Document/Exhibit Description Pages Size
1: 10-K 12/31/97 Form 10-K 48± 225K
3: EX-4 364-Day Credit and Reimbursement Agreement 68± 272K
2: EX-4 Five-Year Credit and Reimbursement Agreement 76± 299K
5: EX-10 Dunton Letter Agreement 15± 56K
7: EX-10 Ingrey Consulting Agreement 4± 20K
6: EX-10 Ingrey Stock Appreciation Rights Agreement 4± 20K
4: EX-10 Stout Letter Agreement 5± 24K
8: EX-21 Exhibit 21 - Subsidiaries of the Registrant 1 5K
9: EX-23 Consent of Independent Auditors 1 8K
10: EX-27 Restated Financial Data Schedule (For Sfas No.128) 2± 8K
EX-4 — Five-Year Credit and Reimbursement Agreement
Exhibit Table of Contents
[EXECUTION COPY]
$250,000,000
FIVE-YEAR
CREDIT AND REIMBURSEMENT AGREEMENT
dated as of
December 18, 1997
among
USF&G Corporation
The Banks Listed Herein,
The Letter of Credit Issuing Banks Named Herein
Morgan Guaranty Trust Company of New York,
as Administrative Agent
and
Deutsche Bank AG, New York Branch,
as Documentation Agent
-----------------------------
J.P. Morgan Securities Inc.,
Arranger
Deutsche Morgan Grenfell Inc.,
Co-Arranger
TABLE OF CONTENTS
----------------------
PAGE
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions.....................................................1
SECTION 1.02. Accounting Terms and Determinations............................17
SECTION 1.03. Types of Borrowings............................................17
ARTICLE 2
THE CREDITS
SECTION 2.01. Commitments to Lend............................................18
SECTION 2.02. Notice of Committed Borrowing..................................18
SECTION 2.03. Money Market Borrowings........................................19
SECTION 2.04. Notice to Banks; Funding of Loans..............................23
SECTION 2.05. Notes..........................................................23
SECTION 2.06. Maturity of Loans..............................................24
SECTION 2.07. Interest Rates.................................................24
SECTION 2.08. Fees...........................................................28
SECTION 2.09. Optional Termination or Reduction of Commitments...............29
SECTION 2.10. Mandatory Termination of Commitments...........................29
SECTION 2.11. Method of Electing Interest Rates..............................29
SECTION 2.12. Mandatory or Optional Prepayments..............................31
SECTION 2.13. General Provisions as to Payments..............................32
SECTION 2.14. Funding Losses.................................................33
SECTION 2.15. Computation of Interest and Fees...............................33
SECTION 2.16. Letters of Credit..............................................33
SECTION 2.17. Alternative Currency Advances..................................38
ARTICLE 3
CONDITIONS
SECTION 3.01. Closing........................................................39
SECTION 3.02. Borrowing and Issuance of Letters of Credit....................40
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Corporate Existence and Power..................................41
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention........................................................41
SECTION 4.03. Binding Effect.................................................42
SECTION 4.04. Financial Information..........................................42
SECTION 4.05. Litigation.....................................................43
SECTION 4.06. Compliance with ERISA..........................................43
SECTION 4.07. Environmental Matters..........................................43
SECTION 4.08. Taxes..........................................................44
SECTION 4.09. Subsidiaries...................................................44
SECTION 4.10. Not an Investment Company......................................44
SECTION 4.11. Full Disclosure................................................44
ARTICLE 5
COVENANTS
SECTION 5.01. Information....................................................45
SECTION 5.02. Payment of Obligations.........................................47
SECTION 5.03. Maintenance of Property; Insurance.............................47
SECTION 5.04. Conduct of Business and Maintenance of Existence...............48
SECTION 5.05. Compliance with Laws...........................................48
SECTION 5.06. Negative Pledge................................................48
SECTION 5.07. Consolidations, Mergers and Sales of Assets; Ownership
by USF&G Corporation.................................................50
SECTION 5.08. Use of Proceeds................................................50
SECTION 5.09. Ratio of Debt to Adjusted Consolidated Tangible Net
Worth................................................................50
SECTION 5.10. Minimum Adjusted Consolidated Tangible Net Worth...............50
SECTION 5.11. Transactions with Affiliates...................................51
ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Default..............................................51
SECTION 6.02. Notice of Default..............................................54
SECTION 6.03. Cash Cover.....................................................54
ARTICLE 7
THE AGENTS
SECTION 7.01. Appointment and Authorization..................................54
SECTION 7.02. Agents and Affiliates..........................................55
SECTION 7.03. Action by Agents...............................................55
SECTION 7.04. Consultation with Experts......................................55
SECTION 7.05. Liability of Agents............................................55
SECTION 7.06. Indemnification................................................56
SECTION 7.07. Credit Decision................................................56
SECTION 7.08. Successor Agents...............................................56
SECTION 7.09. Agents' Fees...................................................57
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair.......57
SECTION 8.02. Illegality.....................................................58
SECTION 8.03. Increased Cost and Reduced Return..............................58
SECTION 8.04. Taxes..........................................................60
SECTION 8.05. Base Rate Loans Substituted for Affected Fixed Rate Loans......62
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices........................................................63
SECTION 9.02. No Waivers.....................................................63
SECTION 9.03. Expenses; Indemnification......................................63
SECTION 9.04. Sharing; Set-offs..............................................64
SECTION 9.05. Amendments and Waivers.........................................65
SECTION 9.06. Successors and Assigns.........................................65
SECTION 9.07. Collateral.....................................................67
SECTION 9.08. Governing Law; Submission to Jurisdiction......................67
SECTION 9.09. Counterparts; Integration; Effectiveness.......................67
SECTION 9.10. WAIVER OF JURY TRIAL...........................................68
SECTION 9.11. Existing Credit Agreements.....................................68
Pricing Schedule
Exhibit A - Note
Exhibit B - Money Market Quote Request
Exhibit C - Invitation for Money Market Quotes
Exhibit D - Money Market Quote
Exhibit E - Opinion of the General Counsel of the Borrower
Exhibit F - Opinion of Counsel to the Borrower
Exhibit G - Opinion of Special Counsel for the Agents
Exhibit H - Assignment and Assumption Agreement
Exhibit I - Form of Letter of Credit Request
Exhibit J - Form of Letter of Credit
FIVE-YEAR
CREDIT AND REIMBURSEMENT AGREEMENT
AGREEMENT dated as of December 18, 1997 among USF&G CORPORATION, the
BANKS listed on the signature pages hereof, the Letter of Credit Issuing Banks
named herein, MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Administrative
Agent, and DEUTSCHE BANK AG, NEW YORK BRANCH, as Documentation Agent.
The parties hereto agree as follows:
ARTICLE 1
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 CONSOLIDATED TANGIBLE NET WORTH" means at any date the
consolidated stockholders' equity of the Borrower and its Consolidated
Subsidiaries (1) plus any unrealized holding losses (or less any unrealized
holding gains), in each case net of relevant adjustments for deferred policy
acquisition costs, on account of available-for-sale debt securities to the
extent reflected therein (together with other adjustments, all as determined in
accordance with Statement of Financial Accounting Standards No. 115 of the
Financial Accounting Standards Board, as amended from time to time, or any
successor provision thereto) and (2) plus, to the extent Qualified Deferrable
Securities Obligations are not included in consolidated stockholders' equity of
the Borrower and its Consolidated Subsidiaries, the Equity Portion of Qualified
Deferrable Securities Obligations (or, if Qualified Deferrable Securities
Obligations are included in consolidated stockholders' equity of the Borrower
and its Consolidated Subsidiaries, less the Debt Portion of Qualified Deferrable
Securities Obligations) and (3) less their consolidated Intangible Assets, all
determined as of such date. For purposes of this definition "Intangible Assets"
means the amount (to the extent reflected in determining such consolidated
stockholders' equity) of (i) all write-ups (other than write-ups resulting from
foreign currency translations, write-ups of assets of a going concern business
made within twelve months after the acquisition of such business and changes
made in accordance with generally accepted accounting principles in the book
value of any Investments in Persons other than the Borrower and its Consolidated
Subsidiaries) subsequent to September 30, 1997 in the book value of any asset
owned by the Borrower or a Consolidated Subsidiary and (ii) all unamortized debt
discount and expense, unamortized deferred charges, goodwill, patents,
trademarks, service marks, trade names, copyrights, organization or
developmental expenses and other intangible assets (other than deferred policy
acquisition costs and net deferred tax assets).
"ADJUSTED LONDON INTERBANK OFFERED RATE" has the meaning set forth
in Section 2.07(c).
"ADMINISTRATIVE AGENT" means Morgan Guaranty Trust Company of New York,
in its capacity as administrative agent for the Banks hereunder, and its
successors in such capacity.
"ADMINISTRATIVE QUESTIONNAIRE" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Administrative Agent
and submitted to the Administrative Agent (with a copy to the Borrower) duly
completed by such Bank.
"AFFILIATE" means (i) any Person that directly, or indirectly through
one or more intermediaries, controls the Borrower (a "Controlling Person") or
(ii) any Person (other than the Borrower or a Subsidiary) which is controlled by
or is under common control with a Controlling Person. As used herein, the term
"control" means possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through
the ownership of voting securities, by contract or otherwise.
"AGENT" means the Administrative Agent or the Documentation Agent, and
"Agents" means both of them.
"ALTERNATIVE CURRENCIES" means Canadian dollars, French francs, Swiss
francs, Australian dollars, Japanese yen, British pounds sterling, Italian lira
and German deutsche marks, provided that any other currency (except Dollars)
shall also be an Alternative Currency if (i) the Borrower requests, by notice to
the Administrative Agent, that such currency be included as an additional
Alternative Currency for purposes of this Agreement, (ii) such currency is
freely transferable and freely convertible into Dollars, (iii) deposits in such
currency are customarily offered to banks in the London interbank market and
(iv) each Bank either (x) approves the inclusion of such currency as an
additional Alternative Currency for purposes hereof or (y) fails to notify the
Administrative Agent that it objects to such inclusion within five Domestic
Business Days after the Administrative Agent notifies it of the Borrower's
request for such inclusion.
"ALTERNATIVE CURRENCY ADVANCE" means an advance made by a Bank to the
Borrower in an Alternative Currency pursuant to Section 2.17.
"ALTERNATIVE CURRENCY ADVANCE REPORT" has the meaning set forth in
Section 2.17(c).
"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 and Alternative Currency Advances, its Euro-Dollar Lending
Office and (iii) in the case of its Money Market Loans, its Money Market Lending
Office.
"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 and shall include, unless the context otherwise clearly requires, any
Issuing Bank in such capacity.
"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 which bears interest at the
Base Rate pursuant to the applicable Notice of Committed Borrowing or Notice of
Interest Rate Election or the provisions of Section 2.11(a) or Article 8.
"BENEFIT ARRANGEMENT" means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"BORROWER" means USF&G Corporation, a Maryland corporation, and its
successors.
"BORROWER'S 1996 FORM 10-K" means the Borrower's annual report on Form
10-K for 1996, as filed with the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934.
"BORROWER'S LATEST FORM 10-Q" means the Borrower's quarterly report on
Form 10-Q for the quarter ended September 30, 1997, as filed with the Securities
and Exchange Commission pursuant to the Securities Exchange Act of 1934.
"BORROWING" has the meaning set forth in Section 1.03.
"CD BASE RATE" has the meaning set forth in Section 2.07(b).
"CD LOAN" means a Committed Loan which bears interest at a CD Rate
pursuant to the applicable Notice of Committed Borrowing or Notice of Interest
Rate Election.
"CD MARGIN" has the meaning set forth in Section 2.07(b).
"CD RATE" means a rate of interest determined pursuant to Section
2.07(b) on the basis of an Adjusted CD Rate.
"CD REFERENCE BANKS" means Deutsche Bank AG, New York Branch, Morgan
Guaranty Trust Company of New York and The Bank of New York.
"CLOSING DATE" means the date on which the Documentation Agent shall
have received the documents specified in or pursuant to Section 3.01.
"CO-APPLICANT" has the meaning set forth in Section 2.16.
"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,
provided that, if any such loan or loans (or portions thereof) are combined or
subdivided pursuant to a Notice of Interest Rate Election, the term "COMMITTED
LOAN" shall refer to the combined principal amount resulting from such
combination or to each of the separate principal amounts resulting from such
subdivision, as the case may be.
"CONSOLIDATED SUBSIDIARY" means at any date any Subsidiary or other
entity the accounts of which would be consolidated with those of the Borrower in
its consolidated financial statements if such statements were prepared as of
such date.
"DEBT" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable, agents' commissions and other similar
charges and expenses arising in the ordinary course of business, (iv) all
obligations of such Person as lessee which are capitalized in accordance with
generally accepted accounting principles, (v) all non-contingent obligations
(and, for purposes of Section 5.06 and the definitions of Material Debt and
Material Financial Obligations, all contingent obligations) of such Person to
reimburse any bank or other Person in respect of amounts paid under a letter of
credit or similar instrument, (vi) all Debt secured by a Lien on any asset of
such Person, whether or not such Debt is otherwise an obligation of such Person
(but excluding any such Debt to the extent such Debt exceeds the fair market
value of such assets (such fair market value to be established by the Borrower
to the reasonable satisfaction of the Required Banks), unless such Debt is
assumed), (vii) all obligations of such Person to purchase securities (or other
property) which arise out of or in connection with the sale of the same or
substantially similar securities or property and (viii) all Debt of others
Guaranteed by such Person, provided that obligations of any Person referred to
only in clauses (i) through (iii), inclusive, above shall constitute Debt of
such Person only to the extent that they are, or are required to be, recorded on
the financial statements of such Person as a liability under generally accepted
accounting principles.
"DEBT PORTION" of Qualified Deferrable Securities Obligations means at
any time the amount thereof (including, without duplication, any subordinated
Guarantee of payment of Qualified Preferred Securities) that is not the "Equity
Portion" of Qualified Deferrable Securities Obligations.
"DEFAULT" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"DERIVATIVES OBLIGATIONS" of any Person means all obligations (other
than obligations incurred as a result of investments in or writing of futures,
options, swaps or other derivative transactions in respect of, or based upon,
insurance products or risks, including the futures and options contracts
relating to catastrophic losses traded on the Chicago Board of Trade or
otherwise) of such Person in respect of any rate swap transaction, basis swap,
forward rate transaction, commodity swap, commodity option, equity or equity
index swap, equity or equity index option, bond option, interest rate option,
foreign exchange transaction, cap transaction, floor transaction, collar
transaction, currency swap transaction, cross-currency rate swap transaction,
currency option or any other similar transaction (including any option with
respect to any of the foregoing transactions) or any combination of the
foregoing transactions.
"DOCUMENTATION AGENT" means Deutsche Bank AG, New York Branch in its
capacity as documentation agent for the Banks hereunder, and its successors in
such capacity.
"DOLLAR EQUIVALENT" means, as used in each Alternative Currency Advance
Report and in respect of any Alternative Currency Advance, the amount of Dollars
obtained by converting the outstanding amount of currency of such Alternative
Currency Advance, as specified in such Alternative Currency Advance Report, into
Dollars at the spot rate for the purchase of Dollars with such currency as
quoted by the Administrative Agent at approximately 9:00 A.M. (New York City
time) on the date of such Alternative Currency Advance Report (unless another
rate or time is agreed to by the Borrower and the Administrative Agent). The
Dollar Equivalent of any Alternative Currency Advance at any date shall be the
Dollar Equivalent thereof set forth in the Alternative Currency Advance Report
most recently delivered on or prior to such date.
"DOLLARS" and the sign "$" mean lawful money in the United States of
America.
"DOMESTIC BUSINESS DAY" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City are authorized by law to
close.
"DOMESTIC LENDING OFFICE" means, as to each Bank, its office located
at its address set forth in its Administrative Questionnaire (or identified in
its Administrative Questionnaire as its Domestic Lending Office) or such other
office as such Bank may hereafter designate as its Domestic Lending Office by
notice to the Borrower and the Administrative 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).
"ENVIRONMENTAL LAWS" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
the environment, the effect of the environment on human health or to emissions,
discharges or releases of pollutants, contaminants, Hazardous Substances or
wastes into the environment including, without limitation, ambient air, surface
water, ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, Hazardous Substances or wastes or the
clean-up or other remediation thereof.
"EQUITY PORTION" of Qualified Deferrable Securities Obligations means
at any time the amount of Qualified Deferrable Securities Obligations that does
not exceed the greater of (i) 15% of Total Capital at such time (including,
without duplication, any subordinated Guarantee of payment of the related
Qualified Preferred Securities, but only if such Guarantee guarantees payment
only to the extent that the Subsidiary issuing the Qualified Preferred
Securities has funds on hand available for payment) or (ii) $300,000,000, but
only for so long as no event of default exists under, or with respect to, any
Qualified Deferrable Securities Obligations and no Qualified Deferrable
Securities Obligations have been accelerated or may, with the passage of time or
the giving of notice, be accelerated.
"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" means the currency of participating member states of the
European Union that adopt a single currency in accordance with the Treaty on
European Union signed February 7, 1992.
"EURO-DOLLAR BUSINESS DAY" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"EURO-DOLLAR LENDING OFFICE" means, as to each Bank, its office,
branch or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of such
Bank as it may hereafter designate as its Euro-Dollar Lending Office by notice
to the Borrower and the Administrative Agent. The Applicable Lending Office for
any Alternative Currency Advance shall be the Euro-Dollar Lending Office of the
Bank making such advance as so set forth and identified unless another office,
branch or affiliate of such Bank is hereafter designated as its Euro-Dollar
Lending Office for such Alternative Currency Advance by notice to the Borrower
and the Administrative Agent.
"EURO-DOLLAR LOAN" means a Committed Loan which bears interest at a
Euro-Dollar Rate pursuant to the applicable Notice of Committed Borrowing or
Notice of Interest Rate Election.
"EURO-DOLLAR RATE" means a rate of interest determined pursuant to
Section 2.07(c) on the basis of a London Interbank Offered Rate.
"EURO-DOLLAR MARGIN" has the meaning set forth in Section 2.07(c).
"EURO-DOLLAR REFERENCE BANKS" means the principal London offices of
Deutsche Bank AG, Morgan Guaranty Trust Company of New York and The
Bank 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.
"EXCLUDED SUBSIDIARY" means any Subsidiary or Insurance Company
Subsidiary other than any (i) Insurance Company Subsidiary with total admitted
assets, as of the date of determination, of $25,000,000 or more and (ii)
"Significant Subsidiary", as defined in Section 210.1-02(v) of Regulation S-X,
as amended from time to time, promulgated by the Securities and Exchange
Commission (17 C.F.R. Section 210.1-02(w)).
"EXISTING CREDIT AGREEMENTS" means (i) the Credit and Reimbursement
Agreement dated as of March 29, 1996 among USF&G Corporation, the banks party
thereto, the Letter of Credit Issuing Banks named therein and Morgan Guaranty
Trust Company of New York, as agent, as amended as of June 30, 1997 (the
"EXISTING MORGAN CREDIT AGREEMENT") and (ii) the Credit Agreement dated as of
March 29, 1996 among USF&G Corporation, the banks party thereto and Deutsche
Bank AG, New York and/or Cayman Island Branches, as agent (the "EXISTING
DEUTSCHE BANK CREDIT AGREEMENT")..
"EXISTING LETTER OF CREDIT" means the three letters of credit issued
pursuant to the Existing Morgan Credit Agreement and outstanding on the Closing
Date, each of which letters of credit will become a Letter of Credit hereunder
pursuant to Section 2.16(a).
"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 Administrative 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.
"GROUP OF LOANS" means at any time a group of Committed Loans
consisting of (i) all Base Rate Loans which are outstanding at such time, (ii)
all Euro-Dollar Loans having the same Interest Period at such time or (iii) all
CD Loans having the same Interest Period at such time; provided that, if a
Committed Loan of any particular Bank is converted to or made as a Base Rate
Loan pursuant to Section 8.02 or 8.05, such Loan shall be included in the same
Group or Groups of Loans from time to time as it would have been in if it had
not been so converted or made.
"GUARANTEE" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in any
other manner the obligee of such Debt or other obligation of the payment thereof
or to protect such obligee against loss in respect thereof (in whole or in
part), provided that the term Guarantee shall not include (i) endorsements for
collection or deposit in the ordinary course of business or (ii) if such Person
is an insurance company, surety bonds and insurance contracts (including
financial guarantee insurance policies) in each case issued in the ordinary
course of such Person's business. The term "Guarantee" used as a verb has a
corresponding meaning.
"HAZARDOUS SUBSTANCES" means any toxic, radioactive, caustic or
otherwise hazardous substance, including petroleum, its derivatives, by-products
and other hydrocarbons, or any substance having any constituent elements
displaying any of the foregoing characteristics.
"INDEMNITEE" has the meaning set forth in Section 9.03(b).
"INSURANCE COMPANY SUBSIDIARY" means any Subsidiary domiciled in the
United States of America (including the District of Columbia) and its
territories and possessions or any State thereof and licensed or authorized to
do an insurance business in any of the foregoing.
"INTEREST PERIOD" means: (a) with respect to each Euro-Dollar Loan, the
period commencing on the date of borrowing specified in the applicable Notice of
Committed Borrowing or on the date specified in an applicable Notice of Interest
Rate Election and ending one, two, three or six months thereafter, as the
Borrower may elect in such notice; provided that:
(i) 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;
(ii) 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 (iii) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(iii) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(b) with respect to each CD Loan, the period commencing on the date of
borrowing specified in the applicable Notice of Committed Borrowing or on the
date specified in an applicable Notice of Interest Rate Election and ending 30,
60, 90 or 180 days thereafter, as the Borrower may elect in such notice;
provided that:
(i) any Interest Period (other than an Interest Period determined
pursuant to clause (ii) below) which would otherwise end on a day which
is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day; and
(ii) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(c) with respect to each Money Market LIBOR Loan, the period
commencing on the date of such Loan and ending such whole number of months
thereafter as the Borrower may elect in accordance with Section 2.03; provided
that:
(i) 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;
(ii) 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 (iii) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(iii) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(d) with respect to each Money Market Absolute Rate Loan, the period
commencing on the date of such Loan and ending such number of days thereafter
(but not less than seven days) as the Borrower may elect in accordance with
Section 2.03; provided that:
(i) 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
(ii) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"INVESTMENT" means any investment in any Person, whether by means of
share purchase, capital contribution, loan, time deposit or otherwise.
"ISSUING BANK" means Morgan Guaranty Trust Company of New York and any
other Bank acceptable to the Borrower and the Administrative Agent that agrees
to issue letters of credit hereunder, in each case in its capacity as the issuer
of letters of credit hereunder, provided that no such other Bank shall
constitute an Issuing Bank hereunder unless and until this Agreement is amended
to reflect the fact that there are two or more Issuing Banks hereunder.
"LETTER OF CREDIT" means a standby letter of credit to be issued by an
Issuing Bank pursuant to Section 2.16(b), and includes each Existing Letter of
Credit.
"LETTER OF CREDIT COMMITMENT" means the lesser of (x)$150,000,000 and
(y) the aggregate Commitments.
"LETTER OF CREDIT LIABILITIES" means, for any Bank and at any time, the
sum of (x) the amounts then owing to such Bank (including in its capacity as an
Issuing Bank) by the Borrower to reimburse it in respect of amounts drawn under
Letters of Credit, including in respect of participations purchased by such Bank
pursuant to Section 2.16(b) and (y) such Bank's ratable participation in the
aggregate amount then available for drawing under all Letters of Credit.
"LIBOR AUCTION" means a solicitation of Money Market Quotes setting
forth Money Market Margins based on the London Interbank Offered Rate pursuant
to Section 2.03.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset. For the purposes of this Agreement, the
Borrower or any Subsidiary shall be deemed to own subject to a Lien any asset
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement relating to such asset.
"LOAN" means a Domestic Loan or a Euro-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 ADVERSE EFFECT" means a material adverse effect on the
business, financial position, results of operations or prospects of the Borrower
and its Consolidated Subsidiaries, considered as a whole.
"MATERIAL DEBT" means Debt (other than the Notes) of the Borrower
and/or one or more of its Subsidiaries (other than an Excluded Subsidiary),
arising in one or more related or unrelated transactions, in an aggregate
principal or face amount exceeding $50,000,000 (or its equivalent in any other
currency).
"MATERIAL FINANCIAL OBLIGATIONS" means a principal or face amount of
Debt and/or the then-owed payment obligations in respect of Derivatives
Obligations of the Borrower and/or one or more of its Subsidiaries (other than
an Excluded Subsidiary), arising in one or more related or unrelated
transactions, exceeding in the aggregate $50,000,000 (or its equivalent in any
other currency).
"MATERIAL PLAN" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $15,000,000.
"MONEY MARKET ABSOLUTE RATE" has the meaning set forth in Section
2.03(d).
"MONEY MARKET ABSOLUTE RATE LOAN" means a loan to be made by a Bank
pursuant to an Absolute Rate Auction.
"MONEY MARKET LENDING OFFICE" means, as to each Bank, its Domestic
Lending Office or such other office, branch or affiliate of such Bank as it may
hereafter designate as its Money Market Lending Office by notice to the Borrower
and the Administrative Agent; provided that any Bank may from time to time by
notice to the Borrower and the Administrative Agent designate separate Money
Market Lending Offices for its Money Market LIBOR Loans, on the one hand, and
its Money Market Absolute Rate Loans, on the other hand, in which case all
references herein to the Money Market Lending Office of such Bank shall be
deemed to refer to either or both of such offices, as the context may require.
"MONEY MARKET LIBOR LOAN" means a loan to be made by a Bank pursuant
to a LIBOR Auction (including such a loan bearing interest at the Base Rate
pursuant to Section 8.01(a)).
"MONEY MARKET LOAN" means a Money Market LIBOR Loan or a Money Market
Absolute Rate Loan.
"MONEY MARKET MARGIN" has the meaning set forth in Section 2.03(d).
"MONEY MARKET QUOTE" means an offer by a Bank to make a Money Market
Loan in accordance with Section 2.03.
"MULTIEMPLOYER PLAN" means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of the ERISA Group during such
five year period.
"NON-RECOURSE DEBT" means Debt, secured only by real property
(including fixtures and personal property used therein or thereon and the rents,
profits and proceeds arising therefrom), in respect of which the holder of such
Debt has no recourse against the Borrower or any Subsidiary (other than a
Subsidiary the only assets of which consist of such real property (including
fixtures and personal property used therein or thereon and the rents, profits
and proceeds therefrom)) or any asset of the Borrower or any Subsidiary (except
such real property (including fixtures and personal property used therein or
thereon and the rents, profits and proceeds arising therefrom)).
"NOTES" means promissory notes of the Borrower, substantially in the
form of Exhibit A hereto, evidencing the obligation of the Borrower to repay the
Loans, and "NOTE" means any one of such promissory notes issued hereunder.
"NOTICE OF BORROWING" means a Notice of Committed Borrowing (as
defined in Section 2.02) or a Notice of Money Market Borrowing (as defined in
Section 2.03(f)).
"NOTICE OF INTEREST RATE ELECTION" has the meaning set forth in Section
2.11.
"NOTICE OF ISSUANCE" has the meaning set forth in Section 2.16(b).
"OFFICER'S CERTIFICATE" means a certificate signed by the President,
any Vice-President responsible for financial matters, the Treasurer or the
Controller of the Borrower.
"PARENT" means, with respect to any Bank, any Person controlling such
Bank.
"PARTICIPANT" has the meaning set forth in Section 9.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PERSON" means an individual, a corporation, a limited liability
company, a partnership, an association, a trust or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"PLAN" means at any time an employee pension benefit plan (other than
a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.
"PRICING SCHEDULE" means the Schedule attached hereto identified as
such.
"PRIME RATE" means the rate of interest publicly announced by Morgan
Guaranty Trust Company of New York in New York City from time to time as its
Prime Rate.
"QUALIFIED DEBT SECURITIES" means Debt securities of the Borrower,
provided that the terms of any such Debt security (i) permit the deferral of
principal and interest payments (other than Tax Interest) for a period of up to
five years (but not beyond the maturity date), as elected by the Borrower, (ii)
have a maturity for payment of principal of not less than 14 3/4 years after the
date of issuance, and (iii) contain subordination terms substantially consistent
with (or more favorable to the Banks than) the subordination terms contained in
the form of Indenture for Subordinated Debt Securities filed as an exhibit to
the Borrower's Registration Statement on Form S-3 (File No. 33-65471) declared
effective by the Securities and Exchange Commission on February 20, 1996.
"QUALIFIED DEFERRABLE SECURITIES OBLIGATIONS" means at any date,
without duplication, the obligations recorded on the consolidated balance sheet
of the Borrower and its Consolidated Subsidiaries in respect of Qualified Debt
Securities and Qualified Preferred Securities issued by the Borrower or any
Subsidiary.
"QUALIFIED PREFERRED SECURITIES" means preferred securities issued by
a Subsidiary, the sole purpose of which is to issue such securities and invest
the proceeds thereof in Qualified Debt Securities, and which preferred
securities are payable solely out of the proceeds of payments on account of such
Qualified Debt Securities. Securities designated 'capital securities' or by
another name shall be deemed 'Qualified Preferred Securities' if they otherwise
meet the requirements set forth herein.
"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.
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REQUIRED BANKS" means at any time Banks having at least 60% of the
aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding Notes evidencing at least 60% of the aggregate unpaid
principal amount of the Loans and having at least 60% of the aggregate Letter of
Credit Liabilities.
"REVOLVING CREDIT PERIOD" means the period from and including the
Closing Date to and including the Termination Date.
"SUBSIDIARY" means, as to any Person, any corporation or other entity
of which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person; unless
otherwise specified, "Subsidiary" means a Subsidiary of the Borrower.
"TAX INTEREST" means any additional amounts payable in respect of
Qualified Debt Securities to reimburse a Subsidiary issuing any related
Qualified Preferred Securities for any taxes or impositions payable by such
Subsidiary in respect of such Qualified Debt Securities during any period in
which interest payments otherwise have been deferred.
"TERMINATION DATE" means December 18, 2002 or, if such day is not a
Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day.
"TOTAL CAPITAL" means at any date, the consolidated debt and
stockholders' equity of the Borrower and the Consolidated Subsidiaries at such
date, including Qualified Deferrable Securities Obligations. For purposes of
determining "stockholders' equity" when calculating Total Capital, there shall
be added any unrealized holding losses (or subtracted any unrealized holding
gains), in each case net of relevant adjustments for deferred policy acquisition
costs, on account of available-for-sale debt securities to the extent reflected
therein (together with other adjustments, all as determined in accordance with
Statement of Financial Accounting Standards No. 115 of the Financial Accounting
Standards Board, as amended from time to time, or any successor provision
thereto).
"UNFUNDED LIABILITIES" means, with respect to any Plan at any time,
the amount (if any) by which (i) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed by
the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market
value of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.
"UNITED STATES" means the United States of America, including the
States and the District of Columbia, but excluding its territories and
possessions.
SECTION 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with United
States 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 Administrative Agent
that the Borrower wishes to amend any covenant in Article 5 to eliminate the
effect of any change in generally accepted accounting principles on the
operation of such covenant (or if the Administrative Agent notifies the Borrower
that the Required Banks wish to amend Article 5 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 2 on a single date and, except in the case of Base Rate Loans, for a
single Interest Period. Borrowings are classified for purposes of this Agreement
either by reference to the pricing of Loans comprising such Borrowing (e.g., a
"EURO-DOLLAR BORROWING" is a Borrowing comprised of Euro-Dollar Loans) or by
reference to the provisions of Article 2 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).
ARTICLE 2
THE CREDITS
SECTION 2.01. Commitments to Lend. During the Revolving Credit Period,
each Bank severally agrees, on the terms and conditions set forth in this
Agreement, to make loans to the Borrower pursuant to this Section from time to
time in amounts such that the aggregate principal amount of Committed Loans by
such Bank at any one time outstanding plus its Letter of Credit Liabilities
shall not exceed the amount of its Commitment. Each Borrowing under this Section
2.01 shall be in an aggregate principal amount of $5,000,000 or any larger
multiple of $1,000,000 (except that any such Borrowing may be in the aggregate
amount available in accordance with Section 3.02(c)) and shall be made from the
several Banks ratably in proportion to their respective Commitments. Within the
foregoing limits, the Borrower may borrow under this Section 2.01, repay, or to
the extent permitted by Section 2.12, prepay Loans and reborrow at any time
during the Revolving Credit Period under this Section 2.01.
SECTION 2.02. Notice of Committed Borrowing. The Borrower shall give
the Administrative Agent notice (a "NOTICE OF COMMITTED BORROWING") not later
than 10:30 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 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 during the Revolving Credit Period 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
Administrative Agent by telex or facsimile transmission a Money Market Quote
Request substantially in the form of Exhibit B hereto so as to be received no
later than 10:30 A.M. (New York City time) on (x) the fifth Euro-Dollar Business
Day prior to the date of Borrowing proposed therein, in the case of a LIBOR
Auction or (y) the Domestic Business Day next preceding the date of Borrowing
proposed therein, in the case of an Absolute Rate Auction (or, in either case,
such other time or date as the Borrower and the Administrative Agent shall have
mutually agreed and shall have notified to the Banks not later than the date of
the Money Market Quote Request for the first LIBOR Auction or Absolute Rate
Auction for which such change is to be effective) specifying:
(i) the proposed date of Borrowing, which shall be a Euro-Dollar
Business Day in the case of a LIBOR Auction or a Domestic Business Day
in the case of an Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which shall be $5,000,000
or a larger multiple of $1,000,000,
(iii) the duration of the Interest Period applicable thereto, subject to
the provisions of the definition of Interest Period, and
(iv) whether the Money Market Quotes requested are to set forth a Money
Market Margin or a Money Market Absolute Rate.
The Borrower may request offers to make Money Market Loans for more than one
Interest Period in a single Money Market Quote Request. No Money Market Quote
Request shall be given within five Euro-Dollar Business Days (or such other
number of days as the Borrower and the Administrative 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 Administrative 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 Administrative Agent by telex or facsimile transmission at its
offices specified in or pursuant to Section 9.01 not later than (x) 2:00 P.M.
(New York City time) on the fourth Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction or (y) 9:30 A.M. (New
York City time) on the proposed date of Borrowing, in the case of an Absolute
Rate Auction (or, in either case, such other time or date as the Borrower and
the Administrative 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 Administrative
Agent (or any affiliate of the Administrative Agent) in the capacity of a Bank
may be submitted, and may only be submitted, if the Administrative 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 3 and
6, any Money Market Quote so made shall be irrevocable except with the written
consent of the Administrative Agent given on the instructions of the Borrower.
(ii) Each Money Market Quote shall be in substantially the form of
Exhibit D hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan for which each such
offer is being made, which principal amount (w) may be greater than or
less than the Commitment of the quoting Bank, (x) must be $5,000,000 or
a larger multiple of $1,000,000, (y) may not exceed the principal
amount of Money Market Loans for which offers were requested and (z)
may be subject to an aggregate limitation as to the principal amount of
Money Market Loans for which offers being made by such quoting Bank may
be accepted,
(C) in the case of a LIBOR Auction, the margin above or below the
applicable London Interbank Offered Rate (the "Money Market Margin")
offered for each such Money Market Loan, expressed as a percentage
(specified to the nearest 1/10,000th of 1%) to be added to or
subtracted from such base rate,
(D) in the case of an Absolute Rate Auction, the rate of interest per
annum (specified to the nearest 1/10,000th of 1%) (the "Money Market
Absolute Rate") offered for each such Money Market Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the quoting
Bank with respect to each Interest Period specified in the related Invitation
for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(A) is not substantially in conformity with Exhibit D hereto or does
not specify all of the information required by subsection (d)(ii);
(B) contains qualifying, conditional or similar language;
(C) proposes terms other than or in addition to those set forth in the
applicable Invitation for Money Market Quotes; or
(D) arrives after the time set forth in subsection (d)(i).
(e) Notice to Borrower. The Administrative 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 Administrative
Agent unless such subsequent Money Market Quote is submitted solely to correct a
manifest error in such former Money Market Quote. The Administrative Agent's
notice to the Borrower shall specify (A) the aggregate principal amount of Money
Market Loans for which offers have been received for each Interest Period
specified in the related Money Market Quote Request, (B) the respective
principal amounts and Money Market Margins or Money Market Absolute Rates, as
the case may be, so offered and (C) if applicable, limitations on the aggregate
principal amount of Money Market Loans for which offers in any single Money
Market Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later than 10:30 A.M. (New
York City time) on (x) the third Euro-Dollar Business Day prior to the proposed
date of Borrowing, in the case of a LIBOR Auction or (y) the proposed date of
Borrowing, in the case of an Absolute Rate Auction (or, in either case, such
other time or date as the Borrower and the Administrative 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
Administrative Agent of its acceptance or non-acceptance of the offers so
notified to it pursuant to subsection (e). In the case of acceptance, such
notice (a "Notice of Money Market Borrowing") shall specify the aggregate
principal amount of offers for each Interest Period that are accepted. The
Borrower may accept any Money Market Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Money Market Borrowing may
not exceed the applicable amount set forth in the related Money Market Quote
Request,
(ii) the principal amount of each Money Market Borrowing must be
$5,000,000 or a larger multiple of $1,000,000,
(iii) acceptance of offers may only be made on the basis of ascending
Money Market Margins or Money Market Absolute Rates, as the case may be, and
(iv) the Borrower may not accept any offer that is described in
subsection (d)(iii) or that otherwise fails to comply with the requirements of
this Agreement.
(g) Allocation by Administrative 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 Administrative Agent among such Banks as
nearly as possible (in multiples of $1,000,000, as the Administrative Agent may
deem appropriate) in proportion to the aggregate principal amounts of such
offers. Determinations by the Administrative 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 Administrative 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 make available its share of
such Borrowing, in Federal or other funds immediately available in New York
City, to the Administrative Agent at its address referred to in Section 9.01.
Unless the Administrative Agent determines that any applicable condition
specified in Article 3 has not been satisfied, the Administrative Agent will
make the funds so received from the Banks available to the Borrower at the
Administrative Agent's aforesaid address.
(c) Unless the Administrative Agent shall have received notice from a
Bank prior to the date of any Borrowing that such Bank will not make available
to the Administrative Agent such Bank's share of such Borrowing, the
Administrative Agent may assume that such Bank has made such share available to
the Administrative Agent on the date of such Borrowing in accordance with
subsection (b) of this Section 2.04 and the Administrative 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 Administrative Agent, such Bank and the Borrower
severally agree to repay to the Administrative 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 Administrative 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 Administrative Agent
such corresponding amount, such amount so repaid shall constitute such Bank's
Loan included in such Borrowing for purposes of this Agreement. Nothing in this
subsection (c) shall be deemed to relieve any Bank from its obligation to extend
Loans hereunder or to prejudice any rights which the Borrower may have against
any Bank as a result of any default by such Bank hereunder. The failure of any
Bank to make Loans hereunder shall not relieve any other Bank from its
obligation to make the Loans required to be made by it hereunder.
SECTION 2.05. 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 Administrative
Agent, request that its Loans of a particular type be evidenced by a separate
Note in an amount equal to the aggregate unpaid principal amount of such Loans.
Each such Note shall be in substantially the form of Exhibit A hereto with
appropriate modifications to reflect the fact that it evidences solely Loans of
the relevant type. Each reference in this Agreement to the "Note" of such Bank
shall be deemed to refer to and include any or all of such Notes, as the context
may require.
(c) Upon receipt of each Bank's Note pursuant to Section 3.01(a), the
Administrative Agent shall forward such Note to such Bank. Each Bank shall
record the date, amount, type and maturity of each Loan made by it and the date
and amount of each payment of principal made by the Borrower with respect
thereto, and may, if such Bank so elects in connection with any transfer or
enforcement of its Note, endorse on the schedule forming a part thereof
appropriate notations to evidence the foregoing information with respect to each
such Loan then outstanding; provided that the failure of any Bank to make any
such recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Notes. Each Bank is hereby irrevocably authorized by the
Borrower so to endorse its Note and to attach to and make a part of its Note a
continuation of any such schedule as and when required.
SECTION 2.06. Maturity of Loans. (a) The Committed Loans shall mature,
and the principal amount thereof shall be due and payable, together with accrued
interest thereon, on the Termination Date.
(b) Each Money Market Loan included in any Money Market Borrowing
shall mature, and the principal amount thereof shall be due and payable,
together with accrued interest thereon, on the last day of the Interest Period
applicable to such Money Market 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 at maturity, quarterly in
arrears on the first day of each March, June, September and December prior to
maturity, and with respect to the principal amount of any Base Rate Loan
converted to a CD Loan or a Euro-Dollar Loan, on the date such amount is so
converted. Any overdue principal of or interest on any Base Rate Loan shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the sum of 2% plus the rate otherwise applicable to Base Rate Loans for such
day.
(b) Each CD Loan shall bear interest on the outstanding principal
amount thereof, for each day during each Interest Period applicable thereto, at
a rate per annum equal to the sum of the CD Margin for such day plus the
Adjusted CD Rate applicable to such Interest Period; provided that if any CD
Loan or any portion thereof shall, as a result of clause (b)(ii) of the
definition of Interest Period, have an Interest Period of less than 30 days,
such portion shall bear interest during such Interest Period at the rate
applicable to Base Rate Loans during such period. Such interest shall be payable
for each Interest Period on the last day thereof and, if such Interest Period is
longer than 90 days, at intervals of 90 days after the first day thereof. Any
overdue principal of or interest on any CD Loan shall bear interest, payable on
demand, for each day until paid at a rate per annum equal to the sum of 2% plus
the higher of (i) the sum of the CD Margin for such day plus the Adjusted CD
Rate applicable to such Loan at the date such payment was due and (ii) the rate
applicable to Base Rate Loans for such day.
"CD MARGIN" means a rate per annum determined in accordance with the
Pricing Schedule.
The "ADJUSTED CD RATE" applicable to any Interest Period means a rate
per annum determined pursuant to the following formula:
[ CDBR ]*
ACDR = [ ---------- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
----------
* The amount in brackets being rounded upward, if necessary, to the
next higher 1/100 of 1%
The "CD BASE RATE" applicable to any Interest Period is the rate of
interest determined by the Administrative 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 327.4(a) (or any successor provision) to the Federal Deposit
Insurance Corporation (or any successor) for such Corporation's (or such
successor's) insuring time deposits at offices of such institution in the United
States. The Adjusted CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during each Interest Period applicable
thereto, at a rate per annum equal to the sum of the Euro-Dollar Margin for such
day plus the Adjusted London Interbank Offered Rate applicable to such Interest
Period. Such interest shall be payable for each Interest Period on the last day
thereof and, if such Interest Period is longer than three months, at intervals
of three months after the first day thereof.
"EURO-DOLLAR MARGIN" means a rate per annum determined in accordance
with the Pricing Schedule.
The "ADJUSTED LONDON INTERBANK OFFERED RATE" applicable to any
Interest Period means a rate per annum equal to the quotient obtained (rounded
upward, if necessary, to the next higher 1/100 of 1%) by dividing (i) the
applicable London Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar
Reserve Percentage.
The "LONDON INTERBANK OFFERED RATE" applicable to any Interest Period
means the average (rounded upward, if necessary, to the next higher 1/16 of 1%)
of the respective rates per annum at which deposits in dollars are offered to
each of the Euro-Dollar Reference Banks in the London interbank market at
approximately 11:00 A.M. (London time) two Euro-Dollar Business Days before the
first day of such Interest Period in an amount approximately equal to the
principal amount of the Euro-Dollar Loan of such Euro-Dollar Reference Bank to
which such Interest Period is to apply and for a period of time comparable to
such Interest Period.
"EURO-DOLLAR RESERVE PERCENTAGE" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any Bank to United
States residents). The Adjusted London Interbank Offered Rate shall be adjusted
automatically on and as of the effective date of any change in the Euro-Dollar
Reserve Percentage.
(d) Any overdue principal of or interest on any Euro-Dollar Loan shall
bear interest, payable on demand, for each day until paid at a rate per annum
equal to the higher of (i) the sum of 2% plus the Euro-Dollar Margin for such
day plus the Adjusted London Interbank Offered Rate applicable to the Interest
Period for such Loan and (ii) the sum of 2% plus the Euro-Dollar Margin for such
day plus the quotient obtained (rounded upward, if necessary, to the next higher
1/100 of 1%) by dividing (x) the average (rounded upward, if necessary, to the
next higher 1/16 of 1%) of the respective rates per annum at which one day (or,
if such amount due remains unpaid more than three Euro-Dollar Business Days,
then for such other period of time not longer than six months as the
Administrative 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 Administrative Agent shall determine each interest rate
applicable to the Loans hereunder. The Administrative 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.
(g) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Administrative Agent as contemplated by this Section. If any
Reference Bank does not furnish a timely quotation, the Administrative Agent
shall determine the relevant interest rate on the basis of the quotation or
quotations furnished by the remaining Reference Bank or Banks or, if none of
such quotations is available on a timely basis, the provisions of Section 8.01
shall apply.
SECTION 2.08. Fees. (a) The Borrower shall pay to the Administrative
Agent for the account of the Banks ratably a facility fee at the Facility Fee
Rate (determined daily in accordance with the Pricing Schedule). Such facility
fee shall accrue (i) from and including the date of this Agreement to but
excluding the Termination Date (or earlier date of termination of the
Commitments in their entirety), on the daily aggregate amount of the Commitments
(whether used or unused) and (ii) from and including the Termination Date or
such earlier date of termination to but excluding the date the Loans and the
Letter of Credit Liabilities shall be repaid in their entirety, on the sum of
the daily aggregate outstanding principal amount of the Loans and the daily
aggregate amount of Letter of Credit Liabilities.
(b) The Borrower shall pay to (i) the Administrative Agent for the
account of the Banks ratably a letter of credit fee accruing daily on the
aggregate amount then available for drawing under all Letters of Credit at the
LC Fee Rate (determined daily in accordance with the Pricing Schedule) and (ii)
each Issuing Bank a letter of credit fronting fee accruing daily on the
aggregate amount then available for drawing under all Letters of Credit issued
by such Issuing Bank at a rate per annum agreed upon by the Borrower and such
Issuing Bank.
(c) Accrued fees under this Section shall be payable quarterly,
commencing on December 31, 1997, on each March 31, June 30, September 30 and
December 31 and upon the date of termination of the Commitments in their
entirety (and, if later, the date the Loans and the aggregate amount of Letter
of Credit Liabilities 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
Administrative Agent, (i) terminate the Commitments at any time, if no Loans,
Alternative Currency Advances or Letter of Credit Liabilities 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 $5,000,000, the aggregate amount of the
Commitments in excess of the sum of (x) the aggregate outstanding principal
amount of the Loans, (y) the aggregate Dollar Equivalent of all Alternative
Currency Advances outstanding and (z) the aggregate amount of Letter of Credit
Liabilities. Upon receipt of any notice pursuant to this Section 2.09, the
Administrative Agent shall promptly notify each Bank of the contents thereof.
SECTION 2.10. Mandatory Termination of Commitments. The
Commitments shall terminate on the Termination Date.
SECTION 2.11. Method of Electing Interest Rates. (a) The Loans
included in each Committed Borrowing shall bear interest initially at the type
of rate specified by the Borrower in the applicable Notice of Committed
Borrowing. Thereafter, the Borrower may from time to time elect to change or
continue the type of interest rate borne by each Group of Loans (subject to
subsection (d) of this Section and the provisions of Article 8), as follows:
(i) if such Loans are Base Rate Loans, the Borrower may elect to
convert such Loans to CD Loans as of any Domestic Business Day or to
Euro-Dollar Loans as of any Euro-Dollar Business Day;
(ii) if such Loans are CD Loans, the Borrower may elect to convert such
Loans to Base Rate Loans or Euro-Dollar Loans or elect to continue such
Loans as CD Loans for an additional Interest Period, subject to Section
2.14 if any such conversion or continuation is effective on any day
other than the last day of an Interest Period applicable to such Loans;
and
(iii) if such Loans are Euro-Dollar Loans, the Borrower may elect to
convert such Loans to Base Rate Loans or CD Loans or elect to continue
such Loans as Euro-Dollar Loans for an additional Interest Period,
subject to Section 2.14 if any such conversion or continuation is
effective on any day other than the last day of an Interest Period
applicable to such Loans.
Each such election shall be made by delivering a notice (a "NOTICE OF INTEREST
RATE ELECTION") to the Administrative Agent not later than 10:30 A.M. (New York
City time) on the third Euro-Dollar Business Day before the conversion or
continuation selected in such notice is to be effective (unless the relevant
Loans are to be converted from Domestic Loans of one type to Domestic Loans of
the other type or are CD Loans to be continued as CD Loans for an additional
Interest Period, in which case such notice shall be delivered to the
Administrative Agent not later than 10:30 A.M. (New York City time) on the
second Domestic Business Day before such conversion or continuation is to be
effective). A Notice of Interest Rate Election may, if it so specifies, apply to
only a portion of the aggregate principal amount of the relevant Group of Loans;
provided that (i) such portion is allocated ratably among the Loans comprising
such Group and (ii) the portion to which such Notice applies, and the remaining
portion to which it does not apply, are each at least $5,000,000 or any larger
amount in multiples of $1,000,000 (unless such portion is comprised of Base Rate
Loans). If no such notice is timely received before the end of an Interest
Period for any Group of CD Loans or Euro-Dollar Loans, the Borrower shall be
deemed to have elected that such Group of Loans be converted to Base Rate Loans
at the end of such Interest Period.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such notice
applies;
(ii) the date on which the conversion or continuation selected in such
notice is to be effective, which shall comply with the applicable
clause of subsection (a) above;
(iii) if the Loans comprising such Group are to be converted, the new
type of Loans and, if the Loans resulting from such conversion are to
be CD Loans or Euro-Dollar Loans, the duration of the next succeeding
Interest Period applicable thereto; and
(iv) if such Loans are to be continued as CD Loans or Euro-Dollar Loans
for an additional Interest Period, the duration of such additional
Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period.
(c) Promptly after receiving a Notice of Interest Rate Election from
the Borrower pursuant to subsection (a) above, the Administrative Agent shall
notify each Bank of the contents thereof and such notice shall not thereafter be
revocable by the Borrower.
(d) The Borrower shall not be entitled to elect to convert any
Committed Loans to, or continue any Committed Loans for an additional Interest
Period as, CD Loans or Euro-Dollar Loans if (i) the aggregate principal amounts
of any Group of CD Loans or Euro-Dollar Loans created or continued as a result
of such election would be less than $5,000,000 or (ii) a Default shall have
occurred and be continuing when the Borrower delivers notice of such election to
the Administrative Agent.
SECTION 2.12. Mandatory or Optional Prepayments. (a) If, on any date
the sum of (i) the aggregate outstanding principal amount of the Loans, (ii) the
aggregate Dollar Equivalent of all Alternative Currency Advances then
outstanding and (iii) the aggregate amount of Letter of Credit Liabilities
exceeds 105% of the aggregate amount of the Commitments, then, the Borrower
shall within five Euro-Dollar Business Days prepay outstanding Committed Loans
or Alternative Currency Advances (as selected by the Borrower and notified to
the Banks through the Administrative Agent not less than three Euro-Dollar
Business Days prior to the date of prepayment) to the extent necessary to
eliminate any such excess.
(b) Subject in the case of any Fixed Rate Borrowing to Section 2.14,
the Borrower may, upon at least three Domestic Business Days' notice (except in
the case of Base Rate Loans, in which case upon one Domestic Business Day's
notice) to the Administrative Agent, prepay any Group of Domestic Loans (or
Money Market Loans bearing interest at the Base Rate pursuant to Section
8.01(a)) or upon at least three Euro-Dollar Business Days' notice to the
Administrative Agent, prepay any Group of Euro-Dollar Loans, in each case in
whole at any time, or from time to time in part in amounts aggregating
$5,000,000 or any larger multiple of $1,000,000, by paying the principal amount
to be prepaid together with accrued interest thereon to the date of prepayment.
Each such optional prepayment shall be applied to prepay ratably the Loans of
the several Banks included in such Group or Borrowing.
(c) Except as provided in Section 2.12(b), the Borrower may not prepay
all or any portion of the principal amount of any Money Market Loan prior to the
maturity thereof except with the consent of the Bank which made such Loan.
(d) Upon receipt of a notice of prepayment pursuant to this Section,
the Administrative Agent shall promptly notify each Bank of the contents thereof
and of such Bank's ratable share (if any) of such prepayment and such notice
shall not thereafter be revocable by the Borrower.
SECTION 2.13. General Provisions as to Payments. (a) The Borrower shall
make each payment of principal of, and interest on, the Loans and of Letter of
Credit Liabilities and interest thereon and of fees hereunder (other than fees
payable directly to the Issuing Bank), 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 and without offset or counterclaim, to the Administrative Agent at
its address referred to in Section 9.01. The Administrative Agent will promptly
distribute to each Bank its ratable share of each such payment received by the
Administrative Agent for the account of the Banks. Whenever any payment of
principal of, or interest on, the Domestic Loans or of Letter of Credit
Liabilities or interest thereon 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 Administrative 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
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative 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
Administrative 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
Administrative Agent, at the Federal Funds Rate.
SECTION 2.14. Funding Losses. If the Borrower makes any payment of
principal with respect to any Fixed Rate Loan or any Fixed Rate Loan is
continued for an additional Interest Period or converted to a different type of
Loan (pursuant to Article 2, 6 or 8 or otherwise) on any day other than the last
day of an 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,
prepay, convert or continue any Fixed Rate Loans after notice has been given to
any Bank in accordance with Section 2.04(a), 2.11(c) or 2.12(d), 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, conversion or continuation or
failure to borrow, prepay, convert or continue, 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 2.15. Computation of Interest and Fees. Interest based on the
Prime Rate hereunder shall be computed on the basis of a year of 365 days (or
366 days in a leap year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All other interest and
fees shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day).
SECTION 2.16. Letters of Credit. (a) Subject to the terms and
conditions hereof, each Issuing Bank agrees to issue standby letters of credit
(the "Letters of Credit") hereunder from time to time before the tenth day
before the Termination Date upon the request, and for the account, of the
Borrower or, on a joint and several basis, the Borrower and each Subsidiary
signing such request (each, a "Co-Applicant"); provided that, immediately after
each Letter of Credit is issued, (i) the aggregate amount of the Letter of
Credit Liabilities shall not exceed the Letter of Credit Commitment and (ii) the
aggregate amount of the Letter of Credit Liabilities plus the aggregate
outstanding amount of all Loans plus the aggregate Dollar Equivalent of all
Alternative Currency Advances then outstanding shall not exceed the aggregate
amount of the Commitments. Upon the date of issuance by an Issuing Bank of a
Letter of Credit (or upon the Closing Date with respect to any Existing Letter
of Credit), the Issuing Bank shall be deemed, without further action by any
party hereto, to have sold to each Bank, and each Bank shall be deemed, without
further action by any party hereto, to have purchased from the Issuing Bank, a
participation in such Letter of Credit and the related Letter of Credit
Liabilities in the proportion their respective Commitments bear to the aggregate
Commitments.
(b) (i) The Borrower shall give the Issuing Bank notice, by a Letter of
Credit Request in the form of Exhibit I hereto, at least three Domestic Business
Days prior to the requested issuance of a Letter of Credit specifying the
beneficiary thereof and its address, the conditions under which a drawing may be
made thereunder, the date such Letter of Credit is to be issued, the maximum
amount thereof, the name and address of each Co-Applicant (if any) therefor and
the terms of such Letter of Credit and the nature of the transactions to be
supported thereby (such notice, including any such notice given in connection
with the extension of a Letter of Credit, a "Notice of Issuance").
(ii) Upon receipt of a Notice of Issuance, the Issuing Bank shall
promptly notify the Administrative Agent, and the Administrative Agent shall
promptly notify each Bank, of the contents thereof and of the amount of such
Bank's participation in such Letter of Credit. The issuance by the Issuing Bank
of each Letter of Credit shall, in addition to the conditions precedent set
forth in Article 3, be subject to the conditions precedent that (i) such Letter
of Credit shall be substantially in the form of Exhibit J hereto or in such
other form and contain such other terms as shall be reasonably satisfactory to
the Issuing Bank, (ii) the Borrower and each Co-Applicant (if any) shall have
executed and delivered such other instruments and agreements relating to such
Letter of Credit as the Issuing Bank shall have reasonably requested and (iii)
the Administrative Agent shall have received the related Letter of Credit
Request signed by such Co-Applicant (if any).
(iii) The extension or renewal of any Letter of Credit shall be deemed
for all purposes of this Agreement to be an issuance of such Letter of Credit,
and if any Letter of Credit contains a provision pursuant to which it is deemed
to be extended unless notice of termination is given by the Issuing Bank, the
Issuing Bank shall timely give such notice of termination unless it has
theretofore timely received a Notice of Issuance and the other conditions to
issuance of a Letter of Credit have also theretofore been met with respect to
such extension, provided that no failure by the Issuing Bank to give any such
notice of termination and no delay in giving any such notice shall affect the
obligations of (i) the Borrower or any Co-Applicant to reimburse the Issuing
Bank for any drawing under any Letter of Credit or (ii) any Banks to pay to the
Issuing Bank an amount in respect of such Bank's ratable share of any such
drawing.
(iv) No Letter of Credit shall have a term of more than one year;
provided that a Letter of Credit may contain a provision pursuant to which it is
deemed to be extended on an annual basis unless notice of termination is given
by the Issuing Bank; provided further that, notwithstanding any other provision
of this Agreement to the contrary, no Letter of Credit shall mature after, or
have a term extending or be extendible beyond, the Termination Date.
(v) Each Letter of Credit shall be subject to the "Uniform Customs and
Practice for Documentary Credits" of the International Chamber of Commerce, to
the extent provided for in Exhibit J and (ii) be satisfactory in form to satisfy
applicable regulatory requirements.
(c) Upon receipt from the beneficiary of any Letter of Credit of any
notice of a drawing under such Letter of Credit, the Issuing Bank shall notify
the Administrative Agent and the Administrative Agent shall promptly notify the
Borrower and each Co-Applicant (if any) and each other Bank as to the amount to
be paid as a result of such drawing and the payment date therefor. The Borrower
and each such Co-Applicant shall jointly and severally be irrevocably and
unconditionally obligated forthwith to reimburse the Issuing Bank for any
amounts paid by the Issuing Bank upon any drawing under any Letter of Credit,
without presentment, demand, protest or other formalities of any kind. All such
amounts paid by the Issuing Bank and remaining unpaid by the Borrower and each
such Co-Applicant 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 applicable to Base
Rate Loans for such day. In addition, each Bank will pay to the Administrative
Agent, for the account of the Issuing Bank, immediately upon the Issuing Bank's
demand at any time during the period commencing after such drawing until
reimbursement therefor in full by the Borrower and each such Co-Applicant, an
amount equal to such Bank's ratable share of such drawing (in proportion to its
participation therein), together with interest on such amount for each day from
the date of the Issuing Bank's demand for such payment (or, if such demand is
made after 12:00 Noon (New York City time) on such date, from the next
succeeding Domestic Business Day) to the date of payment by such Bank of such
amount at a rate of interest per annum equal to the rate applicable to Base Rate
Loans for such period. Each Bank shall also be liable for its pro rata share of
any amounts paid by the Borrower or any Co-Applicant that are subsequently
rescinded or avoided, or must otherwise be restored or returned. Except to the
extent attributable to the gross negligence or willful misconduct of the Issuing
Bank in honoring a drawing under the relevant Letter of Credit, such liabilities
shall be unconditional and without regard to the occurrence of any Default or
the compliance by the Borrower or any Co-Applicant with any of its obligations
under this Agreement or any related document. The Issuing Bank will pay to each
Bank ratably all amounts received from the Borrower for application in payment
of its reimbursement obligations in respect of any Letter of Credit, but only to
the extent such Bank has made payment to the Issuing Bank in respect of such
Letter of Credit pursuant hereto.
(d) The obligations of the Borrower and each Co-Applicant (if any) and
each Bank under subsection (c) above shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement, under all circumstances whatsoever, including without limitation
the following circumstances:
(i) any lack of validity or enforceability of this Agreement or any
Letter of Credit or any document related hereto or thereto;
(ii) any amendment or waiver of or any consent to departure from all or
any of the provisions of this Agreement or any Letter of Credit or any document
related hereto or thereto;
(iii) the use which may be made of the Letter of Credit by, or any acts
or omission of, a beneficiary of a Letter of Credit (or any Person for whom the
beneficiary may be acting);
(iv) the existence of any claim, set-off, defense or other right that
the Borrower or any Co-Applicant may have at any time against a beneficiary of a
Letter of Credit (or any Person for whom the beneficiary may be acting), the
Banks or any of them (including the Issuing Bank) or any other Person, whether
in connection with this Agreement or the Letter of Credit or any document
related hereto or thereto or any unrelated transaction;
(v) any statement or any other document presented under a Letter of
Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect whatsoever;
(vi) payment under a Letter of Credit against presentation to the
Issuing Bank of a draft or certificate that does not comply with the terms of
the Letter of Credit, provided that the Issuing Bank's determination that
documents presented under the Letter of Credit comply with the terms thereof
shall not have constituted gross negligence or willful misconduct of the Issuing
Bank; or
(vii) any other act or omission to act or delay of any kind by any Bank
(including the Issuing Bank), the Administrative Agent or any other Person or
any other event or circumstance whatsoever that might, but for the provisions of
this subsection (vii), constitute a legal or equitable discharge of the
Borrower's or the relevant Co-Applicant's or any Bank's obligations hereunder.
(e) The Borrower (and each Co-Applicant (if any) to the extent of
claims, damages, losses, liabilities, costs and expenses attributable, directly
or indirectly, to Letters of Credit issued for its account) hereby indemnifies
and holds harmless each Bank (including each Issuing Bank) and the
Administrative Agent from and against any and all claims, damages, losses,
liabilities, costs or expenses which such Bank or the Administrative Agent may
incur (including, without limitation, any claims, damages, losses, liabilities,
costs or expenses which the Issuing Bank may incur by reason of or in connection
with the failure of any other Bank to fulfill or comply with its obligations to
such Issuing Bank hereunder (but nothing herein contained shall affect any
rights the Borrower may have against such defaulting Bank)), and none of the
Banks (including an Issuing Bank) nor the Administrative Agent nor any of their
officers or directors or employees or agents shall be liable or responsible, by
reason of or in connection with the execution and delivery or transfer of or
payment or failure to pay under any Letter of Credit, including without
limitation any of the circumstances enumerated in subsection (d) above, as well
as (i) any error, omission, interruption or delay in transmission or delivery of
any messages, by mail, cable, telegraph, telex or otherwise, (ii) any error in
interpretation of technical terms, (iii) any loss or delay in the transmission
of any document required in order to make a drawing under a Letter of Credit,
(iv) any consequences arising from causes beyond the control of the Issuing
Bank, including without limitation any government acts, or any other
circumstances whatsoever in making or failing to make payment under such Letter
of Credit; provided that neither the Borrower nor any relevant Co-Applicant
shall be required to indemnify the Issuing Bank for any claims, damages, losses,
liabilities, costs or expenses, and the Borrower and any such Co-Applicant shall
have a claim for direct (but not consequential) damage suffered by it, to the
extent found by a court of competent jurisdiction to have been caused by (x) the
willful misconduct or gross negligence of the Issuing Bank in determining
whether a request presented under any Letter of Credit complied with the terms
of such Letter of Credit or (y) the Issuing Bank's failure to pay under any
Letter of Credit after the presentation to it of a request strictly complying
with the terms and conditions of the Letter of Credit. Nothing in this
subsection (e) is intended to limit the obligations of the Borrower under any
other provision of this Agreement. To the extent the Borrower does not indemnify
an Issuing Bank as required by this subsection, the Banks agree to do so ratably
in accordance with their Commitments.
(f) The parties hereto agree that in making any payment under any
Letter of Credit none of the following shall constitute or be deemed to
constitute the wilful misconduct or gross negligence of the Issuing Bank: (i)
the Issuing Bank's exclusive reliance on any document (including without
limitation any draft) presented to it under such Letter of Credit as to any and
all matters set forth therein, including reliance on the amount of any draft
presented thereunder, whether or not the amount due to the beneficiary thereof
equals the amount of such draft, and whether or not any document presented
thereunder proves to be inaccurate or otherwise insufficient in any respect, if
such document on its face appears to be in order and whether or not such
document or any statement contained therein proves to be forged or invalid or
inaccurate or untrue in any respect whatsoever and (ii) any non-material,
non-compliance by the documents (including without limitation any draft)
presented under any Letter of Credit with the terms thereof.
(g) With respect to each Letter of Credit, the Borrower shall pay to
the Issuing Bank for its own account fees in the amounts and at the times
previously agreed upon between the Borrower and such Issuing Bank.
SECTION 2.17. Alternative Currency Advances. (a) Requests for Offers.
From time to time after the Closing Date and prior to the Termination Date the
Borrower may request any or all of the Banks to make offers to make Alternative
Currency Advances to the Borrower. Each Bank may, but shall have no obligation
to, make such offers on terms and conditions as are satisfactory to such Bank,
and the Borrower may, but shall have no obligation to, accept any such offers.
Each Alternative Currency Advance shall be subject to the conditions of clauses
(c) through (e), inclusive, of Section 3.02 and to such other conditions as are
agreed upon by the Borrower and the Bank making such Alternative Currency
Advance, and the making of any Alternative Currency Advance shall be deemed to
be a representation and warranty by the Borrower on the date thereof as to the
facts specified in such clauses (c) through (e), inclusive.
(b) Promissory Notes; Status as Loans. If required by the Bank making
such advance, each Alternative Currency Advance shall be evidenced by a single
promissory note of the Borrower in an amount equal to the principal amount of
such Alternative Currency Advance, such promissory note to be in form mutually
satisfactory to the Borrower and such Bank. An Alternative Currency Advance
shall not be a Loan (as defined in Section 1.01 hereof) and a promissory note
issued pursuant to this subsection (b) shall not be a Note (as defined in such
Section 1.01); provided that, for the purposes of Sections 5.08, 6.01, 8.03(a),
8.04, 9.03, 9.04, 9.05 and 9.06 and of the first clause of Article 5, an
Alternative Currency Advance shall be a Loan and a promissory note issued in
connection therewith shall be a Note; provided further that for the purposes of
Sections 2.14, 8.03(a) and 8.04, an Alternative Currency Advance shall be deemed
to be a Euro- Dollar Loan.
(c) Reports to Administrative Agent. The Borrower shall deliver to the
Administrative Agent a report in respect of the Alternative Currency Advances
(an "ALTERNATIVE CURRENCY ADVANCE REPORT") on the date on which each Alternative
Currency Advance is made, and on the first Euro-Dollar Business Day of each
calendar month thereafter on which any Alternative Currency Advance is
outstanding, specifying for each Alternative Currency Advance then outstanding:
(i) the date on which such advance was or is being made;
(ii) the Alternative Currency of such advance;
(iii) the Dollar Equivalent of the advance; and
(iv) the Dollar Equivalent of all Alternative Currency Advances then
outstanding.
Each Alternative Currency Advance Report shall be delivered to the
Administrative Agent not later than 10:30 A.M. (New York City time) on the date
on which it is required to be delivered.
(d) Maturity; No Prepayment. Each Alternative Currency Advance shall
mature, and the principal amount thereof shall be due and payable on the date
agreed upon by the Borrower and the Bank making such Alternative Currency
Advance, which date shall be no later than the Termination Date. Except as
required by Section 2.12(a), no Alternative Currency Advance may be prepaid
without the consent of the Bank making such Alternative Currency Advance.
(e) Substitution of Euro for National Currency. If any Alternative
Currency is replaced by the Euro, the Euro may be tendered in payment of any
outstanding amount denominated in such Alternative Currency at the conversion
rate specified in, or otherwise calculated in accordance with, the regulations
adopted by the Council of the European Union relating to the Euro. No
replacement of an Alternative Currency by the Euro shall discharge, excuse or
otherwise affect the performance of any obligation of the Borrower under this
Agreement or the Notes.
ARTICLE 3
CONDITIONS
SECTION 3.01. Closing. The closing hereunder shall occur upon receipt
by the Documentation Agent of the following documents, each dated the Closing
Date unless otherwise indicated:
(a) a duly executed Note for the account of each Bank dated on or
before the Closing Date complying with the provisions of Section 2.05;
(b) an opinion of the Deputy General Counsel of the Borrower,
substantially in the form of Exhibit E hereto and covering such additional
matters relating to the transactions contemplated hereby as the Required Banks
may reasonably request;
(c) an opinion of Piper & Marbury, counsel for the Borrower,
substantially in the form of Exhibit F hereto and covering such additional
matters relating to the transactions contemplated hereby as the Required Banks
may reasonably request;
(d) an opinion of Davis Polk & Wardwell, special counsel for the
Agents, substantially in the form of Exhibit G hereto and covering such
additional matters relating to the transactions contemplated hereby as the
Required Banks may reasonably request;
(e) evidence satisfactory to it that all fees payable by the Borrower
to the Documentation Agent and the Administrative Agent pursuant to Section 7.09
shall have been paid in full;
(f) evidence satisfactory to it of the payment of all principal of and
interest on any loans outstanding under, and of all other amounts payable under,
the Existing Credit Agreements (except as contemplated by Section 2.16(a) hereof
with respect to the Existing Letters of Credit); and
(g) all documents the Documentation Agent may reasonably request
relating to the existence of the Borrower, the corporate authority for and the
validity of this Agreement and the Notes, and any other matters relevant hereto,
all in form and substance satisfactory to the Documentation Agent.
The Documentation Agent shall promptly notify the Borrower, the Banks and the
Administrative Agent of the Closing Date, and such notice shall be conclusive
and binding on all parties hereto.
SECTION 3.02. Borrowing and Issuance of Letters of Credit. The
obligation of any Bank to make a Loan on the occasion of any Borrowing, and the
obligation of an Issuing Bank to issue (including the renewal or extension of
the term of) any Letter of Credit, is subject to the satisfaction of the
following conditions:
(a) the fact that the Closing Date shall have occurred on or prior to
January 1, 1998;
(b) receipt by the Administrative Agent of a Notice of Borrowing as
required by Section 2.02 or 2.03, as the case may be, or receipt by the Issuing
Bank of a Notice of Issuance as required by Section 2.16(b);
(c) the fact that, immediately after such Borrowing or issuance of a
Letter of Credit, the sum of (x) the aggregate outstanding principal amount of
the Loans, (y) the aggregate Dollar Equivalent of all Alternative Currency
Advances then outstanding and (z) the aggregate amount of Letter of Credit
Liabilities will not exceed the aggregate amount of the Commitments;
(d) the fact that, immediately before and after such Borrowing or
issuance of a Letter of Credit, no Default shall have occurred and be
continuing;
(e) the fact that the representations and warranties of the Borrower
contained in this Agreement (except the representations and warranties set forth
in Sections 4.04(c) or 4.05) shall be true on and as of the date of such
Borrowing or issuance of a Letter of Credit.
Each Borrowing and issuance of a Letter of Credit hereunder shall be deemed to
be a representation and warranty by the Borrower on the date of such Borrowing
or issuance (including the renewal or extension) of a Letter of Credit as to the
facts specified in clauses (c), (d) and (e) of this Section.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The Borrower is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Maryland, and has all corporate powers and all governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted, other than such licenses, authorizations, consents
and approvals which, if not held or obtained by the Borrower, do not, in the
aggregate, have a Material Adverse Effect.
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower of this
Agreement and the Notes are within the Borrower's corporate powers, have been
duly authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or official and do not
contravene, or constitute a default under, any provision of applicable law or
regulation or of the articles of incorporation or by-laws of the Borrower or of
any agreement, judgment, injunction, order, decree or other instrument binding
upon the Borrower or any of its Subsidiaries or result in the creation or
imposition of any Lien on any asset of the Borrower or any of its Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement constitutes a valid and
binding agreement of the Borrower and each Note, when executed and delivered in
accordance with this Agreement, will constitute a valid and binding obligation
of the Borrower, in each case enforceable in accordance with its terms.
SECTION 4.04. Financial Information.
(a) The consolidated statement of financial position and shareholders'
equity of the Borrower and its Consolidated Subsidiaries as of December 31, 1996
and the related consolidated statements of operations and cash flows for the
fiscal year then ended, reported on by Ernst & Young LLP and set forth in the
Borrower's 1996 Form 10-K, a copy of which has been delivered to each of the
Banks, fairly present, in conformity with United States generally accepted
accounting principles, the consolidated financial position of the Borrower and
its Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such fiscal year.
(b) The unaudited consolidated statement of financial position and
shareholders' equity of the Borrower and its Consolidated Subsidiaries as of
September 30, 1997 and the related unaudited consolidated statements of
operations and cash flows for the nine months then ended, set forth in the
Borrower's Latest Form 10-Q, a copy of which has been delivered to each of the
Banks, fairly present, in conformity with United States generally accepted
accounting principles applied on a basis consistent with the financial
statements referred to in subsection (a) of this Section, the consolidated
financial position of the Borrower and its Consolidated Subsidiaries as of such
date and their consolidated results of operations and cash flows for such nine
month period (subject to normal year-end adjustments).
(c) Except as disclosed in the Borrower's Latest Form 10-Q or in any
Form 8-K filed by the Borrower under the Securities Exchange Act of 1934 after
the Borrower's Latest Form 10-Q and provided to the Banks prior to the date of
this Agreement, since December 31, 1996 there has been no Material Adverse
Effect.
(d) A copy of a duly completed and signed Annual Statement or other
similar report of or for each Insurance Company Subsidiary in the form filed
with the governmental body, agency or official which regulates insurance
companies in the jurisdiction in which such Insurance Company Subsidiary is
domiciled for the year ended December 31, 1996 has been delivered to the
Administrative Agent on behalf of each of the Banks and fairly presents, in
accordance with statutory accounting principles, the information contained
therein.
SECTION 4.05. Litigation. Subject to matters disclosed in the financial
statements referred to in Sections 4.04(a) and 4.04(b), there is no action, suit
or proceeding pending against, or to the knowledge of the Borrower threatened
against or affecting, the Borrower or any of its Subsidiaries before any court
or arbitrator or any governmental body, agency or official in which there is a
reasonable expectation of an adverse decision which reasonably could be expected
to have a Material Adverse Effect or which in any manner draws into question the
validity of this Agreement or the Notes.
SECTION 4.06. Compliance with ERISA. Each member of the ERISA Group
has fulfilled its obligations under the minimum funding standards of ERISA and
the Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan. No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement,
which in either case would trigger the provisions of Section 412(n) or
401(a)(29) of the Internal Revenue Code (or any corresponding provisions of
ERISA) or (iii) incurred any liability under Title IV of ERISA other than a
liability to the PBGC for premiums under Section 4007 of ERISA.
SECTION 4.07. Environmental Matters. In the ordinary course of its
business, the Borrower conducts an ongoing review of the effect of Environmental
Laws on the business, operations and properties of the Borrower and its
Subsidiaries, in the course of which it identifies and evaluates associated
liabilities and costs (including, without limitation, any capital or operating
expenditures required for clean-up or closure of properties presently or
previously owned, any capital or operating expenditures required to achieve or
maintain compliance with environmental protection standards imposed by law or as
a condition of any license, permit or contract, any related constraints on
operating activities, including any periodic or permanent shutdown of any
facility or reduction in the level of or change in the nature of operations
conducted thereat, any costs or liabilities in connection with off-site disposal
of wastes or Hazardous Substances, and any actual or potential liabilities to
third parties, including employees, and any related costs and expenses). On the
basis of this review, the Borrower has reasonably concluded that such associated
liabilities and costs, including the costs of compliance with Environmental
Laws, are unlikely to have a Material Adverse Effect.
SECTION 4.08. Taxes. The Borrower and its Subsidiaries have filed all
United States Federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all taxes due pursuant to
such returns or pursuant to any assessment received by the Borrower or any
Subsidiary, other than any such assessments being contested in good faith by
appropriate proceedings and for which any reserves required under generally
accepted accounting principles have been established. The charges, accruals and
reserves on the books of the Borrower and its Subsidiaries in respect of taxes
or other governmental charges are, in the opinion of the Borrower, adequate in
all material respects.
SECTION 4.09. Subsidiaries. Each of the Borrower's corporate
Subsidiaries (other than Excluded Subsidiaries) is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted.
SECTION 4.10. Not an Investment Company. The Borrower is not an
"investment company" within the meaning of the Investment Company Act of
1940, as amended.
SECTION 4.11. Full Disclosure. All information heretofore furnished by
the Borrower to any Agent or Bank or any Issuing 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 any Agent or Bank or
any Issuing Bank will be, true and accurate in all material respects on the date
as of which such information is stated or certified. The Borrower has disclosed
to the Banks in writing any and all facts which materially and adversely affect
or may affect (to the extent the Borrower can now reasonably foresee), the
business, operations or financial condition of the Borrower and its Consolidated
Subsidiaries, taken as a whole, or the ability of the Borrower to perform its
obligations under this Agreement.
ARTICLE 5
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment
hereunder or any amount payable under any Note or any Letter of Credit Liability
remains unpaid:
SECTION 5.01. Information. The Borrower will deliver to each of the
Banks:
(a) as soon as available and in any event within 95 days after the end
of each fiscal year of the Borrower, a consolidated statement of financial
position and shareholders' equity of the Borrower and its Consolidated
Subsidiaries as of the end of such fiscal year and the related consolidated
statements of operations and cash flows for such fiscal year, setting forth in
each case in comparative form the figures for the previous fiscal year, all
reported on in a manner acceptable to the Securities and Exchange Commission by
Ernst & Young LLP or other independent public accountants of nationally
recognized standing;
(b) as soon as available and in any event within 60 days after the end
of each of the first three quarters of each fiscal year of the Borrower, a
consolidated statement of financial position and shareholders' equity of the
Borrower and its Consolidated Subsidiaries as of the end of such quarter and the
related consolidated statements of operations and cash flows for such quarter
and for the portion of the Borrower's fiscal year ended at the end of such
quarter, setting forth in the case of such consolidated statements of operations
and cash flows in comparative form the figures for the corresponding quarter and
the corresponding portion of the Borrower's previous fiscal year, all certified
(subject to normal year-end adjustments) as to fairness of presentation,
generally accepted accounting principles and consistency by the chief financial
officer or the chief accounting officer of the Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, an Officer's Certificate
(i) setting forth in reasonable detail the calculations required to establish
whether the Borrower was in compliance with the requirements of Sections 5.09
and 5.10 on the date of such financial statements and (ii) stating whether any
Default exists on the date of such certificate and, if any Default then exists,
setting forth the details thereof and the action which the Borrower is taking or
proposes to take with respect thereto;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements (i) whether
anything has come to their attention in the course of their examination of the
financial statements of the Borrower and its Subsidiaries to cause them to
believe that any Default existed on the date of such statements and (ii)
confirming the calculations set forth in the officer's certificate delivered
simultaneously therewith pursuant to clause (c) above;
(e) within five days after any officer of the Borrower obtains
knowledge of any Default, if such Default is then continuing, an Officer's
Certificate setting forth the details thereof and the action which the Borrower
is taking or proposes to take with respect thereto;
(f) within 120 days after the end of each fiscal year of each
Insurance Company Subsidiary, a copy of a duly completed and signed Annual
Statement (or any successor form thereto) required to be filed by such Insurance
Company Subsidiary with the governmental body, agency or official which
regulates insurance companies in the jurisdiction in which such Insurance
Company Subsidiary is domiciled, in the form submitted to such governmental
body, agency or official;
(g) within 60 days after the end of the second fiscal quarter of
United States Fidelity and Guaranty Company and Fidelity and Guaranty Life
Insurance Company, respectively, a copy of a duly completed and signed Quarterly
Statement (or any successor form thereto) required to be filed by each such
company with the governmental body, agency or official which regulates insurance
companies in the jurisdiction in which such company is domiciled, in the form
submitted to such governmental body, agency or official;
(h) promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
(i) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their
equivalents) which the Borrower shall have filed with the Securities and
Exchange Commission;
(j) if and when any member of the ERISA Group (i) gives or is required
to give notice to the PBGC of any "reportable event" (as defined in Section 4043
of ERISA) with respect to any Plan, other than a reportable event for which
30-day notice to the PBGC has been waived, or knows that the plan administrator
of any Plan has given or is required to give notice of any such reportable
event, a copy of the notice of such reportable event given or required to be
given to the PBGC; (ii) receives notice of complete or partial withdrawal
liability under Title IV of ERISA or notice that any Multiemployer Plan is in
reorganization, is insolvent or has been terminated, a copy of such notice;
(iii) receives notice from the PBGC under Title IV of ERISA of an intent to
terminate, impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or appoint a trustee to administer any Plan, a copy of
such notice; (iv) applies for a waiver of the minimum funding standard under
Section 412 of the Internal Revenue Code, a copy of such application; (v) gives
notice of intent to terminate any Plan under Section 4041(c) of ERISA, a copy of
such notice and other information filed with the PBGC; (vi) gives notice of
withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of such
notice; or (vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which in either case would trigger
the provisions of Section 412(n)or 401(a)(29) of the Internal Revenue Code (or
any corresponding provisions of ERISA), a certificate of the chief financial
officer or the chief accounting officer of the Borrower setting forth details as
to such occurrence and action, if any, which the Borrower or applicable member
of the ERISA Group is required or proposes to take; and
(k) from time to time such additional information regarding the
financial position or business of the Borrower and its Subsidiaries as the
Administrative Agent, at the request of any Bank, may reasonably request.
SECTION 5.02. Payment of Obligations. The Borrower will pay and
discharge, and will cause each Subsidiary (other than an Excluded Subsidiary) to
pay and discharge, at or before maturity, all their respective material
obligations and liabilities, including, without limitation, tax liabilities,
except where the same may be contested in good faith by appropriate proceedings,
and will maintain, and will cause each Subsidiary to maintain, in accordance
with generally accepted accounting principles, appropriate reserves for the
accrual of any of the same.
SECTION 5.03. Maintenance of Property; Insurance. (a) The Borrower will
keep, and will cause each Subsidiary to keep, all property useful and necessary
in its business in good working order and condition, ordinary wear and tear
excepted.
(b) The Borrower will maintain or cause to be maintained with
financially sound and reputable insurers or through self-insurance programs
appropriate to the type and amount of the risk insured, insurance with respect
to its properties and business, and the properties and business of its
Subsidiaries, against loss or damage of the kinds customarily insured against by
reputable companies in the same or similar businesses, such insurance to be of
such types and in such amounts (with such deductible amounts) as is customary
for such companies under similar circumstances. The Borrower will furnish to the
Banks, upon request from the Administrative Agent, information presented in
reasonable detail as to the insurance so carried.
SECTION 5.04. Conduct of Business and Maintenance of Existence. The
Borrower will continue, and will cause each Subsidiary (other than any Excluded
Subsidiary) to continue, to engage in all material respects in business of the
same general type as now conducted by the Borrower and its Subsidiaries, and
will preserve, renew and keep in full force and effect, and will cause each
Subsidiary (other than any Excluded Subsidiary) to preserve, renew and keep in
full force and effect, their respective corporate existence and their respective
rights, privileges and franchises necessary or desirable in the normal conduct
of business, other than such corporate existences, rights, privileges and
franchises which, if not preserved, renewed or kept in force, will not have, in
the aggregate, a Material Adverse Effect.
SECTION 5.05. Compliance with Laws. The Borrower will comply, and cause
each Subsidiary to comply, with all applicable laws, ordinances, rules,
regulations, and requirements of governmental authorities (including, without
limitation, Environmental Laws and ERISA and the rules and regulations
thereunder) except where the necessity of compliance therewith is contested in
good faith by appropriate proceedings or where the failure to comply with such
laws, ordinances, rules, regulations and requirements will not, in the
aggregate, have a Material Adverse Effect.
SECTION 5.06. Negative Pledge. Neither the Borrower nor any Subsidiary
will create, assume or suffer to exist any Lien on any asset now owned or
hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement securing Debt
outstanding on the date of this Agreement in an aggregate principal or face
amount not exceeding $100,000,000;
(b) any Lien existing on any asset of any corporation at the time such
corporation becomes a Subsidiary and not created in contemplation of such event;
(c) any Lien on any asset securing Debt incurred or assumed for the
purpose of financing all or any part of the cost of acquiring such asset,
provided that such Lien attaches to such asset concurrently with or within 90
days after the acquisition thereof;
(d) any Lien on any asset of any corporation existing at the time such
corporation is merged or consolidated with or into the Borrower or a Subsidiary
and not created in contemplation of such event;
(e) any Lien existing on any asset prior to the acquisition thereof by
the Borrower or a Subsidiary and not created in contemplation of such
acquisition;
(f) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the foregoing
clauses or clause (j) below of this Section, provided that such Debt is not
increased and is not secured by any additional assets;
(g) Liens arising in the ordinary course of its business (including
Liens arising in the ordinary course of its insurance business) which (i) do not
secure Debt or Derivatives Obligations, (ii) do not secure any obligation
(except obligations arising in the ordinary course of its insurance business) in
an amount exceeding $75,000,000 and (iii) do not in the aggregate materially
detract from or impair the use or value of the asset or assets subject thereto
in the operation of its business;
(h) Liens on cash and cash equivalents securing Derivatives
Obligations, provided that the aggregate amount of cash and cash equivalents
subject to such Liens may at no time exceed $25,000,000;
(i) Liens securing obligations (1) of the type referred to in clause
(vii) of the definition of Debt, as long as such Liens arise in the ordinary
course of the Borrower's or the Subsidiary's, as the case may be, business and
such Liens are in amounts and otherwise are on terms consistent with then
existing practices in the repurchase business and (2) of a borrower (or
securities lending agent) in any loaned securities, or Liens held by a borrower
(or securities lending agent) against collateral such borrower has posted, in
either case in securities lending transactions with the Borrower or a Subsidiary
(where the Borrower or the Subsidiary is the lender of securities), as long as,
in either case, such Liens arise in the ordinary course of the Borrower's or the
Subsidiary's, as the case may be, business and such Liens are in amounts and
otherwise on terms consistent with then existing practices in the securities
lending business;
(j) Liens securing Non-Recourse Debt;
(k) Liens on securities or cash of any Insurance Company Subsidiary
which secure its obligations as a reinsurer (as opposed to a ceding insurance
company) under reinsurance contracts entered into with Persons which are
licensed or authorized to do an insurance business in any jurisdiction;
(l) Any Liens secured by accounts receivable of, and other amounts
owed to, Westchester Premium Acceptance Corporation (or any successor), a
Subsidiary, securing a principal amount of Debt incurred by such Subsidiary from
time to time of not more than $60,000,000; and
(m) Liens not otherwise permitted by the foregoing clauses of this
Section securing Debt in an aggregate principal or face amount at any date not
to exceed 7.5% of Adjusted Consolidated Tangible Net Worth.
SECTION 5.07. Consolidations, Mergers and Sales of Assets; Ownership by
USF&G Corporation. The Borrower will not (i) consolidate or merge with or into
any other Person, other than a merger in which the Borrower is the surviving
corporation or a merger solely for the purpose of reincorporating the Borrower
in another jurisdiction, in each case provided no Default shall exist at, or
immediately after, such merger, or (ii) sell, lease or otherwise transfer,
directly or indirectly, all or substantially all of the assets of the Borrower
and its Subsidiaries, taken as a whole, to any other Person. The Borrower will
at all times own all of the outstanding voting securities, other than directors'
qualifying shares, of United States Fidelity and Guaranty Company.
SECTION 5.08. Use of Proceeds. The proceeds of the Loans made under
this Agreement and of drafts drawn under Letters of Credit issued under this
Agreement will be used by the Borrower for general corporate purposes. None of
such proceeds will be used, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of buying or carrying any "margin stock"
within the meaning of Regulation U, other than "margin stock" issued by the
Borrower.
SECTION 5.09. Ratio of Debt to Adjusted Consolidated Tangible Net
Worth. The aggregate amount of Debt (other than (1) Non-Recourse Debt and (2)
the Equity Portion of Qualified Deferrable Securities Obligations, but including
the Debt Portion of Qualified Deferrable Securities Obligations) of the Borrower
and its Subsidiaries shall at no time exceed 55% of Adjusted Consolidated
Tangible Net Worth.
SECTION 5.10. Minimum Adjusted Consolidated Tangible Net Worth.
Adjusted Consolidated Tangible Net Worth will at no time be less than the sum of
(i) $1,300,000,000 plus (ii) 50% of the consolidated net income of the Borrower
and its Consolidated Subsidiaries for the period commencing on January 1, 1998
and ending at the end of the Borrower's then most recent fiscal quarter (treated
for this purpose as a single accounting period). For purposes of this Section,
if consolidated net income of the Borrower and its Consolidated Subsidiaries for
any period shall be less than zero, the amount calculated pursuant to clause
(ii) above for such period shall be zero.
SECTION 5.11. Transactions with Affiliates. The Borrower will not, and
will not permit any Subsidiary to, directly or indirectly, pay any funds to or
for the account of, make any investment (whether by acquisition of stock or
indebtedness, by loan, advance, transfer of property, guarantee or other
agreement to pay, purchase or service, directly or indirectly, any Debt, or
otherwise) in, lease, sell, transfer or otherwise dispose of any assets,
tangible or intangible, to, or participate in, or effect any transaction in
connection with any joint enterprise or other joint arrangement with, any
Affiliate unless such payment, investment, lease, sale, transfer, disposition,
participation or transaction is on terms and conditions at least as favorable to
the Borrower or such Subsidiary as the terms and conditions which would apply in
a similar transaction with a Person not an Affiliate; provided, however, that
the foregoing provisions of this Section shall not prohibit the Borrower from
declaring or paying any lawful dividend or distribution so long as, after giving
effect thereto, no Default shall have occurred and be continuing.
ARTICLE 6
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 (i) to reimburse any drawing under any
Letter of Credit when required hereunder, provided that the failure to reimburse
the Issuing Bank therefor shall not constitute a Default or an Event of Default
hereunder until the beginning of the first Domestic Business Day after the
second Domestic Business Day after the Issuing Bank has given notice to the
Borrower of such Issuing Bank's demand for reimbursement of such drawing, but
only if the Borrower shall, simultaneously with such reimbursement, pay interest
accrued thereon for each day from and including the date on which such drawing
is honored to the date of reimbursement thereof in full, (ii) to pay when due
any principal of any Loan or (iii) to pay within five days of the due date
thereof any interest on any Loan or any fees or any other amount (other than the
principal of any Loan and the reimbursement obligation with respect to any
drawing under any Letter of Credit) payable hereunder;
(b) the Borrower shall fail to observe or perform any covenant
contained in Sections 5.06 to 5.11, inclusive;
(c) the Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by clause (a) or
(b) above) for 30 days after notice thereof has been given to the Borrower by
the Administrative Agent at the request of any Bank;
(d) any representation, warranty, certification or statement made by
the Borrower in this Agreement or in any certificate, financial statement or
other document delivered pursuant to this Agreement shall prove to have been
incorrect in any material respect when made (or deemed made);
(e) the Borrower or any Subsidiary shall fail to make any payment owed
by it in respect of any Material Financial Obligations when due or within any
applicable grace period;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Debt or enables (or, with the
giving of notice or lapse of time or both, would enable) the holder of such Debt
or any Person acting on such holder's behalf to accelerate the maturity thereof;
(g) the Borrower or any Subsidiary (other than an Excluded Subsidiary)
shall commence a voluntary case or other proceeding seeking rehabilitation,
dissolution, conservation, liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, rehabilitator, dissolver, conservator, custodian or other
similar official of it or any substantial part of its property, or shall consent
to any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it, or
shall make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall take any corporate
action to authorize any of the foregoing;
(h) an involuntary case or other proceeding shall be commenced against
the Borrower or any Subsidiary (other than an Excluded Subsidiary) seeking
rehabilitation, dissolution, conservation, liquidation, reorganization or other
relief with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, rehabilitator, dissolver, conservator, custodian or other
similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of 60 days; or an order for relief shall be entered against the Borrower
or any Subsidiary (other than an Excluded Subsidiary) under the federal
bankruptcy laws as now or hereafter in effect; or any governmental body, agency
or official shall apply for, or commence a case or other proceeding to seek, an
order for the rehabilitation, conservation, dissolution or other liquidation of
the Borrower or any Subsidiary (other than an Excluded Subsidiary) or of the
assets or any substantial part thereof of the Borrower or any such Subsidiary or
any other similar remedy;
(i) any member of the ERISA Group shall fail to pay when due an amount
or amounts aggregating in excess of $15,000,000 which it shall have become
liable to pay under Title IV of ERISA; or notice of intent to terminate a
Material Plan shall be filed under Title IV of ERISA by any member of the ERISA
Group, any plan administrator or any combination of the foregoing; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate, to impose
liability (other than for premiums under Section 4007 of ERISA) in respect of,
or to cause a trustee to be appointed to administer any Material Plan; or a
condition shall exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that any Material Plan must be terminated; or there shall
occur a complete or partial withdrawal from, or a default, within the meaning of
Section 4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans
which could cause one or more members of the ERISA Group to incur a current
payment obligation in excess of $15,000,000;
(j) enforceable judgments or orders for the payment of money in excess
of $50,000,000 (or its equivalent in any other currency) in the aggregate shall
be rendered and entered against the Borrower or any Subsidiary (other than an
Excluded Subsidiary) and such judgments or orders shall continue unsatisfied and
unstayed for a period of 30 days; or
(k) any person or group of persons (within the meaning of Section 13
or 14 of the Securities Exchange Act of 1934, as amended) shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under said Act) of 30% or more of the
outstanding shares of common stock of the Borrower; or, during any period of
twelve consecutive calendar months, individuals who were directors of the
Borrower on the first day of such period shall cease to constitute a majority of
the board of directors of the Borrower;
then, and in every such event, the Administrative 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% of the
aggregate principal amount of the Loans and having more than 50% of the
aggregate amount of Letter of Credit Liabilities, by notice to the Borrower
declare the Notes and the Letter of Credit Liabilities (together with accrued
interest thereon) to be, and the Notes (together with accrued interest thereon)
shall thereupon become, immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrower; provided that, in the case of any of the Events of Default specified
in clause (g) or (h) above with respect to the Borrower, without any notice to
the Borrower or any other act by the Administrative Agent or the Banks, the
Commitments shall thereupon terminate and the Notes and the Letter of Credit
Liabilities (together with accrued interest thereon, if any) 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 Administrative 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.
SECTION 6.03. Cash Cover. The Borrower agrees that, in addition to the
provisions of Section 6.01, upon the occurrence and during the continuance of
any Event of Default, it shall, if requested by the Administrative Agent upon
the instruction of the Banks having more than 50% in aggregate amount of the
Commitments (or, if the Commitments shall have been terminated, holding Notes
evidencing more than 50% of the aggregate principal amount of the Loans and
having more than 50% of the Letter of Credit Liabilities), pay to the
Administrative Agent an amount in immediately available funds (which funds shall
be held as collateral pursuant to arrangements satisfactory to the
Administrative Agent) equal to the aggregate amount available for drawing under
all Letters of Credit then outstanding at such time, provided that, upon the
occurrence of any Event of Default specified in Section 6.01(g) or 6.01(h) with
respect to the Borrower, the Borrower shall pay such amount forthwith without
any notice or demand or any other act by the Administrative Agent or the Banks.
ARTICLE 7
THE AGENTS
SECTION 7.01. Appointment and Authorization. Each Bank irrevocably
appoints and authorizes each 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 such Agent by the terms hereof or thereof, together with all such powers as
are reasonably incidental thereto.
SECTION 7.02. Agents and Affiliates. Morgan Guaranty Trust Company of
New York and Deutsche Bank AG, New York Branch 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 they were not each an Agent, and Morgan Guaranty
Trust Company of New York and Deutsche Bank AG, New York Branch and each of
their respective 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 they were not each an Agent hereunder.
SECTION 7.03. Action by Agents. The obligations of the Agents hereunder
are only those expressly set forth herein. Without limiting the generality of
the foregoing, neither Agent shall be required to take any action with respect
to any Default, except, in the case of the Administrative Agent, as expressly
provided in Article 6.
SECTION 7.04. Consultation with Experts. The Agents may consult with
legal counsel (who may be counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
SECTION 7.05. Liability of Agents. Neither Agent nor any of their
respective affiliates nor any of the respective directors, officers, agents or
employees of the foregoing 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 Agent nor any of their respective affiliates nor any of the respective
directors, officers, agents or employees of the foregoing 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 3, except receipt of items required to be delivered to such Agent;
(iv) the validity, effectiveness or genuineness of this Agreement, the Notes or
any other instrument or writing furnished in connection herewith; or (v) any
Alternative Currency Advance or any action or failure to act relating thereto.
Neither Agent shall incur any liability by acting in reliance upon any notice,
consent, certificate, statement, or other writing (which may be a bank wire,
telex, facsimile transmission or similar writing) believed by it to be genuine
or to be signed by the proper party or parties.
SECTION 7.06. Indemnification. Each Bank shall, ratably in accordance
with its Commitment, indemnify each Agent, their respective affiliates and the
respective directors, officers, agents and employees of the foregoing (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. Without
limiting the generality of the foregoing, each Bank shall, ratably and in
accordance with its Commitment, indemnify the Issuing Bank and its directors,
officers, agents and employees (to the extent not reimbursed by the Borrower)
against any costs, expense (including counsel fees and disbursements), claim,
demand, action, loss or liability that each such indemnitee may suffer or incur
and which results from any failure on the part of such Bank to pay to the
Issuing Bank such Bank's ratable share of any drawing under any Letter of Credit
in accordance with Section 2.16(c).
SECTION 7.07. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agents 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 Agents or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking any action under this Agreement.
SECTION 7.08. Successor Agents. Each Agent may resign at any time by
giving notice thereof to the Banks and the Borrower. Upon any such resignation,
the Required Banks shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Required Banks, and shall
have accepted such appointment, within 30 days after the retiring Agent gives
notice of resignation, then the retiring Agent may, on behalf of the Banks,
appoint a successor Agent, which shall be a commercial bank organized or
licensed under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $300,000,000. 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. Agents' Fees. The Borrower shall pay to each Agent for
its own account fees in the amounts and at the times previously agreed upon
between the Borrower and such Agent.
ARTICLE 8
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 Administrative 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 Administrative Agent that, by
reason of adverse conditions generally affecting either the certificate of
deposit market in the United States or the London interbank market, the Adjusted
CD Rate or the Adjusted London Interbank Offered Rate (as the case may be) as
determined by the Administrative 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 Administrative Agent shall forthwith give notice thereof to the Borrower
and the Banks, whereupon until the Administrative Agent notifies the Borrower
that the circumstances giving rise to such suspension no longer exist, (i) the
obligations of the Banks to make CD Loans or Euro-Dollar Loans, as the case may
be, or to continue or convert outstanding Loans as or into CD Loans or Euro-
Dollar Loans shall be suspended and (ii) each outstanding CD Loan or Euro-
Dollar Loan, as the case may be, shall be converted into a Base Rate Loan on the
last day of the then current Interest Period applicable thereto. Unless the
Borrower notifies the Administrative 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. Promptly after the Administrative Agent and the Banks
reasonably determine that the circumstances giving rise to a notice pursuant to
subsection (b) above no longer exists, the Administrative Agent shall notify the
Borrower, and the obligation of the Banks to make, convert and continue
Euro-Dollar Loans and CD Loans shall be reinstated.
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
after the date of this Agreement (whether or not having the force of law) of any
such authority, central bank or comparable agency shall make it unlawful or
impossible for any Bank (or its Euro-Dollar Lending Office) to make, maintain or
fund its Euro-Dollar Loans and such Bank shall so notify the Administrative
Agent, the Administrative Agent shall forthwith give notice thereof to the other
Banks and the Borrower, whereupon until such Bank notifies the Borrower and the
Administrative Agent that the circumstances giving rise to such suspension no
longer exist, the obligation of such Bank to make Euro-Dollar Loans, or to
continue or convert outstanding Loans as or into Euro-Dollar Loans, shall be
suspended. Before giving any notice to the Administrative 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 notice
is given, each Euro-Dollar Loan of such Bank then outstanding shall be converted
to a Base Rate Loan either (a) on the last day of the then current Interest
Period applicable to such Euro-Dollar Loan if such Bank may lawfully continue to
maintain and fund such Loan as a Euro-Dollar Loan to such day or (b) immediately
if such Bank shall determine that it may not lawfully continue to maintain and
fund such Loan as a Euro-Dollar Loan to such day.
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 Letter of Credit or any
obligation to make Committed Loans or issue or participate in any Letter of
Credit or (y) the date of the related Money Market Quote, in the case of any
Money Market Loan, the adoption of any applicable law, rule or regulation, or
any change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or its Applicable Lending Office) with any
request or directive after such date (whether or not having the force of law) of
any such authority, central bank or comparable agency shall impose, modify or
deem applicable any reserve (including, without limitation, any such requirement
imposed by the Board of Governors of the Federal Reserve System, but excluding
(i) with respect to any CD Loan any such requirement included in an applicable
Domestic Reserve Percentage and (ii) with respect to any Euro-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 (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 or its obligations hereunder in respect of Letters of Credit 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 of
issuing or participating in any Letter of Credit, 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 Administrative Agent), the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank for such increased
cost or reduction.
(b) If any Bank shall have determined in good faith that, after the
date hereof, the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change in any such law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive after the date hereof
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on capital of such Bank (or its Parent) as a
consequence of such Bank's obligations hereunder to a level below that which
such Bank (or its Parent) could have achieved but for such adoption, change,
request or directive (taking into consideration its policies with respect to
capital adequacy) by an amount deemed by such Bank to be material, then from
time to time, within 15 days after demand by such Bank (with a copy to the
Administrative 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 Administrative
Agent of any event of which it has knowledge, occurring after the date hereof,
which will entitle such Bank to compensation pursuant to this Section and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. A certificate
of any Bank claiming compensation under this Section and setting forth the
additional amount or amounts to be paid to it hereunder shall, if submitted in
good faith, be conclusive in the absence of manifest error; provided that any
certificate delivered pursuant to this Section 8.03(c) shall (i) in the case of
a certificate in respect of amounts payable pursuant to Section 8.03(a), set
forth in reasonable detail the basis for and the calculation of such amounts,
and (ii) in the case of a certificate in respect of amounts payable pursuant to
Section 8.03(b), set forth at least the same amount of detail in respect of the
calculation of such amounts as such Bank provides in similar circumstances to
other similarly situated borrowers and also include a statement by such Bank
that it has allocated to its Commitment or outstanding Loans or other
obligations hereunder no greater than a substantially proportionate amount of
any reduction of the rate of return on such Bank's capital due to the matters
described in Section 8.03(b) as it has allocated to each of its other
commitments to lend or issue Letters of Credit or to participate therein or any
outstanding loans or unreimbursed drawings or participations therein to
similarly situated borrowers that are affected similarly by such adoption or
change. Subject to the foregoing, in determining such amount, such Bank may use
any reasonable averaging and attribution methods.
SECTION 8.04. Taxes. (a) For purposes of this Section 8.04, the
following terms have the following meanings:
"TAXES" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings with respect to any payment by the
Borrower pursuant to this Agreement or under any Note, and all liabilities with
respect thereto, excluding (i) in the case of each Bank and the Administrative
Agent, taxes imposed on its income, and franchise or similar taxes imposed on
it, by a jurisdiction under the laws of which such Bank or the Administrative
Agent (as the case may be) is organized or in which its principal executive
office is located or, in the case of each Bank, in which its Applicable Lending
Office is located, or, in the case of the Administrative Agent and each Bank,
such taxes which would not have been imposed on the Administrative Agent or such
Bank but for any present or former connection between the Administrative Agent
or such Bank and the jurisdiction imposing such tax (other than any such
connection arising from the Administrative Agent or the Bank having executed,
delivered or performed its obligations or received a payment under, or enforced,
this Agreement or the Notes) and (ii) in the case of each Bank, any United
States withholding tax imposed on such payments but only to the extent that such
Bank (a) is subject to United States withholding tax at the time such Bank first
becomes a party to this Agreement or (b) subsequently becomes subject to United
States withholding tax solely by reason of the change of its Applicable Lending
Office by such Bank.
"OTHER TAXES" means any present or future stamp or documentary taxes
and any other excise or property taxes, or similar charges or levies (other than
franchise taxes or taxes imposed on the net income of a Bank or the
Administrative Agent), which arise from any payment made pursuant to this
Agreement or under any Note or from the execution or delivery of, or otherwise
with respect to, this Agreement or any Note.
(b) Any and all payments by the Borrower to or for the account of any
Bank or the Administrative Agent hereunder or under any Note shall be made
without deduction for any Taxes or Other Taxes; provided that, if the Borrower
shall be required by law to deduct any Taxes or Other Taxes from any such
payments, (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 8.04) such Bank or the Administrative Agent (as
the case may be) receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrower shall make such deductions,
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law and (iv) the
Borrower shall furnish to the Administrative Agent, at its address referred to
in Section 9.01, the original or a certified copy of a receipt evidencing
payment thereof.
(c) The Borrower agrees to indemnify each Bank and the Administrative
Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any jurisdiction on
amounts payable under this Section 8.04) paid by such Bank or the Administrative
Agent (as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto. This indemnification shall
be paid within 15 days after such Bank or the Administrative Agent (as the case
may be) makes demand therefor.
(d) Each Bank organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Bank listed on the signature pages hereof and on
or prior to the date on which it becomes a Bank in the case of each other Bank,
and from time to time thereafter if requested in writing by the Borrower (but
only so long as such Bank remains lawfully able to do so), shall provide the
Borrower with Internal Revenue Service form 1001 or 4224, as appropriate, or any
successor form prescribed by the Internal Revenue Service, certifying that such
Bank is entitled to benefits under an income tax treaty to which the United
States is a party which exempts the Bank from United States withholding tax or
reduces the rate of withholding tax on payments of interest for the account of
such Bank or certifying that the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or business in the United
States.
(e) For any period with respect to which a Bank has failed to provide
the Borrower with the appropriate form pursuant to Section 8.04(d) (unless such
failure is due to a change in treaty, law or regulation occurring subsequent to
the date on which such form originally was required to be provided), such Bank
shall not be entitled to indemnification under Section 8.04(b) or (c) with
respect to Taxes imposed by the United States; provided that if a Bank, which is
otherwise exempt from or subject to a reduced rate of withholding tax, becomes
subject to Taxes because of its failure to deliver a form required hereunder,
the Borrower shall take such steps as such Bank shall reasonably request to
assist such Bank to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to or for
the account of any Bank pursuant to this Section 8.04, then such Bank will
change the jurisdiction of its Applicable Lending Office if, in the judgment of
such Bank, such change (i) will eliminate or reduce any such additional payment
which may thereafter accrue and (ii) is not otherwise disadvantageous to such
Bank.
SECTION 8.05. Base Rate Loans Substituted for Affected Fixed Rate
Loans. If (i) the obligation of any Bank to make or to continue or convert
outstanding Loans as or to Euro-Dollar Loans has been suspended pursuant to
Section 8.02 or (ii) any Bank has demanded compensation under Section 8.03 or
8.04 with respect to its CD Loans or Euro-Dollar Loans and the Borrower shall,
by at least five Euro-Dollar Business Days' prior notice to such Bank through
the Administrative 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 (or
continued as or converted to) CD Loans or Euro-Dollar Loans, as the case may be,
shall instead be 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 (or converted), 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.
If such Bank notifies the Borrower that the circumstances giving rise to such
suspension or demand for compensation no longer exist, the principal amount of
each such Base Rate Loan shall be converted into a CD Loan or Euro-Dollar Loan,
as the case may be, on the first day of the next succeeding Interest Period
applicable to the related CD Loans or Euro-Dollar Loans of the other Banks.
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including bank wire, telex,
facsimile transmission or similar writing) and shall be given to such party: (x)
in the case of the Borrower or the Agents, at its address, facsimile number or
telex number set forth on the signature pages hereof, (y) in the case of any
Bank, at its address, facsimile number or telex number set forth in its
Administrative Questionnaire or (z) in the case of any party, at such other
address, facsimile number or telex number as such party may hereafter specify
for the purpose by notice to the Administrative Agent and the Borrower. Each
such notice, request or other communication shall be effective (i) if given by
telex, when such telex is transmitted to the telex number specified in this
Section and the appropriate answerback is received, (ii) if given by facsimile
transmission, when transmitted to the facsimile number specified in this Section
and confirmation of receipt is received, (iii) if given by mail, 72 hours after
such communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (iv) if given by any other means, when delivered at
the address specified in this Section; provided that notices to the
Administrative Agent or any Issuing Bank under Article 2 or Article 8 shall not
be effective until received.
SECTION 9.02. No Waivers. No failure or delay by either Agent or any
Bank in exercising any right, power or privilege hereunder or under any Note
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.
SECTION 9.03. Expenses; Indemnification. (a) The Borrower shall pay (i)
all out-of-pocket expenses of the Agents, including the reasonable fees and
disbursements of special counsel for the Agents, in connection with the
preparation and administration of this Agreement (including, without limitation,
the issuance of Letters of Credit), any waiver or consent hereunder or any
amendment hereof or any Default or alleged Default hereunder and (ii) if an
Event of Default occurs, all out-of-pocket expenses incurred by each Agent and
each Bank, including (without duplication) the reasonable fees and disbursements
of outside counsel in connection with such Event of Default and collection,
bankruptcy, insolvency and other enforcement proceedings resulting therefrom.
(b) The Borrower agrees to indemnify each 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 or Letters of Credit hereunder; provided that no Indemnitee
shall have the right to be indemnified hereunder for such Indemnitee's own gross
negligence or willful misconduct as determined by a court of competent
jurisdiction and provided further, that no Bank shall have the right to be
indemnified hereunder in any such proceeding wherein the parties thereto are
only such Bank and any other Person (other than a Bank) to whom such Bank shall
have granted a participation in, or assigned all or a proportionate part of, its
Commitment or its Loans or Notes or its participation in Letters of Credit or
its rights or obligations hereunder or under its Notes or under, or in respect
of, Letters of Credit.
SECTION 9.04. Sharing; 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 and any Letter of Credit Liability 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 and any Letter of Credit
Liability held by such other Bank, the Bank receiving such proportionately
greater payment shall purchase such participations in the Notes and any Letter
of Credit Liability 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 and any Letter of Credit Liability held by the Banks
shall be shared by the Banks pro rata; provided that nothing in this Section
shall impair the right of any Bank to exercise any right of set-off or
counterclaim it may have and to apply the amount subject to such exercise to the
payment of indebtedness of the Borrower other than its indebtedness hereunder.
The Borrower agrees, to the fullest extent it may effectively do so under
applicable law, that any holder of a participation in a Note or a Letter of
Credit Liability, 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 either Agent or the Issuing Bank are affected thereby, by
such Agent or the Issuing Bank, as relevant); provided that no such amendment or
waiver shall, unless signed by all the Banks, (i) increase or decrease the
Commitment of any Bank (except for a ratable decrease in the Commitments of all
Banks) or subject any Bank to any additional obligation, (ii) reduce or forgive
the principal of or rate of interest on any Loan or the amount to be reimbursed
in respect of any Letter of Credit or any interest thereon 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 the amount to be reimbursed
in respect of any Letter of Credit or any interest thereon or any fees hereunder
or for the termination of any Commitment or (except as expressly provided in
Section 2.16) postpone or extend the expiry date of any Letter of Credit, (iv)
release any collateral furnished pursuant to Section 6.03 unless no Default then
exists or (v) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Notes and Letter of Credit Liabilities, 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 to the benefit of the parties hereto
and their respective successors and assigns, except that the Borrower may not
assign or otherwise transfer any of its rights under this Agreement without the
prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment or
any or all of its Loans and Letter of Credit Liabilities. 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 Agents, such Bank shall remain
responsible for the performance of its obligations hereunder, and the Borrower,
the Issuing Banks and the Agents shall continue to deal solely and directly with
such Bank in connection with such Bank's rights and obligations under this
Agreement. Any agreement pursuant to which any Bank may grant such a
participating interest shall provide that such Bank shall retain the sole right
and responsibility to enforce the obligations of the Borrower hereunder
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; provided that such participation
agreement may provide that such Bank will not agree to any modification,
amendment or waiver of this Agreement described in clause (i), (ii), (iii) or
(iv) of Section 9.05 without the consent of the Participant. The Borrower agrees
that each Participant shall, to the extent provided in its participation
agreement, be entitled to the benefits of Article 8 with respect to its
participating interest. An assignment or other transfer which is not permitted
by subsection (c) or (d) below shall be given effect for purposes of this
Agreement only to the extent of a participating interest granted in accordance
with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or other
financial institutions (each an "Assignee") all, or a proportionate part
(equivalent to an initial Commitment of not less than $10,000,000, and provided
that after giving effect thereto the Commitment of the assigning Bank is
equivalent to an initial Commitment of not less than $10,000,000) of all, of its
rights and obligations under this Agreement and the Notes, and such Assignee
shall assume such rights and obligations, pursuant to an Assignment and
Assumption Agreement in substantially the form of Exhibit H hereto executed by
such Assignee and such transferor Bank, with (and subject to) the subscribed
consent of the Borrower and the Administrative Agent, which in each case shall
not be unreasonably withheld, and each Issuing Bank; provided that if an
Assignee is an affiliate of such transferor Bank or was a Bank immediately prior
to such assignment, no such consent of the Borrower shall be required; and
provided further that such assignment may, but need not, include rights of the
transferor Bank in respect of outstanding Money Market Loans or Alternative
Currency Advances. 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 Administrative 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 or, in the
case of an assignment made pursuant to subsection (f) below, the Borrower shall
pay to the Administrative Agent an administrative fee for processing such
assignment in the amount of $2,500. If the Assignee is not incorporated under
the laws of the United States of America or a state thereof, it shall deliver to
the Borrower and the Administrative Agent certification as to exemption from
deduction or withholding of any United States federal income taxes in accordance
with Section 8.04.
(d) Any Bank may at any time assign all or any portion of its rights
under this Agreement and its Note to a Federal Reserve Bank. No such assignment
shall release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's rights
shall be entitled to receive any greater payment under Section 8.03 or 8.04 than
such Bank would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrower's prior written
consent or by reason of the provisions of Section 8.02, 8.03 or 8.04 requiring
such Bank to designate a different Applicable Lending Office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.
(f) The Borrower shall have the right to require that any Bank assign
all of its rights and obligations under this Agreement and its Notes (including
any outstanding Money Market Loans) to a new bank or an existing Bank if (i) in
the case of a new bank, such new bank shall be acceptable to the Required Banks
and (ii) such new bank or Bank, as the case may be, shall enter into an
Assignment and Assumption Agreement therefor with such assigning Bank subject to
the provisions of subsection (c) above, pursuant to which such new bank or Bank,
as the case may be shall purchase the outstanding Loans of the assigning Bank at
par plus accrued interest and shall pay to the assigning Bank all accrued fees
and the Borrower shall pay to the assigning Bank all other amounts then owing to
it under this Agreement.
SECTION 9.07. Collateral. Each of the Banks represents to each Agent
and each of the other Banks that it in good faith is not relying upon any
"margin stock" (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 9.08. Governing Law; Submission to Jurisdiction. This Agreement
and each Note shall be governed by and construed in accordance with the laws of
the State of New York. The Borrower hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York State court sitting in New York City for purposes
of all legal proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby. The Borrower irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient forum.
SECTION 9.09. Counterparts; Integration; Effectiveness. This Agreement
may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof. This
Agreement shall become effective upon receipt by the Documentation 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 Documentation Agent in form satisfactory to it of telegraphic, telex,
facsimile or other written confirmation from such party of execution of a
counterpart hereof by such party).
SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE AGENTS,
THE ISSUING BANKS AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 9.11. Existing Credit Agreements. The Banks that are parties to
the Existing Morgan Credit Agreement or the Existing Deutsche Bank Credit
Agreement, comprising the "REQUIRED BANKS", in each case as defined therein, and
the Borrower agree that the commitments under the Existing Morgan Credit
Agreement or the Existing Deutsche Bank Credit Agreement, as the case may be,
shall terminate in their entirety simultaneously with and subject to the
occurrence of the Closing Date under this Agreement and that the Borrower shall
be obligated to pay the accrued letter of credit fees (in the case of the
Existing Morgan Credit Agreement) and facility fees thereunder to but excluding
the Closing Date. Each Bank which is a party hereto and to the Existing Morgan
Credit Agreement hereby waives the notices required to be given pursuant to
Section 2.09 thereof to terminate the "Commitments" (as defined therein) and
each Bank which is a party hereto and to the Existing Deutsche Bank Credit
Agreement hereby waives the notices required to be given pursuant to Section
2.10 thereof to terminate the "Commitments" (as defined therein).
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
USF&G CORPORATION
By /s/ DAN L. HALE
Name: Dan L. Hale
Title: Executive Vice President and
Chief Financial Officer
Corporate Center
6225 Centennial Way - A3
Baltimore, MD 21209
Facsimile number: (410)205-6802
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Issuing Bank
By /s/ MARIA H. DELL'AQUILA
Name: Maria H. Dell'Aquila
Title: Vice President
60 Wall Street
New York, New York 10260-0060
Attention: Anthony R. Malloy
Telex number: 177615
Facsimile number: (212) 648-5249
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Administrative Agent
By /s/ MARIA H. DELL'AQUILA
Name: Maria H. Dell'Aquila
Title: Vice President
60 Wall Street
New York, New York 10260-0060
Attention: Jerry J. Fall
Telex number: 177615
Facsimile number: (212) 648-5249
DEUTSCHE BANK AG, NEW YORK BRANCH,
as Documentation Agent
By: /s/ JOHN S.MCGILL
Name: John S. McGill
Title: Vice President
By: /s/ LOUIS CALTAVUTURO
Name: Louis Caltavuturo
Title: Vice President
31 West 52nd Street
New York, New York 10019
Attention: Susan A. Maros
Telex number: 429166
Facsimile number: (212) 469-8366
Commitments
$25,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ MARIA H. DELL'AQUILA
Name: Maria H. Dell'Aquila
Title: Vice President
$25,000,000 DEUTSCHE BANK AG, NEW YORK AND/OR
CAYMAN ISLANDS BRANCHES
By /s/ JOHN S. MCGILL
Name: John S. McGill
Title: Vice President
By /s/ LOUIS CALTAVUTURO
Name: Louis Caltavuturo
Title: Vice President
$20,000,000 THE BANK OF NEW YORK
By /s/ LIZANNE T. EBERLE
Name: Lizanne T. Eberle
Title: Vice President
$20,000,000 BANKBOSTON, N.A.
By /s/ LAWRENCE C. BIGELOW
Name: Lawrence C. Bigelow
Title: Managing Director
$20,000,000 CITIBANK, N.A.
By /s/ PETER C. BICKFORD
Name: Peter C. Bickford
Title: Attorney-In-Fact
$20,000,000 THE FIRST NATIONAL BANK OF MARYLAND
By /s/ BROOKS W. THROPP
Name: Brooks W. Thropp
Title: Vice President
$20,000,000 MELLON BANK, N.A.
By /s/ SUSAN M. WHITEWOOD
Name: Susan M. Whitewood
Title: Vice President
$20,000,000 NATIONSBANK, N.A.
By /s/ JIM V. MILLER
Name: Jim V. Miller
Title: Senior Vice President
$10,000,000 ABN AMRO BANK N.V.
By /s/ VICTOR J. FENNON
Name: Victor J. Fennon
Title: Vice President
By /s/ JAMES MITCHELL
Name: James Mitchell
Title: Vice President
$10,000,000 BANK ONE, TEXAS, N.A.
By /s/ TIMOTHY J. STAMBAUGH
Name: Timothy J. Stambaugh
Title: Senior Vice President
$10,000,000 CRESTAR BANK, a Virginia banking corporation
By /s/ ANDREW D. WALLER
Name: Andrew D. Waller
Title: Assistant Vice President
$10,000,000 FIRST UNION NATIONAL BANK
By /s/ GAIL M. GOLIGHTLY
Name: Gail M. Golightly
Title: Senior Vice President
$10,000,000 MERCANTILE-SAFE DEPOSIT & TRUST
COMPANY
By /s/ NICHOLAS C. RICHARDSON
Name: Nicholas C. Richardson
Title: Vice President
$10,000,000 THE NORTHERN TRUST COMPANY
By /s/ RICHARD BERGER
Name: Richard Berger
Title: Vice President
$10,000,000 WACHOVIA BANK, N.A.
By /s/ M. EUGENE WOOD, III
Name: M. Eugene Wood, III
Title: Vice President
$10,000,000 WELLS FARGO BANK, N.A.
By /s/ FRIEDA YOULIOS
Name: Frieda Youlios
Title: Vice President
By /s/ RACHEL UYAMA
Name: Rachel Uyama
Title: Assistant Vice President
-------------------
Total Commitments
$250,000,000
PRICING SCHEDULE
The "Euro-Dollar Margin", "CD Margin", "Facility Fee Rate" and "LC Fee
Rate" for any day are the respective percentages set forth below in the
applicable row under the column corresponding to the Status that exists on such
day:
Status Level I Level II Level III Level IV Level V
Euro-Dollar Margin 0.21% 0.225% 0.24% 0.30% 0.375%
CD Margin 0.335% 0.35% 0.365% 0.425% 0.50%
Facility Fee Rate 0.09% 0.10% 0.11% 0.15% 0.225%
LC Fee Rate 0.21% 0.225% 0.24% 0.30% 0.375%
For purposes of this Schedule, the following terms have the following
meanings, subject to the final two paragraphs of this Schedule:
"Level I Status" exists at any date if, at such date, the Borrower's
senior unsecured long-term debt is rated at least A- by S&P or A3 by Moody's.
"Level II Status" exists at any date if, at such date, (i) the
Borrower's senior unsecured long-term debt is rated at least BBB+ by S&P or Baa1
by Moody's and (ii) Level I Status does not exist.
"Level III Status" exists at any date if, at such date, (i) the
Borrower's senior unsecured long-term debt is rated at least BBB by S&P or Baa2
by Moody's and (ii) neither Level I Status nor Level II Status exists.
"Level IV Status" exists at any date if, at such date, (i) the
Borrower's senior unsecured long-term debt is rated at least BBB- by S&P or Baa3
by Moody's and (ii) none of Level I Status, Level II Status and Level III Status
exists.
"Level V Status" exists at any date if, at such date, no other Status
exists.
"Moody's" means Moody's Investors Service, Inc., and its successors.
"S&P" means Standard & Poor's Ratings Services, and its successors.
"Status" refers to the determination of which of Level I Status, Level
II Status, Level III Status, Level IV Status or Level V Status exists at any
date.
The credit ratings to be utilized for purposes of this Schedule are
those assigned to the senior unsecured long-term debt securities of the Borrower
without third-party credit enhancement, and any rating assigned to any other
debt security of the Borrower shall be disregarded. The rating in effect at any
date is that in effect at the close of business on such date.
If the Borrower is split-rated and the rating differential is one
level, the higher of the two ratings will apply (e.g.A-/Baa1 results in Level I
Status and BBB+/Baa2 results in Level II Status). If the Borrower is split-rated
and the ratings differential is more than one level, the average of the two
ratings (or the higher of any two intermediate ratings) shall be used (e.g.
A-/Baa2 results in Level II Status, as does A-/Baa3).
EXHIBIT A
NOTE
New York, New York
, 19
For value received, USF&G CORPORATION, a Maryland corporation
(the "Borrower"), promises to pay to the order of (the "Bank"),
for the account of its Applicable Lending Office, the unpaid principal amount of
each Loan made by the Bank to the Borrower pursuant to the Credit Agreement
referred to below on the maturity date therefor specified in the Credit
Agreement. The Borrower promises to pay interest on the unpaid principal amount
of each such Loan on the dates and at the rate or rates provided for in the
Credit Agreement. All such payments of principal and interest shall be made in
lawful money of the United States in Federal or other immediately available
funds at the office of Morgan Guaranty Trust Company of New York, 60 Wall
Street, New York, New York.
All Loans made by the Bank, the respective types and maturities thereof
and all repayments of the principal thereof shall be recorded by the Bank and,
if the Bank so elects in connection with any transfer or enforcement hereof,
appropriate notations to evidence the foregoing information with respect to each
such Loan then outstanding may be endorsed by the Bank on the schedule attached
hereto, or on a continuation of such schedule attached to and made a part
hereof; provided that the failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower hereunder or under
the Credit Agreement.
This note is one of the Notes referred to in the Five-Year Credit and
Reimbursement Agreement dated as of December 18, 1997 among the Borrower, the
banks listed on the signature pages thereof, the Letter of Credit Issuing Banks
party thereto, Morgan Guaranty Trust Company of New York, as Administrative
Agent, and Deutsche Bank AG, New York Branch, as Documentation Agent (as the
same may be amended from time to time, the "Credit Agreement"). Terms defined in
the Credit Agreement are used herein with the same meanings. Reference is made
to the Credit Agreement for provisions for the prepayment hereof and the
acceleration of the maturity hereof.
USF&G CORPORATION
By ----------------------------
Title: Vice President
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
Amount of
Amount of Type of Principal Maturity Notation
Date Loan Loan Repaid Date Made by
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
EXHIBIT B
Form of Money Market Quote Request
[Date]
To: Morgan Guaranty Trust Company of New York
(the "Administrative Agent")
From: USF&G Corporation
Re: Five-Year Credit and Reimbursement Agreement (the
"Credit Agreement")dated as of December 18,
1997 among the Borrower, the Banks listed on
the signature pages thereof, the Letter of
Credit Issuing Banks party thereto, the
Administrative Agent, and Deutsche Bank AG,
New York Branch, as Documentation Agent
We hereby give notice pursuant to Section 2.03 of the Credit Agreement
that we request Money Market Quotes for the following proposed Money Market
Borrowing(s):
Date of Borrowing: __________________
Principal Amount(1) Interest Period(2)
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
--------
(1) Amount must be $5,000,000 or a larger multiple of $1,000,000.
(2) Not less than one month (LIBOR Auction) or not less than 7 days
(Absolute Rate Auction), subject to the provisions of the definition of Interest
Period.
Terms used herein have the meanings assigned to them in the Credit
Agreement.
USF&G CORPORATION
By ---------------------------
Title:
EXHIBIT C
Form of Invitation for Money Market Quotes
To: [Name of Bank]
Re: Invitation for Money Market Quotes to
USF&G Corporation (the "Borrower")
Pursuant to Section 2.03 of the Five-Year Credit and Reimbursement
Agreement dated as of December 18, 1997 among the Borrower, the Banks parties
thereto, the Letter of Credit Issuing Banks party thereto, the undersigned, as
Administrative Agent, and Deutsche Bank AG, New York Branch, as Documentation
Agent, we are pleased on behalf of the Borrower to invite you to submit Money
Market Quotes to the Borrower for the following proposed Money Market
Borrowing(s):
Date of Borrowing: __________________
Principal Amount Interest Period
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
Please respond to this invitation by no later than [2:00 P.M.] [9:30
A.M.] (New York City time) on [date].
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Administrative Agent
By ----------------------------
Authorized Officer
EXHIBIT D
Form of Money Market Quote
To: Morgan Guaranty Trust Company of New York,
as Administrative Agent
Re: Money Market Quote to USF&G Corporation
(the "Borrower")
In response to your invitation on behalf of the Borrower dated
__________, we hereby make the following Money Market Quote on the following
terms:
1. Quoting Bank: ________________________________
2. Person to contact at Quoting Bank:
_________________________________
3. Date of Borrowing: ____________________(3)
4. We hereby offer to make Money Market Loan(s) in the following principal
amounts, for the following Interest Periods and at the following rates:
Principal Interest Money Market
Amount(4) Period(5) [Margin(6)] [Absolute Rate(7)]
------ ------ ------- -------
$
$
[Provided, that the aggregate principal amount of Money Market Loans
for which the above offers may be accepted shall not exceed
$____________.]**
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in the Five-Year Credit
and Reimbursement Agreement dated as of December 18, 1997 among the Borrower,
the Banks listed on the signature pages thereof, the Letter of Credit Issuing
Banks party thereto, yourselves, as Administrative Agent, and Deutsche Bank AG,
New York Branch, as Documentation Agent, irrevocably obligates us to make the
Money Market Loan(s) for which any offer(s) are accepted, in whole or in part.
Very truly yours,
[NAME OF BANK]
Dated:_______________ By:__________________________
Authorized Officer
--------
(3) As specified in the related Invitation.
(4) Principal amount bid for each Interest Period may not exceed
principal amount requested. Specify aggregate limitation if the sum of the
individual offers exceeds the amount the Bank is willing to lend. Bids must be
made for $5,000,000 or a larger multiple of $1,000,000.
(5) Not less than one month or not less than 7 days, as specified in the
related Invitation. No more than five bids are permitted for each Interest
Period.
(6) Margin over or under the London Interbank Offered Rate determined
for the applicable Interest Period. Specify percentage (to the nearest 1/10,000
of 1%) and specify whether "PLUS" or "MINUS".
(7) Specify rate of interest per annum (to the nearest 1/10,000th
of 1%).
EXHIBIT E
OPINION OF THE
DEPUTY GENERAL COUNSEL OF THE BORROWER
To the Banks and the Agents
Referred to Below
c/o Deutsche Bank AG,
New York Branch,
as Documentation Agent
31 West 52nd Street
New York, New York 10019
Dear Sirs:
I am Deputy General Counsel for USF&G Corporation (the "Borrower") and
have acted in such capacity in connection with the Five-Year Credit and
Reimbursement Agreement (the "Credit Agreement") dated as of December 18, 1997
among the Borrower, the banks parties thereto, the Letter of Credit Issuing
Banks party thereto, Morgan Guaranty Trust Company of New York, as
Administrative Agent, and Deutsche Bank AG, New York Branch, as Documentation
Agent. Terms defined in the Credit Agreement are used herein as therein defined.
This opinion is being rendered to you at the request of my client pursuant to
Section 3.01(b) of the Credit Agreement.
I have examined originals or copies, certified or otherwise identified
to my satisfaction, of such documents, corporate records, certificates of public
officials and other instruments and have conducted such other investigations of
fact and law as I have deemed necessary or advisable for purposes of this
opinion.
Upon the basis of the foregoing, I am of the opinion that:
1. The Borrower is a corporation validly existing and in good standing
under the laws of Maryland, and has all corporate powers required to carry on
its business as now conducted.
2. The Borrower has all governmental licenses, authorizations, consents
and approvals required to carry on its business as now conducted, other than
such licenses, authorizations, consents and approvals which, if not held or
obtained by the Borrower, do not, in the aggregate, have a Material Adverse
Effect.
3. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes are within the Borrower's corporate powers, have
been duly authorized by all necessary corporate action, require no action by the
Borrower by or in respect of, or filing by the Borrower with, any governmental
body, agency or official and do not contravene, or constitute a default under,
any provision of applicable law or regulation or of the articles of
incorporation or by-laws of the Borrower.
4. To the best of my knowledge after responsible inquiry, the
execution, delivery and performance by the Borrower of the Credit Agreement and
the Notes do not contravene, or constitute a default under, any provision of any
material agreement, judgment, injunction, order, decree or other instrument
binding upon the Borrower or any of its Subsidiaries or result in the creation
or imposition of any material Lien on any asset of the Borrower or any of its
Subsidiaries.
5. There is no action, suit or proceeding pending or, to the best of my
knowledge, threatened against or affecting the Borrower or any of its
Subsidiaries before any court or arbitrator or any governmental body, agency or
official, in which there is a reasonable expectation of an adverse decision
which reasonably could be expected to materially adversely affect the business,
consolidated financial position or consolidated results of operations of the
Borrower and its Consolidated Subsidiaries, considered as a whole, or which in
any manner draws into question the validity of the Credit Agreement or the
Notes, except as may have been disclosed in the financial statements referred to
in Section 4.04(a) and (b) of the Credit Agreement.
6. Each of the Borrower and the Borrower's corporate Subsidiaries named
below is a corporation validly existing and in good standing under the laws of
its jurisdiction of incorporation, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted, other than such licenses, authorizations,
consents and approvals which, if not held or obtained by the Borrower or such
Subsidiary, do not, in the aggregate, have a Material Adverse Effect. The
Subsidiaries referred to in this paragraph are United States Fidelity and
Guaranty Company and Fidelity and Guaranty Life Insurance Company. Davis Polk &
Wardwell may rely on this opinion in connection with the rendering by such firm
of an opinion to you dated the date hereof with respect to the Agreement.
Very truly yours,
EXHIBIT F
OPINION OF
COUNSEL FOR THE BORROWER
To the Banks and the Agents
Referred to Below
c/o Deutsche Bank AG,
New York Branch,
as Documentation Agent
31 West 52nd Street
New York, New York 10019
Dear Sirs:
We have acted as counsel for USF&G Corporation (the "Borrower") in
connection with the Five-Year Credit and Reimbursement Agreement (the "Credit
Agreement") dated as of December 18, 1997 among the Borrower, the banks parties
thereto, the Letter of Credit Issuing Banks party thereto, Morgan Guaranty Trust
Company of New York, as Administrative Agent, and Deutsche Bank AG, New York
Branch, as Documentation Agent. Terms defined in the Credit Agreement are used
herein as therein defined. This opinion is being rendered to you at the request
of our client pursuant to Section 3.01(c) of the Credit Agreement.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments and have conducted such other
investigations of fact and law as we have deemed necessary or advisable for
purposes of this opinion. In rendering this opinion, we have assumed that all
documents submitted to us as originals are authentic, all documents submitted to
us as certified or photostatic copies conform to the original document, all
signatures on all documents submitted to us for examination are genuine, and all
public records received are accurate and complete.
Upon the basis of the foregoing, we are of the opinion that the Credit
Agreement constitutes a valid and binding agreement of the Borrower and each
Note constitutes a valid and binding obligation of the Borrower, in each case
enforceable in accordance with its terms, except as the same may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
by general principles of equity (including public policy limitations on the
indemnification provisions thereof).
You may rely upon this opinion only in connection with the transactions
being consummated pursuant to the Credit Agreement and neither you nor any other
person may rely upon or use this opinion for any other purpose whatsoever.
However, Davis Polk & Wardwell may rely on this opinion in connection with the
rendering by such firm of an opinion to you dated the date hereof with respect
to the Agreement.
Very truly yours,
EXHIBIT G
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL COUNSEL
FOR THE AGENTS
To the Banks and the Agents
Referred to Below
c/o Deutsche Bank AG,
New York Branch,
as Documentation Agent
31 West 52nd Street
New York, New York 10019
Dear Sirs:
We have participated in the preparation of the Five-Year Credit and
Reimbursement Agreement (the "Credit Agreement") dated as of December 18, 1997
among USF&G Corporation, a Maryland corporation (the "Borrower"), the banks
parties thereto (the "Banks"), the Letter of Credit Issuing Banks party thereto,
Morgan Guaranty Trust Company of New York, as Administrative Agent (the
"Administrative Agent") and Deutsche Bank AG, New York Branch, as Documentation
Agent (the "Documentation Agent" and together with the Administrative Agent, the
"Agents"), and have acted as special counsel for the Agents for the purpose of
rendering this opinion pursuant to Section 3.01(d) of the Credit Agreement.
Terms defined in the Credit Agreement are used herein as therein defined.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments and have conducted such other
investigations of fact and law as we have deemed necessary or advisable for
purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that the Credit
Agreement constitutes a valid and binding agreement of the Borrower and each
Note constitutes a valid and binding obligation of the Borrower, in each case
enforceable in accordance with its terms, except as the same may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
by general principles of equity.
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York and the federal laws of
the United States of America. In giving the foregoing opinion, we express no
opinion as to the effect (if any) of any law of any jurisdiction (except the
State of New York) in which any Bank is located which limits the rate of
interest that such Bank may charge or collect. Insofar as the foregoing opinion
involves matters governed by the laws of Maryland, we have relied, without
independent investigation, upon the opinions of J. Kendall Huber, Deputy General
Counsel of the Borrower, and of Piper & Marbury, counsel for the Borrower, a
copy of each of which has been delivered to you.
This opinion is rendered solely to you in connection with the above
matter. This opinion may not be relied upon by you for any other purpose or
relied upon by any other Person without our prior written consent.
Very truly yours,
EXHIBIT H
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 19__ among [ASSIGNOR] (the
"Assignor"), [ASSIGNEE] (the "Assignee"), USF&G CORPORATION (the "Borrower"),
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Administrative Agent (the
"Administrative Agent"), and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as
Issuing Bank (the "Issuing Bank").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the "Agreement")
relates to the Five-Year Credit and Reimbursement Agreement dated as of December
18, 1997 among the Borrower, the Assignor and the other Banks party thereto, as
Banks, the Letter of Credit Issuing Banks party thereto, the Administrative
Agent, and Deutsche Bank AG, New York Branch, as Documentation Agent (the
"Credit Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor has a
Commitment to make Loans to the Borrower and participate in Letters of Credit in
an aggregate principal amount at any time outstanding not to exceed
$____________;
WHEREAS, Committed Loans made to the Borrower by the Assignor under the
Credit Agreement in the aggregate principal amount of $__________ are
outstanding at the date hereof;
WHEREAS, Letters of Credit with a total amount available for drawing
thereunder of $__________ are outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the
Assignee all of the rights of the Assignor under the Credit Agreement
in respect of a portion of its Commitment thereunder in an amount equal to
$__________ (the "Assigned Amount"), together with a corresponding portion of
its outstanding Committed Loans and Letter of Credit Liabilities, and the
Assignee proposes to accept assignment of such rights and assume the
corresponding obligations from the Assignor on such terms; NOW,
THEREFORE, in consideration of the foregoing and the mutual agreements contained
herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to the
Assignee without recourse all of the rights of the Assignor under the Credit
Agreement to the extent of the Assigned Amount, and the Assignee hereby accepts
such assignment from the Assignor and assumes all of the obligations of the
Assignor under the Credit Agreement to the extent of the Assigned Amount,
including the purchase from the Assignor of the corresponding portion of the
principal amount of the Committed Loans made by, and Letter of Credit
Liabilities of, the Assignor outstanding at the date hereof. Upon the execution
and delivery hereof by the Assignor, the Assignee[, the Borrower], the Issuing
Bank and the Administrative Agent and the payment of the amounts specified in
Section 3 required to be paid on the date hereof (i) the Assignee shall, as of
the date hereof, succeed to the rights and be obligated to perform the
obligations of a Bank under the Credit Agreement with a Commitment in an amount
equal to the Assigned Amount, and (ii) the Commitment of the Assignor shall, as
of the date hereof, be reduced by a like amount and the Assignor released from
its obligations under the Credit Agreement to the extent such obligations have
been assumed by the Assignee. The assignment provided for herein shall be
without recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the
date hereof in Federal funds the amount heretofore agreed between them.(8) It is
understood that commitment and/or facility fees and/or letter of credit fees
accrued to the date hereof are for the account of the Assignor and such fees
accruing from and including the date hereof in respect of the Assigned Amount
are for the account of the Assignee. Each of the Assignor and the Assignee
hereby agrees that if it receives any amount under the Credit Agreement which is
for the account of the other party hereto, it shall receive the same for the
account of such other party to the extent of such other party's interest therein
and shall promptly pay the same to such other party.
--------
(8) Amount should combine principal together with accrued interest and
breakage compensation, if any, to be paid by the Assignee, net of any portion of
any upfront fee to be paid by the Assignor to the Assignee. It may be preferable
in an appropriate case to specify these amounts generally or by formula rather
than as a fixed sum.
[SECTION 4. Consent of the Borrower, the Issuing Bank and the
Administrative Agent. This Agreement is conditioned upon the consent of the
Borrower, the Administrative Agent and the Issuing Bank pursuant to Section
9.06(c) of the Credit Agreement. The execution of this Agreement by the
Borrower, the Issuing Bank and the Administrative Agent is evidence of this
consent. Pursuant to Section 9.06(c) the Borrower agrees to execute and deliver
a Note payable to the order of the Assignee to evidence the assignment and
assumption provided for herein.]
SECTION 5. Non-Reliance on Assignor. The Assignor makes no
representation or warranty in connection with, and shall have no responsibility
with respect to, the solvency, financial condition, or statements of the
Borrower, or the validity and enforceability of the obligations of the Borrower
in respect of the Credit Agreement or any Note. The Assignee acknowledges that
it has, independently and without reliance on the Assignor, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and will continue to be
responsible for making its own independent appraisal of the business, affairs
and financial condition of the Borrower.
SECTION 6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 7. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
[ASSIGNOR]
By _______________________________
Title
[ASSIGNEE]
By _______________________________
Title:
USF&G CORPORATION
By _______________________________
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Administrative Agent
By _______________________________
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Issuing Bank
By _________________________________
Title:
EXHIBIT I
FORM OF LETTER OF CREDIT REQUEST
, 19__
Morgan Guaranty Trust Company
of New York, as Administrative Agent
60 Wall Street
New York, New York 10260
Attention: ____________________
Morgan Guaranty Trust Company
of New York, as Issuing Bank
c/o J. P. Morgan Services Inc.
P.O. Box 6071
Newark, DE 19714-9857
Attention: International Trade Services
Re: Five-Year Credit and Reimbursement Agreement dated as of
December 18, 1997 (as amended, the "Agreement") among USF&G
Corporation (the "Borrower"), the Banks party thereto, the
Issuing Banks party thereto, Morgan Guaranty Trust Company of
New York, as Administrative Agent, and Deutsche Bank AG, New
York Branch, as Documentation Agent
Capitalized terms used herein that are defined in the Agreement shall
have the meanings therein defined.
1. Pursuant to Section 2.16(b) of the Agreement, the Borrower or, on a
joint and several basis, the Borrower and each undersigned wholly owned
Subsidiary, ____________ (each a "Co-Applicant"), hereby request that the
Issuing Bank issue a Letter of Credit in accordance with the information annexed
hereto as Annex A hereto.
2. The Borrower hereby certifies that on the date hereof and on the
date of issuance set forth in Annex A, and after giving effect to the Letter of
Credit requested hereby:
(a) The Borrower is and shall be in compliance with all of the terms,
covenants and conditions of the Agreement.
(b) No Default exists under the Agreement.
(c) Each of the representations and warranties contained in the
Agreement is and shall be true and correct (except the representations and
warranties set forth in Sections 4.04(c) or 4.05).
(d) After giving effect to the Letter of Credit requested to be issued
hereby, (i) the aggregate amount of the Letter of Credit Liabilities shall not
exceed the Letter of Credit Commitment and (ii) the aggregate amount of the
Letter of Credit Liabilities plus the aggregate outstanding amount of all Loans
plus the aggregate Dollar Equivalent of all Alternative Currency Advances then
outstanding shall not exceed the aggregate amount of the Commitments.
(e) Each undersigned Co-Applicant (if any) acknowledges that it has
received a copy of the Agreement and acknowledges and agrees that, from and
after the date of issuance of the Letter of Credit requested hereby, it shall be
jointly and severally liable with the Borrower for all obligations with respect,
or related, to such Letter of Credit or the payments to be made thereunder,
including, without limitation, all obligations under Sections 2.16, 8.04 and
9.03 of the Agreement. Each undersigned Co-Applicant (if any) will, at the
request of the Administrative Agent or the Issuing Bank, execute a copy of the
Agreement and such other documents as may be reasonably required by the
Administrative Agent or such Issuing Bank.
IN WITNESS WHEREOF, the Borrower and each undersigned Co-Applicant (if
any) has caused this Certificate to be executed by its duly authorized officer
as of the date and year first written above.
USF&G CORPORATION
By:___________________________
Name:_________________________
Title:________________________
[CO-APPLICANT]
By:___________________________
Name:_________________________
Title:________________________
Exhibit J
SAMPLE
DATE:__________________
Letter of Credit No.___
_____________________________________________________________
*FOR INTERNAL IDENTIFICATION PURPOSES ONLY*
*Our Irrevocable Credit No. __________________________________
*Applicant:___________________________________________________
*_____________________________________________________________
MAIL TO:
________________
________________
BENEFICIARY:
________________
Dear Sirs:
We hereby establish this irrevocable standby Letter of Credit in favor
of the aforesaid addressee (Beneficiary) for drawings up to __________ AMOUNT
__________ (____________ AMOUNT IN WORDS________) effective ______________. This
Letter of Credit is issued, presentable and payable at our International Trade
Services Department as provided below and expires with our close of business on
___________________. Drafts and documents presented by mail should be mailed to
Morgan Guaranty Trust Company of New York, c/o J.P. Morgan Services Inc., P.O.
Box 6071 Newark, Delaware, 19714- 9857, Attention: International Trade Services.
Courier or physical deliveries should be addressed to Morgan Guaranty Trust
Company of New York, c/o J.P. Morgan Services Inc., 500 Stanton Christiana Road,
Newark, Delaware, 19713-2107, Attention: International Trade Services. Although
we prefer physical presentations be made to our Newark, Delaware location, our
15 Broad Street, New York, New York, 10015 location is also available for your
physical presentations. Should you use our 15 Broad Street address for physical
presentations, letters of credit/documents must be directed to, the Tellers
Department, Ground Floor, 15 Broad Street, Attention: International Trade
Services.
If the Beneficiary is an insurance company, the term "Beneficiary"
includes any successor by operation of law of the named Beneficiary including
without limitation any liquidator, rehabilitator, receiver or conservator.
We hereby undertake to promptly honor your sight draft(s) drawn on us,
indicating our Credit No. ______, for all or any part of this credit upon
presentation of your draft drawn on us at our office specified in paragraph one
on or before the expiration date or any automatically extended expiry date.
CONTINUED
SAMPLE
DATE:__________________
Letter of Credit No.___
PAGE TWO
MAIL TO:
_____________
_____________
BENEFICIARY:
_____________
Except as expressly stated herein, this undertaking is not subject to any
agreement, requirement or qualification. The obligation of Morgan Guaranty Trust
Company of New York under this Letter of Credit is the individual obligation of
Morgan Guaranty Trust Company of New York and is in no way contingent upon
reimbursement with respect thereto.
It is a condition of this Letter of Credit that it is deemed to be
automatically extended without amendment for one year from the expiry date
hereof, or any future expiration date, unless at least sixty days prior to any
expiration date, we notify you by registered mail that we elect not to consider
this Letter of Credit renewed for any such additional period, provided that
under no circumstance shall this Letter of Credit be renewed or extended
(automatically or otherwise) if the expiry date would be after December 18,
2002.
This Letter of Credit is subject to and governed by the laws of the
State of New York and the 1993 Revision of the Uniform Customs and Practice for
Documentary Credits of the International Chamber of Commerce (Publication No.
500) and, in the event of any conflict, the Laws of the State of New York will
control. If this credit expires during an interruption of business as described
in Article 17 of said Publication 500, the Bank hereby specifically agrees to
effect payment if this Credit is drawn against within 30 days after the
resumption of business.
Yours very truly,
Authorized Signature
Standby/Guarantee Unit
(302) 634-
Annex A
LETTER OF CREDIT INFORMATION
1. Name of Beneficiary:
_______________________________________________________________.
2. Address of Beneficiary of the Letter of Credit:
________________________________________________________________
________________________________________________________________.
3. Conditions under which a drawing under such Letter of Credit may be made
(specify the required documentation):
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________.
4. Maximum amount to be available under such Letter of Credit:
$_____________.
5. Requested Date of Issuance: _______________ __, 199__.
6. Stated Expiration Date: _______________ __, 199__.
7. Description of Transaction to be supported by such Letter of Credit:
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________.
8. Name and address of each Co-Applicant (if any):
________________________________________________________________
________________________________________________________________.
Dates Referenced Herein and Documents Incorporated by Reference
↑Top
Filing Submission 0000354396-98-000003 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)
Copyright © 2024 Fran Finnegan & Company LLC – All Rights Reserved.
About — Privacy — Redactions — Help —
Thu., Apr. 25, 6:23:00.2pm ET 
