and the Borrower shall, by at least five Euro-Dollar
Business Days' 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-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-Dollar Loans, as the case may
be, has been repaid, all payments of principal which would otherwise be
applied to repay such Fixed Rate Loans shall be applied to repay its Base
Rate Loans instead.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. NOTICES. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
telecopier, 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 or
telecopy number set forth on the signature pages hereof, (y) in the case of any
Bank, at its address or telecopy number set forth in its Administrative
Questionnaire or (z) in the case of any party, such other address or telecopy
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 telecopy, when such telecopy is transmitted to the
telecopy number specified in this Section and is received, (ii) if given by
mail, 72
57
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (iii) 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; DOCUMENTARY TAXES; INDEMNIFICATION. (a) The
Borrower shall pay (i) all reasonable out-of-pocket expenses of the Agent,
including fees and disbursements of Davis Polk & Wardwell, 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 hereunder and (ii) if an Event of Default occurs, all reasonable
out-of-pocket expenses incurred by the Agent and each Bank, including fees and
disbursements of counsel, in connection with such Event of Default and
collection, bankruptcy, insolvency and other enforcement proceedings resulting
therefrom. The Borrower shall indemnify each Bank against any transfer taxes,
documentary taxes, assessments or charges made by any governmental authority by
reason of the execution and delivery of this Agreement or the Notes.
(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.
58
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 under the Notes. 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
(and the Borrower and, if and to the extent provided above, the Agent), (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 or (iv) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Notes, or the
number of 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
59
to the benefit of the parties hereto and their respective successors and
permitted 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, and no Bank may grant participating interests in its Commitment or any of
its Loans or assign all or any of its rights and obligations under this
Agreement and the Notes in violation of subsections (b) and (c) below, taking
into account the applicability of the last sentence of such subsection (b).
(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) or (iii) 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 and subject to subsection (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
institutions (each an "Assignee") all, or a proportionate part 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 G hereto executed by
such Assignee and such transferor Bank, with (and subject to) the subscribed
consent of the Borrower and the Agent; PROVIDED that if an Assignee is an
affiliate of such transferor Bank, no such consent shall be required; PROVIDED
FURTHER that such
60
assignment may, but need not, include rights of the transferor Bank in respect
of outstanding Money Market Loans; and PROVIDED FURTHER that such assignment
shall be in a principal amount not less than $10,000,000. Upon execution and
delivery of such instrument and payment by such Assignee to such transferor Bank
of an amount equal to the purchase price agreed between such transferor Bank and
such Assignee, such Assignee shall be a Bank party to this Agreement and shall
have all the rights and obligations of a Bank with a Commitment as set forth in
such instrument of assumption, and the transferor Bank shall be released from
its obligations hereunder to a corresponding extent, and no further consent or
action by any party shall be required. Upon the consummation of any assignment
pursuant to this subsection (c), the transferor Bank, the Agent and the Borrower
shall make appropriate arrangements so that, if required, a new Note is issued
to the Assignee. In connection with any such assignment, the transferor Bank
shall pay to the Agent an administrative fee for processing such assignment in
the amount of $2,000. If the Assignee is not incorporated under the laws of the
United States of America or a state thereof, it shall, prior to the first date
on which interest or fees are payable hereunder for its account, 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
2.15.
(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 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 or 8.03 requiring such Bank to
designate a different Applicable Lending Office under certain circumstances or
at a time when the circumstances giving rise to such greater payment did not
exist.
SECTION 9.07. COLLATERAL. Each of the Banks represents to the Agent
and each of the other Banks that it in good faith is not relying upon any
"margin stock" (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 9.08. GOVERNING LAW; SUBMISSION TO JURISDICTION. This
Agreement and each Note shall be
61
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. 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.
SECTION 9.10. CONFIDENTIALITY. The Agent and each Bank agree that
they will maintain the confidentiality of any material information provided
under, or in connection with, this Agreement by or on behalf of the Borrower
that has been identified by the Borrower as confidential or that the Agent or
such Bank knows, or has reason to know, is confidential (hereinafter
collectively called "Confidential Information"), subject to the Agent's and each
Bank's (a) obligation to disclose any such Confidential Information pursuant to
a request or order under applicable laws and regulations or pursuant to a
subpoena or other legal process, (b) right to disclose any such Confidential
Information to its bank examiners, auditors, counsel and other professional
advisors and to other Banks, (c) right to disclose any such Confidential
Information in connection with any litigation or dispute involving one or more
of the Banks or the Agent and the Borrower, PROVIDED that the Banks so involved
or the Agent, as the case may be, shall provide the Borrower with reasonable
notice of the disclosure of such Confidential Information solely to enable the
Borrower to attempt to obtain a court order limiting the disclosure thereof
outside of the scope of such litigation or dispute but only if such notice is
not prejudicial to such Banks or the Agent and (d) right to provide such
information to participants, prospective participants or prospective assignees
pursuant to Section 9.06 if such participant, prospective participant or
prospective assignee agrees in writing to maintain the confidentiality of such
information on terms substantially similar to those of this Section 9.10
62
as if it were a "Bank" party hereto. Notwithstanding the foregoing, any such
information supplied to a Bank, participant, prospective participant or
prospective assignee under this Agreement shall cease to be Confidential
Information if it is or becomes known to such Person by other than unauthorized
disclosure, or if it becomes a matter of public knowledge.
63
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.
UNUM CORPORATION
By /s/ Timothy W. Ludden
--------------------------------
Title: Vice President and
Treasurer
2211 Congress Street
Portland, Maine 04122
Telecopy number:
64
COMMITMENTS
$50,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Joseph T. Wilson, Jr.
------------------------------
Title: Vice President
$50,000,000 THE BANK OF NEW YORK
By /s/ Lizanne T. Eberle
------------------------------
Title: Vice President
$50,000,000 THE BANK OF TOKYO TRUST COMPANY
By /s/ Alta M. Fleming
------------------------------
Title: Vice President
$50,000,000 MELLON BANK N.A.
By /s/ W. Scott Sanford
------------------------------
Title: Senior Vice President
$50,000,000 THE SUMITOMO BANK, LIMITED
By /s/ Yoshinori Kawamura
------------------------------
Title: Joint General Manager
$50,000,000 WACHOVIA BANK OF GEORGIA, N.A.
By /s/ Linda Harris
------------------------------
Title: Senior Vice President
65
COMMITMENTS
$25,000,000 ABN AMRO BANK, N.V.
By /s/ Brian M. Horgan
------------------------------
Title: Corporate Banking
Officer
$25,000,000 CIBC, INC.
By /s/ Stephen D. Reynolds
------------------------------
Title: Vice President
$25,000,000 CREDIT LYONNAIS NEW YORK BRANCH
By /s/ Robert Ivosevich
------------------------------
Title: Senior Vice President
$25,000,000 FIRST NATIONAL BANK OF BOSTON
By /s/ Nancy E. Fuller
------------------------------
Title: Director
$25,000,000 FLEET BANK OF MAINE
By /s/ Tracy L. Hawkins
------------------------------
Title: Vice President
$25,000,000 THE INDUSTRIAL BANK OF JAPAN,
LIMITED
By /s/ Toshiyuki Ban
------------------------------
Title: Senior Vice President
66
COMMITMENTS
$25,000,000 LLOYDS BANK PLC
By /s/ David Brealey
------------------------------
Title: Assistant Vice
President
$25,000,000 NATIONSBANK OF GEORGIA, N.A.
By /s/ Frank R. Callison
------------------------------
Title: Vice President
-----------------
Total Commitments
$500,000,000
=================
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By /s/ Joseph T. Wilson, Jr.
------------------------------
Title: Vice President
60 Wall Street
New York, New York 10260-0060
Attention: Joseph T. Wilson, Jr.
Telecopy number: 212-648-5249
67