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ENHANCE FINANCIAL SERVICES GROUP INC.
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CREDIT AGREEMENT
Dated as of June 30, 1998
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$100,000,000
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FLEET NATIONAL BANK,
as Administrative Agent
and
Arranger
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TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which it is
attached but is inserted for convenience of reference only.
Page
Section 1. Definitions and Accounting Matters ................................ 1
1.01 Certain Defined Terms ............................................ 1
1.02 Accounting Terms and Determinations ..............................16
1.03 Classes, Series; Type ............................................16
Section 2. Commitments, Loans, Notes and Prepayments .........................17
2.01 Loans ............................................................17
2.02 Borrowings .......................................................18
2.03 Changes in Aggregate Amount of Commitments .......................22
2.04 Fees .............................................................23
2.05 Several Obligations; Remedies Independent ........................23
2.06 Notes ............................................................23
2.07 Optional Prepayments and Conversions or
Continuations of Loans .........................................24
2.08 Extension of Commitment Termination Date .........................25
Section 3. Payments of Principal and Interest ................................27
3.01 Repayment of Loans ...............................................27
3.02 Interest .........................................................27
Section 4. Payments; Pro Rata Treatment, Computations; Etc. ..................28
4.01 Payments .........................................................28
4 02 Pro Rata Treatment ...............................................29
4.03 Computations .....................................................30
4.04 Minimum Amounts ..................................................30
4.05 Certain Notices ..................................................30
4.06 Non-Receipt of Funds by the Administrative Agent .................32
4.07 Sharing of Payments, Etc. ........................................32
Section 5. Yield Protection, Etc. ............................................34
5.01 Additional Costs .................................................34
5.02 Limitation on Types of Loans .....................................36
5.03 Illegality .......................................................36
5.04 Treatment of Affected Loans ......................................37
5.05 Compensation .....................................................37
5.06 U.S. Taxes .......................................................38
5.07 Fair Allocation; Substitution of Banks ...........................39
Section 6. Conditions Precedent ..............................................40
6.01 Effective Date ...................................................40
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6.02 Term Loans .......................................................42
6.03 Initial and Subsequent Loans .....................................42
Section 7. Representations and Warranties
7.01 Corporate Existence ..............................................42
7.02 Financial Condition ..............................................42
7.03 Litigation .......................................................43
7.04 No Breach ........................................................44
7.05 Action ...........................................................44
7.06 Approvals ........................................................44
7.07 Margin Stock .....................................................44
7.08 ERISA ............................................................44
7.09 Taxes ............................................................45
7.10 Investment Company Act ...........................................45
7.11 Public Utility Holding Company Act ...............................45
7.12 Material Agreements and Liens ....................................45
7.13 Environmental Matters ............................................46
7.14 Capitalization ...................................................46
7.15 Subsidiaries, Etc. ...............................................46
7.16 True and Complete Disclosure .....................................46
7.17 Year 2000 ........................................................47
Section 8. Covenants of the Company ..........................................47
8.01 Financial Statements; Information; Etc. ..........................47
8.02 Litigation .......................................................51
8.03 Existence, Etc. ..................................................51
8.04 Insurance ........................................................51
8.05 Prohibition of Fundamental Changes ...............................52
8.06 Limitation on Liens ..............................................53
8.07 Indebtedness .....................................................54
8.08 Investments ......................................................55
8.09 Restricted Payments ..............................................55
8.10 Financial Covenant - Tangible Net Worth ..........................56
8.11 Lines of Business ................................................56
8.12 Transactions with Affiliates .....................................56
8.13 Use of Proceeds ..................................................57
8.14 Certain Obligations Respecting Subsidiaries ......................57
8.15 Modifications of Certain Documents ...............................57
8.16 Claims-Paying Rating .............................................58
8.17 Dividends to or Investments in the Company by
Subsidiaries ...................................................58
Section 9. Events of Default .................................................58
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Section 10. The Administrative Agent .........................................60
10.01 Appointment, Powers and Immunities ...............................60
10.02 Reliance by Administrative Agent .................................61
10.03 Defaults .........................................................62
10.04 Rights as a Bank .................................................62
10.05 Indemnification ..................................................62
10.06 Non-Reliance on Administrative Agent and Other
Banks ..........................................................63
10.07 Failure to Act ...................................................63
10.08 Resignation or Removal of Administrative Agent ...................63
10.09 Consents under Basic Documents ...................................64
Section 11. Miscellaneous ....................................................64
11.01 Waiver ...........................................................64
11.02 Notices ..........................................................64
11 03 Expenses, Etc. ...................................................64
11.04 Amendments Etc. ..................................................65
11.05 Successors and Assigns ...........................................66
11.06 Assignments and Participations ...................................66
11.07 Survival .........................................................68
11.08 Captions .........................................................68
11.09 Counterparts .....................................................68
11.10 Governing Law; Submission to Jurisdiction ........................68
11.11 Waiver of Jury Trial .............................................68
11.12 Treatment of Certain Information; Confidentiality ................68
CREDIT AGREEMENT dated as of June 30, 1998 among: ENHANCE FINANCIAL
SERVICES GROUP INC., a corporation duly organized and validly existing under the
laws of the State of New York (together with its successors and assigns, the
"Company"); each of the lenders named under the caption "BANKS" on the signature
pages hereof (together with its successors and assigns, individually, a "Bank",
together, the "Banks"); and FLEET NATIONAL BANK, as Swingline Bank hereunder (in
such capacity, together with its successors and permitted assigns in such
capacity, the "Swingline Bank") and as agent for the Banks (in such capacity,
together with its successors in such capacity, the "Administrative Agent").
The Company, the Banks, the Swingline Bank and the Administrative
Agent agree as follows:
Section 1. Definitions and Accounting Matters.
1.01. Certain Defined Terms. As used herein, the following terms
shall have the following meanings (all terms defined in this Section 1.01 or in
other provisions of this Agreement in the singular to have the same meanings
when used in the plural and vice versa):
"Affiliate" shall mean, as to any specified Person, any other Person
that directly or indirectly controls, or is under common control with, or is
controlled by, such specified Person. As used in this definition, "control"
(including, with its correlative meanings, "controlled by" and "under common
control with") shall mean possession, directly or indirectly, of power to direct
or cause the direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise), provided that, in any event, any Person that owns directly or
indirectly securities having 10% or more of the voting power for the election of
directors or other governing body of a corporation or 10% or more of the
partnership or other ownership interests of any other Person will be deemed to
control such corporation or other Person. Notwithstanding the foregoing, (a) no
individual shall be an Affiliate of any Person or any of its Subsidiaries solely
by reason of such individual being a director, officer or employee of such
Person or any of its Subsidiaries, (b) a Person and its Subsidiaries shall not
be Affiliates of each other and (c) neither the Administrative Agent nor any
Bank shall be an Affiliate of the Company or any of its Subsidiaries.
"Applicable Insurance Regulatory Authority" shall mean, with respect
to any Insurance Subsidiary, the insurance department or similar insurance
regulatory or administrative authority or agency of the state in which such
Insurance Subsidiary is domiciled.
"Applicable Lending Office" shall mean, for each Bank and each Type
of Loan, the "Lending Office" of such Bank (or of an affiliate of such Bank)
designated for such Type of Loan on the signature pages hereof or such other
office of such Bank (or of an affiliate of such Bank) as such Bank may from time
to time specify to the Administrative Agent and the Company as the office by
which its Loans of a Type are to be made and maintained. The Swingline Loans
shall be made and maintained at the "Lending Office" of the Swingline Bank.
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"Applicable Margin" shall mean: (a) with respect to Revolving Credit
Loans and Term Loans that are Base Rate Loans, 0% per annum; and (b) with
respect to (i) Revolving Credit Loans and Term Loans that are Eurodollar Loans
or (ii) with respect to facility fees payable hereunder, the applicable
percentage per annum set forth below under the caption "Eurodollar Spread" or
"Facility Fee Rate", as the case may be, based upon the ratings by S&P and
Moody's applicable on such date to the Index Debt:
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Eurodollar Spread
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Index Debt Revolving Facility Fee
Rating: Credit Loan(1) Term Loan Rate
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▇▇▇▇▇ ▇ 0.200% 0.300% 0.050%
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▇▇▇▇▇ ▇ 0.240% 0.340% 0.060%
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▇▇▇▇▇ ▇ 0.280% 0.380% 0.070%
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▇▇▇▇▇ ▇ 0.315% 0.415% 0.085%
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▇▇▇▇▇ ▇ 0.345% 0.445% 0.105%
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(1) During any period that the aggregate outstanding principal amount of
Revolving Credit Loans Competitive Loans and Swingline Loans equals or
exceeds 33 1/3% of the aggregate Commitments of the Banks, the Eurodollar
Spread for Revolving Credit Loans shall be increased by .050% above the
percentages set forth in the above grid for each of the Index Debt Rating
Levels.
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For purposes of determining the applicable Index Debt Rating (except for split
ratings of more than one equivalent level as provided for below): (a) ▇▇▇▇▇ ▇
▇▇▇▇▇ ▇▇ deemed to be applicable if (i) no Event of Default shall have occurred
and be continuing and (ii) the Index Debt is rated AA or higher by S&P or Aa2
or higher by Moody's; (b) Level 2 shall be deemed to be applicable if (i) no
Event of Default shall have occurred and be continuing, (ii) Level 1 is not
applicable and (iii) the Index Debt is rated A or higher by S&P or A2 or higher
by Moody's; (c) Level 3 shall be deemed to be applicable if (i) no Event of
Default shall have occurred and be continuing, (ii) neither Level 1 nor Level 2
is applicable and (iii) the Index Debt is rated A- or higher by S&P or A3 or
higher by Moody's; (d) Level 4 shall be deemed to be applicable if (i) no Event
of Default shall have occurred and be continuing, (ii) neither ▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇
nor Level 3 is applicable and (iii) the Index Debt is rated BBB+ or higher by
S&P or Baal or higher by Moody's; and (e) Level 5 shall be deemed to be
applicable if no other Level is applicable. If S&P or Moody's shall not have in
effect a rating for the Index Debt (other than by reason of the circumstances
referred to in the last sentence of this definition), then S&P shall be deemed
to have established a rating in Level 5. If the rating for the Index Debt of S&P
and ▇▇▇▇▇'▇ is split by more than one equivalent rating level, the Index Debt
Rating shall be deemed to be at that Level corresponding to the rating that is
one level higher than the lower of the two ratings. If the
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rating established or deemed to have been established by S&P or Moody's for the
Index Debt shall be changed (other than as a result of a change in the rating
system of S&P or ▇▇▇▇▇`s), such change shall be effective as of the date on
which it is first announced by S&P or Moody's, as the case may be. Each change
in the Applicable Margin shall apply during the period commencing on the
effective date of such change and ending on the date immediately preceding the
effective date of the next such change. If the rating system of S&P or Moody's
shall change, or if S&P or Moody's shall cease to be in the business of rating
corporate debt obligations, the Company and the Banks shall negotiate in good
faith to amend this definition to reflect such changed rating system or the
unavailability of ratings from such rating agency and, pending the effectiveness
of any such amendment, the Applicable Margin shall be determined by reference to
the rating most recently in effect prior to such change or cessation.
"Arranger" shall mean Fleet National Bank.
"Asset Guaranty" shall mean Asset Guaranty Reinsurance Company, a
New York financial guaranty insurance company and a Wholly Owned Subsidiary of
the Company.
"Bankruptcy Code" shall mean the Federal Bankruptcy Code of 1978, as
amended from time to time.
"Base Rate" shall mean, for any day, a rate per annum equal to the
higher of (a) the Federal Funds Rate for such day plus 1/2 of 1% and (b) the
Prime Rate for such day. Each change in any interest rate provided for herein
based upon the Base Rate resulting from a change in the Base Rate shall take
effect at the time of such change in the Base Rate.
"Base Rate Loans" shall mean Loans that bear interest at rates based
upon the Base Rate.
"Basic Documents" shall mean, collectively, this Agreement and the
Notes.
"Borrowings" means (a) Revolving Credit Loans of the same Type,
made, Converted or Continued on the same date and, in the case of Eurodollar
Loans, as to which a single Interest Period is in effect, or (b) a Competitive
Loan or group of Competitive Loans of the same Type made on the same date and as
to which a single Interest Period is in effect.
"Business Day" shall mean any day (a) on which commercial banks are
not authorized or required to close in Hartford, Connecticut or New York City
and (b) if such day relates to a Borrowing of a payment or prepayment of
principal of or interest on, a Conversion of or into, or an Interest Period for,
a Eurodollar Loan or a notice by the Company with respect to any such Borrowing,
payment, prepayment, Conversion or Interest Period, also on which dealings in
Dollar deposits are carried out in the London interbank market.
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"Capital Lease Obligations" shall mean, for any Person, all
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) Property to the extent such
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP (including Statement of Financial
Accounting Standards No. 13 of the Financial Accounting Standards Board), and,
for purposes of this Agreement, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP (including such
Statement No. 13).
"Change in Control" shall mean, with respect to the Company, the
occurrence of a state of facts where (a) any one Person, together with its
Subsidiaries and Affiliates, or any group of Persons acting together as a group
(whether pursuant to a shareholders agreement, partnership or joint venture
agreement or otherwise), shall own (beneficially or otherwise) 50% or more of
the Voting Stock of the Company or (b) the Company is or would be required to
register itself as a "controlled insurer" under Section 1503 of the New York
Insurance Law, or (c) the Company is or would be required under Section 1506(e)
of the New York Insurance Law to notify the New York State Superintendent of
Insurance of a Person which controls or has acquired control of the Company, or
(d) a Person has filed under Section 1506(a) of the New York Insurance Law to
obtain the prior approval of the New York State Superintendent of Insurance to
acquire control of the Company and such approval has been obtained.
"Class" shall have the meaning assigned to such term in Section 1.03
hereof.
"Closing Date" shall mean the date upon which the initial Loans
hereunder are made.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Commitment" shall mean, as to each Bank, the obligation of such
Bank to make Loans in an aggregate amount not exceeding the amount set opposite
such Bank's name on the signature pages hereof under the caption "Commitment"
(as the same may be reduced at any time or from time to time pursuant to Section
2.03 hereof).
"Commitment Termination Date" shall mean June 29, 1999 (provided
that, if such date is not a Business Day, the next preceding Business Day), as
the same may be extended pursuant to Section 2.08 hereof.
"Competitive Bid" means an offer by a Bank to make a Competitive
Loan in accordance with Section 2.02.
"Competitive Bid Rate" means, with respect to any Competitive Bid,
the Competitive Margin or the Fixed Rate, as applicable, offered by the Bank
making such Competitive Bid.
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"Competitive Bid Request" means a request by the Borrower for
Competitive Bids in accordance with Section 2.02.
"Competitive Loan" means a Loan made pursuant to Section 2.01(e).
"Competitive Margin" shall mean wit respect to any Competitive Loan
bearing interest at a rate based on the Eurodollar Base Rate, the marginal rate
of interest, if any, to be added to or subtracted from the Eurodollar Base Rate
to determine the rate of interest applicable to such Loan, as specified by the
Bank making such Loan in its related Competitive Bid.
"Competitive Notes" shall mean the promissory notes provided for by
Section 2.06(e) and all promissory notes delivered in substitution or exchange
therefor, in each case as the same shall be modified and supplemented and in
effect from time to time.
"Computation Date" shall have the meaning in Section 8.09 hereof.
"Computation Period" shall have the meaning assigned to such term in
Section 8.09 hereof.
"Consent Date" shall have the meaning assigned to such term in
Section 2.08 hereof.
"Continue", "Continuation" and "Continued" shall refer to the
continuation pursuant to Section 2.07 hereof of a Eurodollar Loan from one
Interest Period to the next Interest Period.
"Convert", "Conversion" and "Converted" shall refer to a conversion
pursuant to Section 2.07 hereof of one Type of Loans into another Type of Loans,
which may be accompanied by the transfer by a Bank (at its sole discretion) of a
Loan from one Applicable Lending Office to another.
"date hereof" and "date of this Agreement" shall mean June 30, 1998.
"Debentures" shall mean the debentures issued by the Company under
the Indenture before the Effective Date in an aggregate principal amount not in
excess of $75,000,000.
"Default" shall mean an Event of Default or an event that with
notice or lapse of time or both would become an Event of Default.
"Dollars" and "$" shall mean lawful money of the United States of
America.
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"Effective Date" shall mean the date on which all of the conditions
set forth in Section 6.01 hereof shall have been satisfied or waived by the
Banks and the Administrative Agent.
"Equity Rights" shall mean, with respect to any Person, any
outstanding subscriptions, options, warrants, commitments, preemptive rights or
agreements of any kind (including, without limitation, any stockholders' or
voting trust agreements) for the issuance, sale, registration or voting of, or
outstanding securities convertible into, any additional shares of capital stock
of any class, or partnership or other ownership interests of any type in, such
Person.
"ERC" shall mean Enhance Reinsurance Company, a New York financial
guaranty insurance corporation and a Wholly Owned Subsidiary of the Company.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade or business
that is a member of any group of organizations (a) described in Section 414(b)
or (c) of the Code of which the Company is a member and (b) solely for purposes
of potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11)
of the Code and the lien created under Section 302(f) of ERISA and Section
412(n) of the Code, described in Section 414(m) or (o) of the Code of which the
Company is a member.
"Eurodollar" when used in reference to any Loan or Borrowing, shall
refer to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Eurodollar Rate (or, in the
case of a Competitive Loan, the Eurodollar Base Rate).
"Eurodollar Base Rate" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, the rate per annum appearing on the Screen at
approximately 11:00 a.m., London time (or as soon thereafter as practicable),
two Business Days prior to the commencement of such Interest Period, as LIBOR
with a maturity comparable to such Interest Period. In the event that the Screen
shall cease to report such LIBOR or, in the reasonable judgment of the Majority
Banks, shall cease to accurately reflect such LIBOR (as reported by any publicly
available source of similar market data selected by such Majority Banks), then
the "Eurodollar Base Rate" with respect to such Eurodollar Borrowing for such
Interest Period shall be the rate per annum at which dollar deposits of
$5,000,000 and for a maturity comparable to such Interest Period are offered by
the principal London office of the Reference Bank[s] in immediately available
funds in the London interbank market at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period.
"Eurodollar Loans" shall mean Loans that bear interest at rates
based on rates referred to in the definition of "Eurodollar Base Rate" in this
Section 1.01.
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"Eurodollar Rate" shall mean, for any Eurodollar Loan for any
Interest Period therefor, a rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) determined by the Administrative Agent to be equal to
the quotient of (a) the Eurodollar Base Rate for such Loan for such Interest
Period divided by (b) the sum of (i) 1 minus (ii) the Reserve Requirement for
such Loan for such Interest Period.
"Event of Default" shall have the meaning assigned to such term in
Section 9 hereof.
"Existing Commitment Termination Date" shall have the meaning
assigned to such term in Section 2.08 hereof.
"Existing Credit Agreement" shall mean the Amended and Restated
Credit Agreement dated as of November 24, 1992, amended and restated as of
October 1, 1996, among the Company, each of the banks party thereto, The Chase
Manhattan Bank, as both Swingline Bank and Administrative Agent thereunder, as
said agreement has been further amended by a letter agreement dated August 4,
1997, Amendment No. 1 dated as of December 31, 1997 and Amendment No. 2 dated as
of March 27, 1998.
"Existing Loans" shall mean the loans outstanding under the Existing
Credit Agreement on the Effective Date.
"Federal Funds Rate" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day) provided that (a) if the day for which such rate is to
be determined is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day and (b) if such rate is not so
published for any Business Day, the Federal Funds Rate for such Business Day
shall be the average rate charged to Fleet on such Business Day on such
transactions as reasonably determined by the Administrative Agent.
"Fixed Rate" shall mean, with respect to any Competitive Loan (other
than a Competitive Loan based on the rates referred to in the definition of
Eurodollar Base Rate), the fixed rate of interest per annum specified by the
Bank making such Competitive Loan in its related Competitive Bid.
"Fixed Rate Loan" shall mean a Competitive Loan bearing interest at
a Fixed Rate.
"Fleet" shall mean Fleet National Bank.
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"Funded Debt" shall mean Indebtedness of the Company and its
Subsidiaries which by its terms becomes payable more than one year from the date
of origination thereof or which is renewable at the option of the Company or any
of its Subsidiaries beyond one year from the date of such origination.
"GAAP" shall mean the generally accepted accounting principles
which, in accordance with Section 1.02(a) hereof, are to be used in preparing
financial statements on the basis of which are to be made the calculations for
purposes of determining compliance with the financial covenants in this
Agreement.
"Guarantee" shall mean a guarantee, an endorsement, a contingent
agreement to purchase or to furnish funds for the payment or maintenance of, or
otherwise to be or become contingently liable under or with respect to, the
Indebtedness, other obligations, net worth, working capital or earnings of any
Person, or a guarantee of the payment of dividends or other distributions upon
the stock or equity interests of any Person, or an agreement to purchase, sell
or lease (as lessee or lessor) Property, products, materials, supplies or
services primarily for the purpose of enabling a debtor to make payment of such
debtor's obligations or an agreement to assure a creditor against loss, and
including, without limitation, causing a bank or other financial institution to
issue a letter of credit or other similar instrument for the benefit of another
Person, but excluding endorsements for collection or deposit in the ordinary
course of business; provided that the term Guarantee shall not include any
financial guaranty insurance, credit insurance or residual value insurance (or
any reinsurance of the same), surety bond, or similar or related products,
issued by any Insurance Subsidiary in the ordinary course of its business. The
terms "Guarantee" and "Guaranteed" used as a verb shall have a correlative
meaning.
"Indebtedness" shall mean, for any Person: (a) obligations created,
issued or incurred by such Person for borrowed money (whether by loan, the
issuance and sale of debt securities or the sale of Property to another Person
subject to an understanding or agreement, contingent or otherwise, to repurchase
such Property from such Person), (b) all Redeemable Preferred Stock issued by
such Person; (c) obligations of such Person to pay the deferred purchase or
acquisition price of Property or services, other than trade accounts payable
(other than for borrowed money) arising, and accrued expenses incurred, in the
ordinary course of business so long as such trade accounts payable are payable
within 90 days of the date the respective goods are delivered or the respective
services are rendered; (d) Indebtedness of others secured by a Lien on the
Property of such Person, whether or not the respective Indebtedness so secured
has been assumed by such Person; (e) obligations (contingent or otherwise) of
such Person in respect of letters of credit, bankers' acceptances or similar
instruments issued or accepted by banks and other financial institutions for the
account of such Person; (f) Capital Lease Obligations of such Person; and (g)
Indebtedness of others Guaranteed by such Person; provided that accrued profit
commissions shall not be treated as Indebtedness.
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"Indenture" shall mean the Indenture dated as of March 5, 1993
between the Company and The Chase Manhattan Bank, as Trustee, as the same shall
be modified and supplemented and in effect from time to time.
"Index Debt" shall mean senior, unsecured, long-term indebtedness
for borrowed money of the Company that is not guaranteed by any other Person or
subject to any other credit enhancement.
"Insurance Subsidiaries" shall mean ERC, Asset Guaranty and any
other Subsidiary of the Company that is licensed to do an insurance business by
an Applicable Insurance Regulatory Authority.
"Interest Period" shall mean (a) with respect to any Revolving
Credit Loan that is a Eurodollar Loan, each period commencing on the date such
Eurodollar Loan is made or Converted from a Base Rate Loan or (in the event of a
Continuation) the last day of the next preceding Interest Period and ending on
the numerically corresponding day in the first, second or third calendar month
thereafter, as the Company may select as provided in Section 4.05 hereof, (b)
with respect to any Competitive Loan that is a Eurodollar Loan, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two or three months
thereafter, as specified in the applicable Competitive Bid Request, (c) with
respect to any Fixed Rate Borrowing, the period (which shall not be fewer than 3
days or more than 180 days) commencing on the date of such Borrowing and ending
on the date specified in the applicable Competitive Bid Request, (d) with
respect to any Term Loan that is a Eurodollar Loan, each period commencing on
the date such Term Loan is made or Convened from a Base Rate Loan or (in the
event of a Continuation) the last day of the next preceding Interest Period and
ending on the numerically corresponding day in the first, second, third or sixth
calendar month thereafter, as the Company may select as provided in Section 4.05
hereof, except that each Interest Period that commences on the last Business Day
of a calendar month (or on any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall end on the
last Business Day of the appropriate subsequent calendar month and (e) with
respect to any Swingline Loan, the period commencing on the date such Swingline
Loan is made and ending on the date three Business Days thereafter.
Notwithstanding the foregoing: (i) the Company may not select any Interest
Period for any Revolving Credit Loan or Competitive Loan that ends after the
Commitment Termination Date or for any Swingline Loan that ends after the date
which is three Business Days prior to the Commitment Termination Date; (ii) no
Interest Period for any Term Loans may commence before and end after any
Principal Payment Date for such Term Loans unless, after giving effect thereto,
the aggregate principal amount of such Term Loans having Interest Periods that
end after such Principal Payment Date shall be equal to or less than the
aggregate principal amount of such Term Loans scheduled to be outstanding after
giving effect to the payments of principal required to be made on such Principal
Payment Date; and (iii) each Interest Period that would otherwise end on a day
which is not a Business Day shall end on the next succeeding Business
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Day (or, with respect to Eurodollar Loans, if such next succeeding Business Day
falls in the next succeeding calendar month, on the next preceding Business
Day).
"Interest Rate Protection Agreement" shall mean, for any Person, an
interest rate swap, cap or collar agreement or similar arrangement between such
Person and one or more financial institutions providing for the transfer or
mitigation of interest risks either generally or under specific contingencies.
"Investment" shall mean, for any Person: (a) the acquisition
(whether for cash, Property, services or securities or otherwise) of capital
stock, bonds, notes, debentures, partnership or other ownership interests or
other securities of any other Person or any agreement to make any such
acquisition (including, without limitation, any "short sale" or any sale of any
securities at a time when such securities are not owned by the Person entering
into such short sale); (b) the making of any deposit with, or advance, loan or
other extension of credit to, any other Person (including the purchase of
Property from another Person subject to an understanding or agreement,
contingent or otherwise, to resell such Property to such Person, but excluding
any such advance, loan or extension of credit having a term not exceeding 90
days representing the purchase price of inventory or supplies sold by such
Person in the ordinary course of business) and (without duplication) the
entering into of any commitment to deposit funds with, advance or lend funds to
or otherwise extend credit to such Person; (c) the entering into of any
Guarantee of Indebtedness of any other Person; or (d) the entering into of any
Interest Rate Protection Agreement; provided that the term "Investment" shall
not include (i) the ownership interest of the Company and its Subsidiaries on
the date hereof in the capital stock of any Subsidiary of the Company, (ii) any
capital contribution or loan by the Company or by any Wholly Owned Subsidiary of
the Company to the Company or to any Wholly Owned Subsidiary of the Company or
(iii) or any acquisition by the Company or by any Wholly Owned Subsidiary of the
Company of the capital stock of any Wholly Owned Subsidiary of the Company.
"LIBOR" means the rate at which deposits in dollars are offered to
leading banks in the London interbank market.
"Lien" shall mean, with respect to any Property, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
Property. For purposes of this Agreement and the other Basic Documents, a Person
shall be deemed to own subject to a Lien any Property that it has acquired or
holds subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement (other than an
operating lease) relating to such Property.
"Loans" shall mean the Revolving Credit Loans, Term Loans,
Competitive Loans and Swingline Loans.
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"Majority Banks" shall mean Banks having at least 51% of the
aggregate amount of the Commitments or, if the Commitments shall have
terminated, Banks holding at least 51% of the aggregate unpaid principal amount
of the Loans.
"Margin Stock" shall mean "margin stock" within the meaning of
Regulations U and X.
"Material Adverse Effect" shall mean a material adverse effect on
(a) the Property, business, operations, financial condition, prospects,
liabilities or capitalization of the Company and its Subsidiaries taken as a
whole, (b) the ability of the Company to perform its obligations under any of
the Basic Documents, (c) the validity or enforceability of any of the Basic
Documents, (d) the rights and remedies of the Banks and the Administrative Agent
under any of the Basic Documents or (e) the timely payment of the principal of
or interest on the Loans or other amounts payable in connection therewith.
"Material Subsidiary" shall mean any Subsidiary of the Company that
as of such time meets the definition of "significant subsidiary" contained as of
the date hereof in Regulation S-X of the Securities and Exchange Commission or
any governmental authority succeeding to its principal functions.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc., and any
successor thereto.
"Multiemployer Plan" shall mean a multiemployer plan defined as such
in Section 3(37) of ERISA to which contributions have been made by the Company
or any ERISA Affiliate and which is covered by Title IV of ERISA.
"Net Worth" shall mean, as at any date, the sum, for the Company and
its Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following.
(a) the amount of capital stock (other than any Redeemable Preferred
Stock and cumulative preferred stock), plus
(b) the amount of additional paid-in capital and retained earnings
(or, in the case of a retained earnings deficit, minus the amount of such
deficit).
"Notes" shall mean the Revolving Credit Notes, the Competitive
Notes, the Term Loan Notes and the Swingline Note.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
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"Person" shall mean any individual, corporation, company, voluntary
association, partnership, joint venture, trust, unincorporated organization or
government (or any agency, instrumentality or political subdivision thereof).
"Plan" shall mean an employee benefit or other plan established or
maintained by the Company or any ERISA Affiliate and that is covered by Title IV
of ERISA, other than a Multiemployer Plan.
"Post-Default Rate" shall mean, in respect of any principal of any
Loan or any other amount under this Agreement, any Note or any other Basic
Document that is not paid when due (whether at stated maturity, by acceleration,
by optional or mandatory prepayment or otherwise), a rate per annum during the
period from and including the due date to but excluding the date on which such
amount is paid in full equal to 2% plus the Base Rare as in effect from time to
time (provided that, if the amount so in default is principal of a Eurodollar
Loan and the due date thereof is a day other than the last day of the Interest
Period therefor, the "Post-Default Rate" for such principal shall be, for the
period from and including such due date to but excluding the last day of such
Interest Period, the greater of (i) 2% plus the interest rate for such
Eurodollar Loan as provided in Section 3.02(b) hereof or (ii) 2% plus the Base
Rate as in effect from time to time and, thereafter, the rate provided for above
in this definition).
"Prime Rate" shall mean the rate of interest from time to time
announced by Fleet at its principal office as its prime commercial lending rate.
The Prime Rate is a reference rate and does not necessarily represent the lowest
or best rate being charged by Fleet.
"Principal Payment Date" shall have the meaning assigned to such
term in Section 3.01(b) hereof.
"Property" shall mean any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Quarterly Dates" shall mean the last Business Day of each March,
June, September and December in each year, the first of which shall be the first
such day after the Effective Date.
"Redeemable Preferred Stock" shall mean, for any Person, all
obligations of such Person, contingent or otherwise, to purchase, redeem, retire
or otherwise acquire for value any capital stock (other than common stock) of
such Person.
"Reference Banks" shall mean Fleet and such other Bank(s) as shall
be mutually acceptable to Fleet and the Borrower (or their respective Applicable
Lending Offices, as the case may be).
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"Regulation A", "Regulation D", "Regulation U" and "Regulation X"
shall mean, respectively, Regulation A, Regulation D, Regulation U and
Regulation X of the Board of Governors of the Federal Reserve System (or any
successor), as the same may be modified and supplemented and in effect from time
to time.
"Regulatory Change" shall mean, with respect to any Bank, any change
after the date of this Agreement in Federal, state or foreign law or regulations
(including, without limitation, Regulation D) or the adoption or making after
such date of any interpretation, directive or request applying to a class of
banks including such Bank of or under any Federal, state or foreign law or
regulations (whether or not having the force of law and whether or not failure
to comply therewith would be unlawful) by any court or governmental or monetary
authority charged with the interpretation or administration thereof.
"Reserve Requirement" shall mean, for any Interest Period for any
Eurodollar Loan, the average maximum rate at which reserves (including, without
limitation, any marginal, supplemental or emergency reserves) are required to be
maintained during such Interest Period under Regulation D by member banks of the
Federal Reserve System with deposits exceeding one billion Dollars against
"Eurocurrency liabilities" (as such term is used in Regulation D). Without
limiting the effect of the foregoing, the Reserve Requirement shall include any
other reserves required to be maintained by such member banks by reason of any
Regulatory Change with respect to (i) any liabilities that include deposits by
reference to which the Eurodollar Base Rate is to be determined as provided in
the definition of "Eurodollar Base Rate" in this Section 1.01 or (ii) any
extensions of credit or other assets that include the Eurodollar Loans.
"Restricted Payment" shall mean dividends (in cash, Property or
obligations) on, or other payments or distributions on account of, or the
setting apart of money for a sinking or other analogous fund for, or the
purchase, redemption, retirement or other acquisition of, any shares of any
class of stock of the Company or of any warrants, options or other rights to
acquire the same (or to make any payments to any Person, such as "phantom stock"
payments, where the amount thereof is calculated with reference to the fair
market or equity value of the Company or any of its Subsidiaries), but excluding
dividends payable solely in shares of common stock of the Company.
"Revolving Credit Loans" shall mean the loans provided for by
Section 2.01(a) hereof, which may be Base Rate Loans and/or Eurodollar Loans.
"Revolving Credit Notes" shall mean the promissory notes provided
for by Section 2.06(a) hereof and all promissory notes delivered in substitution
or exchange therefor, in each case as the same shall be modified and
supplemented and in effect from time to time.
"S&P" shall mean Standard & Poor's Ratings Group, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and any successor thereto.
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"Screen" shall mean the display page 3750 for LIBOR on the Dow ▇▇▇▇▇
Markets (Telerate) Service (or on any successor or substitute page of such
Service, as determined by the Administrative Agent); provided that if the
Administrative Agent determines that there is no such relevant display page for
LIBOR, "Screen" shall mean the relevant display page for LIBOR (as determined by
the Administrative Agent) on the Enter Monitor Money Rates Service.
"Series" shall have the meaning assigned to such term in Section
1.03 hereof.
"Shareholders' Agreement" shall mean the Shareholders' Agreement
dated May 10, 1988 among US West Financial Services, Inc., Manufacturers Life
Insurance Company, the Shareholders party thereto and the Company, as amended by
Amendment No. 1 to Shareholders' Agreement dated as of April 7, 1989, Amendment
No. 2 to Shareholders' Agreement dated as of April 5, 1993 and Amendment to
Shareholders' Agreement dated as of February 23, 1996.
"Statutory Statement" shall mean, as to any Insurance Subsidiary, a
statement of the condition and affairs of such Insurance Subsidiary, prepared in
accordance with statutory accounting practices required or permitted by the
Applicable Insurance Regulatory Authority, and filed with the Applicable
Insurance Regulatory Authority.
"Subsidiary" shall mean, with respect to any Person, any
corporation, partnership or other entity of which at least a majority of the
securities or other ownership interests having by the terms thereof ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions of such corporation, partnership or other entity
(irrespective of whether or not at the time securities or other ownership
interests of any other class or classes of such corporation, partnership or
other entity shall have or might have voting power by reason of the happening of
any contingency) is at the particular time in question directly or indirectly
owned or controlled by such Person or one or more Subsidiaries of such Person or
by such Person and one or more Subsidiaries of such Person.
"Swingline Commitment" shall mean the obligation of the Swingline
Bank to make Swingline Loans in an aggregate amount not to exceed the lesser of
(i) $10,000,000 and (ii) the aggregate amount of the Commitments.
"Swingline Loans" shall mean the loans provided for by Section
2.01(d) hereof.
"Swingline Maturity Date" shall mean, for any Swingline Loan, the
last day of the Interest Period for such Swingline Loan.
"Swingline Note" shall mean the promissory note provided for by
Section 2.06(d) hereof and any promissory note delivered in substitution or
exchange therefor, in each case as the same shall be modified and supplemented
and in effect from time to time.
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"Swingline Rate" shall mean, for any day, a rate per annum equal to
the Federal Funds Rate for such day plus 1/2 of 1%. Each change in any interest
rate provided for herein based upon the Swingline Rate resulting from a change
to the Swingline Rate shall take effect at the time of such change in the
Swingline Rate.
"Tangible Net Worth" shall mean, as at any date, the sum for the
Company and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following:
(a) Net Worth, minus
(b) the sum of the following (without duplication of deductions in
respect of items already deducted in arriving at Net Worth): cost of
treasury shares and the book value of all assets which should be
classified as intangibles but in any event including goodwill, minority
interests, trademarks, trade names, copyrights, parents and franchises,
unamortized debt discount and expense, all reserves and any write-up in
the book value of assets resulting from a revaluation thereof subsequent
to December 31, 1997.
"Term Loan Notes" shall mean the promissory notes provided for by
Section 2.06(b) hereof and all promissory notes delivered in substitution or
exchange therefor, in each case as the same shall be modified and supplemented
and in effect from time to time.
"Term Loans" shall mean the loans provided for by Section 2.01(b)
hereof, which may be Base Rate Loans and/or Eurodollar Loans.
"Total Capitalization" shall mean the sum of (a) Funded Debt and (b)
Net Worth.
"Type" shall have the meaning assigned to such term in Section 1.03
hereof.
"Voting Stock" shall mean, at any date, the capital stock of any
class or classes of a corporation having general voting power under ordinary
circumstances to elect a majority of the board of directors of such corporation,
or persons performing similar functions (irrespective of whether or not at the
time stock or other securities of any other class or classes shall have or might
have special voting power or rights by reason of the happening of any
contingency).
"Wholly Owned Subsidiary" shall mean, with respect to any Person,
any Subsidiary of such Person all of the equity securities or other ownership
interests (other than, in the case of a corporation, directors' qualifying
shares) of which are owned or controlled by such Person or one or more Wholly
Owned Subsidiaries of such Person.
1.02 Accounting Terms and Determinations.
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(a) Except as otherwise expressly provided herein, (i) all
accounting terms used herein shall be interpreted, (ii) all financial statements
and all certificates and reports as to financial matters required to be
delivered to the Banks hereunder shall (unless otherwise disclosed to the Banks
in writing at the time of delivery thereof in the manner described in subsection
(b) below) be prepared and (iii) all calculations made for the purposes of
determining compliance with this Agreement shall (except as otherwise expressly
provided herein) be made in accordance with or by application of United States
generally accepted accounting principles or statutory accounting practices, as
the case may be, applied on a basis consistent with those used in the
preparation of the most recent financial statements furnished to the Banks
hereunder (or, prior to the delivery of the first financial statements under
Section 8.01 hereof, the financial statements as at December 31, 1997 referred
to in Section 7.02 hereof) unless (x) the Company shall notify the Banks of its
objection thereto at the time of delivery of any financial statements pursuant
to Section 8.01 hereof or (y) the Majority Banks shall notify the Company
(through the Administrative Agent) of their objection within 30 days after the
delivery of any such financial statements, in either of which events such
interpretations, statements, certificates, reports and calculations shall be
made in accordance with, or by application of, generally accepted accounting
principles or statutory accounting practices, as the case may be, on a basis
consistent with those used in the preparation of the most recent financial
statements as to which no such objection shall have been made (or, prior to the
delivery of the first financial statements under Section 8.01 hereof, the
financial statements as at December 31, 1997 referred to in Section 7.02
hereof).
(b) The Company shall deliver to the Banks at the same time as the
delivery of any annual or quarterly financial statement under Section 8.01
hereof (i) a description in reasonable detail of any material variation between
the application of accounting principles employed in the preparation of such
statement and the application of accounting principles employed in the
preparation of the next preceding annual or quarterly financial statements as to
which no objection has been made in accordance with the last sentence of
paragraph (a) above and (ii) reasonable estimates of the difference between such
statements arising as a consequence thereof.
(c) The Company will not, and will not permit any of its
Subsidiaries to, change the last day of its fiscal year from December 31 of each
year, or the last days of the first three fiscal quarters in each of its fiscal
years from March 31, June 30 and September 30 of each year, respectively.
1.03 Classes; Series; Type. Loans hereunder are distinguished by
"Class". The "Class" of a Loan refers to whether such Loan is a Revolving Credit
Loan, a Competitive Loan, a Swingline Loan or a Term Loan, each of which
constitutes, respectively, a "Class" of Loan. Loans are also distinguished by
"Series". The Loans of any one Class made on the occasion of any Borrowing
constitute a "Series" of Loans. Loans hereunder are also distinguished by
"Type". The "Type" of a Loan refers to whether such Loan is a Base Rate Loan,
Eurodollar
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Loan or a Fixed Rate Loan, each of which constitutes a Type. The Loans may be
identified by both Class and Type.
Section 2. Commitments Loans, Notes and Prepayments.
2.01 Loans
(a) Revolving Credit Loans. Each Bank severally agrees, on the terms
and conditions of this Agreement, at the request of the Company, to make
revolving credit loans to the Company in Dollars during the period from and
including the Effective Date to but not including the Commitment Termination
Date in an aggregate principal amount at any one time outstanding up to but not
exceeding the amount of the Commitment of such Bank as in effect from time to
time (each such revolving credit loan being herein called a, "Revolving Credit
Loan" and collectively the "Revolving Credit Loans") provided that, on or
before the Commitment Termination Date) in no event shall the aggregate unpaid
principal amount of all Loans (including all Competitive Loans and Swingline
Loans) exceed the aggregate amount of the Commitments as in effect from time to
time. Subject to the terms and conditions of this Agreement, during such period
the Company may borrow, repay and reborrow the amount of the Commitments by
means of Base Rate Loans and Eurodollar Loans, and the Company may Convert Loans
of one Type into Loans of another Type (as provided in Section 2.07 hereof) or
Continue Loans of one Type as Loans of the same Type (as provided in Section
2.07 hereof).
(b) Term Loans. Each Bank severally agrees, on the terms and
conditions of this Agreement, at the request of the Company, to make, on the
Commitment Termination Date, a term loan (such term loan being herein called a
"Term Loan" and collectively the "Term Loans") to the Company in Dollars in a
principal amount up to but not exceeding the unpaid principal balance of the
Revolving Credit Loans outstanding on such date, the proceeds of which Term
Loans shall be applied (and the Company hereby authorizes and instructs such
Bank to apply such proceeds) to refinance, in whole or in part, the unpaid
principal balance of such Revolving Credit Loans; provided that the Banks shall
not be obligated to make Term Loans unless the aggregate amount of such Term
Loans is equal to $3,000,000 or an integral multiple of $200,000 in excess
thereof. Subject to the terms and conditions of this Agreement, the Company may
borrow such Term Loans by means of Base Rate Loans and Eurodollar Loans and,
prior to payment in full of the principal of such Term Loans, the Company may
Convert Loans of one Type into Loans of another Type (as provided in Section
2.07 hereof) or Continue Loans of one Type as Loans of the same Type (as
provided in Section 2.07 hereof).
(c) Limit on Revolving Credit Loans. No more than five separate
Revolving Credit Loans from each Bank may be outstanding at any one time.
(d) Swingline Loans. In addition to the Loans provided for in
Subsections (a) and (b) above of this Section 2.01, the Swingline Bank hereby
agrees, on the terms an conditions of this Agreement, to make loans ("Swingline
Loans") to the Company during the period from
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the date hereof to but excluding the date five Business Days prior to the
Commitment Termination Date in an aggregate amount at any one time outstanding
up to but not exceeding its Swingline Commitment; provided that the aggregate
principal amount of all Loans (including Swingline Loans) shall not at any time
outstanding exceed the aggregate amount of the Commitments. Subject to the terms
of this Agreement, the Company may borrow, repay and reborrow the amount of the
Swingline Commitment by means of Loans that bear interest at the Swingline Rate;
provided that only one Swingline Loan may be outstanding at any one time and no
Swingline Loan may be borrowed to repay an outstanding Swingline Loan.
(e) Competitive Loans. In addition to the Loans provided for in
Subsections (a), (b) and (d) above of this Section 2.01, the Company may request
Competitive Bids to borrow Competitive Loans during the period from the date
hereof to but excluding the date five Business Days prior to the Commitment
Termination Date; provided that the aggregate principal amount of all Loans
(including Competitive Loans) shall not at any time outstanding exceed the
aggregate amount of the Commitments. The procedures for requesting and making
Competitive Loans are set forth in Section 2.02(d).
2.02 Borrowings.
(a) Revolving Credit Loans. The Company shall give the
Administrative Agent (which shall promptly notify the Banks) notice of each
borrowing hereunder as provided in Section 4.05 hereof. Not later than 1:00 p.m.
Hartford, Connecticut time on the date specified for each borrowing of Revolving
Credit Loans hereunder, which shall be a Business Day, each Bank shall make
available the amount of the Revolving Credit Loan to be made by it on such date
to the Administrative Agent, at an account in Hartford designated by the
Administrative Agent, in Dollars and immediately available funds, for account of
the Company. The amount so received by the Administrative Agent shall, subject
to the terms and conditions of this Agreement, be made available by the
Administrative Agent to the Company by depositing the same, in immediately
available funds, in an account of the Company designated by the Company or by
repaying any then outstanding Swingline Loan.
(b) Swingline Loans. The Company shall give the Administrative Agent
(which shall promptly notify the Swingline Bank) notice of each borrowing of
Swingline Loans hereunder as provided in Section 4.05 hereof. Not later than
1:00 p.m. Hartford time on the date specified for each borrowing of Swingline
Loans hereunder, which shall be a Business Day, the Swingline Bank shall make
available the amount of the Swingline Loan to be made by it on such date to the
Administrative Agent, at an account in Hartford designated by the Administrative
Agent, in Dollars and immediately available funds, for account of the Company.
The amount so received by the Administrative Agent shall, subject to the terms
and conditions of this Agreement, be made available by the Administrative Agent
to the Company by depositing the same, in immediately available funds, in an
account of the Company designated by the Company.
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(c) Borrowings to Repay Swingline Loans. Unless the Company has
already given a notice of borrowing of Revolving Credit Loans to repay a
Swingline Loan, at any time from and including the Swingline Maturity Date for
any Swingline Loan until the unpaid principal amount of such Swingline Loan
shall have been paid in full, the Swingline Bank may, and the Company hereby
irrevocably authorizes and empowers (which power is coupled with an interest)
the Swingline Bank to, deliver, on behalf of the Company, to the Administrative
Agent under Section 2.02(a) hereof a notice of borrowing of Revolving Credit
Loans that are Base Rate Loans in an amount equal to the then unpaid principal
amount of such Swingline Loan. In the event that the power of the Swingline Bank
to give such notice of borrowing on behalf of the Company is terminated for any
reason whatsoever (including, without limitation, a termination resulting from
the occurrence of an event specified in clause (f) or (g) of Section 9 hereof
with respect to the Company), or the Swingline Bank is otherwise precluded for
any reason whatsoever from giving a notice of borrowing on behalf of the Company
as provided in the preceding sentence, each Bank shall, upon notice from the
Swingline Bank on or after the Swingline Maturity Date for such Swingline Loan,
promptly purchase from the Swingline Bank a participation in (or, if and to the
extent specified by the Swingline Bank, an assignment of) such Swingline Loan in
the amount of the Base Rate Loan it would have been obligated to make pursuant
to such notice of borrowing. Each Bank shall, not later than 4:00 p.m. Hartford
time on the Business Day on which such notice is given (if such notice is given
by 3:00 p.m. Hartford time) or 9:00 a.m. Hartford time on the next succeeding
Business Day (if such notice is given after 3:00 p.m., but before 5:00 p.m.,
Hartford time), make available the amount of the Base Rate Loan to be made by it
(Or the amount of the participation or assignment to be purchased by it, as the
case may be) to the Administrative Agent at the account specified in Section
2.02(a) hereof and the amount so received by the Administrative Agent shall
promptly be made available to the Swingline Bank by remitting the same, in
immediately available funds, to the Swingline Bank. Promptly following its
receipt of any payment in respect of such Swingline Loan, the Swingline Bank
shall pay to each Bank that has acquired a participation in such Swingline Loan
such Bank's proportionate share of such payment. Anything in this Agreement to
the contrary notwithstanding (including, without limitation, in Section 6.03
hereof), the obligation of each Bank to make its Base Rate Loan (or purchase its
participation in or assignment of such Swingline Loan, as the case may be)
pursuant to this Section 2.02(c) is unconditional under any and all
circumstances whatsoever and shall not be subject to set-off, counterclaim or
defense to payment that such Bank may have or have had against the Company, the
Administrative Agent, the Swingline Bank or any other Bank and, without limiting
any of the foregoing, shall be unconditional irrespective of (i) the occurrence
of any Default, (ii) the financial condition of the Company, any Subsidiary, the
Administrative Agent, the Swingline Bank or any other Bank or (iii) the
termination or cancellation of the Commitments; provided that no Bank shall be
obligated to make any such Base Rate Loan (or to purchase any such participation
or direct interest in the Swingline Loan) if (i) before the making of such
Swingline Loan, such Bank had notified the Swingline Bank that a Default had
occurred and was continuing and that such Bank would nor refinance such
Swingline Loan or (ii) to the extent (and only to the extent) that such
Swingline Loan, together with all Revolving Credit Loans and Competitive Loans
then outstanding at the time of the making of such Swingline Loan, exceeded
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the then aggregate amount of the Commitments at the time of the making of such
Swingline Loan. The Company agrees that any Bank so purchasing a participation
(or assignment) in such Swingline Loan may exercise all rights of set-off,
bankers' lien, counterclaim or similar rights with respect to such participation
as fully as if such Bank were a direct holder of a Swingline Loan in the amount
of such participation.
(d) Competitive Loans.
(i) Subject to the terms and conditions set forth herein, from
time to time during the period from and including the Effective Date to but
excluding the date which is five Business Days prior to the Commitment
Termination Date, the Company may request Competitive Bids and may (but shall
not have any obligation to) accept Competitive Bids and borrow Competitive
Loans; provided that the sum of the total Revolving Credit Loans and Swingline
Loans plus the aggregate principal amount of outstanding Competitive Loans at
any time shall not exceed the total Commitments. To request Competitive Bids,
the Company shall notify the Administrative Agent of such request by telephone,
in the case of a Eurodollar Borrowing, not later than 11:00 a.m., Hartford time,
four Business Days before the date of the proposed Borrowing and, in the case of
a Fixed Rate Borrowing, not later than 10:00 a.m., Hartford time, one Business
Day before the date of the proposed Borrowing; provided that the Company may
submit up to (but not more than) three Competitive Bid Requests on the same day,
but a Competitive Bid Request shall not be made within five Business Days after
the date of any previous Competitive Bid Request, unless any and all such
previous Competitive Bid Requests shall have been withdrawn or all Competitive
Bids received in response thereto rejected. Each such telephonic Competitive Bid
Request shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Competitive Bid Request in a form approved by
the Administrative Agent and signed by the Company. Each such telephonic and
written Competitive Bid Request shall specify the following information:
(A) aggregate amount of the requested Borrowing;
(B) the date of such Borrowing, which shall be a Business Day;
(C) whether such Borrowing is to be a Eurodollar Borrowing or a
Fixed Rate Borrowing;
(D) the Interest Period to be applicable to such Borrowing, which
shall be a period contemplated by the definition of the term "Interest
Period"; and
(E) the location and number of the account to which funds are to be
disbursed.
Promptly following receipt of a Competitive Bid Request in accordance with this
Section, the Administrative Agent shall notify the Banks of the derails thereof
by telecopy, inviting the
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Banks to submit Competitive Bids. Upon each Competitive Bid Request, the Company
shall pay the Administrative Agent an administrative fee of $1,000.
(ii) Each Bank may (but shall not have any obligation to) make
one or more Competitive Bids to the Company in response to a Competitive Bid
Request. Each Competitive Bid by a Bank must be in a form approved by the
Administrative Agent and must be received by the Administrative Agent by
telecopy, in the case of a Eurodollar Competitive Borrowing, not later than
10:00 a.m., Hartford time, three Business Days before the proposed date of such
Competitive Borrowing, and in the case of a Fixed Rate Borrowing, not later than
10:00 a.m., Hartford time, on the proposed date of such Competitive Borrowing.
Competitive Bids that do not conform substantially to the form approved by the
Administrative Agent may be rejected by the Administrative Agent, and the
Administrative Agent shall notify the applicable Bank as promptly as
practicable. Each Competitive Bid shall specify (i) the principal amount (which
shall be a minimum of $5,000,000 and an integral multiple of $1,000,000 and
which may equal the entire principal amount of the Competitive Loan requested by
the Company) of the Competitive Loan or Loans that the Bank is willing to make,
(ii) the Competitive Bid Rate or Rates at which the Bank is prepared to make
such Loan or Loans (expressed as a percentage rate per annum in the form of a
decimal to no more than four decimal places), and (iii) the Interest Period
applicable to each such Loan and the last day thereof.
(iii) The Administrative Agent shall promptly notify the
Company by telecopy of the Competitive Bid Rate and the principal amount
specified in each Competitive Bid and the identity of the Bank that shall have
made such Competitive Bid.
(iv) Subject only to the provisions of this paragraph, the
Company may accept or reject any Competitive Bid. The Company shall notify the
Administrative Agent by telephone, confirmed by telecopy in a form approved by
the Administrative Agent, whether and to what extent it has decided to accept or
reject each Competitive Bid, in the case of a Eurodollar Competitive Borrowing,
not later than 11:00 a.m., Hartford time, three Business Days before the date of
the proposed Competitive Borrowing, and in the case of a Fixed Rate Borrowing,
not later than 11:00 a.m., Hartford time, on the proposed date of the
Competitive Borrowing; provided that (A) the failure of the Company to give such
notice shall be deemed to be a rejection of each Competitive Bid, (B) the
Company shall not accept a Competitive Bid made at a particular Competitive Bid
Rate if the Company rejects a Competitive Bid made at a lower Competitive Bid
Rate, (C) the aggregate amount of the Competitive Bids accepted by the Company
shall not exceed the aggregate amount of the requested Competitive Borrowing
specified in the related Competitive Bid Request, (D) to the extent necessary to
comply with clause (C) above, the Company may accept Competitive Bids at the
same Competitive Bid Rate in part, which acceptance, in the case of multiple
Competitive Bids at such Competitive Bid Rate, shall be made by the Company in
consultation with the Administrative Agent pro rata in accordance with the
amount of each such Competitive Bid, and (E) except pursuant to clause (D)
above, no Competitive Bid shall be accepted for a Competitive Loan unless such
Competitive Loan is in a minimum principal amount of $5,000,000 and an integral
multiple of $1,000,000;
-22-
and provided further that if a Competitive Loan must be in an amount less than
$5,000,000 because of the provisions of clause (D) above, such Competitive Loan
may be for a minimum of $1,000,000 or any integral multiple thereof, and in
calculating the pro rata allocation of acceptances of portions of multiple
Competitive Bids at a particular Competitive Bid Rate pursuant to clause (D) the
amounts shall be rounded to integral multiples of $200,000 in a manner
determined by the Company in consultation with the Administrative Agent. A
notice given by the Company pursuant to this paragraph shall be irrevocable.
(v) The Administrative Agent shall promptly notify each
bidding Bank by telecopy whether or not its Competitive Bid has been accepted
(and, if so, the amount and Competitive Bid Rate so accepted), and each
successful bidder will thereupon become bound, subject to the terms and
conditions hereof, to make the Competitive Loan in respect of which its
Competitive Bid has been accepted.
(vi) If the Administrative Agent shall elect to submit a
Competitive Bid in its capacity as a Bank, it shall submit such Competitive Bid
directly to the Company at least one quarter of an hour earlier than the time by
which the other Banks are required to submit their Competitive Bids to the
Administrative Agent pursuant to Subsection (d)(ii) of this Section 2.02.
2.03 Changes in Aggregate Amount of Commitments.
(a) The aggregate amount of the Commitments shall be automatically
reduced to zero on the Commitment Termination Date.
(b) The Company shall have the right at any time or from time to
time to terminate in whole, or to reduce in part, the aggregate unused amount of
the Commitments; provided that (x) the Company shall give notice of each such
termination or reduction as provided in Section 4.05 hereof, (y) each partial
reduction shall be in an integral multiple of $1,000,000 and (z) on or before
the Commitment Termination Date, the aggregate amount of the Commitments shall
at no time be less than the aggregate outstanding principal amount of all Loans
(including the Competitive Loans and the Swingline Loans).
(c) The Company shall have the right to terminate or reduce the
unused amount of the Swingline Commitment at any time or from time to time on
not less than three Business Days' prior notice to the Administrative Agent
(which shall promptly notify the Swingline Bank and each Bank) of each such
termination or reduction, which notice shall specify the effective date thereof
and the amount of any such reduction (which shall be in integral multiples of
$1,000,000) and shall be irrevocable and effective only upon receipt by the
Administrative Agent.
(d) The Commitments and Swingline Commitment, once terminated or
reduced, may not be reinstated.
-23-
2.04 Fees.
(a) The Company shall pay to the Administrative Agent on or before
the Closing Date for the account of each Bank an upfront fee equal to .02% of
the Commitment of such Bank in effect on the Effective Date. Such fee shall not
be refundable.
(b) The Company shall pay to the Administrative Agent for account of
each Bank a facility fee on the amount of such Bank's Commitment, for the period
from and including the Effective Date to but not including the earlier of the
Commitment Termination Date and the date such Commitment is otherwise
terminated, at a rate per annum as set forth in the definition of "Applicable
Margin" in Section 1.01. Accrued facility fee shall be payable in arrears on
each Quarterly Date and on the earlier of the Commitment Termination Date and
the date the Commitment is otherwise terminated, as the case may be.
2.05 Several Obligations; Remedies Independent. The failure of any
Bank to make any Loan to be made by it on the date specified therefor shall not
relieve any other Bank of its obligation to make its Loan on such date, but
neither any Bank nor the Administrative Agent shall be responsible for the
failure of any other Bank to make a Loan to be made by such other Bank, and no
Bank shall have any obligation to the Administrative Agent or any other Bank for
the failure by such Bank to make any Loan required to be made by such Bank. The
amounts payable by the Company at any time hereunder and under the Notes to each
Bank shall be a separate and independent debt and each Bank shall, subject to
the express provisions of Section 9 with respect to the termination of the
Commitments and the declaration of the Loans to be due and payable, be entitled
to protect and enforce its rights arising out of this Agreement and the Notes,
and it shall not be necessary for any other Bank or the Administrative Agent to
consent to, or be joined as an additional party in, any proceedings for such
purposes.
2.06 Notes.
(a) The Revolving Credit Loans made by each Bank shall be evidenced
by a single promissory note of the Company substantially in the form of Exhibit
A-l hereto, dated the Effective Date, payable to such Bank in a principal amount
equal to the amount of its Commitment as originally in effect and otherwise duly
completed.
(b) The Term Loan made by each Bank shall be evidenced by a separate
promissory note of the Company substantially in the form of Exhibit A-2 hereto,
dated the date of such Term Loan, payable to such Bank in a principal amount
equal to the amount of such Term Loan and otherwise duly completed.
(c) The date, amount, Type, interest rate and duration of Interest
Period (if applicable) of each Revolving Credit Loan made by each Bank to the
Company, and each payment made on account of the principal thereof, shall be
recorded by such Bank on its books and, prior to any transfer of the Revolving
Credit Note evidencing the Revolving Credit Loans
-24-
held by it, endorsed by such Bank on the schedule attached to such Revolving
Credit Note or any continuation thereof; provided that the failure of such Bank
to make any such recordation or endorsement shall not affect the obligations of
the Company to make a payment when due of any amount owing hereunder or under
such Revolving Credit Note in respect of the Revolving Credit Loans evidenced by
such Revolving Credit Note.
(d) The Swingline Loans made by the Swingline Bank shall be
evidenced by a single promissory note of the Company substantially in the form
of Exhibit A-3 hereto dated the Effective Date, payable to the Swingline Bank in
a principal amount equal to $10,000,000 and otherwise duly completed. The date
and amount of each Swingline Loan and each payment made on account of the
principal thereof, shall be recorded by the Swingline Bank on its books and,
prior to any transfer of its Swingline Note, endorsed by the Swingline Bank on
the schedule attached to the Swingline Note or any continuation thereof;
provided that the failure by the Swingline Bank to make any such recordation or
endorsement shall not affect the obligations of the Company to make a payment
when due of any amount owing hereunder or under such Swingline Note in respect
of the Swingline Loans evidenced by such Swingline Note.
(e) The Competitive Loans made by each Bank shall be evidenced by a
single promissory note of the Company substantially in the form of Exhibit A-4
hereto, dated the Effective Date, payable to such Bank in a principal amount
equal to the amount of its Commitment as originally in effect and otherwise duly
completed.
(f) No Bank shall be entitled to have its Notes subdivided, by
exchange for promissory notes of lesser denominations or otherwise, except in
connection with a permitted assignment of all or any portion of such Bank's
relevant Commitment, Loans and Notes pursuant to Section 11.06(b) hereof. The
Swingline Bank shall not be entitled to have its Note subdivided, by exchange
for promissory notes of lesser denominations or otherwise, except in connection
with a permitted assignment of all or any portion of the Swingline Bank's
Swingline Commitment, the Swingline Loans and the Swingline Note pursuant to
Section 11.06(g) hereof.
2.07 Optional Prepayments and Conversions or Continuations of Loans.
Subject to Section 4.04 hereof; the Company shall have the right to prepay
Swingline Loans or any Series of Revolving Credit Loans or the Term Loans, in
whole at any time or in part from time to time or to Convert Loans of one Type
into Loans of another Type or Continue Loans of one Type as Loans of the same
Type, provided that:
(a) the Company shall give the Administrative Agent notice of each
such prepayment, Conversion or Continuation as provided in Section 4.05
hereof (and, upon the prepayment date specified in any such notice of
prepayment, the amount to be prepaid shall become due and payable
hereunder);
(b) the Company shall simultaneously pay interest on any principal
so prepaid accrued to the date of such prepayment;
-25-
(c) if any Revolving Credit Loan that is a Eurodollar Loan is
prepaid or Converted on any day other than the last day of the Interest
Period therefor, the Company shall simultaneously pay any amounts required
by Section 5.05 hereof in respect of such prepayment;
(d) prepayments or Conversions of Term Loans that are Eurodollar
Loans may only be made on the last day of any Interest Period therefor and
shall be applied ratably to the outstanding installments of such Term
Loans;
(e) if any Swingline Loan is outstanding, the Revolving Credit Loans
may not be prepaid or Converted,
(f) Swingline Loans may not be Continued.
The Company shall not have the right to prepay any Competitive Loan without the
consent of the Bank making such Competitive Loan.
Notwithstanding the foregoing, and without limiting the rights and remedies of
the Banks under Section 9 hereof, in the event that any Event of Default shall
have occurred and be continuing, the Administrative Agent may (and at the
request of the Majority Banks shall) suspend (for so long as such Event of
Default shall be continuing) the right of the Company to Convert any Loan into a
Eurodollar Loan, or to Continue any Loan as a Eurodollar Loan, in which event
all Loans shall be Converted (on the last day(s) of the respective Interest
Periods therefor) or Continued, as the case may be, as Base Rate Loans.
2.08 Extension of Commitment Termination Date.
(a) The Company may, by notice to the Administrative Agent (which shall
promptly deliver a copy thereof to each of the Banks) not more than 45 days
prior to the Commitment Termination Date then in effect hereunder (the "Existing
Commitment Termination Date"), request that the Banks extend the Commitment
Termination Date for an additional 364 day period. Each Bank, acting in its sole
discretion, shall, by notice to the Company and Administrative Agent given on
the date (and only on the date) 30 days prior to the Existing Commitment
Termination Date (provided, if such date is not a Business Day, then such notice
date shall by the next succeeding Business Day) (the "Consent Date"), advise the
Company and the Administrative Agent whether or not such Bank agrees to such
request, provided that each Bank that determines not to extend the Existing
Commitment Termination Date (a "Non-extending Bank") shall notify the
Administrative Agent (which shall notify the Banks) of such fact promptly after
such determination (but in any event no later than the Consent Date) and any
Bank that does not advise the Company on the Consent Date shall be deemed to be
a Non-extending Bank. The election of any Bank to agree to such extension shall
not obligate any other Bank to so agree.
-26-
(b) Subject to paragraph (c) of this Section, the Company shall have the
right on or before the Existing Commitment Termination Date to replace each
Non-extending Bank with, and otherwise add to this Agreement, one or more other
lenders (which may include any Bank, each prior to the Existing Commitment
Termination Date an "Additional Commitment Bank") with the approval of the
Administrative Agent (which approval shall not be unreasonably withheld), each
of which Additional Commitment Banks shall have entered into an agreement in
form and substance satisfactory to the Company and the Administrative Agent
pursuant to which such Additional Commitment Bank shall, effective as of the
Existing Commitment Termination Date, undertake a Commitment (and, if any such
Additional Commitment Bank is already a Bank, its Commitment shall be in
addition to such Bank's Commitment hereunder on such date).
(c) If (and only if) the total amount of the Commitments of the Banks and
(without duplication) the Additional Commitment Banks that have agreed so to
extend the Existing Commitment Termination Date shall be more than 50% of the
aggregate amount of the Commitments in effect immediately prior to the Consent
Date, then, effective as of the Existing Commitment Termination Date, the
Existing Commitment Termination Date shall be extended to the date falling 364
days after the Consent Date (except that, if such date is not a Business Day,
such Existing Commitment Termination Date as so extended shall be the next
preceding Business Day) and each Additional Commitment Bank shall thereupon
become a "Bank" for all purposes of this Agreement.
Notwithstanding the foregoing, the extension of the Existing Commitment
Termination Date shall not be effective with respect to any Bank unless:
(i) no Default shall have occurred and be continuing on each of the
date of the notice requesting such extension, on the Consent Date and on
the Existing Commitment Termination Date;
(ii) each of the representations and warranties made by the Company
in Section 7 hereof shall be true and complete on and as of each of the
date of the notice requesting such extension, the Consent Date and the
Existing Commitment Termination Date with the same force and effect as if
made on and as of such date (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as of such
specific date); and
(iii) each Non-extending Bank shall have been paid in full by the
Company all amounts owing to such Bank hereunder on or before the Existing
Commitment Termination Date.
Even if the Existing Commitment Termination Date is extended as aforesaid, the
Commitment of each Non-extending Bank shall terminate on the Existing Commitment
Termination Date.
-27-
Section 3. Payments of Principal and Interest.
3.01 Repayment of Loans
(a) The Company hereby promises to pay to the Administrative Agent
for account of each Bank (i) the outstanding principal amount of each of such
Bank's Revolving Credit Loans, and each Revolving Credit Loan shall mature, on
the Commitment Termination Date and (ii) the outstanding principal amount of
each Competitive Loan, and each Competitive Loan shall mature, on the last day
of the Interest Period applicable to such Loan.
(b) The Company hereby promises to pay to the Administrative Agent
for account of the Banks the aggregate principal amount of Term Loans in sixteen
equal consecutive quarterly installments commencing on the date three months
after the date of the making of such Term Loans and thereafter on the quarterly
anniversary dates of the date of the making of such Term Loans (each a
"Principal Payment Date") provided that, if the date of the making of such Term
Loans is the last Business Day of a calendar month (or on any day for which
there is no numerically corresponding date in the appropriate subsequent
calendar month) the payment date shall be the last Business Day of the
appropriate subsequent calendar month; and provided that, if any Principal
Payment Date would fall on a day other than a Business Day, such Principal
Payment Date shall be the next succeeding Business Day (or, if such next
succeeding Business Day falls in the next succeeding calendar month, on the next
preceding Business Day).
(c) The Company hereby promises to pay to the Administrative Agent
for account of the Swingline Bank the principal of each Swingline Loan at or
prior to, and such Swingline Loan shall mature at, 1:00 p.m. Hartford time on
the Swingline Maturity Date for such Swingline Loan.
3.02 Interest. The Company hereby promises to pay to the
Administrative Agent for account of each Bank interest on the unpaid principal
amount of each Loan made by such Bank for the period from and including the date
of such Loan to but excluding the date such Loan shall be paid in full, at the
following rates per annum:
(a) if such Loan is a Revolving Credit Loan, (i) during such periods
as such Loan is a Base Rate Loan, the Base Rate (as in effect from time to
time) plus the Applicable Margin and (ii) during such periods as such Loan
is a Eurodollar Loan, for each Interest Period relating thereto, the
Eurodollar Rate for such Loan for such Interest Period plus the Applicable
Margin;
(b) if such Loan is a Term Loan, (i) during such periods as such
Loan is a Base Rate Loan, the Base Rate (as in effect from time to time)
plus the Applicable Margin and (ii) during such periods as such Loan is a
Eurodollar Loan, for each Interest Period relating thereto, the Eurodollar
Rate for such Loan for such Interest Period plus the Applicable Margin;
-28-
(c) if such Loan is a Swingline Loan, the Swingline Rate for each
day during the period from and including the first day of the Interest
Period related thereto to but excluding the Swingline Maturity Date for
such Swingline Loan; and
(d) if such Loan is a Competitive Loan, (i) during such periods as
such Loan is a Eurodollar Loan, the Eurodollar Base Rate plus or minus as
the case may be, the Competitive Margin and (ii) during such periods as
such Loan is a Fixed Rate Loan, the Fixed Rate.
Notwithstanding the foregoing, the Company hereby promises to pay to the
Administrative Agent for account of each Bank interest at the applicable
Post-Default Rate on any principal of any Loan made by such Bank and on any
other amount payable by the Company hereunder or under the Notes held by such
Bank to or for account of such Bank, which shall not be paid in full when due
(whether at stated maturity, by acceleration, by mandatory prepayment or
otherwise), for the period from and including the due date thereof to but
excluding the date the same is paid in full. Accrued interest on each Loan shall
be payable (i) in the case of a Base Rate Loan, quarterly on the Quarterly
Dates, (ii) in the case of Eurodollar Loans, Swingline Loans, or Fixed Rate
Loans on the last day of each Interest Period therefor and, if such Interest
Period is longer than three months, at three-month intervals following the first
day of such Interest Period, and (iii) upon the payment or prepayment thereof or
the Conversion of such Loan to a Loan of another Type (but only on the principal
amount so paid, or prepaid or Converted), except that interest payable at the
Post-Default Rate shall be payable from time to time on demand of the Banks for
whose account such interest is payable. Promptly after the determination of any
interest rate provided for herein or any change therein, the Administrative
Agent shall give notice thereof to the Banks to which such interest is payable
and to the Company.
Section 4. Payments; Pro Rata Treatment; Computation; Etc.
4.01 Payments.
(a) Except to the extent otherwise provided herein, all payments of
principal, interest and other amounts to be made by the Company under this
Agreement and the Notes, and, except to the extent otherwise provided therein,
all payments to be made by the Company under any other Basic Document, shall be
made in Dollars, in immediately available funds, without deduction, set-off or
counterclaim, to the Administrative Agent at an account at its offices in
Hartford, Connecticut designated by the Administrative Agent, not later than
1:00 p.m. Hartford time on the date on which such payment shall become due (each
such payment made after such time on such due date to be deemed to have been
made on the next succeeding Business Day).
(b) Any Bank or Swingline Bank for whose account any such payment is
to be made may (but shall not be obligated to) debit the amount of any such
payment that is not
-29-
made by such time to any ordinary deposit account of the Company with such Bank
(with notice to the Company and the Administrative Agent).
(c) The Company shall, at the time of making each payment under this
Agreement or any Note for account of any Bank) specify to the Administrative
Agent (which shall notify the intended recipient(s) thereof) the Loans or other
amounts payable by the Company hereunder to which such payment is to be applied,
in which case such payment shall be, subject to Section 4.02 hereof, so applied
(and in the event that the Company fails to so specify, or if an Event of
Default has occurred and is continuing, such payment shall be, subject to said
Section 4.02, applied first to the Swingline Bank (to the extent any amounts are
then due and payable to the Swingline Bank on account of any Swingline Loan) and
then in payment of amounts due under this Agreement or any Note in such manner
as is determined to be appropriate by the Majority Banks or, if the Majority
Banks fail to advise the Administrative Agent of their determination promptly
following a request from the Administrative Agent for such a determination, by
the Administrative Agent).
(d) Each payment received by the Administrative Agent under this
Agreement or any Note for account of any Bank shall be paid by the
Administrative Agent promptly to such Bank, in immediately available funds, for
account of such Bank's Applicable Lending Office for the Loan or other
obligation in respect of which such payment is made.
(e) If the due date of any payment under this Agreement or any Note
would otherwise fall on a day that is not a Business Day, such date shall be
extended to the next succeeding Business Day, and interest shall be payable on
any principal so extended for the period of such extension.
4.02 Pro Rata Treatment. Except to the extent otherwise provided
herein:
(a) the making of Loans of a particular Class (other than
Competitive Loans and Swingline Loans) shall be made pro rata among the
Banks according to the amounts of their respective Commitments (without
taking into account any Competitive Loans or Swingline Loans) and the then
current Interest Period of Loans of a particular Class and Series shall be
coterminous;
(b) except as otherwise provided in Section 5.04 hereof, Eurodollar
Loans having the same Interest Period shall be allocated pro rata among
the flanks according to the amounts of their respective Commitments (in
the case of the making of Loans) or their respective Loans (in the case of
Conversions and Continuations of Loans);
(c) each payment or prepayment of principal of Loans of a particular
Class and Series shall be made for account of the Banks pro rata in
accordance with the respective unpaid principal amounts of the Loans of
such Class and Series held by the Banks;
-30-
(d) each payment of interest on Loans of a particular Class and
Series shall be made for account of the Banks pro rata in accordance with
the amounts of interest on Loans of such Class and Series then due and
payable to the respective Banks;
(e) each termination or reduction of the amount of the Commitments
shall be applied to the Commitments of the Banks, pro rata according to
the respective amounts of the Commitments of the Banks; and
(f) notwithstanding the foregoing, Borrowings, payments and
prepayments of Competitive Loans and Swingline Loans shall be made without
regard to the foregoing provisions of this Section 402.
4.03 Computations. Interest on Eurodollar Loans and Fixed Rate Loans
and the facility fee shall be computed on the basis of a year of 360 days and
actual days elapsed (including the first day but excluding the last day)
occurring in the period for which payable and interest on Base Rate Loans shall
be computed on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed (including the first day but excluding the last day)
occurring in the period for which payable. Notwithstanding the foregoing, for
each day that the Base Rate is calculated by reference to the Federal Funds
Rate, interest on Base Rate Loans shall be computed on the basis of a year of
360 days and actual days elapsed.
4.04 Minimum Amounts. Except for Conversions, or prepayments made
pursuant to Section 5.05 hereof, each Borrowing, Conversion and partial
prepayment of principal of Revolving Credit Loans shall be in an aggregate
amount equal to (i) if it is a Eurodollar Loan, $10,000,000 or any integral
multiple of $1,000,000 in excess thereof or (ii) if it is a Base Rate Loan,
$5,000,000 or integral multiple of $500,000 in excess thereof (Borrowings,
Conversions or prepayments of or into Loans of different Types or, in the case
of Eurodollar Loans, having different Interest Periods at the same time
hereunder to be deemed separate Borrowings, Conversions and prepayments for
purposes of the foregoing, one for each Type or Interest Period). Each
Conversion of Term Loans shall be in an aggregate amount equal to $3,000,000 or
any integral multiple of $200,000 in excess thereof, and each partial prepayment
or Conversion of the principal of Term Loans shall be in an aggregate amount at
least equal to $500,000 (Conversions or prepayments of or into Loans of
different Types or, in the case of Eurodollar Loans, having different Interest
Periods at the same time hereunder to be deemed separate Conversions and
prepayments for purposes of the foregoing, one for each Type or Interest
Period). Each Borrowing or partial prepayment of Swingline Loans shall be in an
aggregate amount at least equal to $1,000,000 or in multiples of $200,000 in
excess thereof. Each Borrowing or partial prepayment of Competitive Loans shall
be in an aggregate amount at least equal to $5,000,000 or in multiples of
$1,000,000 in excess thereof.
4.05 Certain Notices. Notices by the Company to the Administrative
Agent of terminations or reductions of Commitments, of Borrowings, Conversions,
Continuations and optional prepayments of Loans, of Types of Loans and of the
duration of Interest Periods shall
-31-
be irrevocable and shall be effective only if received by the Administrative
Agent not later than 10:00 a.m. Hartford time. The number of Business Days prior
to the date of the relevant termination, reduction, Borrowing, Conversion,
Continuation or prepayment or the first day of such Interest Period specified
below:
Number of Business
Notice Day Prior
------ ---------
Termination or reduction
of Commitments 3
Borrowing or prepayment of,
or Conversions into,
Base Rate Loans 0
Borrowing or prepayment of
Swingline Loans 0
Borrowing or prepayment of,
Conversions into, Continuations as, or
duration of Interest
Period for, Eurodollar Loans (other than
Competitive Loans) 3
Borrowing of Competitive Loans that
are Eurodollar Loans 4
Borrowing of Competitive Loans
that are Fixed Rare Loans 1
Each such notice of termination or reduction shall specify the
amount of the Commitments to be terminated or reduced. Each such notice of
Borrowing, Conversion, Continuation or optional prepayment shall specify the
Class and Series of Loans to be borrowed, Converted, Continued or prepaid, the
amount (subject to Section 4.04 hereof) of each Loan to be borrowed, Converted,
Continued or prepaid, the date of Borrowing, Conversion, Continuation or
optional prepayment (which shall be a Business Day), and the duration of the
Interest Period for such Loan. The Administrative Agent shall promptly notify
the Banks of the contents of each such notice. In the event that the Company
fails to select the Type of Loan, or the duration of any Interest Period for any
Loan, within the time period and otherwise as provided in this Section 4.05,
such Loan (if outstanding as a Eurodollar Loan) will be automatically Converted
into a Base Rate Loan on the last day of the then current Interest Period for
such Loan or (if outstanding as a Base Rate Loan) will remain as, or (if not
then outstanding) will be made as, Base Rate Loan.
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4.06 Non-Receipt of funds by the Administrative Agent. Unless the
Administrative Agent shall have been notified by a Bank or the Company (the
"Payor") prior to the date on which the Payor is to make payment to the
Administrative Agent of (in the case of a Bank) the proceeds of a Loan to be
made by such Bank hereunder or (in the case of the Company) a payment to the
Administrative Agent for account of one or more of the Banks hereunder (such
payment being herein called the "Required Payment"), which notice shall be
effective upon receipt, that the Payor does not intend to make the Required
Payment to the Administrative Agent, the Administrative Agent may assume that
the Required Payment has been made and may, in reliance upon such assumption
(but shall not be required to), make the amount thereof available to the
intended recipient(s) on such date; and, if the Payor has not in fact made the
Required Payment to the Administrative Agent, the recipient(s) of such payment
shall, on demand, repay to the Administrative Agent the amount so made available
together with interest thereon in respect of each day during the period
commencing on the date (the "Advance Date") such amount was so made available by
the Administrative Agent until the date the Administrative Agent recovers such
amount at a rate per annum equal to the Federal Funds Rate for such day and, if
such recipient(s) shall fail promptly to make such payment, the Administrative
Agent shall be entitled to recover such amount, on demand, from the Payor,
together with interest as aforesaid, provided that if the recipient(s) shall
fail to return, and the Payor shall fail to make, the Required Payment to the
Administrative Agent within three Business Days of the Advance Date, then the
Payor and the recipient(s) shall each be obligated to pay interest on the
Required Payment (but without duplication) as follows:
(a) if the Required Payment shall represent a payment to be made by
the Company to the Banks, the Company and the recipient(s) shall each be
obligated retroactively to the Advance Date to pay interest in respect of
the Required Payment at the Post-Default Rate (and, in case the
recipient(s) shall return the Required Payment to the Administrative
Agent, without limiting the obligation of the Company under Section 3.02
hereof to pay interest to such recipient(s) at the Post-Default Rate in
respect of the Required Payment); and
(b) if the Required Payment shall represent proceeds of a Loan to be
made by the Banks to the Company, the Payor and the Company shall each be
obligated retroactively to the Advance Date to pay interest in respect of
the Required Payment at the rate of interest provided for such Required
Payment pursuant to whichever of the rates specified in Section 3.02
hereof is applicable to the Type of such Loan (and, in case the Company
shall return the Required Payment to the Administrative Agent, without
limiting any claim the Company may have against the Payor in respect of
the Required Payment).
4.07 Sharing of Payments Etc.
(a) The Company agrees that, in addition to (and without limitation
of) any right of set-off, bankers lien or counterclaim a Bank or the Swingline
Bank (as the case may be)
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may otherwise have, each Bank and the Swingline Bank shall be entitled, at its
option, to offset balances held by it for account of the Company at any of its
offices, in Dollars or in any other currency, against any principal of or
interest on any of such Bank's or the Swingline Bank's Loans or any other amount
payable to such Bank or Swingline Bank (as the case may be) hereunder, that is
not paid when due (regardless of whether such balances are then due to the
Company), in which case it shall promptly thereafter notify the Company and the
Administrative Agent thereof, provided that such Banks or the Swingline Bank's
failure to give such notice shall not affect the validity thereof.
(b) If any Bank shall obtain payment of any principal of or interest
on any Loan of a particular Class and Series owing to it or payment of any other
amount under this Agreement or any other Basic Document through the exercise of
any right of set-off, banker's lien or counterclaim or similar right or
otherwise (other than through the Administrative Agent as provided herein), and,
as a result of such payment, such Bank shall have received a greater percentage
of the principal of or interest on the Loans of such Class and Series or such
other amounts then due hereunder or thereunder by the Company to such Bank than
the percentage received by any other Bank, it shall promptly purchase from such
other Banks participations in (or, if and to the extent specified by such Bank,
direct interests in) the Loans of such Class and Series or such other amounts,
respectively, owing to such other Banks (or in interest due thereon, as the case
may be) in such amounts, and make such other adjustments from time to time as
shall be equitable, to the end that all the Banks shall share the benefit of
such excess payment (net of any expenses that may be incurred by such Bank in
obtaining or preserving such excess payment) pro rata in accordance with the
unpaid principal of and/or interest on the Loans of such Class and Series or
such other amounts, respectively, owing to each of the Banks. To such end all
the Banks shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or must otherwise
be restored.
(c) The Company agrees that any Bank so purchasing such a
participation (or direct interest) may exercise all rights of set-off, bankers
lien, counterclaim or similar rights with respect to such participation as fully
as if such Bank were a direct holder of Loans or other amounts (as the case may
be) owing to such Bank in the amount of such participation.
(d) Noting contained herein shall require any Bank or the Swingline
Bank to exercise any such right or shall affect the right of any Bank or the
Swingline Bank to exercise, and retain the benefits of exercising, any such
right with respect to any other indebtedness or obligation of the Company. If
under any applicable bankruptcy, insolvency or other similar law, any Bank
receives a secured claim in lieu of a set-off to which this Section 4.07
applies, such Bank shall, to the extent practicable, exercise its rights in
respect of such secured claim in a manner consistent with the tights of the
Banks entitled under this Section 4.07 to share in the benefits of any recovery
on such secured claim.
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Section 5. Yield Protection Etc.
5.01 Additional Costs.
(a) The Company shall pay directly to each Bank from time to time
such amounts as such Bank may determine to be necessary to compensate such Bank
for any costs that such Bank determines are attributable to its making or
maintaining of any Eurodollar Loans or Fixed Rate Loans or its obligation to
make any Eurodollar Loans or Fixed Rate Loans hereunder, or any reduction in any
amount receivable by such Bank hereunder in respect of any Loans or such
obligation (such increases in costs and reductions in amounts receivable being
herein called "Additional Costs"), resulting from any Regulatory Change that:
(i) changes the basis of taxation of any amounts payable to such
Bank under this Agreement or its Notes (other than taxes imposed on or
measured by the overall net income of such Bank or of its Applicable
Lending Office by the jurisdiction in which such Bank has its principal
office or such Applicable Lending Office); or
(ii) imposes or modifies any reserve, special deposit or similar
requirements (other than the Reserve Requirement utilized in the
determination of the Eurodollar Rate for such Loan) relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities of, such Bank (including, without limitation, any of such
Loans or any deposits referred to in the definition of "Eurodollar Base
Rate" in Section 1.01 hereof), or any commitment of such Bank hereunder
(including, without limitation, the Commitment of such Bank); or
(iii) imposes any other condition affecting this Agreement or its
Notes or its Commitment.
If any Bank requests compensation from the Company under this Section 5.01(a),
the Company may, by notice to such Bank (with a copy to the Agent), suspend the
obligation of such Bank thereafter to make or Continue Eurodollar Loans, or to
Convert Base Rate Loans into Eurodollar Loans, until the Regulatory Change
giving rise to such request ceases to be in effect (in which case the provisions
of Section 5.04 hereof shall be applicable), provided that such suspension shall
not affect the right of such Bank to receive the compensation so requested.
(b) Without limiting the effect of the provisions of paragraph (a)
of this Section 5.01, in the event that, by reason of any Regulatory Change, any
Bank either (i) incurs Additional Costs based on or measured by the excess above
a specified level of the amount of a category of deposits or other liabilities
of such Bank that includes deposits by reference to which the interest rate on
Eurodollar Loans or Fixed Rate Loans is determined as provided in this Agreement
or a category of extensions of credit or other assets of such Bank that includes
Eurodollar Loans or Fixed Rate Loans or (ii) becomes subject to restrictions on
the amount of such a category of liabilities or assets that it may hold, then,
if such Bank so elects by notice to
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the Company (with a copy to the Administrative Agent), the obligation of such
Bank to make Eurodollar Loans or Fixed Rate Loans as the case may be, hereunder
shall be suspended until such Regulatory Change ceases to be in effect (in which
case the Loans theretofore made by such Bank shall bear interest at the Base
Rate from the last day of the then current Interest Period for such Loans in
accordance with the provisions of Section 5.04).
(c) Without limiting the effect of the foregoing provisions of this
Section 5.01 (but without duplication), the Company shall pay directly to each
Bank from time to time on request such amounts as such Bank may determine to be
necessary to compensate such Bank (or, without duplication, the bank holding
company of which such Bank is a subsidiary) for any costs that it determines are
attributable to the maintenance by such Bank (or any Applicable Lending Office
or such bank holding company), pursuant to any law or regulation or any
interpretation, directive or request (whether or not having the force of law and
whether or not failure to comply therewith would be unlawful) of any court or
governmental or monetary authority (i) following any Regulatory Change or (ii)
implementing any risk-based capital guideline or other requirement (whether or
not having the force of law and whether or not the failure to comply therewith
would be unlawful) hereafter issued by any government or governmental or
supervisory authority implementing at the national level the Basel Accord
(including, without limitation, the Final Risk-Based Capital Guidelines of the
Board of Governors of the Federal Reserve System (12 C.F.R. Part 208, Appendix
A; ▇▇ ▇.▇.▇. ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇) and the Final Risk-Based Capital Guidelines
of the Office of the Comptroller of the Currency (12 C.F.R. Pan 3, Appendix A)),
of capital in respect of its Commitment(s) or Loans (such compensation to
include, without limitation, an amount equal to any reduction of the rate of
return on assets or equity of such Bank (or any Applicable Lending Office or
such bank holding company) to a level below that which such Bank (or any
Applicable Lending Office or such bank holding company) could have achieved but
for such law, regulation, interpretation, directive or request). For purposes of
this Section 5.01(c), "Basel Accord" shall mean the proposals for risk-based
capital framework described by the Basel Committee on Banking Regulations and
Supervisory Practices in its paper entitled "International Convergence of
Capital Measurement and Capital Standards" dated July 1988, as amended, modified
and supplemented and in effect from time to time or any replacement thereof.
(d) Each Bank shall notify the Company of any event occurring alter
the date of this Agreement entitling such Bank to compensation under paragraph
(a) or (c) of this Section 5.01 as promptly as practicable; provided that the
Company shall not be required to pay any amounts under this Section 5.01 to the
extent the amount requested to be paid is allocable to a period or date prior to
the date which is 90 days before the date of such notice by such Bank to the
Company. Each Bank will designate a different Applicable Lending Office for the
Loans of such Bank affected by such event if such designation will avoid the
need for, or reduce the amount of, such compensation and will not, in the sole
good faith opinion of such Bank, be disadvantageous to such Bank, except that
such Bank shall have no obligation to designate an Applicable Lending Office
located in the United States of America. Each Bank will furnish to the Company a
certificate setting forth in reasonable detail the basis and amount of each
request
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by such Bank for compensation under paragraph (a) or (c) of this Section 5.01.
Determinations and allocations by any Bank for purposes of this Section 5.01 of
the effect of any Regulatory Change pursuant to paragraph (a) or (b) of this
Section 5.01, or of the effect of capital maintained pursuant to paragraph (c)
of this Section 5.01, on its costs or rate of return of maintaining Loans or its
obligation to make Loans, or on amounts receivable by it in respect of Loans,
and of the amounts required to compensate such Bank under this Section 5.01,
shall be conclusive, provided that such determinations and allocations are made
on a reasonable basis and are not manifestly in error.
5.02 Limitation on Types of Loans. Anything herein to the contrary
notwithstanding, if, on or prior to the determination of any Eurodollar Base
Rate for any Interest Period:
(a) the Administrative Agent determines, which determination shall
be conclusive, that quotations of interest rates for the relevant deposits
referred to in the definition of "Eurodollar Base Rate" in Section 1.01
hereof are nor being provided in the relevant amounts or for the relevant
maturities for purposes of determining rates of interest for Eurodollar
Loans as provided herein; or
(b) if the Majority Banks in good faith determine, which
determination shall otherwise be conclusive, and notify the Administrative
Agent that the relevant rates of interest referred to in the definition of
"Eurodollar Base Rate" in Section 1.01 hereof upon the basis of which the
rate of interest for Eurodollar Loans for such Interest Period is to be
determined are not likely adequately to cover the cost to such Banks of
making or maintaining Eurodollar Loans for such Interest Period;
then the Administrative Agent shall give the Company and each Bank prompt notice
thereof and, so long as such condition remains in effect, the Banks shall be
under no obligation to make additional Eurodollar Loans, to Continue Eurodollar
Loans or to Convert Base Rate Loans into Eurodollar Loans, and the Company
shall, on the last day(s) of the then current Interest Period(s) for the
outstanding Eurodollar Loans, either prepay such Loans or Convert such Loans
into Base Rate Loans in accordance with Section 2.07 hereof.
5.03 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Bank or its Applicable
Lending Office to honor its obligation to make or maintain Eurodollar Loans
hereunder, then such Bank shall promptly notify the Company thereof (with a copy
to the Administrative Agent) and, in the case that it has become unlawful for
such Bank to make Loans, such Bank's obligation to make or Continue, or to
Convert Loans of any other Type into, Eurodollar Loans shall be suspended until
such time as such Bank may again make and maintain Eurodollar Loans and, in the
case that it has become unlawful for such Bank to maintain Loans, its
outstanding Loans shall bear interest at the Base Rate from the date such Bank
may specify to the Company with a copy to the Administrative
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Agent until it shall no longer be unlawful for such Bank to maintain Eurodollar
Loans (in which case the provisions of Section 5.04 hereof shall be applicable).
5.04 Treatment of Affected Loans. If the obligation of any Bank to
make Eurodollar Loans or to Continue, or to Convert Base Rate Loans into,
Eurodollar Loans shall be suspended pursuant to Section 5.01 or 5.03 hereof,
such Bank's Eurodollar Loans shall be automatically Converted into Base Rate
Loans on the last day(s) of the then current Interest Period(s) for such
Eurodollar Loans (or, in the case of a Conversion resulting from a circumstance
described in Section 5.03 hereof, on such earlier date as such Bank may specify
to the Company with a copy to the Agent) and, unless and until such Bank gives
notice as provided below that the circumstances specified in Section 5.01 or
5.03 hereof that gave rise to such Conversion no longer exist:
(a) to the extent that such Bank's Eurodollar Loans have been so
Converted, all payments and prepayments of principal that would otherwise
be applied to such Bank's Eurodollar Loans shall be applied instead to its
Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by such Bank
as Eurodollar Loans shall be made or Continued instead as Base Rate Loans,
and all Base Rate Loans of such Bank that would otherwise be Converted
into Eurodollar Loans shall remain as Base Rate Loans.
If such Bank gives notice to the Company with a copy to the Agent that the
circumstances specified in Section 5.01 or 5.03 hereof that gave rise to the
Conversion of such Bank's Eurodollar Loans pursuant to this Section 5.04 no
longer exist (which such Bank agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans made by other Banks are
outstanding, such Bank's Base Rate Loans shall be automatically Converted, on
the first day(s) of the next succeeding Interest Period(s) for such outstanding
Eurodollar Loans, to the extent necessary so that, after giving effect thereto,
all Base Rate and Eurodollar Loans are allocated among the Banks ratably (as to
principal amounts, Types and Interest Periods) in accordance with their
respective Commitments.
5.05 Compensation. The Company shall pay to the Administrative Agent
for account of each Bank, upon the request of such Bank through the
Administrative Agent, such amount or amounts as shall be sufficient (in the
reasonable opinion of such Bank) to compensate it for any loss, cost or expense
that such Bank determines is attributable to:
(a) any payment, mandatory or optional prepayment, or Conversion of,
a Eurodollar Loan or Fixed Rate Loan made by such Bank for any reason
(including, without limitation, the acceleration of the Loans pursuant to
Section 9 hereof) on a date other than the last day of an Interest Period
for such Loan; or
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(b) any failure by the Company (whether by reason of the Company's
election not to proceed or the failure of any of the conditions precedent
specified in Section 6 hereof to be satisfied) to borrow a Eurodollar Loan
or Fixed Rate Loan from such Bank on the date for such borrowing specified
in the relevant notice of Borrowing given under Section 2.02 hereof.
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess (if any) of (i) the amount of interest
that otherwise would have accrued on the principal amount of any such Eurodollar
Loan so paid, prepaid, Converted or not borrowed, for the period from the date
of such payment, prepayment, Conversion or failure to borrow, to the last day of
the then current Interest Period for such Eurodollar Loan (or, in the case of a
failure to borrow, the Interest Period for such Eurodollar Loan that would have
commenced on the date specified for such Borrowing) at the applicable rate of
interest for such Eurodollar Loan provided for herein, less the Applicable
Margin for such Eurodollar Loan, over (ii) the amount of interest that otherwise
would have accrued on such principal amount at a rate per annum equal to the
interest component of the amount Such Bank would have bid on the date of such
payment, prepayment or failure to borrow in the London interbank market for
Dollar deposits of leading banks in amounts comparable to such principal amount
and with maturities comparable to such period (as reasonably determined by such
Bank).
5.06 U.S. Taxes.
(a) The Company agrees to pay to each of the Banks and the Swingline
Bank that is not a U.S. Person such additional amounts as are necessary in order
that the net payment of any amount due to such non-U.S. Person hereunder after
deduction for or withholding in respect of any U.S. Taxes imposed with respect
to such payment (or in lieu thereof, payment of such U.S. Taxes by such non-U.S.
Person), net of any tax credit available to such non-U.S. Person from its home
country as determined by such Bank in its sole discretion, will not be less than
the amount stated herein to be then due and payable, provided that the foregoing
obligation to pay such additional amounts shall not apply:
(i) to any payment to a Bank hereunder unless such Bank is, on the
Effective Date (or on the date it becomes a Bank or the Swingline Bank as
provided in Section 11.06(b) hereof) and on the date of any change in the
Applicable Lending Office of such Bank or the Swingline Bank, either
entitled to submit a Form 1001 (relating to such Bank and entitling it to
a complete exemption from withholding on all interest to be received by it
hereunder in respect of the Loans) or Form 4224 (relating to all interest
to be received by such Bank hereunder in respect of the Loans), or
(ii) to any U.S. Taxes imposed solely by reason of the failure by
such non-U.S. Person to comply with applicable certification, information,
documentation or other reporting requirements if such compliance is
required by statute or regulation of the United States of America as a
precondition to relief or exemption from such U.S. Taxes
-39-
For the purposes of this Section 5.06(a), (w) "Form 1001" shall mean Form 1001
(Ownership, Exemption, or Reduced Rate Certificate) of the Department of the
Treasury of the United States of America, (x) "Form 4224" shall mean Form 4224
(Exemption from Withholding of Tax on Income Effectively Connected with the
Conduct of a Trade or Business in the United States) of the Department of the
Treasury of the United States of America (or in relation to either such Form
such successor and related forms as may from time to time be adopted by the
relevant taxing authorities of the United States of America to document a claim
to which such Form relates), (y) "U.S. Person" shall mean a citizen, national or
resident of the United States of America, a corporation, partnership or other
entity created or organized in or under any laws of the United States of
America, or any estate or trust that is subject to Federal income taxation
regardless of the source of its income and (z) "U.S. Taxes" shall mean any
present or future tax, assessment or other charge or levy imposed by or on
behalf of the United States of America or any taxing authority thereof or
therein.
(b) Within 30 days after paying any amount to the Administrative
Agent or any Bank or the Swingline Sank from which it is required by law to make
any deduction or withholding, and within 30 days after it is required by law to
remit such deduction or withholding to any relevant taxing or other authority,
the Company shall deliver to the Administrative Agent for delivery to such
non-U.S. Person evidence satisfactory to such Person of such deduction,
withholding or payment (as the case may be).
5.07 Fair Allocation: Substitution of Banks.
(a) Anything herein to the contrary notwithstanding, any
determination by any Bank of any amounts payable by the Company under Section
5.01 shall be based upon a fair and equitable allocation by such Bank of the
particular overall cost or loss among all its similarly situated borrowers
relative to such Bank, and the Company shall not be obligated to compensate any
Bank for any costs that would not have been incurred by such Bank but for its
gross negligence or willful misconduct.
(b) Provided that no Default shall have occurred and be continuing,
the Company may, at any time, replace any Bank or the Swingline Bank that has
requested compensation from the Company pursuant to Section 5.01 hereof or whose
obligation to make additional Loans has been suspended pursuant to Section 5.03
hereof or that is entitled to payment of additional amounts under Section 5.06
hereof (any such Bank or the Swingline Bank being herein called an "Affected
Bank"), by giving not less than ten Business Days' prior notice to the
Administrative Agent (which shall promptly notify such Affected Bank and each
other Bank), that it intends to replace such Affected Bank with one or more
banks (including, but not limited to, any other Bank under this Agreement)
selected by the Company and acceptable to the Administrative Agent (which shall
not unreasonably withhold its consent). The method (whether by assignment or
otherwise) of and documentation for such replacement shall be acceptable to the
Affected Bank, the other Banks and the Administrative Agent (which shall not
unreasonably withhold their consent and shall cooperate with the Company in
effecting such
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replacement). Upon the effective date of any replacement under this Section 5.07
(and as a condition thereto), the Company shall, or shall cause the replacement
bank(s) to, pay to the Affected Bank being replaced any amounts owing to such
Affected Bank hereunder (including, without limitation, interest, facility fees,
compensation and additional amounts under this Section 5, in each case accrued
to the effective date of such replacement), whereupon each replacement bank
shall become a "Bank" or the "Swingline Bank", as the case may be, for all
purposes of this Agreement having a Commitment in the amount of such Affected
Bank's Commitment assumed by it, and such Commitment of the Affected Bank being
replaced (including, if such Affected Bank is the Swingline Bank, its Swingline
Commitment) shall be terminated upon such effective date and all of such
Affected Bank's rights and obligations under this Agreement shall terminate
(provided that the obligations of the Company under Sections 5.01, 5.05, 5.06
and 11.03 hereof to such Affected Bank shall survive such replacement as
provided in Section 11.07 hereof).
Section 6. Conditions Precedent
6.01 Effective Date. The effectiveness of this Agreement is subject
to the receipt by the Administrative Agent of the following documents, each of
which shall be satisfactory to the Administrative Agent (and to the extent
specified below, to each Bank) in form and substance:
(a) Corporate Documents. The following documents, each certified as
indicated below:
(i) a copy of the charters or similar organizational
documents, as amended and in effect, of the Company and of each
Material Subsidiary certified as of a recent date by the Secretary
of State of the jurisdiction of its incorporation or formation and
by the Applicable Insurance Regulatory Authority, if any, as the
case may be, and a certificate from such respective authorities
dated as of a recent date as to the good standing of and charter
documents or other organizational documents filed by the Company and
by such Material Subsidiary;
(ii) a certificate of the Secretary or an Assistant Secretary
of the Company, dated the Effective Date and certifying (A) that
attached thereto is a true and complete copy of the by-laws or
operating agreement of the Company and of each Material Subsidiary
as amended and in effect at all times from the date on which the
resolutions referred to in clause (B) were adopted to and including
the date of such certificate, (B) that attached thereto is a true
and complete copy of resolutions duly adopted by the board of
directors of the Company authorizing the execution, delivery and
performance of the Basic Documents and the extensions of credit
hereunder, and that such resolutions have not been modified,
rescinded or amended and are in full force and effect, (C) that the
charters or similar organizational documents of the Company and the
Material
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Subsidiaries have not been amended since the date of the
certification thereto furnished pursuant to subparagraph (i) above,
and (D) as to the incumbency and specimen signature of each officer
of the Company executing the Basic Documents and each other document
to be delivered by the Company from time to time in connection
therewith (and the Administrative Agent and each Bank may
conclusively rely on such certificate until it receives notice in
writing from the Company); and
(iii) a certificate of another officer of the Company as to
the incumbency and specimen signature of the Secretary or Assistant
Secretary, as the case may be, of the Company.
(b) Officer's Certificate. A certificate of a senior officer of the
Company, dated the Effective Date, to the effect set forth in the first
sentence of Section 6.03 hereof.
(c) Opinion of Counsel to The Company. An opinion, dated the
Effective Date, of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Executive Vice President and General
Counsel of the Company, substantially in the form of Exhibit C hereto and
covering such other matters as the Administrative Agent or any Bank may
reasonably request (and the Company hereby instructs such counsel to
deliver such opinion to the Banks and the Administrative Agent).
(d) Notes. The Revolving Credit Notes, Competitive Notes and
Swingline Note, duly completed and executed.
(e) Tax Sharing Agreements. True, correct and complete copies of all
tax sharing agreements (if any) to which the Company or any of its
Subsidiaries is a party, which agreements must be in form and substance
satisfactory to the Banks.
(f) Termination of Existing Credit Agreement. Evidence that the
Existing Credit Agreement and Pledge Agreement (as defined therein) have
been terminated and all principal of and interest on the Existing Loans
and all other amounts owing under the Existing Credit Agreement accrued to
the Effective Date, have been indefeasibly paid in full and all Liens
granted in connection therewith shall have been terminated and released
and the Administrative Agent shall have received all instruments of
release, including without limitation all Form UCC-3 termination
statements, to evidence such termination and release.
(g) Release of Security for Debentures. Evidence that all security
interests granted to secure the Debentures shall have been terminated and
released.
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(h) Other Documents. Such other documents as the Administrative
Agent or any Bank or special counsel to Fleet may reasonably request.
The effectiveness of this Agreement is also subject to the payment by the
Company of such fees as the Company shall have agreed to pay or deliver to any
Bank or the Administrative Agent in connection herewith, including, without
limitation, the reasonable fees and expenses of special counsel to Fleet in
connection with the negotiation, preparation, execution and delivery of this
Agreement and the Notes and the making of the Loans hereunder (to the extent
that statements for such fees and expenses have been delivered to the Company
not less than five days prior to the Effective Date).
6.02 Term Loans.
The obligation of the Banks to make any Term Loans to the Company
hereunder on the occasion of the borrowing of Term Loans is subject to the
further condition precedent that the Company shall have delivered to the
Administrative Agent the Term Notes evidencing such Term Loans.
6.03 Initial and Subsequent Loans.
The obligation of any Bank or the Swingline Bank to make any Loan to
the Company upon the occasion of any Borrowing hereunder (including the initial
Borrowing) is subject to the further conditions precedent that, both immediately
prior to the making of such Loan and also after giving effect thereto and to the
intended use thereof:
(a) no Default shall have occurred and be continuing; and
(b) the representations and warranties made by the Company in
Section 7 hereof, and in each of the other Basic Documents, shall be true
and complete on and as of the date of the making of such Loan with the
same force and effect as if made on and as of such date (or, if any such
representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date).
Each notice of Borrowing by the Company hereunder shall constitute a
certification by the Company to the effect set forth in the preceding sentence
(both as of the date of such notice and, unless the Company otherwise notifies
the Administrative Agent prior to the date of such Borrowing, as of the date of
such Borrowing).
Section 7. Representations and Warranties. The Company represents
and warrants to the Administrative Agent, the Banks and the Swingline Bank that:
7.01 Corporate Existence. Each of the Company and its Material
Subsidiaries: (a) is a corporation, partnership or other entity duly organized,
validly existing and in good
-43-
standing under the laws of the jurisdiction of its organization; (b) has all
requisite corporate or other power, and has all material governmental licenses,
authorizations, consents and approvals, necessary to own its assets and carry on
its business as now being or as proposed to be conducted; and (c) is qualified
to do business and is in good standing in all jurisdictions in which the nature
of the business conducted by it makes such qualification necessary and where
failure so to qualify could, either individually or in the aggregate, have a
Material Adverse Effect.
7.02 Financial Condition.
(a) The Company has heretofore furnished to each of the Banks
consolidated and consolidating balance sheets of the Company and its
Subsidiaries as at December 31, 1997 and the related consolidated and
consolidating statements of income, shareholders' equity and cash flows of the
Company and its Subsidiaries for the fiscal year ended on said date, with the
opinion thereon (in the case of said consolidated balance sheet and statements)
of Deloitte & Touche LLP, and the unaudited consolidated and consolidating
balance sheets of the Company and its Subsidiaries as at March 31, 1998 and the
related consolidated and consolidating statements of income, shareholders'
equity and cash flows of the Company and its Subsidiaries for the three-month
period ended on such date. All such financial statements present fairly, in all
material respects, the consolidated financial condition of the Company and its
Subsidiaries, and (in the case of said consolidating financial statements) the
respective unconsolidated financial condition of the Company and of each of its
Subsidiaries, as at said dates and the consolidated results of their operations,
and (in the case of said consolidating statements) the respective unconsolidated
results of operations of the Company and of each of its Subsidiaries, for the
fiscal year and three-month period ended on said dates (subject, in the case of
such financial statements as at March 31, 1998, to normal year-end audit
adjustments), all in accordance with generally accepted accounting principles
and practices applied on a consistent basis. None of the Company nor any of its
Subsidiaries has on the Effective Date any material contingent liabilities,
liabilities for taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments, except as referred to or
reflected or provided for in said financial statements (or in the notes thereto)
as at said dates. Since December 31, 1997, there has been no material adverse
change in the consolidated financial condition, operations, business or
prospects of the Company and its Subsidiaries taken as a whole from that set
forth in said financial statements as at said date.
(b) The Company has heretofore furnished to each of the Banks the
annual and quarterly Statutory Statements of the Company (consolidated) and of
each of its Insurance Subsidiaries for the fiscal year ended December 31, 1997
and for the quarterly fiscal period ended March 31, 1998 as filed with the
Applicable Insurance Regulatory Authority. All such Statutory Statements present
fairly, in all material respects, the financial condition of the Company
(consolidated) and of each Insurance Subsidiary, respectively, as at the
respective dates thereof and its results of operations through fiscal year ended
on December 31, 1997 and the quarterly fiscal period ended March 31, 1998, in
accordance with statutory accounting practices prescribed or permitted by the
Applicable Insurance Regulatory Authority.
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7.03 Litigation. Except as disclosed in Schedule III hereto, there
are no legal or arbitration proceedings, or any proceedings by or before any
governmental or regulatory authority or agency, now pending or (to the knowledge
of the Company) threatened against the Company or any of its Subsidiaries that,
if adversely determined, could, either individually or in the aggregate, have a
Material Adverse Effect.
7.04 No Breach. None of the execution and delivery of this Agreement
and the Notes, the consummation of the transactions herein and therein
contemplated or compliance with the terms and provisions hereof and thereof will
conflict with or result in a breach of, or require any consent under, the
charter or by-laws of the Company, or any applicable law or regulation, or any
order, writ, injunction or decree of any court or governmental authority or
agency, or any agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which any of them or any of their Property is
bound or to which any of them is subject, or constitute a default under any such
agreement or instrument, or result in the creation or imposition of any Lien
upon any Property of the Company or any of its Subsidiaries pursuant to the
terms of any such agreement or instrument.
7.05 Action. The Company has all necessary corporate power,
authority and legal right to execute and deliver this Agreement and the Notes
and perform its obligations under each of the Basic Documents; the execution and
delivery of this Agreement and the Notes and performance by the Company thereof
have been duly authorized by all necessary corporate action on its part
(including, without limitation, any required shareholder approvals); and this
Agreement has been duly and validly executed and delivered by the Company and
constitutes, and each of the Notes when executed and delivered for value will
constitute, the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms.
7.06 Approvals. No authorizations, approvals or consents of, and no
filings or registrations with, any governmental or regulatory authority or
agency, or any securities exchange, are necessary for the execution or delivery
by the Company of this Agreement and the Notes or performance by the Company
thereof or for the legality, validity or enforceability hereof or thereof.
7.07 Margin Stock. Not more than 25% of the value (as determined by
any reasonable method) of the Properties of the Company and its Subsidiaries
(including, without limitation, common stock of the Company held in treasury)
subject to the provisions of Section 8.05 or 8.06 hereof is represented by
Margin Stock.
7.08 ERISA. Each Plan, and, to the knowledge of the Company, each
Multiemployer Plan, is in compliance in all material respects with, and has been
administered in all material respects in compliance with, the applicable
provisions of ERISA, the Code and any other Federal or State law, and no event
or condition has occurred and is continuing as to which
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the Company would be under an obligation to furnish a report to the Banks under
Section 8.01(g) hereof.
7.09 Taxes. The Company and its United States Subsidiaries are
members of an affiliated group of corporations filing consolidated returns for
Federal income tax purposes, of which the Company is the "common parent" (within
the meaning of Section 1504 of the Code) of such group. The Company and its
Subsidiaries have filed all Federal income tax returns and all other material
tax returns that are required to be filed by them and have paid all taxes due
pursuant to such returns or pursuant to any assessment received by the Company
or any of its Subsidiaries. The charges, accruals and reserves on the books of
the Company and its Subsidiaries in respect of taxes and other governmental
charges are, in the opinion of the Company, adequate. The Company has not given
or been requested to give a waiver of the statute of limitations relating to the
payment of Federal, state, local and foreign taxes or other impositions.
7.10 Investment Company Act. Neither the Company nor any of its
Subsidiaries is an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
7.11 Public Utility Holding Company Act. Neither the Company nor any
of its Subsidiaries is a "holding company", or an "affiliate" of a "holding
company" or a "subsidiary company" of a "holding company", within the meaning of
the Public Utility Holding Company Act of 1935, as amended.
7.12 Material Agreements and Liens.
(a) Part A of Schedule I hereto is a complete and correct list, as
of the Effective Date, of each credit agreement, loan agreement, indenture,
securities purchase agreement, guarantee (other than any insurance policy which
is not a Guarantee), letter of credit or other arrangement providing for or
otherwise relating to any Indebtedness of the Company or any of its Subsidiaries
the aggregate principal or face amount of which equals or exceeds (or may equal
or exceed) $3,000,000, and the aggregate principal or face amount outstanding or
that may become outstanding under each such arrangement is correctly described
in Part A of said Schedule I.
(b) Part B of Schedule I hereto is a complete and correct list, as
of the Effective Date, of each Lien securing Indebtedness of any Person the
aggregate principal or face amount of which equals or exceeds (or may equal or
exceed) $3,000,000 and covering any Property of the Company or any of its
Subsidiaries, and the aggregate Indebtedness secured (or which may be secured)
by each such Lien and the Property covered by each such Lien is correctly
described in Part B of said Schedule I.
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7.13 Environmental Matters. There have been no environmental
investigations, studies, audits, tests, reviews or other analyses conducted by
or that are in the possession of the Company or any of its Subsidiaries in
relation to any site or facility now or previously owned, operated or leased by
the Company or any of its Subsidiaries which have not been made available to the
Banks.
7.14 Capitalization. The authorized capital stock of the Company
consists, on the Effective Date, of an aggregate of 100,000,000 shares of common
stock, par value $0.10 per share, of which 39,441,058 shares are duly and
validly issued and outstanding (and of which 1,981,148 shares are held in
treasury), each of which shares is fully paid and nonassessable. As of the
Effective Date, except for the Company's 1987 and 1997 Long-Term Incentive Plans
for Key Employees, its Non-Employee-Director Stock Option Plan and its Directors
Stock Ownership Plan as in effect on the Effective Date and any stock bonus
awards, restricted stock awards, performance units, stock options or stock
appreciation rights heretofore issued thereunder and other than pursuant to the
Shareholders' Agreement, (x) there are no outstanding Equity Rights with respect
to the Company and (y) there are no outstanding obligations of the Company or
any of its Subsidiaries to repurchase, redeem, or otherwise acquire any shares
of capital stock of the Company nor are there any outstanding obligations of the
Company or any of its Subsidiaries to make payments to any Person, such as
"phantom stock" payments, where the amount thereof is calculated with reference
to the fair market value or equity value of the Company or any of its
Subsidiaries.
7.15 Subsidiaries, Etc.
(a) Set forth in Schedule II hereto is a complete and correct list,
as of the Effective Date, of all of the Subsidiaries of the Company, together
with, for each such Subsidiary, (i) the jurisdiction of organization of such
Subsidiary, (ii) each Person holding ownership interests in such Subsidiary and
(iii) the nature of the ownership interests held by each such Person and the
percentage of ownership of such Subsidiary represented by such ownership
interests. Except as disclosed in Schedule II hereto, as of the Effective Date
(x) each of the Company and its Subsidiaries owns, free and clear of Liens, and
has the unencumbered right to vote, all outstanding ownership interests in each
Person shown to be held by it in Schedule II hereto, (y) all of the issued and
outstanding capital stock of each such Person organized as a corporation is
validly issued, fully paid and nonassessable and (z) there are no outstanding
Equity Rights with respect to such Person.
(b) None of the Subsidiaries of the Company is, on the Effective
Date, subject to any indenture, agreement, instrument or other arrangement of
the type described in Section 8.17 hereof.
7.16 True and Complete Disclosure. The information, reports,
financial statements, exhibits and schedules furnished in writing by or on
behalf of the Company or any of its Subsidiaries to the Administrative Agent or
any Bank in connection with the negotiation,
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preparation or delivery of this Agreement and the other Basic Documents or
included herein or therein or delivered pursuant hereto or thereto, when taken
as a whole, do not, as of the Effective Date, contain any untrue statement of
material fact or omit to state any material fact necessary to make the
statements herein or therein, in light of the circumstances under which they
were made, not misleading. All written information furnished after the Effective
Date by the Company and its Subsidiaries to the Administrative Agent and the
Banks in connection with this Agreement and the other Basic Documents and the
transactions contemplated hereby and thereby will be true, complete and accurate
in every material respect, or (in the case of projections) based on reasonable
estimates, on the date as of which such information is stated or certified. To
the Company's knowledge, there is no fact peculiar to the Company or any of its
Subsidiaries (in contrast to information of a general economic or industry
nature) that could have a Material Adverse Effect that has not been disclosed
herein, in the other Basic Documents or in a report, financial statement,
exhibit, schedule, disclosure letter or other writing furnished to the Banks for
use in connection with the transactions contemplated hereby or thereby.
7.17 Year 2000. Substantially all programming required to handle all
material dates and date processing, in and following the year 2000, of (i) the
Company's and each of its Material Subsidiaries' computer systems and (ii)
equipment containing embedded microchips (including systems and equipment
supplied by others or with which the Company's or such Material Subsidiaries'
systems interface) and the testing of all such systems and equipment, as so
reprogrammed, will be substantially completed by June 30, 1999. The expected
cost to the Company and its Material Subsidiaries of such reprogramming and
testing and of the reasonably foreseeable consequences of year 2000 to the
Company and its Material Subsidiaries (including, without limitation,
reprogramming errors and the failure of others' systems or equipment within the
control of the Company or its Material Subsidiaries) is not anticipated to
result in a Default or have Material Adverse Effect.
Section 8. Covenants of the Company. The Company covenants and
agrees with the Banks, the Swingline Bank and the Administrative Agent that, so
long as any Commitment or Loan is outstanding and until payment in full of all
amounts payable by the Company hereunder:
8.01 Financial Statements; Information; Etc. The Company shall
deliver to each of the Banks and the Swingline Bank:
(a) as soon as available and in any event within 55 days after the
end of each quarterly fiscal period of each fiscal year of the Company,
consolidated and consolidating statements of income, shareholders' equity
and cash flows of the Company and its Subsidiaries for such period and for
the period from the beginning of the respective fiscal year to the end of
such period, and the related consolidated and consolidating balance sheets
of the Company and its Subsidiaries as at the end of such period, setting
forth in each case in comparative form the corresponding consolidated and
consolidating figures for the corresponding period in the preceding fiscal
year,
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accompanied by a certificate of a senior financial officer of the Company,
which certificate shall state that said consolidated financial statements
present fairly, in all material respects, the consolidated financial
condition and results of operations of the Company and its Subsidiaries,
and said consolidating financial statements present fairly in all material
respects, the respective individual unconsolidated financial condition and
results of operations of the Company and of each of its Subsidiaries, in
each case in accordance with generally accepted accounting principles,
consistently applied, as at the end of, and for, such period (subject to
normal year-end audit adjustments);
(b) as soon as available and in any event within 100 days after the
end of each fiscal year of the Company, consolidated and consolidating
statements of income, stockholders' equity and cash flows of the Company
and its Subsidiaries for such fiscal year and the related consolidated and
consolidating balance sheets of the Company and its Subsidiaries as at the
end of such fiscal year, setting forth in each case in comparative form
the corresponding consolidated and consolidating figures for the preceding
fiscal year, and accompanied (i) in the case of said consolidated
statements and balance sheet of the Company, by an opinion thereon of
independent certified public accountants of recognized national standing,
which opinion shall state that said consolidated financial statements
present fairly, in all material respects, the consolidated financial
condition and results of operations of the Company and its Subsidiaries as
at the end of, and for, such fiscal year in accordance with generally
accepted accounting principles, and a certificate of such accountants
addressed to the Banks stating that, in making the examination necessary
for their opinion, nothing came to their attention that caused them to
believe that the Company had failed to comply with any of its obligations
under Sections 8.05 to 8.11 (inclusive) or that any Default specified in
paragraph (b) or (e) to (j) inclusive, of Section 9 hereof had occurred,
except as specifically stated, and (ii) in the case of said consolidating
statements and balance sheets, by a certificate of a senior financial
officer of the Company, which certificate shall state that said
consolidating financial statements present fairly, in all material
respects, the respective individual unconsolidated financial condition and
results of operations of the Company and of each of its Subsidiaries, in
each case in accordance with generally accepted accounting principles)
consistently applied, as at the end of, and for, such fiscal year;
(c) within 5 days after filing with the Applicable Insurance
Regulatory Authority and in any event within 55 days after the end of each
of the first three quarterly fiscal periods of each fiscal year of the
Company the quarterly Statutory Statement of the Company (consolidated)
and of each Insurance Subsidiary for such fiscal period, together with a
certificate of a senior financial officer of the Company stating that such
Statutory Statement fairly presents, in all material respects, the
financial condition of the Company (consolidated) and of each Insurance
Subsidiary, respectively, for such quarterly fiscal period in accordance
with statutory accounting practices required or permitted by the
Applicable Insurance Regulatory Authority;
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(d) within 5 days after filing with the Applicable Insurance
Regulatory Authority and in any event within 55 days after the end of each
fiscal year of the Company the annual Statutory Statement of the Company
(consolidated) and of each Insurance Subsidiary for such year, together
with a certificate of a senior financial officer of the Company stating
that such annual Statutory Statement fairly presents, in all material
respects, the financial condition of the Company (consolidated) and of
each Insurance Subsidiary, respectively, for such fiscal year in
accordance with statutory accounting practices required or permitted by
the Applicable Insurance Regulatory Authority;
(e) promptly upon their becoming available, copies of all
registration statements and regular periodic reports, if any, which the
Company shall have filed with the Securities and Exchange Commission (or
any governmental agency substituted therefor) or any national securities
exchange;
(f) promptly upon the mailing thereof to the shareholders of the
Company generally, copies of all financial statements, reports and proxy
statements so mailed;
(g) as soon as possible, and in any event within 10 days after the
Company knows or has reason to believe that any of the events or
conditions specified below with respect to any Plan or Multiemployer Plan
has occurred or exists, a statement signed by a senior financial officer
of the Company setting forth details respecting such event or condition
and the action, if any, that the Company or its ERISA Affiliate proposes
to take with respect thereto (and a copy of any report or notice required
to be filed with or given to PBGC by the Company or an ERISA Affiliate
with respect to such event or condition):
(i) any reportable event, as defined in Section 4043(b) of
ERISA and the regulations issued thereunder, with respect to a Plan,
as to which PBGC has not by regulation waived the requirement of
Section 4043 (a) of ERISA that it be notified within 30 days of the
occurrence of such event (provided that a failure to meet the
minimum funding standard of Section 412 of the Code or Section 302
of ERISA, including, without limitation, the failure to make on or
before its due date a required installment under Section 412(m) of
the Code or Section 302(e) of ERISA, shall be a reportable event
regardless of the issuance of any waivers in accordance with Section
412(d) of the Code); and any request for a waiver under Section 412
(d) of the Code for any Plan;
(ii) the distribution under Section 4041 of ERISA of a notice
of intent to terminate any Plan or any action taken by the Company
or an ERISA Affiliate to terminate any Plan;
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(iii) the institution by PBGC of proceedings under Section
4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by the Company or
any ERISA Affiliate of a notice from a Multiemployer Plan that such
action has been taken by PBGC with respect to such Multiemployer
Plan;
(iv) the complete or partial withdrawal from a Multiemployer
Plan by the Company or any ERISA Affiliate that results in liability
under Section 4201 or 4204 of ERISA (including the obligation to
satisfy secondary liability as a result of a purchaser default) or
the receipt by the Company or any ERISA Affiliate of notice from a
Multiemployer Plan that it is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA or that it intends to
terminate or has terminated under Section 4041A of ERISA;
(v) the institution of a proceeding by a fiduciary of any
Multiemployer Plan against the Company or any ERISA Affiliate to
enforce Section 515 of ERISA, which proceeding is not dismissed
within 30 days, and
(vi) the adoption of an amendment to any Plan that, pursuant
to Section 401 (a) (29) of the Code or Section 307 of ERISA, would
result in the loss of tax-exempt status of the trust of which such
Plan is a part if the Company or an ERISA Affiliate fails to timely
provide security to the Plan in accordance with the provisions of
said Sections;
(h) promptly after the Company knows or has reason to believe that
any Default has occurred, a notice of such Default specifying that such
notice is a "Notice of Default" and describing the same in reasonable
detail and, together with such notice or as soon thereafter as possible, a
description of the action that the Company has taken or proposes to take
with respect thereto; and
(i) from rime to time such other information regarding the financial
condition, operations, business or prospects of the Company or any of its
Subsidiaries (including, without limitation, any Plan or Multiemployer
Plan and any reports or other information required to be filed under
ERISA) as any Bank or the Administrative Agent may reasonably request.
The Company will furnish to each Bank, at the time it furnishes each set of
financial statements pursuant to paragraph (a) or (b) above, a certificate of a
senior financial officer of the Company (i) to the effect that no Default has
occurred and is continuing (or, if any Default has occurred and is continuing,
describing the same in reasonable detail and describing the action that the
Company has taken or proposes to take with respect thereto) and (ii) setting
forth in reasonable detail the computations necessary to determine whether the
Company is in compliance with
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Sections 8.05(d)(v)(z), 8.06(i), 8.07(d), 8.09 and 8.10 hereof as of the end of
the respective quarterly fiscal period or fiscal year.
8.02 Litigation. The Company will promptly give to each Bank and the
Swingline Bank notice of all legal or arbitration proceedings, and of all
proceedings by or before any governmental or regulatory authority or agency, and
any material development in respect of such legal or other proceedings,
affecting the Company or any of its Subsidiaries, except proceedings which, if
adversely determined, could not, either individually or in the aggregate, have a
Material Adverse Effect.
8.03 Existence, Etc. The Company will, and will cause each of its
Material Subsidiaries to:
(a) preserve and maintain its legal existence and all of its
material rights, privileges, licenses and franchises (provided that
nothing in this Section 8.03 shall prohibit any transaction expressly
permitted by Section 8.05 hereof);
(b) comply with the requirements of all applicable laws, rules,
regulations and orders of governmental or regulatory authorities if
failure to comply with such requirements could, either individually or in
the aggregate, have a Material Adverse Effect;
(c) pay and discharge all taxes, assessments and governmental
charges or levies imposed on it or on its income or profits or on any of
its Property prior to the date on which penalties attach thereto, except
for any such tax, assessment, charge or levy the payment of which is being
contested in good faith and by proper proceedings and against which
adequate reserves are being maintained in accordance with GAAP;
(d) maintain all of its Properties material to its business in
reasonably adequate working order and condition, ordinary wear and tear
excepted;
(e) keep adequate records and books of account, in which complete
entries will be made in accordance with generally accepted accounting
principles consistently applied; and
(f) permit representatives of any Bank or the Administrative Agent,
during normal business hours, to examine, copy and make extracts from its
books and records, to inspect any of its Properties, and to discuss its
business and affairs with its officers all to the extent reasonably
requested by such Bank or the Administrative Agent (as the case may be).
8.04 Insurance. The Company will, and will cause each of its
Material Subsidiaries to, keep insured by financially sound and reputable
insurers all Property of a
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character usually insured by corporations engaged in the same or similar
business similarly situated against loss or damage of the kinds and in the
amounts customarily insured against by such corporations and carry such other
insurance as is usually carried by such corporations.
8.05 Prohibition of Fundamental Changes
(a) The Company will not, and will not permit any of its Material
Subsidiaries to, enter into any transaction of merger or consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution).
(b) The Company will not, and will not permit any of its
Subsidiaries to, acquire any business or Property from, or capital stock of, or
be a party to any acquisition of, any Person
(c) The Company will not, and will not permit any of its Material
Subsidiaries to, convey, sell, lease, transfer or otherwise dispose of any part
of its business or Property, whether now owned or hereafter acquired (including,
without limitation, receivables and leasehold interests).
(d) Notwithstanding the foregoing paragraphs of this Section 8.05:
(i) any Subsidiary of the Company may be merged or consolidated with
or into (x) the Company if the Company shall be the continuing or
surviving corporation or (y) any other Subsidiary of the Company; provided
that if any such transaction shall be between a Subsidiary of the Company
and a Wholly Owned Subsidiary of the Company, such Wholly Owned Subsidiary
shall be the continuing or surviving corporation;
(ii) the Company or any of its Subsidiaries may purchase equipment,
furniture and supplies to be used in the ordinary course of business;
(iii) the Company or any of its Subsidiaries may make Investments
permitted by Section 8.08 hereof;
(iv) any Subsidiary of the Company may convey, sell, lease, transfer
or otherwise dispose of any or all of its Property (upon voluntary
liquidation or otherwise) to the Company or a Wholly Owned Subsidiary of
the Company; and
(v) the Company or any of its Subsidiaries may convey, sell, lease,
transfer or otherwise dispose of (x) equipment no longer used or useful in
its business, (y) any portfolio Investment sold or disposed of in the
ordinary course of business and (z) any other Investment (including any
Investment in the capital stock of Subsidiaries of the Company other than
ERC or Asset Guaranty) having a value, together with the value (when sold,
leased transferred or otherwise disposed of), of all Investments sold,
leased,
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transferred or otherwise disposed of in reliance on this sub-clause (z),
nor in excess of $3,000,000.
(e) Except as expressly permitted by this Section 8.05, the Company
shall not, nor shall it permit any of its Material Subsidiaries to, sell,
transfer, convey or otherwise dispose of either directly or indirectly (x) all
or any portion of the capital stock of any of its Material Subsidiaries or (y)
all or substantially all of the Properties of any of its Material Subsidiaries
in one transaction or a series of related transactions.
8.06 Limitation on Liens. The Company will not, and will not permit
any of its Material Subsidiaries to, create, incur, assume or suffer to exist
any Lien upon any of its Property, whether now owned or hereafter acquired,
except:
(a) Liens in existence on the Effective Date and listed in Part B of
Schedule I hereto;
(b) Liens imposed by any governmental authority for taxes,
assessments or charges not yet due or which are being contested in good
faith and by appropriate proceedings, unless the amount thereof is
material with respect to it or its financial condition, if adequate
reserves with respect thereto are maintained on the books of the Company
or the affected Subsidiaries, as the case may be, in accordance with GAAP;
(c) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
which are not overdue for a period of more than 30 days or which are being
contested in good faith and by appropriate proceedings and Liens securing
judgments but only to the extent for an amount and for a period not
resulting in an Event of Default under Section 9(h) hereof;
(d) pledges or deposits under worker's compensation, unemployment
insurance and other social security legislation;
(e) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(f) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and encumbrances
consisting of zoning restrictions, easements, licenses, restrictions on
the use of Property or minor imperfections in tide thereto which, in the
aggregate, are not material in amount, and which do not in any case
materially detract from the value of the Property subject thereto or
interfere with the ordinary conduct of the business of the Company or any
of its Subsidiaries;
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(g) Liens on Property of any corporation which becomes a Subsidiary
of the Company after the Effective Date; provided that such Liens are in
existence at the time such corporation becomes a Subsidiary of the Company
and were not created in anticipation thereof;
(h) Liens upon real and/or tangible personal Property acquired after
the Effective Date (by purchase, construction or otherwise) by the Company
or any of its Subsidiaries, each of which Liens either existed on such
Property before the time of its acquisition and was not created in
anticipation thereof or was created solely for the purpose of securing
Indebtedness incurred to finance, refinance or refund the cost (including
the cost of construction) of such Property; provided that (i) no such Lien
shall extend to or cover any Property of the Company or such Subsidiary
other than the Property so acquired and improvements thereon and (ii) the
principal amount of Indebtedness secured by any such Lien shall not exceed
75% of the fair market value (as determined in good faith by a senior
financial officer of the Company) of such Property at the time it was
acquired (by purchase, construction or otherwise); and
(i) any extension, renewal or replacement of the foregoing; provided
that the Liens permitted by this paragraph shall not extend to or cover
any additional Indebtedness or Property (other than a substitution of like
Property).
8.07 Indebtedness. The Company will not, and will not permit any of
its Material Subsidiaries to, create or incur any Indebtedness except:
(a) Indebtedness to the Banks and the Swingline Bank hereunder;
(b) Indebtedness of the Company to any Subsidiary of the Company or
Indebtedness of any Wholly Owned Subsidiary to the Company or to any other
Wholly Owned Subsidiary of the Company;
(c) Indebtedness of the Company and its Material Subsidiaries
secured by Liens permitted by Section 8 06(h) hereof;
(d) additional Indebtedness of the Company and its Material
Subsidiaries provided that on the date such Indebtedness is incurred and
after giving effect thereto and to the concurrent retirement of any other
Indebtedness of the Company and its Material Subsidiaries, total
consolidated Indebtedness of the Company and its Subsidiaries (including
Indebtedness created or incurred under any other clause of this Section
8.07) does not exceed 25% of Total Capitalization; and
(e) Indebtedness of ERC not exceeding $ 100,000,000 in aggregate
principal amount incurred under a credit facility established by ERC
solely for the purpose of acquiring or supporting one or more of its
claims-paying ability ratings.
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8.08 Investments. The Company will not, and will not permit any of
its Material Subsidiaries to, make or permit to remain outstanding any
Investments except:
(a) Investments constituting (i) operating deposit accounts with
banks and (ii) accounts receivable arising in the ordinary course of
business on ordinary business terms that are not overdue;
(b) portfolio Investments constituting short-term debt instruments
that are rated at least A-1 by Standard & Poor's Corporation or P-1 by
▇▇▇▇▇'▇ Investors Service Inc.;
(c) portfolio Investments constituting fixed income debt securities
it after giving effect to such Investment:
(i) the weighted average credit quality of the fixed income
debt securities portfolio of the Company or any Material Subsidiary,
as determined by the rating system of Standard & Poor's Corporation,
is AA or higher; or
(ii) the aggregate amount invested by the Company and each of
its Material Subsidiaries in fixed income debt securities which are
rated lower than BBB by Standard & Poors Corporation or Baa2 by
▇▇▇▇▇'▇ Investors Service Inc. does not exceed 1% of the aggregate
amount of all portfolio Investments of the Company and its Material
Subsidiaries;
(d) equity Investments if, after giving effect to such investments,
the aggregate amount of equity Investments of the Company and of its
Material Subsidiaries (including, without limitation, Investments in
Subsidiaries of the Company that are not Wholly Owned Subsidiaries of the
Company) does not exceed 6% of the aggregate amount of the consolidated
Investments (both debt and equity) of the Company and its Material
Subsidiaries; and
(e) travel and similar advances by the Company and its Material
Subsidiaries in the ordinary course of business and loans to officers and
directors of the Company and its Material Subsidiaries, provided that such
travel and similar advances and loans to officers and directors at any one
time do not, in the aggregate, exceed $500,000 for the Company and its
Material Subsidiaries.
8.09 Restricted Payments. The Company will not declare or make any
Restricted Payment unless, on the date of declaration in the case of any
proposed dividend and on the date of payment or distribution in the case of the
making of any other Restricted Payment (the "Computation Date") and after giving
effect thereto:
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(i) the aggregate amount of all Restricted Payments made during the
period commencing on January 1, 1998 and ending on and including the
Computation Date (the "Computation Period") shall not exceed an amount
equal to the sum of:
(a) 25% (or, in the case of a deficit, minus 100%) of
consolidated net income of the Company and its Subsidiaries for the
Computation Period, plus
(b) the net cash proceeds received by the Company from the
issue or sale (other than to a Subsidiary) of shares of common or
preferred stock (other than Redeemable Preferred Stock) of the
Company (including shares of common stock issued upon conversion of
Indebtedness to common stock, it being understood and agreed that in
any such conversion, the Company shall be deemed to have received
cash proceeds in an amount equal to the principal amount of
Indebtedness converted to common stock), and
(ii) no Default shall have occurred and be continuing;
provided, that the Company shall not in any fiscal quarter of the Company
declare any dividend to the extent that the amount of such dividend, together
with the sum of (i) the aggregate amount of all dividends theretofore declared
in such fiscal quarter plus (ii) the aggregate amount of dividends actually paid
during the period (the "Measuring Period") of four consecutive fiscal quarters
of the Company ended on (or most recently ended prior to) such declaration,
would exceed 25% of the consolidated net income of the Company and its
Subsidiaries for the Measuring Period (and the Company shall not pay any
dividends it has not previously declared as permitted hereby), and provided
further, that no Restricted Payments shall be permitted if and for so long as
the claims-paying ability rating of any Insurance Subsidiary of the Company, as
determined by Standard & Poors Ratings Group (if rated by said agency), falls
below AA- (or is withdrawn).
8.10 Financial Covenant - Tangible Net Worth. The Company will not
on any date permit Tangible Net Worth to be less than $400,000,000.
8.11 Lines of Business. The Company will not permit any of its
Insurance Subsidiaries to engage to any substantial extent in any line or lines
of business activity other than the business of issuing financial guaranty
insurance, credit insurance and residual value insurance (and reinsurance of the
same), surety bonds, and similar or related products
8.12 Transactions with Affiliates The Company will not, and will not
permit any of its Subsidiaries to, directly or indirectly:
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(a) make any Investment in any Affiliate of the Company;
(b) transfer, sell, lease, assign or otherwise dispose of any
Property to any such Affiliate;
(c) purchase or acquire Property from any such Affiliate; or
(d) enter into any other transaction directly or indirectly with or
for the benefit of any such Affiliate (including, without limitation,
Guarantees and assumptions of obligations of any such Affiliate),
provided that the Company and its Subsidiaries may enter into transactions
(other than Investments by the Company or any of its Subsidiaries in any
Affiliate of the Company) providing for the leasing of Property, the rendering
or receipt of services or the purchase or sale of Property in the ordinary
course of business if the monetary or business consideration arising therefrom
would be substantially as advantageous to the Company and its Subsidiaries as
the monetary or business consideration which would obtain in a comparable
transaction with a Person not an Affiliate of the Company.
8.13 Use of Proceeds. The Company will use the proceeds of the Loans
hereunder solely for general corporate purposes, including repayment of all of
its outstanding obligations under the Existing Credit Agreement and
acquisitions, in compliance with all applicable legal and regulatory
requirements; provided that (a) the proceeds of any Swingline Loan may not be
used to repay or prepay any other Swingline Loan and (b) none of the
Administrative Agent, any Bank or the Swingline Bank shall have any
responsibility as to the use of any of such proceeds.
8.14 Certain Ob1igations Respecting Subsidiaries.
(a) Subject to Section 8.05 hereof, the Company will, and will cause
each of ERC and Asset Guaranty to, take such action from time to time as shall
be necessary to ensure that each of ERC and Asset Guaranty is a Wholly Owned
Subsidiary.
(b) The Company will not permit any of ERC or Asset Guaranty to
issue any shares of stock of any class whatsoever to any Person (other than to
the Company).
8.15 Modifications of Certain Documents. The Company will not
consent to any modification, supplement or waiver of any of the provisions of
the Indenture that would materially increase the obligations, or materially
reduce the rights, of the Company or any of its Subsidiaries thereunder.
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8.16 Claims-Paying Rating. The Company will not allow the
claims-paying rating of any Insurance Subsidiary as rated by Standard & Poor's
Corporation to be less tan AA- (or to be withdrawn) at any time.
8.17 Dividends to or Investments in the Company by Subsidiaries. The
Company will not, not will it permit any of its Subsidiaries to, issue any
securities or enter into any agreements (other than with or as required by
applicable regulatory authorities) that will either (i) limit the ability of any
of the Subsidiaries of the Company to declare or pay or set apart any funds for
the payment of any dividend or make any distribution to or Investment in the
Company or (ii) prevent such Subsidiary from paying to the Company the entire
amount available to be paid as dividends or distributions by such Subsidiary;
provided that nothing herein shall be deemed to require any Subsidiary of the
Company to pay any dividend to, or make any investment in, the Company in excess
of the amount necessary to enable the Company to make all payments required
hereunder and under the Notes.
Section 9. Events of Default. If one or more of the following events
(herein called "Events of Default") shall occur and be continuing:
(a) The Company shall (i) default in the payment of any principal of
any Loan when due (whether at stated maturity or upon mandatory or
optional prepayment); or (ii) default in the payment of any interest on
any Loan or any fee hereunder when due and such default shall have
continued unremedied for five or more days; or
(b) The Company or any of its Subsidiaries shall default in the
payment when due of any principal of or interest on any of its
Indebtedness aggregating $3,000,000 (or its equivalent in any other
currency) or more (other than the Indebtedness referred to in paragraph
(a) above); or any event specified in any note, agreement, indenture or
other document evidencing or relating to any such Indebtedness shall occur
if the effect of such event is to cause, or (with the giving of any notice
or the lapse of time or both) to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders)
to cause, such Indebtedness to become due, or to be prepaid in full
(whether by redemption, purchase, offer to purchase or otherwise), prior
to its stated maturity or to have the interest rate thereon reset to a
level so that securities evidencing such Indebtedness trade at a level
specified in relation to the par value thereof; or
(c) Any representation, warranty or certification made or deemed
made herein or in any other Basic Document (or in any modification or
supplement hereto or thereto) by the Company, or any certificate furnished
to any Bank, the Swingline Bank or the Administrative Agent pursuant to
the provisions hereof or thereof, shall prove to have been false or
misleading as of the time made, deemed made or furnished in any material
respect; or
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(d) The Company shall default in the performance of any of its
obligations under any of Sections 8.01(h), 8.05, 8.06, 8.07, 8.09, 8.10,
8.11 and 8.13 to 8.18 (inclusive) hereof; or the Company shall default in
the performance of any of its other obligations in this Agreement or any
other Basic Document and such default shall continue unremedied for a
period of 15 days after notice thereof to the Company by the
Administrative Agent, any Bank or the Swingline Bank (in either case,
through the Administrative Agent); or
(e) The Company or any of its Material Subsidiaries shall admit in
writing its inability to, or be generally unable to, pay its debts as such
debts become due; or
(f) The Company or any of its Material Subsidiaries shall (i) apply
for or consent to the appointment of, or the taking of possession by, a
receiver, custodian, trustee, examiner, rehabilitator, conservator or
liquidator of itself or of all or a substantial part of its Property, (ii)
make a general assignment for the benefit of its creditors, (iii) commence
a voluntary case under the Bankruptcy Code, (iv) file a petition seeking
to take advantage of any other law relating to bankruptcy, insolvency,
reorganization, liquidation, dissolution, arrangement or winding-up, or
composition or readjustment of debts, (v) fail to controvert in a timely
and appropriate manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under the Bankruptcy Code or (vi) take
any corporate action for the purpose of effecting any of the foregoing; or
(g) A proceeding or case shall be commenced, without the application
or consent of the Company or any of its Material Subsidiaries, in any
court of competent jurisdiction, seeking (i) its reorganization,
rehabilitation, conservation, liquidation, dissolution, arrangement or
winding-up, or the composition or readjustment of its debts, (ii) the
appointment of a receiver, custodian, trustee, examiner, rehabilitator,
conservator, liquidator or the like of the Company or such Material
Subsidiary or of all or any substantial part of its Property, or (iii)
similar relief in respect of the Company or such Subsidiary under any law
relating to bankruptcy, insolvency, reorganization, rehabilitation,
conservation, liquidation, winding-up, or composition or adjustment of
debts, and such proceeding or case shall continue undismissed, or an
order, judgment or decree approving or ordering any of the foregoing
(other than an order for relief in an involuntary case under the
Bankruptcy Code) shall be entered and continue unstayed and in effect, for
a period of 60 or more days; or an order for relief against the Company or
such Material Subsidiary shall be entered in an involuntary case under the
Bankruptcy Code; or
(h) A final judgment or judgments for the payment of money in excess
of $3,000,000 (or its equivalent in any other currency) in the aggregate
(exclusive of judgment amounts fully covered by insurance where the
insurer has admitted liability in respect of such judgment) or in excess
of $5,000,000 (or its equivalent in any other currency) in the aggregate
(regardless of insurance coverage) shall be rendered by one or
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more courts, administrative tribunals or other bodies having jurisdiction
against the Company or any of its Subsidiaries and the same shall not be
discharged (or provision shall not be made for such discharge), or a stay
of execution thereof shall not be procured, within 30 days from the date
of entry thereof and the Company or the relevant Subsidiary shall not,
within said period of 30 days, or such longer period during which
execution of the same shall have been stayed, appeal therefrom and cause
the execution thereof to be stayed during such appeal; or
(i) An event or condition specified in Section 8.01(g) hereof shall
occur or exist with respect to any Plan or Multiemployer Plan and, as a
result of such event or condition, together wit all other such events or
conditions, the Company or any ERISA Affiliate shall incur or in the
opinion of the Majority Banks shall be reasonably likely to incur a
liability to a Plan, a Multiemployer Plan or PBGC (or any combination of
the foregoing) which, in the determination of the Majority Banks, could
have a Material Adverse Effect, or
(j) A Change in Control shall occur;
THEREUPON: (1) in the case of an Event of Default other than one referred to in
paragraph (f) or (g) of this Section 9 with respect to the Company, the
Administrative Agent may and, upon request of the Majority Banks (or with
respect to Swingline Loans, upon the request of the Swingline Bank), shall, by
notice to the Company, terminate the Commitments (and/or the Swingline
Commitment) and/or declare the principal amount then outstanding of, and the
accrued interest on, the Loans and all other amounts payable by the Company
hereunder and under the Notes (including, without limitation, any amounts
payable under Section 5.05 hereof) to be forthwith due and payable, whereupon
such amounts shall be immediately due and payable without presentment, demand,
protest or other formalities of any kind, all of which are hereby expressly
waived by the Company, and (2) in the case of the occurrence of an Event of
Default referred to in paragraph (f) or (g) of this Section 9 with respect to
the Company, the Commitments shall automatically be terminated and the principal
amount then outstanding of, and the accrued interest on, the Loans and all other
amounts payable by the Company hereunder and under the Notes (including, without
limitation, any amounts payable under Section 5.05 hereof) shall automatically
become immediately due and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by the
Company.
Section 10. The Administrative Agent.
10.01 Appointment Powers and Immunities. Each Bank and the Swingline
Bank hereby irrevocably (subject to Section 10.08 hereof) appoints and
authorizes the Administrative Agent to act as its agent hereunder and under the
other Basic Documents with such powers as are specifically delegated to the
Administrative Agent by the terms of this Agreement and of the other Basic
Documents, together with such other powers as are reasonably
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incidental thereto. The Administrative Agent (which term as used in this
sentence and in Section 10.05 and the first sentence of Section 10.06 hereof
shall include reference to its affiliates and its own and its affiliates'
officers, directors, employees and agents): (a) shall have no duties or
responsibilities except those expressly set forth in this Agreement and in the
other Basic Documents, and shall not by reason of this Agreement or any other
Basic Document be a trustee for any Bank or the Swingline Bank; (b) shall not be
responsible to the Banks or the Swingline Bank for any recitals, statements,
representations or warranties made by any other Person contained in this
Agreement or in any other Basic Document, or in any certificate or other
document referred to or provided for in, or received by any of them under, this
Agreement or any other Basic Document, or for the value, validity, effectiveness
(other than the Agent's own due execution), genuineness, enforceability or
sufficiency of this Agreement or any Note or any other document referred to or
provided for herein or herein or for any failure by the Company or any other
Person to perform any of its obligations hereunder or thereunder; (c) shall not
be required to initiate or conduct any litigation or collection proceedings
hereunder or under any other Basic Document; (d) shall not be responsible for
any action taken or omitted to be taken by it hereunder or under any other Basic
Document or under any other document or instrument referred to or provided for
herein or therein or in connection herewith or therewith, except for its own
gross negligence or willful misconduct; and (e) shall not be responsible to the
Company, the Banks or the Swingline Bank for (i) determining whether or not any
of the transactions contemplated hereby qualifies as a highly leveraged
transaction ("HLT") as defined by any bank regulatory authority, (ii) notifying
the Banks or the Swingline Bank regarding the HLT status of any transaction
contemplated hereby or of any change in that status or (iii) the correctness of
any determination as to HLT status. The Administrative Agent may employ agents
and attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it in good faith.
The Administrative Agent may deem and treat the payee of any Note as the holder
thereof for all purposes hereof unless and until a notice of the assignment or
transfer thereof shall have been filed with the Administrative Agent, together
with the consent of the Company to such assignment or transfer (to the extent
provided in Section 11.06(b) hereof).
10.02 Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely upon any certification, notice or other communication
(including, without limitation, any thereof by telephone, telecopy, telex,
telegram or cable) believed by it to be genuine and correct and to have been
signed or sent by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel, independent accountants and other experts
selected by the Administrative Agent. As to any matters not expressly provided
for by this Agreement or any other Basic Document, the Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
hereunder or thereunder in accordance with instructions given by the Majority
Banks or, if provided herein, in accordance with the instructions given by the
Majority Banks or all of the Banks as is required in such circumstance, and such
instructions of such Banks and any action taken or failure to act pursuant
thereto shall be binding on all of the Banks.
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10.03 Defaults. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default (other than the non-payment
of principal of or interest on Loans) unless the Administrative Agent has
received notice from a Bank or the Company specifying such Default and stating
that such notice is a "Notice of Default". In the event that the Administrative
Agent receives such a notice of the occurrence of a Default, the Administrative
Agent shall give prompt notice thereof to the Banks and the Swingline Bank (and
shall give each Bank, and with respect to Swingline Loans, the Swingline Bank,
prompt notice of each such non-payment). The Administrative Agent shall (subject
to Sections 10.01, 10.07 and 11.04 hereof) take such action with respect to such
Default as shall be directed by the Majority Banks or in the case of Swingline
Loans, the Swingline Bank, provided that, unless and until the Administrative
Agent shall have received such directions, the Administrative Agent may (but
shall not be obligated to) take such action, or refrain from taking such action)
with respect to such Default as it shall deem advisable in the best interest of
the Banks except to the extent that this Agreement expressly requires that such
action be taken, or not be taken, only with the consent or upon the
authorization of the Majority Banks or all of the Banks.
10.04 Rights as a Bank. With respect to its Commitments, its
Swingline Commitment and the Loans made by it, Fleet (and any successor acting
as Administrative Agent) in its capacity as a Bank or the Swingline Bank
hereunder shall have the same rights and powers hereunder as any other Bank and
may exercise the same as though it were not acting as the Administrative Agent,
and the term "Bank' or "Banks" or "Swingline Bank" shall, unless the context
otherwise indicates) include the Administrative Agent in its individual
capacity. Fleet (and any successor acting as Administrative Agent) and its
affiliates may (without having to account therefor to any Bank) accept deposits
from, lend money to, make investments in and generally engage in any kind of
banking, trust or other business with the Company (and any of its Subsidiaries
or Affiliates) as if it were not acting as the Administrative Agent, and Fleet
and its affiliates may accept fees and other consideration from the Company for
services in connection with this Agreement or otherwise without having to
account for the same to the Banks or the Swingline Bank.
10.05 Indemnification. The Banks agree to indemnify the
Administrative Agent (to the extent not reimbursed under Section 11.03 hereof,
but without limiting the obligations of the Company under said Section 11.03)
ratably in accordance with the aggregate principal amount of the Loans held by
the Banks (or, if no Loans are at the time outstanding, ratably in accordance
with their respective Commitments), for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever that may be imposed on, incurred
by or asserted against the Administrative Agent (including by any Bank) arising
our of or by reason of any investigation in or in any way relating to or arising
out of this Agreement or any other Basic Document or any other documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby (including, without limitation, the costs and
expenses that the Company is obligated to pay under Section 11.03 hereof, but
excluding, unless a Default has occurred and is continuing, notmal
administrative costs and expenses incident to the performance of its agency
duties
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hereunder) or the enforcement of any of the terms hereof or thereof or of any
such other documents, provided that no Bank shall be liable for any of the
foregoing to the extent they arise from the gross negligence or willful
misconduct of the party to be indemnified.
10.06 Non-Reliance on Administrative Agent and Other Banks. Each
Bank agrees that it has, independently and without reliance on the
Administrative Agent or any other Bank, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Company and its Subsidiaries and decision to enter into this Agreement and 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 analysis and decisions in
taking or not taking action under this Agreement. The Administrative Agent shall
not be required to keep itself informed as to the performance or observance by
the Company of this Agreement or any of the other Basic Documents or any other
document referred to or provided for herein or therein or to inspect the
Properties or books of the Company or any of its Subsidiaries. Except for
notices) reports and other documents and information expressly required to be
furnished to the Banks by the Administrative Agent hereunder, the Administrative
Agent shall not have any duty or responsibility to provide any Bank with any
credit or other information concerning the affairs, financial condition or
business of the Company or any of its Subsidiaries (or any of their affiliates)
that may come into the possession of the Administrative Agent or any of its
affiliates.
10.07 Failure to Act. Except for action expressly required of the
Administrative Agent hereunder and under the other Basic Documents, the
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder and thereunder unless it shall receive further
assurances to its satisfaction from the Banks of their indemnification
obligations under Section 10.05 hereof against any and all liability and expense
that may be incurred by it by reason of taking or continuing to take any such
action.
10.08 Designation or Removal of Administrative Agent. Subject to the
Appointment and acceptance of a successor Administrative Agent as provided
below) the Administrative Agent may resign at any time by giving notice thereof
to the Banks and the Company, and the Administrative Agent may be removed at any
time with or without cause by the Majority Banks. Upon any such resignation or
removal, the Majority Banks shall have the right to appoint a successor
Administrative Agent. If no successor Administrative Agent shall have been so
appointed by the Majority Banks and shall have accepted such appointment within
30 days after the retiring Administrative Agent's giving of notice of
resignation or the Majority Banks' removal of the retiring Administrative Agent,
then the retiring Administrative Agent may, on behalf of the Banks, after
consultation with the Company, appoint a successor Administrative Agent that
shall be a bank which has an office in New York, New York and which has a
combined capital and surplus of at least $500,000,000. Upon the acceptance of
any appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring
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Administrative Agent shall be discharged from its duties and obligations
hereunder. After any retiring Administrative Agent's resignation or removal
hereunder as Administrative Agent, the provisions of this Section 10 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as the Administrative Agent.
10.09 Consents under Basic Documents. Except as otherwise provided
in Section 11.04 hereof with respect to this Agreement, the Administrative Agent
may, with the prior consent of the Majority Banks (but not otherwise), consent
to any modification, supplement or waiver under any of the Basic Documents.
Section 11. Miscellaneous
11.01 Waiver. No failure on the part of the Administrative Agent or
any Bank or the Swingline Bank to exercise and no delay in exercising, and no
course of dealing with respect to, any right, power or privilege under this
Agreement or any Note shall operate as a waiver thereof, not shall any single or
partial exercise of any right, power or privilege under this Agreement or any
Note preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.
11.02 Notices. All notices, requests and other communications
provided for herein (including, without limitation, any modifications of, or
waivers, requests or consents under, this Agreement) shall be given or made in
writing (including, without limitation, by telecopy) delivered to the intended
recipient at the "Address for Notices" specified below its name on the signature
pages hereof), or, as to any party, at such other address as shall be designated
by such party in a notice to each other party. Except as otherwise provided in
this Agreement, all such communications shall be deemed to have been duly given
when transmitted by telecopier or personally delivered or, in the case of a
mailed notice, upon receipt, in each case given or addressed as aforesaid.
11.03 Expenses Etc. The Company agrees to pay or reimburse each of
the Banks and the Swingline Bank, the Administrative Agent and the Arranger for
paying: (a) all reasonable out-of-pocket costs and expenses of the
Administrative Agent (including, without limitation, the reasonable fees and
expenses of Day, ▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, special counsel to Fleet), in connection
with (i) the negotiation, preparation, execution and delivery of this Agreement
and the other Basic Documents and the making of the Loans hereunder and (ii) any
modification, supplement or waiver of any of the terms of this Agreement or any
of the other Basic Documents; (b) all costs and expenses of the Banks, the
Swingline Bank and the Administrative Agent (including, without limitation,
reasonable counsels' fees) in connection with (i) any Default and any
enforcement or collection proceedings resulting therefrom or in connection with
the negotiation of any restructuring or "work-out" (whether or not consummated)
of the obligations of the Company hereunder or under any of the other Basic
Documents and (ii) the enforcement of this Section 11.03; and (c) all transfer,
stamp,
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documentary or other similar taxes, assessments or charges levied by any
governmental or revenue authority in respect of this Agreement or any of the
other Basic Documents or any other document referred to herein or therein.
The Company hereby agrees to indemnify the Administrative Agent, the
Arranger, each Bank and the Swingline Bank and their respective directors,
officers, employees, attorneys and agents from, and hold each of them harmless
against, any and all losses, liabilities, claims, damages or expenses incurred
by any of them (other than liability of the Administrative Agent to any Bank)
arising out of or by reason of any investigation or litigation or other
proceedings (including any threatened investigation or litigation or other
proceedings and whether or not the Administrative Agent or such Bank or the
Swingline Bank or other Person is a party thereto) relating to the extensions of
credit hereunder or any actual or proposed use by the Company or any of its
Subsidiaries of the proceeds of any of the extensions of credit hereunder,
including, without limitation, the reasonable fees and disbursements of counsel
incurred in connection with any such investigation or litigation or other
proceedings (but excluding any such losses, liabilities, claims, damages or
expenses incurred by reason of the gross negligence or willful misconduct of the
Person to be indemnified).
11.04 Amendments, Etc. Except as otherwise expressly provided in
this Agreement, any provision of this Agreement may be modified or supplemented
only by an instrument in writing signed by the Company, the Administrative Agent
and the Majority Banks, or by the Company and the Administrative Agent acting
with the consent of the Majority Banks, and, if the rights or obligations
hereunder of the Swingline Bank are affected thereby, the Swingline Bank, and
any provision of this Agreement may be waived by the Majority Banks or by the
Administrative Agent acting with the consent of the Majority Banks and, if the
rights or obligations hereunder of the Swingline Bank are affected thereby, the
Swingline Bank; provided that: (a) no modification, supplement or waiver shall,
unless by an instrument signed by all of the Banks or by the Administrative
Agent acting with the consent of all of the Banks (i) increase or extend the
term of any of the Commitments, or extend the time or waive any requirement for
the reduction or termination of any of the Commitments, (ii) extend any date
fixed for the payment of principal of or interest on any Loan or any fee
hereunder (other than any fee payable solely for account of the Administrative
Agent), (iii) reduce the amount of any such payment of principal, (iv) reduce
the rate at which interest is payable thereon or any fee is payable hereunder
(other than any fee payable solely for account of the Administrative Agent), (v)
alter the several nature of the obligations of each Bank and the Swingline Bank
hereunder, (vi) alter the terms of any of Sections 2.07, 4.02 or 4.07 hereof or
this Section 11.04, (vii) modify the definition of the term "Majority Banks" or
modify in any other manner the number or percentage of the Banks required to
make any determinations or waive any rights hereunder or to modify any provision
hereof, or (viii) waive any of the conditions precedent set forth in Section 6
hereof, and (b) if at the time any Swingline Loans shall be outstanding, no
modification, supplement or waiver with respect to any provision of Sections 8
or 9 hereof shall be effective without the concurrence of the Swingline Bank;
and (c) any modification of any of the rights or obligations of the
Administrative Agent hereunder shall require the consent of the Administrative
Agent.
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11.05 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
11.06 Assignments and Participations.
(a) The Company may not assign any of its rights or obligations
hereunder or under the Notes without the prior consent of all of the Banks and
the Administrative Agent and the Swingline Bank.
(b) Each Bank may, at any time or from time to time, assign to one
or more other Persons all or any portion of its Loans, its Notes, and its
Commitment (but only with the consent of the Company, the Administrative Agent
and the Swingline Bank, which consents shall not be unreasonably withheld);
provided that (i) no such consent by the Company, the Administrative Agent or
the Swingline Bank shall be required in the case of any assignment to another
Bank; (ii) any such partial assignment shall be in an amount at least equal to
$5,000,000 or any integral multiple of $1,000,000 in excess thereof; (iii) each
such assignment by a Bank of its Revolving Credit Loans, Revolving Credit Note,
Term Loan, Term Loan Note or Commitment shall be made in such manner so that the
same portion of its Revolving Credit Loans, Revolving Credit Note, Term Loan,
Term Loan Note and Commitment is assigned to the respective assignee; (iv) each
such assignment shall be effected by an Assignment and Acceptance in
substantially the form of Exhibit D hereto. Upon execution and delivery by the
assignee to the Company and the Administrative Agent of an Assignment and
Acceptance pursuant to which such assignee agrees to become a "Bank" hereunder
(if not already a Bank) having the Commitment and Loans specified in such
Assignment and Acceptance, and upon consent thereto by the Company and the
Administrative Agent, to the extent required above, the assignee shall have, to
the extent of such assignment (unless otherwise provided in such assignment with
the consent of the Company and the Administrative Agent), the obligations,
rights and benefits of a Bank hereunder holding the Commitment and Loans (or
portions thereof) assigned to it (in addition to the Commitment and Loans, if
any, theretofore held by such assignee) and the assigning Bank shall, to the
extent of such assignment, be released from the Commitment (or portion thereof)
so assigned. Notwithstanding the foregoing, no assignee or other transferee of
any of the rights, obligations or benefits of a Bank in respect of the Loans
shall be entitled to receive any greater payment under Sections 5.01, 5.05 and
5.06 than such Bank would have been entitled to receive with respect to the
Loans unless such transfer is made with the Company's prior written consent
specifically detailing the nature of the greater payments to be due, or at a
time when the circumstances giving rise to such greater payment did not exist or
had not been announced. Upon each such assignment the assigning Bank shall pay
the Administrative Agent an assignment fee of $3,500.
(c) A Bank may, at any time or from time to time, sell or agree to
sell to one or more other Persons a participation in all or any part of any
Loans held by it, or in its Commitment, but no purchaser of a participation (a
"Participant") shall, except as otherwise provided in Section 4.07(c) hereof,
have any rights or benefits under this Agreement or any Note
-67-
or any other Basic Document (the Participant's rights against such Bank in
respect of such participation to be those set forth in the agreements executed
by such Bank in favor of the Participant). All amounts payable by the Company to
any Bank under Section 5 hereof in respect of the Loans held by it, and its
Commitment, shall be determined as if such Bank had not sold or agreed to sell
any participations in such Loans and Commitment, and as if such Bank were
funding each of such Loan and Commitment in the same way that it is funding the
portion of such Loan and Commitment in which no participations have been sold.
In no event shall a Bank that sells a participation agree with the Participant
to take or refrain from taking any action hereunder or under any other Basic
Document except that such Bank may agree with the Participant that it will not,
without the consent of the Participant, agree to (i) increase or extend the
term, or extend the time or waive any requirement for the reduction or
termination, of such Bank's related Commitment, (ii) extend any date fixed for
the payment of principal of or interest on the related Loan or Loans or any
portion of any fee hereunder payable to the Participant, (iii) reduce the amount
of any such payment of principal, (iv) reduce the rate at which interest is
payable thereon, or any fee hereunder payable to the Participant, to a level
below the rate at which the Participant is entitled to receive such interest or
fee, (v) increase the rights or reduce the obligations of the Company to prepay
the related Loans or (vi) consent to any modification, supplement or waiver
hereof or of any of the other Basic Documents to the extent that the same, under
Section 10.09 or 11.04 hereof, requires the consent of each Bank.
(d) In addition to the assignments and participations permitted by
the foregoing provisions of this Section 11.06, any Bank may assign and pledge
all or any portion of its Loans and its Notes to any Federal Reserve Bank as
collateral security pursuant to Regulation A and any Operating Circular issued
by such Federal Reserve Bank. No such assignment shall release the assigning
Bank from its obligations hereunder.
(e) A Bank or the Swingline Bank may furnish any information
concerning the Company or any of its Subsidiaries in the possession of such Bank
from time to time to assignees and participants (including prospective assignees
and participants), subject, however, to the provisions of Section 11.12(b)
hereof.
(f) Anything in this Section 11.06 to the contrary notwithstanding,
neither the Company not any of its Subsidiaries or Affiliates may acquire
(whether by assignment, participation or otherwise), and neither any Bank not
the Swingline Bank shall assign or participate to the Company or any of its
Subsidiaries or Affiliates, any interest in any Commitment or Loan without the
prior consent of each Bank.
(g) The Swingline Bank may not (except as provided in Section
2.02(c) hereof) assign or sell participations in all or any part of its
Swingline Loans, its Swingline Note or its Swingline Commitment; provided that
the Swingline Bank may assign to another Bank all of its obligations, rights and
benefits in respect of its Swingline Loans) its Swingline Note and its Swingline
Commitment (but only with the consent of the Company which consent will not be
unreasonably withheld). Upon the effectiveness of any such assignment, the
assignee shall have
-68-
the obligations, rights and benefits of the Swingline Bank hereunder holding the
Swingline Commitment and Swingline Loans assigned to it, and the assigning
Swingline Bank shall be released from its Swingline Commitment so assigned.
11.07 Survival. The obligations of the Company under Sections 5.01,
5.05, 5.06 and 11.03 hereof and the obligations of the Banks under Section 10.05
hereof shall survive the repayment of the Loans and the termination of the
Commitments. In addition, each representation and warranty made, or deemed to be
made by a notice of any Loan, herein or pursuant hereto shall survive the making
of such representation and warranty, and no Bank shall be deemed to have waived,
by reason of making any Loan, any Default which may arise by reason of such
representation or warranty proving to have been false or misleading,
notwithstanding that such Bank or the Swingline Bank or the Administrative Agent
may have had notice or knowledge or reason to believe that such representation
or warranty was false or misleading at the time such Loan was made.
11.08 Captions. The table of contents and captions and section
headings appearing herein are included solely for convenience of reference and
are not intended to affect the interpretation of any provision of this
Agreement.
11.09 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
11.10 Governing Law; Submission to Jurisdiction. This Agreement and
the Notes shall be governed by, and construed in accordance with, the law of the
State of New York. The Company hereby submits to the nonexclusive jurisdiction
of the United States District Court for the District of Connecticut and of any
Connecticut State court sitting in Connecticut for the purposes of all legal
proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby. The Company irrevocably waives, to the fullest extent
permitted by applicable law, any objection which it may now or hereafter have to
the laying of the venue of any such proceeding brought in such a court and any
claim that any such proceeding brought in such a court has been brought in an
inconvenient forum.
11.11 Waiver of Jury Trial. EACH OF TUE COMPANY, THE ADMINISTRATIVE
AGENT AND THE BANKS AND THE SWINGLINE BANK HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
11.12 Treatment of Certain Information; Confidentiality.
-69-
(a) The Company acknowledges that from time to time financial
advisory, investment banking and other services may be offered or provided to
the Company or one or more of its Subsidiaries (in connection with this
Agreement or otherwise) by any Bank or by one or more subsidiaries or affiliates
of such Bank and the Company hereby authorizes each Bank and the Swingline Bank
to share any information delivered to such Bank by the Company and its
Subsidiaries pursuant to this Agreement, or in connection with the decision of
such Bank or the Swingline Bank to enter into this Agreement, to any such
subsidiary or affiliate, it being understood that any such subsidiary or
affiliate receiving such information shall be bound by the provisions of
paragraph (b) below as if it were a Bank hereunder.
(b) Each Bank and the Swingline Bank and the Administrative Agent
agrees (on behalf of itself and each of its affiliates, directors, officers,
employees and representatives) to use reasonable precautions to keep
confidential, in accordance with their customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices, any non-public information supplied to it by the Company
pursuant to this Agreement which is identified by the Company as being
confidential at the time the same is delivered to the Banks or the Swingline
Bank or the Administrative Agent, provided that nothing herein shall limit the
disclosure of any such information (i) to the extent required by statute, rule,
regulation or judicial process (with concurrent notice thereof to be given to
the Company), (ii) to counsel, auditors or accountants for any of the Banks or
the Swingline Bank or the Administrative Agent (so long as they are advised of
the non-public nature of the information), (iii) to bank examiners, (iv) to the
Administrative Agent or any other Bank or the Swingline Bank, (v) in connection
with any litigation to which any one or more of the Banks or the Swingline Bank
or the Administrative Agent is a party, (vi) to a subsidiary or affiliate of
such Bank as provided in paragraph (a) above or (vii) to any assignee or
participant (or prospective assignee or participant) so long as such assignee or
participant (or prospective assignee or participant) first executes and delivers
to the respective Bank and the Company a Confidentiality Agreement substantially
in the form of Exhibit C hereto; provided, further, that in no event shall any
Bank or the Administrative Agent be obligated or required to return any
materials furnished by the Company. The obligations of each Bank under this
Section 11.12 shall supersede and replace the obligations of such Bank under the
confidentiality letter in respect of this financing signed and delivered by such
Bank to the Company prior to the Effective Date.
Remainder of Page Intentionally Left Blank
S-1
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first above written.
ENHANCE FINANCIAL SERVICES GROUP INC.
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Title: Executive Vice President
& Chief Financial Officer
Address for Notices:
Enhance Financial Services Group Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Executive Vice President
and Chief Financial Officer
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
S-2
BANKS
Commitment FLEET NATIONAL BANK
----------
$30,000,000
By /s/ ▇.▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Title: Senior Vice President
Lending Office for all Loans:
Fleet National Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇ 0250
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
Fleet National Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇ 0250
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Financial Institutions Group
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
S-3
Commitment THE BANK OF TOKYO - MITSUBISHI, LTD,
---------- NEW YORK BRANCH
$25,000,000
By /s/ ▇.▇. ▇▇▇▇
--------------------------------------
Title: Attorney-In-Fact
Lending Office for all Loans:
The Bank of Tokyo - Mitsubishi, Ltd,
New York Branch
U.S. Corporate Banking Division
Healthcare and Insurance Department
1251 Avenue of the Americas, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Address for Notices:
The Bank of Tokyo - Mitsubishi, Ltd, New
New York Branch York Branch
U.S. Corporate Banking Division
Healthcare and Insurance Department
1251 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopier No.. (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
S-4
Commitment THE FIRST NATIONAL BANK OF CHICAGO
----------
$25,000,000
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Title: VP
Lending Office for all Loans:
The First National Bank of Chicago
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Address for Notice:
The First National Bank of Chicago
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
S-5
Commitment DEUTSCHE BANK AG, NEW YORK AND/OR
---------- CAYMAN ISLAND BRANCHES
$20,000,000
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
and
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
Lending Office for all Loans (other than
Eurodollar Loans):
Deutsche Bank AG
New York Branch
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Lending Office for Eurodollar Loans:
Deutsche Bank AG
Cayman Islands Branch
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Address for Notices:
Deutsche Bank AG
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Vice President
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telex/Answerback: 429166/DEUT BK NY
S-6
SWINGLINE BANK
FLEET NATIONAL BANK,
as Swingline Bank
By /s/ ▇.▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Title: Senior Vice President
S-7
FLEET NATIONAL BANK,
as Administrative Agent
By /s/ ▇.▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Title: Senior Vice President
Address for Notices to the Administrative
Agent:
Fleet National Bank
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Agency Services Group
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE I
Material Agreements and Liens
Part A - Material Agreements
1. Indenture dated as of March 5, 1993 between Enhance Financial Services
Group Inc. and The Chase Manhattan Bank, as Trustee, and $75 million
principal amount of 6 3/4% Debentures due 2003 issued pursuant thereto.
2 Guaranty of Enhance Financial Services Group Inc. to Bank America National
Trust and Savings Association ("BofA"), dated as of January 30, 1998,
guaranteeing up to $25 million of the obligations of Credit-Based Asset
Servicing and Securitization LLC, an affiliate of Enhance Financial
Services Group Inc. ("C-BASS"), to BofA pursuant to a Credit Agreement,
dated as of January 30, 1998 between BofA and C-BASS.
Part B-Liens
None
SCHEDULE II
Subsidiaries
[See Section 7.15]
(A) ENHANCE REINSURANCE COMPANY
(i) New York
(ii) Enhance Financial Services Group Inc.
(iii) 100% of the outstanding common stock
(B) ASSET GUARANTY REINSURANCE COMPANY
(i) New York
(ii) Enhance Financial Services Group Inc.
(iii) 100% of the outstanding common stock
(C) GUARANTY RISK SERVICES, INC.
(i) New York
(ii) Enhance Financial Services Group Inc.
(iii) 100% of the outstanding common stock
(D) SINGER ASSET FINANCE COMPANY, L.L.C
(i) Delaware
(ii) Enhance Financial Services Group Inc.
(iii) 100% of the outstanding membership interests
(E) CREDIT-BASED ASSET SERVICING AND SECURITIZATION, INC.
(i) New York
(ii) Enhance Financial Services Group Inc.
(iii) 100% of the outstanding stock
(F) VAN-AMERICAN COMPANIES, INC.
(formerly Vantage American, Inc.)
(i) Delaware
(ii) Asset Guaranty Insurance Company
-2-
(iii) 95.8% of the common stock, 100% of the non-cumulative senior
preferred stock; 100% of the non-cumulative convertible preferred
stock Note: The remaining 4.2% of the common stock is owned by
employees of Van-American Companies, Inc. In addition, certain
employees of Van-American Companies, Inc. own options to purchase
common stock of Van-American Companies, Inc. which if fully
exercised would not materially dilute the Company's interest in
Van-American Companies, Inc.
(G) VAN-AMERICAN INSURANCE COMPANY
(i) Kentucky
(ii) Vantage-American Companies, Inc.
(iii) 100% of the common stock
(H) A.G. INTERMEDIARIES, INC.
(i) New York
(ii) Enhance Financial Services Group Inc.
(iii) 100% of the outstanding common stock
(G) ORLEANS ACQUISITION CORP.
(i) Illinois
(ii) Enhance Financial Services Group Inc.
(iii) 100% of the outstanding common stock
(H) ENHANCE REINSURANCE BERMUDA, LTD.
(i) Bermuda
(ii) Enhance Financial Services Group Inc.
(iii) 100% of the outstanding common stock
(I) ▇▇▇▇▇▇ LOAN SERVICING INC.
(i) Texas
(ii) Enhance Financial Services Group Inc.
(iii) 100% of the outstanding common stock
SCHEDULE III
Litigation
None
EXHIBIT A-1
[Form of Revolving Credit Note]
PROMISSORY NOTE
$________________ _____________, ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
FOR VALUE RECEIVED, ENHANCE FINANCIAL SERVICES GROUP INC., a New
York corporation (the "Company"), hereby promises to pay to the order of
_____________ (the "Payee"), for the account of its respective Applicable
Lending Offices provided for by the Credit Agreement referred to below, at the
principal office of Fleet National Bank at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, the principal sum of________________ Dollars (or such lesser
amount as shall equal the aggregate unpaid principal amount of the Revolving
Credit Loans made by the Payee to the Company under the Credit Agreement), in
lawful money of the United States of America and in immediately available funds,
on the dates and in the principal amounts provided in the Credit Agreement, and
to pay interest on the unpaid principal amount of each such Revolving Credit
Loan, at such office, in like money and funds, for the period commencing on the
date of such Revolving Credit Loan until such Revolving Credit Loan shall be
paid in full, at the rates per annum and on the dates provided in the Credit
Agreement.
The date, amount, interest rate and duration of Interest Period of
each Revolving Credit Loan made by the Payee to the Company, and each payment
made on account of the principal thereof, shall be recorded by the Payee on its
books and, prior to any transfer of this Note, endorsed by the Payee on the
schedule attached hereto or any continuation thereof, provided that the failure
of the Payee to make any such recordation or endorsement shall not affect the
obligations of the Company to make a payment when due of any amount owing under
the Credit Agreement or hereunder in respect of the Revolving Credit Loans made
by the Payee.
This Note is one of the Revolving Credit Notes referred to in the
Credit Agreement dated as of June 30, 1998 (as modified and supplemented and in
effect from time to time, the "Credit Agreement") among the Company, the banks
party thereto and Fleet National Bank, as Swingline Bank and Administrative
Agent, and evidences Revolving Credit Loans made by the Payee thereunder. Terms
used but not defined in this Note have the respective meanings assigned to them
in the Credit Agreement.
-2-
The Credit Agreement provides for the acceleration of the maturity
of this Note upon the occurrence of certain events and for prepayments of Loans
upon the terms and conditions specified therein.
Except as permitted by Sections 11.06(b) and 11.06(d) of the Credit
Agreement, this Note may not be assigned by the Payee to any other Person.
This Note shall be governed by, and construed in accordance with,
the law of the State of New York.
ENHANCE FINANCIAL SERVICES GROUP INC
By________________________________
Title:
SCHEDULE OF REVOLVING CREDIT LOANS
This Note evidences Revolving Credit Loans made, Continued or
Converted under the within-described Credit Agreement to the Company, on the
dates, in the principal amounts, of the Types bearing interest at the rates and
having Interest Periods (if applicable) of the durations set forth below,
subject to the payments and prepayments, Continuations, and Conversions of
principal set forth below:
Amount
Date Paid,
Made, Principal Duration Prepaid,
Continued Type Amount of Continued Unpaid
or of of Interest Interest or Principal Notation
Converted Loan Loan Rate Period Converted Amount Made by
--------- ---- ---- ---- ------ --------- ------ -------
EXHIBIT A-2
[Form of Term Loan Note]
PROMISSORY NOTE
$________________ ______________, 199_
New York, New York
FOR VALUE RECEIVED, ENHANCE FINANCIAL SERVICES GROUP INC., a New
York corporation (the "Company") hereby promises to pay to the order of
________________ (the "Payee"), for the account of its Applicable Lending Office
provided for by the Credit Agreement referred to below, at the principal office
of Fleet National Bank at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, the
principal sum of______________ Dollars, in lawful money of the United States of
America and in immediately available funds, on the dates and in the principal
amounts provided in the Credit Agreement, and to pay interest on the unpaid
principal amount hereof, at such office, in like money and funds, for the period
commencing on the date hereof until this Note shall be paid in full, at the
rates per annum and on the dates provided in the Credit Agreement.
This Note is one of the Term Loan Notes referred to in the Credit
Agreement dated as of June 30, 1998 (as modified and supplemented and in effect
from time to time, the "Credit Agreement") among the Company, the banks party
thereto and Fleet National Bank, as Swingline Bank and Administrative Agent, and
evidences a Term Loan made by the Payee thereunder. Terms used but not defined
in this Note have the respective meanings assigned to them in the Credit
Agreement.
The Credit Agreement provides for the acceleration of the maturity
of this Note upon the occurrence of certain events and for prepayments of Term
Loans upon the terms and conditions specified therein.
Except as permitted by Sections 11.06(b) and 11.06(d) and of the
Credit Agreement, this Note may not be assigned by the Payee to any other
Person.
This Note shall be governed by, and construed in accordance with,
the law of the State of New York.
ENHANCE FINANCIAL SERVICES GROUP INC.
By_______________________________
Title:
EXHIBIT A-3
[Form of Swingline Note]
PROMISSORY NOTE
$10,000,000.00 ______________, ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
FOR VALUE RECEIVED, ENHANCE FINANCIAL SERVICES GROUP INC., a New
York corporation (the "Company"), hereby promises to pay to the order of FLEET
NATIONAL BANK (the "Bank") at its principal office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, the principal sum of TEN MILLION Dollars (or such lesser
amount as shall equal the aggregate unpaid principal amount of the Swingline
Loans made by the Bank to the Company under the Credit Agreement), in lawful
money of the United States of America and in immediately available funds, on the
dates and in the principal amounts provided in the Credit Agreement, and to pay
interest on the unpaid principal amount of each such Swingline Loan, at such
office, in like money and funds, for the period commencing on the date of such
Swingline Loan until such Swingline Loan shall be paid in full, at the rates per
annum and on the dates provided in the Credit Agreement.
The date and amount of each Swingline Loan made by the Bank to the
Company, and each payment made on account of the principal thereof, shall be
recorded by the Bank on its books and, prior to any transfer of this Note,
endorsed by the Bank on the schedule attached hereto or any continuation
thereof, provided that the failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Company to make a payment
when due of any amount owing under the Credit Agreement or hereunder in respect
of the Swingline Loans made by the Bank.
This Note is the Swingline Note referred to in the Credit Agreement
dated as of June 30, 1998 (as modified and supplemented and in effect from time
to time, the "Credit Agreement") between the Company, the banks party thereto
(including the Bank) and Fleet National Bank, as Swingline Bank and
Administrative Agent, and evidences Swingline Loans made by the Bank thereunder.
Terms used but not defined in this Note have the respective meanings assigned to
them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity
of this Note upon the occurrence of certain events and for prepayments of Loans
upon the terms and conditions specified therein.
Except as permitted by Section 11.06(g) of the Credit Agreement,
this Note may not be assigned by the Bank to any other Person.
-2-
This Note shall be governed by, and construed in accordance with,
the law of the State of New York.
ENHANCE FINANCIAL SERVICES GROUP INC.
By __________________________________
Title:
-3-
SCHEDULE OF SWINGLINE LOANS
This Note evidences Swingline Loans made under the within-described
Credit Agreement to the Company, on the dates and in the principal amounts set
forth below, subject to the payments and prepayments of principal set forth
below:
Principal
Date Amount Amount Unpaid
of of Paid or Principal Notation
Loan Loan Prepaid Amount Made by
---- ---- ------- ------ -------
EXHIBIT A-4
[Form of Competitive Note]
PROMISSORY NOTE
$___________ _____________, ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
FOR VALUE RECEIVED, ENHANCE FINANCIAL SERVICES GROUP INC., a New
York corporation (the "Company"), hereby promises to pay to the order of
____________________ (the "Payee") at the principal office of Fleet National
Bank at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, the principal sum
of_______________ Dollars (or such lesser amount as shall equal the aggregate
unpaid principal amount of the Competitive Loans made by the Payee to the
Company under the Credit Agreement), in lawful money of the United States of
America and in immediately available funds, on the dates and in the principal
amounts provided in the Credit Agreement, and to pay interest on the unpaid
principal amount of each such Competitive Loan, at such office, in like money
and funds, for the period commencing on the date of such Competitive Loan until
such Competitive Loan shall be paid in full, at the rates per annum and on the
dates provided in the Credit Agreement.
The date and amount of each Competitive Loan made by the Payee to
the Company, and each payment made on account of the principal thereof, shall be
recorded by the Payee on its books and, prior to any transfer of this Note,
endorsed by the Payee on the schedule attached hereto or any continuation
thereof, provided that the failure of the Payee to make any such recordation or
endorsement shall not affect the obligations of the Company to make a payment
when due of any amount owing under the Credit Agreement or hereunder in respect
of the Competitive Loans made by the Payee.
This Note is the Note referred to in the Credit Agreement dated as
of June 30, 1998 (as modified and supplemented and in effect from time to time,
the "Credit Agreement") between the Company, the banks party thereto and Fleet
National Bank, as Swingline Bank and Administrative Agent, and evidences
Competitive Loans made by the Payee thereunder. Terms used but not defined in
this Note have the respective meanings assigned to them in the Credit Agreement
The Credit Agreement provides for the acceleration of the maturity
of this Note upon the occurrence of certain events and for prepayments of Loans
upon the terms and conditions specified therein.
Except as permitted by Section 11.06(g) of the Credit Agreement, this Note may
not be assigned by the Bank to any other Person.
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This Note shall be governed by, and construed in accordance with,
the law of the State of New York.
ENHANCE FINANCIAL SERVICES GROUP INC.
By __________________________________
Title:
EXHIBIT B
[Form of Opinion of General Counsel to the Company]
_______________, 1998
Each of the Banks party
to the Credit Agreement
referred to below
Fleet National Bank,
as Administrative Agent for said Banks
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
I am Executive Vice President and General Counsel to Enhance
Financial Services Group Inc., a corporation organized under the law of the
State of New York (the "Company"), and am rendering this opinion in connection
with the Credit Agreement dated as of ___________, 1998 (the "Credit Agreement")
among the Company, the banks party thereto (the "Banks") and Fleet National
Bank, in its capacity as agent for said Banks (the "Administrative Agent"). All
capitalized terms used but not defined herein have the respective meanings given
to such terms in the Credit Agreement.
In rendering the opinions expressed below, I have examined:
(i) the Credit Agreement;
(ii) the Revolving Credit Notes, the Competitive Notes, the
Swingline Notes and the form of the Term Notes (together with
the Credit Agreement, the "Credit Documents"); and
(iii) such corporate records of the Company and such other documents
as I have deemed necessary as a basis for the opinions
expressed below.
In my examination, I have assumed the genuineness of all signatures, the
authenticity of all documents submitted to me as originals and the conformity
with authentic original documents of all documents submitted to me as copies.
-2-
In rendering the opinions expressed below, I have assumed, with
respect to all of the documents referred to in this opinion, that (except, to
the extent set forth in the opinions expressed below, as to the Company):
(i) such documents have been duly authorized by, have been (or, in the
case of the Term Notes, will be) duly executed and delivered by, and
constitute (or, in the case of the Term Notes, will constitute)
legal, valid, binding and enforceable obligations of, all of the
parties to such documents;
(ii) all signatories to such documents have been duly authorized; and
(iii) all of the parties to such documents are duly organized and validly
existing and have the power and authority (corporate or other) to
execute, deliver and perform such documents.
Based upon and subject to the foregoing and subject also to the
comments and qualifications set forth below, and having considered such
questions of law as I have deemed necessary as a basis for the opinions
expressed below, I am of the opinion that:
1. The Company is a corporation duly organized, validly existing and
in good standing under the law of the State of New York. The Company has
all material government licenses, authorizations, consents and approvals
necessary to own assets and carry on its business as now being conducted.
2. The Company has all requisite corporate power to execute and
deliver, and to perform its obligations under, each Credit Document. The
Company has all requisite corporate power to borrow under the Credit
Agreement.
3. The execution, delivery and performance by the Company of each
Credit Document has been duly authorized by all necessary corporate action
on the part of the Company.
4. Each Credit Document (other than the Term Notes) has been duly
executed and delivered by the Company.
5. Each Credit Document (other than the Term Notes) constitutes, and
each Term Note upon its execution and delivery by the Company for value
will constitute, the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as
may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights of creditors
generally and except as the enforceability of the Credit Documents is
subject to the application of general principles of equity (regardless of
whether considered in a proceeding in equity or at law), including,
without limitation, (a) the possible
-3-
unavailability of specific performance, injunctive relief or any other
equitable remedy and (b) concepts of materiality, reasonableness, good
faith and fair dealing.
6. No authorization, approval or consent of, and no filing or
registration with, any governmental or regulatory authority or agency of
the United States of America or the State of New York is required on the
part of the Company for the execution, delivery or performance by the
Company of the Credit Documents or for any Borrowings by the Company under
the Credit Agreement.
7. The execution, delivery and performance by the Company of, and
the consummation by the Company of the transactions contemplated by, the
Credit Documents do not and will not (a) violate any provision of the
charter or by-laws of the Company, (b) violate any applicable law, rule or
regulation of the United States of America or the State of New York, (c)
violate any order, writ, injunction or decree of any court or governmental
authority or agency or any arbitral award applicable to the Company or any
of its Subsidiaries or (d) result in a breach of, constitute a default
under, require any consent under, or result in the acceleration or
required prepayment of any indebtedness pursuant to the terms of, any
agreement or instrument to which the Company or any of its Subsidiaries is
a party or by which any of them is bound or to which any of them is
subject, or result in the creation or imposition of any Lien upon any
Property of the Company or any of its Subsidiaries pursuant to the terms
of any such agreement or instrument.
8. Except as disclosed in Schedule III to the Credit Agreement,
there are no legal or arbitral proceedings, or any proceedings by or
before any governmental or regulatory authority or agency, now pending or
to my knowledge threatened against the Company or any of its Subsidiaries
or any of their respective Properties that, if adversely determined, could
have a Material Adverse Effect.
9. Neither the Company nor any of its Subsidiaries is an "investment
company", or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
10. Neither the Company nor any of its Subsidiaries is a "holding
company", or an "affiliate" of a "holding company" or a "subsidiary
company" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
The foregoing opinions are subject to the following comments and
qualifications:
A. The enforceability of Section 11.03 of the Credit Agreement may
be limited by laws rendering unenforceable indemnification contrary to
Federal or state securities laws and the public policy underlying such
laws.
-4-
B. The enforceability of provisions in the Credit Documents to the
effect that terms may not be waived or modified except in writing may be
limited under certain circumstances.
C. I express no opinion as to (i) the effect of the laws of any
jurisdiction in which any Bank is located (other than the State of New
York) that limit the interest, fees or other charges such Bank may impose,
(ii) the last sentence of Section 2.02(c) and Section 4.07(c) of the
Credit Agreement and (iii) the second sentence of Section 11.10 of the
Credit Agreement, insofar as such sentence relates to the subject matter
jurisdiction of the United States District Court for the District of
Connecticut to adjudicate any controversy related to the Credit Documents.
The foregoing opinions are limited to matters involving the Federal
laws of the United States of America and the law of the State of New York, and I
do not express any opinion as to the laws of any other jurisdiction.
At the request of the Company, this opinion is, pursuant to Section
6.01(c) of the Credit Agreement, provided to you by me in my capacity as General
Counsel to the Company and may not be relied upon by any Person other than the
addressees hereof without, in each instance, my prior written consent.
Very truly yours,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Executive Vice President and
General Counsel
EXHIBIT C
(Form of Confidentiality Agreement]
CONFIDENTIALITY AGREEMENT
[Date]
[Insert Name and
Address of Prospective
Participant or Assignee]
Re: Credit Agreement dated as of __________, 1998 (the "Credit
Agreement"), among Enhance Financial Services Group Inc. (the
"Company"), the banks named therein and Fleet National Bank, as
Administrative Agent
Ladies and Gentlemen:
As a Bank party to the Credit Agreement, we have agreed with the
Company pursuant to Section 11.12 of the Credit Agreement to use reasonable
precautions to keep confidential, except as otherwise provided therein, all
non-public information identified by the Company as being confidential at the
time the same is delivered to us pursuant to the Credit Agreement.
As provided in said Section 11.12, we are permitted to provide you,
as a prospective [holder of a participation in the Loans (as defined in the
Credit Agreement)] [assignee Bank], with certain of such non-public information
subject to the execution and delivery by you, prior to receiving such non-public
information, of a Confidentiality Agreement in this form. Such information will
not be made available to you until your execution and return to us of this
Confidentiality Agreement.
Accordingly, in consideration of the foregoing, you agree (on behalf
of yourself and each of your affiliates, directors, officers, employees and
representatives) that (A) such information will not be used by you except in
connection with the proposed [participation] [assignment] mentioned above and
(B) you shall use reasonable precautions, in accordance with your customary
procedures for handling confidential information and in accordance with safe and
sound banking practices, to keep such information confidential, provided that
nothing herein shall limit the disclosure of any such information (i) to the
extent required by statute, rule, regulation or judicial process, (ii) to your
counsel or to counsel for any of the Banks or the Administrative Agent, (iii) to
bank examiners, auditors or accountants, (iv) to the Administrative Agent or any
other Bank, (v) in connection with any litigation to which you or any one or
more
-2-
of the Banks or the Administrative Agent are a party, (vi) to a subsidiary or
affiliate of yours as provided in Section 11.12(a) of the Credit Agreement or
(vii) to any assignee or participant (or prospective assignee or participant) so
long as such assignee or participant (or prospective assignee or participant)
first executes and delivers to you a Confidentiality Agreement substantially in
the form hereof; provided, further, that in no event shall you be obligated to
return any materials furnished to you pursuant to this Confidentiality
Agreement.
Please indicate your agreement to the foregoing by signing as
provided below the enclosed copy of this Confidentiality Agreement and returning
the same to us.
Very truly yours,
[INSERT NAME OF BANK]
By _____________________________
Title:
AGREED AS AFORESAID:
[INSERT NAME OF PROSPECTIVE
PARTICIPANT OR ASSIGNEE]
By __________________________
Title:
EXHIBIT D
[Form of Assignment and Acceptance]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement, dated as of ____________,
1998 (as modified and supplemented and in effect from time to time, the "Credit
Agreement"), among Enhance Financial Services Group Inc. (the "Company"), the
banks named therein, and Fleet National Bank, as agent for such banks (the
"Administrative Agent"). Terms defined in the Credit Agreement are used herein
as defined therein.
______________________ (the "Assignor") and ____________ (the
"Assignee") agree as follows:
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Date as set forth in Schedule 1 hereto (the "Effective Date"), an
interest (the "Assigned Interest") in and to the Assignor's rights and
obligations under the Credit Agreement with respect to those credit facilities
contained in the Credit Agreement as are set forth on Schedule 1 (individually,
an "Assigned Facility"; collectively, the "Assigned Facilities"), in a principal
amount and percentage for each Assigned Facility as set forth on Schedule 1.
2. The Assignor (i) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement, any other Basic Document or
any other instrument or document furnished pursuant thereto, or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Credit Agreement, any other Basic Document or any other instrument or document
furnished pursuant thereto, other than that it has not created any adverse claim
upon the interest being assigned by it hereunder and that such interest is free
and clear of any such adverse claim; (ii) makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Company, any of its Subsidiaries or any other obligation or the performance or
observance by the Company, any of its Subsidiaries or any other obligor of any
of their respective obligations under the Credit Agreement or any other Basic
Document or any other instrument or document furnished pursuant hereto or
thereto; and (iii) attaches the Note(s) held by it evidencing the Assigned
Facilities and requests that the Administrative Agent exchange such Note(s) for
a new Note or Notes payable to the Assignor (if the Assignor has retained any
interest in the Assigned Facility) and a new Note or Notes payable to the
Assignee in the respective amounts which reflect the assignment being made
hereby (and after giving effect to any other assignments which have become
effective on the Effective Date).
3. The Assignee (i) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (ii) confirms that it
has received a copy of the Credit
-2-
Agreement, together with copies of the financial statements referred to in
Section 7.02 thereof, the financial statements delivered pursuant to Section
8.01 thereof, if any, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (iii) agrees that it will, independently and without
reliance upon the Assignor, 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
the Credit Agreement, the other Basic Documents or any other instrument or
document furnished pursuant hereto or thereto; (iv) appoints and authorizes the
Administrative Agent to take such action as administrative agent on its behalf
and to exercise such powers and discretion under the Credit Agreement, the other
Basic Documents or any other instrument or document furnished pursuant hereto or
thereto as are delegated to the Administrative Agent by the terms thereof,
together with such powers as are incidental thereto; and (v) agrees that it will
be bound by the provisions of the Credit Agreement and will perform in
accordance with its terms all the obligations which by the terms of the Credit
Agreement are required to be performed by it as a Bank including, if it is
organized under the laws of a jurisdiction outside the United States of America,
its obligation pursuant to Section 5.06 of the Credit Agreement to deliver the
forms prescribed by the Internal Revenue Service of the United States certifying
as to the Assignee's exemption from United States withholding taxes with respect
to all payments to be made to the Assignee under the Credit Agreement, or such
other documents as are necessary to indicate that all such payments are subject
to such tax at a rate reduced by an applicable tax treaty.
4. Following the execution of this Assignment and Acceptance, it
will be delivered to the Administrative Agent for acceptance by the
Administrative Agent pursuant to Section 11.06(b) of the Credit Agreement,
effective as of the Effective Date (which date shall not, unless otherwise
agreed to by the Administrative Agent, be earlier than five Business Days after
the date of such acceptance.
5. Upon such acceptance, from and after the Effective Date, the
Administrative Agent shall make all payments in respect of the Assigned Interest
(including payments of principal, interest, fees and other amounts) to the
Assignee which accrue subsequent to the Effective Date.
6. From and after the Effective Date, (i) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Bank thereunder and under the
other Basic Documents and shall be bound by the provisions thereof and (ii) the
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement except as provided in Section 11.07 of the Credit Agreement.
7. This Assignment and Acceptance shall be governed by and construed
in accordance with the law of the State of New York.
-3-
8. This Assignment and Acceptance may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Assignment and
Acceptance by signing any such counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
and Acceptance to be executed as of the date first above written by their
respective duly authorized officers on Schedule 1 hereto.
-4-
[ASSIGNEE] [ASSIGNOR]
By: __________________________ By: ___________________________
Title: Title:
[Consented to and] Accepted:
FLEET NATIONAL BANK, as
Administrative Agent
By: ____________________________
Title:
[Consented to:
ENHANCE FINANCIAL SERVICES
GROUP INC.
By: ____________________________
Title:
FLEET NATIONAL BANK,
as Swingline Bank
By: ____________________________
Title:
Schedule 1 to
Assignment and Acceptance
relating to the Credit Agreement
dated as of ____________, 1998,
among Enhance Financial Services Group Inc.
the banks named therein and
Fleet National Bank, as agent for the Banks
(in such capacity, the "Administrative Agent")
Name of Assignor:
Name of Assignee:
Effective Date of Assignment:
Credit Principal Percentage
Facility Assigned Amount Assigned Assigned
----------------- --------------- --------