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CREDIT AGREEMENT
Dated as of September 15, 1999
among
THE INDIVIDUALS LISTED ON THE SIGNATURE PAGES HERETO,
as Borrowers,
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO,
and
THE CHASE MANHATTAN BANK
as Administrative Agent
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Page The following Table of Contents has been inserted for convenience only and
does not constitute a part of this Agreement.
TABLE OF CONTENTS
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SECTION 1. DEFINITIONS AND ACCOUNTING TERMS................................. 1
1.1 Certain Defined Terms.............................................. 1
1.2 Other Definitional Provisions......................................12
1.3 Accounting and Financial Determinations............................13
SECTION 2. THE COMMITMENTS AND THE LOANS....................................13
2.1 Commitment.........................................................13
2.2 Procedure for Borrowings...........................................14
2.3 Funding Reliance for Borrowings....................................15
2.4 Conversion and Continuation Elections..............................15
2.5 Repayment of Loans.................................................16
2.6 Loan Accounts; Record Keeping......................................16
SECTION 3. INTEREST AND FEES................................................17
3.1 Interest Rates.....................................................17
3.2 Default Interest Rate..............................................17
3.3 Interest Payment Dates.............................................18
3.4 Setting and Notice of Rates........................................18
3.5 Fees...............................................................18
3.6 Computation of Interest and Fees...................................18
SECTION 4. PAYMENTS AND PREPAYMENTS.........................................18
4.1 Voluntary Termination or Reduction of Commitments..................18
4.2 Optional Prepayments...............................................19
4.3 Payments by the Borrowers..........................................19
4.4 Application of Prepayments.........................................20
4.5 Sharing of Payments................................................20
4.6 Setoff.............................................................20
4.7 Net Payments.......................................................21
SECTION 5. CHANGES IN CIRCUMSTANCES.........................................22
5.1 Increased Costs....................................................22
5.2 Change in Rate of Return...........................................23
5.3 Basis for Determining Interest Rate Inadequate or Unfair...........23
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5.4 Changes in Law Rendering Certain Loans Unlawful....................24
5.5 Funding Losses.....................................................24
5.6 Right of Banks to Fund Through Other Offices.......................25
5.7 Discretion of Banks as to Manner of Funding........................25
5.8 Replacement of Banks...............................................25
5.9 Conclusiveness of Statements; Survival of Provisions...............25
SECTION 6. COLLATERAL AND OTHER SECURITY....................................26
6.1 Collateral Documents...............................................26
6.2 Application of Proceeds from Collateral............................26
6.3 Further Assurances.................................................26
SECTION 7. REPRESENTATIONS AND WARRANTIES OF BORROWERS......................27
7.1 No Conflict........................................................27
7.2 Validity...........................................................27
7.3 Financial Statements...............................................27
7.4 Material Adverse Change............................................27
7.5 Litigation and Contingent Obligations..............................27
7.6 Liens..............................................................28
7.7 Taxes..............................................................28
7.8 Accuracy of Information............................................28
7.9 Proceeds...........................................................28
7.10 Securities Laws...................................................28
7.11 Solvency..........................................................28
7.12 No Default........................................................28
7.13 Organization, etc.................................................28
7.14 Authorization.....................................................29
7.15 Margin Regulations................................................29
7.16 No Default or Event of Default....................................29
SECTION 8. COVENANTS OF BORROWERS...........................................29
8.1 Reports, Certificates and Other Information........................30
8.1.1 Borrower Financials.......................................30
8.1.2 Tax Returns and Reports...................................30
8.1.3 Notice of Default and Litigation..........................30
8.1.4 Collateral Ratio..........................................30
8.1.5 Other Information.........................................31
8.2 Taxes and Liabilities..............................................31
8.3 Compliance with Laws...........................................31
8.4 Other Agreements..............................................31
SECTION 9. CONDITIONS AND EFFECTIVENESS OF
THIS AGREEMENT......................................................31
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9.1 Initial Loans......................................................31
9.2 All Loans..........................................................33
SECTION 10. EVENTS OF DEFAULT AND THEIR EFFECT..............................34
10.1 Events of Default.................................................34
10.1.1 NonPayment of Loans, etc. ...............................34
10.1.2 Bankruptcy, Insolvency, etc..............................34
10.1.3 Defaults Under this Agreement............................34
10.1.4 Representations and Warranties...........................35
10.1.5 Collateral Ratio.........................................35
10.1.6 Defaults under Revolving Credit Agreement................35
10.1.7 Defaults Under Existing Credit Agreement.................35
10.1.8 Default Under Other Indebtedness.........................35
10.2 Effect of Event of Default.........................................35
SECTION 11. THE AGENT.......................................................36
11.1 Authorization and Action...........................................36
11.2 Liability of the Administrative Agent..............................36
11.3 Administrative Agent and Affiliates................................37
11.4 Bank Credit Decision...............................................37
11.5 Indemnification....................................................37
11.6 Successor Agent....................................................37
SECTION 12. ASSIGNMENTS AND PARTICIPATIONS..................................38
12.1 Assignments........................................................38
12.2 Participations.....................................................39
12.3 Disclosure of Information..........................................40
12.4 Foreign Transferees................................................40
SECTION 13. MISCELLANEOUS...................................................41
13.1 Waivers and Amendments.............................................41
13.2 Failure to Consent.................................................42
13.3 Notices............................................................42
13.4 Indemnity..........................................................43
13.5 Subsidiary References..............................................43
13.6 Captions...........................................................43
13.7 GOVERNING LAW......................................................43
13.8 Counterparts.......................................................43
13.9 SUBMISSION TO JURISDICTION; WAIVER OF VENUE........................44
13.10 Successors and Assigns............................................44
13.11 WAIVER OF JURY TRIAL..............................................44
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SCHEDULES AND EXHIBITS
SCHEDULES
SCHEDULE 2.1 Banks and Percentages
SCHEDULE 2.2 Borrower Loan Percentage
EXHIBITS
EXHIBIT A Form of Note
EXHIBIT B Form of Notice of Borrowing
EXHIBIT C Form of Notice of Conversion/Continuation
EXHIBIT D Form of Pledge Agreement
EXHIBIT E Form of Guaranty
EXHIBIT F-1 Form of Opinion of ▇▇▇▇ ▇. ▇▇▇▇, counsel to Guarantor
EXHIBIT F-2 Form of Opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇, outside counsel to Guarantor
EXHIBIT G Form of Confidentiality Letter
EXHIBIT H Form of Assignment Agreement
EXHIBIT I Funding Loss Formula
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT is entered into as of September 15, 1999, among
the individuals listed as borrowers on the signature pages hereto (herein,
collectively called the "Borrowers" and each individually, a "Borrower"), the
several financial institutions from time to time party to this Agreement
(herein, together with any Eligible Assignees thereof, collectively called the
"Banks" and each individually, a "Bank"), and THE CHASE MANHATTAN BANK
("Chase"), as administrative agent for the Banks (herein in such capacity,
together with any successors thereto in such capacity, called the
"Administrative Agent").
Background
WHEREAS, the Borrowers have requested that the Banks agree to make term
loans in an aggregate principal amount of $150,000,000;
WHEREAS, the proceeds of the term loans to be made under this Agreement
will be used by the Borrowers solely to purchase shares of common stock of
Conseco, Inc.;
WHEREAS, Conseco, Inc. will guarantee all term loans made hereunder;
and
WHEREAS, the Banks are willing, on the terms and conditions hereinafter
set forth, to make the term loans to the Borrowers;
NOW, THEREFORE, in consideration of the mutual promises herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Administrative Agent" - see Preamble.
"Administrative Agent's Office" shall mean ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other address designated by the Administrative
Agent (or any successor agent) to the Borrowers and the Banks from time to
time.
"Affected Bank" - see Section 5.4.
"Affiliate" shall mean, as to any Person, any other Person which,
directly or indirectly, owns, holds, controls, is controlled by or is under
common control with such Person (including
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all beneficial control as a trustee, guardian or other fiduciary). A Person
shall be deemed to be "controlled by" any other Person if such other Person
possesses, directly or indirectly, power (a) to vote 10% or more of the
securities (on a fully diluted basis) having ordinary voting power for the
election of directors, managing general partners or managers; or (b) to
direct or cause the direction of the management and policies of such Person
whether through the ownership of voting securities, membership interests,
by contract or otherwise.
"Agent-Related Persons" shall mean Chase and any successor agent
arising under Section 11.6, together with its Affiliates (including, in the
case of Chase, the Arranger), and the officers, directors, employees,
agents and attorneys-in-fact of such Persons and Affiliates.
"Agreement" shall mean this Credit Agreement, as amended or modified.
"Arranger" shall mean Chase Securities Inc., solely in its capacity as
arranger.
"Assignment Agreement" see Section 12.1.
"Bank" or "Banks" - see Preamble.
"Bank Default" shall mean (a) the refusal (which has not been
retracted) of a Bank to make available its Percentage of any Loans when
required hereunder or (b) a Bank having notified the Administrative Agent
and/or Guarantor (on behalf of any Borrower) that it does not intend to
comply with its obligations under Section 2.1 to the extent required
thereunder.
"Base Rate" for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) 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 Rate for such day plus 1/2 of 1%. For purposes
hereof: "Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by Chase as its prime rate in effect at its
principal office in New York City (the Prime Rate not being intended to be
the lowest rate of interest charged by Chase in connection with extensions
of credit to debtors); "Base CD Rate" shall mean the sum of (a) the product
of (i) the Three-Month Secondary CD Rate and (ii) a fraction, the numerator
of which is one and the denominator of which is one minus the C/D Reserve
Percentage and (b) the C/D Assessment Rate; "Three- Month Secondary CD
Rate" shall mean, 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 shall not be a Business Day, the next preceding Business Day) by
the Board of Governors of the Federal Reserve System (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 shall not be 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
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at approximately 10:00 A.M., New York City time, on such day (or, if such
day shall not be a Business Day, on the next preceding Business Day) by the
Administrative Agent from three New York City negotiable certificate of
deposit dealers of recognized standing selected by it; and "Federal Funds
Rate" shall mean, for any day, the rate at which U.S. Dollar deposits with
an overnight maturity are offered by Chase in the Federal funds market at
11:00 a.m., New York City time, on such day. Any change in the Base Rate
due to a change in the Prime Rate, the Three-Month Secondary CD Rate or the
Federal Funds Rate shall be effective as of the opening of business on the
effective day of such change in the Prime Rate, the Three-Month Secondary
CD Rate or the Federal Funds Rate, respectively.
"Base Rate Loan" shall mean a Loan bearing interest at the Base Rate.
"Borrower" or "Borrowers" - see Preamble.
"Borrower Collateral Percentage" shall mean, as to any Borrower, a
fraction, the numerator of which is equal to the principal amount of the
Loans to such Borrower then outstanding hereunder and the denominator of
which is equal to the aggregate principal amount of the Loans to all
Borrowers then outstanding hereunder.
"Borrowing" shall mean a borrowing hereunder consisting of Loans made
to the Borrowers or any Borrower on the same day by the Banks under Section
2.
"Borrowing Date" shall mean any date on which a Borrowing occurs under
Section 2.
"Borrowing Termination Date" shall mean the earlier of (a) November 15,
1999 or (b) the Termination Date.
"Business Day" shall mean any day other than a Saturday, Sunday or
other day on which commercial banks in Chicago, New York City or San
Francisco are authorized or required by law to close and, if the applicable
Business Day relates to any Offshore Rate Loan, means such a day on which
dealings are carried on in the applicable offshore dollar interbank market.
"C/D Assessment Rate" for any day as applied to any Base Rate Loan, the
annual assessment rate in effect on such day which is payable by a member
of the Bank Insurance Fund maintained by the Federal Deposit Insurance
Corporation (the "FDIC") classified as well-capitalized and within
supervisory subgroup "B" (or a comparable successor assessment risk
classification) within the meaning of 12 C.F.R. ss. 327.4 (or any successor
provision) to the FDIC (or any successor) for the FDIC's (or such
successor's) insuring time deposits at offices of such institution in the
United States.
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"C/D Reserve Percentage" for any day as applied to any Base Rate Loan,
that percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board, for determining the maximum reserve requirement
for a Depositary Institution (as defined in Regulation D of the Board) in
respect of new non-personal time deposits in Dollars having a maturity of
30 days or more.
"Charges" see Section 4.7.
"Chase" - see Preamble.
"Closing Date" shall mean the date on which all conditions precedent
set forth in Section 9 are satisfied or waived by all Banks or, with
respect to any payment to be made hereunder, waived by the Person entitled
to receive such payment.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
regulations promulgated thereunder, or, as the context requires, applicable
provisions of prior laws.
"Collateral Ratio" shall mean, as to any Borrower, the ratio of (a) the
sum of the Loan Value of Direct Collateral of such Borrower plus the
Borrower Collateral Percentage of the Loan Value of Indirect Collateral to
(b) the aggregate principal amount of the Loans of such Borrower then
outstanding.
"Commitments" - see Section 2.1.
"Contingent Obligation" shall mean any agreement, undertaking or
arrangement by which any Person guarantees, endorses or otherwise becomes
or is contingently liable upon (by direct or indirect agreement, contingent
or otherwise, to provide funds for payment, to supply funds to, or
otherwise to invest in, a debtor, or otherwise to assure a creditor against
loss) the debt, obligation or other liability of any other Person (other
than by endorsements of instruments in the course of collection), or
guarantees the payment of dividends or other distributions upon the shares
of any other Person. The amount of any Person's liability with respect to
any Contingent Obligation shall (subject to any limitation set forth
therein) be deemed to be the outstanding principal amount (or maximum
outstanding principal amount, if larger) of the debt, obligation or other
liability outstanding thereunder.
"Conversion/Continuation Date" shall mean any date on which, under
Section 2.4, Guarantor (on behalf of the Borrowers) (a) converts Loans of
one Type to another Type, or (b) continues as Loans of the same Type, but
with a new Interest Period, Loans having Interest Periods expiring on such
date.
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"Default" shall mean any condition or event which constitutes an Event
of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.
"Defaulting Bank(s)" shall mean any Bank(s) with respect to which a
Bank Default is in effect.
"Direct Collateral" shall mean, with respect to any Borrower, all
property, assets and/or rights on or in which a Lien is now or hereafter
granted by such Borrower to the Administrative Agent (or to any agent,
trustee or other party acting on behalf of the Administrative Agent) for
the benefit of the Banks, pursuant to the Pledge Agreement and any other
instruments or documents provided for herein or therein or delivered
hereunder or thereunder or in connection herewith or therewith.
"Dollars" and the sign "$" shall mean lawful money of the United States
of America.
"Eligible Assignee" shall mean any bank, pension fund, mutual fund,
investment fund or other financial institution (other than an insurance
company or any Affiliate of an insurance company except those to which the
Borrowers consent).
"Eurodollar Reserve Percentage" has the meaning specified in the
definition of "Offshore Rate."
"Event of Default" - see Section 10.1.
"Existing Credit Agreement" shall mean the Amended and Restated Credit
Agreement, dated as of August 21, 1998 (as amended or modified through the
date hereof), among the borrowers listed on the signature pages thereof,
certain of the Banks and Bank of America National Trust and Savings
Association, as administrative agent.
"FRB" shall mean the Board of Governors of the Federal Reserve System,
and any Governmental Authority succeeding to any of its principal
functions.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as from time to time in the opinions and
pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements
of the Financial Accounting Standards Board (or agencies with similar
functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.
"Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority)
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thereof, and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government, and
any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Guarantor" shall mean Conseco, Inc., an Indiana corporation.
"Guaranty" shall mean the Guaranty of Guarantor, dated as of the date
hereof, executed and delivered in favor of the Administrative Agent, for
the benefit of the Banks, in substantially the form of Exhibit E.
"Hedging Obligations" shall have the meaning provided in the Revolving
Credit Agreement.
"IBOR" has the meaning set forth in the definition of Offshore Rate.
"Indebtedness" shall mean, with respect to any Person at any date,
without duplication: (a) all obligations of such Person for borrowed money
or in respect of loans or advances; (b) all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments; (c) all
obligations in respect of letters of credit, whether or not drawn, and
bankers' acceptances issued for the account of such Person; (d) all
Capitalized Lease Liabilities of such Person; (e) all Hedging Obligations
of such Person; (f) all obligations of such Person to pay the deferred
purchase price of property or services which are included as liabilities in
accordance with GAAP, and Indebtedness secured by a Lien on property owned
or being purchased by such Person (including Indebtedness arising under
conditional sales or other title retention agreements); (g) any
Indebtedness of a partnership in which such Person is a general partner;
and (h) all Contingent Obligations of such Person in connection with the
foregoing.
"Indemnified Parties" - see Section 13.4.
"Indirect Collateral" shall mean any assets of Guarantor which, as
determined by the Administrative Agent in its sole discretion exercised in
good faith, shall be deemed to "indirectly secure" the Liabilities pursuant
to Regulation U as a result of the negative pledge agreement and/or other
covenants of Guarantor set forth in the Guaranty.
"Interest Payment Date" shall mean, as to any Loan other than a Base
Rate Loan, the last day of each Interest Period applicable to such Loan
and, as to any Base Rate Loan, the last Business Day of each calendar
quarter and each date such Loan is converted into another Type of Loan,
provided, however, that if any Interest Period for an Offshore Rate Loan
exceeds three months, the date that falls three months (as the case may be)
after the beginning of such Interest Period and after each Interest Payment
Date thereafter is also an Interest Payment Date.
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"Interest Period" shall mean, as to any Offshore Rate Loan, the period
commencing on the Borrowing Date of such Loan or on the
Conversion/Continuation Date on which the Loan is converted into or
continued as an Offshore Rate Loan, and ending on the date one, two or
three weeks (for Interest Periods ending prior to the Borrowing Termination
Date), or one, two, three or six months thereafter as selected by Guarantor
(on behalf of the Borrowers) in its Notice of Borrowing or Notice of
Conversion/Continuation;
provided that:
(a) if any Interest Period would otherwise end on a day that
is not a Business Day, that Interest Period shall be extended to
the following Business Day unless, in the case of an Offshore Rate
Loan, the result of such extension would be to carry such Interest
Period into another calendar month, in which event such Interest
Period shall end on the preceding Business Day;
(b) any Interest Period of a duration of one month or longer
pertaining to an Offshore Rate Loan that begins on the last
Business Day of a calendar month (or on a day for which there is
no numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last Business Day of the
calendar month at the end of such Interest Period;
(c) any Interest Period which commences prior to the Borrowing
Terminate Date and would otherwise end on a date following the
Borrowing Termination Date shall end on the Borrowing Termination
Date;
(d) no more than one Interest Period shall be in effect at any
time after the Borrowing Termination Date; and
(e) no Interest Period for any Loan shall extend beyond the
Termination Date.
"Lending Office" shall mean, with respect to any Bank, any office
designated by such Bank in its sole discretion beneath its signature hereto
(or in an Assignment Agreement) or otherwise from time to time by written
notice to the Borrowers and the Administrative Agent, as a Lending Office
for purposes hereunder. A Bank may designate separate Lending Offices for
the purposes of making and maintaining Loans.
"Liabilities" shall mean, as to any Borrower, all obligations of such
Borrower to the Banks or the Administrative Agent, howsoever created,
arising or evidenced, whether direct or indirect, joint or several,
absolute or contingent, or now or hereafter existing, or due or to become
due, which arise out of or in connection with this Agreement, the Notes, if
any, or the other Loan Documents.
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"Lien" shall mean any security interest, mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or other) or other priority or preferential arrangement of any
kind or nature whatsoever.
"Litigation" shall mean any litigation (including, without limitation,
any governmental proceeding or arbitration proceeding), tax audit or
investigative proceeding, claim, lawsuit, and/or investigation pending or
threatened against or involving any Borrower, or Guarantor or any of its
Subsidiaries or any of its or their businesses or operations.
"Loan(s)" shall have the meaning set forth in Section 2.1 and may be a
Base Rate Loan or an Offshore Rate Loan (each, a "Type of Loan").
"Loan Documents" shall mean, collectively, this Agreement, the Notes,
if any, the Guaranty, the Pledge Agreement, the Syndication Letter
Agreement and any and all other documents or instruments furnished or
required to be furnished in connection with any of the foregoing, as the
same may be amended or modified in accordance with this Agreement.
"Loan Value of Direct Collateral" shall mean, with respect to any
Borrower, (a) the current market value of the common stock of Guarantor
pledged by such Borrower to the Administrative Agent, for the benefit of
the Banks, under the Pledge Agreement, plus (b) without duplication, the
current market value of any other Direct Collateral constituting Margin
Stock pledged by such Borrower to the Administrative Agent, for the benefit
of the Banks, under any Loan Document, plus (c) without duplication, the
maximum loan value of all Direct Collateral of such Borrower not
constituting Margin Stock, it being understood that the maximum loan value
of Direct Collateral shall be its good faith loan value (i.e., the value of
such Direct Collateral as determined from time to time by the
Administrative Agent (with the concurrence of the Required Lenders)
exercising sound banking judgment) without regard to such Borrower's assets
securing any unrelated transactions. The Administrative Agent and/or the
Required Lenders shall have the right at any time in their sole discretion
to recompute the Loan Value of Direct Collateral.
"Loan Value of Indirect Collateral" shall mean, with respect to any
Borrower, the sum of the maximum loan value of Indirect Collateral under
Regulation U, after taking into account any other Indebtedness of Guarantor
"indirectly secured" (as set forth in Regulation U and the interpretations
thereof) by the assets of Guarantor, it being understood that (a) the
maximum loan value of Indirect Collateral constituting Margin Stock shall
be 50% of its current market value and (b) the maximum loan value of
Indirect Collateral not constituting Margin Stock shall be its good faith
loan value (i.e., the value of such Indirect Collateral as determined from
time to time by the Administrative Agent (with the concurrence of the
Required Lenders) exercising sound banking judgment), in each case without
regard to Guarantor's assets securing any unrelated transactions. Until
further notice from the Administrative Agent to the Borrower, the Loan
Value of Indirect Collateral shall be deemed to be $2,000,000,000, it being
understood
8
that the Administrative Agent and/or the Required Lenders shall have the
right at any time in their sole discretion to recompute the Loan Value of
Indirect Collateral.
"Margin Stock" shall mean "margin stock" as such term is defined in
Regulation U.
"Material Adverse Change" or "Material Adverse Effect" shall mean any
change, event, action, condition or effect which individually or in the
aggregate (a) impairs the validity or enforceability of this Agreement or
any other Loan Document, or (b) materially and adversely affects the
consolidated business, operations, financial prospects or condition of
Guarantor and its Subsidiaries taken as a whole, or (c) materially impairs
the ability of any Borrower or Guarantor to perform his, hers or its
obligations under this Agreement or any of the other Loan Documents to
which he, she or it is a party, or (d) materially adversely affects the
perfection or priority of any Lien granted under any of the Loan Documents.
"Material Litigation" or "Material Litigation Development" shall mean
any Litigation, or development in any Litigation, as the case may be, (a)
which seeks to enjoin, prohibit, discontinue or otherwise impacts the
validity or enforceability of this Agreement or any of the other Loan
Documents or other transactions contemplated hereby or thereby, or (b)
which could be reasonably expected to have a Material Adverse Effect.
"Nonconsenting Bank" - see Section 13.2.
"Note" shall mean a promissory note, substantially in the form of
Exhibit A with blanks appropriately completed in conformity herewith,
evidencing the aggregate Commitments of the Banks, or any promissory note
or promissory notes issued in substitution or replacement therefor.
"Notice of Borrowing" shall mean a notice in substantially the form of
Exhibit B.
"Notice of Conversion/Continuation" shall mean a notice in
substantially the form of Exhibit C.
"Obligations" shall have the meaning provided in the Guaranty.
"Offshore Rate" shall mean, for any Interest Period, with respect to
Offshore Rate Loans comprising part of the same Borrowing, the rate of
interest per annum (rounded upward to the next 1/100th of 1%) determined by
the Administrative Agent as follows:
Offshore Rate = IBOR
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1.00 Eurodollar Reserve Percentage
Where,
9
"Eurodollar Reserve Percentage" means for any day for any
Interest Period the maximum reserve percentage (expressed as a
decimal, rounded upward to the next 1/100th of 1%) in effect on
such day (whether or not applicable to any Bank) under regulations
issued from time to time by the FRB for determining the maximum
reserve requirement (including any emergency, supplemental or
other marginal reserve requirement) with respect to Eurocurrency
funding (currently referred to as "Eurocurrency liabilities"); and
"IBOR" shall mean the rate of interest per annum (computed for
the actual number of days elapsed on the basis of a 360-day year)
appearing on Page 3750 of the Telerate Service (or any successor
or substitute page of such Service, or any successor to or
substitute to such Service, providing rate quotations comparable
to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for
purposes of providing quotations of interest rates applicable to
dollar deposits in the London interbank market) at approximately
11:00 A.M. (London time) two (2) Business Days prior to the
commencement of such Interest Period, provided that, for Interest
Periods shorter than one month, IBOR shall be derived from such
source as the Administrative Agent shall reasonably determine.
The Offshore Rate shall be adjusted automatically as to all Offshore
Rate Loans then outstanding as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Offshore Rate Loan" shall mean a Loan that bears interest based on the
Offshore Rate.
"Percentage" shall mean, relative to any Bank, the percentage set forth
opposite such Bank's name on Schedule 2.1 (or set forth in an Assignment
Agreement), as such Percentage may be adjusted from time to time pursuant
to Assignment Agreement(s) executed by such Bank and its Eligible Assignee
and delivered pursuant to Section 12.1.
"Pledge Agreement" shall mean the Pledge Agreement, dated as of the
date hereof, substantially in the form of Exhibit D.
"Regulation "D" and "U" shall mean Regulation D and Regulation U,
respectively, or any successor regulation thereto, promulgated by the FRB
as from time to time in effect.
"Replaced Bank" - see Section 5.8.
"Replacement Bank" - see Section 5.8.
10
"Required Banks" shall mean Banks (other than a Defaulting Bank) having
at least 51% of the Commitments (excluding the Commitment of any Defaulting
Bank) or, if the Commitments have terminated or expired, 51% of the
aggregate principal amount of the Loans outstanding at such time (excluding
the Loans of any Defaulting Bank).
"Responsible Officer" shall mean, in the case of any Person, any of the
following officers of such Person: the chief executive officer; the
president; the chief financial officer; the chief operating officer; the
chief investment officer; the general counsel; the secretary; the treasurer
or any senior or executive vice president; or, in the case of each such
officer, the individual designated by such officer to act on its behalf
hereunder. If any of the titles of the preceding officers of such corporate
Person are changed after the date hereof, the term "Responsible Officer"
shall thereafter mean any officer performing substantially the same
functions as are presently performed by one or more of the officers listed
in the first sentence of this definition.
"Revolving Credit Agent" shall mean the Administrative Agent (as
defined in the Revolving Credit Agreement).
"Revolving Credit Agreement" shall mean that certain Credit Agreement
(five-year facility), dated as of September 25, 1998, among Guarantor, the
Revolving Credit Banks, Bank of America National Trust and Savings
Association, as agent, and others, as the same may be amended, modified,
replaced, restated or substituted from time to time provided, that each of
the Banks has received at least 10 days' prior written notice of any such
amendment, modification replacement, restatement or substitution and the
Required Banks (either directly or through the Administrative Agent) have
not prior to the end of such 10 day period given notice to Guarantor that
such amendment, modification, replacement, restatement or substitution is
not acceptable.
"Revolving Credit Bank(s)" shall mean the Bank(s) (as defined in the
Revolving Credit Agreement).
"Revolving Credit Loan Documents" shall mean the Loan Documents (as
defined in the Revolving Credit Agreement).
"Significant Subsidiary" shall have the meaning provided in the
Revolving Credit Agreement as in effect on the Closing Date.
"Solvent", as to any Person on a particular date, shall mean 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
Obligations, 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 liabilities of such Person on its debts as they become
absolute and matured, (c) such Person is
11
able to realize upon its assets and pay its debts and other
liabilities, Contingent Obligations and other commitments as they
mature in the normal course of business, (d) such Person does not
intend to, and does not believe that such Person will, incur debts or
liabilities beyond such Person's ability to pay as such debts and
liabilities mature, and (e) 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 unreasonably small
capital after giving due consideration to the prevailing practice in
the industry in which such Person is engaged. For the purposes of this
definition, in computing the amount of any Contingent Obligation at any
time, it is intended that such Contingent Obligation will be computed
at the amount which, in light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be
expected to become an actual or matured liability.
"Subsidiary" shall have the meaning provided in the Revolving
Credit Agreement as in effect on the Closing Date.
"Substitute Bank" - see Section 13.2.
"Syndication Letter Agreement" shall mean the Syndication Letter
Agreement, dated the date hereof, among Guarantor, the Administrative
Agent and the Arranger.
"Taxes" or "Tax" shall mean all taxes of any nature whatsoever and
howsoever denominated, including, without limitation, retaliatory,
income, premium, withholding, guaranty fund or similar assessments,
excise, import, governmental fees, duties and all other charges, as
well as additions to tax, penalties and interest thereon, imposed by
any Governmental Authority.
"Termination Date" shall mean, as to any Borrower, the earlier of
(a) March 31, 2000, or (b) the date of termination in whole of the
Commitments pursuant to Section 4.1, 4.2 or 10.2.
"Transferee" see Section 12.3.
"Type" or "Type of Loan" has the meaning specified in the
definition of "Loan."
"UCC" shall mean the Uniform Commercial Code or comparable statute
or any successor statutes thereto, as in effect from time to time in
the relevant jurisdiction.
"United States" and "U.S." each means the United States of
America.
SECTION 1.2 Other Definitional Provisions. (a) All terms defined in
this Agreement shall have the above defined meanings when used in any Loan
Document, or any certificate, report or other
12
document made or delivered pursuant to this Agreement, unless the context
therein shall clearly otherwise require.
(b) The words "hereof," "herein," "hereunder" and similar terms when
used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement; and subsection, Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(c) The words "amended or modified" when used in any Loan Document
shall mean with respect to such Loan Document as from time to time, in whole or
in part, amended, modified, supplemented, restated, refinanced, refunded or
renewed.
(d) In the computation of periods of time in this Agreement from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding."
(e) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Administrative
Agent, the Borrowers and the other parties, and are the products of all parties.
Accordingly, they shall not be construed against the Banks or the Administrative
Agent merely because of the Administrative Agent's or Banks' involvement in
their preparation.
SECTION 1.3 Accounting and Financial Determinations. For purposes of
this Agreement, unless otherwise specified or the context otherwise requires,
all accounting terms used in any Loan Document shall be interpreted, all
accounting determinations and computations hereunder or thereunder shall be
made, and all financial statements required to be delivered hereunder or
thereunder shall be prepared, in accordance with GAAP.
SECTION 2. THE COMMITMENTS AND THE LOANS
Subject to the terms and conditions of this Agreement and relying on
the representations and warranties herein set forth:
SECTION 2.1 Commitment. Each of the Banks, severally and for itself
alone, agrees, on the terms and conditions set forth herein, to make term loans
(herein collectively called the "Loans" and individually called a "Loan") to the
Borrowers in the aggregate principal amount for each Bank set forth on Schedule
2.2 from the Closing Date until the Borrowing Termination Date in such Bank's
Percentage of the aggregate amount of such Loans as the Borrowers may request
from all Banks. The aggregate principal amount of Loans which any Bank shall be
committed to make to the Borrowers shall not at any one time exceed the amount
set opposite such Bank's name on Schedule 2.1 and the aggregate principal amount
of the Loans which all Banks shall be committed to make hereunder to the
Borrowers shall not at any one time exceed $150,000,000 (or such reduced amount
as may be fixed
13
pursuant to Sections 4.1, 4.2 and 10.2). The Loans to any Borrower shall be
disbursed in accordance with Section 2.2 and once repaid may not thereafter be
reborrowed. The foregoing commitment of each Bank is herein called its
"Commitment" and for all Banks the "Commitments."
SECTION 2.2 Procedure for Borrowings. (a) Each Borrowing shall be made
to each Borrower upon irrevocable written notice (or by telephone promptly
confirmed in writing) of Guarantor (on behalf of such Borrower) delivered to the
Administrative Agent in the form of a Notice of Borrowing (which notice must be
received by the Administrative Agent prior to (i) 4:00 P.M. (New York City time)
three Business Days prior to the requested Borrowing Date, in the case of
Offshore Rate Loans with Interest Periods shorter than one month borrowed prior
to the Borrowing Termination Date, (ii) 12:00 Noon (New York City time) three
Business Days prior to the requested Borrowing Date, in the case of all other
Offshore Rate Loans, and (iii) 12:00 Noon (New York City time) on the requested
Borrowing Date, in the case of Base Rate Loans, specifying:
(i) the amount of such Borrowing, which shall be in an aggregate
minimum amount of $1,000,000 for all Borrowers requesting that a
Borrowing be made pursuant to such Notice of Borrowing or any integral
multiple of $100,000 in excess thereof; provided that the last
Borrowing to be made under this Agreement shall not be required to be
in an integral multiple of $100,000;
(ii) the requested Borrowing Date, which shall be a Business Day
and the same Business Day for each Borrower to which such Notice of
Borrowing relates;
(iii) the Type of Loans comprising such Borrowing; and
(iv) with respect to any Borrowing comprised of Offshore Rate
Loans, the duration of the Interest Period applicable to such Offshore
Rate Loan included in such notice. If the Notice of Borrowing fails to
specify the duration of the Interest Period for any Borrowing comprised
of Offshore Rate Loans, such Interest Period shall be one (1) months.
(b) The Administrative Agent will promptly notify each Bank of its
receipt of any Notice of Borrowing and of the amount of such Bank's Percentage
of the related Borrowing(s).
(c) Each Bank will make the amount of its Percentage of each Borrowing
available to the Administrative Agent for the account of each Borrower
requesting a Loan at the Administrative Agent's Office by 2:00 P.M. (New York
City time) on the Borrowing Date requested by such Borrower in funds immediately
available to the Administrative Agent. The proceeds of all such Loans will then
be made available to such Borrower by the Administrative Agent by wire transfer
in accordance with written instructions provided to the Administrative Agent by
such Borrower of like funds as received by the Administrative Agent.
14
(d) After giving effect to any Borrowing, unless the Administrative
Agent shall otherwise consent, there may not be more than five (5) Interest
Periods in effect for all Loans then outstanding.
SECTION 2.3 Funding Reliance for Borrowings. Unless the Administrative
Agent shall have been notified by telephone, confirmed in writing, by any Bank
by 12:30 P.M. (New York City time) on the relevant Borrowing Date that such Bank
will not make available the amount which would constitute its Percentage of the
related Borrowing(s), the Administrative Agent may assume, subject to the
satisfactory fulfillment by the Borrower requesting such Borrowing of the
conditions precedent set forth in Section 9, that such Bank shall make such
amount available to the Administrative Agent and, in reliance upon such
assumption the Administrative Agent may (but shall not be required to) make
available to such Borrower a corresponding amount. If and to the extent that
such Bank shall not make such amount available to the Administrative Agent, such
Bank and such Borrower severally agree to repay the Administrative Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date the Administrative Agent made such amount available
to such Borrower to the date such amount is repaid to the Administrative Agent,
at the interest rate applicable at the time to the Type of Loans comprising such
Borrowing; provided that if such amount is repaid by such Borrower and such Bank
the Administrative Agent agrees to refund to such Borrower any excess amount
paid by such Borrower; and provided, further, that such Borrower, upon the
request of the Administrative Agent, agrees to return such refund to the
Administrative Agent, on demand, in the event the Administrative Agent is
legally required to return any amount received from such Bank.
SECTION 2.4 Conversion and Continuation Elections. (a) Guarantor (on behalf
of the Borrowers) may, upon irrevocable written notice to the Agent in
accordance with Section 2.4(b):
(i) elect, as of any Business Day, in the case of Base Rate Loans, or
as of the last day of the applicable Interest Period, in the case of
Offshore Rate Loans, to convert any such Loans (or any part thereof in an
amount not less than $5,000,000, or that is in an integral multiple of
$1,000,000 in excess thereof) into Loans of any other Type; or
(ii) elect as of the last day of the applicable Interest Period, to
continue any Offshore Rate Loans having Interest Periods expiring on such
day (or any part thereof) in an amount not less than $5,000,000, or that is
in an integral multiple of $1,000,000 in excess thereof;
provided, that if at any time the aggregate amount of Offshore Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than
$5,000,000, such Offshore Rate Loans shall automatically convert into Base Rate
Loans, and on and after such date the right of Guarantor (on behalf of the
Borrowers) to continue such Loans as, or convert such Loans into, Offshore Rate
Loans, as the case may be, shall terminate.
(b) Guarantor (on behalf of the Borrowers) shall deliver a Notice of
Conversion/Continuation to be received by the Agent not later than 11:00 A.M.
(New York City time)
15
at least (i) three Business Days in advance of the Conversion/Continuation Date,
if the Loans are to be converted into or continued as Offshore Rate Loans; and
(ii) one Business Day in advance of the Conversion/Continuation Date, if the
Loans are to be converted into Base Rate Loans, specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Loans to be converted or continued;
(C) the Type of Loans resulting from the proposed conversion or
continuation; and
(D) in the case of conversions into Offshore Rate Loans, the duration
of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to
Offshore Rate Loans, Guarantor (on behalf of the Borrowers) has failed to select
timely a new Interest Period to be applicable to such Offshore Rate Loans or if
any Default or Event of Default then exists, Guarantor (on behalf of the
Borrowers) shall be deemed to have elected to convert such Offshore Rate Loans
into Base Rate Loans effective as of the expiration date of such Interest
Period.
(d) The Administrative Agent will promptly notify each Bank of its
receipt of a Notice of Conversion/Continuation, or, if no timely notice is
provided by Guarantor (on behalf of the Borrowers), the Administrative Agent
will promptly notify each Bank of the details of any automatic conversion. All
conversions and continuations shall be made ratably according to the respective
outstanding principal amounts of the Loans with respect to which the notice was
given held by each Bank.
(e) Unless the Required Banks otherwise consent, during the existence
of a Default or Event of Default, Guarantor (on behalf of the Borrowers) may not
elect to have a Loan converted into or continued as an Offshore Rate Loan.
(f) After giving effect to any conversion or continuation of Loans,
unless the Administrative Agent shall otherwise consent, there may not be more
than five (5) Interest Periods in effect for all Loans hereunder.
SECTION 2.5 Repayment of Loans. Subject to the provisions of Sections 4.1,
4.2 and 10.2, the Loans of each Bank shall be payable in full (and each Borrower
agrees to pay such Loans) on the Termination Date.
SECTION 2.6 Loan Accounts; Record Keeping. (a) The Loans made by each Bank
shall be evidenced by one or more loan accounts or records maintained by such
Bank in the ordinary course of business and the Administrative Agent. The loan
accounts or records maintained by the Administrative Agent and each Bank shall
be conclusive absent manifest error of the amount of the Loans made by the
16
Banks to the Borrowers and the interest and payments thereon; provided, that in
the event of a conflict between information recorded by the Administrative Agent
and any Bank as to such Bank's Loans, the records of the Administrative Agent
absent manifest error shall control. Any failure to so record or any error in
doing so shall not, however, limit or otherwise affect the obligations of any
Borrower hereunder or to pay any amount owing with respect to the Loans.
(b) The Loans made by the Banks to each Borrower shall, upon the
request of the Administrative Agent, be evidenced by a Note executed and
delivered by such Borrower payable to the Administrative Agent, for the benefit
of the Banks, in an aggregate principal amount equal to the aggregate
Commitments of the Banks to make Loans to such Borrower instead of or in
addition to loan accounts. The Administrative Agent shall endorse on the
schedules annexed to each Note the date, amount and maturity of each Loan made
by the Banks to such Borrower and the amount of each payment of principal made
by such Borrower with respect thereto. The Administrative Agent is irrevocably
authorized by each Borrower to endorse the Note of such Borrower and the
Administrative Agent's record shall be conclusive absent manifest error;
provided, however, that the failure of the Administrative Agent to make, or an
error in making, a notation thereon with respect to any Loan shall not limit or
otherwise affect the obligations of any Borrower hereunder or under any such
Note to any Bank.
SECTION 3. INTEREST AND FEES
SECTION 3.1 Interest Rates. With respect to each Loan made to any Borrower
hereunder, such Borrower hereby promises to pay interest on the unpaid principal
amount thereof for the period commencing on the Borrowing Date of such Loan
until such Loan is paid in full as follows:
(a) at all times while such Loan or any portion thereof is a Base Rate
Loan, at a rate per annum equal to the Base Rate from time to time in
effect.
(b) at all times while such Loan or any portion thereof is an Offshore
Rate Loan, at a rate per annum equal to the Offshore Rate, plus the
Applicable Facility Fee plus the Applicable Offshore Rate Margin (each as
defined in the Revolving Credit Agreement) plus .40% per annum.
SECTION 3.2 Default Interest Rate. Notwithstanding the provisions of
Section 3.1, in the event that any Default under Section 10.1.2 or any Event of
Default shall occur with respect to any Borrower, such Borrower hereby promises
to pay, automatically in the case of a Default under Section 10.1.2 or upon
demand therefor by the Administrative Agent for any Event of Default (other than
pursuant to Section 10.1.2), interest on the unpaid principal amount of the
Loans of such Borrower (and interest thereon to the extent permitted by law) for
the period commencing on the date of such Default or demand until such Loans are
paid in full or such Default or Event of Default is cured or waived in
accordance with Sections 10.2 and 13.1 at a rate per annum equal to the
applicable interest
17
rate from time to time in effect (but not less than the applicable interest rate
as at such date of demand), plus two percent (2%) per annum.
SECTION 3.3 Interest Payment Dates. Interest on each Loan shall be paid in
arrears on each Interest Payment Date. Interest shall also be paid on the date
of any prepayment of Loans under Section 4.1 or 4.2 for the portion of the Loans
so prepaid and upon payment (including prepayment) in full thereof and during
the existence of any Event of Default, interest shall be paid on demand of the
Administrative Agent at the request or with the consent of the Required Banks.
After maturity, accrued interest on the Loans shall be payable on demand.
SECTION 3.4 Setting and Notice of Rates. The applicable Offshore Rate shall
be determined by the Administrative Agent. Each determination of the applicable
Offshore Rate shall be conclusive and binding upon the parties hereto, in the
absence of manifest error. If the Administrative Agent is unable to determine
such a rate, the provisions of Section 5.3 shall apply. The Administrative Agent
shall, upon written request of Guarantor (on behalf of the Borrowers) or a Bank,
deliver to Guarantor (on behalf of the Borrowers) or such Bank a statement
showing the computations used by the Administrative Agent in determining any
applicable Offshore Rate hereunder.
SECTION 3.5 Fees. The Borrowers agree to pay (a) to Chase on behalf of each
Bank, a commitment fee, payable quarterly in arrears, on the average daily
undrawn amount of the undrawn Commitments, calculated at the rate per annum of
0.25% and (b) to Chase, the fees set forth in the Fee Letter dated September 13,
1999, between Guarantor and Chase.
SECTION 3.6 Computation of Interest and Fees. Interest on Offshore Rate
Loans shall be computed for the actual number of days elapsed on the basis of a
360-day year, and interest on Base Rate Loans shall be computed for the actual
number of days elapsed on the basis of a 365/366-day year. Each determination of
an interest rate by the Administrative Agent shall be conclusive and binding on
the Borrowers and the Banks in the absence of manifest error. Notwithstanding
anything contained herein to the contrary interest on the Loans shall not exceed
the maximum interest permitted by applicable law.
SECTION 4. PAYMENTS AND PREPAYMENTS
SECTION 4.1 Voluntary Termination or Reduction of Commitments. Each
Borrower may, upon not less than three (3) Business Days' irrevocable prior
written notice to the Administrative Agent (which shall promptly advise each
Bank thereof), terminate the Commitments of the Banks relating to such Borrower
or permanently reduce such Commitments by an aggregate minimum amount of
$100,000 or any integral multiple of $100,000 in excess thereof; unless, after
giving effect thereto and to any prepayments of Loans made on the effective date
thereof, the then outstanding principal amount of the Loans of such Borrower
would exceed the amount of the aggregate Commitments then in effect with respect
to such Borrower. Once reduced in accordance with this Section, such
Commitments, to
18
the extent terminated or permanently reduced, may not be increased. Any
reduction of the Commitments of such Borrower pursuant to this Section 4.1 shall
be applied in accordance with Section 4.4.
SECTION 4.2 Optional Prepayments. Each Borrower may, at any time or from
time to time, upon not less than three (3) Business Day's irrevocable written
notice with respect to such Borrower's Loans to the Administrative Agent by
12:00 Noon (New York City time), ratably prepay such Loans in whole or in part,
in minimum amounts of $100,000 or any integral multiple of $100,000 in excess
thereof (unless such Borrower is prepaying the total amount of the Loans then
outstanding with respect to such Borrower). Such notice of prepayment shall
specify the date, the amount of such prepayment and the Types of Loans to be
prepaid. The Administrative Agent will promptly notify each Bank of its receipt
of any such notice, and of such Bank's Percentage of such prepayment. If such
notice is given by such Borrower, such Borrower shall make such prepayment and
the payment amount specified in such notice shall be due and payable on the date
specified therein, together with accrued interest to each such date on the
amount prepaid and any amounts required pursuant to Section 5.5. Any prepayment
of the Loans of such Borrower pursuant to this Section 4.2 shall be applied in
accordance with Section 4.4 and shall reduce the Commitments of the Banks with
respect to such Borrower as set forth therein.
SECTION 4.3 Payments by the Borrowers. (a) All payments to be made by any
Borrower hereunder shall be made without setoff, recoupment or counterclaim.
Except as otherwise expressly provided herein, all payments by such Borrower
shall be made to the Administrative Agent for the account of the Banks at the
Administrative Agent's Office, and shall be made in Dollars and in immediately
available funds, no later than 1:30 P.M. (New York City time) on the date
specified herein. The Administrative Agent will promptly distribute to each Bank
its Percentage (or other applicable share as expressly provided herein) of such
payment in like funds as received. Any payment received by the Administrative
Agent later than 1:30 P.M. (New York City time) shall be deemed to have been
received on the following Business Day and any applicable interest or fee shall
continue to accrue.
(b) Subject to the provisions set forth in the definition of Interest
Period, whenever any payment is due on a day other than a Business Day, such
payment shall be made on the following Business Day, and such extension of time
shall in such case be included in the computation of interest or fees, as the
case may be.
(c) Unless the Administrative Agent receives notice from the applicable
Borrower prior to the date on which any payment is due to the Banks that such
Borrower will not make such payment in full as and when required, the
Administrative Agent may assume that such Borrower has made such payment in full
to the Administrative Agent on such date in immediately available funds and the
Administrative Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Bank on such due date an amount equal to the
amount then due such Bank. If and to the extent such Borrower has not made such
payment in full to the Administrative Agent, each Bank shall repay to the
Administrative Agent on demand such amount distributed to such Bank, together
with interest
19
thereon at the Federal Funds Effective Rate for each day from the date such
amount is distributed to such Bank until the date repaid.
SECTION 4.4 Application of Prepayments. Except as otherwise set forth in
this Agreement, any reduction in the Commitments pursuant to Sections 4.1 and
4.2 shall be applied to a reduction of the remaining Commitments and prepayment
of the Loans of each Bank, pro rata, according to its Percentage.
SECTION 4.5 Sharing of Payments. (a) If any Bank shall obtain any payment
or other recovery (whether voluntary, involuntary, by application of offset or
otherwise) on account of the Loans (other than pursuant to the terms of Sections
5, 12.1 and 13.2) in excess of its pro rata share (based on its Percentage) of
payments and other recoveries obtained by all Banks of the Loans on account of
principal of and interest on the Loans, such Bank shall purchase from the other
Banks such participation in the Loans as shall be necessary to cause such
purchasing Bank to share the excess payment or other recovery ratably with each
of them; provided, however, that if all or any portion of the excess payment or
other recovery is thereafter recovered from such purchasing Bank, the purchase
shall be rescinded and each Bank which has sold a participation to the
purchasing Bank shall repay to the purchasing Bank the purchase price to the
ratable extent of such recovery together with an amount equal to such selling
Bank's ratable share (according to the proportion of (i) the amount of such
selling Bank's required repayment to the purchasing Bank to (ii) the total
amount so recovered from the purchasing Bank) of any interest or other amount
paid or payable by the purchasing Bank in respect of the total amount so
recovered.
(b) Each Borrower agrees that any Bank so purchasing a participation
from another Bank pursuant to Section 4.5(a) may, to the fullest extent
permitted by law, exercise all its rights of payment (including pursuant to
Section 4.6) with respect to such participation as fully as if such Bank were
the direct creditor of such Borrower in the amount of such participation. If
under any applicable bankruptcy, insolvency or other similar law, any Bank
receives a secured claim in lieu of a setoff to which this Section applies, such
Bank shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Banks entitled under
this Section 4.5(b) to share in the benefits of any recovery of such secured
claim.
SECTION 4.6 Setoff. Each Bank shall, upon the occurrence of any Event of
Default under Section 10.1.1, the occurrence of a Default under Section 10.1.2,
or, with the consent of the Required Banks, upon the occurrence of any other
Event of Default, have the right to appropriate and apply to the payment of the
Liabilities owing to it (whether or not then due), and (as security for such
Liabilities) each Borrower hereby grants to each Bank a continuing security
interest in, any and all balances, credits, deposits, accounts or moneys of such
Borrower then or thereafter maintained with such Bank. Any such appropriation
and application shall be subject to the provisions of Section 4.5. Each Bank
agrees promptly to notify such Borrower and the Administrative Agent after any
such setoff and application made by such Bank; provided, however, that the
failure to give such notice shall not affect the validity of such setoff and
application. The rights of each Bank under this Section 4.6 are in
20
addition to other rights and remedies (including other rights of setoff under
applicable law or otherwise) which such Bank may have.
SECTION 4.7 Net Payments. All payments by any Borrower of principal of, and
interest on, the Loans and all other amounts payable hereunder shall be made
free and clear of and without deduction for any present or future income, stamp
or other Taxes, fees, duties, withholdings or other charges of any nature
whatsoever imposed by any taxing authority, other than Taxes imposed on or
measured by any Bank's net income or receipts with respect to payments received
hereunder (such nonexcluded items being called "Charges"). In the event that any
withholding or deduction from any payment to be made by any Borrower hereunder
is required in respect of any Charges pursuant to any applicable law, rule or
regulation, then such Borrower will:
(a) pay directly to the relevant authority the full amount required to
be so withheld or deducted;
(b) promptly forward to the Administrative Agent an official receipt or
other documentation satisfactory to the Administrative Agent evidencing
such payment to such authority;
(c) pay to the Administrative Agent for the account of the Banks such
additional amount or amounts as are necessary to ensure that the net amount
actually received by each Bank will equal the full amount such Bank would
have received had no such withholding or deduction been required; and
(d) if any Bank receives a refund in respect of any Taxes as to which
it has been indemnified by any Borrower or with respect to which any
Borrower (or any Person acting on behalf of such Borrower) has paid
additional amounts pursuant to this Section 4.7, it shall promptly repay
such refund (but only to the extent of indemnity payments made, or
additional amounts paid, by such Borrower (or such Person acting on behalf
of such Borrower) under this Section 4.7 with respect to the Taxes giving
rise to such refund), net of all out-of-pocket expenses of such Bank or the
Administrative Agent, as the case may be; provided, that such Borrower,
upon the request of such Bank or the Administrative Agent, agrees to return
such refund (together with any penalties, interest or other charges due in
connection therewith to the appropriate taxing authority or other
Governmental Authority) to such Bank or the Administrative Agent in the
event such Bank or the Administrative Agent is required to pay or to return
such refund to the relevant taxing authority or other Governmental
Authority.
Each Bank that is organized under the laws of a jurisdiction other than the
United States shall, prior to the due date of any payments under the Loans,
execute and deliver to the Borrowers, on or about the first scheduled payment
date in each calendar year, a United States Internal Revenue Service Form 4224
or Form 1001, as may be applicable (or any successor form), appropriately
completed. Without prejudice to the survival of any other agreement of the
Borrowers hereunder or any other document,
21
the agreements of the Borrowers contained in this Section shall survive
satisfaction of the Liabilities and termination of this Agreement.
SECTION 5. CHANGES IN CIRCUMSTANCES
SECTION 5.1 Increased Costs. If (a) Regulation D, or (b) after the Closing
Date, the adoption of any applicable law, rule or regulation, or any change
therein, or any change in the interpretation or administration thereof by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or any
Lending Office of such Bank) with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency,
(i) shall subject any Bank (other than a Defaulting Bank) (or any
Lending Office of such Bank) to any tax, duty or other charge or shall
change the basis of taxation of payments to any Bank (other than a
Defaulting Bank) of the principal of, or interest on, any other amounts due
under this Agreement in respect of its Loans or its obligation to make
Loans (except for changes in the rate of Tax, other than Taxes covered by
Section 4.7, on the overall gross or net income of such Bank or its Lending
Office); or
(ii) shall impose, modify or deem applicable any reserve (including,
without limitation, any reserve imposed by the FRB, but excluding any
reserve included in the determination of interest rates pursuant to Section
3), special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by, any Bank (other than a
Defaulting Bank) (or any Lending Office of such Bank); or
(iii) shall impose on any Bank (other than a Defaulting Bank) (or its
Lending Office) any other condition affecting its Loans;
and the result of any of the foregoing is to increase the cost to (or in the
case of Regulation D referred to above, to impose a cost on) such Bank (or any
Lending Office of such Bank) of making or maintaining Offshore Rate Loans to
reduce the amount of any sum received or receivable by such Bank (or the Lending
Office of such Bank) under this Agreement or under its Loans with respect
thereto, then within thirty (30) days after demand by such Bank (which demand
shall be accompanied by a statement setting forth in reasonable detail the basis
of such demand and the calculation of such additional amount), the relevant
Borrowers shall pay directly to such Bank such additional amount or amounts as
will compensate such Bank for such increased cost or such reduction. Each Bank
shall promptly, but in no event more than ninety (90) days after it has
knowledge thereof, notify such Borrower of any event occurring after the date
hereof, which will entitle such Bank to compensation pursuant to this Section
5.1.
22
SECTION 5.2 Change in Rate of Return. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or phase
in of, any law or regulation, directive, guideline, decision or request (whether
or not having the force of law) of any court, central bank, regulator or other
Governmental Authority affects or would affect the amount of capital required or
expected to be maintained by any Bank (other than a Defaulting Bank) or any
Person controlling such Bank, and such Bank reasonably determines that the rate
of return on its or such controlling Person's capital as a consequence of the
Loans made by such Bank (or any participating interest therein held by such
Bank) is reduced to a level below that which such Bank or such controlling
Person could have achieved but for the occurrence of any such circumstance,
then, in any such case the relevant Borrowers shall, within thirty (30) days
after written demand by such Bank to such Borrowers, pay directly to such Bank
additional amounts sufficient to compensate such Bank or such controlling Person
for such reduction in rate of return. A statement of such Bank as to any such
additional amount or amounts (including calculations thereof in reasonable
detail) shall, in the absence of manifest error, be conclusive and binding on
such Borrowers. In determining such amount, such Bank may use any method of
averaging and attribution that it shall deem reasonably applicable. Each Bank
shall promptly, but in no event more than ninety (90) days after it has
knowledge thereof, notify such Borrowers of any event occurring after the
Closing Date, which will entitle such Bank to compensation pursuant to this
Section 5.2.
SECTION 5.3 Basis for Determining Interest Rate Inadequate or Unfair. If
with respect to any Interest Period:
(a) deposits in Dollars (in the applicable amounts) are not being
offered to the Administrative Agent in the offshore dollar interbank market
for such Interest Period, or the Administrative Agent otherwise determines
(which determination shall be conclusive and binding on all parties) that
by reason of circumstances affecting the offshore dollar interbank market
adequate and reasonable means do not exist for ascertaining the applicable
Offshore Rate; or
(b) any Bank advises the Administrative Agent that the Offshore Rate as
determined by the Administrative Agent, will not adequately and fairly
reflect the cost to such Bank of maintaining or funding such Loan for such
Interest Period, or that the making or funding of Offshore Rate Loans has
become impracticable as a result of an event occurring after the Closing
Date which in the opinion of such Bank materially changes such Loans;
then, so long as such circumstances shall continue:
(i) the Administrative Agent shall promptly notify Guarantor (on behalf
of the Borrowers) and the Banks thereof,
(ii) no Bank shall be under any obligation to make or continue or
convert into Offshore Rate Loans so affected, and
23
(iii) on the last day of the then current Interest Period for Offshore
Rate Loans so affected, such Offshore Rate Loans shall, unless then repaid
in full, automatically convert to Base Rate Loans.
Notwithstanding the foregoing, the Administrative Agent and each Bank shall take
any reasonable actions available to it (including designation of a different
Lending Office), consistent with legal and regulatory restrictions, that will
avoid the need to take the steps described in this Section 5.3, which will not,
in the reasonable judgment of the Administrative Agent or such Bank, be
disadvantageous to the Administrative Agent or such Bank.
SECTION 5.4 Changes in Law Rendering Certain Loans Unlawful. In the event
that any change in (including the adoption of any new) applicable laws or
regulations, or any change in the interpretation of applicable laws or
regulations by any governmental or other regulatory body charged with the
administration thereof, should make it unlawful for a Bank or the Lending Office
of such Bank ("Affected Bank") to make, maintain or fund Offshore Rate Loans,
then (a) the Affected Bank shall promptly notify each of the other parties
hereto, (b) the obligation of all Banks to make or continue or convert into
Offshore Rate Loans or make Offshore Rate Loans made unlawful for the Affected
Bank shall, upon the effectiveness of such event, be suspended for the duration
of such unlawfulness, and (c) on the last day of the current Interest Period for
Offshore Rate Loans (or, in any event, if the Affected Bank so requests, on such
earlier date as may be required by the relevant law, regulation or
interpretation), the Offshore Rate Loans shall, unless then repaid in full,
automatically convert to Base Rate Loans. Notwithstanding the foregoing, the
Administrative Agent and each Bank shall take any reasonable actions available
to it (including designation of a different Lending Office), consistent with
legal and regulatory restrictions, that will avoid the need to take the steps
described in this Section 5.4, which will not, in the reasonable judgment of the
Administrative Agent or such Bank, be disadvantageous to Administrative Agent or
such Bank.
SECTION 5.5 Funding Losses. Each Borrower hereby agrees that upon demand by
any Bank to the Administrative Agent (which demand shall be made within three
(3) Business Days after receipt of notice of any payment or proposed payment by
such Borrower under this Agreement giving rise to indemnification under this
Section 5.5 and shall be accompanied by a statement setting forth in reasonable
detail using the methodology set forth in Exhibit I) such Borrower will
indemnify such Bank against any loss or expense which such Bank may sustain or
incur (including, without limitation, any loss or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such Bank
to fund or maintain Offshore Rate Loans), as reasonably determined by such Bank,
as a result of (a) any payment or prepayment or conversion of any Offshore Rate
Loans of such Bank on a date other than the last day of an Interest Period for
such Offshore Rate Loan, or (b) any failure of such Borrower to borrow on the
date of any Borrowing set forth in any Notice of Borrowing or (c) any failure of
such Borrower to convert or continue any portion of the Loans on a date
specified therefor in the Notice of Continuation/Conversion delivered pursuant
to this Agreement. For this purpose, all notices to the Administrative Agent
pursuant to this Agreement shall be deemed to be irrevocable.
24
SECTION 5.6 Right of Banks to Fund Through Other Offices. Each Bank may, if
it so elects, fulfill its commitment as to any Offshore Rate Loans by causing
any of its Lending Offices to make such Offshore Rate Loans; provided, that in
such event for the purposes of this Agreement, such Loan shall be deemed to have
been made by such Bank and the obligation of the Borrower to repay such Offshore
Rate Loan shall nevertheless be to such Bank and shall be deemed held by it, to
the extent of such Offshore Rate Loan, for the account of such branch or
affiliate.
SECTION 5.7 Discretion of Banks as to Manner of Funding. Notwithstanding
any provision of this Agreement to the contrary, each Bank shall be entitled to
fund and maintain its funding of all or any part of its Loans in any manner it
sees fit, it being understood, however, that for the purposes of this Agreement
all determinations hereunder shall be made as if such Bank had actually funded
and maintained each Offshore Rate Loan during each Interest Period for such Loan
through the purchase of deposits having a maturity corresponding to such
Interest Period and bearing an interest rate equal to the Offshore Rate, as the
case may be, for such Interest Period.
SECTION 5.8 Replacement of Banks. If any Bank shall become affected by any
of the changes or events described in Section 5.1, 5.2, 5.3(b), or 5.4 above
(any such Bank being hereinafter referred to as a "Replaced Bank") and shall
petition the relevant Borrowers for any increased cost or amounts thereunder,
then in such case, Guarantor (on behalf of the Borrowers) may, upon at least
five (5) Business Days' notice to the Administrative Agent and such Replaced
Bank, designate a replacement bank (a "Replacement Bank") acceptable to the
Administrative Agent in its reasonable discretion, to which such Replaced Bank
shall, subject to its receipt (unless a later date for the remittance thereof
shall be agreed upon by the relevant Borrowers and the Replaced Bank) of all
amounts owed to such Replaced Bank under Section 5.1, 5.2, 5.3(b), or 5.4 above,
assign all (but not less than all) of its rights, obligations, Loans and
Commitment hereunder and execute an Assignment Agreement with such Replacement
Bank; provided, that all Liabilities (except Liabilities which by the terms
hereof survive the payment in full of the Loans and termination of this
Agreement) due and payable to the Replaced Bank shall be paid in full as of the
date of such assignment. Upon any assignment by any Bank pursuant to this
Section 5.8 becoming effective, the Replacement Bank shall thereupon be deemed
to be a "Bank" for all purposes of this Agreement and such Replaced Bank shall
thereupon cease to be a "Bank" for all purposes of this Agreement and shall have
no further rights or obligations hereunder (other than pursuant to Sections 5.1,
5.2, 5.5, 11.5 and 13.4, and Sections 7.1 and 7.2 of the Guaranty while such
Replaced Bank was a Bank). Notwithstanding any Replaced Bank's failure or
refusal to assign its rights, obligations, Loans and Commitment under this
Section 5.8, the Replaced Bank shall cease to be a "Bank" for all purposes of
this Agreement and the Replacement Bank substituted therefor upon payment to the
Replaced Bank by the Replacement Bank of all amounts set forth in this Section
5.8 without any further action of the Replaced Bank.
SECTION 5.9 Conclusiveness of Statements; Survival of Provisions.
Determinations and statements of the Administrative Agent or any Bank pursuant
to Sections 5.1, 5.2, 5.3, 5.4 and Section 5.5 shall be conclusive absent
demonstrable error. The provisions of Sections 5.1, 5.2, 5.5 and this Section
5.9 shall survive termination of this Agreement.
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SECTION 6. COLLATERAL AND OTHER SECURITY
SECTION 6.1 Collateral Documents. Concurrently with or prior to the Closing
Date:
(a) Pledge Agreement. The Borrowers shall execute and deliver to the
Administrative Agent, for the benefit of the Banks, a pledge agreement,
substantially in the form of Exhibit D (herein, as the same may be amended
or modified, called the "Pledge Agreement"), whereby each of the Borrowers
shall pledge all of the issued and outstanding common stock of Guarantor
owned by each Borrower and purchased with proceeds of the Loans.
(b) Guaranty. Guarantor shall execute and deliver to the Administrative
Agent the Guaranty, covering (i) the payment and performance of all of the
Liabilities and (ii) the other Obligations.
SECTION 6.2 Application of Proceeds from Collateral. As to each Borrower,
all proceeds received by the Administrative Agent from the sale or disposition
of any of the Direct Collateral furnished by such Borrower pursuant to this
Agreement or Indirect Collateral furnished by Guarantor pursuant to the Guaranty
shall be applied by the Administrative Agent in the following order after
receipt thereof:
First: to the payment of all of the reasonable costs and expenses of
the Administrative Agent in connection with (a) the administration, sale or
disposition of such Direct Collateral or Indirect Collateral, as the case
may be, and (b) the administration and enforcement of this Agreement and
the other Loan Documents, to the extent that such costs and expenses shall
not have been reimbursed to the Administrative Agent;
Second: to the payment in full of all accrued and unpaid interest on
the Loans of such Borrower, then to the payment in full of all unpaid
principal of the Loans of such Borrower, and then to any remaining
Liabilities of such Borrower;
Third: the balance, if any, of such proceeds shall be paid to such
Borrower, to such Borrower's heirs and assigns, or as a court of competent
jurisdiction may direct.
SECTION 6.3 Further Assurances. Each Borrower agrees that upon request of
the Administrative Agent (a) such Borrower shall promptly deliver or cause to be
delivered to the Administrative Agent, in due form for transfer, all chattel
paper, instruments, securities and documents of title, if any, at any time
representing all or any of the Direct Collateral, and (b) such Borrower shall
forthwith execute and deliver or cause to be executed and delivered to the
Administrative Agent, in due form for filing or recording (and pay the cost of
filing or recording the same in all public offices deemed necessary by the
Administrative Agent), such further assignment agreements, security agreements,
26
pledge agreements, instruments, consents, waivers, financing statements, stock
or bond powers, searches, releases, and other documents, and do such other acts
and things, all as the Administrative Agent may from time to time reasonably
request to establish and maintain to the satisfaction of the Administrative
Agent a valid perfected Lien on all Direct Collateral (free of all other Liens)
to secure payment of the Liabilities.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF BORROWERS
To induce the Administrative Agent and the Banks to enter into this
Agreement and to make the Loans hereunder, each Borrower represents and warrants
to the Administrative Agent and to each of the Banks that:
SECTION 7.1 No Conflict. The execution, delivery and performance by such
Borrower of this Agreement and the other Loan Documents to which such Borrower
is a party does not and will not (a) contravene or conflict with any provision
of any law, statute, rule or regulation applicable to such Borrower, (b)
contravene or conflict with, result in any breach of, or constitute a default
under, any material agreement or instrument binding on such Borrower (including,
without limitation, any writ, judgment, injunction or other similar court order)
or (c) result in the creation or imposition of or the obligation to create or
impose any Lien upon any of the property or assets of such Borrower (except for
the Lien of the Administrative Agent).
SECTION 7.2 Validity. This Agreement and the other Loan Documents to which
such Borrower is a party constitute or upon execution and delivery will
constitute the legal, valid and binding obligation of such Borrower enforceable
in accordance with its terms subject to (a) applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting creditors' rights
generally and (b) general equitable principles, including without limitation,
concepts of good faith and fair dealing, materiality, fraudulent transfer and
reasonableness (regardless of whether considered in a proceeding in equity or at
law).
SECTION 7.3 Financial Statements. Such Borrower's financial statement when
delivered to the Administrative Agent upon the request of the Administrative
Agent, shall accurately present the financial condition of such Borrower at the
date of such financial statement.
SECTION 7.4 Material Adverse Change. No Material Adverse Change has
occurred since December 31, 1998 as to such Borrower.
SECTION 7.5 Litigation and Contingent Obligations. No Material Litigation
is pending as to such Borrower or, to the best of such Borrower's knowledge,
threatened as to such Borrower, and such Borrower has no material Contingent
Obligations.
27
SECTION 7.6 Liens. None of the Direct Collateral pledged by such Borrower
is subject to any Lien (except for the Lien of the Administrative Agent).
SECTION 7.7 Taxes. Such Borrower has filed all material tax returns and
reports ("Tax Returns and Reports") required by law to have been filed by such
Borrower and has paid Taxes thereby shown to be owing, except any such Taxes
which are being diligently contested in good faith by appropriate proceedings.
There is no ongoing audit or, to the best of such Borrower's knowledge, other
governmental investigation of the tax liability of such Borrower and there is no
unresolved claim by a taxing authority concerning such Borrower's tax liability,
for any period for which returns have been filed or were due.
SECTION 7.8 Accuracy of Information. All factual information heretofore or
contemporaneously furnished by or on behalf of such Borrower in writing to the
Administrative Agent or any Bank for purposes of or in connection with this
Agreement or any transaction contemplated hereby is, and all other such factual
information hereafter furnished by or on behalf of such Borrower to the
Administrative Agent or any Bank will be, true and accurate in every material
respect on the date as of which such information is dated or certified and,
except as such information speaks solely as of a particular date, such
information is not, or shall not be, as the case may be, incomplete by omitting
to state any material fact necessary to make such information not misleading.
SECTION 7.9 Proceeds. The proceeds of the Loans made to such Borrower will
be used solely to purchase shares of common stock of Guarantor.
SECTION 7.10 Securities Laws. Neither such Borrower nor, to the best of
such Borrower's knowledge, any of its Affiliates, nor anyone acting on behalf of
any such Person, has directly or indirectly offered any interest in the Loans or
any other Liabilities for sale to, or solicited any offer to acquire any such
interest from, or has sold any such interest to, any Person that would subject
the making of the Loans or any other Liabilities to registration under the
Securities Act of 1933, as amended.
SECTION 7.11 Solvency. Such Borrower is and, after consummation of this
Agreement and after giving effect to all Indebtedness incurred by such Borrower
in connection herewith, will be, Solvent.
SECTION 7.12 No Default. Such Borrower is not in default under any
agreement or instrument to which such Borrower is a party or by which any of its
properties or assets is bound or affected, which default might reasonably be
expected to have a Material Adverse Effect.
SECTION 7.13 Organization, etc. Each Borrower (other than any Borrower
which is an individual) is a partnership or irrevocable trust duly organized,
validly existing and, with respect to any partnership, in good standing under
the laws of the state of its formation and each partnership Borrower is duly
qualified to transact business as a foreign partnership authorized to do
business in each
28
jurisdiction where the nature of its business makes such qualification necessary
and failure to so qualify could reasonably be expected to have a Material
Adverse Effect.
SECTION 7.14 Authorization. Each Borrower (other than any Borrower which is
an individual) (a) has the power to execute, deliver and perform this Agreement
and the other Loan Documents to which it is a party, and (b) has taken all
necessary action to authorize the execution, delivery and performance by it of
this Agreement and the other Loan Documents to which it is a party.
SECTION 7.15 Margin Regulations. (a) None of the obligations of such
Borrower to Guarantor is or will be secured, directly or indirectly, by Margin
Stock;
(b) Neither Guarantor nor any third party acting on behalf of Guarantor has
taken or will take possession of such Borrower's Margin Stock to secure,
directly or indirectly, any of the obligations of such Borrower to Guarantor;
(c) Guarantor does not and will not have any right to prohibit such
Borrower from selling, pledging, encumbering or otherwise disposing of any
Margin Stock owned by such Borrower so long as the Guaranty is in effect or any
of the obligations of such Borrower or the obligations of Guarantor under the
this Agreement, the Guaranty or any of the Loan Documents remain outstanding;
(d) Such Borrower has not granted and will not grant Guarantor or any third
party acting on behalf of Guarantor the right to accelerate repayment of any of
the obligations under this Agreement of such Borrower if any of the Margin Stock
owned by such Borrower is sold by such Borrower or otherwise; and
(e) There is no agreement or other arrangement between such Borrower and
Guarantor or any third party acting on behalf of Guarantor (and no such
agreement or arrangement shall be entered into so long as this Agreement or
Guaranty is in effect or any of the Obligations of such Borrower or the
obligations of Guarantor under the Guaranty or any of the Loan Documents remain
outstanding) under which the Margin Stock of such Borrower would be made more
readily available as security to Guarantor than to other creditors of such
Borrower.
SECTION 7.16 No Default or Event of Default. No Default or Event of Default
(as such terms are defined in the Existing Credit Agreement) has occurred and
is continuing under the Existing Credit Agreement, and no Default or Event of
Default has occurred and is continuing hereunder.
SECTION 8. COVENANTS OF BORROWERS
Each Borrower agrees that, on and after the Closing Date until the
termination or expiration of the Commitments and for so long thereafter as any
of the Liabilities remain unpaid or outstanding
29
(except Liabilities which by the terms hereof survive the payment in full of the
Loans and termination of this Agreement), such Borrower will:
SECTION 8.1 Reports, Certificates and Other Information. Unless otherwise
provided herein, furnish or cause to be furnished to the Administrative Agent
and each Bank:
8.1.1 Borrower Financials. Upon the request of the Administrative
Agent, a financial statement of such Borrower in a form acceptable to the
Required Banks;
8.1.2 Tax Returns and Reports. If requested by the Administrative Agent
or the Required Banks, copies of all federal, state, local and foreign Tax
Returns and Reports filed by such Borrower;
8.1.3 Notice of Default and Litigation. Promptly upon learning of the
occurrence of any of the following, written notice thereof, describing the
same and the steps being taken by such Borrower with respect thereto:
(a) the occurrence of a Default;
(b) the institution of any Material Litigation or the
occurrence of any Material Litigation Development as to such
Borrower;
(c) the commencement of any dispute which might reasonably be
expected to lead to the material modification, transfer,
revocation, suspension or termination of any Loan Document; or
(d) any Material Adverse Change as to such Borrower;
8.1.4 Collateral Ratio. Upon the request of the Administrative Agent or
the Required Banks, cause Guarantor (on behalf of the Borrowers) to provide
to the Administrative Agent, for the benefit of the Banks, a computation of
the Collateral Ratio certified by its chief financial officer or a vice
president with responsibility for or knowledge of financial matters of
Guarantor. Nothing contained in this Section 8.1.4 shall be deemed to limit
in any way whatsoever the Administrative Agent's right, on behalf of the
Banks, to calculate the Loan Value of Direct Collateral or the Loan Value
of Indirect Collateral or the Collateral Ratio at any time it deems
appropriate or necessary. If after making such calculation, the
Administrative Agent or the Required Banks determine that the amount of
such Collateral Ratio is different from the Collateral Ratio most recently
provided by Guarantor or the Administrative Agent, as the case may be, the
Administrative Agent shall deliver written notice of such amount to
Guarantor (on behalf of the Borrowers); provided that the Administrative
Agent's failure to deliver such notice shall not prejudice the rights of
the Administrative Agent and the Banks or the obligations of the Borrowers
under this Agreement or the other Loan Documents; and
30
8.1.5 Other Information. From time to time, such other information
concerning such Borrower as the Administrative Agent or a Bank may
reasonably request.
SECTION 8.2 Taxes and Liabilities. Pay when due all of its Taxes and other
material liabilities, except as contested in good faith and by appropriate
proceedings.
SECTION 8.3 Compliance with Laws. Comply with all federal, state and local
laws, rules and regulations related to such Borrower, except where such failure
to comply could not reasonably be expected to have a Material Adverse Effect.
SECTION 8.4 Other Agreements. Not enter into any agreement containing any
provision which (a) would be violated or breached by the performance of its
obligations hereunder or under any instrument or document delivered or to be
delivered by such Borrower hereunder or in connection herewith, (b) prohibits or
restricts the ability of such Borrower to amend or otherwise modify this
Agreement, any other Loan Document or any other document executed in connection
herewith or (c) constitutes an agreement to a limitation or restriction of the
type described in clauses (a) and (b) with respect to any other Indebtedness.
SECTION 9. CONDITIONS AND EFFECTIVENESS OF
THIS AGREEMENT
The obligation of the Banks to make the Loans and the effectiveness of this
Agreement is subject to the performance by the Borrowers and Guarantor of all of
the obligations under this Agreement and to the satisfaction of the following
conditions precedent:
SECTION 9.1 Initial Loans. Prior to or concurrent with the making of the
initial Loans, the Administrative Agent shall have received all of the
following, each, except to the extent otherwise specified below, duly executed
by such Borrower dated the date of the initial Loans (or such earlier date as
shall be satisfactory to the Administrative Agent), in form and substance
satisfactory to the Administrative Agent, each in sufficient number of signed
counterparts or copies to provide one for each Bank and the Administrative
Agent:
9.1.1 If requested by the Administrative Agent, an appropriately
completed Note from each Borrower, payable to the order of the
Administrative Agent evidencing the aggregate Commitments of the Banks to
make Loans to such Borrower;
9.1.2 The Pledge Agreement;
9.1.3 The Administrative Agent's receipt of all shares of common stock
of Guarantor owned by each Borrower which have been purchased with proceeds
of Loans or any of the
31
foregoing relating thereto as required by the Pledge Agreement, together
with appropriate stock powers for such shares endorsed in blank and/or
other appropriate evidence of the perfection of the Administrative Agent's
Lien, including UCC financing statements and/or registrations or
acknowledgments of the Lien of the Administrative Agent on any applicable
brokerage account of each Borrower;
9.1.4 The Guaranty, together with the documents provided in Article V
of the Guaranty;
9.1.5 A favorable opinion of ▇▇▇▇ ▇. ▇▇▇▇, counsel of Guarantor,
substantially in the form of Exhibit F-1, and addressing such other legal
matters as the Administrative Agent may require;
9.1.6 A favorable opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇, outside counsel to
Guarantor, substantially in the form of Exhibit F-2, and addressing such
other legal matters as the Administrative Agent may require;
9.1.7 Certified copies of each material consent, license and approval
(including, without limitation, any consent or approval required under the
Revolving Credit Agreement) required in connection with the execution,
delivery, performance, validity and enforceability of this Agreement and
the other Loan Documents; such consents, licenses and approvals shall be in
full force and effect, shall be satisfactory in form and substance to the
Administrative Agent and shall be all of the material consents required to
be obtained or made on or before the consummation of the financing
contemplated by this Agreement;
9.1.8 A certificate of Guarantor certifying that since December 31,
1998, no event has occurred which individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect as to the
Guarantor;
9.1.9 Schedules and Exhibits satisfactory to the Administrative Agent
and the Banks;
9.1.10 Evidence satisfactory to the Administrative Agent of compliance
by each Borrower and Guarantor with Regulation U in connection with the
financing transactions contemplated hereby;
9.1.11 Evidence of each filing, registration or recordation (and
payment of any necessary fee, Tax or expense relating thereto) with respect
to each document (including, without limitation, any UCC financing
statement) required by the Loan Documents or under law or requested by the
Administrative Agent to be filed, registered or recorded in order to
create, in favor of the Administrative Agent, for the benefit of the Banks
a valid perfected Lien on all Direct Collateral (free of all other Liens)
(other than UCC financing statements to be filed in connection with the
Loan Documents which will be delivered for filing on the Closing Date);
32
9.1.12 Evidence satisfactory to the Administrative Agent that each of
the Loan Documents has been duly executed and delivered and is in full
force and effect without modification; and
9.1.13 Certified copies of any indemnification or similar agreements or
arrangements between any Borrower and Guarantor relating to the
reimbursement by such Borrower of any payments made by Guarantor under the
Guaranty, and certified copies of all documents and instruments relating to
the Conseco Stock Purchase Program (including, without limitation, any plan
relating thereto), as the same may have been amended or modified.
9.1.14 A Federal Reserve Form U-1 for the benefit of the Banks, duly
executed by each Borrower and the Guarantor, the statements made in which
shall be such, in the opinion of the Administrative Agent, as to permit the
transactions contemplated by this Agreement in accordance with Regulation
U.
9.1.15 Such other information and documents including direction
letters, powers of attorney, and Borrower authorizations to the
Administrative Agent to supplement Form U-1 statements in connection with
subsequent Loans as may reasonably be required by the Administrative Agent
and the Administrative Agent's counsel.
SECTION 9.2 All Loans. The obligation of the Banks to make Loans hereunder
is subject to the following further conditions precedent:
9.2.1 The Administrative Agent shall have received a duly executed
Notice of Borrowing;
9.2.2 No Default exists or will result from the making of the Loans,
and no Default (as defined under the Revolving Credit Agreement) has
occurred and is continuing;
9.2.3 The representations and warranties of the Borrowers contained in
Section 7, the representations and warranties of Guarantor contained in
Article III of the Guaranty and the other Loan Documents are true and
correct with the same effect as though made on the Borrowing Date;
9.2.4 No Material Litigation exists;
9.2.5 No Material Adverse Change has occurred with respect to the
Guarantor or any Borrower since the date of the most recent respective
financial statements of the Guarantor and each such Borrower delivered to
the Banks pursuant to this Agreement or the Guaranty, respectively;
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9.2.6 The Collateral Ratio for such Borrower, after giving effect to
such Loan, is at least 2.0 to 1.0.
SECTION 10. EVENTS OF DEFAULT AND THEIR EFFECT
SECTION 10.1 Events of Default. An "Event of Default" shall exist with
respect to a Borrower if any one or more of the following events (herein
collectively called "Events of Default") shall occur and be continuing:
10.1.1 NonPayment of Loans, etc.
(a) Default by such Borrower in the payment or prepayment when
due of any principal on the Loans made to such Borrower, or
(b) Default by such Borrower in the payment within five (5) days
of when due of any interest on the Loans made to such Borrower or any
other amount owing by such Borrower pursuant to this Agreement.
10.1.2 Bankruptcy, Insolvency, etc. Such Borrower, Guarantor or any
Significant Subsidiary becomes insolvent or generally fails to pay, or
admits in writing its inability to pay, debts as they become due; or such
Borrower, Guarantor or any such Significant Subsidiary applies for,
consents to, or acquiesces in the appointment of, a trustee, receiver or
other custodian for such Borrower, Guarantor or such Significant Subsidiary
or any property thereof, or makes a general assignment for the benefit of
creditors; or, in the absence of such application, consent or acquiescence,
a trustee, receiver or other custodian is appointed for such Borrower,
Guarantor or such Significant Subsidiary or for a substantial part of the
property of such Borrower, Guarantor or such Significant Subsidiary and is
not discharged within sixty (60) days; or any bankruptcy, reorganization,
debt arrangement, or other case or proceeding under any bankruptcy or
similar insolvency law is commenced in respect of such Borrower, Guarantor
or such Significant Subsidiary and if such case or proceeding is not
commenced by such Borrower, Guarantor or such Significant Subsidiary, it is
consented to or acquiesced in by such Borrower, Guarantor or such
Significant Subsidiary or remains for sixty (60) days undismissed.
10.1.3 Defaults Under this Agreement. Failure by such Borrower or
Guarantor (or any of its Subsidiaries) to comply with or perform any of the
covenants or agreements of such Borrower, Guarantor or any of its
Subsidiaries set forth in this Agreement or the other Loan Documents
applicable to such Borrower, Guarantor or any of its Subsidiaries (other
than those constituting an Event of Default under any of the other
provisions of this Section 10) and continuance of such failure for thirty
(30) days with respect to such Borrower and ten (10) days
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with respect to Guarantor, in each case after notice thereof to such
Borrower or Guarantor, as the case may be, from the Administrative Agent.
10.1.4 Representations and Warranties. Any representation or warranty
made by such Borrower or Guarantor in any of the Loan Documents is false or
misleading in any material respect as of the date hereof or as of the date
hereafter certified, or any schedule, certificate, financial statement,
report, notice, or other writing furnished by such Borrower or Guarantor to
the Administrative Agent or any Bank is false or misleading in any material
respect on the date as of which the facts therein set forth are stated or
certified.
10.1.5 Collateral Ratio. The Collateral Ratio for such Borrower is less
than 1.5 to 1.0.
10.1.6 Defaults under Revolving Credit Agreement. An event of default
shall have occurred and be continuing under the Revolving Credit Agreement.
If the Revolving Credit Agreement is terminated (and not replaced, restated
or substituted as permitted pursuant to the definition of "Revolving Credit
Agreement" in Section 1.1), the occurrence of any event or the existence of
any circumstance which would have, had it occurred or existed prior to such
termination, constituted an event of default, shall constitute an Event of
Default hereunder.
10.1.7 Defaults Under Existing Credit Agreement. An event of default
shall have occurred and be continuing under the Existing Credit Agreement.
10.1.8 Default Under Other Indebtedness. The Guarantor or any
Significant Subsidiary defaults in the payment when due (subject to any
applicable grace period), whether by acceleration or otherwise, of any
Indebtedness of Guarantor or any Significant Subsidiary (other than
Indebtedness in respect of the Guaranty) in an amount in excess of
$75,000,000.
SECTION 10.2 Effect of Event of Default. If any Event of Default described
in Section 10.1.2 shall occur and be continuing, the Commitments with respect to
such Borrower (or if such Event of Default relates to Guarantor, any Significant
Subsidiary or Section 10.1.7, all Borrowers) (if they have not theretofore
terminated) shall immediately terminate and all Liabilities of such Borrower
shall become immediately due and payable, all without presentment, demand,
protest or notice of any kind; and, in the case of any other Event of Default,
the Administrative Agent may (or shall, upon the written request of the Required
Banks) declare the Commitments of such Borrower (or if such Event of Default
relates to Guarantor, any Significant Subsidiary or Section 10.1.7, all
Borrowers) (if they have not theretofore terminated) to be terminated and all
Liabilities with respect to such Borrower to be due and payable, whereupon the
Commitments with respect to such Borrower (or if such Event of Default relates
to Guarantor, any Significant Subsidiary or Section 10.1.7, all Borrowers) (if
they have not theretofore terminated) shall immediately terminate and all
Liabilities with respect to such Borrower or all Borrowers, as the case may be,
shall become immediately due and payable, all without presentment, demand,
protest or notice of any kind. The Administrative Agent shall promptly advise
such Borrower or all Borrowers, as the case may be, and each Bank of any such
declaration, but failure to do so shall
35
not impair the effect of such declaration. Notwithstanding the foregoing or any
provision of Section 13.1, the effect as an Event of Default of any event
described in Section 10.1.2 may be waived by the written concurrence of the
Banks holding 100% of the aggregate unpaid principal amount of the Loans, and
the effect as an Event of Default of any other event described in this Section
10 may be waived as provided in Section 13.1.
SECTION 11. THE AGENT
SECTION 11.1 Authorization and Action. Each Bank hereby appoints and
authorizes the Administrative Agent to take such action as administrative agent
on its behalf and to exercise such powers to the extent provided herein or in
any document or instrument delivered hereunder or in connection herewith,
together with such other action as may be reasonably incidental thereto. As to
matters not expressly provided for by this Agreement (including, without
limitation, enforcement or collection of this Agreement or any other Loan
Document) the Administrative Agent shall not be required to exercise any
discretion, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Banks and such instructions shall be binding upon all Banks. Under
no circumstances shall the Administrative Agent have any fiduciary duties to any
Bank or be required to take any action which exposes the Administrative Agent to
personal liability or which is contrary to this Agreement or to the other Loan
Documents or applicable law.
SECTION 11.2 Liability of the Administrative Agent. None of the
Administrative Agent or any Agent-Related Person shall be liable for any action
taken or omitted to be taken by it or them under or in connection with this
Agreement and the other Loan Documents, except for its own gross negligence or
willful misconduct. Without limiting the generality of the foregoing, the
Administrative Agent: (a) may treat a Bank as such until the Administrative
Agent receives an executed Assignment Agreement entered into between a Bank and
an Eligible Assignee pursuant to Section 12.1 hereof; (b) may consult with legal
counsel (including counsel for any Borrower), independent public accountants and
other experts or consultants selected by it; (c) shall not be liable for any
action taken or omitted to be taken in good faith by the Administrative Agent in
accordance with the advice of counsel, accountants, consultants or experts; (d)
shall make no warranty or representation to any Bank and shall not be
responsible to any Bank for any recitals, statements, warranties or
representations, whether written or oral, made in or in connection with this
Agreement or the other Loan Documents; (e) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms,
obligations, covenants or conditions of this Agreement on the part of any
Borrower or to inspect the property (including, without limitation, any books
and records) of any Borrower; (f) shall not be responsible to any Bank for the
due execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other Loan Document or other support or security
(including the validity, priority or perfection of any Lien), or any other
document furnished in connection with any of the foregoing; and (g) shall incur
no liability under or in respect of this Agreement or any other Loan Document by
action upon any written notice, statement, certificate, order, telephone
message, facsimile
36
or other document which the Administrative Agent believes in good faith to be
genuine and correct and to have been signed, sent or made by the proper Person.
SECTION 11.3 Administrative Agent and Affiliates. With respect to the Loans
made by it, Chase shall have the same rights and powers under this Agreement and
the other Loan Documents as any other Bank and may exercise the same as though
it were not the Administrative Agent; and the term "Bank" or "Banks" shall,
unless otherwise expressly indicated, include Chase in its individual capacity.
Chase and its Affiliates may accept deposits from, lend money to, act as trustee
under indentures of, and generally engage in any kind of business with, any
Borrower, Guarantor and any of its Subsidiaries and any Person who may do
business with or own securities of Guarantor or any such Subsidiary, all as if
Chase was not the Administrative Agent and without any duty to account therefor
to the Banks.
SECTION 11.4 Bank Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Bank and based on the financial statements referred to in Section 7.3 hereof and
Section 3.7 of the Guaranty and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Bank and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement.
SECTION 11.5 Indemnification. The Banks agree to indemnify the
Administrative Agent and each Agent-Related Person (to the extent not reimbursed
by the Borrower), ratably according to their Percentages, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or assessed against the
Administrative Agent in any way relating to or arising out of this Agreement or
the other Loan Documents, or any action taken or omitted by the Administrative
Agent under this Agreement or the other Loan Documents; provided, that no Bank
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Administrative Agent's gross negligence or willful
misconduct. Without limiting any of the foregoing, each Bank agrees to reimburse
the Administrative Agent promptly upon demand for their Percentage of any
expenses (including reasonable counsel fees) incurred by the Administrative
Agent (in its individual capacity as agent or in its capacity as representative
of the Banks) in connection with the preparation, execution, delivery,
administration, modification, amendment, waiver or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under this Agreement or the other Loan Documents to
the extent that the Administrative Agent is not reimbursed for such expenses by
the Borrowers or Guarantor. All obligations provided for in this Section 11.5
shall survive termination of this Agreement.
SECTION 11.6 Successor Agent. The Administrative Agent may, and at the
request of the Required Banks shall, resign as Administrative Agent upon 30
days' notice to the Banks. If the
37
Administrative Agent resigns under this Agreement, the Required Banks shall
appoint from among the Banks a successor agent for the Banks which successor
agent shall be approved by a majority of the Borrowers (which consent shall not
be unreasonably withheld). If no successor agent is appointed prior to the
effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after consulting with the Banks and the
Borrowers, a successor agent from among the Banks. Upon the acceptance of its
appointment as successor agent hereunder, such successor agent shall succeed to
all the rights, powers and duties of the retiring Administrative Agent and the
term "Administrative Agent" shall mean such successor agent and the retiring
Administrative Agent's appointment, powers and duties as Administrative Agent
shall be terminated. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Section 11 shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement. If no successor agent has accepted
appointment as Administrative Agent by the date which is 30 days following a
retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Banks shall perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Banks appoint a successor
agent as provided for above.
SECTION 12. ASSIGNMENTS AND PARTICIPATIONS
SECTION 12.1 Assignments. (a) Each Bank shall have the right at any time to
assign with the consent of Guarantor (on behalf of the Borrowers) and the
Administrative Agent (which consent, in each case, will not unreasonably be
withheld), to any Eligible Assignee, all or any part of such Bank's rights and
obligations under this Agreement and each other Loan Document including its
rights in respect of its Loans and Notes, if any. Any such assignment shall be
pursuant to an assignment agreement, substantially in the form of Exhibit H (an
"Assignment Agreement"), duly executed by such Bank and the Eligible Assignee,
and acknowledged by the Administrative Agent. Notwithstanding the foregoing,
each Bank may make assignments to its Affiliates or to any Federal Reserve Bank
without obtaining consent of the Administrative Agent.
(b) Each assignment shall be pro rata with respect to all rights and
obligations of the assigning Bank including the Commitments, the Loans and the
Notes, if any. Each assignment shall be in an amount equal to or in excess of
$5,000,000 (except for assignments of the entire unpaid balance, if less than
$5,000,000, of the Loans of a Bank or assignments to existing Banks). In the
case of any such assignment, upon the fulfillment of the conditions in Section
12.1(c), this Agreement shall be deemed to be amended to the extent, and only to
the extent, necessary to reflect the addition of such Eligible Assignee, and
such Eligible Assignee shall for all purposes be a Bank party hereto and shall
have, to the extent of such assignment, the same rights and obligations as a
Bank hereunder.
(c) An assignment shall become effective hereunder when all of the
following shall have occurred:
38
(i) the Assignment Agreement shall have been executed by the assigning
Bank and the Eligible Assignee,
(ii) the Assignment Agreement shall have been acknowledged by the
Administrative Agent,
(iii) either the assigning Bank or the Eligible Assignee shall have
paid a processing fee of $3,000 to the Administrative Agent for its own
account; provided that the Eligible Assignee shall be solely responsible
for such processing fee with respect to any assignment pursuant to Sections
5.8 and 13.2, and
(iv) the assigning Bank and the Administrative Agent shall have agreed
upon a date upon which such assignment shall become effective. Upon such
assignment becoming effective, the Administrative Agent shall forward all
payments of interest, principal, fees and other amounts that would have
been made to the assigning Bank, in proportion to the percentage of the
assigning Bank's rights transferred, to the Eligible Assignee.
(d) Upon the effectiveness of any assignment, the assigning Bank shall
be relieved from its obligations hereunder to the extent of the obligations so
assigned (except to the extent, if any, that any Borrower, any other Bank or the
Administrative Agent have rights against such assigning Bank as a result of any
default by such Bank under this Agreement). Promptly following the effectiveness
of each assignment, the Administrative Agent shall furnish to the Borrowers and
each Bank a revised Schedule 2.1, revised to reflect such assignment.
SECTION 12.2 Participations. (a) Each Bank may grant participations in all
or any part of its Loans, Commitments and, if applicable, the Notes to any
commercial bank or other financial institution (other than insurance companies
and Affiliates thereof unless consented to by Guarantor). A participant shall
not have any rights under this Agreement or any other document delivered in
connection herewith (the participant's rights against such Bank in respect of
such participation to be those set forth in the agreement executed by such Bank
in favor of the participant relating thereto, which agreement with respect to
such participation shall not restrict such Bank's ability to make any
modification, amendment or waiver to this Agreement without the consent of the
participant except that the consent of such participant may be required in
connection with matters requiring the consent of all of the Banks under Section
13.1). Notwithstanding the foregoing, each participant shall have the rights of
a Bank pursuant to Section 4.6. All amounts payable by any Borrower under this
Agreement shall be determined as if the Bank had not sold such participation. In
the event of any such sale by a Bank of participating interests to a
participant, such Bank's obligations under this Agreement shall remain
unchanged, such Bank shall remain solely responsible for the performance
thereof, such Bank shall remain the holder of any obligation for all purposes
under this Agreement, and the Borrowers and the Administrative Agent shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement.
39
(b) Limitation of Rights of any Participant. Notwithstanding anything
in the foregoing to the contrary,
(i) no participant shall have any direct rights hereunder,
(ii) the Borrowers, the Administrative Agent and the Banks, other than
the selling Bank, shall deal solely with the selling Bank and shall not be
obligated to extend any rights or make any payment to, or seek any consent
of, the participant,
(iii) no participation shall relieve the selling Bank of any of its
other obligations hereunder and such Bank shall remain solely responsible
for the performance thereof, and
(iv) no participant, other than an affiliate of the selling Bank, shall
be entitled to require such Bank to take or omit to take any action
hereunder, except that such Bank may agree with such participant that such
Bank will not, without participant's consent, take any action which
requires the consent of all of the Banks under Section 13.1.
SECTION 12.3 Disclosure of Information. Each Borrower authorizes each Bank
to disclose to any participant, assignee or Eligible Assignee (each, a
"Transferee") and any prospective Transferee any and all financial and other
information in such Bank's possession concerning such Borrower, Guarantor and
its Subsidiaries which has been delivered to such Bank by such Borrower and/or
Guarantor in connection with such Bank's credit evaluation of such Borrower
prior to entering into this Agreement or which has been delivered to such Bank
by such Borrower and/or Guarantor pursuant to this Agreement; provided, however,
that each Bank, participant, assignee and Eligible Assignee shall execute a
confidentiality agreement substantially in the form of Exhibit G in which it
agrees that it shall hold all non-public, confidential and proprietary
information obtained pursuant to the requirements of this Agreement in
accordance with safe and sound banking and business practices and may make
disclosure reasonably required by any bona fide participant, assignee or
Eligible Assignee (or potential participant, assignee or Eligible Assignee) in
connection with the contemplated transfer of any portion of the Loans or as
required or requested by any Governmental Authority or representative thereof or
pursuant to legal process. For the purposes of this Section 12.3, by execution
of this Agreement each of the Banks shall be deemed to have agreed to and
executed the confidentiality agreement contained in Exhibit G.
SECTION 12.4 Foreign Transferees. If, pursuant to this Section 12, any
interest in this Agreement or any Loans or the Note is transferred to any
Transferee which is organized under the laws of any jurisdiction other than the
United States or any state thereof or upon the request of the Administrative
Agent, the transferor Bank shall cause such Transferee (other than any
participant), and may cause any participant, concurrently with the effectiveness
of such transfer,
40
(a) to represent to the transferor Bank (for the benefit of the
transferor Bank, the Administrative Agent and the Borrowers) that under
applicable law and treaties no Taxes will be required to be withheld by the
Administrative Agent,
(b) to represent to the Borrowers or the transferor Bank that under
applicable law and treaties no Taxes will be required to be withheld with
respect to any payments to be made to such Transferee in respect of the
Loans or, if applicable, the Notes,
(c) to furnish to the transferor Bank, the Administrative Agent and the
Borrowers either U.S. Internal Revenue Service Form 4224 or U.S. Internal
Revenue Service Form 1001 (wherein such Transferee claims entitlement to
complete exemption from U.S. federal withholding tax on all interest
payments hereunder), and
(d) to agree (for the benefit of the transferor Bank, the
Administrative Agent and the Borrowers) to provide the transferor Bank, the
Administrative Agent and the Borrowers a new Form 4224 or Form 1001 upon
the obsolescence of any previously delivered form and comparable statements
in accordance with applicable U.S. laws and regulations and amendments duly
executed and completed by such Transferee, and to comply from time to time
with all applicable U.S. laws and regulations with regard to such
withholding tax exemption.
SECTION 13. MISCELLANEOUS
SECTION 13.1 Waivers and Amendments. The provisions of this Agreement and
of each other Loan Document may from time to time be amended, modified or
waived, if such amendment, modification or waiver is in writing and consented to
by the Borrowers and the Required Banks; provided, that no such amendment,
modification or waiver:
(a) which would modify any requirement hereunder that any particular
action be taken by all Banks or by the Required Banks, shall be effective
without the consent of each Bank;
(b) which would modify this Section 13.1, change the definition of
"Required Banks," change any Percentage for any Bank (except pursuant to an
Assignment Agreement), reduce any fees, extend the maturity date of any
Loan, reduce any rate of interest payable on the Loans or subject any Bank
to any additional obligations, shall be effective without the consent of
each Bank;
(c) which would permit the release of all or any material portion of
the Direct Collateral or Indirect Collateral or the release or termination
of Guarantor's obligations in the aggregate, or any material obligation
individually, under the Guaranty, shall be effective without the consent of
each Bank;
41
(d) which would extend the due date for, or reduce the amount of, any
payment or prepayment of principal of or interest on the Loans, shall be
effective without the consent of each Bank directly affected thereby; or
(e) which would affect adversely the interests, rights or obligations
of the Administrative Agent (in such capacity) other than removal in
accordance with Section 11.6, shall be effective without consent of the
Administrative Agent.
SECTION 13.2 Failure to Consent. If any Bank shall fail to consent to any
amendment, modification or waiver described in Section 13.1 (any such Bank being
hereinafter referred to as a "Non-Consenting Bank") then in such case, Guarantor
(on behalf of the Borrowers) may, upon at least five (5) Business Days' written
notice to the Administrative Agent and such Non-Consenting Bank, designate a
substitute lender (a "Substitute Bank") acceptable to the Administrative Agent
in its sole discretion, to which such Non-Consenting Bank shall assign all (but
not less than all) of its rights and obligations under the Loans and Commitment
hereunder. Upon any assignment by any Bank pursuant to this Section 13.2
becoming effective, the Substitute Bank shall thereupon be deemed to be a "Bank"
for all purposes of this Agreement and the assigning Bank shall thereupon cease
to be a "Bank" for all purposes of this Agreement and shall have no further
rights or obligations hereunder (other than pursuant to Sections 5.1, 5.2, 5.5,
11.5 and 13.4, and Sections 7.1 and 7.2 of the Guaranty while such
Non-Consenting Bank was a Bank); provided, that all Liabilities (except
Liabilities which by the terms hereof survive the payment in full of the Loans
and termination of this Agreement) due and payable to the Non-Consenting Bank
shall be paid in full as of the date of such assignment. Notwithstanding the
foregoing, in the event that in connection with any amendment, modification or
waiver more than one Bank is a Non-Consenting Bank, the Borrowers may not
require one Bank to assign its rights and obligations to a Substitute Bank
unless all Non-Consenting Banks are required to make such an assignment.
Notwithstanding any Non-Consenting Bank's failure or refusal to assign its
rights, obligations, Loans and Commitment under this Section 13.2, the
Non-Consenting Bank shall cease to be a "Bank" for all purposes of this
Agreement and the Substitute Bank substituted therefor upon payment to the
Non-Consenting Bank by the Substitute Bank of all amounts set forth in this
Section 13.2 without any further action of the Non-Consenting Bank.
SECTION 13.3 Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including bank wire, telex, facsimile or
similar writing) and shall be given to such party at its address, facsimile or
telex number set forth on the signature or acknowledgement pages hereof or such
other address, facsimile or telex number as such party may hereafter specify for
the purpose by written notice to the Administrative Agent, the Borrowers and
Guarantor. Each such notice, request or other communication shall be effective
(a) if given by facsimile or telex, when such facsimile or telex is transmitted
to the facsimile or telex number specified in this Section and, in the case of
telex, the appropriate answerback is received, (b) if given by mail, seventy-two
(72) hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (c) if given by any other means, when
delivered at the address specified in this Section, provided, that notices
42
to the Administrative Agent under Sections 2, 3, 4 and 10 shall not be effective
until received by the Administrative Agent.
SECTION 13.4 Indemnity. The Borrowers agree, jointly and severally, to
indemnify each Bank, its Affiliates and each of their respective directors,
officers, employees, persons controlling or controlled by any of them or their
respective agents, consultants, attorneys and advisors (the "Indemnified
Parties") and hold each Indemnified Party harmless from and against any and all
liabilities, losses, claims, damages, costs and expenses of any kind to which
any of the Indemnified Parties may become subject, whether directly or
indirectly (including, without limitation, the reasonable fees and disbursements
of counsel for any Indemnified Party), relating to or arising out of this
Agreement, the other Loan Documents, or any actual or proposed use of the
proceeds of the Loans hereunder; provided, that no Indemnified Party shall have
the right to be indemnified hereunder for its own gross negligence or willful
misconduct as determined by a court of competent jurisdiction. All obligations
of the Borrowers and Guarantor provided for in this Section 13.4 shall survive
termination of this Agreement.
SECTION 13.5 Subsidiary References. The provisions of this Agreement
relating to Subsidiaries shall apply only during such times as a Person
referenced in such a provision has one or more Subsidiaries.
SECTION 13.6 Captions. Section captions used in this Agreement are for
convenience only, and shall not affect the construction of this Agreement.
SECTION 13.7 GOVERNING LAW. THIS AGREEMENT, THE NOTES, IF ANY, AND THE
LOANS SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK. ALL OBLIGATIONS OF THE BORROWERS AND GUARANTOR AND RIGHTS OF THE
ADMINISTRATIVE AGENT AND THE BANKS IN RESPECT OF THE LIABILITIES EXPRESSED
HEREIN OR IN THE OTHER LOAN DOCUMENTS SHALL BE IN ADDITION TO AND NOT IN
LIMITATION OF THOSE PROVIDED BY APPLICABLE LAW.
SECTION 13.8 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties on separate counterparts and each such
counterpart shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same agreement. When counterparts executed
by all the parties shall have been lodged with the Administrative Agent (or, in
the case of any Bank as to which an executed counterpart shall not have been so
lodged, the Administrative Agent shall have received telegraphic, facsimile,
telex or other written confirmation from such Bank of execution of a counterpart
hereof by such Bank), this Agreement shall become effective as of the Closing
Date hereof, and at such time the Administrative Agent shall notify the
Borrowers and each Bank.
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SECTION 13.9 SUBMISSION TO JURISDICTION; WAIVER OF VENUE. THE
ADMINISTRATIVE AGENT, EACH BANK AND EACH BORROWER HEREBY IRREVOCABLY SUBMIT 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 FOR THE
SOUTHERN DISTRICT OF NEW YORK OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, AND THE ADMINISTRATIVE
AGENT, EACH BANK AND EACH BORROWER HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW
YORK STATE OR, TO THE EXTENT PERMITTED BY LAW, FEDERAL COURT. THE ADMINISTRATIVE
AGENT, EACH BANK AND EACH BORROWER HEREBY IRREVOCABLY WAIVE, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION IT OR THEY MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE IN ANY ACTION OR PROCEEDING (WHETHER BROUGHT BY ANY
BORROWER, THE ADMINISTRATIVE AGENT, ANY BANK, OR OTHERWISE) IN ANY COURT
HEREINABOVE SPECIFIED IN THIS SECTION 13.9 AS WELL AS ANY RIGHT IT OR THEY MAY
NOW OR HEREAFTER HAVE TO REMOVE ANY SUCH ACTION OR PROCEEDING, ONCE COMMENCED,
TO ANOTHER COURT ON THE GROUNDS OF FORUM NON CONVENIENS OR OTHERWISE. THE
ADMINISTRATIVE AGENT, EACH BANK AND EACH BORROWER AGREE 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.
SECTION 13.10 Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that: the Borrowers may not assign or
transfer their rights or obligations under this Agreement or any other Loan
Document without the prior written consent of all Banks, and the rights of the
Banks to make assignments or grant participations are subject to the provisions
of Section 12.
SECTION 13.11 WAIVER OF JURY TRIAL. EACH BORROWER, THE ADMINISTRATIVE AGENT
AND EACH BANK HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT TO
A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS
UNDER THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY OTHER DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
THEREWITH, OR ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH
THIS AGREEMENT, AND AGREE THAT ANY SUCH ACTION, PROCEEDING OR COUNTERCLAIM SHALL
BE TRIED BEFORE A COURT AND NOT BEFORE A JURY;
44
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THIS
AGREEMENT.
* * *
45
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by themselves or their respective authorized officers as of the
day and year first above written.
THE CHASE MANHATTAN BANK, as
Administrative Agent and as a Bank
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
BORROWERS:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ IRREVOCABLE TRUST, II
(By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as Trustee)
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
MARYJOSC, LP
(By: ▇▇▇▇▇▇ ▇. ▇▇▇▇, General Partner)
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
DPM, LTD
(By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. and
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, General Partners
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. DECATUR
/S/ ▇▇▇▇▇ ▇. Decatur
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Name: ▇▇▇▇▇ ▇. Decatur
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
/S/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇
/S/ ▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇
M. ▇▇▇▇ ▇▇▇▇▇▇▇▇
/S/ M. ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: M. ▇▇▇▇ ▇▇▇▇▇▇▇▇
ACCEPTANCE AND ACKNOWLEDGMENT
-----------------------------
CONSECO, INC. hereby acknowledges and agrees to make such deliveries as are
required by it and comply with the covenants and other provisions applicable to
it contained in this Agreement.
CONSECO, INC.
By: /S/▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
and Chief Financial Officer
Notice Address:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇