Exhibit 10.13
================================================================================
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
Dated as of November 3, 1997
between
LEUCADIA NATIONAL CORPORATION
and
BANKBOSTON, N.A.,
as Administrative Agent,
THE CHASE MANHATTAN BANK,
as Syndication Agent,
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION,
as Documentation Agent,
and
the BANKS listed on Schedule 1 hereto
----------
================================================================================
TABLE OF CONTENTS
-----------------
SECTION 1 DEFINITIONS
-----------
1.1 Defined Terms............................................1
1.2 Other Definitional Provisions...........................11
SECTION 2 REVOLVING CREDIT FACILITY
-------------------------
2.1 Revolving Credit Commitment.............................12
2.2 Notes...................................................13
2.3 Procedure for Credit Borrowing..........................13
2.4. Interest Rate...........................................15
2.5. Interest Rate Conversion Options........................15
2.6. Termination or Reduction of Commitment..................16
2.7. Prepayments.............................................16
2.8. Repayment of Loans......................................16
SECTION 3 SWING LINE FACILITY
-------------------
3.1. The Swing Line Loans....................................16
3.2. Notice of Borrowing.....................................17
3.3. Interest on Swing Line Loans............................17
3.4. Repayment of Swing Line Loans...........................17
3.5. The Swing Line Note.....................................18
SECTION 4 CERTAIN GENERAL PROVISIONS
--------------------------
4.1. Use of Proceeds.........................................18
4.2. Annual/Commitment Fees..................................19
4.3. Agents' Fees............................................19
4.4. Computation of Interest and Fees........................19
4.5. Inability to Determine Interest Rate....................20
4.6. Overdue Amounts; Interest Payments......................20
4.7. Payments................................................20
4.8. Foreign Taxes...........................................20
4.9. Illegality..............................................21
4.10. Additional Costs, Etc...................................21
4.11. Indemnity...............................................24
SECTION 5 REPRESENTATIONS AND WARRANTIES
------------------------------
5.1. Financial Condition.....................................24
5.2. No Change...............................................24
5.3. Corporate Existence; Compliance with Law................24
5.4. Corporate Power; Authorization; Enforceable
Obligations............................................25
5.5. No Legal Bar............................................25
i
5.6. No Material Litigation..................................25
5.7. No Default..............................................26
5.8. Ownership of Property; Liens............................26
5.9. No Burdensome Restrictions..............................26
5.10. Taxes...................................................26
5.11. Federal Regulations.....................................26
5.12. ERISA...................................................27
5.13. Investment Company Act..................................27
5.14. Full Disclosure.........................................27
5.15. Certain Contingent Obligations..........................27
5.16. Environmental Compliance................................27
5.17 Nonrecourse Indebtedness................................28
SECTION 6 CONDITIONS PRECEDENT
--------------------
6.1. Conditions of Initial Loan..............................28
6.2. Conditions to All Loans.................................29
SECTION 7 AFFIRMATIVE COVENANTS
---------------------
7.1. Financial Statements....................................29
7.2. Certificates; Other Information.........................30
7.3. Payment of Obligations..................................31
7.4. Conduct of Business, and Maintenance of Existence.......31
7.5. Maintenance of Property, Insurance......................31
7.6. Inspection of Property; Books and Records; Discussions..31
7.7. Notices.................................................32
SECTION 8 NEGATIVE COVENANTS
------------------
8.1. Total Liquid Assets Ratio...............................33
8.2. Maintenance of Consolidated Tangible Net Worth..........33
8.3. Debt Leverage Ratio.....................................33
8.4. Limitations on Liens....................................33
8.5. Prohibition of Fundamental Changes......................34
8.6. Investments.............................................35
8.7. Limitation on Contingent Obligations....................35
8.8. Limitation on Subsidiary Indebtedness...................35
SECTION 9 EVENTS OF DEFAULT.......................................36
-----------------
SECTION 10 THE AGENTS
----------
10.1. Authorization...........................................38
10.2. Employees and Agents....................................39
10.3. No Liability............................................39
10.4. No Representations......................................39
10.5. Payments................................................39
ii
10.6. Holders of Notes........................................40
10.7. Indemnity...............................................40
10.8. Administrative Agent as Bank............................40
10.9. Resignation.............................................40
10.10. Notification of Defaults and Events of Default..........41
SECTION 11 ASSIGNMENT AND PARTICIPATION
----------------------------
11.1. Conditions to Assignment by Banks.......................41
11.2. Certain Representations and Warranties; Limitations;
Covenants...............................................41
11.3. Register................................................42
11.4. New Notes...............................................43
11.5. Participations..........................................43
11.6. Disclosure..............................................43
11.7. Assignee or Participant Affiliated with the Company.....44
11.8. Miscellaneous Assignment Provisions.....................44
11.9. Assignment by the Company...............................44
SECTION 12 MISCELLANEOUS
-------------
12.1. Consents, Amendments and Waivers........................44
12.2. Notices.................................................45
12.3. No Waiver; Cumulative Remedies..........................47
12.4. Survival of Representations and Warranties..............47
12.5. Payment of Expenses.....................................47
12.6. Indemnification.........................................47
12.7. Successors and Assigns..................................48
12.8. Set-off.................................................48
12.9. Termination.............................................49
12.10. Counterparts............................................49
12.11. Governing Law...........................................50
12.12. Effective Date..........................................50
SCHEDULES
---------
Schedule 1 List of Banks
Schedule 4.1 Indebtedness To Be Repaid
Schedule 5.16 Environmental Compliance
Schedule 5.17 Nonrecourse Indebtedness
Schedule 8.4 Permitted Liens
EXHIBITS
--------
Exhibit A Revolving Credit Note
Exhibit B Swing Line Note
Exhibit C Legal Opinion
Exhibit D Officer's Certificate
Exhibit E Assignment and Acceptance
iii
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
-----------------------------------------------
This AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT (this "Agreement")
is entered into as of November 3, 1997, to become effective as of the Effective
Date as defined in Section 12.12 hereof only upon satisfaction of the conditions
specified therein, between LEUCADIA NATIONAL CORPORATION, a New York corporation
(the "Company"), the lending institutions listed on Schedule 1 attached hereto
(the "Banks"), BANKBOSTON, N.A. (formerly named The First National Bank of
Boston), as administrative agent for itself and the other Banks (the
"Administrative Agent"), THE CHASE MANHATTAN BANK, as syndication agent for
itself and the other Banks (the "Syndication Agent") and BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION, as documentation agent for itself and
the other Banks (the "Documentation Agent"), amending and restating in its
entirety the Revolving Credit Agreement dated as of February 28, 1997 (the
"Prior Agreement") between the Company, the Banks, First Union National Bank of
North Carolina ("First Union"), the Administrative Agent, the Syndication Agent
and the Documentation Agent.
SECTION 1. DEFINITIONS
-----------
1.1 DEFINED TERMS. As used in this Agreement, the following terms
have the following meanings:
"Administrative Agent": BankBoston, N.A. acting in the capacity of
administrative agent for the Banks, or any successor in such capacity.
"Affiliate": any Person that would be considered to be an affiliate
of the Company under Rule 144(a) of the Rules and Regulations of the Securities
and Exchange Commission, as in effect on the date hereof, if the Company were
issuing securities.
"Agreement": this Amended and Restated Revolving Credit Agreement, as
it may be further amended, supplemented or modified from time to time.
"Annual Fee": as defined in Subsection 4.2.
"Assignment and Acceptance": as defined in Subsection 11.1.
"Available Commitment": at a particular time, an amount equal to the
positive remainder of (a) the aggregate amount of the Total Commitment at such
time, less (b) the aggregate unpaid principal amount of all Loans.
"Banking Subsidiaries": (i) so long as they are Subsidiaries of the
Company, (x) American Investment Bank, N.A., and (y) American Investment
Financial and (ii) any other Subsidiary of the Company taking Federal Deposit
Insurance Corporation (or other similar entity) insured deposits.
"Banks": at any time of reference thereto, those lending institutions
listed on Schedule 1 hereto (including without limitation the Swing Line Bank
acting in such capacity) and any other Person who becomes an Assignee of any
rights and obligations of a Bank pursuant to Section 11 hereof; and any one of
the Banks individually, a "Bank".
"Base Rate": the interest rate per annum equal to the higher of (a) the
rate of interest publicly announced by the Administrative Agent at its head
office in Boston, Massachusetts from time to time as its base rate (the base
rate is not intended to be the lowest rate of interest charged by BankBoston,
N.A. in connection with extensions of credit to debtors), and (b) one-half of
one percentage point (0.5%) above the overnight Federal Funds Effective Rate.
For the purposes of this definition, "Federal Funds Effective Rate" shall mean,
for any day, the rate per annum 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, as published for such day (or, if such day is
not a Business Day for the next preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day on such transactions
received by the Administrative Agent from three funds brokers of recognized
standing selected by the Administrative Agent.
"Base Rate Loans": Loans hereunder at any time of reference bearing
interest at a rate based upon the Base Rate.
"Borrowing Date": any Business Day specified in a notice pursuant to
Subsections 2.3, 3.2 or 3.4 as a date on which the Company requests (or is
deemed to have requested) the Banks to make Revolving Credit Loans or the Swing
Line Bank to make a Swing Line Loan hereunder.
"Business Day": any day on which banking institutions in Boston,
Massachusetts, are open for the transaction of banking business and, in the case
of Eurodollar Loans, which is also a Eurodollar Business Day.
"Code": the Internal Revenue Code of 1986, as amended and in effect
from time to time.
"Commitment": with respect to each Bank, the amount set forth herein
as its commitment to make Loans to the Company as such amount may be reduced
from time to time as provided herein.
"Commitment Fee": as defined in Subsection 4.2.
"Commitment Percentage": with respect to each Bank, the percentage set
forth beside its name in Schedule 1 (subject to adjustment upon any assignment
permitted by Section 11 hereof) as such Bank's percentage of the Total
Commitment and such Bank's interest in the aggregate amount of all Swing Line
Loans.
"Commitment Period": the period from and including the date hereof
to, but not including, the Termination Date or such earlier date as the
Commitment shall terminate as provided herein.
2
"Commonly Controlled Entity": an entity, whether or not incorporated,
which is under common control with the Company within the meaning of Section
414(b) or (c) of the Code.
"Company": Leucadia National Corporation, a New York corporation.
"Consolidated" or "consolidated": with reference to any term defined
herein, that term as applied to the accounts of the Company and its
Subsidiaries, consolidated in accordance with GAAP.
"Consolidated Intangibles": at a particular date, all assets of the
Company and its Subsidiaries, determined on a consolidated basis at such date,
that would be classified as intangible assets in accordance with GAAP, but in
any event including, without limitation, unamortized debt discount and expense,
unamortized organization and reorganization expense, costs in excess of the net
asset value of acquired companies, patents, trade or service marks, franchises,
trade names, goodwill and deferred tax assets. Notwithstanding anything to the
contrary contained in the preceding sentence, Consolidated Intangibles shall not
include deferred insurance policy acquisition costs or the value of life
insurance in force.
"Consolidated Net Worth": as to any Person at a particular date, all
amounts which should be included under shareholders' equity on a balance sheet
of such Person and its Subsidiaries determined on a consolidated basis as at
such date; provided that, in calculating shareholders' equity, marketable
securities that have not suffered a decline in value (other than a decline of a
temporary nature) shall be reflected at the amortized cost thereof and
marketable securities that have suffered a decline in value considered to be
other than temporary shall be reflected at the current value thereof. For
purposes of this definition, the recorded value of the Company's outstanding
preferred stock shall be included under shareholders' equity.
"Consolidated Tangible Net Worth": at a particular date, the excess,
if any, of Consolidated Net Worth over Consolidated Intangibles as at such date.
"Contingent Obligation": as to any Person, any reimbursement obligation
of such Person in respect of the face amount of all letters of credit for the
account of such Person and (without duplication) all drafts thereunder (other
than trade letters of credit or interest or currency swap transactions entered
into in the ordinary course of business) and any obligation of such Person
guarantying or in effect guarantying any Indebtedness, leases, dividends or
other obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (a) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (b) to advance or supply funds (i) for the purchase
or payment of any such primary obligation or (ii) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (c) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
3
obligation of the ability of the primary obligor to make payment of such primary
obligation or (d) otherwise to assure or hold harmless the owner of such primary
obligation against loss in respect thereof; provided, however, that the term
Contingent Obligation shall not include (i) endorsements of instruments for
deposit or collection in the ordinary course of business, (ii) indemnities
granted in the ordinary course of business (including in connection with
dispositions by the Company and/or its Subsidiaries), (iii) any insurance or
reinsurance obligation of any Subsidiary of the Company entered into in the
ordinary course of the insurance business of such Subsidiary, (iv) any guaranty
by a Subsidiary of the Company of the obligation of another Subsidiary (other
than the Company, if the guarantied obligation of the Subsidiary is reflected in
the Company's consolidated financial statements as a liability, (v) any
obligation (other than the guaranty by a Subsidiary of an obligation of the
Company) reflected as a liability in the Company's consolidated financial
statements, including without limitation the Company's obligations in respect of
the TRUPS and (vi) any Indebtedness. The amount of any Contingent Obligation
shall be deemed to be an amount equal to the stated or determinable amount of
the primary obligation in respect of which such Contingent Obligation is made
or, if not stated or determinable, the maximum reasonably anticipated liability
in respect thereof as determined by the Company in good faith. For the purposes
of this definition, Contingent Obligations shall not include (x) any guaranty or
indemnification undertaking given in connection with the return of the assets of
Colonial Penn Madison Insurance Company ("Madison"), Commercial Loan Insurance
Corporation ("CLIC") and WMAC Credit Insurance Corporation ("WMAC Credit"), or
the assets of any other Insurance Subsidiary under the jurisdiction of the
Wisconsin Insurance Commissioner (collectively, the "Returned Companies") to the
control of the Company or any of its Subsidiaries, or (y) any contingent
obligation arising from the operations of such Returned Companies; provided,
that, any such guaranty, indemnification, undertaking or contingent obligation
has recourse solely to such Returned Companies and the operations of such
Returned Companies are kept separate and apart from those of the Company and
each of the Company's other Subsidiaries.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or undertaking to
which such Person is a party or by which it or any of its property is bound.
"Default": any of the events specified in Section 9, whether or not
any requirement for the giving of notice, the lapse of time, or both, or any
other condition, has been satisfied.
"Delinquent Bank": any Bank that fails to make available when due to
the Administrative Agent its pro rata share of any Loan, or fails to make
available when due to the Swing Line Bank its pro rata share of any Swing Line
Loan.
"Documentation Agent": Bank of America National Trust and Savings
Association acting as documentation agent for the Banks.
"Dollars or $:" dollars in lawful currency of the United States of
America.
"Domestic Lending Office": initially, the office of each Bank;
thereafter, such other office of such Bank, if any, located within the United
States that will be making or maintaining Base Rate Loans.
4
"Eligible Assignee": Any of (i) a commercial bank organized under the
laws of the United States, or any State thereof or the District of Columbia, and
having total assets in excess of $1,000,000,000; (ii) a savings and loan
association or savings bank organized under the laws of the United States, or
any State thereof or the District of Columbia, and having a net worth of at
least $500,000,000, calculated in accordance with generally accepted accounting
principles; (iii) a commercial bank organized under the laws of any other
country which is a member of the Organization for Economic Cooperation and
Development (the "OECD"), or a political subdivision of any such country, and
having total assets in excess of $1,000,000,000, provided that such bank is
acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD; (iv) the
central bank of any country which is a member of the OECD; and (v) if, but only
if, any Event of Default has occurred and is continuing, any other bank,
insurance company, commercial finance company or other financial institution
approved by the Administrative Agent, such approval not to be unreasonably
withheld.
"Entity": any partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association, joint
venture or other business entity of whatever nature.
"Environmental Laws": any judgment, decree, order, law, license,
rule or regulation of any Governmental Authority pertaining to protection of the
environment, or any United States state or local statute, regulation, ordinance,
order or decree relating to health, safety or the environment.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurodollar Business Day": any day on which commercial banks
are open for international business (including dealings in Dollar deposits) in
London or such other eurodollar interbank market as may be selected by the
Administrative Agent in its sole discretion acting in good faith.
"Eurodollar Lending Office": initially, the office of each Bank;
thereafter, such other office of such Bank, if any, that shall be making or
maintaining Eurodollar Rate Loans.
"Eurodollar Loans": Loans hereunder at any time of reference bearing
interest at a rate based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each Interest Period pertaining to
Eurodollar Loans, the rate of interest per annum (rounded upwards to the nearest
1/100 of one percent) determined by the Administrative Agent to be equal to the
quotient of (a) the rate at which its Eurodollar Lending Office is offered
Dollar deposits two Eurodollar Business Days prior to the beginning of such
Interest Period pertaining to any such Eurodollar Loan in the eurodollar
interbank market selected by the Administrative Agent in its sole discretion in
good faith at 10:00 a.m., Boston time, for delivery on the first day of such
Interest Period for the number of days comprised therein and in an amount equal
to the amount of the Eurodollar Loan to be outstanding during such Interest
5
Period, divided by (b) a number equal to l.00 minus the daily average of the
maximum rates in effect on each day of such Interest Period (expressed as a
decimal fraction) at which the Banks subject thereto would be required to
maintain reserves under Regulation D of the Board of Governors of the Federal
Reserve System (or any successor or similar regulations relating to such reserve
requirements) against "Eurocurrency Liabilities" (as such term is used in
Regulation D), if such liabilities were outstanding.
"Event of Default": any of the events specified in Section 9, provided
that any requirement for the giving of notice or the lapse of time, or both, or
any other condition specified therein, has been satisfied.
"First Union": First Union National Bank of North Carolina, one of the
Banks under the Prior Agreement.
"Foreign Recipient": any Bank or Participant which is a recipient
of payments under Subsection 4.8 and that is organized under a jurisdiction
other than the United States of America or a state thereof.
"Foreign Taxes": as defined in Subsection 4.8.
"Funded Debt": all Indebtedness of the Company and its Subsidiaries on
a consolidated basis in respect of (i) Loans under this Agreement, and (ii) any
other Indebtedness for borrowed money (other than Nonrecourse Debt); provided
that Funded Debt shall not be deemed to include customer deposits of Banking
Subsidiaries.
"F&H Guaranty": the Guaranty of the Company in the form of Exhibit E to
the Master Agreement dated as of November 1989, by and among CX Partners, L.P.,
a Delaware limited partnership, each of its Limited Partners, including F&H
Associates, C.V., a Netherlands Antilles limited partnership ("F&H"), its
Liquidating Trustee, and the parties named therein, with respect to the
obligations of F&H under said Master Agreement.
"GAAP": (i) When used in Section 8 means generally accepted accounting
principles that are consistent with the accounting practices of the Company
reflected in its financial statements for the fiscal year ended on December 31,
1996 referred to in Subsection 5.1, and (ii) when used in general, other than in
Section 8, means generally accepted accounting principles that are consistent
with the principles promulgated or adopted by the Financial Accounting Standards
Board and its predecessors, as in effect from time to time.
"Governmental Authority": any nation or government (other than
Kazakstan, Kyrgyzstan, or Russia), any state or other political subdivision
thereof, and any entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to such government.
"Hazardous Substances": hazardous waste, pollutants or contaminants,
toxic substances, oil or hazardous materials or other chemicals or substances
regulated by any Environmental Laws.
6
"Indebtedness": as to any Person at a particular time, all items which,
in conformity with GAAP, would be classified as liabilities on a balance sheet
of such Person as at such time and which constitute (a) indebtedness for
borrowed money or constituting the deferred purchase price of assets or other
property, (b) obligations with respect to any conditional sale agreement or
title retention agreement, (c) indebtedness arising under acceptance facilities
and all drafts drawn under all letters of credit issued for the account of such
Person, (d) all liabilities secured by any Lien on any property owned by such
Person even though it has not assumed or otherwise become liable for the payment
thereof, (e) obligations under leases which have been, or under GAAP are
required to be, capitalized, (f) obligations with respect to interest payable
and (g) any asserted withdrawal liability of such Person or a Commonly
Controlled Entity to a Multiemployer Plan.
"Insurance Subsidiary": Any Subsidiary of the Company licensed as an
insurance company.
"Interest Payment Date": (a) as to any Base Rate Loan, the last day of
each March, June, September and December and the Termination Date or such
earlier date as the Commitment shall terminate as provided herein, and (b) as to
any Eurodollar Loan in respect of which the Interest Period is (i) three months
or less, the last day of such Interest Period and (ii) more than three months,
the date which is three months from the first day of such Interest Period and in
addition the last day of such Interest Period.
"Interest Period": (a) with respect to any Eurodollar Loan, the period
commencing on the Borrowing Date with respect to such Eurodollar Loan and ending
one, two, three or six months thereafter, as selected by the Company in its
notice of borrowing as provided in Subsection 2.3; (b) with respect to any Base
Rate Loan, the period commencing on the Borrowing Date with respect to such Base
Rate Loan and ending on the earlier to occur of the date of repayment or
conversion of such Base Rate Loan or the Termination Date; and (c) with respect
to any Swing Line Loan, the period commencing on the Borrowing Date and ending
on the maturity date specified in the request therefor pursuant to Subsection
3.2; provided, that, all of the foregoing provisions relating to Interest
Periods are subject to the following:
(i) if any Interest Period pertaining to a Eurodollar Loan
would otherwise end on a day which is not a Eurodollar Business Day, that
Interest Period shall be extended to the next succeeding Eurodollar Business Day
unless the result of such extension would be to carry such Interest Period into
another calendar month, in which event such Interest Period shall end on the
immediately preceding Eurodollar Business Day;
(ii) if any Interest Period pertaining to a Base Rate Loan or
Swing Line Loan would otherwise end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day;
(iii) any Interest Period pertaining to a Eurodollar Loan that
begins on the last Eurodollar Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last Eurodollar Business Day of a
calendar month; and
7
(iv) any Interest Period that would otherwise extend beyond
the Termination Date shall end on the Termination Date.
"Investments": any advance, loan, extension of credit or capital
contribution to, or purchase of any stocks, bonds, notes, debentures or other
securities of, or any other investment in, any Person.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), or preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, and any financing lease having substantially the same
economic effect as any of the foregoing).
"Loans": the Revolving Credit Loans and the Swing Line Loans; and any
one of such Loans individually, a "Loan".
"Majority Banks": as of any date, the Banks holding at least fifty-one
percent (51%) of the outstanding principal amount of the Revolving Credit Notes
on such date; and if no such principal is outstanding, the Banks whose aggregate
Commitments constitute at least fifty-one percent (51%) of the Total Commitment.
"Market Price": with reference to the Company's Common Shares ("Common
Share") for any Trading Day, the last reported sale price of a Common Share as
reported on the New York Stock Exchange or on any principal stock exchange on
which the Common Shares are then listed or admitted to trading or on the
National Association of Securities Dealers National Market System, if quoted;
or, if the Common Shares are not then listed or admitted to trading on any
national securities exchange and there is no reported last sale price or bid and
asked prices available, the average of the reported high-bid and low-asked
prices on such day as reported by a reputable quotation service or a newspaper
of general circulation in the Borough of Manhattan, City and State of New York,
customarily published on each business day; or, in the absence of one or more
such quotations, the current market price determined in good faith by the Board
of Directors of the Company on the basis of such quotations or factors as it
deems appropriate.
"Market Value": with reference to the Company's Common Shares,
the average Market Price of such Common Shares for the twenty Trading Days
immediately preceding the date of the sale, transfer or disposition giving rise
to the need to determine Market Value.
"Maximum Swing Line Loan Amount": as defined in Subsection 3.1.
"Multiemployer Plan": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"Nonrecourse Debt": (x) Indebtedness of any Subsidiary of the Company
which is not guaranteed by, is not secured by assets (other than assets of such
Subsidiary) of, and does not otherwise have recourse to, the Company or its
assets (other than assets of such Subsidiary) and (y) Indebtedness of the
Company incurred to finance one or more assets of the Company, which
Indebtedness has recourse only to such asset or assets for payment.
8
"Note Record": the grid attached to a Revolving Credit Note or the
Swing Line Note, or the continuation of such grid, or any other similar record,
including computer records, maintained by any Bank with respect to any Loan
referred to in such Note.
"Notes": the Revolving Credit Notes and the Swing Line Note; and any
one of such Notes individually, a "Note".
"Participant": as defined in Subsection 11.5.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
"Permitted Distribution": any distribution to the Company's
shareholders of equity shares of one or more Subsidiaries, provided, that (i)
the aggregate book value of such Subsidiary or Subsidiaries, when added together
with the aggregate book value of all other Subsidiaries with respect to which
such a Permitted Distribution has been effected from and after January 1, 1997,
shall not exceed $150,000,000, and (ii) no Default or Event of Default exists at
the time of declaration of such distribution or at the time of the consummation
thereof, either before or after giving effect thereto.
"Permitted Liens": as defined in Subsection 8.4.
"Permitted Voluntary Proceeding": the commencement by the Company of a
voluntary case or proceeding under Title 11, U.S. Code or any similar federal or
state law for the relief of debtors with respect to any Subsidiary if (i) the
sum of the Company's total investment at cost, after write-downs, in such
Subsidiary and the Company's Contingent Obligations in respect of liabilities of
such Subsidiary does not exceed $90,000,000, and (ii) the commencement of such
case or proceeding does not create nor occasion any violation or noncompliance
with other provisions of this Agreement.
"Person": an individual, Entity or Governmental Authority.
"Plan": any pension plan which is covered by Title IV of ERISA and
in respect of which the Company or a Commonly Controlled Entity is an "employer"
as defined in Section 3(5) of ERISA.
"Prior Agreement": as defined in the preamble.
"Real Estate": the real properties owned or leased by the Company or
any of its Subsidiaries.
"Recipient": as defined in Subsection 12.9.
"Register": as defined in Subsection 11.3.
9
"Reportable Event": any of the events set forth in Section 4043(b)
of ERISA or the regulations thereunder.
"Requirements of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and (other than with respect to Kazakstan, Kyrgyzstan and Russia) any
law, treaty, rule or regulation, or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.
"Responsible Officer": the Chairman of the Board of Directors,
President, Treasurer or any Vice President of the Company.
"Revolving Credit Loans": as defined in Subsection 2.1.
"Revolving Credit Notes": as defined in Subsection 2.2.
"Shareholders' Equity": at any particular date, the total shareholders'
equity of the Company (including without limitation equity in respect of the
Company's outstanding preferred stock, if any), determined on a consolidated
basis in accordance with GAAP; provided that, if any Nonrecourse Debt is
excluded from the computation of Funded Debt under Subsection 8.3, then, for
purposes of determining Shareholders' Equity under Subsection 8.3, Shareholders'
Equity shall be reduced (x) by the carrying value of the assets of the Company
to which such Nonrecourse Debt has recourse, to the extent of such Nonrecourse
Debt of the Company, and/or (y) by the Company's equity investment in any
Subsidiary having such Nonrecourse Debt, to the extent of such Subsidiary's
Nonrecourse Debt.
"Single Employer Plan": any Plan which is not a Multiemployer Plan.
"Subsidiary": as to any Person, any Entity which is consolidated
in such Person's consolidated financial statements determined in accordance with
GAAP as in effect on December 31, 1996.
"Swing Line Bank": BankBoston, N.A. acting in such capacity under
Section 3 hereof, or any successor in such capacity.
"Swing Line Loan": any loan made by the Swing Line Bank pursuant to
Section 3.
"Swing Line Loan Maturity Date": as defined in Subsection 3.2.
"Swing Line Note": as defined in Subsection 3.5.
"Syndication Agent": The Chase Manhattan Bank acting in the capacity of
syndication agent for the Banks.
"Taxes": as defined in Subsection 4.10.
10
"Terminating Event": any of the events specified in Subsection 12.9,
whether or not any requirement for the lapse of time, or any other condition,
has been satisfied.
"Termination Date": November 3, 2002.
"Total Commitment": the aggregate amount of the Commitments of the
Banks to make Loans to the Company as provided herein.
"Total Liquid Assets": at any date of determination, the sum of (i) the
book value (as determined in accordance with GAAP) of all marketable securities
(adjusted by the net unrealized gain or loss on such securities not reflected in
book value) and aggregate cash and cash equivalent balances, in each case held
by the Company and/or its consolidated Subsidiaries (other than Banking
Subsidiaries and Insurance Subsidiaries), (ii) balances available under the
Company's bank credit agreements maturing twelve months or more after the date
of determination, (iii) all amounts legally distributable from the Company's
Insurance Subsidiaries and Banking Subsidiaries, and (iv) amounts payable under
negotiable promissory notes issued by Conseco, Inc. to Colonial Penn Holdings
Inc. in the aggregate principal amount of $400,000,000, which notes are backed
by letters of credit. For purposes of this definition, "marketable securities"
shall mean (A) securities that are publicly traded or (B) securities offered by
an independent broker that the Company in good faith believes can be sold within
180 days; and "legally distributable from the Company's Insurance Subsidiaries
and Banking Subsidiaries" shall mean, in the case of the Company's Insurance
Subsidiaries, the maximum sum which those regulators with supervisory authority
over such Subsidiaries in the state or states of their incorporation permit them
to distribute by statute, regulation or otherwise, and in the case of the
Company's Banking Subsidiaries, the maximum sum which those regulators with
supervisory authority over such Subsidiaries either at the national level or in
the state of their incorporation permit them to distribute by statute,
regulation or otherwise.
"Trading Day": any day on which the principal exchange or quotation
system on which the Company's Common Shares are listed or traded, is open for
trading.
"TRUPS": the $150,000,000 8.65% Capital Trust Pass-through Securities
issued in January 1997 by Leucadia Capital Trust I, all of the common capital
securities of which are owned by the Company.
"Type": as to all or any portion of any Loan, its nature as a Base
Rate Loan or Eurodollar Loan.
"Voting Stock": as to the Company, shares of stock having
ordinary voting power (other than stock having such power only by reason of the
happening of a contingency).
1.2. OTHER DEFINITIONAL PROVISIONS.
-----------------------------
(a) All terms defined in this Agreement shall have the
defined meanings when used in the Notes or any certificate or other document
made or delivered pursuant hereto or thereto.
11
(b) As used herein and in the Notes, and any certificate
or other document made or delivered pursuant hereto, accounting terms relating
to the Company and its Subsidiaries not defined in Subsection 1.1, and
accounting terms partly defined in Subsection 1.1 to the extent not defined,
shall have the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
section, subsection, schedule and exhibit references are to this Agreement
unless otherwise specified.
SECTION 2. REVOLVING CREDIT FACILITY
-------------------------
2.1. REVOLVING CREDIT COMMITMENT.
---------------------------
(a) Subject to the terms and conditions hereof, each of the
Banks severally agrees to make revolving credit loans (individually, a
"Revolving Credit Loan"; collectively the "Revolving Credit Loans") to the
Company from time to time during the Commitment Period upon notice by the
Company to the Administrative Agent given in accordance with Subsection 2.3
hereof, in an amount equal to such Bank's Commitment Percentage of the aggregate
principal amount of Loans requested in the Company's notice. The respective
amount of each Bank's Commitment and its Commitment Percentage shall be as set
forth in Schedule 1 attached hereto.
(b) Notwithstanding any other provision of this Agreement
but subject to the following paragraph (c) of this Subsection 2.1, at no time
shall the sum of (i) the aggregate principal amount of all Revolving Credit
Loans outstanding (after giving effect to all Loans requested), plus (ii) the
aggregate principal amount of all Swing Line Loans outstanding exceed the Total
Commitment of the Banks then in effect. The principal amount of the Revolving
Credit Loans outstanding from each Bank to the Company shall not at any time
exceed in the aggregate an amount (after giving effect to all Loans requested)
equal to such Bank's Commitment Percentage times (i) the Total Commitment minus
(ii) the aggregate principal amount of all Swing Line Loans outstanding. Within
the foregoing limits, and subject to all of the other terms and conditions set
forth in this Agreement, the Company may borrow, prepay pursuant to Subsection
2.7 hereof, and reborrow Revolving Credit Loans.
(c) Notwithstanding the foregoing, each of the Banks
agree to, on one or more occasions during the Commitment Period, and regardless
of whether the conditions set forth in Section 6 are satisfied, make Revolving
Credit Loans to the Company solely for the purposes of repaying Swing Line Loans
pursuant to Subsection 3.4 hereof. Section 3 hereof shall govern the Company's
obligations with respect to Swing Line Loans. In the event that any advances of
Revolving Credit Loans pursuant to this Subsection 2.1(c) cause the sum of the
aggregate principal amount of Revolving Credit Loans and Swing Line Loans
outstanding to exceed the Total Commitment then in effect, the Company shall
immediately prepay such excess amount together with any interest accrued
thereon.
12
(d) The Revolving Credit Loans may be Eurodollar Loans or
Base Rate Loans, or combinations thereof, as determined by the Company and
notified to the Administrative Agent and the Banks in accordance with Subsection
2.3; provided that no Eurodollar Loan shall be made with an Interest Period
extending beyond the Termination Date. Eurodollar Loans shall be made and
maintained by the Administrative Agent for the accounts of the Banks at its
Eurodollar Lending Office, and Base Rate Loans shall be made and maintained by
the Administrative Agent for the accounts of the Banks at its Domestic Lending
Office.
2.2. NOTES. The Revolving Credit Loans made pursuant hereto are
-----
evidenced by separate promissory notes of the Company, substantially in the form
of Exhibit A (together with any promissory notes in substantially such form
issued in substitution or replacement therefor, the "Revolving Credit Notes" or,
in the singular, a "Revolving Credit Note"); one Revolving Credit Note being
payable to the order of each Bank in a principal amount equal to such Bank's
Commitment and representing the obligation of the Company to pay to such Bank
the amount of the Commitment or, if less, the aggregate unpaid principal amount
of all Revolving Credit Loans made by such Bank hereunder, plus accrued interest
thereon, as set forth below. Each Bank is hereby authorized to record the date
and amount of its Revolving Credit Loan, the maturity date thereof, the date and
amount of each repayment of principal thereof, and, in the case of Eurodollar
Loans, the interest rate with respect thereto, on such Bank's Note Record. The
outstanding amount of the Revolving Credit Loans set forth on such Bank's Note
Record shall be prima facie evidence of the principal amount thereof owing and
unpaid to such Bank, but the failure to record, or any error in so recording,
any such amount on such Bank's Note Record shall not limit or otherwise affect
the actual amount of the obligations of the Company hereunder or under any
Revolving Credit Note to make payments of principal of or interest on any
Revolving Credit Note when due.
2.3. PROCEDURE FOR REVOLVING CREDIT BORROWING.
----------------------------------------
(a) The Company may borrow Revolving Credit Loans under the
Commitments during the Commitment Period on any Eurodollar Business Day if the
borrowing is a Eurodollar Loan or on any Business Day if the borrowing is a Base
Rate Loan; provided, that, the Company shall give the Administrative Agent
irrevocable notice, which notice must be received by the Administrative Agent
(i) prior to 10:00 A.M., Boston time two Eurodollar Business Days prior to the
requested Borrowing Date, in the case of Eurodollar Loans, and (ii) prior to
12:00 noon Boston time on the requested Borrowing Date, in the case of Base Rate
Loans, specifying (A) the amount to be borrowed, (B) the requested Borrowing
Date, (C) whether the borrowing is to be a Eurodollar Loan or a Base Rate Loan,
or a combination thereof, and (D) the length of the Interest Period for each
Eurodollar Loan included in such notice. No more than ten (10) Eurodollar Loans
with different Interest Periods shall be outstanding at one time. Promptly upon
receipt of such notice, the Administrative Agent shall notify each of the Banks
thereof. Each borrowing of Base Rate Loans pursuant to the Commitments shall be
in a minimum aggregate principal amount equal to the lesser of (i) $1,000,000
and (ii) the Available Commitment, and shall be in an integral multiple of
$250,000 in excess thereof. Each borrowing of Eurodollar Loans pursuant to the
Commitments shall be in a minimum amount equal to $4,000,000 and shall be in an
integral multiple of $500,000 in excess thereof.
13
(b) Not later than 2:00 P.M. (Boston time) on any
requested Borrowing Date (including without limitation pursuant to notice under
Subsection 3.4 with regard to the repayment of any Swing Line Loan), each of the
Banks will make available to the Administrative Agent, at its head office, in
immediately available funds, the amount of the Revolving Credit Loan to be
loaned by it on such Borrowing Date. Upon receipt from each Bank of the amount
of its Revolving Credit Loan, the Administrative Agent will make the aggregate
amount of such Revolving Credit Loans available to the Company. The failure or
refusal of any Bank to make available to the Administrative Agent at the
aforesaid time on any Borrowing Date the amount of the Revolving Credit Loan to
be made by such Bank shall not relieve any other Bank from its several
obligations hereunder to make its respective Commitment Percentage of any
requested Loans.
(c) The Administrative Agent may (unless notified to the
contrary by a Bank prior to a Borrowing Date) assume that each Bank has made
available to the Administrative Agent on such Borrowing Date such Bank's
Commitment Percentage of the Revolving Credit Loans to be made on such Borrowing
Date, and the Administrative Agent may (but it shall not be required to), in
reliance upon such assumption, make available to the Company a corresponding
amount. If any Bank makes available all or any portion of such amount to the
Administrative Agent on a date after such Borrowing Date, then such Delinquent
Bank shall pay to the Administrative Agent on demand an amount equal to the
product of (i) the average computed for the period referred to in clause (iii)
below, of the weighted average interest rate paid by the Administrative Agent
for federal funds acquired by the Administrative Agent during each day included
in such period, times (ii) the amount equal to the lesser of such Bank's
Commitment Percentage of such borrowing or the portion thereof made available
after such Borrowing Date, times (iii) a fraction, the numerator of which is the
number of days that elapse from and including such Borrowing Date to the date on
which such Bank's Commitment Percentage of such borrowing shall become
immediately available to the Administrative Agent, and the denominator of which
is 360. A statement of the Administrative Agent submitted to any Bank with
respect to any amounts owing under this paragraph shall be prima facie evidence
of the amount due and owing. If any portion of such Bank's Commitment Percentage
of such Loan is not in fact made available to the Administrative Agent by such
Bank within three Business Days of such Borrowing Date, the Administrative Agent
shall be entitled to recover such amount from the Company on demand, with
interest thereon at the rate per annum applicable to the Loans made on such
Borrowing Date.
(d) The provisions of Subsection 2.3(a) notwithstanding,
if the Company shall not have given a timely notice of a borrowing to be made on
the last day of any Interest Period for an outstanding Eurodollar Loan, then
unless the Administrative Agent shall have received notice that the Company
elects not to make a borrowing on such a day (such notice to have been received
at least one Business Day prior to such day) the Company shall be deemed
irrevocably to have requested a Base Rate Loan to be made on such day in an
amount equal to the amount of such outstanding Loan (reduced to the extent
necessary to reflect any reductions of the Total Commitment on or prior to such
day).
14
(e) If the Administrative Agent, for the account of a
Bank, makes a new Revolving Credit Loan on a day on which the Company is to
repay all or any part of any outstanding Revolving Credit Loan from such Bank,
such Bank shall apply the proceeds of its new Loan to make such repayment, and
only an amount equal to the difference (if any) between the amount being
borrowed and the amount being repaid shall be made available by such Bank to the
Company or remitted by the Company to such Bank as provided in Subsection 4.7,
as the case may be.
2.4. INTEREST RATE.
-------------
(a) Each Eurodollar Loan shall bear interest, for the
period commencing on the Borrowing Date thereof and ending on the last day of
the Interest Period with respect thereto, on the unpaid principal amount thereof
at a rate per annum equal to the Eurodollar Rate determined by the
Administrative Agent for the Interest Period therefor plus 0.50%.
(b) Each Base Rate Loan shall bear interest for the
period commencing on the Borrowing Date thereof on the unpaid principal amount
thereof at a fluctuating rate per annum equal to the Base Rate.
2.5. INTEREST RATE CONVERSION OPTIONS.
--------------------------------
(a) The Company may elect from time to time to convert
any outstanding Loan (other than a Swing Line Loan) to a Loan of another Type,
provided that (i) with respect to any such conversion of a Eurodollar Loan to a
Base Rate Loan, the Company shall give the Administrative Agent at least one (1)
Business Day prior written notice of such election; (ii) with respect to any
such conversion of a Base Rate Loan to a Eurodollar Loan, the Company shall give
the Administrative Agent at least two (2) Eurodollar Business Days' prior
written notice of such election; (iii) with respect to any such conversion of a
Eurodollar Loan into a Base Rate Loan, such conversion shall only be made on the
last day of the Interest Period with respect thereto, and (iv) no Base Rate Loan
may be converted into a Eurodollar Loan when any Default or Event of Default has
occurred and is continuing. On the date on which such conversion is being made
each Bank shall take such action as is necessary to transfer its portion of such
Loans to its Domestic Lending Office or its Eurodollar Lending Office, as the
case may be. All or any part of outstanding Revolving Credit Loans of any Type
may be converted into a Revolving Credit Loan of another Type as provided
herein, provided that any conversion shall comply with the minimum aggregate
principal amount requirements set forth in Subsection 2.3(a). Each Conversion
Request relating to the conversion of a Base Rate Loan to a Eurodollar Loan
shall be irrevocable by the Company.
(b) Any Revolving Credit Loan of any Type may be
continued as a Revolving Credit Loan of the same Type upon the expiration of an
Interest Period with respect thereto by compliance by the Company with the
notice provisions contained in Subsection 2.5(a) hereof; provided that no
Eurodollar Loan may be continued as such when any Default or Event of Default
has occurred and is continuing, but shall be automatically converted to a Base
Rate Loan on the last day of the first Interest Period relating thereto ending
during the continuance of any Default or Event of Default. The Administrative
Agent shall notify the Banks promptly when any such automatic conversion
contemplated by this Subsection 2.5(b) is scheduled to occur.
15
(c) Any conversion to or from Eurodollar Loans shall be
in such amounts and be made pursuant to such elections so that, after giving
effect thereto, the aggregate principal amount of all Eurodollar Loans having
the same Interest Period shall not be less than $4,000,000 or a whole multiple
of $500,000 in excess thereof. No more than ten (10) Eurodollar Loans with
different Interest Periods shall be outstanding at one time.
2.6. TERMINATION OR REDUCTION OF COMMITMENT. The Company shall have the
--------------------------------------
right, upon not less than five (5) Business Days' notice to the Administrative
Agent, to terminate the Total Commitment or, from time to time, reduce the
amount of the Total Commitment, provided, that, (i) each reduction (other than a
termination) shall be in a minimum amount of $10,000,000 and in integral
multiples of $5,000,000 in excess thereof, (ii) no such reduction or termination
shall be permitted if, after giving effect thereto and to any prepayments of the
Loans made on the effective date thereof, the then outstanding principal amount
of the Loans would exceed the amount of the Total Commitment then in effect and
(iii) each Bank's Commitment shall be reduced proportionately. Termination of
the Commitments shall also terminate the obligation of the Banks to make Loans.
The portions of Commitments once terminated or reduced may not be reinstated.
2.7. PREPAYMENTS. The Company may (i) at any time and from time to time
-----------
prepay the Base Rate Loans, in whole or in part, without premium or penalty and
(ii) subject to payment of the amounts set forth in Subsection 4.11, prepay the
Eurodollar Loans, in either case upon at least one Business Day's irrevocable
notice to the Administrative Agent, specifying the date and amount of prepayment
and whether the prepayment is of Eurodollar Loans or Base Rate Loans, or a
combination thereof, and if of a combination thereof, the amount of prepayment
allocable to each. If such notice is given, the Administrative Agent shall
thereupon transmit such notice to the Banks, the Company shall make such
prepayment to the Administrative Agent for the accounts of the Banks, and the
prepayment amount specified in such notice shall be due and payable on the date
specified therein, together with accrued interest to such date on the amount
prepaid. Partial prepayments shall be in an amount equal to $100,000 or a whole
multiple thereof and may only be made if, after giving effect thereto,
Subsection 2.6 shall not have been contravened, and each partial prepayment
shall be allocated among the Banks, in proportion, as nearly as practicable, to
the respective unpaid principal amount of each Bank's Revolving Credit Note,
with adjustments to the extent practical to equalize any prior prepayments not
exactly in proportion.
2.8. REPAYMENT OF LOANS. The Company will pay to the Administrative
------------------
Agent for the accounts of the Banks the unpaid principal amount of each
Revolving Credit Loan made by the Banks on the last day of the Interest Period
therefor.
SECTION 3. SWING LINE FACILITY
-------------------
3.1. THE SWING LINE LOANS. Subject to the terms and conditions
--------------------
hereinafter set forth, upon notice by the Company made to the Swing Line Bank in
accordance with Subsection 3.2 hereof, the Swing Line Bank agrees to lend to the
Company Swing Line Loans on any Business Day during the Commitment Period in an
aggregate principal amount not to exceed $10,000,000 (the "Maximum Swing Line
16
Loan Amount"). Each Swing Line Loan shall be in such minimum amount as
determined by the Swing Line Bank. Notwithstanding any other provisions of this
Agreement and in addition to the limit set forth above, (a) at no time shall the
aggregate principal amount of all outstanding Swing Line Loans exceed the Total
Commitment of the Banks then in effect minus the aggregate principal amount of
all Revolving Credit Loans outstanding, provided however that, subject to the
limitations set forth in this Subsection, from time to time the sum of the
aggregate outstanding Swing Line Loans plus all outstanding Revolving Credit
Loans made by the Swing Line Bank may exceed the Swing Line Bank's Commitment
then in effect.
3.2. NOTICE OF BORROWING. When the Company desires the Swing Line Bank
-------------------
to make a Swing Line Loan, it shall send to the Administrative Agent and the
Swing Line Bank a Swing Line Loan request, which shall set forth the principal
amount of the proposed Swing Line Loan and the date on which the proposed Swing
Line Loan would mature (the "Swing Line Loan Maturity Date") which shall be not
earlier than the first day after the Borrowing Date nor later than the third day
after the Borrowing Date thereof, and in no event shall be later than the last
day of the Commitment Period. Each such Loan request must be received by the
Swing Line Bank not later than 3:00 p.m. (Boston time) on the date of the
proposed borrowing. Each Swing Line Loan request shall be irrevocable and
binding on the Company and shall obligate the Company to borrow the Swing Line
Loan from the Borrowing Date thereof. Upon satisfaction of the applicable
conditions set forth in this Agreement, on the proposed Borrowing Date the Swing
Line Bank shall make the Swing Line Loan available to the Company by 5:00 p.m.
(Boston time) on the proposed Borrowing Date by crediting the amount of the
Swing Line Loan to the Company's account maintained with the Administrative
Agent at the Head Office; provided that the Swing Line Bank shall not advance
any Swing Line Loans after it has received notice that a Default or Event of
Default has occurred and has not been cured or waived in accordance with the
provisions of this Agreement. The Swing Line Bank shall not be obligated to make
any Swing Line Loans at any time when any Bank is a Delinquent Bank unless the
Swing Line Bank has entered into arrangements satisfactory to it to eliminate
the Swing Line Bank's risk with respect to such Delinquent Bank, including by
cash collateralizing such Delinquent Bank's Commitment Percentage of the
outstanding Swing Line Loans and any such additional Swing Line Loans to be
made.
3.3. INTEREST ON SWING LINE LOANS. Each Swing Line Loan shall bear
----------------------------
interest from the Borrowing Date thereof until the Swing Line Loan Maturity Date
thereof at the rate quoted by the Administrative Agent in its sole discretion
(which shall not be greater than the then applicable Base Rate) at the time the
request for such Swing Line Loan is made.
3.4. REPAYMENT OF SWING LINE LOANS. The Company shall repay each
-----------------------------
outstanding Swing Line Loan on the Swing Line Loan Maturity Date. Upon notice by
the Swing Line Bank on any Business Day, the Company shall be deemed irrevocably
to have requested, and each of the Banks hereby agrees to make, a Revolving
Credit Loan bearing interest at the Base Rate to the Company on the next
succeeding Business Day following such notice, in an amount equal to such Bank's
Commitment Percentage of the aggregate amount of all Swing Line Loans
17
outstanding. The proceeds thereof shall be applied directly to repay the Swing
Line Bank for such outstanding Swing Line Loans. In the event that it is
impracticable for such Revolving Credit Loan to be made for any reason on the
date otherwise required above, then each Bank hereby agrees that it shall
forthwith purchase (as of the date such Revolving Credit Loan would have been
made, but adjusted for any payments received from the Company on or after such
date and prior to such purchase) from the Swing Line Bank, and the Swing Line
Bank shall sell to each Bank, such participations in the Swing Line Loans
(including all accrued and unpaid interest thereon) outstanding as shall be
necessary to cause the Banks to share in such Swing Line Loans pro rata based on
their respective Commitment Percentages by making available to the Swing Line
Bank an amount equal to such Bank's participation in the Swing Line Loans;
provided that all interest payable on the Swing Line Loans shall be for the
account of the Swing Line Bank as a funding and administrative fee until the
date as of which the respective participation is purchased. The obligation of
each Bank to make such Revolving Credit Loan, or as the case may be to purchase
such participation in a Swing Line Loan, upon one Business Day's notice as set
forth above, is absolute, unconditional and irrevocable notwithstanding (i) that
the amount of such Loan may not comply with the applicable minimums set forth in
Subsection 2.3 hereof, (ii) the failure of the Company to meet the conditions
set forth in Section 6 hereof, (iii) the occurrence or continuance of a Default
or an Event of Default hereunder, (iv) the date of such Revolving Credit Loan or
participation, and (v) the Commitment of the Swing Line Bank in effect at such
time.
3.5. THE SWING LINE NOTE. The obligation of the Company to repay the
-------------------
Swing Line Loans made pursuant to this Agreement and to pay interest thereon as
set forth in this Agreement shall be evidenced by a promissory note of the
Company with appropriate insertions substantially in the form of Exhibit B
attached hereto (the "Swing Line Note"), of even date herewith and payable to
the order of the Swing Line Bank in a principal amount stated to be the lesser
of (i) the Maximum Swing Line Loan Amount, or (ii) the aggregate principal
amount of Swing Line Loans at any time advanced by the Swing Line Bank and
outstanding thereunder. The Borrower irrevocably authorizes the Swing Line Bank
to make or cause to be made, at or about the time of the Borrowing Date of any
Swing Line Loan or at the time of receipt of any payment of principal on the
Swing Line Note, an appropriate notation on the Note Record reflecting the
making of such Swing Line Loan or (as the case may be) the receipt of such
payment. The outstanding amount of the Swing Line Loans set forth on such Note
Record shall be prima facie evidence of the principal amount thereof owing and
unpaid to the Swing Line Bank, but the failure to record, or any error in so
recording, any such amount on such Note Record shall not limit or otherwise
affect the actual amount of the obligations of the Company hereunder or under
the Swing Line Note to make payments of principal of or interest on the Swing
Line Note when due.
SECTION 4. CERTAIN GENERAL PROVISIONS
--------------------------
4.1. USE OF PROCEEDS. The Company shall use the proceeds of the Loans
---------------
to refinance existing senior revolver and term debt set forth on Schedule 4.1
and for general corporate purposes in the ordinary course of its business. No
part of the proceeds of any Loans hereunder will be used (a) for "purchasing" or
"carrying" any "margin security" or "margin stock" within the respective
meanings of each of the quoted terms under Regulations U and X of the Board of
18
Governors of the Federal Reserve System as now and from time to time hereafter
in effect unless (i) the Company shall have theretofore furnished to the Banks a
statement on Federal Reserve Form U-1 with respect to such Loans or (ii) not
more than 25% of the value of the assets of either the Company or the Company
and its Subsidiaries on a consolidated basis, respectively, is represented by
"margin stock" as so defined, or (b) for any purpose which violates, or which
would be inconsistent with, the provisions of the Regulations of the Board of
Governors of the Federal Reserve System.
4.2. ANNUAL/COMMITMENT FEES. The Company agrees to pay to the
----------------------
Administrative Agent for the accounts of the Banks in accordance with their
respective Commitment Percentages:
(a) an annual fee (the "Annual Fee") computed at the rate of
0.025% per annum on the amount of the Total Commitment, and payable on the date
hereof and on each successive anniversary of the date hereof up to but not
including the Termination Date or such earlier date as the Commitment shall
terminate as provided herein, and
(b) an unused commitment fee (the "Commitment Fee") from and
including the date hereof to the Termination Date, computed at the rate of
0.375% per annum on the average daily amount of the Available Commitment during
the period for which payment is made, payable quarterly on the last day of each
March, June, September and December and on the Termination Date or such earlier
date as the Commitment shall terminate as provided herein, commencing on the
first of such dates to occur after the date hereof.
4.3. AGENTS' FEES. The Company shall pay to each of the Administrative
------------
Agent, Syndication Agent, and Documentation Agent on the date hereof an agent's
closing fee for each agent's own respective account, and shall pay to the
Administrative Agent on the date hereof and on each anniversary of such date, up
to but not including the Termination Date or such earlier date as the Commitment
shall terminate as provided herein, an administration fee for the Administrative
Agent's own account, all as set forth in certain letter agreements dated as of
February 28, 1997.
4.4. COMPUTATION OF INTEREST AND FEES. (a) Interest in respect of Base
--------------------------------
Rate Loans shall be calculated on the basis of a 365-day year for the actual
number of days elapsed (including the first day but excluding the last day).
Commitment fees and interest in respect of Eurodollar Loans and Swing Line Loans
shall be calculated on the basis of a 360-day year for the actual number of days
elapsed. The Administrative Agent shall as soon as practicable notify the
Company and the Banks of each determination of a Eurodollar Rate. Any change in
the interest rate on a Loan resulting from a change in the Base Rate shall
become effective as of the opening of business on the day on which such change
in the Base Rate is announced. The Administrative Agent shall as soon as
practicable notify the Company of the effective date and the amount of each such
change. The outstanding amount of the Loans as reflected on the Administrative
Agent's records from time to time shall be considered correct and binding on the
Company and the Banks unless within five Business Days after receipt of any
notice by the Administrative Agent of such outstanding amount, the Company or
any of the Banks, as the case may be, shall notify the Administrative Agent to
the contrary.
19
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Company in the absence of manifest error. The Administrative Agent shall, at
the request of the Company, deliver to the Company a statement showing the
quotations used by the Administrative Agent in determining any interest rate
pursuant to Subsection 2.4(a).
4.5. INABILITY TO DETERMINE INTEREST RATE. In the event that the
------------------------------------
Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the Company) that, by reason of circumstances
affecting the eurodollar interbank markets, adequate and reasonable means do not
exist for ascertaining the Eurodollar Rate applicable pursuant to Subsection
2.4(a) for any requested Interest Period with respect to a proposed Loan that
the Company has requested be made as a Eurodollar Loan, the Administrative Agent
shall forthwith give telex or telecopy notice of such determination to the
Company and the Banks at least one day prior to the proposed Borrowing Date for
such Eurodollar Loan. If such notice is given, any requested Eurodollar Loan
shall be made as a Base Rate Loan. Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans may be requested by the
Company.
4.6. OVERDUE AMOUNTS; INTEREST PAYMENTS.
----------------------------------
(a) Overdue principal of any Loan and (to the extent
permitted by law) overdue interest on the Loans and all other overdue amounts
payable hereunder shall, without limiting any rights of the Administrative Agent
under Section 9, bear interest at a rate per annum which is 2% above the Base
Rate until paid in full (after as well as before judgment).
(b) Interest on each Loan shall be payable in arrears on
each Interest Payment Date with respect thereto and after the occurrence of any
Event of Default, shall be payable upon demand.
4.7. PAYMENTS. All payments (including prepayments) to be made by the
--------
Company on account of principal, interest and fees shall be made without set off
or counterclaim and shall be made to the Administrative Agent for the accounts
of the Banks at the Administrative Agent's office set forth in Subsection 12.2
in lawful money of the United States of America and in immediately available
funds. If any payment hereunder (other than payments on the Eurodollar Loans)
becomes due and payable on a day other than a Business Day, such payment shall
be extended to the next succeeding Business Day and, with respect to payments of
principal, interest thereon shall be payable at the Base Rate. If any payment on
a Eurodollar Loan becomes due and payable on a day other than a Eurodollar
Business Day, the maturity thereof shall be extended to the next succeeding
Eurodollar Business Day unless the result of such extension would be to extend
such payment into another calendar month in which event such payment shall be
made on the immediately preceding Eurodollar Business Day.
4.8. FOREIGN TAXES. All payments made by the Company under this
-------------
Agreement shall be made free and clear of, and without reduction for or on
account of, any present or future income, stamp or other taxes, levies, imposts,
20
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority excluding
income and franchise taxes of the United States of America or any political
subdivision or taxing authority thereof or therein (including Puerto Rico), and
the country in which the Administrative Agent's Eurodollar Lending Office is
located or any political subdivision or taxing authority thereof or therein
(such non-excluded taxes being herein called "Foreign Taxes"). If any Foreign
Taxes are required to be withheld from any amounts payable to the Banks
hereunder or under the Notes, the amounts so payable to the Banks shall be
increased to the extent necessary to yield to the Banks (after payment of all
Foreign Taxes) interest or any such other amounts payable hereunder at the rates
or in the amounts specified in this Agreement and the Notes. Whenever any
Foreign Tax is payable by the Company, as promptly as possible thereafter, the
Company shall send to the Administrative Agent a certified copy of an original
official receipt showing payment thereof. If the Company fails to pay any
Foreign Taxes when due to the appropriate taxing authority or fails to remit to
the Administrative Agent the required receipts or other required documentary
evidence, the Company shall indemnify the Administrative Agent and the Banks for
any incremental taxes, interest or penalties that may become payable by the
Banks as a result of any such failure.
4.9. ILLEGALITY. Notwithstanding any other provisions herein, (i) if
----------
any Requirement of Law enacted after the date hereof, or (ii) if any change in
the interpretation or application of any Requirement of Law as in effect on the
date hereof, shall make it unlawful for the Banks to make or maintain Eurodollar
Loans as contemplated by this Agreement, (a) the Commitment to make Eurodollar
Loans shall forthwith be cancelled and (b) the Loans then outstanding as
Eurodollar Loans, if any, shall be repaid on the last day of the Interest Period
therefor, or within such earlier period as required by law, and reborrowed as
Base Rate Loans. If any such prepayment of a Eurodollar Loan is made on a day
which is not the last day of the Interest Period therefor, the Company shall pay
to the Administrative Agent for the accounts of the Banks such amounts, if any,
as may be required pursuant to Subsection 4.11.
4.10. ADDITIONAL COSTS, ETC.
---------------------
(a) In the event that any Requirement of Law or any change therein or
in the interpretation or application thereof or compliance by any Bank with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority or any agency or instrumentality thereof:
(i) does or shall subject any Bank to any tax of any kind
whatsoever other than taxes imposed on or measured by the net income or any
franchise taxes imposed in lieu of a tax on or measured by net income of such
Bank or any Participant (such non-excluded items being hereinafter referred to
as "Taxes") with respect to this Agreement, the Notes or any Loans made
hereunder, or changes the basis of taxation of payments to such Bank of
principal, Annual Fees, Commitment Fees, interest or any other amount payable
hereunder (except for changes in the rate of tax on the overall net income of
such Bank);
(ii) does or shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement against assets
held by, or deposits or other liabilities in or for the account of, advances or
21
loans by, or other credit extended by, or any other acquisition of funds by, any
office of such Bank which are not otherwise included in the determination of the
Eurodollar Rate; or
(iii) does or shall impose on such Bank any other
condition;
and the result of any of the foregoing is, in respect of Eurodollar Loans, to
increase the cost to such Bank of making, renewing or maintaining Loans or
extensions of credit hereunder or to reduce any amount receivable hereunder,
then the Company shall promptly pay to the Administrative Agent, for the account
of such Bank, upon demand, any additional amounts necessary to compensate such
Bank for such additional cost or reduced amount receivable which such Bank deems
to be material as determined by such Bank with respect to such Eurodollar Loans.
If such Bank becomes entitled to claim any additional amounts pursuant to this
subsection, it shall promptly notify the Administrative Agent which will
promptly notify the Company of the event by reason of which such Bank has become
so entitled. A statement as to any additional amounts payable pursuant to the
foregoing sentence submitted by the Administrative Agent to the Company shall be
conclusive in the absence of manifest error. This covenant shall survive the
termination of this Agreement and payment of the Notes.
(b) If any change in, or the introduction, adoption, effectiveness,
interpretation, reinterpretation or phase-in of, any law or regulation,
directive, guideline, decision or request (whether or not having the force of
law) of any court, central bank, regulator or other Governmental Authority
affects or would affect the amount of capital required or expected to be
maintained by any Bank or any corporation controlling any Bank, and such Bank
determines (in its sole and absolute discretion) that the rate of return on such
Bank's or such controlling corporation's capital as a consequence of its
obligation hereunder is reduced to a level below that which such Bank or such
controlling corporation could have achieved but for the occurrence of any such
circumstance, then, in any such case, upon the notice from time to time by the
Administrative Agent or such Bank to the Company, the Company shall pay to the
Administrative Agent, for the account of such Bank, on demand, any additional
amount or amounts as may be sufficient to compensate such Bank or such
controlling corporation for such reduction in rate of return. A statement of the
Administrative Agent or such Bank as to any such additional amount or amounts
(including calculations thereof in reasonable detail) shall, in the absence of
manifest error, be conclusive and binding on the Company. In determining such
amount or amounts, such Bank may use any method of averaging and attribution
that it (in its sole and absolute discretion) shall deem applicable. This
covenant shall survive the termination of this Agreement and payment of the
Notes.
(c) Any Foreign Recipient, no later than the date of the initial Loan
(or the date of assignment or transfer, as the case may be) and, subject to
clause (e) below, annually (or at such other times as the Company may reasonably
request) thereafter, shall timely deliver two accurate and complete signed
originals of either of Internal Revenue Forms 1001 or 4224 (or any successor of
such form) to the Company (or in the case of a Participant which holds a
participation interest which it acquired from any Bank, to such Bank which shall
22
provide copies thereof to the Company), in either case, indicating that all
payments by the Company of principal of, and interest on, the Loans and all
other amounts payable hereunder to such Foreign Recipient may be made free and
clear of, and without deduction for, any United States withholding tax. In
addition, if required under statute, treaty, regulation, or administrative
practice of the United States, the Foreign Recipient that is claiming exemption
from U.S. withholding tax under a treaty agrees to provide the Company with
proof of tax residence in the applicable country by providing a certified
taxpayer identification number (TIN), a certificate of residence or other
documentary evidence. The obligation to deliver forms set forth in the preceding
sentence shall not apply for any period during which any change in law or
circumstance shall have eliminated any and all obligations imposed on the
Company to withhold or deduct United States withholding tax in respect of
payments made by the Company hereunder; provided that the Foreign Recipient has
complied with all requirements, if any, imposed by statute, treaty, regulation
or administrative practice of the United States necessary to eliminate such
obligation to withhold by the Company.
(d) The Company shall not be required to pay any additional amounts to
a Foreign Recipient in respect of United States withholding tax pursuant to
Subsection 4.08 or this Subsection 4.10 if the obligation to pay such additional
amounts would not have arisen but for a failure by such Foreign Recipient to
comply with the provisions of Subsection 4.10(c) for any reason (including a
change in circumstances that renders such Foreign Recipient unable to so comply)
other than (x) a change in applicable law, regulation or official interpretation
thereof or (y) an amendment, modification or revocation of any applicable tax
treaty or a change in official position regarding the application or
interpretation thereof, in each case after the date hereof (and in the case of a
Participant, after the date of assignment or transfer). In no event, however,
will the Company be required to pay additional amounts if any obligation to pay
such additional amounts would not have arisen but for the failure of the Foreign
Recipient to comply with any requirement under a statute, treaty, regulations,
or administrative practice of the United States to establish exemption from all
or part of the tax in respect of which the additional amount would otherwise be
paid.
(e) If, solely as a result of an event described in clause (x) or (y)
of Subsection 4.10(d), after the date hereof (or, in the case of a Participant,
after the date of assignment or transfer), (i) any Foreign Recipient is unable
to furnish the Company with a form otherwise required to be delivered by it
pursuant to Subsection 4.10(c), or (ii) any Bank or any Foreign Recipient makes
any payment or becomes liable to make any payment on account of any Taxes, other
than a United States withholding tax, with respect to payments by the Company
hereunder, the Company may, at its option, either (x) prepay the Loans held by
such Bank (or such Foreign Recipient) or (y) continue to make payments to the
Administrative Agent on behalf of such Bank or such Foreign Recipient under the
terms of this Agreement and the Notes, which payments shall be made in
accordance with the provisions hereof if the condition set forth in the next
succeeding sentence is satisfied. If the Company exercises its option under
clause (y) of the preceding sentence, the Company's obligation to make payments
to the Administrative Agent on behalf of such Bank (or such Foreign Recipient)
under the terms of this Agreement and the Notes without deduction for Taxes
shall be conditioned on such Bank (or such Foreign Recipient), prior to the time
that the next payment under the Notes is due (and thereafter as is required by
23
applicable law), having furnished the Company with such certificate as may be
required, and having taken such other steps as reasonably may be available to
it, under applicable tax laws and any applicable tax treaty or convention to
obtain an exemption from, or reduction (to the lowest applicable rate) of, such
Taxes.
4.11. INDEMNITY. The Company agrees to indemnify each Bank and to hold
---------
each Bank harmless from and against any loss, cost or expense or loss of margin
that such Bank may sustain or incur as a consequence of (i) default by the
Company in payment of the principal amount of or any interest on any Eurodollar
Loans as and when due and payable, including any such loss or expense arising
from interest or fees payable by such Bank to lenders of funds obtained by it in
order to maintain its Eurodollar Loans, (ii) default by the Company in making a
borrowing or conversion after the Company has given (or is deemed to have given)
a notice of borrowing or conversion in accordance with Subsections 2.3 and 2.5
hereof, (iii) default by the Company in making any prepayment of a Loan after
the Company has given a notice in accordance with Subsection 2.7 hereof or (iv)
the making of any payment of a Eurodollar Loan (including, without limitation,
any prepayment made as a result of action taken under Subsection 4.9 or as a
result of the Administrative Agent's exercise of rights under Section 9 hereof)
on a day that is not the last day of the applicable Interest Period with respect
thereto, or the making of any payment on a Swing Line Loan on a day other than
the maturity date thereof, including (in the case of either such Eurodollar Loan
or Swing Line Loan payments) interest or fees payable by such Bank to lenders of
funds obtained by it in order to maintain any such Loans. This covenant shall
survive termination of this Agreement and payment of the Notes.
SECTION 5. REPRESENTATIONS AND WARRANTIES
------------------------------
To induce the Banks to enter into this Agreement and to make the Loans
herein provided for, the Company hereby covenants, represents and warrants to
the Banks that:
5.1. FINANCIAL CONDITION. The consolidated balance sheet of the Company
-------------------
and its consolidated Subsidiaries as at December 31, 1996, and the related
consolidated statements of income, statements of changes in shareholders equity
and statements of cash flows for the fiscal year ended on such date, certified
by Coopers & ▇▇▇▇▇▇▇, copies of which have heretofore been furnished to the
Banks, are complete and correct and present fairly in accordance with GAAP the
consolidated financial condition of the Company and its consolidated
Subsidiaries as at such date, and the consolidated results of their operations
and changes in cash flows for the fiscal year then ended. All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently with the preceding year.
5.2. NO CHANGE. Except as set forth in the filings of the Company with
---------
the Securities and Exchange Commission prior to the date hereof, copies of which
have been delivered to the Banks, since December 31, 1996 there has been no
material adverse change in the business, operations, assets or financial or
other condition of the Company and its Subsidiaries taken as a whole.
5.3. CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each of the Company and
----------------------------------------
its Subsidiaries (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation, (b) has the corporate
power and authority and the legal right to own and operate its property, to
lease the property it operates and to conduct the business in which it is
24
currently engaged, (c) is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, except in those jurisdictions in which the failure to be so
qualified or in good standing would not be reasonably likely to have a material
adverse effect upon the business, operations or condition, financial or
otherwise, of the Company and its Subsidiaries taken as a whole, and (d) is in
compliance with all Requirements of Law, except (with reference to each of
clauses (a), (b), (c) and (d) above) to the extent that the failure to comply
therewith would not, in the aggregate, be reasonably likely to have a material
adverse effect on the business, operations, property or financial or other
condition of the Company and its Subsidiaries taken as a whole, and would not be
reasonably likely to have a material adverse affect on the ability of the
Company to perform its obligations under this Agreement and the Notes.
5.4. CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The
-------------------------------------------------------
Company has the corporate power and authority and the legal right to make,
deliver and perform this Agreement and the Notes and to borrow hereunder and has
taken all necessary corporate action to authorize the borrowings on the terms
and conditions of this Agreement and the Notes and to authorize the execution,
delivery and performance of this Agreement and the Notes. No consent or
authorization of, filing with, or other act by or in respect of any Governmental
Authority, is required in connection with the borrowings hereunder or with the
execution, delivery, performance, validity or enforceability of this Agreement
or the Notes. This Agreement has been, and the Notes will be, duly executed and
delivered on behalf of the Company and this Agreement constitutes, and the Notes
when executed and delivered will constitute, legal, valid and binding
obligations of the Company enforceable against the Company in accordance with
their terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally.
5.5. NO LEGAL BAR. The execution, delivery and performance of this
------------
Agreement and the Notes, the borrowings hereunder and the use of the proceeds
thereof, (a) will not violate any Requirement of Law, (b) will not violate any
Contractual Obligation of the Company or any of its Subsidiaries, and (c) will
not result in, or require, the creation or imposition of any Lien on any of its
or their respective properties or revenues pursuant to any Requirement of Law or
Contractual Obligation, except in the case of clauses (b) and (c) any
contractual violations and/or Liens which in the aggregate would not be
reasonably likely to have a material adverse effect on the business, operations,
property or financial or other condition of the Company and its Subsidiaries
taken as a whole and would not be reasonably likely to have a material adverse
affect on the ability of the Company to perform its obligations under this
Agreement and the Notes.
5.6. NO MATERIAL LITIGATION. Except as set forth in the filings of the
----------------------
Company with the Securities and Exchange Commission, copies of which have been
delivered to the Banks, no litigation, investigation or proceeding of or before
any arbitrator or Governmental Authority is pending or, to the knowledge of the
Company, threatened by or against the Company or any of its Subsidiaries or
25
against any of its or their respective properties or revenues (a) with respect
to this Agreement or the Notes or any of the transactions contemplated hereby,
or (b) which would be reasonably likely to result in any material adverse change
in the business, operations, property or financial or other condition of the
Company and its Subsidiaries taken as a whole.
5.7. NO DEFAULT. Neither the Company nor any of its Subsidiaries is in
----------
default under or with respect to any Contractual Obligation in any respect which
would be reasonably likely to be materially adverse to the business, operations,
property or financial or other condition of the Company and its Subsidiaries
taken as a whole, or which would be reasonably likely to materially adversely
affect the ability of the Company to perform its obligations under this
Agreement and the Notes. No Default or Event of Default has occurred and is
continuing.
5.8. OWNERSHIP OF PROPERTY; LIENS. Each of the Company and its
----------------------------
Subsidiaries (a) has good record and marketable title in fee simple to or valid
leasehold interests in all its real property, and good title to all its other
property (except that such representation is not made for any such property with
a book value of $1,000,000 or less provided that the aggregate book value of
such property for which such representation is not made shall not exceed
$10,000,000), and (b) none of such property is subject to any Lien, except as
permitted in Subsection 8.4, except (with reference to clauses (a) and (b)) any
defects in title or Liens which in the aggregate would not be reasonably likely
to have a material adverse effect on the business, operations, property or
financial or other condition of the Company and its Subsidiaries taken as a
whole and would not be reasonably likely to have a material adverse affect on
the ability of the Company to perform its obligations under this Agreement and
the Notes.
5.9. NO BURDENSOME RESTRICTIONS. No Contractual Obligation of the
--------------------------
Company or any of its Subsidiaries and no Requirement of Law materially
adversely affects, or insofar as the Company may reasonably foresee may so
affect, the business, operations, property or financial or other condition of
the Company and its Subsidiaries taken as a whole.
5.10. TAXES. Each of the Company and its Subsidiaries has filed or
-----
caused to be filed all tax returns which to the knowledge of the Company are
required to be filed, and has paid all taxes shown to be due and payable on said
returns or on any assessments made against it or any of its property and all
other taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than (i) those the amount or validity of which is
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the Company or its Subsidiaries, as the case may be or (ii) those which
if not paid would not, either individually or in the aggregate, be reasonably
likely to have a material adverse effect upon the business, operations, property
or financial or other condition of the Company and its Subsidiaries taken as a
whole); and no tax liens have been filed (other than those which, if foreclosed,
would not, either individually or in the aggregate, be reasonably likely to have
a material adverse effect upon the business, operations, property or financial
or other condition of the Company and its Subsidiaries taken as a whole) and, to
the knowledge of the Company, no claims are being asserted with respect to any
such taxes, fees or other charges.
5.11. FEDERAL REGULATIONS. Neither the Company nor any of its
-------------------
Subsidiaries is engaged or will engage, principally or as one of its important
26
activities, in the business of extending credit for the purpose of "purchasing"
or "carrying" any "margin stock" within the respective meanings of each of the
quoted terms under Regulations U and X of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect. No part of the
proceeds of any Loans hereunder will be used (a) for "purchasing" or "carrying"
"margin stock" as so defined unless (i) the Company shall have theretofore
furnished to the Banks a statement on Federal Reserve Form U-1 with respect to
such Loans or (ii) not more than 25% of the value of the assets of either the
Company or the Company and its Subsidiaries on a consolidated basis,
respectively is represented by "margin stock" as so defined, or (b) for any
purpose which violates, or which would be inconsistent with, the provisions of
the Regulations of such Board of Governors.
5.12. ERISA. As of January 1, 1997 the actuarially determined aggregate
-----
amount of unfunded vested benefits under the Plans administered by the Company
and its Subsidiaries was less than $1,000,000. The Company and its Subsidiaries
are in compliance with all applicable provisions of ERISA except for any
noncompliance which, either individually or in the aggregate with all other
instances of such noncompliance, would not be reasonably likely to have a
material adverse effect upon the business, operations or condition, financial or
otherwise, of the Company and its Subsidiaries taken as a whole.
5.13. INVESTMENT COMPANY ACT. The Company is not an "investment
----------------------
company" or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
5.14. FULL DISCLOSURE. Neither this Agreement nor any other
---------------
certificate, report, statement or other writing furnished to the Administrative
Agent or the Banks by the Company in connection with the negotiation of this
Agreement, at the time of execution or delivery, contained any untrue fact or
omits to state a material fact necessary to make the statements contained herein
or therein, in light of the circumstances under which they were made, not
misleading.
5.15. CERTAIN CONTINGENT OBLIGATIONS. As of June 30, 1997, each of
------------------------------
Madison, CLIC and WMAC Credit has assets in excess of its liabilities. The
guaranties or indemnification undertakings given by Madison, CLIC and/or WMAC
Credit referenced in the definition of Contingent Obligation are obligations of
Madison, CLIC or WMAC Credit, as the case may be, without recourse to the
Company.
5.16. ENVIRONMENTAL COMPLIANCE. With respect to the Real Estate and
------------------------
operations thereon by the Company or its Subsidiaries, and except as set forth
on Schedule 5.16, to the knowledge of the Company:
(a) none of the Company, its Subsidiaries or any operator of
the Real Estate which is a Subsidiary, has received any written notice from any
Governmental Authority of any actual or alleged violation of any Environmental
Laws which has not heretofore been resolved, which violation would be reasonably
likely to have a material adverse effect on the business, assets or financial
condition of the Company and its Subsidiaries taken as a whole;
27
(b) neither the Company nor any of its Subsidiaries has
received any written notice from any Governmental Authority or other third party
(i) that any one of them is currently identified by the United States
Environmental Protection Agency as a potentially responsible party under the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended, with respect to a site listed on the National Priorities List, 40
C.F.R. Part 300 Appendix B, or that any of them is currently identified as a
potentially responsible party for environmental damage under any state or local
Environmental Laws; (ii) that any Hazardous Substances which any one of them has
generated, transported or disposed of has been found at any site at which a
federal, state or local governmental agency has conducted or has ordered that
the Company or any of its Subsidiaries conduct a remedial investigation, removal
or other response action pursuant to any Environmental Law and which has not
heretofore been resolved or from which the Company or its Subsidiaries have not
heretofore been dismissed; or (iii) that it is currently a named party to any
claim, action, cause of action, complaint, or legal or administrative proceeding
(in each case, contingent or otherwise) arising out of any third party's
incurrence of costs, expenses, losses or damages of any kind whatsoever in
connection with the release of Hazardous Substances and which would be
reasonably likely to have a material adverse effect on the business, assets or
financial condition of the Company and its Subsidiaries taken as a whole; and
(c) in the conduct of its business by the Company and its
Subsidiaries, the Company or its Subsidiaries have exercised reasonable
diligence in taking appropriate measures so that no Hazardous Substances are
generated, stored, used or disposed of except in material compliance with
applicable Environmental Laws.
5.17. NONRECOURSE INDEBTEDNESS. Schedule 5.17 sets forth, as of June
------------------------
30, 1997, the aggregate outstanding amount on a consolidated basis of the
Nonrecourse Debt.
SECTION 6. CONDITIONS PRECEDENT
--------------------
6.1. CONDITIONS OF INITIAL LOAN. The obligation of the Banks to make
--------------------------
Loans hereunder on the first Borrowing Date is subject to the satisfaction of
the following conditions precedent:
(a) Loan Documents. This Agreement shall have been duly
executed and delivered to the Administrative Agent by the respective parties and
shall be in full force and effect. The Administrative Agent shall have received
each of the Notes, conforming to the requirements hereof and executed by a duly
authorized officer of the Company.
(b) Legal Opinion. The Banks shall have received an
opinion addressed to the Administrative Agent and the Banks of Weil, Gotshal &
▇▇▇▇▇▇ LLP, counsel to the Company, dated the first Borrowing Date,
substantially in the form of Exhibit C. Such opinion shall also cover such other
matters incident to the transactions contemplated by this Agreement as the
Administrative Agent shall reasonably require.
(c) Payment of Existing Notes, Etc. The Administrative
Agent shall have received evidence in form and substance satisfactory to it that
the principal of and interest on the notes and all other obligations and
28
liabilities of the Company under the credit agreements listed on Schedule 4.1
shall have been paid in full or discharged; and each of the Banks holding notes
of the Company evidencing Indebtedness to be paid off listed on Schedule 4.1
shall have returned such notes to the Company or other arrangements satisfactory
to the Company have been made with respect thereto.
(d) Officer's Certificate. The Administrative Agent shall
have received an Officer's Certificate dated the first Borrowing Date,
substantially in the form of Exhibit D, with appropriate insertions and
attachments satisfactory to the Administrative Agent and its counsel, executed
by the Secretary or Assistant Secretary of the Company.
(e) Additional Matters. All other documents and legal
matters in connection with the transactions contemplated by this Agreement shall
be satisfactory in form and substance to the Administrative Agent and its
counsel.
6.2. CONDITIONS TO ALL LOANS. The obligation of the Banks to make any
-----------------------
Loans to be made by them hereunder (including the initial Loans) is subject to
the satisfaction of the following conditions precedent on the relevant Borrowing
Date:
(a) Representations and Warranties. The representations
and warranties contained in Section 5 shall be correct on and as of the
Borrowing Date for such Loan with the same effect as if made on and as of such
date.
(b) No Existing Default. No Default, Event of Default or
Terminating Event shall have occurred and be continuing hereunder on the
Borrowing Date with respect to such Loan or after giving effect to the Loans to
be made on such Borrowing Date.
Each borrowing by the Company hereunder shall constitute a
representation and warranty by the Company hereunder as of the date of each such
borrowing that the conditions in clauses (a) and (b) of this Subsection
applicable thereto have been satisfied.
SECTION 7. AFFIRMATIVE COVENANTS
---------------------
The Company hereby agrees that, so long as the Commitment remains in
effect, any Note remains outstanding and unpaid or any other amount is owing to
any of the Banks hereunder, the Company shall, and in the case of the agreements
set forth in Subsections 7.3, 7.4, 7.5, and 7.6 shall cause each of its
Subsidiaries to:
7.1. FINANCIAL STATEMENTS. Furnish to each of the Banks:
--------------------
(a) as soon as available, but in any event within one
hundred days after the end of each fiscal year of the Company, a copy of (i) the
consolidated balance sheet of the Company and its consolidated Subsidiaries as
at the end of such year and the related consolidated statements of income,
statements of change in shareholder equity and statements of cash flows for such
year, setting forth in each case in comparative form the figures for the
previous year, certified, without a going concern or like qualification or
exception arising out of the scope of the audit, by independent certified public
accountants of nationally recognized standing not unacceptable to the
▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (▇▇) the consolidating balance sheet of the Company and
its consolidated Subsidiaries as at the end of such fiscal year and the related
consolidating statements of income for such fiscal year, showing in each case
inter-company eliminations, certified by a Responsible Officer as being fairly
stated in all material respects when considered in relation to the consolidated
financial statements of the Company and its consolidated Subsidiaries taken as a
whole; and
(b) as soon as available, but in any event not later than
fifty-five days after the end of each of the first three quarterly periods of
each fiscal year of the Company, (i) the Company's quarterly report to
shareholders on Form 10-Q, as filed with the Securities and Exchange Commission,
certified by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments) and (ii) the
consolidating balance sheet of the Company and its Subsidiaries as at the end of
each such quarter, showing inter-company eliminations, and the related
consolidating statements of income, showing inter-company eliminations,
certified by a Responsible Officer as being fairly stated in all material
respects;
all such financial statements to be prepared in accordance with GAAP applied
consistently throughout the periods reflected therein except as approved by such
accountants or Responsible Officer, as the case may be, and disclosed therein.
7.2. CERTIFICATES; OTHER INFORMATION. Furnish to each of the Banks:
-------------------------------
(a) concurrently with the delivery of the financial
statements referred to in Subsection 7.1(a) above, a certificate of the
independent certified public accountants certifying such financial statements
stating that in making the examination necessary therefor no knowledge was
obtained of any Default or Event of Default, except as specified in such
certificate;
(b) concurrently with the delivery of the financial
statements referred to in Subsections 7.1(a) and (b) above, a certificate of a
Responsible Officer (i) stating that, to the best of such officer's knowledge,
the Company during such period has observed or performed all of its covenants
and other agreements, and satisfied every condition contained in this Agreement
and in the Notes to be observed, performed or satisfied by it, and that such
officer has obtained no knowledge of any Default or Event of Default except as
specified in such certificate, and (ii) showing in detail the calculations
supporting such statement in respect of Subsections 8.1, 8.2, 8.3, 8.7, and 8.8;
(c) within ten days after the same are sent, copies of
all financial statements and reports which the Company sends to its
stockholders, and within ten days after the same are filed, copies of all
financial statements and reports which the Company may make to, or file with,
the Securities and Exchange Commission or any successor or analogous
Governmental Authority;
(d) as soon as available, but in any event within thirty
days after filing with the appropriate insurance department, the annual
statements for each Insurance Subsidiary as filed with the insurance department
in its state of domicile, provided that the Company shall deliver one copy
30
thereof to the Administrative Agent who shall make such copy available upon
request to the Banks, and upon request by any Bank the Company shall deliver
additional copies thereof to such Bank; and
(e) promptly, any such additional financial and other
information as the Administrative Agent or any Bank may from time to time
reasonably request.
7.3. PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise satisfy at or
----------------------
before maturity or before they become delinquent, as the case may be, all its
Indebtedness and other obligations of whatever nature, except (a) when the
amount or validity thereof is currently being contested in good faith by
appropriate proceedings and reserves in conformity with GAAP with respect
thereto have been provided on the books of the Company or its Subsidiaries, as
the case may be, or (b) where the failure so to pay, discharge or satisfy would
not be reasonably likely to have a material adverse effect on the business,
operations, property or financial or other condition of the Company and its
Subsidiaries taken as a whole; provided that for purposes of this Subsection
7.3, the term "Indebtedness" shall not include any Nonrecourse Debt.
7.4. CONDUCT OF BUSINESS, AND MAINTENANCE OF EXISTENCE. (a) Continue to
-------------------------------------------------
engage in business of the same general type as now conducted by it, and
preserve, renew and keep in full force and effect its corporate existence and
take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business, provided, however,
that a Permitted Distribution shall not be prohibited or limited by this
Subsection 7.4 and further provided that, subject to Section 8 hereof, this
Subsection 7.4 shall not prohibit the Company or any Subsidiary from taking any
action if such action would not reasonably be likely to have a material adverse
effect upon the business, operations, property or financial or other condition
of the Company and its Subsidiaries taken as a whole; and (b) comply with all
Contractual Obligations and Requirements of Law except to the extent that the
failure to comply therewith would not be reasonably likely to, in the aggregate,
have a material adverse effect on the business, operations, property or
financial or other condition of the Company and its Subsidiaries taken as a
whole.
7.5. MAINTENANCE OF PROPERTY, INSURANCE. Keep all property useful and
----------------------------------
necessary in its business in good working order and condition, except where the
failure to comply herewith would not be reasonably likely to have a material
adverse effect on the business, operations, property, or financial or other
condition of the Company and its Subsidiaries taken as a whole; to the extent
obtainable on terms which its management deems reasonable, maintain with
financially sound and reputable insurance companies insurance on all its
property against such casualties and contingencies and in such types and amounts
as, in the judgment of its executive officers, is deemed adequate; and furnish
to the Administrative Agent, upon written request, full information as to the
insurance carried.
7.6. INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. Keep
------------------------------------------------------
proper books of record and account in which entries, which are accurate and
complete in all material respects, in conformity with GAAP and Requirements of
Law shall be made of all dealings and transactions in relation to its business
and activities; and permit the Banks, through the Administrative Agent or any of
31
their designated representatives, to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any reasonable
time and as often as may reasonably be desired, and to discuss the business,
investments, operations, properties and financial and other condition of the
Company and its Subsidiaries with officers and employees of the Company and its
Subsidiaries and with its independent certified public accountants.
7.7. NOTICES. Promptly give notice in writing to each of the Banks:
-------
(a) of the occurrence of any Default, Terminating Event
or Event of Default;
(b) of any (i) default or event of default under any
Contractual Obligation of the Company or any of its Subsidiaries or (ii)
litigation, investigation or proceeding which may exist at any time between the
Company or any of its Subsidiaries and any Governmental Authority, which in
either case would be reasonably likely to have a material adverse effect on the
business, operations, property or financial or other condition of the Company
and its Subsidiaries taken as a whole;
(c) of any litigation or proceeding affecting the Company
or any of its Subsidiaries in which the relief sought is $30,000,000 or more and
not covered by insurance, or in which injunctive or similar relief is sought
and, if granted, would be reasonably likely to have a material adverse effect on
the business, assets, operations, financial or other condition of the Company
and its Subsidiaries taken as a whole;
(d) of the following events, as soon as possible and in
any event within 30 days after the Company knows or has reason to know thereof:
(i) the occurrence or expected occurrence of any Reportable Event with respect
to any Plan, or (ii) the institution of proceedings or the taking or expected
taking of any other action by PBGC or the Company or any Commonly Controlled
Entity to terminate, withdraw or partially withdraw from any Plan and with
respect to a Multiemployer Plan, the reorganization or insolvency of the Plan,
and in addition to such notice, deliver to each of the Banks whichever of the
following may be applicable: (A) a certificate of a Responsible Officer of the
Company setting forth details as to such Reportable Event and the action that
the Company or Commonly Controlled Entity proposes to take with respect thereto,
together with a copy of any notice of such Reportable Event that may be required
to be filed with PBGC, or (B) any notice delivered by PBGC evidencing its intent
to institute such proceedings or any notice to PBGC that such Plan is to be
terminated, as the case may be; and
(e) of a material adverse change in the business,
operations, property or financial or other condition of the Company, or the
Company and its Subsidiaries taken as a whole.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer of the Company setting forth details of the occurrence
referred to therein and stating what action the Company proposes to take with
respect thereto. For all purposes of clause (d) of this subsection, the Company
shall be deemed to have all knowledge of all facts attributable to the
administrator of such Plan.
32
SECTION 8. NEGATIVE COVENANTS
------------------
The Company hereby agrees that, so long as the Commitment of any Bank
remains in effect, any Note remains outstanding and unpaid or any other amount
is owing to any Bank hereunder:
8.1. TOTAL LIQUID ASSETS RATIO. At the end of any calendar quarter, the
-------------------------
Company will not permit the ratio of (a) Total Liquid Assets to (b) the sum of
(i) the principal of all outstanding consolidated Indebtedness due within twelve
months (excluding, with respect to any calculation date within twelve months of
the Termination Date, principal becoming due under this Agreement on the
Termination Date, and further excluding Indebtedness of the Company's Banking
Subsidiaries), and (ii) interest accruing within the next twelve months on all
outstanding consolidated Indebtedness determined on a pro forma basis based on
the interest rate or rates on such debt in effect on the calculation date, to be
less than 1 to 1.
8.2. MAINTENANCE OF CONSOLIDATED TANGIBLE NET WORTH. At any time during
----------------------------------------------
each fiscal year or portion thereof commencing on the date hereof the Company
will not permit Consolidated Tangible Net Worth to be less than an amount equal
to the sum of (i) $800,000,000 (the "Baseline Amount"), plus (ii) an amount
equal to the sum of 40% of the Consolidated Net Income of the Company and its
Subsidiaries (as determined in accordance with GAAP) for each prior full
calendar year commencing after December 31, 1997 (provided (A) that the amount
determined pursuant to clause (ii) shall be equal to zero for any calendar year
for which there is a net loss and (B) that the amounts included in net income
(determined in accordance with GAAP) resulting from changes in accounting
principles to the extent that such changes increase intangibles shall not be
included in net income for purposes of this Subsection).
8.3. DEBT LEVERAGE RATIO. The Company will not at any time permit the
-------------------
ratio of (a) Funded Debt to (b) the sum of (x) Shareholders' Equity and (y)
Funded Debt to exceed 0.6 to 1.0.
8.4. LIMITATIONS ON LIENS. The Company will not, nor shall it permit
--------------------
any Subsidiary to, at any time directly or indirectly create, incur, assume or
suffer to exist, any Lien upon any of its property, assets or revenues, whether
now owned or hereafter acquired, other than the following ("Permitted Liens"):
(a) Liens for taxes not yet due or which are being
contested in good faith and by appropriate proceedings if adequate reserves with
respect thereto are maintained on the books of the Company or its Subsidiaries,
as the case may be, in accordance with GAAP;
(b) 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;
33
(c) pledges or deposits in connection with workmen's
compensation, unemployment insurance and other social security legislation;
(d) pledges or deposits to secure the performance of
bids, trade contracts (other than for borrowed money), option agreements (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;
(e) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial 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 its Subsidiaries;
(f) Liens described in Schedule 8.4;
(g) Liens on assets owned by the Company or any
Subsidiary securing an amount not to exceed (i) $315,000,000 in the aggregate
for all such assets or (ii) $200,000,000 in the aggregate for Liens imposed in
connection with any single transaction or related series of transactions,
provided that the aggregate book value of all assets securing such Liens shall
not exceed 200% of the aggregate amounts secured thereby;
(h) pledges or deposits effected by the Company or any
Insurance Subsidiary as a condition to obtaining or maintaining any license,
permit or authorization to transact insurance or reinsurance business;
(i) deposits with insurance regulatory authorities;
(j) Liens arising under ceding reinsurance agreements
entered into by any Insurance Subsidiary; and
(k) Liens on cash and/or securities deposited with The
Chase Manhattan Bank ("Chase") as collateral for the standby letter of credit
referred to in Section 8.7 pursuant to the Collateral Agreement dated as of
October __, 1997 between Chase and the Company.
8.5. PROHIBITION OF FUNDAMENTAL CHANGES. The Company will not, nor will
----------------------------------
it permit any Subsidiary to, at any time enter into any transaction of merger or
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, transfer or
otherwise dispose of, in one transaction or a series of transactions, all or
substantially all of its business or assets, except that:
(a) any Subsidiary of the Company may be merged or
consolidated with or into the Company (provided, that, the Company shall be the
continuing or surviving corporation) or with any one or more Subsidiaries of the
Company;
34
(b) the Company or any Subsidiary may sell, lease,
transfer or otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to the Company or any Subsidiary;
(c) the Company may, or may permit a Subsidiary to,
liquidate, sell or dispose of all or substantially all of a Subsidiary's
business or assets at any time, provided that (i) the book value of the
Subsidiary business or assets being liquidated, sold or disposed of shall not
exceed 10% of the then Consolidated Tangible Net Worth of the Company, and (ii)
no Default or Event of Default then exists or shall exist after giving effect to
such liquidation, sale or disposition;
(d) for purposes of this Subsection, a Permitted
Distribution shall not constitute a transfer or disposition of all or
substantially all of the Company's business or assets; and
(e) a Permitted Voluntary Proceeding shall not be prohibited
by this Subsection.
8.6. INVESTMENTS. The Company will not nor will it permit any
-----------
Subsidiary to make or commit to make any Investment in a single Person, other
than an Investment in any Governmental Authority of the United States of
America, in an aggregate amount exceeding the then Consolidated Tangible Net
Worth of the Company.
8.7. LIMITATION ON CONTINGENT OBLIGATIONS. The Company will not, nor
------------------------------------
will it permit any Subsidiary to, create, incur, assume, guarantee, endorse or
otherwise in any way be or become responsible or liable for, directly or
indirectly, or suffer to exist Contingent Obligations in an aggregate amount for
the Company and its Subsidiaries in excess of $200,000,000; provided, that such
amount shall not include the F&H Guaranty or the reimbursement obligation of the
Company in respect of a standby letter of credit issued by Chase for the benefit
of General Electric Capital Corporation in an aggregate maximum face amount of
up to $100,000,000; and provided, further, that as of any time of determination
under this Subsection 8.7, if the aggregate amount of any then outstanding
Contingent Obligations of the Company and/or any Subsidiary would be permitted
under Subsection 8.3 hereof had the amount of such Contingent Obligations been
incurred as Funded Debt, then for the purposes of this Subsection 8.7, only 50%
of the amount of such Contingent Obligations shall be counted towards the
$200,000,000 limitation.
8.8. LIMITATION ON SUBSIDIARY INDEBTEDNESS. At the end of any calendar
-------------------------------------
quarter commencing December 31, 1997, the Company will not permit the aggregate
Indebtedness of all of the Company's consolidated Subsidiaries to be greater
than 25% of Consolidated Tangible Net Worth at such date; provided that, for
purpose of this Subsection, Indebtedness of a Subsidiary shall not include:
(i) any Indebtedness outstanding at December 31, 1996;
(ii) any Indebtedness secured by Permitted Liens ;
(iii) any Indebtedness of the Company's Banking Subsidiaries;
35
(iv) Indebtedness of any Subsidiary the ownership of
which is acquired by the Company, directly or indirectly, after the date hereof,
or which is established by the Company after the date hereof for the purpose of
acquiring assets or equity of any Person not owned, directly or indirectly, by
the Company on the date hereof; provided, that, such Indebtedness is not
guarantied by, is not secured by assets (other than assets of such Subsidiary)
of, and does not otherwise have recourse to the Company or its assets (other
than the assets of such Subsidiary); and
(v) any Indebtedness of a Subsidiary to another Subsidiary or to
the Company.
SECTION 9. EVENTS OF DEFAULT
-----------------
Upon the occurrence of any of the following events:
(a) The Company shall fail to pay any principal of the Notes
when due in accordance with the terms thereof or hereof; or
(b) The Company shall fail to pay any interest on the
Notes, any Commitment Fees, agents' fees or other sums due hereunder or under
the Notes, when the same become due in accordance with the terms thereof or
hereof, and such default shall continue unremedied for a period of five Business
Days; or
(c) Any representation or warranty made or deemed made by
the Company herein or which is contained in any certificate, document or
financial or other statement furnished at any time under or in connection with
this Agreement shall prove to have been incorrect in any material respect on or
as of the date made or deemed made; or
(d) The Company shall default in the observance or
performance of any agreement contained in Sections 7.4, 7.7 or 8; or
(e) The Company shall default in the observance or
performance of any other agreement contained in this Agreement, and such default
shall continue unremedied for a period of 30 days; or
(f) The Company or any of its Subsidiaries shall (i)
default in any payment of principal of or interest on any Indebtedness (other
than the Notes and other than any Nonrecourse Debt) or in the payment of any
Contingent Obligation, in any case having a principal amount exceeding
$30,000,000 or in the aggregate having a principal amount exceeding $50,000,000,
in either case beyond the period of grace (not to exceed 30 days), if any,
provided in the instrument or agreement under which such Indebtedness or
Contingent Obligation was created; or (ii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or Contingent Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
36
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
or beneficiary or beneficiaries of such Contingent Obligation (or a trustee or
Administrative Agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or such Contingent
Obligation to become payable, provided, however, that if any such default shall
occur in respect of the TRUPS, no Event of Default under this ss.9(f) shall be
deemed to have occurred (x) so long as no acceleration of payment obligations in
respect of the TRUPS shall have been declared in accordance with the governing
provisions thereof, or (y) if such acceleration shall have been declared, so
long as the existence of such default shall be contested in good faith by
appropriate legal proceedings by the Company and/or the issuer of the TRUPS and
the enforcement of such acceleration shall be judicially stayed pending final
judgment or settlement.
(g)(i) The Company or any Subsidiary shall commence any
case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, rehabilitation, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts (and except for the commencement of a Permitted Voluntary Proceeding), or
(B) seeking appointment of a receiver, trustee, custodian or other similar
official for it or for all or any substantial part of its assets, or the Company
or any Subsidiary shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against the Company or any
Subsidiary any case, proceeding or other action of a nature referred to in
clause (i) above which (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced against the
Company or any Subsidiary any case, proceeding or other action seeking issuance
of a warrant of attachment, execution, distraint or similar process against all
or any substantial part of its assets which results in the entry of an order for
any such relief which shall not have been vacated, discharged, or stayed or
bonded pending appeal within 60 days from the entry thereof; or (iv) the Company
or any Subsidiary shall have taken any action indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause (i), (ii)
or (iii) above; or (v) the Company or any Subsidiary shall generally not, or
shall be unable to, or shall admit in writing its inability to, pay its debts as
they become due; or
(h)(i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan, (iii) a Reportable Event shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be appointed, to
administer or to terminate, any Single Employer Plan, which Reportable Event or
institution of proceedings is, in the reasonable opinion of the Administrative
Agent, likely to result in the termination of such Plan for purposes of Title IV
of ERISA, and, in the case of a Reportable Event, the continuance of such
Reportable Event unremedied for ten days after notice of such Reportable Event
pursuant to Section 4043(a), (c) or (d) of ERISA is given or the continuance of
such proceedings for ten days after commencement thereof, as the case may be,
37
(iv) any Single Employer Plan shall terminate for purposes of Title V of ERISA,
or (v) any other event or condition shall occur or exist with respect to a
Single Employer Plan; and in each case in clauses (i) through (v) above, such
event or condition, together with all other such events or conditions, if any,
could subject the Company or any of its Subsidiaries to any tax, penalty or
other liabilities which are, in the aggregate, material in relation to the
business, operations, property or financial or other conditions of the Company
and its Subsidiaries taken as a whole; or
(i) One or more judgments or decrees shall be entered
against the Company or any of its Subsidiaries involving in the aggregate a
liability (not paid or fully covered by insurance) of $30,000,000 or more and
all such judgments or decrees shall not have been vacated, discharged, or stayed
or bonded pending appeal within 60 days from the entry thereof;
then, and in any such event, (A) if such event is an Event of Default specified
in clauses (i), (ii) or (iv) of paragraph (g) above, automatically the
Commitment shall immediately terminate and the Loan or Loans hereunder (with
accrued interest thereon) and all other amounts owing under this Agreement and
the Notes shall immediately become due and payable, and (B) if such event is any
other Event of Default, either or both of the following actions may be taken:
(I) the Administrative Agent may, and upon the request of the Majority Banks
shall, by notice of default to the Company, declare the Commitment to be
terminated forthwith whereupon the Commitment shall immediately terminate; and
(II) the Administrative Agent may, and upon the request of the Majority Banks
shall, by notice of default to the Company, declare the Loan or Loans hereunder
(with accrued interest thereon) and all other amounts owing under this Agreement
and the Notes to be due and payable forthwith, whereupon the same shall
immediately become due and payable. Except as expressly provided above in this
Section, presentment, demand, protest and all other notices of any kind are
hereby expressly waived.
SECTION 10. THE AGENTS
----------
10.1. AUTHORIZATION.
-------------
(a) Each Bank hereby irrevocably designates and appoints
BankBoston, N.A. as the Administrative Agent, Bank of America National Trust and
Savings Association as the Documentation Agent, and The Chase Manhattan Bank as
the Syndication Agent under this Agreement and irrevocably authorizes said
agents for such Bank to take such action on its behalf under the provisions of
this Agreement and to exercise such powers and perform such duties as are
expressly delegated to said agents by the terms of this Agreement together with
such other powers as are reasonably incident thereto, provided that no duties or
responsibilities not expressly assumed herein or therein shall be implied to
have been assumed by said agents.
(b) The relationship between the Administrative Agent, the
Documentation Agent and the Syndication Agent and each of the Banks is that of
an independent contractor. The use of the term "Agent" is for convenience only
and is used to describe, as a form of convention, the independent contractual
relationship between the respective party and each of the Banks. Nothing
contained in this Agreement shall be construed to create an agency (except to
the extent of the specific contractual obligations of the Administrative Agent
hereunder), trust or other fiduciary relationship between any of the
Administrative Agent, the Documentation Agent or the Syndication Agent and any
of the Banks.
38
10.2. EMPLOYEES AND AGENTS. The Administrative Agent may exercise its
--------------------
powers and execute its duties by or through employees or agents and shall be
entitled to take, and to rely on, advice of counsel concerning all matters
pertaining to its rights and duties under this Agreement. The Administrative
Agent may utilize the services of such Persons as the Administrative Agent in
its sole discretion may reasonably determine, and all reasonable fees and
expenses of any such Persons shall be paid by the Company.
10.3. NO LIABILITY. Neither the Administrative Agent nor any of its
------------
shareholders, directors, officers or employees nor any other Person assisting
them in their duties nor any Administrative Agent or employee thereof, shall be
liable for any waiver, consent or approval given or any action taken, or omitted
to be taken, in good faith by it or them hereunder, or in connection herewith,
or be responsible for the consequences of any oversight or error of judgment
whatsoever, except that the Administrative Agent or such other Person, as the
case may be, may be liable for losses due to its willful misconduct or gross
negligence.
10.4. NO REPRESENTATIONS. The Administrative Agent shall not be
------------------
responsible for the execution or validity or enforceability of this Agreement,
the Notes, or for any recitals or statements, warranties or representations made
herein or in any certificate or instrument hereafter furnished to it by or on
behalf of the Company or any of its Subsidiaries, or be bound to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
covenants or agreements herein or in any books or records of the Company or any
of its Subsidiaries. The Administrative Agent shall not be bound to ascertain
whether any notice, consent, waiver or request delivered to it by the Company or
any holder of any of the Notes shall have been duly authorized or is true,
accurate and complete. The Administrative Agent has not made nor does it now
make any representations or warranties, express or implied, nor does it assume
any liability to the Banks, with respect to the credit worthiness or financial
conditions of the Company or any of its Subsidiaries. Each Bank acknowledges
that it has, independently and without reliance upon the Administrative Agent or
any other Bank, and based upon such information and documents as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement.
10.5. PAYMENTS.
--------
(a) Payments to Administrative Agent. A payment by the Company
to the Administrative Agent hereunder for the account of any Bank shall
constitute a payment to such Bank. The Administrative Agent agrees promptly to
distribute to each Bank such Bank's pro rata share of payments received by the
Administrative Agent for the account of the Banks except as otherwise expressly
provided herein.
(b) Distribution by Administrative Agent. If in the opinion of
the Administrative Agent the distribution of any amount received by it in such
capacity hereunder or under the Notes might involve it in liability, it may
refrain from making distribution until its right to make distribution shall have
been adjudicated by a court of competent jurisdiction. If a court of competent
39
jurisdiction shall adjudge that any amount received and distributed by the
Administrative Agent is to be repaid, each Person to whom any such distribution
shall have been made shall either repay to the Administrative Agent its
proportionate share of the amount so adjudged to be repaid or shall pay over the
same in such manner and to such Persons as shall be determined by such court.
(c) Delinquent Banks. Notwithstanding anything to the contrary
contained in this Agreement, any Bank that fails to make available to the
Administrative Agent its pro rata share of any Loan, or fails to make available
to the Swing Line Bank its pro rata share of any Swing Line Loan, when and to
the full extent required by the provisions of this Agreement, shall be deemed a
Delinquent Bank and shall be deemed a Delinquent Bank until such time as such
delinquency is satisfied. A Delinquent Bank shall be deemed to have assigned any
and all payments due to it from the Company to the remaining nondelinquent Banks
for application to, and reduction of, their respective pro rata shares of all
outstanding Loans. The Delinquent Bank hereby authorizes the Administrative
Agent to distribute such payments to the nondelinquent Banks in proportion to
their respective pro rata shares of all outstanding Loans. A Delinquent Bank
shall be deemed to have satisfied in full a delinquency when and if, as a result
of application of the assigned payments to all outstanding Loans of the
nondelinquent Banks, the Banks' respective pro rata shares of all outstanding
Loans have returned to those in effect immediately prior to such delinquency and
without giving effect to the nonpayment causing such delinquency.
10.6. HOLDERS OF NOTES. The Administrative Agent may deem and treat the
----------------
payee of any Note as the absolute owner or purchaser thereof for all purposes
hereof until it shall have been furnished in writing with a different name by
such payee or by a subsequent holder, assignee or transferee.
10.7. INDEMNITY. The Banks ratably agree hereby to indemnify and hold
---------
harmless the Administrative Agent from and against any and all claims, actions
and suits (whether groundless or otherwise), losses, damages, costs, expenses
(including without limitation, any expenses for which the Administrative Agent
has not been reimbursed by the Company as required by Subsection 10.5 hereof),
and liabilities of every nature and character arising out of or related to this
Agreement, the Notes, or the transactions contemplated or evidenced hereby, or
the Administrative Agent's actions taken hereunder, except to the extent that
any of the same shall be caused by the Administrative Agent's willful misconduct
or gross negligence.
10.8. ADMINISTRATIVE AGENT AS BANK. In its individual capacity,
----------------------------
BankBoston, N.A. shall have the same obligations and the same rights, powers and
privileges in respect to its Commitment and the Loans made by it, and as the
holder of any of the Notes, as it would have were it not also the Administrative
Agent.
10.9. RESIGNATION. The Administrative Agent may resign at any time by
-----------
giving sixty (60) days prior written notice thereof to the Banks and the
Company. Upon any such resignation, the Majority Banks shall have the right to
appoint a successor Administrative Agent. Unless a Default or Event of Default
shall have occurred and be continuing, such successor Administrative Agent shall
be reasonably acceptable to the Company. If no successor Administrative Agent
shall have been so appointed by the Majority Banks and shall have accepted such
appointment within thirty (30) days after the retiring Administrative Agent's
40
giving of notice of resignation, then the retiring Administrative Agent may, on
behalf of the Banks, appoint a successor Administrative Agent, which shall be a
financial institution having a rating of not less than A or its equivalent by
Standard & Poor's Corporation. 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 Administrative Agent shall be discharged from its duties
and obligations hereunder. After any retiring Administrative Agent's
resignation, the provisions of this Agreement shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Administrative Agent.
10.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each Bank hereby
----------------------------------------------
agrees that, upon learning of the existence of a Default or an Event of Default,
it shall promptly notify the Administrative Agent thereof. The Administrative
Agent hereby agrees that upon receipt of any notice under this Subsection it
shall promptly notify the other Banks of the existence of such Default or Event
of Default.
SECTION 11. ASSIGNMENT AND PARTICIPATION
----------------------------
11.1. CONDITIONS TO ASSIGNMENT BY BANKS. Except as provided herein,
---------------------------------
each Bank may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Commitment Percentage and Commitment and the same portion of the
Loans at the time owing to it and the Notes held by it); provided that (i) each
of the Administrative Agent and, unless (x) a Default or Event of Default shall
have occurred and be continuing or (y) the Assignee is an Affiliate of the
assigning Bank, the Company shall have given its prior written consent to such
assignment, which consent will not be unreasonably withheld, (ii) each such
assignment shall be of a constant, and not a varying, percentage of all the
assigning Bank's rights and obligations under this Agreement, (iii) each
assignment shall be in an amount that is a whole multiple of $10,000,000, (iv)
the parties to such assignment shall execute and deliver to the Administrative
Agent, for recording in the Register, an Assignment and Acceptance,
substantially in the form of Exhibit E hereto (an "Assignment and Acceptance"),
together with any Notes subject to such assignment, and (v) the Company shall
not, at the time of such assignment, incur any additional expenses solely as a
result of such assignment other than as contemplated under Subsection 11.4
hereof. Upon such execution, delivery, acceptance and recording, from and after
the effective date specified in each Assignment and Acceptance, which effective
date shall be at least five (5) Business Days after the execution thereof, (i)
the assignee thereunder shall be a party hereto and, to the extent provided in
such Assignment and Acceptance, have the rights and obligations of a Bank
hereunder, and (ii) the assigning Bank shall, to the extent provided in such
assignment and upon payment to the Administrative Agent of the registration fee
referred to in Subsection 11.3, be released from its obligations under this
Agreement.
11.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS.
--------------------------------------------------------------
By executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:
41
(a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, the assigning Bank makes no representation or warranty,
express or implied, and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto;
(b) the assigning Bank makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the Company
and its Subsidiaries, or the performance or observance by the Company and its
Subsidiaries of any of their obligations under this Agreement or any other
instrument or document furnished pursuant hereto or thereto;
(c) such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements referred
to herein and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such Assignment and
Acceptance;
(d) such assignee will, independently and without reliance
upon the assigning Bank, the Administrative Agent or any other Bank and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement;
(e) such assignee represents and warrants that it is an
Eligible Assignee;
(f) such assignee appoints and authorizes the Administrative
Agent to take such action as Administrative Agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Administrative Agent by
the terms hereof, together with such powers as are reasonably incidental
thereto;
(g) such assignee agrees that it will perform all of the
obligations that by the terms of this Agreement are required to be performed by
it as a Bank;
(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance.
11.3. REGISTER. The Administrative Agent shall maintain a copy of each
--------
Assignment and Acceptance delivered to it and a register or similar list (the
"Register") for the recordation of the names and addresses of the Banks and the
Commitment Percentage of, and principal amount of the Loans owing to the Banks
from time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Company, the Administrative Agent and the
Banks may treat each Person whose name is recorded in the Register as a Bank
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Company and the Banks at any reasonable time and from time
to time upon reasonable prior notice. Upon each such recordation, the assigning
Bank agrees to pay to the Administrative Agent a registration fee in the sum of
$2,500.
42
11.4. NEW NOTES. Upon its receipt of an Assignment and Acceptance
---------
executed by the parties to such assignment, together with each Note subject to
such assignment, the Administrative Agent shall (i) record the information
contained therein in the Register, and (ii) give prompt notice thereof to the
Company and the Banks (other than the assigning Bank). Within five (5) Business
Days after receipt of such notice, the Company, at its own expense, shall
execute and deliver to the Administrative Agent, in exchange for each
surrendered Note, a new Note to the order of such Eligible Assignee in an amount
equal to the amount assumed by such Eligible Assignee pursuant to such
Assignment and Acceptance and, if the assigning Bank has retained some portion
of its obligations hereunder, a new Note to the order of the assigning Bank in
an amount equal to the amount retained by it hereunder. Such new Notes shall
provide that they are replacements for the surrendered Notes, shall be in an
aggregate principal amount equal to the aggregate principal amount of the
surrendered Notes, shall be dated the effective date of such in Assignment and
Acceptance and shall otherwise be substantially the form of the assigned Notes.
The surrendered Notes shall be cancelled and returned to the Company.
11.5. PARTICIPATIONS. Each Bank may sell participations to one or more
--------------
banks or other entities (any such entity, a "Participant" in all or a portion of
such Bank's rights and obligations under this Agreement; provided that (i) each
such participation shall be in an amount of not less than $10,000,000, (ii) any
such sale or participation shall not affect the rights and duties of the selling
Bank hereunder to the Company, (iii) the only rights granted to the Participant
pursuant to such participation arrangements with respect to waivers, amendments
or modifications of this Agreement shall be the rights to approve waivers,
amendments or modifications that would reduce the principal of or the interest
rate on any Loans, extend the term or increase the amount of the Commitment of
such Bank as it relates to such Participant, reduce the amount of any Annual
Fees or Commitment Fees to which such Participant is entitled or extend any
regularly scheduled payment date for principal or interest and (iv) the Company
shall not, at the time of such transfer of a participation interest, incur any
additional expenses solely as a result of such transfer. The Company agrees that
each Participant may, subject to the provisions of this Agreement, exercise all
rights of payment with respect to the portion of such Loans held by it as fully
as if such Participant were the direct holder thereof, and that each Participant
shall be entitled to the benefits of Subsections 4.7, 4.9 and 4.10 (including
without limitation, with respect to Subsection 4.10, that the covenants therein
shall survive termination of this Agreement and payment of the Notes) with
respect to its participation in any Eurodollar Loans; provided that such
Participant complies with the provisions of such Subsections, and provided
further that the Company shall not be obligated to pay to a Bank and its
Participants collectively, in respect of such Subsections, any greater amount
than the Company would be obligated to pay to such Bank had it not entered into
any participations.
11.6. DISCLOSURE. The Company agrees that in addition to disclosures
----------
made in accordance with standard and customary banking practices any Bank may
disclose information obtained by such Bank pursuant to this Agreement to
Eligible Assignees or Participants and potential Eligible Assignees or
Participants hereunder; provided that such Eligible Assignees or Participants or
potential Eligible Assignees or Participants shall agree (i) to treat in
43
confidence such information unless such information otherwise becomes public
knowledge, (ii) not to disclose such information to a third party, except as
required by law or legal process and (iii) not to make use of such information
for purposes of transactions unrelated to such contemplated assignment or
participation.
11.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE COMPANY. If any
---------------------------------------------------
assignee Bank is an Affiliate of the Company, then any such assignee Bank shall
have no right to vote as a Bank hereunder for purposes of granting consents or
waivers or for purposes of agreeing to amendments or other modifications to this
Agreement, and the determination of the Majority Banks shall for all purposes of
this Agreement be made without regard to such assignee Bank's interest in any of
the Loans. If any Bank sells a participating interest in any of the Loans to a
Participant, and such Participant is the Company or an Affiliate of the Company,
then such transferor Bank shall promptly notify the Administrative Agent of the
sale of such participation. A transferor Bank shall have no right to vote as a
Bank hereunder for purposes of granting consents or waivers or for purposes of
agreeing to amendments or modifications to this Agreement to the extent that
such participation is beneficially owned by the Company or any Affiliate of the
Company, and the determination of the Majority Banks shall for all purposes of
this Agreement be made without regard to the interest of such transferor Bank in
the Loans to the extent of such participation.
11.8. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Bank shall
-----------------------------------
retain its rights to be indemnified pursuant to Subsection 12.6 with respect to
any claims or actions arising prior to the date of such assignment. If any
assignee Bank is not incorporated under the laws of the United States of America
or any state thereof, it shall, prior to the date on which any interest or fees
are payable hereunder for its account, deliver to the Company and the
Administrative Agent certification as to its exemption from deduction or
withholding of any United States federal income taxes. Anything contained in
this Subsection to the contrary notwithstanding, any Bank may at any time pledge
all or any portion of its interest and rights under this Agreement (including
all or any portion of its Notes) to any of the twelve Federal Reserve Banks
organized under ss.4 of the Federal Reserve Act, 12 U.S.C. ss.341. No such
pledge or the enforcement thereof shall release the pledgor Bank from its
obligations hereunder.
11.9. ASSIGNMENT BY THE COMPANY. The Company shall not assign or
-------------------------
transfer any of its rights or obligations under any of this Agreement without
the prior written consent of each of the Banks.
SECTION 12. MISCELLANEOUS
-------------
12.1. CONSENTS, AMENDMENTS AND WAIVERS. Any consent or approval
--------------------------------
required or permitted by this Agreement to be given by all of the Banks may be
given, and any term of this Agreement or any instrument related hereto may be
amended, and the performance or observance by the Company or any of its
Subsidiaries of any terms of this Agreement or the continuance of any Default or
Event of Default may be waived (either generally or in a particular instance and
either retroactively or prospectively) with, but only with, the written consent
of the Company and the written consent of the Majority Banks. Notwithstanding
the foregoing, the rate of interest on the Notes, the term of the Notes, the
Total Commitment, the Commitment Percentage of any Bank, and the amount of the
44
Annual Fee and Commitment Fee hereunder may not be changed without the written
consent of the Company and the written consent of each Bank affected thereby;
the definition of Majority Banks may not be amended without the written consent
of all of the Banks; and the amount of the agents' fees and Section 10 may not
be amended without the written consent of the Administrative Agent and, if
affected thereby, the Syndication Agent and/or Documentation Agent. No waiver
shall extend to or affect any obligation not expressly waived or impair any
right consequent thereon. No course of dealing or delay or omission on the part
of the Administrative Agent or any Bank in exercising any right shall operate as
a waiver thereof or otherwise be prejudicial thereto. No notice to or demand
upon the Company shall entitle the Company to other or further notice or demand
in similar or other circumstances.
12.2. NOTICES. All notices, requests and demands to or upon the
-------
respective parties hereto to be effective shall be in writing and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or
made when delivered by hand, or when deposited in the mail, postage prepaid, or,
if sent by telecopy, when received, addressed as follows or to such other
address as may be hereafter notified by the respective parties hereto and any
future holders of the Notes:
The Company: Leucadia National Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: President
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to: Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
The Banks: BankBoston, N.A.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
45
Bank of America National Trust
and Savings Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Republic National Bank of New York
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
U.S. Bank National Association
First Bank Place, MPFP 0704
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Fleet National Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇ CT MO 0367
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
National Bank of Canada
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
The Administrative Agent: BankBoston, N.A.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Administrative Agent
pursuant to Subsections 2.3 or 3.2 shall be subject to the time restrictions
stated in those Subsections.
46
12.3. NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
------------------------------
delay in exercising, on the part of the Administrative Agent or the Banks, any
right, remedy, power or privilege hereunder, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
12.4. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
------------------------------------------
and warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement and the Notes.
12.5. PAYMENT OF EXPENSES. Subject to a Bank's compliance with
-------------------
Subsection 4.10 hereof, the Company agrees to pay (a) the reasonable costs of
producing and reproducing this Agreement, (b) any taxes (including any interest
and penalties in respect thereto) payable by the Administrative Agent or any of
the Banks (other than taxes based upon the Administrative Agent's or any Bank's
net income) on or with respect to the transactions contemplated by this
Agreement (the Company hereby agreeing to indemnify the Administrative Agent and
each Bank with respect thereto), (c) the reasonable fees, expenses and
disbursements of the Administrative Agent's counsel incurred in connection with
the preparation, administration or interpretation of this Agreement, each
closing hereunder, and amendments, modifications, approvals, consents or waivers
hereto or hereunder, (d) the fees, expenses and disbursements of the
Administrative Agent incurred by the Administrative Agent in connection with the
preparation, administration or interpretation of this Agreement, and (e) all
reasonable out-of-pocket expenses (including without limitation reasonable
attorneys' fees and costs, which attorneys may be employees of any Bank or the
Administrative Agent, and reasonable consulting, accounting, appraisal,
investment banking and similar professional fees and charges) incurred by any
Bank or the Administrative Agent in connection with (i) the enforcement of or
preservation of rights under this Agreement against the Company or any of its
Subsidiaries or the administration thereof after the occurrence of a Default or
Event of Default and (ii) any litigation, proceeding or dispute whether arising
hereunder or otherwise, in any way related to any Bank's or the Administrative
Agent's relationship with the Company or any of its Subsidiaries. The agreements
in this subsection shall survive repayment of the Notes and all other amounts
payable hereunder.
12.6. INDEMNIFICATION. The Company agrees to indemnify and hold
---------------
harmless the Administrative Agent and the Banks from and against any and all
claims, actions and suits whether groundless or otherwise, and from and against
any and all liabilities, losses, damages and expenses of every nature and
character arising out of this Agreement or the transactions contemplated hereby
including, without limitation, (i) any actual or proposed use by the Company or
any of its Subsidiaries of the proceeds of any of the Loans, (ii) the Company or
any of its Subsidiaries entering into or performing this Agreement or any of the
other Loan Documents or (iii) with respect to the Company and its Subsidiaries
and their respective properties and assets, the violation of any Environmental
Law, the presence, disposal, escape, seepage, leakage, spillage, discharge,
47
emission, release or threatened release of any Hazardous Substances or any
action, suit, proceeding or investigation brought or threatened with respect to
any Hazardous Substances (including, but not limited to, claims with respect to
wrongful death, personal injury or damage to property), in each case including,
without limitation, the reasonable fees and disbursements of counsel and
allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding. The Company shall have control of
any such litigation and the Company shall pay the reasonable fees and expenses
of one counsel to be selected jointly by the Administrative Agent and the Banks,
which counsel shall be reasonably acceptable to the Company. If, and to the
extent that the obligations of the Company under this subsection are
unenforceable for any reason, the Company hereby agrees to make the maximum
contribution to the payment in satisfaction of such obligations which is
permissible under applicable law. The agreements in this subsection shall
survive repayment of the Notes and all other amounts payable hereunder.
12.7. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
----------------------
inure to the benefit of the Company, the Administrative Agent, the Banks, all
future holders of the Notes and their respective successors and assigns, except
that the Company may not assign or transfer any of its rights under this
Agreement without the prior written consent of each of the Banks.
12.8. SET-OFF. In addition to any rights or remedies of the Banks
-------
provided by law, each Bank shall have the right, without prior notice to the
Company, any such notice being expressly waived by the Company to the extent
permitted by applicable law, upon the acceleration of obligations under and in
respect of this Agreement and the Notes pursuant to Section 9, the filing of a
petition under any of the provisions of the federal bankruptcy act or amendments
thereto, by or against the Company, the making of an assignment for the benefit
of creditors by the Company, the application for the appointment, or the actual
appointment, of any receiver of the Company, or of any of the property of the
Company, the issuance of any execution against any of the property of the
Company, the issuance of a subpoena or order, in supplementary proceedings,
against or with respect to any of the property of the Company, or the issuance
of a warrant of attachment against any of the property of the Company, to
set-off and apply against any indebtedness, whether matured or unmatured of the
Company to such Bank, any amount owing from such Bank to the Company at, or at
any time after, the happening of any of the above mentioned events, and the
aforesaid right of set-off may be exercised by such Bank against the Company or
against any trustee in bankruptcy, debtor in possession, assignee for the
benefit of creditors, receiver or execution, judgment or attachment creditor of
the Company, the Company or such trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, receiver or execution, judgment or
attachment creditor, notwithstanding the fact that such right of set-off shall
not have been exercised by such Bank prior to the making, filing or issuance, or
service upon such Bank (either directly or through the Administrative Agent) of,
or of notice of, any such petition; assignment for the benefit of creditors;
appointment or application for the appointment of a receiver; or issuance of
execution, subpoena, order or warrant. Such Bank agrees promptly to notify the
Company and the Administrative Agent after any such set-off and application made
by the Bank, provided, that, the failure to give such notice shall not affect
the validity of such set-off and application. Each Bank agrees with the other
Banks that (i) if an amount to be set off is to be applied to Indebtedness of
48
the Company to a Bank, other than Indebtedness evidenced by the then outstanding
Notes held by all of the Banks, such amount shall be applied ratably to such
other Indebtedness and to the Indebtedness evidenced by all such Notes, and (ii)
if a Bank shall receive from the Company, whether by voluntary payment, exercise
of the right of set-off, counterclaim, cross action, enforcement of the claim
evidenced by the Notes held by a Bank by proceeding against the Company at law
or in equity or by proof thereof in bankruptcy, reorganization, liquidation,
receivership or similar proceedings, or otherwise, and shall retain and apply to
the payment of the Note or Notes held by a Bank any amount in excess of its
ratable portion of the payments received by all of the Banks, such Bank will
make such disposition and arrangements with the other Banks with respect to such
excess, either by way of distribution, pro tanto assignment of claims,
subrogation or otherwise as shall result in each Bank receiving in respect of
the Notes held by it its proportionate payment as contemplated by this
Agreement; provided, however, that if all or any part of such excess payment is
thereafter recovered from such Bank, such disposition and arrangements shall be
rescinded and the amount restored to the extent of such recovery, but without
interest.
12.9. TERMINATION. This Agreement shall terminate in the event (I) Ian
-----------
Cumming and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ cease to own, directly or indirectly, 32% or more
of the Voting Stock of the Company, provided, that Messrs. Cumming and/or
▇▇▇▇▇▇▇▇▇ may cease to own, directly or indirectly, 32% or more of the Voting
Stock of the Company if: (a) in the aggregate, they own, directly or indirectly,
at least 23% of the outstanding Voting Stock, and (b)(i) if during the lifetime
of ▇▇. ▇▇▇▇▇▇▇ or ▇▇. ▇▇▇▇▇▇▇▇▇, the aggregate Market Value of the Voting Stock
owned by them, directly or indirectly, is at least $200,000,000 or (ii) if upon
the death of either ▇▇. ▇▇▇▇▇▇▇ or ▇▇. ▇▇▇▇▇▇▇▇▇, the aggregate Market Value of
the Voting Stock owned, directly or indirectly, by the survivor would be at
least $100,000,000 or (II) either ▇▇. ▇▇▇▇▇▇▇ or ▇▇. ▇▇▇▇▇▇▇▇▇ ceases to be a
principal executive officer (which shall include the office of Chairman of the
Board of Directors) of the Company. For purposes hereof, the term "owned,
directly or indirectly" shall be deemed to include all Voting Stock received
from ▇▇. ▇▇▇▇▇▇▇ or ▇▇. ▇▇▇▇▇▇▇▇▇ by any member of their respective immediate
families or by any trust for the benefit of either of them or any member of
their respective immediate families (a "Recipient"), which Voting Stock is held
by a Recipient during the lifetime of ▇▇. ▇▇▇▇▇▇▇ or ▇▇. ▇▇▇▇▇▇▇▇▇. In
determining the number of outstanding Common Shares then held by Messrs. Cumming
and ▇▇▇▇▇▇▇▇▇ and the total number of outstanding Common Shares, there shall be
excluded Common Shares issued by the Company after December 31, 1991, or the
conversion into or exchange for, after December 31, 1991, Common Shares or
securities convertible into or exchangeable for Common Shares. Such termination
shall be immediate if it arises from any event other than the death or
incapacity of either or both of ▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇. If such
termination shall arise from the death or incapacity of either or both of ▇▇▇
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ such termination shall take effect 120 days after
such event. Upon any such termination, the Company shall pay to the
Administrative Agent for the accounts of the Banks all amounts owing under this
Agreement and the Notes. No such termination shall affect any rights acquired by
the Banks under this Agreement prior to or as a result of such termination.
12.10. COUNTERPARTS. This Agreement may be executed by one or more of
------------
the parties to this Agreement in any number of separate counterparts and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument.
49
12.11. GOVERNING LAW. This Agreement and the Notes and the rights and
-------------
obligations of the parties under this Agreement and the Notes shall be governed
by, and construed and interpreted in accordance with, the laws (excluding the
laws applicable to conflicts or choice of law) of the Commonwealth of
Massachusetts.
12.12. EFFECTIVE DATE. This Agreement shall become effective only upon
--------------
the occurrence of the following events (the earliest date upon which all such
events have occurred being the "Effective Date"):
(a) the closing of the sale of Colonial Penn Insurance
Company and its subsidiaries contemplated between the Company and General
Electric Capital Corporation and scheduled to occur on or about November 3,
1997;
(b) payment in full by the Company to First Union of all
amounts owing to First Union under the Prior Agreement; and
(c) payment by the Company to the Banks of the aggregate
principal amount outstanding under the Prior Agreement (after repayment of First
Union as provided in paragraph (b) above) in excess of the Total Commitment of
the Banks under this Agreement.
50
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
LEUCADIA NATIONAL CORPORATION
By:
Name:
Title:
BANKBOSTON, N.A.,
as Administrative Agent
By:
Name:
Title:
THE CHASE MANHATTAN BANK,
as Syndication Agent
By:
Name:
Title:
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Documentation Agent
By:
Name:
Title:
BANKBOSTON, N.A.
By:
Name:
Title:
▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ BANK
By:
Name:
Title:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION (successor by
merger to Bank of America Illinois)
By:
Name:
Title:
REPUBLIC NATIONAL BANK OF NEW YORK
By:
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION
By:
Name:
Title:
FLEET NATIONAL BANK
By:
Name:
Title:
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇
By:
Name:
Title:
By:
Name:
Title:
53
