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EXHIBIT 10(a)
CONFORMED COPY
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CREDIT AND GUARANTEE AGREEMENT
dated as of
November 1, 1999
among
BLOCK FINANCIAL CORPORATION,
as Borrower,
H&R BLOCK, INC.,
as Guarantor,
The Lenders Party Hereto,
MELLON BANK, N.A.
as Syndication Agent,
FLEET NATIONAL BANK and BANK ONE, NA
as Co-Documentation Agents
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
$1,890,000,000 364-DAY REVOLVING CREDIT FACILITY
CHASE SECURITIES INC.,
as Lead Arranger and Sole Book Manager
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS......................................................................1
SECTION 1.1 Defined Terms.......................................................1
SECTION 1.2 Terms Generally....................................................15
SECTION 1.3 Classification of Loans and Borrowings.............................15
SECTION 1.4 Accounting Terms; GAAP.............................................15
ARTICLE II THE CREDITS....................................................................16
SECTION 2.1 Commitments........................................................16
SECTION 2.2 Loans and Borrowings...............................................16
SECTION 2.3 Requests for Revolving Borrowings..................................16
SECTION 2.4 Funding of Borrowings..............................................17
SECTION 2.5 Interest Elections.................................................18
SECTION 2.6 Termination and Reduction of Commitments...........................19
SECTION 2.7 Repayment of Loans, Evidence of Debt...............................20
SECTION 2.8 Prepayment of Loans................................................20
SECTION 2.9 Fees...............................................................21
SECTION 2.10 Interest...........................................................22
SECTION 2.11 Alternate Rate of Interest.........................................23
SECTION 2.12 Increased Costs....................................................23
SECTION 2.13 Break Funding Payments.............................................24
SECTION 2.14 Taxes..............................................................25
SECTION 2.15 Payments Generally; Pro Rata Treatment; Sharing of Set-offs........26
SECTION 2.16 Mitigation Obligations; Replacement of Lenders.....................27
SECTION 2.17 Extension of Maturity Date.........................................28
ARTICLE III REPRESENTATIONS AND WARRANTIES................................................29
SECTION 3.1 Organization; Powers...............................................29
SECTION 3.2 Authorization; Enforceability......................................29
SECTION 3.3 Governmental Approvals; No Conflicts...............................29
SECTION 3.4. Financial Condition; No Material Adverse Change....................30
SECTION 3.5. Properties.........................................................31
SECTION 3.6. Litigation and Environmental Matters...............................31
SECTION 3.7. Compliance with Laws and Agreements................................32
SECTION 3.8. Investment and Holding Company Status..............................32
SECTION 3.9. Taxes..............................................................32
SECTION 3.10 ERISA..............................................................32
SECTION 3.11. Disclosure.........................................................32
SECTION 3.12. No Default.........................................................33
SECTION 3.13. Federal Regulations................................................33
SECTION 3.14. Subsidiaries.......................................................33
SECTION 3.15. Solvency...........................................................33
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SECTION 3.16. Insurance...........................................................33
SECTION 3.17. Refund Anticipation Loan Program Documents..........................33
SECTION 3.18. Year 2000 Matter....................................................33
ARTICLE IV CONDITIONS......................................................................34
SECTION 4.1. Effective Date......................................................34
SECTION 4.2. Closing Date........................................................35
SECTION 4.3. Each Loan...........................................................36
ARTICLE V AFFIRMATIVE COVENANTS............................................................36
SECTION 5.1. Financial Statements and Other Information..........................36
SECTION 5.2. Notices of Material Events..........................................38
SECTION 5.3. Existence; Conduct of Business......................................38
SECTION 5.4. Payment of Obligations..............................................38
SECTION 5.5. Maintenance of Properties; Insurance................................38
SECTION 5.6. Books and Records; Inspection Rights................................39
SECTION 5.7. Compliance with Laws................................................39
SECTION 5.8. Use of Proceeds.....................................................39
ARTICLE VI NEGATIVE COVENANTS..............................................................39
SECTION 6.1. Adjusted Net Worth..................................................39
SECTION 6.2. Indebtedness........................................................39
SECTION 6.3. Liens...............................................................41
SECTION 6.4. Fundamental Changes.................................................43
SECTION 6.5. Transactions with Affiliates........................................43
SECTION 6.6. Restrictive Agreements..............................................43
SECTION 6.7. Limitation on Sale of Assets........................................44
ARTICLE VII GUARANTEE......................................................................45
SECTION 7.1. Guarantee...........................................................45
SECTION 7.2. No Subrogation......................................................45
SECTION 7.3. Amendments, etc. with respect to the Obligations; Waiver of Rights..46
SECTION 7.4. Guarantee Absolute and Unconditional................................46
SECTION 7.5. Reinstatement.......................................................47
SECTION 7.6. Payments............................................................47
ARTICLE VIII EVENTS OF DEFAULT.............................................................48
ARTICLE IX THE ADMINISTRATIVE AGENT........................................................50
ARTICLE X MISCELLANEOUS....................................................................52
SECTION 10.1. Notices.............................................................52
SECTION 10.2. Waivers; Amendments.................................................53
SECTION 10.3. Expenses; Indemnity; Damage Waiver..................................53
SECTION 10.4. Successors and Assigns..............................................55
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SECTION 10.5. Survival.........................................................57
SECTION 10.6. Counterparts; Integration; Effectiveness.........................57
SECTION 10.7. Severability.....................................................57
SECTION 10.8. Right of Setoff..................................................58
SECTION 10.9. Governing Law; Jurisdiction; Consent to Service of Process.......58
SECTION 10.10. WAIVER OF JURY TRIAL.............................................58
SECTION 10.11 Headings.........................................................59
SECTION 10.12 Confidentiality..................................................59
SECTION 10.13. Interest Rate Limitation.........................................59
SCHEDULES:
Schedule 2.1 Commitments
Schedule 3.4(a) Guarantee Obligations
Schedule 3.6 Disclosed Matters
Schedule 3.14 Subsidiaries
Schedule 6.2 Existing Indebtedness
Schedule 6.3 Existing Liens
Schedule 6.4(b) Additional Businesses
Schedule 6.6 Existing Restrictions
EXHIBITS:
Exhibit A Form of Assignment and Acceptance
Exhibit B Form of Opinion of Borrower's Counsel
Exhibit C Form of Extension Request
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CREDIT AND GUARANTEE AGREEMENT, dated as of November 1, 1999,
among BLOCK FINANCIAL CORPORATION, a Delaware corporation, as Borrower, H&R
BLOCK, INC., a Missouri corporation, as Guarantor, the LENDERS party hereto, and
THE CHASE MANHATTAN BANK, a New York banking corporation, as Administrative
Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or
Borrowing, refers to whether such Loan, or the Loans comprising such
Borrowing, are bearing interest at a rate determined by reference to
the Alternate Base Rate.
"Acquisition" means the purchase by the Borrower of
all of the issued and outstanding Capital Stock of Olde and FMS
pursuant to the terms of the Acquisition Documentation.
"Acquisition Agreement" means the Stock Purchase
Agreement dated as of August 31, 1999, among the Borrower, the
Guarantor, Olde, FMS and several other parties thereto.
"Acquisition Documentation" means, collectively, the
Acquisition Agreement and all schedules, exhibits and annexes thereto
and all side letters and agreements affecting the terms thereof or
entered into in connection therewith, in each case as amended,
supplemented or otherwise modified from time to time.
"Acquisition Facility" has the meaning assigned to
such term in Section 6.2(b).
"Adjusted LIBO Rate" means, with respect to any
Eurodollar Borrowing for any Interest Period, an interest rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to
(a) the LIBO Rate for such Interest Period multiplied by (b) the
Statutory Reserve Rate.
"Adjusted Net Worth" means, at any time, Consolidated
Net Worth of the Guarantor without giving effect to reductions in
stockholders' equity as a result of repurchases by the Guarantor of its
own Capital Stock subsequent to July 31, 1999 in an aggregate amount
not exceeding $500,000,000; provided that at all times prior to the
Borrower selling all or any part of Option One Mortgage Corporation,
Adjusted Net Worth shall mean Consolidated Net Worth of the Guarantor
without giving effect to reductions in stockholders' equity as a result
of repurchases by the Guarantor of its own
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Capital Stock subsequent to July 31, 1999 in an aggregate amount not
exceeding $100,000,000.
"Administrative Agent" means The Chase Manhattan
Bank, a New York banking corporation, in its capacity as administrative
agent for the Lenders hereunder.
"Administrative Questionnaire" means an
Administrative Questionnaire in a form supplied by the Administrative
Agent.
"Affiliate" means, with respect to a specified
Person, another Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control
with the Person specified.
"Alternate Base Rate" means, for any day, a rate per
annum equal to the greatest of (a) the Prime Rate in effect on such
day, (b) the Base CD Rate in effect on such day plus 1% and (c) the
Federal Funds Effective Rate in effect on such day plus 2 of 1%. Any
change in the Alternate Base Rate due to a change in the Prime Rate,
the Base CD Rate or the Federal Funds Effective Rate shall be effective
from and including the effective date of such change in the Prime Rate,
the Base CD Rate or the Federal Funds Effective Rate, respectively.
"Applicable Percentage" means, with respect to any
Lender, the percentage of the total Commitments represented by such
Lender's Commitment. If the Commitments have terminated or expired, the
Applicable Percentages shall be determined based upon the Commitments
most recently in effect, giving effect to any assignments.
"Applicable Rate" means, for any day, the rate per
annum based on the Ratings in effect on such day, as set forth under
the relevant column heading below:
-------------- ------------------------- ---------------------------------------------------------------------
Applicable Rate for
----------------- ---------------- ----------------- ----------------
Facility Fees Utilization
Eurodollar Payable Fees Payable
Category Ratings ABR Loans Loans Hereunder Hereunder
-------------- ------------------------- ----------------- ---------------- ----------------- ----------------
Greater than: A by S&P
I or A2 by Moody's 0% 0.18% 0.07% 0.15%
-------------- ------------------------- ----------------- ---------------- ----------------- ----------------
A by S&P or A2 by
II Moody's 0% 0.265% 0.085% 0.15%
-------------- ------------------------- ----------------- ---------------- ----------------- ----------------
A - by S&P or A3 by
III Moody's 0% 0.53% 0.095% 0.15%
-------------- ------------------------- ----------------- ---------------- ----------------- ----------------
BBB + by S&P or Baa1 by
IV Moody's 0% 0.64% 0.11% 0.15%
-------------- ------------------------- ----------------- ---------------- ----------------- ----------------
Lower than: BBB + by
S&P or Baa1 by Moody's
V 0% 0.75% 0.125% 0.15%
-------------- ------------------------- ----------------- ---------------- ----------------- ----------------
; provided that (a) if on any day the Ratings of S&P and Moody's do not
fall in the same category, then the lower of such Ratings shall be
applicable for such day, (b) if on any day
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the Rating of only S&P or ▇▇▇▇▇'▇ is available, then such Rating shall
be applicable for such day and (c) if on any day a Rating is not
available from either S&P or Moody's, then the Ratings in category V
above shall be applicable for such day. Any change in the Applicable
Rate resulting from a change in Rating by either S&P or Moody's shall
become effective on the date such change is publicly announced by such
rating agency.
"Assessment Rate" means, for any day, the annual
assessment rate in effect on such day that is payable by a member of
the Bank Insurance Fund classified as "well-capitalized" and within
supervisory subgroup "B" (or a comparable successor risk
classification) within the meaning of 12 C.F.R. Part 327 (or any
successor provision) to the Federal Deposit Insurance Corporation for
insurance by such Corporation of time deposits made in dollars at the
offices of such member in the United States; provided that if, as a
result of any change in any law, rule or regulation, it is no longer
possible to determine the Assessment Rate as aforesaid, then the
Assessment Rate shall be such annual rate as shall be determined by the
Administrative Agent to be representative of the cost of such insurance
to the Lenders.
"Assignment and Acceptance" means an assignment and
acceptance entered into by a Lender and an assignee (with the consent
of any party whose consent is required by Section 10.4), and accepted
by the Administrative Agent, substantially in the form of Exhibit A or
any other form approved by the Administrative Agent.
"Availability Period" means the period from and
including the Closing Date to but excluding the earlier of the Maturity
Date and the date of termination of the Commitments.
"Base CD Rate" means the sum of (a) the Three-Month
Secondary CD Rate multiplied by the Statutory Reserve Rate plus (b) the
Assessment Rate.
"Board" means the Board of Governors of the Federal
Reserve System of the United States of America.
"Borrower" means Block Financial Corporation, a
Delaware corporation and a wholly-owned Subsidiary of the Guarantor.
"Borrowing" means Revolving Loans of the same Type,
made, converted or continued on the same date and, in the case of
Eurodollar Loans, as to which a single Interest Period is in effect.
"Borrowing Request" means a request by the Borrower
for a Revolving Borrowing in accordance with Section 2.3.
"Business Day" means any day that is not a Saturday,
Sunday or other day on which commercial banks in New York City are
authorized or required by law to remain closed; provided that, when
used in connection with a Eurodollar Loan, the term "Business Day"
shall also exclude any day on which banks are not open for dealings in
dollar deposits in the London interbank market.
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"Capital Lease Obligations" of any Person means the
obligations of such Person to pay rent or other amounts under any lease
of (or other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required to
be classified and accounted for as capital leases on a balance sheet of
such Person under GAAP, and the amount of such obligations shall be the
capitalized amount thereof determined in accordance with GAAP.
"Capital Stock" means any and all shares, interests,
participations or other equivalents (however designated) of capital
stock of a corporation, any and all equivalent ownership interests in a
Person (other than a corporation) and any and all warrants or options
to purchase any of the foregoing.
"Change in Control" means (a) the acquisition of
ownership, directly or indirectly, beneficially or of record, by any
Person or group (within the meaning of the Securities Exchange Act of
1934 and the rules of the Securities and Exchange Commission thereunder
as in effect on the date hereof) of shares representing more than 25%
of the aggregate ordinary voting power represented by the issued and
outstanding Capital Stock of the Guarantor; (b) occupation of a
majority of the seats (other than vacant seats) on the board of
directors of the Guarantor by Persons who were neither (i) nominated by
the board of directors of the Guarantor nor (ii) appointed by directors
so nominated; (c) the acquisition of direct or indirect Control of the
Guarantor by any Person or group; or (d) the failure of the Guarantor
to own, directly or indirectly, shares representing 100% of the
aggregate ordinary voting power represented by the issued and
outstanding Capital Stock of the Borrower.
"Change in Law" means (a) the adoption of any law,
rule or regulation after the date of this Agreement, (b) any change in
any law, rule or regulation or in the interpretation or application
thereof by any Governmental Authority after the date of this Agreement
or (c) compliance by any Lender (or, for purposes of Section 2.12(b),
by any lending office of such Lender or by such Lender's holding
company, if any) with any request, guideline or directive (whether or
not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"Charges" has the meaning assigned to such term in
Section 10.13.
"Closing Date" means the date on which the conditions
specified in Section 4.2 are satisfied (or waived in accordance with
Section 10.2).
"Code" means the Internal Revenue Code of 1986, as
amended from time to time.
"Commitment" means, with respect to each Lender, the
commitment of such Lender to make Revolving Loans hereunder, expressed
as an amount representing the maximum aggregate amount of such Lender's
Revolving Credit Exposure hereunder, as such commitment may be (a)
reduced from time to time pursuant to Section 2.6 and (b) reduced or
increased from time to time pursuant to assignments by or to such
Lender
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pursuant to Section 10.4. The initial amount of each Lender's
Commitment is set forth on Schedule 2.1, or in the Assignment and
Acceptance pursuant to which such Lender shall have assumed its
Commitment, as applicable.
"Commitment Expiration Date" has the meaning assigned
to such term in Section 2.17(a).
"Confidential Information Memorandum" means the
Confidential Information Memorandum dated September 1999 and furnished
to the Lenders.
"Consolidated Net Worth" means, at any time, the
total amount of stockholders' equity of the Guarantor and its
consolidated Subsidiaries at such time determined on a consolidated
basis in accordance with GAAP.
"Contractual Obligation" means, as to any Person, any
provision of any security issued by such Person or of any agreement,
instrument or undertaking to which such Person is a party or by which
it or any of its property is bound.
"Control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management or policies of a Person, whether through the ability to
exercise voting power, by contract or otherwise. "Controlling" and
"Controlled" have meanings correlative thereto.
"Credit Parties" means the collective reference to
the Borrower and the Guarantor.
"Default" means any event or condition which
constitutes an Event of Default or which upon notice, lapse of time or
both would, unless cured or waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and
proceedings and the environmental matters disclosed in Schedule 3.6.
"dollars" or "$" refers to lawful money of the United
States of America.
"Effective Date" means the date on which the
conditions specified in Section 4.1 are satisfied (or waived in
accordance with Section 10.2).
"Environmental Laws" means all laws, rules,
regulations, codes, ordinances, orders, decrees, judgments,
injunctions, notices or binding agreements issued, promulgated or
entered into by any Governmental Authority, relating in any way to the
environment, preservation or reclamation of natural resources, to the
management, release or threatened release of any Hazardous Material or
to health and safety matters.
"Environmental Liability" means any liability,
contingent or otherwise (including any liability for damages, costs of
environmental remediation, fines, penalties or indemnities), of any
Credit Party or any Subsidiary directly or indirectly resulting from
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or based upon (a) violation of any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous
Materials into the environment or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or
imposed with respect to any of the foregoing.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time.
"ERISA Affiliate" means any trade or business
(whether or not incorporated) that, together with any Credit Party, is
treated as a single employer under Section 414(b) or (c) of the Code
or, solely for purposes of Section 302 of ERISA and Section 412 of the
Code, is treated as a single employer under Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as
defined in Section 4043 of ERISA or the regulations issued thereunder
with respect to a Plan (other than an event for which the 30-day notice
period is waived); (b) the existence with respect to any Plan of an
"accumulated funding deficiency" (as defined in Section 412 of the Code
or Section 302 of ERISA), whether or not waived; (c) the filing
pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect
to any Plan; (d) the incurrence by any Credit Party or any of their
ERISA Affiliates of any liability under Title IV of ERISA with respect
to the termination of any Plan; (e) the receipt by any Credit Party or
any ERISA Affiliate from the PBGC or a plan administrator of any notice
relating to an intention to terminate any Plan or Plans or to appoint a
trustee to administer any Plan; (f) the incurrence by any Credit Party
or any of their ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan;
or (g) the receipt by any Credit Party or any ERISA Affiliate of any
notice, or the receipt by any Multiemployer Plan from any Credit Party
or any ERISA Affiliate of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is,
or is expected to be, insolvent or in reorganization, within the
meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or
Borrowing, refers to whether such Loan, or the Loans comprising such
Borrowing, are bearing interest at a rate determined by reference to
the Adjusted LIBO Rate.
"Events of Default" has the meaning assigned to such
term in Article VIII.
"Excluded Taxes" means, with respect to the
Administrative Agent, any Lender or any other recipient of any payment
to be made by or on account of any obligation of the Borrower
hereunder, (a) income or franchise taxes imposed on (or measured by)
its net income by the United States of America, or by the jurisdiction
under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits taxes
imposed by the United States of America or any similar tax imposed by
any
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other jurisdiction in which the Borrower is located and (c) in the
case of a Foreign Lender (other than an assignee pursuant to a request
by the Borrower under Section 2.16(b)), any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such
Foreign Lender becomes a party to this Agreement or is attributable to
such Foreign Lender's failure or inability to comply with Section
2.14(e), except to the extent that such Foreign Lender's assignor (if
any) was entitled, at the time of assignment, to receive additional
amounts from the Borrower with respect to such withholding tax pursuant
to Section 2.14(a).
"Federal Funds Effective Rate" means (a) for the
first day of a Borrowing, the rate per annum which is the average of
the rates on the offered side of the Federal funds market quoted by
three interbank Federal funds brokers, selected by the Administrative
Agent, at approximately the time the Borrower requests such Borrowing,
for dollar deposits in immediately available funds, in an amount,
comparable to the principal amount of such Borrowing and (b) for each
day of such Borrowing thereafter, or for any other amount hereunder
which bears interest at the Alternate Base Rate, the rate per annum
which is the average of the rates on the offered side of the Federal
funds market quoted by three interbank Federal funds brokers, selected
by the Administrative Agent, at approximately 2:00 p.m., New York City
time, on such day for dollar deposits in immediately available funds,
in an amount, comparable to the principal amount of such Borrowing or
other amount, as the case may be; in the case of both clauses (a) and
(b), as determined by the Administrative Agent and rounded upwards, if
necessary, to the nearest 1/100 of 1%.
"Financial Officer" means the chief financial
officer, principal accounting officer, treasurer or controller of the
Borrower or the Guarantor, as the context may require.
"Foreign Lender" means any Lender that is organized
under the laws of a jurisdiction other than that in which the Borrower
is located. For purposes of this definition, the United States of
America, each State thereof and the District of Columbia shall be
deemed to constitute a single jurisdiction.
"FMS" means Financial Marketing Services, Inc., a
Michigan corporation.
"GAAP" means generally accepted accounting principles
in the United States of America.
"Governmental Authority" means the government of the
United States of America, any other nation or any political subdivision
thereof, whether state, provincial or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"Guarantee" of or by any Person (the "guarantor")
means any obligation, contingent or otherwise, of the guarantor
guaranteeing or having the economic effect of
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guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly,
and including any obligation of the guarantor, direct or indirect, (a)
to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation or to purchase (or to
advance or supply funds for the purchase of) any security for the
payment thereof, (b) to purchase or lease property, securities or
services for the purpose of assuring the owner of such Indebtedness or
other obligation of the payment thereof, (c) to maintain working
capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to
pay such Indebtedness or other obligation or (d) as an account party in
respect of any letter of credit or letter of guaranty issued to support
such Indebtedness or obligation; provided that the term Guarantee shall
not include endorsements for collection or deposit in the ordinary
course of business.
"Guarantee Obligation" means, as to any Person, any
obligation of such Person guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary
obligations") of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation,
any obligation of such Person, whether or not contingent, (a) to
purchase any such primary obligation or any property constituting
direct or indirect security therefor, (b) to advance or supply funds
(i) for the purchase or payment of any such primary obligation or (ii)
to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor,
(c) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary
obligation or (d) otherwise to assure or hold harmless the owner of any
such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Guarantee Obligation shall be
deemed to be an amount equal as of any date of determination to the
stated determinable amount of the primary obligation in respect of
which such Guarantee Obligation is made (unless such Guarantee
Obligation shall be expressly limited to a lesser amount, in which case
such lesser amount shall apply) or, if not stated or determinable, the
amount as of any date of determination of the maximum reasonably
anticipated liability in respect thereof as determined by such Person
in good faith.
"Guarantor" means H&R Block, Inc., a Missouri
corporation.
"Hazardous Materials" means all explosive or
radioactive substances or wastes and all hazardous or toxic substances,
wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated
biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Agreement" means any interest rate
protection agreement, foreign currency exchange agreement, commodity
price protection agreement or other interest or currency exchange rate
or commodity price hedging arrangement.
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"Indebtedness" of any Person means, without
duplication, (a) all obligations of such Person for borrowed money or
with respect to deposits or advances of any kind, (b) all obligations
of such Person evidenced by bonds, debentures, notes or similar
instruments, (c) all obligations of such Person upon which interest
charges are customarily paid, (d) all obligations of such Person under
conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in
respect of the deferred purchase price of property or services
(excluding current accounts payable incurred in the ordinary course of
business), (f) all Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by
such Person, whether or not the Indebtedness secured thereby has been
assumed, (g) all Guarantees by such Person of Indebtedness of others,
(h) all Capital Lease Obligations of such Person, (i) all obligations,
contingent or otherwise, of such Person as an account party in respect
of letters of credit and letters of guaranty, (j) all obligations,
contingent or otherwise, of such Person in respect of bankers'
acceptances and (k) for purposes of Section 6.2 only, all preferred
stock issued by a Subsidiary of such Person. The Indebtedness of any
Person shall include the Indebtedness of any other entity (including
any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's
ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness provide that such Person is
not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded
Taxes.
"Indemnitee" has the meaning assigned to such term in
Section 10.3(b).
"Information" has the meaning assigned to such term
in Section 10.12.
"Interest Election Request" means a request by the
Borrower to convert or continue a Revolving Borrowing in accordance
with Section 2.5.
"Interest Payment Date" means (a) with respect to any
ABR Loan, the last day of each March, June, September and December or
(b) with respect to any Eurodollar Loan, the last day of the Interest
Period applicable to the Borrowing of which such Loan is a part and, in
the case of a Eurodollar Borrowing with an Interest Period of more than
three months' duration, each day prior to the last day of such Interest
Period that occurs at intervals of three months' duration after the
first day of such Interest Period.
"Interest Period" means, with respect to any
Eurodollar Borrowing, the period commencing on the date of such
Borrowing and ending on the numerically corresponding day in the
calendar month that is one, two, three or six months thereafter, as the
Borrower may elect; provided that (a) if any Interest Period would end
on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding Business Day
and (b) any Interest Period that commences on the last Business Day of
a calendar month
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(or on a day for which there is no numerically corresponding day in the
last calendar month of such Interest Period) shall end on the last
Business Day of the last calendar month of such Interest Period. For
purposes hereof, the date of a Borrowing initially shall be the date on
which such Borrowing is made and thereafter shall be the effective date
of the most recent conversion or continuation of such Borrowing.
"Lenders" means the Persons listed on Schedule 2.1
and any other Person that shall have become a party hereto pursuant to
an Assignment and Acceptance, other than any such Person that ceases to
be a party hereto pursuant to an Assignment and Acceptance.
"LIBO Rate" means, with respect to any Eurodollar
Borrowing for any Interest Period, the rate appearing on Page 3750 of
the Dow ▇▇▇▇▇ Markets screen at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period, as
the rate for dollar deposits with a maturity comparable to such
Interest Period. In the event that such rate is not available at such
time for any reason, then the "LIBO Rate" with respect to such
Eurodollar Borrowing for such Interest Period shall be determined by
reference to such other comparable publicly available service for
displaying eurodollar rates as may be selected by the Administrative
Agent or, in the absence of such availability, by reference to the rate
at which dollar deposits of $5,000,000 and for a maturity comparable to
such Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London
interbank market at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period.
"Lien" means, with respect to any asset, (a) any
mortgage, deed of trust, lien, pledge, hypothecation, encumbrance,
charge or security interest in, on or of such asset, (b) the interest
of a vendor or a lessor under any conditional sale agreement, capital
lease or title retention agreement (or any financing lease having
substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase
option, call or similar right of a third party with respect to such
securities; provided that clause (c) above shall be deemed not to
include stock options granted by any Person to its directors, officers
or employees with respect to the Capital Stock of such Person.
"Loans" means the loans made by the Lenders to the
Borrower pursuant to this Agreement.
"Material Adverse Effect" means a material adverse
effect on (a) the business, assets, property or condition (financial or
otherwise) of the Guarantor and the Subsidiaries taken as a whole, (b)
the ability of any Credit Party to perform any of its obligations under
this Agreement or (c) the rights of or benefits available to the
Lenders under this Agreement.
"Material Indebtedness" means Indebtedness (other
than the Loans), or obligations in respect of one or more Hedging
Agreements, of any one or more of the
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Credit Parties and any Subsidiaries in an aggregate principal amount
exceeding $25,000,000. For purposes of determining Material
Indebtedness, the "principal amount" of the obligations of any Credit
Party or any Subsidiary in respect of any Hedging Agreement at any time
shall be the maximum aggregate amount (giving effect to any netting
agreements) that the Credit Party or such Subsidiary would be required
to pay if such Hedging Agreement were terminated at such time.
"Maturity Date" means October 30, 2000 or such later
date as shall be determined pursuant to the provisions of Section 2.17
with respect to non-Objecting Lenders.
"Maximum Rate" has the meaning assigned to such term
in Section 10.13.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Objecting Lender" has the meaning assigned to such
term in Section 2.17(a).
"Obligations" means collectively, the unpaid
principal of and interest on the Loans and all other obligations and
liabilities of the Borrower (including, without limitation, interest
accruing at the then applicable rate provided herein after the maturity
of the Loans and interest accruing at the then applicable rate provided
herein after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding,
relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) to the
Administrative Agent or any Lender (or, in the case of any Hedging
Agreement referred to below, any Affiliate of any Lender), whether
direct or indirect, absolute or contingent, due or to become due, or
now existing or hereafter incurred, which may arise under, out of, or
in connection with, this Agreement or any Hedging Agreement entered
into by the Borrower with any Lender (or any Affiliate of any Lender)
or any other document made, delivered or given in connection herewith
or therewith, in each case whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of
counsel to the Administrative Agent or to the Lenders that are required
to be paid by the Borrower pursuant to the terms of any of the
foregoing agreements).
"Olde" means Olde Financial Corporation, a Michigan
corporation.
"Other Taxes" means any and all present or future
stamp or documentary taxes or any other excise or property taxes,
charges or similar levies arising from any payment made hereunder or
from the execution, delivery or enforcement of, or otherwise with
respect to, this Agreement.
"Participant" has the meaning assigned to such term
in Section 10.4(e).
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"PBGC" means the Pension Benefit Guaranty Corporation
referred to and defined in ERISA and any successor entity performing
similar functions.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet
due or are being contested in compliance with Section 5.4;
(b) carriers', warehousemen's, mechanics',
materialmen's, repairmen's and other like Liens imposed by law, arising
in the ordinary course of business and securing obligations that are
not overdue by more than 30 days or are being contested in compliance
with Section 5.4;
(c) pledges and deposits made in the ordinary course
of business in compliance with workers' compensation, unemployment
insurance and other social security laws or regulations;
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case
in the ordinary course of business; and
(e) easements, zoning restrictions, rights-of-way and
similar encumbrances on real property imposed by law or arising in the
ordinary course of business that do not secure any monetary obligations
and do not materially detract from the value of the affected property
or interfere with the ordinary conduct of business of the Credit
Parties or any Subsidiary;
provided that the term "Permitted Encumbrances" shall not include any
Lien securing Indebtedness.
"Person" means any natural person, corporation,
limited liability company, trust, joint venture, association, company,
partnership, Governmental Authority or other entity.
"Plan" means any employee pension benefit plan (other
than a Multiemployer Plan) subject to the provisions of Title IV of
ERISA or Section 412 of the Code or Section 302 of ERISA, and in
respect of which any Credit Party or any ERISA Affiliate is (or, if
such plan were terminated, would under Section 4069 of ERISA be deemed
to be) an "employer" as defined in Section 3(5) of ERISA.
"Prime Rate" means the rate of interest per annum
publicly announced from time to time by The Chase Manhattan Bank as its
prime rate in effect at its principal office in New York City; each
change in the Prime Rate shall be effective from and including the date
such change is publicly announced as being effective.
"Pro Forma Balance Sheet" has the meaning assigned to
such term in Section 3.4(c).
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"RAL Program Documents" means (a) that certain Refund
Anticipation Loan Participation Agreement, dated as of July 19, 1996,
among Borrower, Beneficial National Bank, and Beneficial Tax Masters,
Inc.; (b) that certain Refund Anticipation Loan Operations Agreement,
dated as of July 19, 1996, among H&R Block Tax Services, Inc., HRB
Royalty, Inc., Beneficial Tax Masters, Inc., Beneficial National Bank,
and Beneficial Franchise Company, Inc.; and (c) all other documents,
instruments, agreements or schedules now or hereafter attached to,
referred to in or delivered in connection with any or all of the
agreements referred to in the foregoing clauses (a) and (b), as any or
all of the items referred to in the foregoing clauses (a) through (c)
may be amended, modified or supplemented at any time or from time to
time.
"Rating" means the respective rating of each of S&P
and Moody's applicable to the long-term senior unsecured non-credit
enhanced debt of the Borrower, as announced by S&P and Moody's from
time to time.
"Register" has the meaning assigned to such term in
Section 10.4(c).
"Related Parties" means, with respect to any
specified Person, such Person's Affiliates and the respective
directors, officers, employees, agents and advisors of such Person and
such Person's Affiliates.
"Required Lenders" means, at any time, Lenders having
Revolving Credit Exposures and unused Commitments representing at least
51% of the sum of the total Revolving Credit Exposures and unused
Commitments at such time.
"Revolving Credit Exposure" means, with respect to
any Lender at any time, the sum of the outstanding principal amount of
such Lender's Revolving Loans.
"Revolving Loan" means a Loan made pursuant to
Section 2.3.
"S&P" means Standard & Poor's Ratings Services.
"Solvent" means, with respect to any Person on a
particular date, the condition that on such date, (a) the fair value of
the property of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of
such Person, (b) the present fair salable value of the assets of such
Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute
and mature, (c) such Person does not intend to, and does not believe
that it will, incur debts or liabilities beyond such Person's ability
to pay as such debts and liabilities mature, and (d) such Person is not
engaged in business or a transaction, and is not about to engage in
business or a transaction, for which such Person's property would
constitute an unreasonably small amount of capital.
"Statutory Reserve Rate" means a fraction (expressed
as a decimal), the numerator of which is the number one and the
denominator of which is the number one minus the aggregate of the
maximum reserve percentages (including any marginal, special, emergency
or supplemental reserves) expressed as a decimal established by the
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Board to which the Administrative Agent (or its London branch) is
subject (a) with respect to the Base CD Rate, for new negotiable
nonpersonal time deposits in dollars of over $100,000 with maturities
approximately equal to three months and (b) with respect to the
Adjusted LIBO Rate, for eurocurrency funding. Such reserve percentages
shall include those imposed pursuant to Regulation D of the Board.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and
to be subject to such reserve requirements without benefit of or credit
for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D or any comparable
regulation. The Statutory Reserve Rate shall be adjusted automatically
on and as of the effective date of any change in any reserve
percentage.
"Subsidiary" means, with respect to any Person (the
"parent") at any date, any corporation, limited liability company,
partnership, association or other entity the accounts of which would be
consolidated with those of the parent in the parent's consolidated
financial statements if such financial statements were prepared in
accordance with GAAP as of such date, as well as any other corporation,
limited liability company, partnership, association or other entity (a)
of which securities or other ownership interests representing more than
50% of the equity or more than 50% of the ordinary voting power or, in
the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held, or (b) that
is, as of such date, otherwise Controlled, by the parent or one or more
Subsidiaries of the parent or by the parent and one or more
Subsidiaries of the parent. Unless the context shall otherwise require,
all references to a "Subsidiary" or to "Subsidiaries" in this Agreement
shall refer to a Subsidiary or Subsidiaries of the Guarantor,
including, without limitation, the Borrower and the Subsidiaries of the
Borrower.
"Taxes" means any and all present or future taxes,
levies, imposts, duties, deductions, charges or withholdings imposed by
any Governmental Authority.
"Three-Month Secondary CD Rate" means, for any day,
the secondary market rate for three-month certificates of deposit
reported as being in effect on such day (or, if such day is not a
Business Day, the next preceding Business Day) by the Board through the
public information telephone line of the Federal Reserve Bank of New
York (which rate will, under the current practices of the Board, be
published in Federal Reserve Statistical Release H.15(519) during the
week following such day) or, if such rate is not so reported on such
day or such next preceding Business Day, the average of the secondary
market quotations for three-month certificates of deposit of major
money center banks in New York City received at approximately 10:00
a.m., New York City time, on such day (or, if such day is not a
Business Day, on the next preceding Business Day) by the Administrative
Agent from three negotiable certificate of deposit dealers of
recognized standing selected by it.
"Transactions" means the execution, delivery and
performance by the Credit Parties of this Agreement, the borrowing of
Loans and the use of the proceeds thereof.
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"Type", when used in reference to any Loan or
Borrowing, refers to whether the rate of interest on such Loan, or on
the Loans comprising such Borrowing, is determined by reference to the
Adjusted LIBO Rate or the Alternate Base Rate.
"Withdrawal Liability" means liability to a
Multiemployer Plan as a result of a complete or partial withdrawal from
such Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.
SECTION 1.2. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.3. Classification of Loans and Borrowings. For
purposes of this Agreement, Loans may be classified and referred to by class
(e.g., a "Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by class
and Type (e.g., a "Eurodollar Revolving Loan"). Borrowings also may be
classified and referred to by class (e.g., a "Revolving Borrowing") or by Type
(e.g., a "Eurodollar Borrowing") or by class and Type (e.g., a "Eurodollar
Revolving Borrowing").
SECTION 1.4. Accounting Terms; GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
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ARTICLE II
THE CREDITS
SECTION 2.1. Commitments. Subject to the terms and conditions
set forth herein, each Lender agrees to make Revolving Loans to the Borrower
from time to time during the Availability Period in an aggregate principal
amount that will not result in (a) such Lender's Revolving Credit Exposure
exceeding such Lender's Commitment or (b) the total Revolving Credit Exposures
exceeding the total Commitments. Within the foregoing limits and subject to the
terms and conditions set forth herein, the Borrower may borrow, prepay and
reborrow Revolving Loans.
SECTION 2.2. Loans and Borrowings.
(a) Each Revolving Loan shall be made as part of a
Borrowing consisting of Revolving Loans made by the Lenders ratably in
accordance with their respective Commitments. The failure of any Lender
to make any Loan required to be made by it shall not relieve any other
Lender of its obligations hereunder; provided that the Commitments of
the Lenders are several and no Lender shall be responsible for any
other Lender's failure to make Loans as required.
(b) Subject to Section 2.11, (i) each Revolving
Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans
as the Borrower may request in accordance herewith. Each Lender at its
option may make any Eurodollar Loan by causing any domestic or foreign
branch or Affiliate of such Lender to make such Loan; provided that any
exercise of such option shall not affect the obligation of the Borrower
to repay such Loan in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for
any Eurodollar Revolving Borrowing, such Borrowing shall be in an
aggregate amount that is an integral multiple of $1,000,000 and not
less than $25,000,000. At the time that each ABR Revolving Borrowing is
made, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $25,000,000; provided
that an ABR Revolving Borrowing may be in an aggregate amount that is
equal to the entire unused balance of the total Commitments. Borrowings
of more than one Type may be outstanding at the same time; provided
that there shall not at any time be more than a total of six Eurodollar
Revolving Borrowings outstanding.
(d) Notwithstanding any other provision of this
Agreement, the Borrower shall not be entitled to request, or to elect
to convert or continue, any Borrowing if the Interest Period requested
with respect thereto would end after the Maturity Date.
SECTION 2.3. Requests for Revolving Borrowings. To request a
Revolving Borrowing, the Borrower shall notify the Administrative Agent of such
request by telephone (a) in the case of a Eurodollar Borrowing, not later than
11:00 a.m., New York City time, three
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Business Days before the date of the proposed Borrowing or (b) in the case of an
ABR Borrowing, not later than 11:00 a.m., New York City time, one Business Day
before the date of the proposed Borrowing. Each such telephonic Borrowing
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Borrowing Request in a form
approved by the Administrative Agent and signed by the Borrower. Each such
telephonic and written Borrowing Request shall specify the following information
in compliance with Section 2.2:
(i) the aggregate amount of the requested
Borrowing;
(ii) the date of such Borrowing, which shall be a
Business Day;
(iii) whether such Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing;
(iv) in the case of a Eurodollar Borrowing, the
initial Interest Period to be applicable thereto, which shall
be a period contemplated by the definition of the term
"Interest Period"; and
(v) the location and number of the Borrower's
account to which funds are to be disbursed, which shall comply
with the requirements of Section 2.4(a).
If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing. If no Interest Period
is specified with respect to any requested Eurodollar Revolving Borrowing, then
the Borrower shall be deemed to have selected an Interest Period of one month's
duration. Promptly following receipt of a Borrowing Request in accordance with
this Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender's Loan to be made as part of the
requested Borrowing.
SECTION 2.4. Funding of Borrowings.
(a) Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately
available funds by 12:00 noon, New York City time, to the account of
the Administrative Agent most recently designated by it for such
purpose by notice to the Lenders. The Administrative Agent will make
such Loans available to the Borrower by promptly crediting the amounts
so received, in like funds, to an account of the Borrower maintained
with the Administrative Agent in New York City and designated by the
Borrower in the applicable Borrowing Request.
(b) Unless the Administrative Agent shall have
received notice from a Lender prior to the proposed date of any
Borrowing that such Lender will not make available to the
Administrative Agent such Lender's share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share
available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the
Borrower a corresponding amount. In such event, if a Lender has not in
fact made its share of the applicable Borrowing available to the
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Administrative Agent, then the applicable Lender and the Borrower
severally agree to pay to the Administrative Agent forthwith on demand
such corresponding amount with interest thereon, for each day from and
including the date such amount is made available to the Borrower to but
excluding the date of payment to the Administrative Agent, at (i) in
the case of such Lender, the Federal Funds Effective Rate or (ii) in
the case of the Borrower, the interest rate applicable to ABR Loans. If
such Lender pays such amount to the Administrative Agent, then such
amount shall constitute such Lender's Loan included in such Borrowing.
SECTION 2.5. Interest Elections.
(a) Each Revolving Borrowing initially shall be of the Type
specified in the applicable Borrowing Request and, in the case of a
Eurodollar Revolving Borrowing, shall have an initial Interest Period
as specified in such Borrowing Request or determined pursuant to the
penultimate sentence of Section 2.3. Thereafter, the Borrower may elect
to convert such Borrowing to a different Type or to continue such
Borrowing and, in the case of a Eurodollar Revolving Borrowing, may
elect Interest Periods therefor, all as provided in this Section. The
Borrower may elect different options with respect to different portions
of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be
considered a separate Borrowing.
(b) To make an election pursuant to this Section, the Borrower
shall notify the Administrative Agent of such election by telephone by
the time that a Borrowing Request would be required under Section 2.3
if the Borrower were requesting a Revolving Borrowing of the Type
resulting from such election to be made on the effective date of such
election. Each such telephonic Interest Election Request shall be
irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by
the Borrower.
(c) Each telephonic and written Interest Election Request
shall specify the following information in compliance with Section 2.2:
(i) the Borrowing to which such Interest Election
Request applies and, if different options are being elected
with respect to different portions thereof, the portions
thereof to be allocated to each resulting Borrowing (in which
case the information to be specified pursuant to clauses (iii)
and (iv) below shall be specified for each resulting
Borrowing);
(ii) the effective date of the election made pursuant
to such Interest Election Request, which shall be a Business
Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
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(iv) if the resulting Borrowing is a Eurodollar
Borrowing, the Interest Period to be applicable thereto after
giving effect to such election, which shall be a period
contemplated by the definition of the term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election
Request, the Administrative Agent shall advise each Lender of the
details thereof and of such Lender's portion of each resulting
Borrowing.
(e) If the Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Revolving Borrowing prior
to the end of the Interest Period applicable thereto, then, unless such
Borrowing is repaid as provided herein, at the end of such Interest
Period such Borrowing shall be converted to an ABR Borrowing.
Notwithstanding any contrary provision hereof, if an Event of Default
has occurred and is continuing and the Administrative Agent, at the
request of the Required Lenders, so notifies the Borrower, then, so
long as an Event of Default is continuing (i) no outstanding Revolving
Borrowing may be converted to or continued as a Eurodollar Borrowing
and (ii) unless repaid, each Eurodollar Revolving Borrowing shall be
converted to an ABR Borrowing at the end of the Interest Period
applicable thereto.
SECTION 2.6. Termination and Reduction of Commitments.
(a) Unless previously terminated, the Commitments shall
terminate on the Maturity Date.
(b) The Borrower may at any time terminate, or from time to
time reduce, the Commitments; provided that (i) each reduction of the
Commitments shall be in an amount that is an integral multiple of
$1,000,000 and not less than $25,000,000 and (ii) the Borrower shall
not terminate or reduce the Commitments if, after giving effect to any
concurrent prepayment of the Loans in accordance with Section 2.8, the
Revolving Credit Exposures would exceed the total Commitments.
(c) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) of
this Section at least three Business Days prior to the effective date
of such termination or reduction, specifying such election and the
effective date thereof. Promptly following receipt of any notice, the
Administrative Agent shall advise the Lenders of the contents thereof.
Each notice delivered by the Borrower pursuant to this Section shall be
irrevocable; provided that a notice of termination of the Commitments
delivered by the Borrower may state that such notice is conditioned
upon the effectiveness of other credit facilities, in which case such
notice may be revoked by the Borrower (by notice to the Administrative
Agent on or prior to the specified effective date) if such condition is
not satisfied. Any termination or reduction of the Commitments
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shall be permanent. Each reduction of the Commitments shall be made
ratably among the Lenders in accordance with their respective
Commitments.
SECTION 2.7. Repayment of Loans; Evidence of Debt.
(a) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Lender the then unpaid
principal amount of each Revolving Loan on the Maturity Date.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the
Borrower to such Lender resulting from each Loan made by such Lender,
including the amounts of principal and interest payable and paid to
such Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in which
it shall record (i) the amount of each Loan made hereunder, the Type
thereof and the Interest Period applicable thereto, (ii) the amount of
any principal or interest due and payable or to become due and payable
from the Borrower to each Lender hereunder and (iii) the amount of any
sum received by the Administrative Agent hereunder for the account of
the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of
the existence and amounts of the obligations recorded therein; provided
that the failure of any Lender or the Administrative Agent to maintain
such accounts or any error therein shall not in any manner affect the
obligation of the Borrower to repay the Loans in accordance with the
terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced
by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the
order of such Lender (or, if requested by such Lender, to such Lender
and its registered assigns) and in a form approved by the
Administrative Agent. Thereafter, the Loans evidenced by such
promissory note and interest thereon shall at all times (including
after assignment pursuant to Section 10.4) be represented by one or
more promissory notes in such form payable to the order of the payee
named therein (or, if such promissory note is a registered note, to
such payee and its registered assigns).
SECTION 2.8. Prepayment of Loans.
(a) The Borrower shall have the right at any time and from
time to time to prepay any Borrowing in whole or in part without
premium or penalty except as provided in Section 2.13, subject to prior
notice in accordance with paragraph (b) of this Section.
(b) The Borrower shall notify the Administrative Agent by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in
the case of prepayment of a
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Eurodollar Revolving Borrowing, not later than 11:00 a.m., New York
City time, three Business Days before the date of prepayment or (ii) in
the case of prepayment of an ABR Revolving Borrowing, not later than
11:00 a.m., New York City time, one Business Day before the date of
prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date and the principal amount of each Borrowing or portion
thereof to be prepaid; provided that, if a notice of prepayment is
given in connection with a conditional notice of termination of the
Commitments as contemplated by Section 2.6, then such notice of
prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.6. Promptly following receipt of any such
notice relating to a Revolving Borrowing, the Administrative Agent
shall advise the Lenders of the contents thereof. Each partial
prepayment of any Revolving Borrowing shall be in an amount that would
be permitted in the case of an advance of a Revolving Borrowing of the
same Type as provided in Section 2.2. Each prepayment of a Revolving
Borrowing shall be applied ratably to the Loans included in the prepaid
Borrowing. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.10.
SECTION 2.9. Fees.
(a) The Borrower agrees to pay to the Administrative Agent for
the account of each Lender a facility fee, which shall accrue at the
Applicable Rate on the daily amount of the Commitment of such Lender
(whether used or unused) during the period from and including the date
hereof to but excluding the date on which such Commitment terminates;
provided that, if such Lender continues to have any Revolving Credit
Exposure after its Commitment terminates, then such facility fee shall
continue to accrue on the daily amount of such Lender's Revolving
Credit Exposure from and including the date on which its Commitment
terminates to but excluding the date on which such Lender ceases to
have any Revolving Credit Exposure. Accrued facility fees shall be
payable in arrears on the last day of March, June, September and
December of each year and on the date on which the Commitments
terminate, commencing on the first such date to occur after the date
hereof; provided that any facility fees accruing after the date on
which the Commitments terminate shall be payable on demand. All
facility fees shall be computed on the basis of a year of 360 days and
shall be payable for the actual number of days elapsed (including the
first day but excluding the last day).
(b) The Borrower agrees to pay to the Administrative Agent for
the account of each Lender a utilization fee, which shall accrue at the
Applicable Rate on the daily amount of the Revolving Loans of such
Lender for each day the Revolving Loans of such Lender exceed 33% of
such Lender's Commitment; provided that, if such Lender continues to
have any Revolving Credit Exposure after its Commitment terminates and
the amount of such Revolving Credit Exposure exceeds 33% of such
Lender's Commitment immediately prior to such Commitment being
terminated, then such utilization fee shall continue to accrue on the
daily amount of such Lender's Revolving Credit Exposure from and
including the date on which its Commitment terminates to but excluding
the date on which such Lender ceases to have any Revolving Credit
Exposure. Accrued utilization fees shall be payable in arrears on the
last day of March, June, September and December of each year and on the
date on which the Commitments
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terminate, commencing on the first such date on which such utilization
fees became due and payable; provided that any utilization fees
accruing after the date on which the Commitments terminate shall be
payable on demand. All utilization fees shall be computed on the basis
of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first but excluding the last day).
(c) The Borrower agrees to pay to the Administrative Agent,
for its own account, fees payable in the amounts and at the times
separately agreed upon between the Borrower and the Administrative
Agent.
(d) All fees payable hereunder shall be paid on the dates due,
in immediately available funds, to the Administrative Agent for
distribution, in the case of facility fees and utilization fees, to the
Lenders. Fees paid shall not be refundable under any circumstances.
SECTION 2.10. Interest.
(a) Subject to paragraph (c) of this Section, the Loans
comprising each ABR Borrowing shall bear interest at a rate per annum
equal to the Alternate Base Rate plus the Applicable Rate.
(b) Subject to paragraph (c) of this Section, the Loans
comprising each Eurodollar Borrowing shall bear interest at a rate per
annum equal to the Adjusted LIBO Rate for the Interest Period in effect
for such Borrowing plus the Applicable Rate.
(c) Notwithstanding the provisions of the foregoing paragraphs
(a) and (b) of this Section, for each day during the period from and
including December 1, 1999 through and including January 15, 2000, all
Loans will bear interest at a rate per annum equal to the greater of
(i) the ABR and (ii) the Federal Funds Effective Rate determined by the
Administrative Agent to be in effect for such day plus 1.8%.
(d) Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable by the Borrower
hereunder is not paid when due, whether at stated maturity, upon
acceleration or otherwise, such overdue amount shall bear interest,
after as well as before judgment, at a rate per annum equal to (i) in
the case of overdue principal of any Loan, 2% plus the rate otherwise
applicable to such Loan as provided above or (ii) in the case of any
other amount, 2% plus the rate applicable to ABR Loans as provided
above.
(e) Accrued interest on each Loan shall be payable in arrears
on each Interest Payment Date for such Loan; provided that (i) interest
accrued pursuant to paragraph (d) of this Section shall be payable on
demand, (ii) in the event of any repayment or prepayment of any Loan
(other than a prepayment of an ABR Revolving Loan prior to the end of
the Availability Period), accrued interest on the principal amount
repaid or prepaid shall be payable on the date of such repayment or
prepayment, (iii) in the event of any conversion of any Eurodollar
Revolving Loan prior to the end of the
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current Interest Period therefor, accrued interest on such Loan shall
be payable on the effective date of such conversion and (iv) all
accrued interest shall be payable upon termination of the Commitments.
(f) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the
Alternate Base Rate at times when the Alternate Base Rate is based on
the Prime Rate shall be computed on the basis of a year of 365 days (or
366 days in a leap year), and in each case shall be payable for the
actual number of days elapsed (including the first day but excluding
the last day). The applicable Alternate Base Rate, Adjusted LIBO Rate
or LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error. The
Administrative Agent shall as soon as practicable notify the Borrower
and the Lenders of the effective date and the amount of each change in
interest rate.
SECTION 2.11. Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable
means do not exist for ascertaining the Adjusted LIBO Rate or the LIBO
Rate, as applicable, for such Interest Period; or
(b) the Administrative Agent is advised by the Required
Lenders that the Adjusted LIBO Rate or the LIBO Rate, as applicable,
for such Interest Period will not adequately and fairly reflect the
cost to such Lenders of making or maintaining their Loans included in
such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a Eurodollar Borrowing shall be
ineffective, and (ii) if any Borrowing Request requests a Eurodollar Revolving
Borrowing, such Borrowing shall be made as an ABR Borrowing.
SECTION 2.12. Increased Costs.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by,
any Lender (except any such reserve requirement reflected in
the Adjusted LIBO Rate); or
(ii) impose on any Lender or the London interbank
market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender;
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and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or to
reduce the amount of any sum received or receivable by such Lender hereunder
(whether of principal, interest or otherwise), then the Borrower will pay to
such Lender such additional amount or amounts as will compensate such Lender for
such additional costs incurred or reduction suffered.
(b) If any Lender determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate
of return on such Lender's capital or on the capital of such Lender's
holding company, if any, as a consequence of this Agreement or the
Loans made by such Lender to a level below that which such Lender or
such Lender's holding company could have achieved but for such Change
in Law (taking into consideration such Lender's policies and the
policies of such Lender's holding company with respect to capital
adequacy), then from time to time the Borrower will pay to such Lender
such additional amount or amounts as will compensate such Lender or
such Lender's holding company for any such reduction suffered.
(c) A certificate of a Lender setting forth the amount or
amounts necessary to compensate such Lender or its holding company, as
the case may be, as specified in paragraph (a) or (b) of this Section
shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as
due on any such certificate within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender to demand
compensation pursuant to this Section shall not constitute a waiver of
such Lender's right to demand such compensation; provided that the
Borrower shall not be required to compensate a Lender pursuant to this
Section for any increased costs or reductions incurred more than six
months prior to the date that such Lender notifies the Borrower of the
Change in Law giving rise to such increased costs or reductions and of
such Lender's intention to claim compensation therefor; provided,
further, that, if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the six-month period referred to
above shall be extended to include the period of retroactive effect
thereof.
SECTION 2.13. Break Funding Payments. In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Revolving Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice is permitted to be
revocable under Section 2.8(b) and is revoked in accordance herewith), (d) the
assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant to
Section 2.16, then, in any such event, the Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event. In the case of a
Eurodollar Loan, the loss to any Lender attributable to any such event shall be
deemed to include an amount determined by such Lender to be equal to the excess,
if any, of (i) the amount of interest that such Lender would pay for a deposit
equal to the principal amount of such Loan for the period from
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the date of such payment, conversion, failure or assignment to the last day of
the then current Interest Period for such Loan (or, in the case of a failure to
borrow, convert or continue, the duration of the Interest Period that would have
resulted from such borrowing, conversion or continuation) if the interest rate
payable on such deposit were equal to the Adjusted LIBO Rate for such Interest
Period, over (ii) the amount of interest that such Lender would earn on such
principal amount for such period if such Lender were to invest such principal
amount for such period at the interest rate that would be bid by such Lender (or
an affiliate of such Lender) for dollar deposits from other banks in the
eurodollar market at the commencement of such period. A certificate of any
Lender setting forth any amount or amounts that such Lender is entitled to
receive pursuant to this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.
SECTION 2.14. Taxes.
(a) Any and all payments by or on account of any obligation of
the Borrower or the Guarantor hereunder shall be made free and clear of
and without deduction for any Indemnified Taxes or Other Taxes;
provided that if the Borrower or the Guarantor shall be required to
deduct any Indemnified Taxes or Other Taxes from such payments, then
(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) the Administrative Agent or
Lender (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
or the Guarantor shall make such deductions and (iii) the Borrower or
the Guarantor shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent and
each Lender, within 10 days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts
payable under this Section) paid by the Administrative Agent or such
Lender, as the case may be, and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to the Borrower by a
Lender, or by the Administrative Agent on its own behalf or on behalf
of a Lender, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority, the
Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such
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payment or other evidence of such payment reasonably satisfactory to
the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from
or reduction of withholding tax under the law of the jurisdiction in
which the Borrower is located, or any treaty to which such jurisdiction
is a party, with respect to payments under this Agreement shall deliver
to the Borrower (with a copy to the Administrative Agent), at the time
or times prescribed by applicable law or reasonably requested by the
Borrower, such properly completed and executed documentation prescribed
by applicable law as will permit such payments to be made without
withholding or at a reduced rate.
SECTION 2.15. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs.
(a) The Borrower shall make each payment required to be made
by it hereunder (whether of principal, interest or fees, or under
Section 2.12, 2.13 or 2.14, or otherwise) prior to 12:00 noon, New York
City time, on the date when due, in immediately available funds,
without set-off or counterclaim. Any amounts received after such time
on any date may, in the discretion of the Administrative Agent, be
deemed to have been received on the next succeeding Business Day for
purposes of calculating interest thereon. All such payments shall be
made to the Administrative Agent at its offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, except that payments pursuant to Sections 2.12, 2.13,
2.14 and 10.3 shall be made directly to the Persons entitled thereto.
The Administrative Agent shall distribute any such payments received by
it for the account of any other Person to the appropriate recipient
promptly following receipt thereof. If any payment hereunder shall be
due on a day that is not a Business Day, the date for payment shall be
extended to the next succeeding Business Day, and, in the case of any
payment accruing interest, interest thereon shall be payable for the
period of such extension. All payments hereunder shall be made in
dollars.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of
principal, interest and fees then due hereunder, such funds shall be
applied (i) first, to pay interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of
interest and fees then due to such parties, and (ii) second, to pay
principal then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of principal then due to such
parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal
of or interest on any of its Revolving Loans resulting in such Lender
receiving payment of a greater proportion of the aggregate amount of
its Revolving Loans and accrued interest thereon than the proportion
received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in
the Revolving Loans of other Lenders to the extent necessary so that
the benefit of all such payments shall be shared by the Lenders ratably
in accordance with the aggregate amount of principal of and accrued
interest on their respective Revolving Loans, provided that (i) if any
such
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participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be
rescinded and the purchase price restored to the extent of such
recovery, without interest, and (ii) the provisions of this paragraph
shall not be construed to apply to any payment made by the Borrower
pursuant to and in accordance with the express terms of this Agreement
or any payment obtained by a Lender as consideration for the assignment
of or sale of a participation in any of its Loans to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate
thereof (as to which the provisions of this paragraph shall apply). The
Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise
against the Borrower rights of set-off and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of
the Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received
notice from the Borrower prior to the date on which any payment is due
to the Administrative Agent for the account of the Lenders hereunder
that the Borrower will not make such payment, the Administrative Agent
may assume that the Borrower has made such payment on such date in
accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders
severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender with interest thereon,
for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at
the Federal Funds Effective Rate.
(e) If any Lender shall fail to make any payment required
to be made by it pursuant to Section 2.4(b) or 2.15(d), then the
Administrative Agent may, in its discretion (notwithstanding any
contrary provision hereof), apply any amounts thereafter received by
the Administrative Agent for the account of such Lender to satisfy such
Lender's obligations under such Sections until all such unsatisfied
obligations are fully paid.
SECTION 2.16. Mitigation Obligations; Replacement of Lenders.
(a) If any Lender requests compensation under Section
2.12, or if the Borrower is required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.14, then such Lender shall use reasonable efforts
to designate a different lending office for funding or booking its
Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the judgment of
such Lender, such designation or assignment (i) would eliminate or
reduce amounts payable pursuant to Section 2.12 or 2.14, as the case
may be, in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous
to such Lender. The Borrower hereby agrees to pay all reasonable costs
and expenses incurred by any Lender in connection with any such
designation or assignment.
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(b) If any Lender requests compensation under Section
2.12, or if the Borrower is required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.14, or if any Lender defaults in its obligation
to fund Loans hereunder, or if any Lender becomes an Objecting Lender,
then the Borrower may, at its sole expense and effort, upon notice to
such Lender and the Administrative Agent, require such Lender to assign
and delegate, without recourse (in accordance with and subject to the
restrictions contained in Section 10.4), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts
such assignment); provided that (i) the Borrower shall have received
the prior written consent of the Administrative Agent, which consent
shall not unreasonably be withheld, (ii) such Lender shall have
received payment of an amount equal to the outstanding principal of its
Loans, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrower
(in the case of all other amounts) and (iii) in the case of any such
assignment resulting from a claim for compensation under Section 2.12
or payments required to be made pursuant to Section 2.14, such
assignment will result in a reduction in such compensation or payments.
A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such
assignment and delegation cease to apply.
SECTION 2.17. Extension of Maturity Date.
(a) Not less than 60 days and not more than 90 days prior
to the Maturity Date then in effect, provided that no Event of Default
shall have occurred and be continuing, the Borrower may request an
extension of such Maturity Date by submitting to the Administrative
Agent an Extension Request containing the information in respect of
such extension specified in Exhibit C, which the Administrative Agent
shall promptly furnish to each Lender. Each Lender shall, not less than
30 days and not more than 60 days prior to the Maturity Date then in
effect, notify the Borrower and the Administrative Agent of its
election to extend or not extend the Maturity Date as requested in such
Extension Request, which election shall be made by each Lender at its
absolute discretion. Notwithstanding any provision of this Agreement to
the contrary, any notice by any Lender of its willingness to extend the
Maturity Date shall be revocable by such Lender in its sole and
absolute discretion at any time prior to the date which is 30 days
prior to the Maturity Date then in effect. If the Required Lenders
shall approve in writing the extension of the Maturity Date requested
in such Extension Request, the Maturity Date shall automatically and
without any further action by any Person be extended for the period
specified in such Extension Request; provided that (i) each extension
pursuant to this Section 2.17 shall be for a maximum of 364 days and
(ii) the Commitment of any Lender that does not consent in writing to
such extension not less than 30 days and not more than 60 days prior to
the Maturity Date then in effect (an "Objecting Lender") shall, unless
earlier terminated in accordance with this Agreement, expire on the
Maturity Date in effect on the date of such Extension Request (such
Maturity Date, if any, referred to as the "Commitment Expiration Date"
with respect to such Objecting Lender). If, not less
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than 30 days and not more than 60 days prior to the Maturity Date then
in effect, the Required Lenders shall not approve in writing the
extension of the Maturity Date requested in an Extension Request, the
Maturity Date shall not be extended pursuant to such Extension Request.
The Administrative Agent shall promptly notify (y) the Lenders and the
Borrower of any extension of the Maturity Date pursuant to this Section
2.17 and (z) the Borrower and any other Lender of any Lender which
becomes an Objecting Lender.
(b) Obligations owing to any Objecting Lender on the
Commitment Expiration Date with respect to such Lender shall be repaid
in full on or before such Commitment Expiration Date.
(c) The Borrower shall have the right, so long as no Event
of Default has occurred and is then continuing, upon giving notice to
the Administrative Agent and the Objecting Lenders in accordance with
Section 2.8, to prepay in full the Loans of the Objecting Lenders,
together with accrued interest thereon, any amounts payable pursuant to
Sections 2.12, 2.13, 2.14 and 10.3 and any accrued and unpaid facility
fee or other amounts payable to them hereunder and/or, upon giving not
less than three Business Days' notice to the Objecting Lenders and the
Administrative Agent, to cancel the whole or part of the Commitments of
the Objecting Lenders.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each of the Credit Parties represents and warrants to the Lenders that:
SECTION 3.1. Organization; Powers. Each of the Credit Parties and
the Subsidiaries is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, has the power and authority to
carry on its business as now conducted and, except where the failure to be so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required.
SECTION 3.2. Authorization; Enforceability. The Transactions are
within each Credit Party's corporate powers and have been duly authorized by all
necessary corporate and, if required, stockholder action. This Agreement has
been duly executed and delivered by each Credit Party and constitutes a legal,
valid and binding obligation of each Credit Party, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.
SECTION 3.3. Governmental Approvals; No Conflicts. The
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except such as
have been obtained or made and are in full force and effect, (b) will not
violate any applicable law or regulation or the charter, by-laws or other
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organizational documents of any Credit Party or any Subsidiary or any order of
any Governmental Authority, (c) will not violate or result in a default under
any indenture, agreement or other instrument (other than those to be terminated
on or prior to the Closing Date) binding upon any Credit Party or any Subsidiary
or their assets, or give rise to a right thereunder to require any payment to be
made by any Credit Party or any Subsidiary, and (d) will not result in the
creation or imposition of any Lien on any asset of any Credit Party or any
Subsidiary.
SECTION 3.4. Financial Condition; No Material Adverse Change.
(a) Each Credit Party has heretofore furnished to the
Lenders consolidated balance sheets and statements of income,
stockholders' equity and cash flows (i) as of and for the fiscal year
ended April 30, 1999, (A) reported on by PricewaterhouseCoopers LLP,
independent public accountants, in respect of the financial statements
of the Guarantor, and (B) certified by its chief financial officer, in
respect of the financial statements of the Borrower, and (ii) as of and
for the fiscal quarter and the portion of the fiscal year ended July
31, 1999 certified by its chief financial officer. Such financial
statements present fairly, in all material respects, the financial
position and results of operations and cash flows of the Borrower and
its consolidated Subsidiaries and of the Guarantor and its consolidated
Subsidiaries as of such dates and for such periods in accordance with
GAAP, subject to year-end audit adjustments and the absence of
footnotes in the case of the statements referred to in clause (ii)
above. Except as set forth on Schedule 3.4(a), neither the Guarantor
nor any of its consolidated Subsidiaries had, at the date of the most
recent balance sheet referred to above, any material Guarantee
Obligation, contingent liability or liability for taxes, or any
long-term lease or unusual forward or long-term commitment, including,
without limitation, any interest rate or foreign currency swap or
exchange transaction, which is not reflected in the foregoing
statements or in the notes thereto. During the period from April 30,
1999 to and including the date hereof, and except as disclosed in
filings made by the Guarantor with the U.S. Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, there has been no sale,
transfer or other disposition by the Guarantor or any of its
consolidated Subsidiaries of any material part of its business or
property other than sales of financial services or mortgage loans in
the ordinary course of business and no purchase or other acquisition of
any business or property (including any Capital Stock of any other
Person) other than the acquisition of substantially all of the assets
of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, LLP, McGladrey & ▇▇▇▇▇▇, LLP and Kinder & ▇▇▇▇▇,
P.C., material in relation to the consolidated financial condition of
the Guarantor and its consolidated Subsidiaries at April 30, 1999.
(b) Since April 30, 1999, there has been no material
adverse change in the business, assets, property or condition
(financial or otherwise) of the Guarantor and its Subsidiaries, taken
as a whole.
(c) The unaudited pro forma consolidated balance sheet of
the Borrower and its consolidated Subsidiaries as at July 31, 1999
(including the notes thereto) (the "Pro Forma Balance Sheet"), a copy
of which has heretofore been furnished to each Lender, has been
prepared giving effect (as if such events had occurred on such
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date) to (i) the consummation of the Acquisition, (ii) the Indebtedness
of the Borrower to be incurred in connection with the Acquisition and
the use of proceeds thereof and (iii) the payment of fees and expenses
in connection with the foregoing. The Pro Forma Balance Sheet has been
prepared based on the best information available to the Borrower as of
the date of delivery thereof, and presents fairly on a pro forma basis
the estimated financial position of the Borrower and its consolidated
Subsidiaries as at July 31, 1999, assuming that the events specified in
the preceding sentence had actually occurred at such date.
SECTION 3.5. Properties.
(a) Each of the Credit Parties and the Subsidiaries has
good title to, or valid leasehold interests in, all its real and
personal property material to its business, except for minor defects in
title that do not interfere with its ability to conduct its business as
currently conducted or to utilize such properties for their intended
purposes.
(b) Each of the Credit Parties and the Subsidiaries owns,
or is licensed to use, all trademarks, tradenames, copyrights, patents
and other intellectual property material to its business, and the use
thereof by the Credit Parties and the Subsidiaries does not infringe
upon the rights of any other Person, except for any such infringements
that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.6. Litigation and Environmental Matters.
(a) There are no actions, suits or proceedings by or
before any arbitrator or Governmental Authority pending against or, to
the knowledge of any Credit Party, threatened against or affecting any
Credit Party or any Subsidiary (i) as to which there is a reasonable
possibility of an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the
Disclosed Matters) or (ii) that involve this Agreement or the
Transactions.
(b) Except for the Disclosed Matters and except with
respect to any other matters that, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse
Effect, neither of the Credit Parties nor any Subsidiary (i) has failed
to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any
Environmental Law, (ii) has become subject to any Environmental
Liability, (iii) has received notice of any claim with respect to any
Environmental Liability or (iv) knows of any basis for any
Environmental Liability.
(c) Since the date of this Agreement, there has been no
change in the status of the Disclosed Matters that, individually or in
the aggregate, has resulted in, or materially increased the likelihood
of, a Material Adverse Effect.
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SECTION 3.7. Compliance with Laws and Agreements. Each of the
Credit Parties and the Subsidiaries is in compliance with all laws, regulations
and orders of any Governmental Authority applicable to it or its property and
all indentures, agreements and other instruments binding upon it or its
property, except where the failure to be so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect. No
Default has occurred and is continuing.
SECTION 3.8. Investment and Holding Company Status. Neither of
the Credit Parties nor any of the Subsidiaries is (a) an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940
or (b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.
SECTION 3.9. Taxes. Each of the Credit Parties and the
Subsidiaries has timely filed or caused to be filed all Tax returns and reports
required to have been filed and has paid or caused to be paid all Taxes required
to have been paid by it, except (a) Taxes that are being contested in good faith
by appropriate proceedings and for which the Guarantor, the Borrower or such
Subsidiary, as applicable, has set aside on its books adequate reserves or (b)
to the extent that the failure to do so could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $25,000,000 the fair market value of the assets of such Plan, and the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $25,000,000 the fair
market value of the assets of all such underfunded Plans.
SECTION 3.11. Disclosure. The Credit Parties have disclosed to
the Lenders (i) all material agreements, instruments and corporate or other
restrictions to which any Credit Party or any Subsidiary is subject, and (ii)
all other matters known to it, that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. None of the
reports, financial statements, certificates or other information furnished by or
on behalf of the Credit Parties to the Administrative Agent or any Lender in
connection with the negotiation of this Agreement or delivered hereunder (as
modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that, with respect to projected financial
information, the Credit Parties represent only that such information was
prepared in good faith based upon assumptions believed to be reasonable at the
time.
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SECTION 3.12. No Default. Neither Credit Party nor any Subsidiary
is in default under or with respect to any of its Contractual Obligations in any
respect which could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
SECTION 3.13. Federal Regulations. No part of the proceeds of any
Loans will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U of the Board
as now and from time to time hereafter in effect. If requested by any Lender or
the Administrative Agent, the Borrower will furnish to the Administrative Agent
and each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1 referred to in said Regulation U, as
the case may be.
SECTION 3.14. Subsidiaries. As of the date hereof, the Guarantor
has only the Subsidiaries set forth on
Schedule 3.14.
SECTION 3.15. Solvency. Each Credit Party is, and after giving
effect to the incurrence of all Indebtedness and obligations being incurred in
connection herewith will be and will continue to be, Solvent.
SECTION 3.16. Insurance. Each Credit Party and each Subsidiary of
each Credit Party maintains with financially sound and reputable insurers
insurance with respect to its properties and business and against at least such
liabilities, casualties and contingencies and in at least such types and amounts
as is customary in the case of companies engaged in the same or a similar
business or having similar properties similarly situated. The Guarantor will be
deemed to be a financially sound and reputable insurer up to the $1,000,000
limit of its self-insured retention.
SECTION 3.17. Refund Anticipation Loan Program Documents. Each of
the RAL Program Documents is in full force and effect, provided that for
purposes of this Section 3.17, clause (c) of the definition of RAL Program
Documents shall be deemed to include only those documents that have been entered
into as of the date this representation is deemed to be made; none of the
respective parties thereto is in breach of or default under any of the terms,
conditions or provisions thereof; and no event or condition has occurred or
exists which would give rise to any right on the part of any party to terminate
any or all of the obligations or liabilities of such party under any of the RAL
Program Documents. The Borrower has furnished to the Administrative Agent true,
correct and complete copies of each of the RAL Program Documents.
SECTION 3.18. Year 2000 Matter. Substantially all reprogramming
or modifications required to permit the proper functioning (but only to the
extent that such proper functioning would otherwise be impaired by the
occurrence of the year 2000) in and following the year 2000 of the computer
systems and other equipment containing embedded microchips, in either case owned
or operated by any Credit Party or any material Subsidiary or used or relied
upon in the conduct of their respective businesses (including any such systems
and other equipment supplied by others (other than any Credit Parties' external
phone systems) or with
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which the computer systems of any Credit Party or any material Subsidiary
interface), and the testing of substantially all such systems and other
equipment as so reprogrammed or so modified, has been completed. The costs to
any Credit Party or any Subsidiary that have not been incurred as of the date
hereof for such reprogramming and testing and for the other reasonably
foreseeable consequences to it if any improper functioning of other computer
systems and equipment containing embedded microchips due to the occurrence of
the year 2000 could not reasonably be expected to result in a Default, Event of
Default or Material Adverse Effect. Except for any reprogramming referred to
above, the computer systems of the Credit Parties and the Subsidiaries are, and,
with ordinary course upgrading and maintenance, will continue for the term of
this Agreement to be, sufficient for the conduct of their business as currently
conducted.
ARTICLE IV
CONDITIONS
SECTION 4.1. Effective Date. Except as otherwise provided in
Sections 4.2 and 4.3, this Agreement shall become effective on the date on which
each of the following conditions is satisfied (or waived in accordance with
Section 10.2):
(a) The Administrative Agent (or its counsel) shall have
received from each party hereto a counterpart of this Agreement signed
on behalf of such party.
(b) The Lenders and the Administrative Agent shall have
received all fees required to be paid on or prior to the Effective
Date.
(c) Each Lender shall have received, for each Credit
Party, consolidated balance sheets and statements of income,
stockholders' equity and cash flows (i) as of and for the fiscal year
ended April 30, 1999, (A) reported on by PricewaterhouseCoopers LLP,
independent public accountants, in respect of the financial statements
of the Guarantor, and (B) certified by its chief financial officer, in
respect of the financial statements of the Borrower, and (ii) as of and
for the fiscal quarter and the portion of the fiscal year ended July
31, 1999, certified by such Credit Party's chief financial officer.
Such financial statements shall present fairly, in all material
respects, the financial position and results of operations and cash
flows of the Borrower and its consolidated Subsidiaries and of the
Guarantor and its consolidated Subsidiaries as of such dates and for
such periods in accordance with GAAP, subject to year-end audit
adjustments and the absence of footnotes in the case of the statements
referred to in clause (ii) above.
(d) Each Lender shall have received (i) the Pro Forma
Balance Sheet, (ii) audited consolidated financial statements of Olde
and unaudited consolidated financial statements of FMS for the 1996,
1997 and 1998 fiscal years and (iii) unaudited interim consolidated
financial statements of each of Olde and FMS for each quarterly period
ended subsequent to the date of the latest applicable financial
statements delivered pursuant to clause (ii) of this paragraph as to
which such financial statements are available, and such financial
statements shall not, in the reasonable judgment of the
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Lenders, reflect any material adverse change in the consolidated
financial condition of any of Olde and FMS, as reflected in the
financial statements or projections contained in the Confidential
Information Memorandum.
SECTION 4.2. Closing Date. The obligations of the Lenders to make
Loans hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 10.2):
(a) The Effective Date shall have occurred.
(b) The Administrative Agent shall have received a
reasonably satisfactory written opinion (addressed to the
Administrative Agent and the Lenders and dated the Closing Date) of
▇▇▇▇▇ ▇▇▇▇ LLP, counsel for the Credit Parties, substantially in the
form of Exhibit B, and covering such other matters relating to the
Credit Parties, this Agreement or the Transactions as the Required
Lenders shall reasonably request. The Credit Parties hereby request
such counsel to deliver such opinion.
(c) The Administrative Agent shall have received such
documents and certificates as the Administrative Agent or its counsel
may reasonably request relating to the organization, existence and good
standing of the Credit Parties, the authorization of the Transactions
and any other legal matters relating to the Credit Parties, this
Agreement or the Transactions, all in form and substance satisfactory
to the Administrative Agent and its counsel.
(d) The Administrative Agent shall have received a
certificate, dated the Closing Date and signed by the President, a Vice
President or a Financial Officer of each Credit Party, confirming
compliance with the conditions set forth in paragraphs (a) and (b) of
Section 4.3.
(e) The Administrative Agent shall have received all fees
and other amounts due and payable on or prior to the Closing Date,
including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by the
Borrower hereunder.
(f) The Borrower shall have repaid all obligations owing
and outstanding under, and terminated, the Credit and Guarantee
Agreement, dated as of November 17, 1998 by and among the Borrower, the
Guarantor, the lenders parties thereto from time to time, Mellon Bank,
N.A., as syndication agent, Fleet National Bank and Bank One, NA,
(formerly The First National Bank of Chicago), as co-documentation
agents, and The Chase Manhattan Bank, as administrative agent.
(g) (i) All governmental and material third party
approvals (including material landlords' and other consents) necessary
in connection with the execution, delivery and performance of this
Agreement and the continuing operation of the business of the Credit
Parties and Subsidiaries shall have been obtained and be in full force
and effect, and (ii) all applicable waiting periods shall have expired
without any action being
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taken or threatened by any competent Governmental Authority which would
restrain, prevent or otherwise impose adverse conditions on any Credit
Party or any Subsidiary.
The Administrative Agent shall notify the Borrower and the Lenders of the
Closing Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 10.2) at or prior to 3:00 p.m., New York City time, on
December 22, 1999 (and, in the event such conditions are not so satisfied or
waived, the Commitments shall terminate at such time).
SECTION 4.3. Each Loan. The obligation of each Lender to make a
Loan on the occasion of any Borrowing is subject to the satisfaction of the
following conditions:
(a) The representations and warranties of the Credit
Parties set forth in this Agreement shall be true and correct in all
material respects on and as of the date of such Borrowing.
(b) At the time of and immediately after giving effect to
such Borrowing, no Default shall have occurred and be continuing.
Each Borrowing shall be deemed to constitute a representation and warranty by
each of the Credit Parties on the date thereof as to the matters specified in
paragraphs (a) and (b) of this Section.
ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full, each of the Credit Parties covenants and agrees with the
Lenders that:
SECTION 5.1. Financial Statements and Other Information. The
Borrower will furnish to the Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year of
the Guarantor, an audited consolidated balance sheet and related
statements of operations, stockholders' equity and cash flows of the
Guarantor and its consolidated Subsidiaries as of the end of and for
such year, setting forth in each case in comparative form the figures
for the previous fiscal year, all reported on by PricewaterhouseCoopers
LLP or other independent public accountants of recognized national
standing (without a "going concern" or like qualification or exception
and without any qualification or exception as to the scope of such
audit) to the effect that such consolidated financial statements
present fairly in all material respects the financial condition and
results of operations of the Guarantor and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied;
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(b) within 45 days after the end of (i) in the case of the
Guarantor, each of the first three fiscal quarters of each fiscal year
of the Guarantor and (ii) in the case of the Borrower, each fiscal year
of the Borrower, consolidated balance sheets and related statements of
operations, stockholders' equity and cash flows of the Borrower and the
Guarantor and their consolidated Subsidiaries as of the end of and for
such fiscal quarter and the then elapsed portion of the fiscal year,
setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance
sheet, as of the end of) the previous fiscal year, all certified by a
Financial Officer of the Borrower and the Guarantor as presenting
fairly in all material respects the financial condition and results of
operations of the Borrower and the Guarantor and their consolidated
Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and
the absence of footnotes;
(c) concurrently with any delivery of financial statements
under clause (a) or (b) above, a certificate of a Financial Officer of
the Borrower and the Guarantor (i) certifying as to whether a Default
has occurred and, if a Default has occurred, specifying the details
thereof and any action taken or proposed to be taken with respect
thereto, (ii) setting forth reasonably detailed calculations
demonstrating compliance with Section 6.1 and (iii) stating whether any
change in GAAP or in the application thereof has occurred since the
date of the audited financial statements referred to in Section 3.4
and, if any such change has occurred, specifying the effect of such
change on the financial statements accompanying such certificate;
(d) concurrently with any delivery of financial statements
under clause (a) above, a certificate of the accounting firm that
reported on such financial statements stating whether they obtained
knowledge during the course of their examination of such financial
statements of any Default (which certificate may be limited to the
extent required by accounting rules or guidelines);
(e) promptly after the same become publicly available,
copies of all periodic and other reports, proxy statements and other
materials (other than routine monthly reports on Form 8-K filed by
Block Mortgage Finance, Inc. or routine filings by H&R Block Financial
Advisors, Inc. or HRB Financial Services, Inc.) filed by any Credit
Party or any Subsidiary with the Securities and Exchange Commission, or
any Governmental Authority succeeding to any or all of the functions of
said Commission, or with any national securities exchange, or
distributed by any Credit Party to its shareholders generally, as the
case may be; and
(f) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of any Credit Party or any Subsidiary, or compliance with the
terms of this Agreement, as the Administrative Agent or any Lender may
reasonably request.
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SECTION 5.2. Notices of Material Events. The Borrower will
furnish to the Administrative Agent and each Lender prompt written notice of the
following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority
against or affecting any Credit Party or any Affiliate thereof that, if
adversely determined, could reasonably be expected to result in a
Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or
together with any other ERISA Events that have occurred, could
reasonably be expected to result in liability of the Borrower, the
Guarantor or any Subsidiary in an aggregate amount exceeding
$25,000,000; and
(d) any other development that results in, or could
reasonably be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower and the Guarantor
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken with respect thereto.
SECTION 5.3. Existence; Conduct of Business. Each Credit Party
will, and will cause each of the Subsidiaries to, do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of its business; provided that the foregoing shall not prohibit
any merger, consolidation, liquidation, disposition or dissolution permitted
under Section 6.4.
SECTION 5.4. Payment of Obligations. Each Credit Party will, and
will cause each of the Subsidiaries to, pay its obligations, including Tax
liabilities, that, if not paid, could result in a Material Adverse Effect before
the same shall become delinquent or in default, except where (a) the validity or
amount thereof is being contested in good faith by appropriate proceedings, (b)
such Credit Party or such Subsidiary has set aside on its books adequate
reserves with respect thereto in accordance with GAAP and (c) the failure to
make payment pending such contest could not reasonably be expected to result in
a Material Adverse Effect.
SECTION 5.5. Maintenance of Properties; Insurance. Each Credit
Party will, and will cause each of the Subsidiaries to, (a) keep and maintain
all property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted, and (b) maintain, with financially
sound and reputable insurers, insurance in such amounts and against such risks
as is customarily maintained by companies engaged in the same or similar
businesses operating in the same or similar locations. The Guarantor will be
deemed to be a financially sound and reputable insurer up to the $1,000,000
limit of its self-insured retention.
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SECTION 5.6. Books and Records; Inspection Rights. Each Credit
Party will, and will cause each of the Subsidiaries to, keep proper books of
record and account in which full, true and correct entries are made of all
dealings and transactions in relation to its business and activities. Each
Credit Party will, and will cause each of the Subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender, upon
reasonable prior notice, to visit and inspect its properties, to examine and
make extracts from its books and records, and to discuss its affairs, finances
and condition with its officers and independent accountants, all at such
reasonable times and as often as reasonably requested.
SECTION 5.7. Compliance with Laws. Each Credit Party will, and
will cause each of the Subsidiaries to, comply with all Contractual Obligations
and all laws, rules, regulations and orders of any Governmental Authority
applicable to it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
SECTION 5.8. Use of Proceeds. The proceeds of the Loans will be
used only for paying at maturity commercial paper issued by the Borrower from
time to time. No part of the proceeds of any Loan will be used, whether directly
or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board, including Regulations U and X.
ARTICLE VI
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the
principal of and interest on each Loan and all fees payable hereunder have been
paid in full, each of the Credit Parties covenants and agrees with the Lenders
that:
SECTION 6.1. Adjusted Net Worth. The Guarantor will not permit
Adjusted Net Worth as at the last day of any fiscal quarter of the Guarantor to
be less than the sum of (a) $800,000,000 plus (b) 80% of the net gain attributed
to Consolidated Net Worth as a result of the sale by the Borrower of all or any
part of Option One Mortgage Corporation.
SECTION 6.2. Indebtedness. The Credit Parties will not, and will
not permit any Subsidiary to, create, incur, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness created hereunder;
(b) Indebtedness in an aggregate principal amount not to
exceed $750,000,000 under a credit and guarantee agreement dated as of
the date hereof among the Borrower, the Guarantor, the lenders parties
thereto and The Chase Manhattan Bank, as administrative agent (the
"Acquisition Facility"), the proceeds of which are used to pay at
maturity commercial paper issued by the Borrower in connection with the
acquisition by the Borrower of all of the issued and outstanding
Capital Stock of Olde and FMS.
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(c) Indebtedness existing on the date hereof and set forth
in Schedule 6.2 and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount
thereof;
(d) Indebtedness in an aggregate principal amount not to
exceed $1,000,000,000 issued pursuant to the Registration Statement of
the Borrower and the Guarantor on Form S-3 (Registration No. 333-33655
and 333-33655-01) filed with the Securities and Exchange Commission on
August 14, 1997, as amended by Amendment No. 1 filed with the
Securities and Exchange Commission on September 26, 1997, Amendment No.
2 filed with the Securities and Exchange Commission on October 2, 1997,
Amendment No. 3 filed with the Securities and Exchange Commission on
October 6, 1997 and Amendment No. 4 filed with the Securities and
Exchange Commission on October 8, 1997, which Registration Statement
became effective on October 17, 1997, provided that the obligations of
the Credit Parties hereunder shall rank pari passu with such
Indebtedness;
(e) Indebtedness consisting of trade accounts payable and
accrued expenses incurred in the ordinary cause of business;
(f) (i) Indebtedness in connection with commercial paper
issued in the United States through the Borrower which is guaranteed by
the Guarantor and (ii) Indebtedness in connection with commercial paper
issued in Canada through H&R Block Canada, Inc. which is guaranteed by
the Guarantor; provided that the sum of (A) the aggregate amount of all
Indebtedness incurred pursuant to this subsection 6.2(f) at any one
time outstanding plus (B) the Obligations outstanding at such time plus
(C) the "Obligations" (as such term is defined in the Acquisition
Facility) under the Acquisition Facility at such time, shall not exceed
$2,640,000,000;
(g) Indebtedness in connection with Guarantees of the
performance of any Subsidiary's obligations under or pursuant to (i)
any office lease entered into in the ordinary course of business, and
(ii) any promotional, joint-promotional, cross-promotional, joint
marketing, service, equipment or supply procurement, software license
or other similar agreement entered into by such Subsidiary with one or
more vendors, suppliers, retail businesses or other third parties in
the ordinary course of business, including, but not limited to,
indemnification obligations relating to such Subsidiary's failure to
perform its obligations under such lease or agreement;
(h) acquisition-related Indebtedness (either purchased or
assumed) and Indebtedness in connection with the Guarantor's guarantees
of the payment or performance of primary obligations of Subsidiaries of
the Guarantor in connection with such Subsidiaries' acquisition of
accounting firms and accounting related business; provided that the
aggregate amount of all Indebtedness incurred pursuant to this
subsection 6.2(h) shall not exceed $100,000,000 during any fiscal year;
(i) Indebtedness of any Credit Party to any other Credit
Party, of any Credit Party to any Subsidiary, of any Subsidiary to any
Credit Party and of any
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Subsidiary to any other Subsidiary; provided that such Indebtedness
shall not be prohibited by Section 6.5;
(j) Indebtedness in connection with repurchase agreements
pursuant to which mortgage loans of a Credit Party or a Subsidiary are
sold with the simultaneous agreement to repurchase the mortgage loans
at the same price plus interest at an agreed upon rate; provided that
the aggregate amount of all Indebtedness incurred pursuant to this
subsection 6.2(j) shall not at any time exceed $500,000,000; provided
further that no agreed upon repurchase date shall be later than 90
business days after the date of the corresponding repurchase agreement;
(k) Indebtedness in connection with Guarantees or
Guarantee Obligations which are made, given or undertaken as
representations and warranties, indemnities or assurances of the
payment or performance of primary obligations in connection with
securitization transactions or other transactions permitted hereunder,
as to which primary obligations the primary obligor is a Credit Party
or a Subsidiary;
(l) Indebtedness of RSM McGladrey, Inc. ("RSM"), a
Subsidiary of the Guarantor, to McGladrey & ▇▇▇▇▇▇, LLP ("M&P") and
certain related trusts under (i) that certain Asset Purchase Agreement
dated as of June 28, 1999 among RSM, M&P, the Guarantor and certain
other parties signatory thereto (the "M&P Purchase Agreement") and (ii)
the Retired Partners Agreement and the Loan Agreement (as such terms
are defined in the M&P Purchase Agreement); provided that the amount
payable by RSM in respect of such Indebtedness permitted under this
paragraph (l) shall not exceed $325,000,000 in the aggregate; and
(m) Indebtedness of Olde and its Subsidiaries in
connection with (i) Capital Lease Obligations in an aggregate amount
not exceeding $10,000,000 at any time, (ii) obligations under existing
mortgages in an aggregate amount not exceeding $12,000,000 at any time,
(iii) securities sold and not yet purchased, provided that the
aggregate amount of all Indebtedness incurred pursuant to this clause
(iii) shall not at any time exceed $15,000,000, (iv) customer deposits
in the ordinary course of business, (v) payables to brokers and dealers
in the ordinary course of business and (vi) reimbursement obligations
relating to letters of credit in favor of a clearing corporation in a
face amount not to exceed $125,000,000 at any time, provided such
letters of credit are used solely to satisfy margin deposit
requirements.
SECTION 6.3. Liens. Each Credit Party will not, and will not
permit any Subsidiary to, create, incur, assume or permit to exist any Lien on
any property or asset now owned or hereafter acquired by it, or assign or sell
any income or revenues (including accounts receivable) or rights in respect of
any thereof, except:
(a) Permitted Encumbrances;
(b) any Lien on any property or asset of any Credit Party
or any Subsidiary existing on the date hereof and set forth in Schedule
6.3; provided that (i) such
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Lien shall not apply to any other property or asset of any Credit Party
or any Subsidiary and (ii) such Lien shall secure only those
obligations which it secures on the date hereof and extensions,
renewals and replacements thereof that do not increase the outstanding
principal amount thereof;
(c) any Lien existing on any property or asset prior to the
acquisition thereof by any Credit Party or any Subsidiary or existing
on any property or asset of any Person that becomes a Subsidiary after
the date hereof prior to the time such Person becomes a Subsidiary;
provided that (i) such Lien is not created in contemplation of or in
connection with such acquisition or such Person becoming a Subsidiary,
as the case may be, (ii) such Lien shall not apply to any other
property or assets of any Credit Party or any Subsidiary and (iii) such
Lien shall secure only those obligations which it secures on the date
of such acquisition or the date such Person becomes a Subsidiary, as
the case may be, and extensions, renewals and replacements thereof that
do not increase the outstanding principal amount thereof;
(d) Liens arising in connection with the securitization of any
mortgage loans owned by the Borrower or any of its Subsidiaries;
(e) Liens arising in connection with the sale of any credit
card receivables owned by the Borrower or any of its Subsidiaries;
(f) Liens on fixed or capital assets acquired, constructed or
improved by any Credit Party or any Subsidiary to secure Indebtedness
of such Credit Party or such Subsidiary incurred to finance the
acquisition, construction or improvement of such fixed or capital
assets; provided that (i) such Liens and the Indebtedness secured
thereby are incurred prior to or within 90 days after such acquisition
or the completion of such construction or improvement, (ii) the
Indebtedness secured thereby does not exceed 100% of the cost of
acquiring, constructing or improving such fixed or capital assets and
(iii) such security interests shall not apply to any other property or
assets of any Credit Party or any Subsidiary;
(g) Liens arising in connection with repurchase agreements
contemplated by Section 6.2(j); provided that such security interests
shall not apply to any property or assets of any Credit Party or any
Subsidiary except for the mortgage loans or securities, as applicable,
subject to such repurchase agreements;
(h) Liens arising in connection with Indebtedness permitted by
Section 6.2(m)(v), which Liens are granted in the ordinary course of
business;
(i) Liens not otherwise permitted by this Section 6.3 so long
as the Obligations hereunder are contemporaneously secured equally and
ratably with the obligations secured thereby; and
(j) Liens not otherwise permitted by this Section 6.3 so long
as neither (i) the aggregate outstanding principal amount of the
obligations secured thereby nor (ii)
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the aggregate fair market value (determined as of the date such Lien is
incurred) of the assets subject thereto exceeds (as to the Credit
Parties and all Subsidiaries) $10,000,000 at any one time.
SECTION 6.4. Fundamental Changes.
(a) Each Credit Party will not, and will not permit any
Subsidiary to, merge into or consolidate with any other Person, or
permit any other Person to merge into or consolidate with it, or sell,
transfer, lease or otherwise dispose of (in one transaction or in a
series of transactions) all or any substantial part of its assets, or
all or substantially all of the stock of any of the Subsidiaries (in
each case, whether now owned or hereafter acquired), or liquidate or
dissolve, except that, if at the time thereof and immediately after
giving effect thereto no Default shall have occurred and be continuing,
(i) any Subsidiary other than the Borrower may merge into a Credit
Party in a transaction in which the Credit Party is the surviving
corporation, (ii) any wholly owned Subsidiary other than the Borrower
may merge into any other wholly owned Subsidiary in a transaction in
which the surviving entity is a wholly owned Subsidiary, (iii) any
Subsidiary other than the Borrower may sell, transfer, lease or
otherwise dispose of its assets to the Guarantor or to another
Subsidiary and (iv) any Subsidiary other than the Borrower may
liquidate or dissolve if the Guarantor determines in good faith that
such liquidation or dissolution is in the best interests of the
Guarantor and is not materially disadvantageous to the Lenders;
provided that any such merger involving a Person that is not a wholly
owned Subsidiary immediately prior to such merger shall not be
permitted unless also permitted by Section 6.5.
(b) Except as set forth on Schedule 6.4(b), the Credit Parties
will not, and will not permit any Subsidiary to, engage to any material
extent in any business other than businesses of the type conducted by
the Credit Parties and the Subsidiaries on the date of execution of
this Agreement and businesses reasonably related thereto.
SECTION 6.5. Transactions with Affiliates. Each Credit Party will
not, and will not permit any Subsidiary to, sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire
any property or assets from, or otherwise engage in any other transactions
with, any of its Affiliates, except (a) in the ordinary course of business
at prices and on terms and conditions not less favorable to such Credit
Party or such Subsidiary than could be obtained on an arm's-length basis
from unrelated third parties and (b) transactions between or among the
Guarantor and its wholly owned Subsidiaries not involving any other
Affiliate.
SECTION 6.6. Restrictive Agreements. The Credit Parties will not,
and will not permit any Subsidiary to, directly or indirectly, enter into,
incur or permit to exist any agreement or other arrangement that by its
terms prohibits, restricts or imposes any condition upon (a) the ability of
any Credit Party or any Subsidiary to create, incur or permit to exist any
Lien upon any of its material property or assets, or (b) the ability of any
Subsidiary to pay dividends or other distributions with respect to any
shares of its capital stock or to make or repay loans or advances to the
Guarantor or any other Subsidiary or to Guarantee Indebtedness of the
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Guarantor or any other Subsidiary; provided that (i) the foregoing shall not
apply to restrictions and conditions imposed by law or by this Agreement,
(ii) the foregoing shall not apply to restrictions and conditions existing
on the date hereof identified on Schedule 6.6 (but shall apply to any
extension or renewal of, or any amendment or modification expanding the
scope of, any such restriction or condition), (iii) the foregoing shall not
apply to customary restrictions and conditions contained in agreements
relating to the sale of a Subsidiary pending such sale, provided such
restrictions and conditions apply only to the Subsidiary that is to be sold
and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall
not apply to restrictions or conditions imposed by any agreement relating to
secured Indebtedness permitted by this Agreement if such restrictions or
conditions apply only to the property or assets securing such Indebtedness
and (v) clause (a) of the foregoing shall not apply to customary provisions
in leases and other contracts restricting the assignment thereof.
SECTION 6.7. Limitation on Sale of Assets. Each Credit Party will
not, and will not permit any Subsidiary to, convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests),
whether now owned or hereafter acquired, or, in the case of any Subsidiary,
issue or sell any shares of such Subsidiary's Capital Stock to any Person
other than the Guarantor or any wholly owned Subsidiary of the Guarantor,
except:
(a) the sale or other disposition of obsolete or worn out
property in the ordinary course of business;
(b) the sale or other disposition of any property in the
ordinary course of business, provided that the aggregate book value of
all assets (other than inventory) so sold or disposed of in any period
of twelve consecutive months shall not exceed 5% of consolidated total
assets of the Guarantor and the Subsidiaries as at the beginning of
such twelve-month period;
(c) the sale of inventory (including mortgage loans) or
financial services in the ordinary course of business;
(d) the sale or discount without recourse of accounts
receivable arising in the ordinary course of business in connection
with the compromise or collection thereof;
(e) the Borrower may sell all or any part of Option One
Mortgage Corporation; and
(f) as permitted by Section 6.4.
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ARTICLE VII
GUARANTEE
SECTION 7.1. Guarantee.
(a) The Guarantor hereby unconditionally and irrevocably
guarantees to the Administrative Agent and the Lenders and their
respective successors, indorsees, transferees and assigns, the prompt
and complete payment and performance by the Borrower when due (whether
at the stated maturity, by acceleration or otherwise) of the
Obligations.
(b) The Guarantor further agrees to pay any and all expenses
(including, without limitation, all fees and disbursements of counsel)
which may be paid or incurred by the Administrative Agent or any Lender
in enforcing, or obtaining advice of counsel in respect of, any rights
with respect to, or collecting, any or all of the Obligations and/or
enforcing any rights with respect to, or collecting against, the
Guarantor under this Article. This Article shall remain in full force
and effect until the Obligations and the obligations of the Guarantor
under the guarantee contained in this Article shall have been satisfied
by payment in full and the Commitments shall be terminated,
notwithstanding that from time to time prior thereto the Borrower may
be free from any Obligations.
(c) No payment or payments made by any Credit Party, any other
guarantor or any other Person or received or collected by the
Administrative Agent or any Lender from any Credit Party or any other
Person by virtue of any action or proceeding or any set-off or
appropriation or application, at any time or from time to time, in
reduction of or in payment of the Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of the
Guarantor hereunder which shall, notwithstanding any such payment or
payments, remain liable hereunder for the Obligations until the
Obligations are paid in full and the Commitments are terminated.
(d) The Guarantor agrees that whenever, at any time or from
time to time, it shall make any payment to the Administrative Agent or
any Lender on account of its liability hereunder, it will notify the
Administrative Agent and such Lender in writing that such payment is
made under this Article for such purpose.
SECTION 7.2. No Subrogation. Notwithstanding any payment or
payments made by the Guarantor hereunder, or any set-off or application of
funds of the Guarantor by the Administrative Agent or any Lender, the
Guarantor shall not be entitled to be subrogated to any of the rights of the
Administrative Agent or any Lender against the Borrower or against any
collateral security or guarantee or right of offset held by the
Administrative Agent or any Lender for the payment of the Obligations, nor
shall the Guarantor seek or be entitled to seek any contribution or
reimbursement from the Borrower in respect of payments made by the Guarantor
hereunder, until all amounts owing to the Administrative Agent and the
Lenders by the Borrower on account of the Obligations are paid in full and
the Commitments are terminated. If any
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amount shall be paid to the Guarantor on account of such subrogation rights
at any time when all of the Obligations shall not have been paid in full,
such amount shall be held by the Guarantor in trust for the Administrative
Agent and the Lenders, segregated from other funds of the Guarantor, and
shall, forthwith upon receipt by the Guarantor, be turned over to the
Administrative Agent in the exact form received by the Guarantor (duly
indorsed by the Guarantor to the Administrative Agent, if required) to be
applied against the Obligations, whether matured or unmatured, in such order
as the Administrative Agent may determine. The provisions of this Section
shall be effective notwithstanding the termination of this Agreement and the
payment in full of the Obligations and the termination of the Commitments.
SECTION 7.3. Amendments, etc. with respect to the Obligations;
Waiver of Rights. The Guarantor shall remain obligated hereunder
notwithstanding that, without any reservation of rights against the
Guarantor, and without notice to or further assent by the Guarantor, any
demand for payment of any of the Obligations made by the Administrative
Agent or any Lender may be rescinded by the Administrative Agent or such
Lender, and any of the Obligations continued, and the Obligations, or the
liability of any other party upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended,
modified, accelerated, compromised, waived, surrendered or released by the
Administrative Agent or any Lender, and this Agreement and any other
documents executed and delivered in connection herewith may be amended,
modified, supplemented or terminated, in whole or in part, in accordance
with the provisions hereof as the Administrative Agent (or the requisite
Lenders, as the case may be) may deem advisable from time to time, and any
collateral security, guarantee or right of offset at any time held by the
Administrative Agent or any Lender for the payment of the Obligations may be
sold, exchanged, waived, surrendered or released. Neither the Administrative
Agent nor any Lender shall have any obligation to protect, secure, perfect
or insure any Lien at any time held by it as security for the Obligations or
for this Agreement or any property subject thereto. When making any demand
hereunder against the Guarantor, the Administrative Agent or any Lender may,
but shall be under no obligation to, make a similar demand on the Borrower
or any other guarantor, and any failure by the Administrative Agent or any
Lender to make any such demand or to collect any payments from the Borrower
or any such other guarantor or any release of the Borrower or such other
guarantor shall not relieve the Guarantor of its obligations or liabilities
hereunder, and shall not impair or affect the rights and remedies, express
or implied, or as a matter of law, of the Administrative Agent or any Lender
against the Guarantor. For the purposes hereof "demand" shall include the
commencement and continuance of any legal proceedings.
SECTION 7.4. Guarantee Absolute and Unconditional. The Guarantor
waives any and all notice of the creation, renewal, extension or accrual of
any of the Obligations and notice of or proof of reliance by the
Administrative Agent or any Lender upon this Agreement or acceptance of this
Agreement; the Obligations, and any of them, shall conclusively be deemed to
have been created, contracted or incurred, or renewed, extended, amended or
waived, in reliance upon this Agreement; and all dealings between the
Borrower and the Guarantor, on the one hand, and the Administrative Agent
and the Lenders, on the other, shall likewise be conclusively presumed to
have been had or consummated in reliance upon this Agreement. The Guarantor
waives diligence, presentment, protest, demand for payment and notice of
default or nonpayment
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to or upon the Borrower and the Guarantor with respect to the Obligations.
This Article shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity, regularity or
enforceability of this Agreement, any other documents executed and delivered
in connection herewith, any of the Obligations or any other collateral
security therefor or guarantee or right of offset with respect thereto at
any time or from time to time held by the Administrative Agent or any
Lender, (b) any defense, set-off or counterclaim (other than a defense of
payment or performance) which may at any time be available to or be asserted
by the Guarantor against the Administrative Agent or any Lender, or (c) any
other circumstance whatsoever (with or without notice to or knowledge of the
Borrower or the Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrower for the
Obligations, or of the Guarantor under this Article, in bankruptcy or in any
other instance. When pursuing its rights and remedies hereunder against the
Guarantor, the Administrative Agent and any Lender may, but shall be under
no obligation to, pursue such rights and remedies as it may have against the
Borrower or any other Person or against any collateral security or guarantee
for the Obligations or any right of offset with respect thereto, and any
failure by the Administrative Agent or any Lender to pursue such other
rights or remedies or to collect any payments from the Borrower or any such
other Person or to realize upon any such collateral security or guarantee or
to exercise any such right of offset, or any release of the Borrower or any
such other Person or of any such collateral security, guarantee or right of
offset, shall not relieve the Guarantor of any liability hereunder, and
shall not impair or affect the rights and remedies, whether express, implied
or available as a matter of law, of the Administrative Agent or any Lender
against the Guarantor. This Article shall remain in full force and effect
and be binding in accordance with and to the extent of its terms upon the
Guarantor and its successors and assigns, and shall inure to the benefit of
the Administrative Agent and the Lenders, and their respective successors,
indorsees, transferees and assigns, until all the Obligations and the
obligations of the Guarantor under this Agreement shall have been satisfied
by payment in full and the Commitments shall be terminated, notwithstanding
that from time to time during the term of this Agreement the Borrower may be
free from any Obligations.
SECTION 7.5. Reinstatement. This Article shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or
any part thereof, of any of the Obligations is rescinded or must otherwise
be restored or returned by the Administrative Agent or any Lender upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of any
Credit Party or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, any Credit
Party or any substantial part of its property, or otherwise, all as though
such payments had not been made.
SECTION 7.6. Payments. The Guarantor hereby agrees that all
payments required to be made by it hereunder will be made to the
Administrative Agent without set-off or counterclaim in accordance with the
terms of the Obligations, including, without limitation, in the currency in
which payment is due.
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ARTICLE VIII
EVENTS OF DEFAULT
If any of the following events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan when
and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or any
fee or any other amount (other than an amount referred to in clause (a) of
this Article) payable under this Agreement, when and as the same shall
become due and payable, and such failure shall continue unremedied for a
period of five days;
(c) any representation or warranty made or deemed made by or on
behalf of any Credit Party or any Subsidiary in or in connection with this
Agreement or any amendment or modification hereof, or in any report,
certificate, financial statement or other document furnished pursuant to or
in connection with this Agreement or any amendment or modification hereof,
shall prove to have been incorrect in any material respect when made or
deemed made;
(d) any Credit Party shall fail to observe or perform any
covenant, condition or agreement contained in Section 5.2, 5.3 (with
respect to the Credit Parties' existence) or 5.8 or in Article VI;
(e) any Credit Party shall fail to observe or perform any
covenant, condition or agreement contained in this Agreement (other than
those specified in clause (a), (b) or (d) of this Article), and such
failure shall continue unremedied for a period of 30 days after notice
thereof from the Administrative Agent (given at the request of any Lender)
to the Borrower;
(f) any Credit Party or any Subsidiary shall fail to make any
payment (whether of principal or interest and regardless of amount) in
respect of any Material Indebtedness, when and as the same shall become due
and payable (after expiration of any applicable grace or cure period);
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables
or permits (after expiration of any applicable grace or cure period) the
holder or holders of any Material Indebtedness or any trustee or agent on
its or their behalf to cause any Material Indebtedness to become due, or to
require the prepayment, repurchase, redemption or defeasance thereof, prior
to its scheduled maturity; provided that this clause (g) shall not apply to
secured Indebtedness that becomes due as a result of the voluntary sale or
transfer of the property or assets securing such Indebtedness;
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(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of any Credit Party or any Subsidiary or its debts, or of
a substantial part of its assets, under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in
effect or (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for any Credit Party or any
Subsidiary or for a substantial part of its assets, and, in any such case,
such proceeding or petition shall continue undismissed for 60 days or an
order or decree approving or ordering any of the foregoing shall be
entered;
(i) any Credit Party or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in
effect, (ii) consent to the institution of, or fail to contest in a timely
and appropriate manner, any proceeding or petition described in clause (h)
of this Article, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any Subsidiary or for a substantial part of its assets,
(iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the
benefit of creditors or (vi) take any action for the purpose of effecting
any of the foregoing;
(j) any Credit Party or any Subsidiary shall become unable, admit
in writing or fail generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $15,000,000 shall be rendered against the Guarantor,
the Borrower, any Subsidiary or any combination thereof and the same shall
remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, or any action shall be legally
taken by a judgment creditor to attach or levy upon any assets of any
Credit Party or any Subsidiary to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in a Material Adverse
Effect;
(m) a Change in Control shall occur;
(n) the Guarantee contained in Article VII herein shall cease, for
any reason, to be in full force and effect in any material respect or any
Credit Party shall so assert; or
(o) any of the RAL Program Documents or any material term or
provision thereof shall cease to be in full force and effect; or any party
thereto shall, or shall purport to, terminate, repudiate, declare voidable
or void or otherwise contest any of the RAL Program Documents or any
material term or provision thereof or any material obligation or liability
of any party thereunder; or any party thereto shall default beyond
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any applicable grace or cure period in the observance or performance of any
material term, provision or condition thereof;
then, and in every such event (other than an event with respect to the Credit
Parties described in clause (h) or (i) of this Article), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by notice to the Borrower,
take either or both of the following actions, at the same or different times:
(i) terminate the Commitments, and thereupon the Commitments shall terminate
immediately, and (ii) declare the Loans then outstanding to be due and payable
in whole (or in part, in which case any principal not so declared to be due and
payable may thereafter be declared to be due and payable), and thereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other Obligations of the Credit Parties
accrued hereunder, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Credit Parties; and in case of any event with respect to
the Credit Parties described in clause (h) or (i) of this Article, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other
Obligations of the Credit Parties accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Credit Parties.
ARTICLE IX
THE ADMINISTRATIVE AGENT
Each of the Lenders hereby irrevocably appoints the Administrative
Agent as its agent and authorizes the Administrative Agent to take such actions
on its behalf and to exercise such powers as are delegated to the Administrative
Agent by the terms hereof, together with such actions and powers as are
reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein. Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Administrative Agent is
required to exercise in writing by the Required Lenders, and (c) except as
expressly set forth herein, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to any Credit Party or any Subsidiary that is communicated to or
obtained by the bank serving as Administrative Agent or any of its Affiliates in
any capacity. The Administrative Agent shall not be liable for any action taken
or not taken by
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it with the consent or at the request of the Required Lenders (or when
expressly, required hereby, all the Lenders) or in the absence of its own gross
negligence or willful misconduct. The Administrative Agent shall be deemed not
to have knowledge of any Default unless and until written notice thereof is
given to the Administrative Agent by any Credit Party or a Lender, and the
Administrative Agent shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or in
connection with this Agreement, (ii) the contents of any certificate, report or
other document delivered hereunder or in connection herewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth herein, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement or any other agreement, instrument or document, or
(v) the satisfaction of any condition set forth in Article IV or elsewhere
herein, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for any Credit Party), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all of its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and of all its duties and exercise its rights and
powers through their respective Related Parties. The exculpatory provisions of
the preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative
Agent as provided in this paragraph, the Administrative Agent may resign at any
time by notifying the Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right, in consultation with the Borrower, to
appoint a successor. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Administrative Agent gives notice of its resignation, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent which shall be a bank with an office in New York, New York,
or an Affiliate of any such bank. Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. The fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor. After the Administrative Agent's resignation
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hereunder, the provisions of this Article and Section 10.3 shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any related agreement or any document furnished hereunder or thereunder.
Notwithstanding anything to the contrary contained in this Agreement,
the parties hereto hereby agree that no agent (other than the Administrative
Agent) shall have any rights, duties or responsibilities in its capacity as
agent hereunder and that no agent (other than the Administrative Agent) shall
have the authority to take any action hereunder in its capacity as such.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower or the Guarantor, to it at ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇ ▇▇▇▇▇▇ (Telecopy No.
(▇▇▇) ▇▇▇-▇▇▇▇);
(b) if to the Administrative Agent, to The Chase Manhattan Bank,
Agent Bank Services Group, One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇),
with a copy to The Chase Manhattan Bank, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇ ▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇); and
(c) if to any Lender, to it at its address (or telecopy number)
set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
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SECTION 10.2. Waivers; Amendments.
(a) No failure or delay by the Administrative Agent or any Lender
in exercising any right or power hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right
or power, preclude any other or further exercise thereof or the exercise of
any other right or power. The rights and remedies of the Administrative
Agent and the Lenders hereunder are cumulative and are not exclusive of any
rights or remedies that they would otherwise have. No waiver of any
provision of this Agreement or consent to any departure by the Credit
Parties therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for
which given. Without limiting the generality of the foregoing, the making of
a Loan shall not be construed as a waiver of any Default, regardless of
whether the Administrative Agent or any Lender may have had notice or
knowledge of such Default at the time.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Credit Parties and the Required Lenders or by the Credit
Parties and the Administrative Agent with the consent of the Required
Lenders; provided that no such agreement shall (i) increase the Commitment
of any Lender without the written consent of such Lender, (ii) reduce the
principal amount of any Loan or reduce the rate of interest thereon, or
reduce any fees payable hereunder, without the written consent of each
Lender affected thereby, (iii) postpone the scheduled date of payment of the
principal amount of any Loan, or any interest thereon, or any fees payable
hereunder, or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date of expiration of any Commitment, without the
written consent of each Lender affected thereby, (iv) change Section 2.15(b)
or (c) in a manner that would alter the pro rata sharing of payments
required thereby, without the written consent of each Lender, (v) release
the guarantee contained in Article VII, without the written consent of each
Lender or (vi) change any of the provisions of this Section or the
definition of "Required Lenders" or any other provision hereof specifying
the number or percentage of Lenders required to waive, amend or modify any
rights hereunder or make any determination or grant any consent hereunder,
without the written consent of each Lender; provided, further, that no such
agreement shall amend, modify or otherwise affect the rights or duties of
the Administrative Agent hereunder without the prior written consent of the
Administrative Agent.
SECTION 10.3. Expenses; Indemnity; Damage Waiver.
(a) The Borrower shall pay (i) all reasonable out-of-pocket
expenses incurred by the Administrative Agent and its Affiliates, including
the reasonable fees, charges and disbursements of counsel for the
Administrative Agent, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of this
Agreement and any amendments, modifications or waivers of the
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provisions hereof (whether or not the transactions contemplated hereby or
thereby shall be consummated) and (ii) all out-of-pocket expenses incurred
by the Administrative Agent, or any Lender, including the fees, charges and
disbursements of any counsel for the Administrative Agent, or any Lender, in
connection with the enforcement or protection of its rights in connection
with this Agreement, including its rights under this Section, or in
connection with the Loans made hereunder, including in connection with any
workout, restructuring or negotiations in respect thereof.
(b) The Credit Parties shall jointly and severally indemnify the
Administrative Agent and each Lender, and each Related Party of any of the
foregoing Persons (each such Person being called an "Indemnitee") against,
and hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted
against any Indemnitee arising out of, in connection with, or as a result of
(i) the execution or delivery of this Agreement or any agreement or
instrument contemplated hereby, the performance by the parties hereto of
their respective obligations hereunder or the consummation of the
Transactions or any other transactions contemplated hereby, (ii) any Loan or
the use of the proceeds therefrom, (iii) any actual or alleged presence or
release of Hazardous Materials on or from any property owned or operated by
the Credit Parties or any Subsidiaries, or any Environmental Liability
related in any way to the Credit Parties or any Subsidiaries, or (iv) any
actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any
other theory and regardless of whether any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available
to the extent that such losses, claims, damages, liabilities or related
expenses are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee.
(c) To the extent that any Credit Party fails to pay any amount
required to be paid by it to the Administrative Agent under paragraph (a) or
(b) of this Section, each Lender severally agrees to pay to the
Administrative Agent such Lender's Applicable Percentage (determined as of
the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount; provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Administrative Agent in its
capacity as such. The Administrative Agent shall have the right to deduct
any amount owed to it by any Lender under this paragraph (c) from any
payment made by it to such Lender hereunder.
(d) To the extent permitted by applicable law, the Credit Parties
shall not assert, and hereby waive, any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any agreement or
instrument contemplated hereby, the Transactions, any Loan or the use of the
proceeds thereof.
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(e) All amounts due under this Section shall be payable promptly
after written demand therefor.
SECTION 10.4. 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 permitted hereby, except that no Credit Party may assign or
otherwise transfer any of its rights or obligations hereunder without the
prior written consent of each Lender (and any attempted assignment or
transfer by any Credit Party without such consent shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent
and the Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all
or a portion of its Commitment and the Loans at the time owing to it);
provided that (i) except in the case of an assignment to a Lender or an
Affiliate of a Lender, each of the Borrower and the Administrative Agent
must give its prior written consent to such assignment (which consent shall
not be unreasonably withheld), (ii) except in the case of an assignment to
a Lender or an Affiliate of a Lender or an assignment of the entire
remaining amount of the assigning Lender's Commitment, the amount of the
Commitment of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to
such assignment is delivered to the Administrative Agent) shall not be less
than $5,000,000 unless each of the Borrower and the Administrative Agent
otherwise consent, (iii) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender's rights and
obligations under this Agreement, (iv) the parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and
Acceptance, together with a processing and recordation fee of $3,500, and
(v) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire; provided, further,
that any consent of the Borrower otherwise required under this paragraph
shall not be required if an Event of Default has occurred and is
continuing. Upon acceptance and recording pursuant to paragraph (d) of this
Section, from and after the effective date specified in each Assignment and
Acceptance, the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Acceptance, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of
the assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled
to the benefits of Sections 2.12, 2.13, 2.14 and 10.3). Any assignment or
transfer by a Lender of rights or obligations under this Agreement that
does not comply with this paragraph shall be treated for purposes of this
Agreement as a sale by such Lender of a
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participation in such rights and obligations in accordance with paragraph
(e) of this Section.
(c) The Administrative Agent, acting for this purpose as an agent
of the Borrower, shall maintain at one of its offices in The City of New
York a copy of each Assignment and Acceptance delivered to it and a register
for the recordation of the names and addresses of the Lenders, and the
Commitment of, and principal amount of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries
in the Register shall be conclusive, and each Credit Party, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder
for all purposes of this Agreement, notwithstanding notice to the contrary.
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be
a Lender hereunder), the processing and recordation fee referred to in
paragraph (b) of this Section and any written consent to such assignment
required by paragraph (b) of this Section, the Administrative Agent shall
accept such Assignment and Acceptance and record the information contained
therein in the Register. No assignment shall be effective for purposes of
this Agreement unless it has been recorded in the Register as provided in
this paragraph.
(e) Any Lender may, without the consent of any Credit Party or
the Administrative Agent, sell participations to one or more banks or other
entities (a "Participant") in all or a portion of such Lender's rights and
obligations under this Agreement (including all or a portion of its
Commitment and the Loans owing to it); provided that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Credit Parties, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to
which a Lender sells such a participation shall provide that such Lender
shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement;
provided that such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 10.2(b)
that affects such Participant. Subject to paragraph (f) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.12, 2.13 and 2.14 to the same extent as if it were a Lender and
had acquired its interest by assignment pursuant to paragraph (b) of this
Section.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.12 or 2.14 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is
made with the Borrower's prior written consent. A
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Participant that would be a Foreign Lender if it were a Lender shall
not be entitled to the benefits of Section 2.14 unless the Borrower is
notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with
Section 2.14(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any such pledge or
assignment to a Federal Reserve Bank, and this Section shall not apply
to any such pledge or assignment of a security interest; provided that
no such pledge or assignment of a security interest shall release a
Lender from any of its obligations hereunder or substitute any such
assignee for such Lender as a party hereto.
SECTION 10.5. Survival. All covenants, agreements,
representations and warranties made by the Credit Parties herein and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of this Agreement and the
making of any Loans regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Administrative Agent or any Lender
may have had notice or knowledge of any Default or incorrect representation or
warranty at the time any credit is extended hereunder, and shall continue in
full force and effect as long as the principal of or any accrued interest on any
Loan or any fee or any other amount payable under this Agreement is outstanding
and unpaid and so long as the Commitments have not expired or terminated. The
provisions of Sections 2.12, 2.13, 2.14 and 10.3 and Article IX shall survive
and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Commitments or the termination of this Agreement or any
provision hereof.
SECTION 10.6. Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement and
any separate letter agreements with respect to fees payable to the
Administrative Agent constitute the entire contract among the parties relating
to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.1, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 10.7. Severability. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
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SECTION 10.8. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender
to or for the credit or the account of either Credit Party against any of and
all the obligations of such Credit Party now or hereafter existing under this
Agreement held by such Lender, irrespective of whether or not such Lender shall
have made any demand under this Agreement and although such obligations may be
unmatured. The rights of each Lender under this Section are in addition to other
rights and remedies (including other rights of setoff) which such Lender may
have.
SECTION 10.9. Governing Law; Jurisdiction; Consent to Service
of Process.
(a) This Agreement shall be construed in accordance with
and governed by the law of the State of New York.
(b) Each Credit Party hereby irrevocably and
unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of the Supreme Court of the State of New York
sitting in New York County and of the United States District Court of
the Southern District of New York, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each
of the parties hereto hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be
heard and determined in such New York State or, to the extent permitted
by law, in such Federal court. Each of the parties hereto agrees that a
final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in
any other manner provided by law. Nothing in this Agreement shall
affect any right that the Administrative Agent or any Lender may
otherwise have to bring any action or proceeding relating to this
Agreement against any Credit Party or its properties in the courts of
any jurisdiction.
(c) Each Credit Party hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter have to
the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement in any court referred to in paragraph (b) of
this Section. Each of the parties hereto hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such
court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 10.1.
Nothing in this Agreement will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
SECTION 10.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
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ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 10.11. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 10.12. Confidentiality. Each of the Administrative
Agent and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or the enforcement of rights hereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to any assignee of
or Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement, (g) with the consent of the Borrower
or (h) to the extent such Information (i) becomes publicly available other than
as a result of a breach of this Section by it or (ii) becomes available to the
Administrative Agent or any Lender on a nonconfidential basis from a source
other than any Credit Party. For the purposes of this Section, "Information"
means all information received from any Credit Party relating to any Credit
Party or its business, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by such Credit Party; provided that, in the case of information
received from any Credit Party after the date hereof, such information is
clearly identified at the time of delivery as confidential. Any Person required
to maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
SECTION 10.13. Interest Rate Limitation. Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan, together with all fees, charges and other amounts which are treated as
interest on such Loan under applicable law (collectively the "Charges"), shall
exceed the maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
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accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by such Lender.
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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.
BLOCK FINANCIAL CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------------------
Title: President
H&R BLOCK, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------------
Title: Senior Vice President and
Chief Financial Officer
THE CHASE MANHATTAN BANK,
as a Lender and as Administrative Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------------
Title: Vice President
MELLON BANK N.A.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------------
Title: Vice President
FLEET NATIONAL BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------------
Title: Vice President
BANK ONE, NA
(Main Office Chicago)
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------------
Title: Vice President
BANCO DI NAPOLI, S.p.A.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------------------------
Title: Executive Vice President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------------
Title: First Vice President
BANK OF AMERICA, N.A.
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By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------------------
Title: Vice President
CITIBANK, N.A.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Packard
-------------------------------------------------
Title: Vice President
COMERICA BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------------
Title: First Vice President
COMMERCE BANK, N.A.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------------
Title: Vice President
COMMERZBANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------------
Title: Assistant Vice President
By: /s/ J. ▇▇▇▇▇▇▇ Shortly
-------------------------------------------------
Title: Senior Vice President
CREDIT LYONNAIS, NEW YORK BRANCH
By: /s/ W. ▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------------------
Title: Vice President
FIRST HAWAIIAN BANK
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------------
Title: Corporate Banking Officer
MERCANTILE BANK
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------------
Title: Vice President
NATIONAL AUSTRALIA BANK LIMITED
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By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------------
Title: Vice President
ROYAL BANK OF CANADA
By: /s/ ▇.▇. ▇▇▇▇▇▇
-------------------------------------------------
Title: Senior Manager
THE BANK OF NEW YORK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------------
Title: Vice President
THE NORTHERN TRUST COMPANY
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------------------
Title: Vice President
TORONTO DOMINION (TEXAS), INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------------
Title: Vice President
WACHOVIA BANK, N.A.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------------
Title: Vice President
▇▇▇▇▇ FARGO BANK, N.A.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇▇
-------------------------------------------------
Title: Vice President
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Assistant Vice President
WESTDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------------
Title: Vice President
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------------
Title: Associate
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SCHEDULE 2.1
COMMITMENTS
Lender Commitment
------ ----------
ADMINISTRATIVE AGENT
THE CHASE MANHATTAN BANK $ 150,000,000
SYNDICATION AGENT
MELLON BANK, N.A. 145,000,000
CO-DOCUMENTATION AGENTS
FLEET NATIONAL BANK 145,000,000
BANK ONE, NA 145,000,000
MANAGING AGENTS
BANK OF AMERICA, N.A. 125,000,000
CITIBANK, N.A. 125,000,000
THE BANK OF NEW YORK 100,000,000
COMMERZBANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES 100,000,000
CREDIT LYONNAIS, NEW YORK BRANCH 100,000,000
NATIONAL AUSTRALIA BANK LIMITED 100,000,000
ROYAL BANK OF CANADA 100,000,000
TORONTO DOMINION (TEXAS), INC. 100,000,000
WACHOVIA BANK, N.A. 100,000,000
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK BRANCH 100,000,000
LEAD MANAGER
COMERICA BANK 75,000,000
PARTICIPANTS
MERCANTILE BANK 50,000,000
COMMERCE BANK, N.A. 30,000,000
BANCO DI NAPOLI, S.p.A. 25,000,000
FIRST HAWAIIAN BANK 25,000,000
THE NORTHERN TRUST COMPANY 25,000,000
▇▇▇▇▇ FARGO BANK, N.A. 25,000,000
--------------
TOTAL: $1,890,000,000
==============
SCHEDULE 3.4(a)
--------------
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GUARANTEE OBLIGATIONS
- Guarantee Obligations of the Borrower which have been given or made as
representations or warranties, indemnities or assurance of the payment
or performance of primary obligations of Subsidiaries of the Borrower
in connection with securitization transactions.
- Guarantee Obligations of the Guarantor or its Subsidiaries which have
been given or made as indemnities or assurance of the payment or
performance of primary obligations of Subsidiaries of the Guarantor in
connection with such Subsidiaries' acquisitions of (i) all the Capital
Stock of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Inc. on May 15, 1998, (ii)
substantially all of the assets of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇, LLP and Practice Development Institute, LLC on October 21,
1998, (iii) substantially all of the assets ▇▇▇▇, Sapper & ▇▇▇▇▇▇, LLP
on November 2, 1998, (iv) substantially all of the assets of Freed
▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇, P.C. and Freed ▇▇▇▇▇▇ ABL Services, Inc. on
November 3, 1998, (v) substantially all of the assets of ▇▇▇▇▇▇▇
▇▇▇▇▇▇, LLP, on May 28, 1999, (vi) substantially all of the assets of
McGladrey & ▇▇▇▇▇▇, LLP on August 2, 1999, (vii) substantially all of
the assets of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Company on December 15, 1998, (viii)
substantially all of the assets of ▇.▇. ▇▇▇▇ & Company on April 16,
1999, (ix) substantially all of the assets of Berg, DeMarco, ▇▇▇▇▇ &
Sawatski & Co. on February 25, 1999, (x) Troupe ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇,
L.L.C., by merger on December 2, 1998, (xi) substantially all of the
assets of ▇.▇. ▇▇▇▇▇▇ & Associates, P.C. on March 18, 1999, (xii)
substantially all of the assets of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇, P.C. on
February 26, 1999, and (xiv) substantially all of the assets of Kinder
& ▇▇▇▇▇, P.C. on September 24, 1999.
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SCHEDULE 3.6
DISCLOSED MATTERS
-NONE-
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SCHEDULE 3.14
SUBSIDIARIES
The following is a list of the direct and indirect
subsidiaries of H&R Block, Inc., a Missouri corporation. All active subsidiaries
do business under their corporate names listed below or close derivatives
thereof:
Jurisdiction in
Name which organized
H&R Block Group, Inc. Delaware (1)
Block Investment Corporation Delaware (1)
HRB Management, Inc. Missouri (2)
H&R Block Tax Services, Inc. Missouri (2)
H&R Block Eastern Tax Services, Inc. Missouri (3)
H&R Block of Dallas, Inc. Texas (3)
HRB Partners, Inc. Delaware (4)
H&R Block and Associates, L.P. Delaware (5)
HRB Royalty, Inc. Delaware (3)
BWA Advertising, Inc. Missouri (3)
H&R Block Canada, Inc. Canada (3)
H&R Block (Nova Scotia), Incorporated Nova Scotia (6)
Cashplan Systems, Inc. British Columbia (6)
H&R Block (Guam), Inc. Guam (3)
H&R Block Limited New South Wales (7)
Block Financial Corporation Delaware (2)
Franchise Partner, Inc. Nevada (8)
MECA Sub - LFOD, Ltd. New Hampshire (8)
Block Mortgage Finance, Inc. Delaware (9)
Option One Mortgage Corporation California (8)
Option One Mortgage Acceptance Corporation Delaware (10)
Premier Trust Deed Services, Inc. California (10)
Companion Insurance, Ltd. Bermuda (11)
H&R Block Tax and Financial Services Limited. United Kingdom (11)
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Jurisdiction in
Name which organized
H&R Block Financial Advisors, Inc. Delaware (8)
H&R Block Insurance Services, Inc. Delaware (8)
Premier Mortgage Services of Washington Inc. Washington (10)
H&R Block Home Loans, Inc. California (10)
H&R Block Mortgage Corporation Ontario (10)
HRB Business Services, Inc. Delaware (2)
DMJK Business Services, Inc. Missouri (13)
FERS Business Services, Inc. Delaware (13)
Practice Development Institute, Inc. Delaware (13)
Block Holdings, Inc. Illinois (13)
FERS Personal Financial Services, Inc. Delaware (13)
KSM Business Services, Inc.. Delaware (13)
FM Business Services, Inc. Delaware (13)
Freed ▇▇▇▇▇▇ ABL Services, Inc. Delaware (13)
NCS Mortgage Services, L.L.C. Georgia (14)
NCS Mortgage Services II, L.L.C. Georgia (14)
Birchtree Financial Services, Inc. Oklahoma (8)
Companion Mortgage Corporation Delaware (8)
Option One Direct Insurance Agency, Inc. California (10)
Assurance Mortgage Corporation of America Massachusetts (10)
RSM McGladrey, Inc. Delaware (13)
▇.▇. ▇▇▇▇ Business Services, Inc. Delaware (13)
RP Business Services, Inc. Delaware (13)
WS Business Services, Inc. Delaware (13)
▇▇▇ Investments, Inc. Texas (15)
▇.▇. ▇▇▇▇ Investment Advisors, LLC Maryland (16)
McGladrey Contract Business Services, L.L.C. Minnesota (17)
H&R Block Enterprises, Inc. Missouri (3)
H&R Block Eastern Enterprises, Inc. Missouri (18)
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Jurisdiction in
Name which organized
H&R Block NC Tax Services, Inc. Missouri (18)
AJR Acquisition, Inc. North Carolina (1)
HRB Retail Services, Inc. Delaware (2)
Notes to Subsidiaries of H&R Block, Inc.:
(1) Wholly owned subsidiary of H&R Block, Inc.
(2) Wholly owned subsidiary of H&R Block Group, Inc.
(3) Wholly owned subsidiary of H&R Block Tax Services, Inc.
(4) Wholly owned subsidiary of H&R Block of Dallas, Inc.
(5) Limited partnership in which H&R Block Tax Services, Inc. is a 1% general
partner and HRB Partners, Inc. is a 99% limited partner.
(6) Wholly owned subsidiary of H&R Block Canada, Inc.
(7) Wholly owned subsidiary of HRB Royalty, Inc.
(8) Wholly owned subsidiary of Block Financial Corporation.
(9) Wholly owned subsidiary of Companion Mortgage Corporation.
(10) Wholly owned subsidiary of Option One Mortgage Corporation.
(11) Wholly owned subsidiary of HRB Management, Inc.
(12) Wholly owned subsidiary of Premier Trust Deed Services, Inc.
(13) Wholly owned subsidiary of HRB Business Services, Inc.
(14) Limited liability company in which Block Financial Corporation has a 96.25%
membership interest and non-affiliated individuals have a combined 3.75%
membership interest.
(15) Wholly owned subsidiary of WS Business Services, Inc.
(16) Limited liability company in which ▇.▇. ▇▇▇▇ Business Services, Inc. has a
100% membership interest.
(17) Limited liability company in which RSM McGladrey, Inc. has a 100%
membership interest.
(18) Wholly owned subsidiary of H&R Block Eastern Tax Services, Inc.
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SCHEDULE 6.2
EXISTING INDEBTEDNESS
- Back-up credit facility for Canadian commercial paper program which is
guaranteed by H&R Block, Inc., in an aggregate principal amount of
approximately $125,000,000.
- H&R Block, Inc. guarantee of Subsidiaries' obligations under surety
bonds and fidelity bonds issued pursuant to state mortgage licensing
requirements.
- Indebtedness or obligations in respect of one or more Hedging
Agreements of any one or more of the Credit Parties and any
Subsidiaries in an aggregate principal amount not exceeding
$25,000,000. For purposes hereof, the "principal amount" of the
obligations of any Credit Party or any Subsidiary in respect of any
Hedging Agreement at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that the Credit Party or such
Subsidiary would be required to pay if such Hedging Agreement were
terminated at such time.
- Credit facility for New York licensing purposes for Option One Mortgage
Corporation in an aggregate principal amount of $1,000,000.
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SCHEDULE 6.3
EXISTING LIENS
-NONE-
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SCHEDULE 6.4(b)
ADDITIONAL BUSINESSES
- Financial planning and/or advisory products and services in the United
States, Canada, the United Kingdom and Australia, including (without
limitation) brokerage services (stocks, bonds, mutual funds), IRAs
(United States) and RSPs (Canada), 401(k) rollover products and
services, insurance and annuities.
- Finance Company Business (consumer finance and mortgage loan related
products and services in addition to the consumer finance, credit card
and mortgage business currently conducted by the Credit Parties and
their Subsidiaries).
- Check cashing.
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SCHEDULE 6.6
EXISTING RESTRICTIONS
- Indenture, dated as of October 20, 1997, by and between the Credit
Parties and Bankers Trust Company, as trustee.
- Repurchase Agreements pursuant to which mortgage loans of a Credit
Party or a Subsidiary of a Credit Party are sold with the simultaneous
agreement to repurchase the mortgage loans at some point in the future
at the same price plus interest at an agreed upon rate; provided that
(i) the aggregate principal balance of such mortgage loans subject to a
repurchase agreement at any given time shall not exceed $500,000,000
and (ii) no agreed upon repurchase date shall be later than 90 business
days after the date of the applicable repurchase agreement.
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EXHIBIT A
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the $1,890,000,000 Credit and Guarantee
Agreement, dated as of November 1, 1999 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among Block Financial
Corporation (the "Borrower"), H&R Block, Inc., the Lenders party thereto and The
Chase Manhattan Bank, as administrative agent for the Lenders (in such capacity,
the "Agent"). Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement.
The Assignor identified on Schedule l hereto (the "Assignor")
and the Assignee identified on Schedule l hereto (the "Assignee") agree as
follows:
1. The Assignor hereby irrevocably sells and assigns to the
Assignee without recourse to the Assignor, and the Assignee hereby irrevocably
purchases and assumes from the Assignor without recourse to the Assignor, as of
the Effective Date (as defined below), the interest described in Schedule 1
hereto (the "Assigned Interest") in and to the Assignor's rights and obligations
under the Credit Agreement with respect to those credit facilities contained in
the Credit Agreement as are set forth on Schedule 1 hereto (individually, an
"Assigned Facility"; collectively, the "Assigned Facilities"), in a principal
amount for each Assigned Facility as set forth on Schedule 1 hereto.
2. The Assignor (a) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or with
respect to the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement, or any other instrument or
document furnished pursuant thereto, other than that the Assignor has not
created any adverse claim upon the interest being assigned by it hereunder and
that such interest is free and clear of any such adverse claim; (b) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any Credit Party, any of their respective Subsidiaries or
any other obligor or the performance or observance by any Credit Party, any of
their Subsidiaries or any other obligor of any of their respective obligations
under the Credit Agreement or any other instrument or document furnished
pursuant hereto or thereto; and (c) attaches any promissory notes held by it
evidencing the Assigned Facilities and (i) requests that the Agent, upon request
by the Assignee, exchange the attached promissory notes for a new promissory
note or promissory notes payable to the Assignee and (ii) if the Assignor has
retained any interest in the Assigned Facility, requests that the Agent exchange
the attached promissory notes for a new promissory note or promissory notes
payable to the Assignor, in each case in amounts which reflect the assignment
being made hereby (and after giving effect to any other assignments which have
become effective on the Effective Date).
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3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received a copy of the Credit Agreement, together with copies of the
financial statements delivered pursuant to Section 3.4 thereof and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (c) agrees
that it will, independently and without reliance upon the Assignor, the Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement or any other instrument or document
furnished pursuant hereto or thereto; (d) appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such powers and
discretion under the Credit Agreement or any other instrument or document
furnished pursuant hereto or thereto as are delegated to the Agent by the terms
thereof, together with such powers as are incidental thereto; and (e) agrees
that it will be bound by the provisions of the Credit Agreement and will perform
in accordance with its terms all the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender including, if it
is organized under the laws of a jurisdiction outside the United States, its
obligation pursuant to Section 2.14 of the Credit Agreement.
4. The effective date of this Assignment and Acceptance shall
be the Effective Date of Assignment described in Schedule 1 hereto (the
"Effective Date"). Following the execution of this Assignment and Acceptance, it
will be delivered to the Agent for acceptance by it and recording by the Agent
pursuant to the Credit Agreement, effective as of the Effective Date (which
shall not, unless otherwise agreed to by the Agent, be earlier than five
Business Days after the date of such acceptance and recording by the Agent).
5. Upon such acceptance and recording, from and after the
Effective Date, the Agent shall make all payments in respect of the Assigned
Interest (including payments of principal, interest, fees and other amounts) to
the Assignor for amounts which have accrued to the Effective Date and to the
Assignee for amounts which have accrued subsequent to the Effective Date. The
Assignor and the Assignee shall make all appropriate adjustments in payments by
the Agent for periods prior to the Effective Date or with respect to the making
of this assignment directly between themselves.
6. From and after the Effective Date, (a) the Assignee shall
be a party to the Credit Agreement and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and shall be bound by the provisions thereof and (b) the Assignor
shall, to the extent provided in this Assignment and Acceptance, relinquish its
rights and be released from its obligations under the Credit Agreement.
7. This Assignment and Acceptance shall be governed by and
construed in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed as of the date first above written by
their respective duly authorized officers on Schedule 1 hereto.
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Schedule 1
to Assignment and Acceptance
Name of Assignor:
-----------------------
Name of Assignee:
-----------------------
Effective Date of Assignment:
-----------
Credit Principal
Facility Assigned Amount Assigned Commitment Percentage Assigned
================================== ============================= ===================================================
Revolving Credit $ . %
------------- --- ----------
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By: By:
Title: Title:
[Consented to and] Accepted: [Consented To:
THE CHASE MANHATTAN BANK, as BLOCK FINANCIAL CORPORATION
Administrative Agent
By: By:
Title: Title:]
-------------------------------- ----------------------------------
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, 1999
The Chase Manhattan Bank,
as Administrative Agent
and
The Lenders Party to the Credit and Guarantee
Agreement Referenced Below
RE: CREDIT AND GUARANTEE AGREEMENT DATED AS OF NOVEMBER
1, 1999 AMONG BLOCK FINANCIAL CORPORATION, AS
BORROWER, H&R BLOCK, INC., AS GUARANTOR, THE LENDERS
PARTY THERETO AND THE CHASE MANHATTAN BANK, AS
ADMINISTRATIVE AGENT (THE "CREDIT AGREEMENT")
Ladies and Gentlemen:
We have acted as counsel to Block Financial Corporation, a
Delaware corporation (the "Borrower"), and H & R Block, Inc., a Missouri
corporation (the "Guarantor"), in connection with the above-referenced Credit
Agreement. The Borrower and the Guarantor are sometimes individually referred to
herein as a "Credit Party" and collectively referred to herein as the "Credit
Parties." This opinion is furnished to you pursuant to subsection 4.2(b) of the
Credit Agreement. Capitalized terms used herein without definition have the same
meanings as in the Credit Agreement.
For purposes of this opinion, we have examined the following documents:
(a) a copy of the Credit Agreement;
(b) a copy of the certificate delivered to the Administrative Agent
by each Credit Party pursuant to Sections 4.2(c) and 4.2(d) of
the Credit Agreement;
(c) the Officer's Certificates delivered to us by the Credit Parties,
copies of which are attached hereto as Exhibits 1 and 2;
(d) a copy of the Certificate of Good Standing with respect to the
Borrower issued by the Secretary of State of the State of
Delaware dated , 1999;
(e) a copy of the Certificate of Good Standing with respect to the
Guarantor issued by the Secretary of State of the State of
Missouri dated , 1999; and
(f) such other corporate records of the Credit Parties as we have
deemed necessary or appropriate to enable us to render the
opinions expressed below.
Whenever our opinion with respect to the existence or absence
of facts is indicated to be based on our knowledge or awareness, we are
referring solely to the actual knowledge of the particular ▇▇▇▇▇ ▇▇▇▇ LLP
attorneys who have represented the Credit Parties in
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connection with the transactions contemplated by the Credit Agreement. Except as
expressly set forth herein, we have not undertaken any independent investigation
to determine the existence or absence of such facts and no inference as to our
knowledge concerning such facts should be drawn from the fact that such
representation has been undertaken by us.
In rendering this opinion, we have made and relied on the
following assumptions with your permission, and without independent
investigation: (i) the representations and warranties made in the Credit
Agreement, and the other factual matters contained in certificates and other
documents examined by us, are true and accurate; (ii) the signatures of
individuals (other than individuals signing on behalf of any Credit Party)
signing all documents in connection with which this opinion is rendered are
genuine and authorized; (iii) all documents submitted to us as copies, whether
certified or not, conform to authentic original documents; (iv) all parties
(other than any Credit Party) to the documents reviewed by us have full power
and authority to execute, deliver and perform thereunder, and all such documents
have been duly authorized by all necessary corporate or other actions on the
part of such parties and others, have been duly executed by such parties, have
been duly delivered by such parties and, as to all such parties, constitute
legal, valid and binding obligations of such parties; (v) no consent, approval,
authorization, declaration or filing by or with any governmental commission,
board or agency is required for the valid execution and delivery by the
Administrative Agent or any Lender of the Credit Agreement; and (vi) there are
no agreements between any of the parties that would alter the agreements set
forth in the Credit Agreement.
Based on the foregoing and in reliance thereon, and subject to
the limitations, qualifications and exceptions set forth below, we are of the
opinion that:
1. Each Credit Party is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and has the full corporate power and corporate authority to own
and operate its material properties and to carry on its business as now
conducted.
2. Each Credit Party has the full corporate power and
corporate authority to execute, deliver and perform the Credit Agreement.
3. The execution, delivery and performance by each Credit
Party of the Credit Agreement (a) have been duly authorized by all necessary
corporate action on the part of such Credit Party, and (b) do not, in respect of
the Credit Parties or any of their respective Subsidiaries, require the approval
or consent of, authorization by, or registration, declaration or filing with,
any governmental authority, except for those which have been obtained and remain
in effect.
4. The Credit Agreement has been duly executed and delivered
by each Credit Party and constitutes the legal, valid and binding obligation of
such Credit Party, enforceable in accordance with its terms.
5. The execution, delivery and performance by each Credit
Party of the Credit Agreement will not: (a) contravene the terms of the
Certificate or Articles of Incorporation or
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bylaws of such Credit Party; (b) conflict with or result in the breach of any
material provision of or constitute a default (with due notice or lapse of time,
or both) under any material agreement to which such Credit Party is a party or
its properties are subject, or result in the creation or imposition of any lien
or encumbrance upon any of the property of any Credit Party pursuant to the
provisions of any such agreement or instrument; (c) contravene, to our
knowledge, any order, injunction, writ or decree of any court or arbiter to
which any Credit Party or its property is subject; or (d) violate any law,
treaty, rule or regulation, in each case applicable to or binding upon any
Credit Party or any of its property or to which any Credit Party or any of its
property is subject.
6. To our knowledge there are no actions, suits or proceedings
pending or threatened against any Credit Party in any court or before any
governmental authority which have a significant likelihood of materially and
adversely affecting either the ability of such Credit Party to perform its
obligations under the Credit Agreement or the financial condition or operations
of the Guarantor and its Subsidiaries taken as a whole.
7. The making of any Loan and the application of the proceeds
thereof as provided in the Credit Agreement will not violate Regulation T, U or
X of the Board of Governors of the Federal Reserve System.
8. Neither Credit Party is an "investment company" or a
company "controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
The opinions set forth above are subject to the following
qualifications:
a. Our opinions expressed herein are limited to the laws of
the State of Missouri, the laws of the State of New York, the federal law of the
United States, and the General Corporation Law of the State of Delaware, and we
do not express any opinion concerning any other law nor do we purport to be
experts in the laws of any other states.
b. Our opinion above as to enforceability of the Credit
Agreement is subject to (i) the effect of any applicable bankruptcy, insolvency,
reorganization, receivership, moratorium or similar laws affecting creditors'
rights and remedies generally, and (ii) the effect of general principles of
equity including, without limitation, concepts of materiality, reasonableness,
good faith and fair dealing, and the possible unavailability of specific
performance, injunctive relief or other equitable remedies (regardless of
whether considered in a proceeding in equity or at law).
c. We have not been requested to render, and with your
permission we do not express, any opinion as to the applicability of Section 548
of the Bankruptcy Code, Article 10 of the New York Debtor & Creditor Law or any
other law relating to fraudulent conveyances, transfers and obligations, or to
fraudulent transfers and conveyances generally, to the transactions and
documents referred to herein.
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d. We express no opinion as to the enforceability of (i) any
provision relating to jurisdiction or service of process, (ii) any forum
selection or waiver of venue or waiver of jury trial provisions, or (iii) any
waiver or other provision contained in the Credit Agreement that is against
public policy.
e. While Missouri choice-of-law rules are not entirely
settled, we believe that a properly instructed state or federal court sitting in
the State of Missouri and applying Missouri choice-of-law rules would likely
find sufficient contacts with New York in the transactions contemplated by the
Credit Agreement to honor the choice of New York law contained therein in the
absence of a determination that application of New York law would violate the
public policy of the State of Missouri. In this regard, a Missouri court (or a
court applying Missouri law) would consider, among other things, the following
facts, factors or circumstances in analyzing such choice of law provisions: (i)
the place of contracting; (ii) the place of negotiation; (iii) the place of
performance (i.e., where repayment must be made); (iv) the location of the
subject matter of the contract; and (v) the domicile or jurisdiction of
incorporation and place of business of the parties. For the purposes of this
opinion we have assumed that (x) the Administrative Agent maintains an office in
the State of New York and is qualified to do business in the State of New York
and that the Loans will be made in the State of New York, and (y) the repayment
of the Loans is made in the State of New York.
The opinions expressed herein shall be effective only as of
the date of this opinion. We do not assume responsibility for updating this
opinion as of any date subsequent to the date hereof and assume no
responsibility for advising you of any changes with respect to any matters
described herein that may occur subsequent to the date hereof or from the
discovery subsequent to the date of this opinion of information not previously
known to us pertaining to events occurring prior to the date of this opinion.
This opinion is rendered only to the Administrative Agent and
the Lenders and is solely for their benefit and the benefit of their permitted
assignees and participants in connection with the above transactions. This
opinion may not be relied upon by the Administrative Agent, the Lenders or any
assignee or participant for any other purpose, or quoted to or relied upon by
any other person, firm or corporation for any purpose without our prior written
consent.
Very truly yours,
▇▇▇▇▇ ▇▇▇▇ LLP
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EXHIBIT C
[FORM OF EXTENSION REQUEST]
[Date]
The Chase Manhattan Bank, as Administrative Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
-----------
Dear Sirs:
Reference is made to the $1,890,000,000 Credit and Guarantee
Agreement, dated as of November 1, 1999, among Block Financial Corporation, H&R
Block, Inc., the Lenders party thereto and The Chase Manhattan Bank, as
Administrative Agent (as the same may be amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"). Terms defined in the Credit
Agreement are used herein as therein defined.
This is an Extension Request pursuant to Section 2.17 of the
Credit Agreement requesting an extension of the Maturity Date to [INSERT
REQUESTED MATURITY DATE]. Please transmit a copy of this Extension Request to
each of the Lenders.
Very truly yours,
BLOCK FINANCIAL CORPORATION
By:
Title:
H&R BLOCK, INC.
By:
Title:
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