-11-
EXHIBIT 1
TO
AMENDMENT NO. 5 TO THE CREDIT AGREEMENT
WHEREAS, the Borrower has requested the Agent and the Banks to amend and
restate the Senior Secured Credit Agreement, (the "EXISTING SENIOR CREDIT
AGREEMENT") dated as of January 31, 1996 among the Borrower, the Banks set forth
therein and the Agent, as amended, to provide to the Borrower a $150,000,000
revolving credit facility (the "REVOLVING CREDIT FACILITY"); and
WHEREAS, the Revolving Credit Facility shall be used for general business
purposes; and
WHEREAS, the Agent and the Banks are willing to amend and restate the
Existing Senior Credit Agreement upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, amend and restate the Existing Senior Credit Agreement as follows:
1. CERTAIN DEFINITIONS
CERTAIN DEFINITIONS.
In addition to words and terms defined elsewhere in this Agreement,
the following words and terms shall have the following meanings, respectively,
unless the context hereof clearly requires otherwise:
AFFILIATE as to any person shall mean any other person (i)
which directly or indirectly controls, is controlled by, or is under common
control with such person, (ii) which beneficially owns or holds five percent
(5%) or more of any class of the voting stock of such person, or (iii) fifty
percent (50%) or more of the voting stock (or in the case of a person which is
not a corporation, fifty percent (50%) or more of the equity interest) of which
is beneficially owned or held, directly or indirectly, by such person.
AGENT shall mean PNC Bank, National Association and its
successors.
AGENT'S FEE shall have the meaning specified in Section 10.15.
AGREEMENT shall mean this Senior Secured Credit Agreement, as
amended and restated herein and as the same may be further supplemented,
amended, restated or modified from time to time, including all schedules and
exhibits.
ASSIGNMENT AND ASSUMPTION AGREEMENT shall mean an Assignment
and Assumption Agreement by and among a Purchasing Bank, the Transferor Bank and
the Agent in the form of EXHIBIT A.
AUDITED STATEMENTS shall have the meaning specified in Section
6.1(i).
AUTHORIZED OFFICER shall mean those persons designated by
written notice to the Agent from the Borrower, authorized to execute notices,
reports and other documents required hereunder. The Borrower may amend such list
of persons from time to time by giving written notice of such amendment to the
Agent.
BANKS shall mean the financial institutions named on SCHEDULE
1.1(A) and their respective successors and assigns as permitted hereunder, each
of which is referred to herein as a Bank.
BASE RATE shall mean the greater of (i) the interest rate per
annum announced from time to time by the Agent at its Principal Office as its
then prime rate, which rate may not be the lowest rate then being charged
commercial borrowers by the Agent, or (ii) the Federal Funds Effective Rate plus
one-half percent (0.50%) per annum.
BASE RATE MARGIN shall have the meaning specified in Section
4.1(b).
BASE RATE OPTION shall mean the Interest Rate Option set forth
in Section 4.1(a).
BASE RATE PORTION shall mean the portion of the Loans bearing
interest at any time under the Base Rate Option.
BENEFIT ARRANGEMENT shall mean at any time an "employee
benefit plan," within the meaning of Section 3(3) of ERISA, which is neither a
Defined Benefit Pension Plan nor a Multiemployer Plan, but which is maintained,
sponsored or otherwise contributed to, by any member of the ERISA Group. Thus, a
Benefit Arrangement includes, e.g., an "employee welfare benefit plan" within
the meaning of Section 3(1) of ERISA, a money purchase pension plan, a funded
deferred profit-sharing plan and an ESOP.
BORROWER shall mean Federated Investors, Inc., a Pennsylvania corporation.
BORROWING DATE shall mean with respect to any Loan, the date
for the making thereof or the renewal or conversion thereof to the same or a
different Interest Rate Option, which shall be a Business Day, as specified in
the relevant Loan Request.
BORROWING TRANCHE shall mean, with respect to the Euro-Rate
Portion, Loans to which a Euro-Rate Option applies by reason of the selection
of, conversion to or renewal of such Interest Rate Option on the same day and
having the same Euro-Rate Interest Period, and, with respect to the Base Rate
Portion, Loans to which the Base Rate Option or PNC Quoted Rate Option applies
by reason of the selection of or conversion to such Interest Rate Options.
BUSINESS DAY shall mean (i) with respect to matters relating
to the Euro-Rate Option, a day on which banks in the London interbank market are
dealing in U.S. Dollar deposits and on which commercial banks are open for
domestic and international business in Pittsburgh, Pennsylvania and New York,
New York and (ii) with respect to any other matter, a day on which commercial
banks are open for business in Pittsburgh, Pennsylvania and New York, New York.
CAPITALIZED PREMIUMS shall mean the amount of premiums paid by
the Borrower or any Pledged Subsidiary for officers' life insurance which
increase the cash surrender value of such policies, PROVIDED the Borrower or a
Pledged Subsidiary is named as a beneficiary under such policies to the extent
of premiums paid by the Borrower or such Pledged Subsidiary.
CASH FLOW FROM OPERATIONS for each fiscal quarter for the four
(4) fiscal quarters then ended shall mean (i) the sum of net income,
depreciation, amortization, other non-cash charges to net income (excluding any
non-cash charges which require an accrual or reserve for cash charges for any
future period), interest expense and income tax expense MINUS (ii) non-cash
credits to net income, in each case of the Borrower and its Consolidated
Subsidiaries for such period determined in accordance with GAAP; PROVIDED that
if the Borrower and Consolidated Subsidiaries shall make one or more
acquisitions of the capital stock of any Person or all or substantially all of
the assets of any Person permitted by Section 8.2(j) during such period, Cash
Flow from Operations for such period shall be adjusted on a PRO FORMA basis in a
manner satisfactory to the Agent to give effect to all such acquisitions as if
they had occurred at the beginning of such period.
CERTAIN FIXED CHARGES shall mean (A) for any period of
determination through December 31, 1996, the sum of (i) $25,000,000, PLUS (ii)
all dividend payments after the Closing Date on the Common Shares actually paid
in cash, MINUS (iii) $1,250,000 multiplied by the number of fiscal quarters in
1996 through the date of determination, and (B) for any period of determination
after fiscal year 1996, the sum of (i) scheduled principal payments on all
Indebtedness of the Borrower (other than the Senior Subordinated Term Notes)
plus (ii) all dividend payments on the Common Shares actually paid in cash.
CLASS A SHARES shall mean the Class A Common Stock of the
Borrower.
CLASS B SHARES shall mean the Class B Common Stock of the
Borrower.
CLOSING DATE shall mean the Business Day on which the first
Loans are to be made, which shall be January 31, 1996 or, if all the conditions
specified in Article 7 have not been satisfied or waived by such date, not later
than May 8, 1996, as designated by the Borrower by at least five (5) Business
Days' advance notice to the Agent at its Principal Office, or such other date as
the parties agree. The closing shall take place on the Closing Date at the
offices of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Professional Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at such time as the parties shall agree.
CO-AGENT shall mean Bank of America Illinois and ▇▇▇▇▇▇
Guaranty Trust Company of New York and their respective successors.
COBRA VIOLATION shall mean a failure by any of the Companies
to comply with group health plan continuation coverage requirements of Sections
601 et seq. of ERISA.
COLLATERAL shall mean the Pledged Collateral and the UCC
Collateral.
COMMITMENT FEE shall have the meaning specified in Section
2.3.
COMMITMENT shall mean, as to any Bank, its Revolving Credit
Commitment, and COMMITMENTS shall mean the Revolving Credit Commitments of all
of the Banks.
COMMON SHARES shall mean the Class A Shares and Class B
Shares.
COMPANIES shall mean the Borrower and its Subsidiaries.
CONSOLIDATED SUBSIDIARIES shall mean and include those
subsidiaries or other entities whose accounts are consolidated with the accounts
of the Borrower in accordance with GAAP PROVIDED that for the purpose of
calculating the financial ratios in Sections 8.2(a)-(c) the impact of the
consolidation of any Special Purpose Subsidiary or entity to which Designated
Assets are sold or assigned by a Special Purpose Subsidiary, in either case
pursuant to the Master Agreement and in accordance with Section 8.2(k)(i), shall
be excluded.
CONTROL or CONTROL shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a person, whether through the ownership of voting securities, by
contract or otherwise, including the power to elect a majority of the directors
or trustees of a corporation or trust, as the case may be.
CONTROLLED GROUP shall mean (i) the controlled group of
corporations as defined in Section 1563 of the Internal Revenue Code and
regulations thereunder, and (ii) the group of trades or businesses under common
control as defined in Section 414(c) of the Internal Revenue Code and
regulations thereunder, in the case of either clause (i) or (ii), of which the
Borrower or any Subsidiary is a part or may become a part.
DEBT SERVICE COVERAGE RATIO shall mean the ratio of EBDA to
Certain Fixed Charges.
DECLARATION OF TRUST shall mean the Restated Declaration of
Trust of the Borrower dated as of July 28, 1989, as the same may be supplemented
or amended from time to time in accordance herewith.
DEFINED BENEFIT PENSION PLAN shall mean at any time an
employee pension benefit plan (including a Multiple Employer Plan but not a
Multiemployer Plan) which is covered by Title IV of ERISA or is subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained by any member of the ERISA Group for employees of any
member of the ERISA Group or (ii) has at any time within the preceding five (5)
years been maintained by any entity which was at such time a member of the ERISA
Group for employees of any entity which was at such time a member of the ERISA
Group.
DESIGNATED ASSETS shall mean the right to receive deferred
sales charges, including 12b-1 and contingent deferred sales charges, and any
comparable fees from a Fund relating to the sale of Fund shares and the
maintenance of customer accounts, including shareholder servicing fees.
DOLLAR, DOLLARS, U.S. DOLLARS and the symbol $ shall mean lawful money of
the United States of America.
EBDA shall mean, for any period of determination, (i) the sum
of net income, depreciation, amortization, other non-cash charges to net income
(excluding any non-cash charges which require an accrual or reserve for cash
charges for any future period), MINUS (ii) non-cash credits to net income, in
each case of the Borrower and its Consolidated Subsidiaries for such period
determined in accordance with GAAP.
ENVIRONMENTAL COMPLAINT shall mean any written complaint
setting forth a cause of action for personal or property damage or equitable
relief arising under any Environmental Law, an order, notice of violation,
citation, request for information issued pursuant to any Environmental Laws by
an Official Body, a subpoena or other written notice of any type relating to,
arising out of, or issued pursuant to any Environmental Law.
ENVIRONMENTAL LAWS shall mean all federal, state, local or
foreign laws and regulations, including permits, orders, judgments, consent
decrees issued, or entered into, pursuant thereto, relating to pollution or
protection of human health or the environment.
ERISA shall mean the Employee Retirement Income Security Act
of 1974, as the same may be amended or supplemented from time to time, and any
successor statute of similar import, and the rules and regulations thereunder,
as from time to time in effect.
ERISA GROUP shall mean, at any time, the Borrower and all
members of a Controlled Group.
ESOP shall mean an employee stock ownership plan.
EQUITY OFFERING shall mean any offering or placement of any
equity securities of the Borrower excluding Class B Shares issued to employees
of the Borrower or any of its Subsidiaries under the Profit-Sharing Trust, stock
options, an ESOP or other employee stock arrangements or any equity securities
given as consideration in connection with any investment or acquisition
permitted under Sections 8.2 (h)(iii) or 8.2 (j)(iii).
EQUITY OFFERING (SUBSIDIARY) shall mean any offering or
placement of any equity securities of any Subsidiary of the Borrower.
EURO-RATE shall mean with respect to the Loans comprising any
Borrowing Tranche to which the Euro-Rate Option applies for any Euro-Rate
Interest Period, the interest rate per annum determined by the Agent by dividing
(the resulting quotient rounded upward, if necessary, to the nearest 1/100 of 1%
per annum) (i) the rate of interest determined by the Agent in accordance with
its usual procedures (which determination shall be conclusive absent manifest
error) to be the average of the London interbank offered rates for U.S. Dollars
quoted by the British Bankers' Association as set forth on Dow ▇▇▇▇▇ Markets
Service (formerly known as Telerate) (or appropriate successor or, if British
Bankers' Association or its successor ceases to provide such quotes, a
comparable replacement determined by the Agent) display page 3750 (or such other
display page on the Dow ▇▇▇▇▇ Market Service system as may replace display page
3750) two (2) Business Days prior to the first day of such Euro-Rate Interest
Period for an amount comparable to such borrowing and have a borrowing date and
a maturity comparable to such Euro-Rate Interest Period by (ii) a number equal
to 1.00 MINUS the Euro-Rate Reserve Percentage. The Euro-Rate may also be
expressed by the following formula:
Euro-Rate = Average of London Interbank offered rates
quoted by BBA as shown on Dow ▇▇▇▇▇ Markets
Service display page 3750 OR APPROPRIATE
SUCCESSOR 1.00 - Euro-Rate Reserve
Percentage
EURO-RATE INTEREST PERIODS shall have the meaning specified in
Section 4.2.
EURO-RATE MARGIN shall have the meaning specified in Section
4.1(b).
EURO-RATE OPTION shall mean the Interest Rate Option set forth
in Section 4.1(b).
EURO-RATE PORTION shall mean the portion of the Revolving
Credit Loans and Term Loans bearing interest at any time under the Euro-Rate
Option.
EURO-RATE RESERVE PERCENTAGE shall mean the maximum percentage
(expressed as a decimal rounded upward to the nearest 1/100 of 1%) as determined
by the Agent (which determination shall be conclusive absent manifest error)
which is in effect during any relevant period (or, if more than one such
percentage shall be applicable, the daily average of such percentages for those
days in such period during which any such percentages shall be so applicable),
as prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the reserve requirements (including supplemental,
marginal and emergency reserve requirements) with respect to eurocurrency
funding (currently referred to as "EUROCURRENCY LIABILITIES") of a member bank
in the Federal Reserve System.
EVENT OF DEFAULT shall mean any of the Events of Default
described in Section 9.1.
EXCESS CASH FLOW shall be computed as of the close of each
fiscal year by taking the positive difference (if any) between Cash Flow from
Operations for such fiscal year and the sum of Fixed Charges and Net Broker Fees
for such fiscal year.
EXISTING SENIOR CREDIT AGREEMENT shall have the meaning given
to such term in the first recital clause.
FEDERAL FUNDS EFFECTIVE RATE for any day shall mean the rate
per annum (based on a year of 360 days and actual days elapsed and rounded
upward to the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New
York (or any successor) on such day as being the weighted average of the rates
on overnight federal funds transactions arranged by federal funds brokers on the
previous trading day, as computed and announced by such Federal Reserve Bank (or
any successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the "FEDERAL FUNDS
EFFECTIVE RATE" as of the date of this Agreement; PROVIDED, if such Federal
Reserve Bank (or its successor) does not announce such rate on any day, the
"FEDERAL FUNDS EFFECTIVE RATE" for such day shall be the Federal Funds Effective
Rate for the last day on which such rate was announced.
FEDERATED BANK shall mean Federated Bank and Trust, a state
chartered bank under the laws of New Jersey.
FINANCIAL STATEMENTS DERIVED FROM ASSUMPTIONS shall have the
meaning specified in Section 6.1(i).
FIXED CHARGES shall mean for any period of determination the
sum of (i) interest expense paid or payable by the Borrower and its Consolidated
Subsidiaries, (ii) income taxes (net of any deferred portion) paid or payable by
the Borrower and its Consolidated Subsidiaries, (iii) all scheduled principal
payments and permitted principal prepayments (to the extent such prepayments are
actually paid in cash) on all Indebtedness of the Borrower under the Senior
Subordinated Term Notes, (iv) scheduled principal payments on all Indebtedness
of the Borrower other than under the Senior Subordinated Term Notes, (v) all
dividend payments on the Common Shares and the Preferred Shares, actually paid
in cash, (vi) payments by the Companies under any interest rate protection
agreement, payments under capitalized leases, capital expenditures (but
excluding, to the extent applicable, the Permitted Acquisition Payment),
payments against deferred compensation obligations (exclusive of any Capitalized
Premiums), in each case under this clause (vi) of the Borrower and its
Consolidated Subsidiaries for such period determined and consolidated in
accordance with GAAP as actually made in cash. For purposes of calculating Fixed
Charges, scheduled principal installments of the Loans which are due and payable
on the second Business Day of each fiscal quarter shall be deemed to be paid or
payable during the fiscal quarter immediately preceding the quarter in which
such payments are actually due.
FUND FEES shall mean the management, administrative,
shareholder services, 12b-1, back-end and other similar fees contractually due
any of the Companies.
FUNDS shall mean the mutual funds for which any of the
Companies serves as an advisor, an administrator, a distributor, a transfer
agent, a portfolio or fund accountant, or a clearing servicer.
GAAP shall mean generally accepted accounting principles as
are in effect from time to time, subject to the provisions of Section 1.3, and
applied on a consistent basis (except for changes in application in which the
Borrower's independent certified public accountants concur) both as to
classification of items and amounts.
GOVERNMENTAL ACTS shall have the meaning given to such term in
Section 2.10(h).
GRANTORS shall mean the Borrower and certain of its
Subsidiaries who are signatories to the Security Agreement as indicated in
EXHIBIT B.
GUARANTY of any person shall mean any obligation of such
person guaranteeing or in effect guaranteeing any liability or obligation of any
other person in any manner, whether directly or indirectly, including any
agreement to indemnify or hold harmless any other person, any performance bond
or other suretyship arrangement and any other form of assurance against loss,
except endorsement of negotiable or other instruments for deposit or collection
in the ordinary course of business.
HISTORICAL STATEMENTS shall have the meaning specified in
Section 6.1(i).
ICI CONTINGENCY shall have the meaning specified in Section
6.1(i).
INDEBTEDNESS shall mean as to any person at any time, any and
all indebtedness, obligations or liabilities (whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent, or joint
or several) of such person for or in respect of: (i) borrowed money, (ii)
amounts raised under or liabilities in respect of any note purchase or
acceptance credit facility, (iii) reimbursement obligations under any letter of
credit, currency swap agreement, interest rate swap, cap, collar or floor
agreement or other interest rate protection device, (iv) any other transaction
(including forward sale or purchase agreements, capitalized leases and
conditional sales agreements) having the commercial effect of a borrowing of
money entered into by such person to finance its operations or capital
requirements (but not including trade payables and accrued expenses incurred in
the ordinary course of business which are not represented by a promissory note
or other evidence of indebtedness and which are not more than thirty (30) days
past due), or (v) any Guaranty of Indebtedness for borrowed money.
INSURANCE SUBSIDIARIES shall mean Federated Reinsurance
Limited, an Irish corporation owned by FII and FII Holdings, Inc., and any other
corporation, business trust or other entity which is (i) organized under the
laws of Ireland or any other foreign jurisdiction acceptable to the Agent in its
sole discretion, (ii) formed to engage in the limited activity permitted by
Section 8.2(p)(i), and (iii) wholly owned by one or more Pledging Subsidiaries,
PROVIDED, that if the Insurance Subsidiary is organized under the law of a
foreign jurisdiction which requires that residents of such foreign jurisdiction
maintain a certain level of ownership interest in such Insurance Subsidiary,
then not less than 98% of the outstanding shares of such Insurance Subsidiary
shall be owned by one or more Pledging Subsidiaries.
INTERCOMPANY SUBORDINATION AGREEMENT shall mean the
Intercompany Subordination Agreement in the form of EXHIBIT C executed and
delivered by the Companies to the Agent for the benefit of the Banks.
INTERCREDITOR AGREEMENT (SENIOR NOTES) shall mean the
Intercreditor Agreement between the Agent for the benefit of the Banks and the
holders of the Senior Notes to be executed in connection with the Senior Notes
which Intercreditor Agreement (Senior Notes) shall be on terms satisfactory to
the Agent.
INTEREST PAYMENT DATE shall mean each date specified for the
payment of interest in Section 5.3.
INTEREST RATE OPTION shall mean the Euro-Rate Option, the Base
Rate Option or the PNC Quoted Rate Option.
INTERIM STATEMENTS shall have the meaning specified in Section
6.1(i).
INTERNAL REVENUE CODE shall mean the Internal Revenue Code of
1986, as the same may be amended or supplemented from time to time, and any
successor statute of similar import, and the rules and regulations thereunder,
as from time to time in effect.
INVESTMENT COMPANY ACT shall mean the Investment Company Act
of 1940, as the same may be amended or supplemented from time to time, and any
successor statute of similar import, and the rules and regulations thereunder,
as from time to time in effect.
IRS shall mean the Internal Revenue Service.
LABOR CONTRACTS shall have the meaning specified in Section
6.1(u).
LAW shall mean any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, opinion, release, ruling, order,
injunction, writ, decree or award of any Official Body.
LETTER OF CREDIT shall have the meaning assigned to that term
in Section 2.10(a).
LETTER OF CREDIT FEE shall have the meaning assigned to that
term in Section 2.10(c).
LETTER OF CREDIT OUTSTANDINGS shall mean at any time the sum
of (i) the aggregate undrawn face amount of outstanding Letters of Credit and
(ii) the aggregate amount of all unpaid and outstanding Reimbursement
Obligations.
LEVERAGE RATIO shall mean the ratio of Total Indebtedness to
Cash Flow from Operations.
LIEN shall mean any mortgage, deed of trust, pledge, lien,
security interest, charge or other encumbrance or security arrangement of any
nature whatsoever, whether voluntarily or involuntarily given, including any
conditional sale or title retention arrangement, and any assignment, deposit
arrangement or lease intended as, or having the effect of, security and any
filed financing statement or other notice of any of the foregoing (whether or
not a lien or other encumbrance is created or exists at the time of the filing).
LIMITED INVESTMENTS shall mean the following: (i) investments
or contributions by a Loan Party directly or indirectly in the capital stock of
or other payments (except in connection with transactions for fair value in the
ordinary course of business, including usual and customary service and occupancy
contracts) to any of the Limited Purpose Subsidiaries, (ii) loans by a Loan
Party directly or indirectly to any of the Limited Purpose Subsidiaries, (iii)
guarantees by a Loan Party directly or indirectly of the obligations of any of
the Limited Purpose Subsidiaries, or (iv) other obligations, contingent or
otherwise, of the Loan Parties to or for the benefit of any of the Limited
Purpose Subsidiaries.
LIMITED PURPOSE SUBSIDIARIES shall mean, collectively, the
Insurance Subsidiaries and the Special Purpose Subsidiaries.
LOAN PARTIES shall mean the Pledgors and the Companies.
LOAN REQUEST shall mean a Revolving Credit or Swing Loan
Request made in accordance with Section 2.6(a) or 2.6(b) respectively, or, with
respect to a Revolving Credit Loan, a request to select, convert to or renew a
Euro-Rate Option in accordance with Section 4.2.
LOANS shall mean collectively and LOAN shall mean separately
all Revolving Credit Loans and Swing Loans or any Revolving Credit Loan or Swing
Loan.
MASTER AGREEMENT shall mean the Federated Investors Program
Master Agreement dated as of October 24, 1997, among Federated Investors,
Federated Funding 1997-1, Inc., Federated Investors Management Company,
Federated Securities Corp., the Owner Trustee of the PLT Finance Trust 1997-1,
PLT Finance, L.P., ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Inc., and Bankers Trust Company, as
amended from time to time as permitted under this Agreement.
MATERIAL ADVERSE CHANGE shall mean any set of circumstances or
events which (i) has or could reasonably be expected to have any material
adverse effect whatsoever upon the validity or enforceability of this Agreement
or any other Senior Loan Document, (ii) is or could reasonably be expected to be
material and adverse to the business, properties, assets, financial condition,
results of operations or prospects of the Companies, (iii) impairs materially or
could reasonably be expected to impair materially the ability of any of the
Companies to pay punctually its Indebtedness or perform any other obligations in
connection with its Indebtedness, or (iv) impairs materially or could reasonably
be expected to impair materially the ability of the Agent or any of the Banks,
to the extent permitted, to enforce their legal remedies pursuant to this
Agreement or any other Senior Loan Document.
MONTH, with respect to a Euro-Rate Interest Period, shall mean
the interval between the days in consecutive calendar months numerically
corresponding to the first day of such Euro-Rate Interest Period. Any Euro-Rate
Interest Period which begins on the last Business Day of a calendar month for
which there is no numerically corresponding Business Day in the subsequent
calendar month shall end on the last Business Day of such subsequent month.
MULTIEMPLOYER PLAN shall mean any employee benefit plan which
is a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and
to which the Borrower, any Subsidiary of the Borrower or any member of the ERISA
Group is then making or accruing an obligation to make contributions or, within
the preceding five (5) plan years, has made or had an obligation to make such
contributions.
MULTIPLE EMPLOYER PLAN shall mean a Defined Benefit Pension
Plan which has two (2) or more contributing sponsors (including the Borrower or
any member of the ERISA Group) at least two (2) of whom are not under common
control, as such a plan is described in Sections 4063 and 4064 of ERISA.
NET BROKER FEES shall mean the difference between front-end
marketing fees paid to broker-dealers by the Companies and back-end fees paid to
the Companies on any redemption occurring within a period requiring payments of
such back-end fees.
NOTES shall mean the Revolving Credit Notes, the Swing Note
and the Term Notes.
OFFICIAL BODY shall mean any national, federal, state, local
or other government or political subdivision or any agency, authority, bureau,
central bank, commission, department or instrumentality of either, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
PASSPORT shall mean Passport Research Ltd., an indirect
Subsidiary of the Borrower.
PBGC shall mean the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA or any successor.
PERMITTED ACQUISITION PAYMENT shall have the meaning given to
such term in Section 8.2(j)(iii).
PERMITTED INVESTMENTS shall mean:
investments made under usual and customary terms in the ordinary course of
business in or relating to the
establishment or maintenance of the Funds;
direct obligations of the United States of America or any agency or
instrumentality thereof or obligations backed by the full faith and credit of
the United States of America, maturing in sixty (60) months or less from the
date of acquisition;
commercial paper maturing in one hundred eighty (180)
days or less rated not lower than A-1 by Standard & Poor's
Corporation or P-1 by ▇▇▇▇▇'▇ Investors Service on the date of acquisition;
demand deposits, time deposits or certificates of
deposit maturing within five (5) years in commercial banks whose
obligations are rated A-1, P-1 or the equivalent or better by Standard & Poor's
Corporation or ▇▇▇▇▇'▇ Investors Service on the date of acquisition;
corporate obligations rated A or better by Standard & Poor's Corporation or
▇▇▇▇▇'▇ Investors Service on the date of acquisition, MATURING IN SIXTY (60)
MONTHS OR LESS FROM THE DATE OF ACQUISITION;
repurchase agreements and reverse repurchase agreements maturing within one
(1) year and entered into with commercial banks or investment banking firms of
recognized standing with respect to any investment permitted under clauses (i)
through (v) above;
the interest rate protection agreement described in Section 8.1(Error!
Reference source not found.) and any other interest rate protection instrument
reasonably acceptable to the Agent; and
any mutual fund for which any of the Companies serves as an investment
advisor and which invests in (A) money market or fixed income securities with an
average maturity of five (5) years or less or (B) any obligations or securities
(other than permitted in the preceding clause (A)), including without limitation
equity securities, PROVIDED that the aggregate investment in mutual funds
governed by clause (B) shall not exceed $20,000,000 at any one time.
PERMITTED LIENS shall mean:
Liens for taxes, assessments, or similar charges, incurred in the ordinary
course of business and which are not yet
due and payable;
pledges or deposits made in the ordinary course of business to secure
payment of workmen's compensation, or to participate in any fund in connection
with workmen's compensation, unemployment insurance, old-age pensions or other
social security programs;
Liens of mechanics, materialmen, warehousemen, carriers, or other like
liens, securing obligations incurred in the ordinary course of business that are
not yet due and payable and Liens of landlords securing obligations to pay lease
payments that are not yet due and payable or in default;
(A) good-faith pledges or deposits made in the ordinary
course of business to secure performance of bids, tenders,
contracts (other than for the repayment of borrowed money) or leases, not in
excess of the aggregate amount due thereunder, or to secure statutory
obligations, or surety, appeal, indemnity, performance or other similar bonds
required in the ordinary course of business and (B) Liens granted to surety
companies or to financial institutions to secure standby letters of credit
issued by such institutions to surety companies as an inducement for such surety
companies to issue or maintain existing surety, appeal, indemnity, performance
or other similar bonds required in the ordinary course of business;
encumbrances consisting of zoning restrictions, easements or other
restrictions on the use of real property, none of
which materially impairs the use of such property or the value thereof, and none
of which is violated in any material respect by existing or proposed structures
or land use;
Liens, security interests and mortgages in favor of (A) the Agent for the
benefit of the Banks and (B) the holders of
the Senior Notes PROVIDED, any liens, security interests or mortgages in favor
of the holders or the Senior Notes shall relate only to the Collateral or any
portion thereof and not to any other assets or property of any nature not
included in the Collateral;
any Lien existing on the date of this Agreement and described on SCHEDULE
8.2(E), PROVIDED that the principal amount secured thereby as of the Closing
Date is not hereafter increased and no additional assets become subject to such
Lien;
capital and operating leases as and to the extent permitted in Sections
8.2(n) and (o);
the following, (A) if the validity or amount thereof is being contested in
good faith by appropriate and lawful proceedings diligently conducted so long as
levy and execution thereon have been stayed and continue to be stayed or (B) if
a final judgment is entered and such judgment is discharged within thirty (30)
days of entry, and in either case they do not affect the Collateral or result in
a Material Adverse Change:
(1) claims or Liens for taxes, assessments or
charges due and payable and subject to interest or
penalty, PROVIDED that each of the Companies maintains
such reserves or other appropriate provisions as shall
be required by GAAP and pays all such taxes, assessments
or charges forthwith upon the commencement of
proceedings to foreclose any such Lien;
(2) claims, Liens or encumbrances upon, and
defects of title to, real or personal property other
than the Collateral, including any attachment of
personal or real property or other legal process prior
to adjudication of a dispute on the merits;
(3) claims or Liens of mechanics, materialmen, warehousemen, carriers, or
other statutory nonconsensual Liens; or
(4) Liens of governmental entities arising under
federal or state environmental laws.
PERSON or PERSON shall mean any individual, corporation,
partnership, association, joint-stock company, trust, unincorporated
organization, joint venture, government or political subdivision or agency
thereof, or any other entity.
PLEDGE AGREEMENT shall mean the Pledge Agreement in the form
of EXHIBIT E executed and delivered by the Pledgors to the Agent for the benefit
of the Banks as security for the Loans.
PLEDGED COLLATERAL shall mean that portion of the Collateral
which consists of the issued and outstanding shares of capital stock, beneficial
interests or partnership interests of the Companies and related items which are
pledged under the Pledge Agreement.
PLEDGED SHARES shall mean that portion of the Pledged Collateral which
consists of all of the issued and outstanding Class A -------------- Shares.
PLEDGED SUBSIDIARY shall mean a Subsidiary (other than
Passport) of the Borrower whose outstanding capital stock or shares of
beneficial interest or partnership interests are pledged to the Agent for the
benefit of the Banks under the Pledge Agreement.
PLEDGING SUBSIDIARIES shall mean FII Holdings, Inc., Federated Services
Company, FS Holdings, Inc. and Federated Shareholder Services Company.
PLEDGORS shall mean the Borrower, the Pledging Subsidiaries
and the holders of the Class A Shares.
PNC shall mean PNC Bank, National Association and its
successors and assigns.
PNC QUOTED RATE OPTION shall mean the Interest Rate Option set
forth in Section 4.1(b-1).
POTENTIAL DEFAULT shall mean any event or condition which with
notice, passage of time or a determination by the Agent, all the Banks or the
Required Banks, or any combination of the foregoing, as the case may be, would
constitute an Event of Default.
PREFERRED SHARES shall mean the Preferred Stock of the
Borrower.
PRINCIPAL OFFICE shall mean the main banking office of the
Agent in Pittsburgh, Pennsylvania.
PRIOR SECURITY INTEREST shall mean a valid and enforceable
perfected first priority security interest under the Uniform Commercial Code in
the UCC Collateral and the Pledged Collateral which is subject only to Liens for
taxes not yet due and payable to the extent such prospective tax payments are
given priority by statute as permitted hereunder.
PROFIT-SHARING TRUST shall mean the Federated Investors, Inc. Employees
Profit-Sharing Trust.
PROHIBITED TRANSACTION shall mean any prohibited transaction
as defined in Section 4975 of the Internal Revenue Code or Section 406 of ERISA
for which neither an individual nor a class exemption has been issued by the
United States Department of Labor.
PURCHASING BANK shall mean a Bank which becomes a party to
this Agreement by executing an Assignment and Assumption Agreement.
RATABLE SHARE shall mean the proportion that a Bank's
Commitment bears to the Commitments of all the Banks.
REGULATION U shall mean Regulation U, T, G or X as promulgated
by the Board of Governors of the Federal Reserve System, as amended from time to
time.
REIMBURSEMENT OBLIGATIONS shall have the meaning given to such
term in Section 2.10(d)(i).
REPORTABLE EVENT shall mean (i) a reportable event described
in Section 4043 of ERISA and regulations thereunder with respect to a Defined
Benefit Pension Plan, (ii) a withdrawal by a substantial employer from a Defined
Benefit Pension Plan to which more than one employer contributes, as referred to
in Section 4063(b) of ERISA, or (iii) a cessation of operations at a facility
causing more than twenty percent (20%) of plan participants to be separated from
employment, as referred to in Section 4062(f) of ERISA.
REQUIRED BANKS shall mean (i) if there are no Loans
outstanding, Banks whose Commitments aggregate at least 66 2/3% of the total
Commitments of all Banks, or (ii) if there are Loans outstanding, Banks, the
total principal amount of whose Loans outstanding aggregate at least 66 2/3% of
the total principal amount of the Loans outstanding hereunder as of the
immediately preceding Settlement Date; PROVIDED in both clause (i) and (ii), the
percentage shall be 60% at any time that PNC's Ratable Share is greater than 33
1/3%.
RESTRICTED STOCK shall mean the Class B Shares issued under
and in accordance with the Federated Investors Employee Restricted Stock Plan.
REVOLVING CREDIT COMMITMENT shall mean, as to any Bank at any
time, the amount initially set forth opposite its name on SCHEDULE 1.1(A) in the
column labeled "Amount of Commitment for Revolving Credit Loans" and thereafter
on Schedule I to the most recent Assignment and Assumption Agreement, and
REVOLVING CREDIT COMMITMENTS shall mean the aggregate Revolving Credit
Commitments of all of the Banks.
REVOLVING CREDIT EXPIRATION DATE shall mean January 31, 2001.
REVOLVING CREDIT FACILITY shall have the meaning given to such
term in the first recital clause.
REVOLVING CREDIT LOAN REQUEST shall mean a request for
Revolving Credit Loans made in accordance with Section 2.6(a).
REVOLVING CREDIT LOANS shall mean collectively all, and
Revolving Credit Loan shall mean separately any, of the revolving credit loans
made by the Banks or one of the Banks to the Borrower pursuant to Section
2.1(a).
REVOLVING CREDIT NOTES shall mean collectively all, and
REVOLVING CREDIT NOTE shall mean separately any, of the Revolving Credit Notes
of the Borrower in the form of EXHIBIT F, evidencing the Revolving Credit Loans
together with all amendments, restatements, extensions, renewals, replacements,
refinancings or refundings thereof in whole or in part.
REVOLVING FACILITY USAGE shall mean at any time the sum of the
Revolving Credit Loans and Swing Loans outstanding and the Letter of Credit
Outstandings.
SECTION 12B-1 PLAN shall mean a plan of distribution adopted
by a mutual fund pursuant to Rule 12b-1 of the Investment Company Act.
SECURITY AGREEMENT shall mean the Security Agreement in the
form of EXHIBIT B executed and delivered by the Grantors to the Agent for the
benefit of the Banks as security for the Loans.
SENIOR LOAN DOCUMENTS shall mean this Agreement, the Notes,
the Intercompany Subordination Agreement, the Security Agreement, the Pledge
Agreement, the Intercreditor Agreement, the Intercreditor Agreement (Senior
Notes) and any other instruments, certificates, powers of attorney or documents
delivered or contemplated to be delivered thereunder or in connection herewith,
as the same may be supplemented or amended from time to time in accordance
herewith, and SENIOR LOAN DOCUMENT shall mean any of the Senior Loan Documents.
SENIOR NOTES shall have the meaning given such term in Section
8.2(e)(ii).
SETTLEMENT DATE shall mean the second Business Day of each
month and the third Wednesday of each month (if such day is a Business Day and
if not, the next succeeding Business Day) and any other Business Day on which
the Agent elects to effect settlement pursuant to Section 5.6.
SHAREHOLDER RIGHTS AGREEMENT shall mean the Shareholder Rights
Agreement dated August 1, 1989 among Standard Fire, the Borrower and the persons
executing a letter substantially in the form of EXHIBIT A thereto, as amended
through the Closing Date and as the same may be further amended from time to
time in accordance herewith.
SOLVENT shall mean, with respect to any person on a particular
date, that on such date (i) the fair value of the property of such person is
greater than the total amount of liabilities, including contingent liabilities,
of such person, (ii) the present fair salable value of the assets of such person
is not less than the amount that will be required to pay the probable liability
of such person on its debts as they become absolute and matured, (iii) such
person is able to realize upon its assets and pay its debts and other
liabilities, contingent obligations and other commitments as they mature in the
normal course of business, (iv) such person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such person's ability to
pay as such debts and liabilities mature, and (v) such person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such person's property would constitute unreasonably
small capital after giving due consideration to the prevailing practice in the
industry in which such person is engaged. In computing the amount of contingent
liabilities at any time, it is intended that such liabilities will be computed
at the amount which, in light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
SPECIAL PURPOSE SUBSIDIARY shall mean any corporation,
business trust or other entity formed by the Borrower to engage in the limited
activities permitted by Section 8.2(p)(ii) and shall be an indirect wholly owned
subsidiary of the Borrower, PROVIDED, that if the Special Purpose Subsidiary is
organized under the law of a foreign jurisdiction which requires that residents
of such foreign jurisdiction maintain a certain level of ownership interest in
such Special Purpose Subsidiary, then not less than 98% of the outstanding
shares of such Special Purpose Subsidiary shall be owned by a wholly owned
Subsidiary of the Borrower.
SUBSIDIARY of any person at any time shall mean (i) any
corporation or trust of which fifty percent (50%) or more (by number of shares
or number of votes) of the outstanding capital stock or shares of beneficial
interest normally entitled to vote for the election of one or more directors or
trustees (regardless of any contingency which does or may suspend or dilute the
voting rights) is at such time owned directly or indirectly by such person or
one or more of such person's Subsidiaries, or any partnership of which such
person is a general partner or of which fifty percent (50%) or more of the
partnership interests is at the time directly or indirectly owned by such person
or one or more of such person's Subsidiaries, and (ii) any corporation, trust,
partnership or other entity which is controlled or capable of being controlled
by such person or one or more of such person's Subsidiaries. For the purposes of
this Agreement, none of the Special Purpose Subsidiaries or the Funds shall be
considered a "Subsidiary" of the Borrower. For the purposes of this Agreement,
the term "wholly owned Subsidiaries" shall include (i) all Subsidiaries of which
all of the outstanding shares of capital stock or beneficial interest of such
Subsidiary are owned by the Borrower or another wholly owned Subsidiary of the
Borrower, or (ii) foreign Subsidiaries where the law of the applicable foreign
jurisdiction requires that residents of such foreign jurisdiction maintain a
certain level of ownership interest in such Subsidiary and not less than 98% of
the outstanding shares of capital stock or beneficial interests of such
Subsidiary are owned by the Borrower or another wholly owned Subsidiary of the
Borrower.
SUBSIDIARY SHARES shall have the meaning specified in Section
6.1(c).
SWING LOAN COMMITMENT shall mean PNC's commitment to make
Swing Loans to the Borrower pursuant to Section 2.1(b) in an aggregate principal
amount up to $15,000,000.
SWING LOAN REQUEST shall mean a request for Swing Loans made
in accordance with Section 2.6(b).
SWING LOANS shall mean collectively and SWING LOAN shall mean
separately all swing loans or any swing loan made by PNC to the Borrower
pursuant to Section . 2.1(b).
SWING NOTE shall mean the Swing Note of the Borrower in the
form of EXHIBIT G, evidencing the Swing Loans, together with all amendments,
extensions, renewals, restatements, refinancings or refundings thereof in whole
or in part.
TOTAL INDEBTEDNESS shall mean, for any fiscal quarter for the
fiscal quarter then ended, all Indebtedness of the Borrower and its Consolidated
Subsidiaries.
TRANSFEROR BANK shall mean the selling Bank pursuant to an
Assignment and Assumption Agreement.
UCC COLLATERAL shall mean that portion of the Collateral which
consists of the property of the Companies in which security interests are
granted under the Security Agreement.
UNIFORM COMMERCIAL CODE shall have the meaning assigned to
that term in Section 6.1(p).
UNPLEDGED SHARES shall mean all of the issued and outstanding shares of
capital stock of the Borrower other than the Class A ---------------- Shares.
CONSTRUCTION.
Unless the context of this Agreement otherwise clearly requires,
references to the plural include the singular, the singular the plural and the
part the whole, "or" has the inclusive meaning represented by the phrase
"and/or," and "including" has the meaning represented by the phrase "including
without limitation." References in this Agreement to "determination" of or by
the Agent or the Banks shall be deemed to include good-faith estimates by the
Agent or the Banks (in the case of quantitative determinations) and good-faith
beliefs by the Agent or the Banks (in the case of qualitative determinations).
Whenever the Agent or the Banks are granted the right herein to act in its or
their sole discretion or to grant or withhold consent, such right shall be
exercised in good faith. The words "hereof," "herein," "hereunder" and similar
terms in this Agreement refer to this Agreement as a whole and not to any
particular provision of this Agreement. The section headings and other headings
contained in this Agreement and the Table of Contents preceding this Agreement
are for reference purposes only and shall not control or affect the construction
of this Agreement or the interpretation thereof in any respect. Section,
subsection, schedule and exhibit references are to this Agreement unless
otherwise specified.
ACCOUNTING PRINCIPLES.
Except as otherwise provided in this Agreement, all computations and
determinations as to accounting or financial matters and all financial
statements to be delivered pursuant to this Agreement shall be made and prepared
in accordance with GAAP (including principles of consolidation where
appropriate), and all accounting or financial terms shall have the meanings
ascribed to such terms by GAAP provided that for the purpose of determining
compliance with Section 8.2(e) and (f), the impact of the incurrence of
indebtedness or creation of liens in connection with the sale or transfer of
Designated Assets as described and permitted under Section 8.2(k)(i) shall be
excluded. If one or more changes in GAAP after the date of this Agreement are
required to be applied to then existing transactions, and either a violation of
one or more provisions hereof shall have occurred which would not have occurred
if no change in accounting principles had taken place or a violation of one or
more of the provisions hereof shall not occur which would have occurred if no
change in accounting principles had taken place:
the parties agree that any such violation shall not be considered to
constitute an Event of Default for a period of thirty (30) days;
the parties agree in such event to negotiate in good faith to
attempt to draft an amendment of this Agreement satisfactory to the Required
Banks which shall approximate to the extent possible the economic effect of the
original provisions hereof after taking into account such change or changes in
GAAP; and
if the parties are unable to negotiate such an amendment
satisfactory to the Required Banks within thirty (30) days, then as used in this
Agreement "GAAP" shall mean generally accepted accounting principles as in
effect prior to such change.
2. REVOLVING CREDIT AND SWING LOAN FACILITIES
THE COMMITMENTS.
REVOLVING CREDIT COMMITMENTS. Subject to the terms and
conditions hereof and relying upon the representations and warranties herein set
forth, each Bank severally agrees to make Revolving Credit Loans to the Borrower
at any time or from time to time on or after the date hereof to, but not
including, the Revolving Credit Expiration Date in an aggregate principal amount
not to exceed, at any one time such Bank's Revolving Credit Commitment MINUS
such Bank's Ratable Share of the Letter of Credit Outstandings. Within such
limits of time and amount and subject to the other provisions of this Agreement,
the Borrower may borrow, repay and reborrow pursuant to this Section 2.1(a).
SWING LOAN COMMITMENT. Subject to the terms and conditions
hereof and relying upon the representations and warranties herein set forth, and
in order to facilitate loans and repayments between Settlement Dates, PNC may
make, at its option, cancelable at any time for any reason whatsoever, swing
loans (the "SWING LOANS") to the Borrower at any time or from time to time after
the date hereof to, but not including, the Revolving Credit Expiration Date in
an aggregate principal amount up to $20,000,000 (the "SWING LOAN COMMITMENT"),
PROVIDED that the aggregate principal amount of PNC's Swing Loans and the
Revolving Credit Loans of all the Banks at any one time outstanding shall not
exceed the Revolving Credit Commitments of all the Banks. Within such limits of
time and amount and subject to the other provisions of this Agreement, the
Borrower may borrow, repay and reborrow pursuant to this Section 2.1(b).
NATURE OF THE BANKS' AND THE BORROWER'S OBLIGATIONS.
Each Bank shall be obligated to participate in each request for
Revolving Credit Loans pursuant to Section 2.6 in accordance with its Ratable
Share. The aggregate of each Bank's Revolving Credit Loans outstanding hereunder
to the Borrower at any time shall never exceed its Revolving Credit Commitment
MINUS its Ratable Share of the Letter of Credit Outstandings at such time. The
obligations of each Bank hereunder are several. The failure of any Bank to
perform its obligations hereunder shall not affect the obligations of the
Borrower to any other party nor shall any other party be liable for the failure
of such Bank to perform its obligations hereunder. The Banks shall have no
obligation to make Revolving Credit Loans hereunder on or after the Revolving
Credit Expiration Date.
COMMITMENT FEES.
Accruing from the Closing Date until the Revolving Credit Expiration
Date, the Borrower agrees to pay to the Agent for the account of each Bank, as
consideration for such Bank's Revolving Credit Commitment hereunder, a
commitment fee (the "COMMITMENT FEE") equal to a percentage per annum (computed
on the basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed) which shall be based upon the Leverage Ratio for the immediately
preceding fiscal quarter, as shown on the Borrower's most recently delivered
financial statements pursuant to Section 8.3(b) (except as otherwise set forth
in Section 4.1(c)), as follows, on the average daily unborrowed amount of such
Bank's Revolving Credit Commitment as the same may be constituted from time to
time (for purposes of this computation, PNC's Swing Loans shall be deemed to be
borrowed amounts under its Revolving Credit Commitment, Letter of Credit
Outstandings shall be deemed to be borrowed amounts under each Bank's Revolving
Credit Commitments in accordance with its Ratable Share, and the amount of any
Revolving Credit Loans that any Bank wrongfully fails to fund shall not be
deemed to be an unborrowed amount under such Bank's Revolving Credit
Commitment):
LEVERAGE RATIO COMMITMENT FEE (%)
greater than or equal to 3.0 .375%
less than 3.0 .25%
All Commitment Fees shall be payable in arrears on the second Business Day of
each April, July, October and January after the date hereof and on the Revolving
Credit Expiration Date or upon acceleration of the Notes.
PERMANENT REDUCTIONS OF COMMITMENTS.
VOLUNTARY REDUCTIONS. The Borrower shall be permitted,
without premium or penalty, at any time upon five (5) Business Day's notice to
the Agent, to reduce permanently the Revolving Credit Commitments in an
aggregate amount of not less than $5,000,000 and in integral multiples of
$1,000,000 for amounts in excess of $5,000,000, and each Bank's Revolving Credit
Commitments shall be reduced in accordance with its Ratable Share; PROVIDED,
HOWEVER, the principal amount of all Revolving Credit Loans outstanding at any
time shall not be permitted to exceed the Revolving Credit Commitments of all
the Banks at such time.
EFFECT OF REDUCTIONS. After each such reduction, the
Commitment Fee shall be calculated upon the Revolving Credit Commitments of the
Banks as so reduced, and the amount of the reduction of the Revolving Credit
Commitments may not be reinstated.
MANDATORY PREPAYMENTS.
Within five (5) Business Days of any sale or assignment of
Designated Assets permitted under Section 8.2 (k), the Borrower shall make a
mandatory prepayment of principal equal to the after-tax proceeds of such sale
or assignment (as estimated in good faith by the Borrower), together with
accrued interest on such principal amount. All prepayments required pursuant to
this Section 2.5 shall first be applied among the Interest Rate Options to the
principal amount of the Revolving Credit Loans subject to a Base Rate Option,
then to the Revolving Credit Loans subject to the Euro-Rate Option. In
accordance with Section 5.5(b), the Borrower shall indemnify the Banks for any
loss or expense, including loss of margin, incurred with respect to any such
prepayments applied against the Euro-Rate Portion on any day other than the last
day of the applicable Euro-Rate Interest Period. Notwithstanding the foregoing,
so long as no Event of Default or Potential Default has occurred and is
continuing, if any mandatory prepayment required under this Section 2.5 would be
applied to Loans subject to the Euro-Rate Option, and would result in prepayment
on a day other than the last day of the applicable Euro-Rate Interest Period,
then unless the Banks agree to waive any resulting loss or expense, such portion
of the mandatory prepayment that would be due on a day other than the last day
of the applicable Euro-Rate Interest Period shall be due and payable on the
earlier of (i) the last day of the applicable Euro-Rate Interest Period or (ii)
the occurrence of an Event of Default or Potential Default. To the extent the
Borrower fails to make any accrued interest or related fee payment under Section
2.5 or 5.4 at the time of any prepayment, then any amounts received shall be
applied first, to pay any related fees, second, to pay any accrued interest and
third, to pay principal, PROVIDED, the Borrower shall remain liable for the
balance due.
LOAN REQUESTS.
REVOLVING CREDIT LOAN REQUESTS. Except as otherwise provided
herein, the Borrower may from time to time prior to the Revolving Credit
Expiration Date request the Banks to make Revolving Credit Loans, or renew or
convert the Interest Rate Option applicable to existing Revolving Credit Loans,
by the delivery to the Agent, not later than 2:00 p.m. Pittsburgh time (i) three
(3) Business Days prior to the proposed Borrowing Date with respect to the
making of Revolving Credit Loans to which the Euro-Rate Option applies or the
conversion to or the renewal of the Euro-Rate Option for any Revolving Credit
Loans; and (ii) not later than 11:00 a.m. Pittsburgh time on the proposed
Borrowing Date with respect to the making of a Revolving Credit Loan to which
the Base Rate Option applies or the last day of the preceding Euro-Rate Interest
Period with respect to the conversion to the Base Rate Option for any Revolving
Credit Loan, of a duly completed request therefor substantially in the form of
EXHIBIT H-1 or a request by telephone immediately confirmed in writing by
letter, facsimile or telex (each, a "REVOLVING CREDIT LOAN REQUEST"), it being
understood that the Agent may rely on the authority of any person making such a
telephonic request without the necessity of receipt of such written
confirmation. Each Revolving Credit Loan Request shall be irrevocable and shall
specify (i) the proposed Borrowing Date; (ii) the aggregate principal amount of
the proposed Revolving Credit Loans comprising the Borrowing Tranche, which
shall be in integral multiples of $50,000 and not less than $5,000,000 for
Revolving Credit Loans to which the Euro-Rate Option applies and not less than
the lesser of $1,000,000 or the maximum amount available under the Revolving
Credit Commitments for Revolving Credit Loans to which the Base Rate Option
applies; (iii) whether the Euro-Rate Option or the Base Rate Option shall apply
to the proposed Revolving Credit Loans comprising the Borrowing Tranche; and
(iv) in the case of Revolving Credit Loans to which the Euro-Rate Option
applies, an appropriate Euro-Rate Interest Period for the proposed Revolving
Credit Loans comprising the Borrowing Tranche. If no such notice is given at
least three (3) Business Days prior to the expiration of any Euro-Rate Interest
Period for any Revolving Credit Loan or portion thereof, the Borrower shall be
deemed to have converted such Revolving Credit Loan or portion thereof to the
Base Rate Option commencing upon the last day of that Euro-Rate Interest Period.
SWING LOAN REQUESTS. Except as otherwise provided herein, the
Borrower may from time to time prior to the Revolving Credit Expiration Date
request PNC to make Swing Loans by delivery to PNC not later than 3:00 p.m.
Pittsburgh time on the proposed Borrowing Date of a duly completed request
therefor substantially in the form of EXHIBIT H-2 or a request by telephone
immediately confirmed in writing by letter, facsimile or telex (each, a "SWING
LOAN REQUEST"), it being understood that the Agent may rely on the authority of
any person making such a telephonic request without the necessity of receipt of
such written confirmation. Each Swing Loan Request shall be irrevocable and
shall specify (i) the proposed Borrowing Date (ii) whether the Base Rate Option
or the PNC Quoted Rate Option shall apply and (iii) the principal amount of such
Swing Loan, which shall not be less than $100,000. PNC shall use reasonable
efforts to inform the Borrower by 12:00 noon (Pittsburgh time) on each Business
Day as to what the PNC Quoted Rate Option is on such Business Day. If PNC has
not informed the Borrower as to the PNC Quoted Rate Option available on any
Business Day, the Borrower may also telephone PNC on any Business Day to request
PNC to provide the Borrower with the PNC Quoted Rate Option available on such
Business Day, and PNC shall promptly respond to such request. If the Borrower
elects the PNC Quoted Rate Option to apply with respect to any Swing Loan, such
PNC Quoted Rate Option will be in effect until 3:00 p.m.
(Pittsburgh time) on the following Business Day.
MAKING LOANS.
REVOLVING CREDIT LOANS. The Agent shall, promptly after
receipt by it of a Revolving Credit Loan Request pursuant to Section 2.6(a),
notify the Banks of its receipt of such Revolving Credit Loan Request
specifying: (i) the proposed Borrowing Date and the time and method of
disbursement of such Revolving Credit Loan; (ii) the amount and type of such
Revolving Credit Loan and the applicable Euro-Rate Interest Period (if any); and
(iii) the apportionment among the Banks of the Revolving Credit Loans as
determined by the Agent in accordance with Section 2.2. Each Bank shall remit
the principal amount of each Revolving Credit Loan to the Agent such that the
Agent is able to, and the Agent shall, to the extent the Banks have made funds
available to it for such purpose, fund such Revolving Credit Loan to the
Borrower in U.S. Dollars and immediately available funds at the Principal Office
prior to 3:00 p.m. Pittsburgh time on the Borrowing Date; PROVIDED that if any
Bank fails to remit such funds to the Agent in a timely manner the Agent may
elect in its sole discretion to fund with its own funds the Revolving Credit
Loan of such Bank on the Borrowing Date; PROVIDED, FURTHER, that such funding by
the Agent shall not be deemed to increase the Revolving Credit Commitment of the
Agent or to reduce the Revolving Credit Commitment of such Bank.
SWING LOANS. So long as PNC elects to make Swing Loans, PNC
shall, after receipt by it of a Swing Loan Request pursuant to Section 2.6(b),
fund such Swing Loan to the Borrower in U.S. Dollars and immediately available
funds at the Principal Office prior to 5:00 p.m. Pittsburgh time on the
Borrowing Date; PROVIDED that after PNC receives notice of default as set forth
in Section 10.9, PNC shall not make any Swing Loans.
BORROWINGS TO REPAY SWING LOANS.
PNC may at its option, exercisable at any time for any reason
whatsoever, demand repayment of the Swing Loans, and each Bank shall make a
Revolving Credit Loan in an amount equal to such Bank's Ratable Share of the
aggregate principal amount of the outstanding Swing Loans plus, if PNC so
requests, accrued interest thereon, PROVIDED that no Bank shall be obligated in
any event to make Revolving Credit Loans in excess of its Revolving Credit
Commitment MINUS its Ratable Share of the Letter of Credit Outstandings.
Revolving Credit Loans made pursuant to the preceding sentence shall bear
interest at the Base Rate Option and shall be deemed to have been properly
requested in accordance with Section 2.6(a) without regard to any of the
requirements of that provision. PNC shall provide notice to the Banks (which may
be telephonic or written notice by letter, facsimile or telex) that such
Revolving Credit Loans are to be made under this Section 2.8 and of the
apportionment among the Banks, and the Banks shall be unconditionally obligated
to fund such Revolving Credit Loans (whether or not the conditions specified in
Section 7.2 are then satisfied) by the time PNC so requests, which shall not be
earlier than 3:00 p.m. Pittsburgh time on the Business Day next succeeding the
date the Banks receive such notice from PNC.
NOTES.
REVOLVING CREDIT NOTES. The obligation of the Borrower to
repay the aggregate unpaid principal amount of the Revolving Credit Loans made
to it by each Bank together with interest thereon shall be evidenced by a
promissory note of the Borrower dated the Closing Date in the form of EXHIBIT F
payable to the order of each Bank in a face amount equal to the Revolving Credit
Commitment of such Bank. The Revolving Credit Notes shall be payable in full on
the Revolving Credit Expiration Date or earlier acceleration of the Notes.
SWING NOTE. The obligation of the Borrower to repay the
unpaid principal amount of the Swing Loans made to it by PNC together with
interest thereon shall be evidenced by a demand promissory note of the Borrower
dated the Closing Date in the form of EXHIBIT G payable to the order of PNC in a
face amount equal to the Swing Loan Commitment.
LETTER OF CREDIT SUBFACILITY.
ISSUANCE OF LETTERS OF CREDIT. The Borrower may request the
issuance of a letter of credit (each a "LETTER OF CREDIT") on behalf of itself
or another Company by delivering to the Agent a completed application and
agreement for letters of credit in such form as the Agent may specify from time
to time by no later than 10:00 a.m. Pittsburgh time at least three (3) Business
Days, or such shorter period as may be agreed to by the Agent, in advance of the
proposed date of issuance. Subject to the terms and conditions hereof and in
reliance on the agreements of the other Banks set forth in this Section 2.10,
the Agent will issue a Letter of Credit PROVIDED that each Letter of Credit
shall (A) have a maximum maturity of three hundred ninety-seven (397) days from
the date of issuance, (B) in no event expire later than five (5) Business Days
prior to the Revolving Credit Expiration Date, PROVIDED, FURTHER, that in no
event shall (i) the Letter of Credit Outstandings exceed, at any one time,
$25,000,000, or (ii) the Revolving Facility Usage exceed, at any one time, the
Revolving Credit Commitments.
PARTICIPATIONS. Immediately upon issuance of each Letter of
Credit, and without further action, each Bank shall be deemed to, and hereby
agrees that it shall, have irrevocably purchased for such Bank's own account and
risk from the Agent an individual participation interest in such Letter of
Credit and drawings thereunder in an amount equal to such Bank's Ratable Share
of the maximum amount which is or at any time may become available to be drawn
thereunder and each such Bank shall be responsible to reimburse the Agent
immediately for its Ratable Share of any disbursement under any Letter of Credit
which has not been reimbursed by the Borrower in accordance with Section
2.10(d).
LETTER OF CREDIT FEES. The Borrower shall pay to the Agent
for the ratable account of the Banks a fee (the "LETTER OF CREDIT FEE") equal to
the then-applicable Euro-Rate Margin per annum, which fee shall be computed on
the daily average Letter of Credit Outstandings and shall be payable quarterly
in arrears commencing with the second Business Day of each April, July, October
and January following issuance of each Letter of Credit and on the Revolving
Credit Expiration Date. The Borrower shall also pay to the Agent for the Agent's
sole account the Agent's then in effect customary fees and administrative
expenses payable with respect to the Letters of Credit as the Agent may
generally charge or incur from time to time in connection with the issuance,
maintenance, modification (if any), assignment or transfer (if any),
negotiation, and administration of Letters of Credit.
DISBURSEMENTS, REIMBURSEMENT.
The Borrower shall be obligated immediately to reimburse the Agent for all
amounts which the Agent is required to advance pursuant to the Letters of Credit
(collectively, the "REIMBURSEMENT OBLIGATIONS"). Such amounts advanced shall
become, at the time the amounts are advanced, Revolving Credit Loans from the
Banks. Such Revolving Credit Loans shall bear interest at the rate applicable
under the Base Rate Option unless the Borrower elects to have a different
Interest Rate Option apply to such Revolving Credit Loans pursuant to and in
accordance with the provisions contained in Section 4.1.
The Agent will notify (A) the Borrower of each demand
or presentment for payment or other drawing under each Letter of
Credit, and (B) the Banks of the amount required to be advanced pursuant to the
Letters of Credit. Before 10:00 a.m. (Pittsburgh time) on the date of any
advance the Agent is required to make pursuant to the Letters of Credit, each
Bank shall make available such Bank's Ratable Share of such advance in
immediately available funds to the Agent.
DOCUMENTATION. The Borrower agrees to be bound by the terms
of the Agent's application and agreement for Letters of Credit and the Agent's
written regulations and customary practices relating to Letters of Credit,
though such interpretation may be different from the Borrower's own. In the
event of a conflict between such application or agreement and this Agreement,
this Agreement shall govern. It is understood and agreed that, except in the
case of gross negligence or willful misconduct, the Agent shall not be liable
for any error, negligence and/or mistakes, whether of omission or commission, in
following any Company's instructions or those contained in the Letters of Credit
or any modifications, amendments or supplements thereto.
DETERMINATIONS TO HONOR DRAWING REQUESTS. In determining
whether to honor any request for drawing under any Letter of Credit by the
beneficiary thereof, the Agent shall be responsible only to determine that the
documents and certificates required to be delivered under such Letter of Credit
have been delivered and that they comply on their face with the requirements of
such Letter of Credit.
NATURE OF PARTICIPATION AND REIMBURSEMENT OBLIGATIONS. The
obligation of the Banks to participate in Letters of Credit pursuant to Section
2.10(b) and the obligation of the Banks pursuant to Section 2.10(d) to fund
Revolving Credit Loans upon a draw under a Letter of Credit and the obligations
of the Borrower to reimburse the Agent upon a draw under a Letter of Credit
pursuant to Section 2.10 shall be absolute, unconditional and irrevocable and
shall be performed strictly in accordance with the terms of such Sections under
all circumstances, including the following circumstances:
the failure of any Company or any other Person to comply with the
conditions set forth in Sections 2.1, 2.6, 2.7 or 7.2 or as otherwise set forth
in this Agreement for the making of a Revolving Credit Loan, it being
acknowledged that such conditions are not required for the making of a Revolving
Credit Loan under Section 2.10(d);
any lack of validity or enforceability of any Letter of Credit;
the existence of any claim, set-off, defense or other right which any
Company or any Bank may have at any time against
a beneficiary or any transferee of any Letter of Credit (or any Person for whom
any such transferee may be acting), the Agent or other bank or any other Person
or, whether in connection with this Agreement, the transactions contemplated
herein or any unrelated transaction (including any underlying transaction
between any Company or Subsidiaries of a Company and the beneficiary for which
any Letter of Credit was procured);
any draft, demand, certificate or other document presented under any Letter
of Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;
payment by the Agent under any Letter of Credit against presentation of a
demand, draft or certificate or other document which does not comply with the
terms of such Letter of Credit;
any adverse change in the business, operations, properties, assets,
condition (financial or otherwise) or prospects of any Company or Subsidiaries
of any Company;
any breach of this Agreement or any other Senior Loan Document by any party
thereto;
any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing;
the fact that an Event of Default or a Potential Default shall have
occurred and be continuing; or
the Revolving Credit Expiration Date shall have passed or this Agreement or
the Revolving Credit Commitments hereunder shall have been terminated (in which
case the Borrower shall be required to immediately reimburse the Agent and the
Banks for the amount of any drawing funded by the Banks).
INDEMNITY. In addition to amounts payable as provided in
Section 10.5, the Borrower hereby agrees to protect, indemnify, pay and save
harmless the Agent from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable fees,
expenses and disbursements of counsel and allocated costs of internal counsel)
which the Agent may incur or be subject to as a consequence, direct or indirect,
of (i) the issuance of any Letter of Credit, other than as a result of (A) the
gross negligence or willful misconduct of the Agent as determined by a final
judgment of a court of competent jurisdiction or (B) subject to the following
clause (ii), the wrongful dishonor by the Agent of a proper demand for payment
made under any Letter of Credit or (ii) the failure of the Agent to honor a
drawing under any such Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto
government or governmental authority (all such acts or omissions herein called
"GOVERNMENTAL ACTS").
LIABILITY FOR ACTS AND OMISSIONS. As between the Borrower and
the Agent, the Borrower assumes all risks of the acts and omissions of, or
misuse of the Letters of Credit by, the respective beneficiaries of such Letters
of Credit. In furtherance and not in limitation of the foregoing, the Agent
shall not be responsible for : (i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in connection
with the application for an issuance of any such Letter of Credit, even if it
should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
such Letter of Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, which may prove to be invalid or ineffective for any
reason; (iii) failure of the beneficiary of any such Letter of Credit to comply
fully with any conditions required in order to draw upon such Letter of Credit;
(iv) errors, omissions, interruptions or delays in transmission or delivery of
any messages, by mail, cable, telegraph, telex or otherwise, whether or not they
be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or
delay in the transmission or otherwise of any document required in order to make
a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit; or (viii) any
consequences arising from causes beyond the control of the Agent, including any
Governmental Acts, and none of the above shall affect or impair, or prevent the
vesting of, any of the Agent's rights or powers hereunder.
In furtherance and extension and not in limitation of the
specific provisions set forth above, any action taken or omitted by the Agent
under or in connection with the Letters of Credit issued by it or any documents
and certificates delivered thereunder, if taken or omitted in good-faith, shall
not put the Agent under any resulting liability to the Borrower.
USE OF PROCEEDS.
The proceeds of the Revolving Credit Loans shall be used for lawful
purposes in accordance with the second recital clause above.
3. [Intentionally Omitted.]
4. INTEREST RATES
INTEREST RATE OPTIONS.
The Borrower shall pay interest in respect of the outstanding unpaid
principal amount of the Loans as selected from one (1) of the three (3) Interest
Rate Options set forth below, it being understood that subject to the provisions
of this Agreement, the Borrower may select different Interest Rate Options and
different Euro-Rate Interest Periods to apply simultaneously to the Loans
comprising different Borrowing Tranches and may convert to or renew one or more
Interest Rate Options with respect to all or any portion of the Loans comprising
any Borrowing Tranche; PROVIDED that there shall not be at any one time
outstanding more than seven (7) Borrowing Tranches in the aggregate among all
the Loans accruing interest at the Euro-Rate Option, PROVIDED, FURTHER, that
only the Base Rate Option or the PNC Quoted Rate Option shall be applicable with
respect to Swing Loans, and PROVIDED, FURTHER, that the PNC Quoted Rate Option
shall not be applicable with respect to any Loans other than the Swing Loans.
The Agent's determination of a rate of interest and any change therein shall in
the absence of manifest error be conclusive and binding upon all parties hereto.
If at any time the designated rate applicable to any Loan made by the Bank
exceeds such Bank's highest lawful rate, the rate of interest on such Bank's
Loan shall be limited to such Bank's highest lawful rate; PROVIDED, that the
portion of interest which exceeds the amount such Bank can lawfully receive and,
thus, is not paid to such Bank shall be due and payable upon the following
Interest Payment Date(s) to the extent lawfully permissible.
BASE RATE OPTION: A fluctuating rate per annum (computed on
the basis of a year of (i) 365 or 366 days, as the case may be, and actual days
elapsed, for Loans based on the Agent's prime rate or (ii) 360 days and actual
days elapsed for Loans based on the Federal Funds Effective Rate) equal to the
Base Rate PLUS the Base Rate Margin (as set forth in Section 4.1(b)), such
interest rate to change automatically from time to time effective as of the
effective date of each change in the Base Rate or the Base Rate Margin.
EURO-RATE OPTION: A rate per annum (computed on a basis of a
year of 360 days and actual days elapsed) equal to the Euro-Rate PLUS the
Euro-Rate Margin (as set forth in Section 4.1(b)). The Euro-Rate shall be
adjusted automatically with respect to any Euro-Rate Portion outstanding on the
effective date of any change in the Euro-Rate Reserve Percentage notwithstanding
that such effective date occurs during a Euro-Rate Interest Period. The Agent
shall give prompt notice to the Borrower of the Euro-Rate as determined or
adjusted in accordance herewith, which determination shall be conclusive.
(b-1)PNC QUOTED RATE OPTION: A fixed rate per annum computed
on the basis of a year of 365 or 366 days, as the case may be, equal to such
interest rate as offered by PNC pursuant to Section 2.6(b) hereof, such interest
rate to remain in effect from the time the PNC Quoted Rate Option is elected
until 3:00 p.m. (Pittsburgh time) on the following Business Day.
INTEREST RATE MARGINS. The base rate margin (the "BASE RATE
MARGIN") on the Closing Date shall equal zero percent (0%). The Euro-Rate margin
(the "EURO-RATE MARGIN") on the Closing Date shall equal one and one-half
percent (1.5%). After the Closing Date, the Base Rate Margin and the Euro-Rate
Margin shall be based upon the Leverage Ratio for the immediately preceding
fiscal quarter, as shown on the Borrower's most recently delivered financial
statements pursuant to Section 8.3(b) as follows:
LEVERAGE RATIO EURO-RATE MARGIN BASE RATE MARGIN
greater than or equal to 3.0 1.375% 0%
less than 3.0 and greater 1.125% 0%
than or equal to 2.5
less than 2.5 .875% 0%
Notwithstanding the foregoing, the first adjustment to the Base Rate Margin and
Euro-Rate Margin hereunder and to the Commitment Fee under Section 2.3 will
occur on the earlier of (i) the date of the closing of the syndication hereunder
or (ii) June 30, 1996 and, for the purpose of calculating the Total Indebtedness
component of the Leverage Ratio for the initial adjustment hereunder only, Total
Indebtedness shall be calculated as of the foregoing date rather than for the
previous quarter then ended.
Except as noted above, in the event the Leverage Ratio has changed such that a
different rate is applicable, the rate shall be effective as of the first
Settlement Date following receipt by the Agent of the financial statements,
notwithstanding that such effective date occurs during a Euro-Rate Interest
Period. In the event the financial statements of the Borrower with respect to
any fiscal quarter are not delivered within forty-five (45) days of the end of
such quarter as required under Section 8.3(b), any rate reduction then in effect
shall continue until the first Settlement Date following receipt by the Agent of
financial statements reflecting that a different Base Rate Margin or Euro-Rate
Margin is applicable as a result of a change in the Leverage Ratio; PROVIDED,
that if such financial statements indicate that the Euro-Rate Margin or Base
Rate Margin should have been higher than the margins which were in effect, as a
result of the Borrower's failure to deliver such financial statements in a
timely manner, the Euro-Rate Margin and the Base Rate Margin shall be
retroactively adjusted and the Borrower shall immediately upon written notice
from the Agent pay to the Agent, for the ratable benefit of the Banks, the
additional interest to which the Banks are entitled.
RATE QUOTATIONS. The Borrower may call the Agent on or before
the date on which a Loan Request is to be delivered to receive an indication of
the rates then in effect, but it is acknowledged that such indication shall not
be binding on the Agent or the Banks nor affect the rate of interest which
thereafter is actually in effect when the election is made.
EURO-RATE INTEREST PERIODS.
At any time when the Borrower shall select, convert to or renew the
Euro-Rate Option to apply to any Revolving Credit Loan, the Borrower shall
notify the Agent thereof at least three (3) Business Days prior to the effective
date of such Euro-Rate Option by delivering a Loan Request. The notice shall
select a Euro-Rate interest period during which such Interest Rate Option shall
apply, such periods to be one (1), two (2), three (3) or six (6) months (the
"EURO-RATE INTEREST PERIODS"); PROVIDED that:
any Euro-Rate Interest Period which would otherwise end on a
date which is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in the next calendar month, in which
case such Euro-Rate Interest Period shall end on the next preceding Business
Day;
any Euro-Rate Interest Period which begins on the last
Business Day of a calendar month for which there is no numerically corresponding
Business Day in the subsequent calendar month during which such Interest Period
is to end shall end on the last Business Day of such subsequent month;
the Euro-Rate Portion for each Euro-Rate Interest Period shall be in
integral multiples of $50,000 and not less than $5,000,000;
the Borrower shall not select, convert to or renew a
Euro-Rate Interest Period for any portion of the Revolving Credit Loans that
would end after the Revolving Credit Expiration Date; and
in the case of the renewal of the Euro-Rate Option at the end
of a Euro-Rate Interest Period, the first day of the new Euro-Rate Interest
Period shall be the last day of the preceding Euro-Rate Interest Period, without
duplication in payment of interest for such day.
INTEREST AFTER DEFAULT.
To the extent permitted by Law, upon the occurrence and during the
continuance of an Event of Default, after any principal of or interest on any
Loan or any fee or other amounts hereunder shall have become due and payable by
its terms or by acceleration, declaration or otherwise, and after expiration of
any applicable grace period, such principal, interest, fee or other amount shall
bear interest for each day thereafter until paid in full (before and after
judgment) at a rate per annum which shall be equal to two percent (2%) above the
rate of interest otherwise applicable with respect to such amount or two percent
(2%) above the Base Rate Option if no rate of interest is otherwise applicable,
payable on demand. The Borrower acknowledges that such increased interest rate
reflects, among other things, the fact that such Loans or other amounts have
become a substantially greater risk given their default status and that the
Banks are entitled to additional compensation for such risk.
EURO-RATE UNASCERTAINABLE.
If
on any date on which a Euro-Rate would otherwise be
determined, the Agent shall have determined (which determination shall be
conclusive absent manifest error) that:
adequate and reasonable means do not exist for ascertaining such Euro-Rate,
or
a contingency has occurred which materially and adversely affects the
London interbank market,
at any time any Bank shall have determined (which determination shall be
conclusive absent manifest error) that:
the making, maintenance or funding of any Loan to which the Euro-Rate
Option applies has been made impracticable or unlawful by compliance by such
Bank in good faith with any Law or any interpretation or application thereof by
any Official Body or with any request or directive of any such Official Body
(whether or not having the force of Law),
the Euro-Rate Option will not adequately and fairly reflect the cost to
such Bank of the establishment or maintenance of any Loan, or if any Bank
determines after making all reasonable efforts that deposits of the relevant
amount in Dollars for the relevant Euro-Rate Interest Period for a Loan to which
the Euro-Rate Option applies are not available to such Bank in the London
interbank market, then, in the case of any event specified in subsection (a)
above, the Agent shall promptly so notify the Banks and the Borrower thereof,
and in the case of an event specified in subsection (b) above, such Bank shall
promptly so notify the Agent and attach a certificate to such notice as to the
specific circumstances of such notice and the Agent shall promptly send copies
of such notice and certificate to the other Banks and the Borrower. Upon such
date as shall be specified in such notice (which shall not be earlier than the
date such notice is given) the obligation of (A) the Banks in the case of such
notice given by the Agent, or (B) such Bank in the case of such notice given by
such Bank, to allow the Borrower to select, convert to or renew the Euro-Rate
Option shall be suspended until the Agent shall have later notified the
Borrower, or such Bank shall have later notified the Agent, of the Agent's or
such Bank's, as the case may be, determination (which determination shall be
conclusive absent manifest error) that the circumstances giving rise to such
previous determination no longer exist. If at any time the Agent makes a
determination under subsection (a) of this Section 4.4 or any Bank notifies the
Agent of a determination under subsection (b) of this Section 4.4 and, in either
case, the Borrower has previously notified the Agent of its selection of,
conversion to or renewal of the Euro-Rate Option and such Euro-Rate Option has
not yet gone into effect, such notification shall be deemed to provide for
selection of, conversion to or renewal of the Base Rate Option otherwise
available with respect to such Loans. If any Bank notifies the Agent of a
determination under subsection (b) of this Section 4.4, the Borrower shall,
subject to the Borrower's indemnification obligations under Section 5.5(b), as
to any Loan of the Bank to which the Euro-Rate Option applies, on the date
specified in such notice either convert such Loan to the Base Rate Option
otherwise available with respect to such Loan or prepay such Loan in accordance
with Section 5.4. Absent due notice from the Borrower of conversion or
prepayment, such Loan shall automatically be converted to the Base Rate Option
otherwise available with respect to such Loan upon such specified date.
SELECTION OF INTEREST RATE OPTIONS.
If the Borrower fails to select a Euro-Rate Interest Period
in accordance with the provisions of Section 4.2 in the case of renewal of the
Euro-Rate Portion, the Borrower shall be deemed to have converted such Loan or
option thereof to the Base Rate Option otherwise available with respect to such
Loans, commencing upon the last day of that Euro-Rate Interest Period. If an
Event of Default shall occur and be continuing, the Agent shall limit the
Borrower to the Base Rate Option hereunder; PROVIDED, HOWEVER, that, unless the
Loans have been accelerated hereunder, such limitation with respect to the
Euro-Rate Portion shall not be effective until the expiration of any applicable
Euro-Rate Interest Period.
If the Borrower fails to select an Interest Rate Option in
accordance with the provisions of Section 4.1 for any Swing Loan to which the
PNC Quoted Rate applies before the PNC Quoted Rate Option expires, the Borrower
shall be deemed to have converted such loan to the Base Rate Option otherwise
available with respect to such Swing Loan, commencing immediately upon the
expiration of the PNC Quoted Rate Option.
5. PAYMENTS
PAYMENTS.
All payments and prepayments to be made in respect of principal, interest,
Commitment Fees, Letter of Credit Fees, Agent's Fees or other amounts due from
the Borrower hereunder shall be payable prior to 11:00 a.m. Pittsburgh time (or
3:00 p.m. Pittsburgh time, in the event payments are to be made using the
proceeds of Loans to be made on such date), on the date when due without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived by the Borrower, and without set-off, counterclaim or other
deduction of any nature, and an action therefor shall immediately accrue. Such
payments shall be made to the Agent at the Principal Office for the account of
PNC with respect to the Swing Loans and the ratable accounts of the Banks with
respect to the Revolving Credit Loans in U.S. Dollars and in immediately
available funds, and the Agent shall promptly distribute such amounts to the
Banks in immediately available funds, subject to the provisions of Section 5.6;
PROVIDED that in the event payments are received by 11:00 a.m. Pittsburgh time
by the Agent with respect to the Revolving Credit Loans on the Settlement Date
and such payments are not distributed to the Banks on the same day received by
the Agent, the Agent shall pay the Banks the Federal Funds Effective Rate with
respect to the amount of such payments for each day held by the Agent and not
distributed to the Banks. The Agent's and each Bank's statement of account,
ledger or other relevant record shall, in the absence of manifest error, be
conclusive as the statement of the amount of principal of and interest on the
Loans and other amounts owing under this Agreement and shall be deemed an
"account stated."
PRO RATA TREATMENT OF THE BANKS.
Each borrowing, and each selection of, conversion to or renewal of any
Interest Rate Option and each payment or prepayment by the Borrower with respect
to principal, interest, Commitment Fees, Letter of Credit Fees or other fees
(except for the Agent's Fees and the fees set forth in the second sentence of
Section 2.10(c)) or amounts due from the Borrower hereunder to the Banks with
respect to the Revolving Credit Loans, shall (except as provided in Section
4.4(b), 5.4 or 5.5) be made in proportion to the Revolving Credit Loans
outstanding from each Bank and, if no Revolving Credit Loans are then
outstanding, in proportion to the Ratable Share of each Bank.
INTEREST PAYMENT DATES.
Interest on Loans to which the Base Rate Option or the PNC Quoted
Rate Option applies shall be due and payable in arrears on the second Business
Day of each April, July, October and January after the date hereof and on the
Revolving Credit Expiration Date (with respect to Revolving Credit Loans) and
upon any earlier acceleration of the Notes. Interest on the Euro-Rate Portion
shall be due and payable on the last day of each Euro-Rate Interest Period and,
if any such Euro-Rate Interest Period is longer than three (3) months, also on
the second Business Day after the end of the third month during such period and
on the Revolving Credit Expiration Date (with respect to Revolving Credit Loans)
and upon any earlier acceleration of the Notes. Interest on mandatory
prepayments of principal under Sections 2.5 (Mandatory Prepayments) shall be due
on the date such mandatory prepayment is due.
VOLUNTARY PREPAYMENTS.
The Borrower shall have the right at its option from time to
time to prepay the Loans in whole or part without premium or penalty (except as
provided in sub-section (b) below or in Section 5.5):
at any time with respect to any Swing Loan or any other Loan to which the
Base Rate Option applies;
on the last day of the applicable Euro-Rate Interest Period with respect to
Revolving Credit Loans to which the Euro-Rate Option applies; and
on the date specified in a notice by any Bank pursuant to Section 4.4(b)
with respect to any Revolving Credit Loan to which the Euro-Rate Option applies.
Whenever the Borrower desires to prepay any part of the Loans, it shall
provide a prepayment notice to the Agent at least one (1) Business Day prior to
the date of prepayment of Revolving Credit Loans or no later than 3:00 p.m.
Pittsburgh time on the date of prepayment of Swing Loans setting forth the
following information:
(x) the date, which shall be a Business Day, on which the proposed
prepayment is to be made; and
(y) the total principal amount of such prepayment, which shall not be less
than $100,000 for any Swing Loan or $1,000,000 for any Revolving Credit Loan.
All prepayment notices shall be irrevocable. The principal amount of the
Loans to which the Euro-Rate Option applies for which a prepayment notice is
given, together with interest on such principal amount and any related fees
shall be due and payable on the date specified in such prepayment notice as the
date on which the proposed prepayment is to be made. The principal amount of the
Loans to which the Base Rate Option applies for which a prepayment notice is
given shall be due and payable on the date specified in such prepayment notice
as the date on which the proposed prepayment is made; but interest on such
principal amount and any related fees shall be due and payable on the next
scheduled Interest Payment Date. All prepayments permitted pursuant to this
Section 5.4(a) shall be applied to the unpaid installments of principal of the
Loans in the inverse order of scheduled maturities. Unless otherwise specified
by the Borrower with respect to prepayments of the Euro-Rate Portion permitted
under this Section 5.4(a)(ii) or (iii) above, all prepayments shall be applied
first to the Base Rate Portion and then to the Euro-Rate Portion, subject to
Section 5.5(b).
In the event any Bank (i) gives notice under Section 4.4(b)
or Section 5.5(a), (ii) does not fund Loans because the making of such Loans
would contravene any Law applicable to such Bank pursuant to Section 7.2, (iii)
does not approve any action as to which consent of the Required Banks is
requested by the Borrower and obtained hereunder, or (iv) becomes subject to the
control of an Official Body (other than normal and customary supervision), then
the Borrower shall have the right at its option, with the consent of the Agent,
which shall not be unreasonably withheld, to prepay the Loans of such Bank in
whole together with all interest accrued thereon, within ninety (90) days after
(w) receipt of such Bank's notice under Section 4.4(b) or 5.5(a), (x) the date
such Bank has failed to fund Loans pursuant to Section 7.2 because the making of
such Loans would contravene Law applicable to such Bank, (y) the date of
obtaining the consent which such Bank has not approved, or (z) the date such
Bank became subject to the control of an Official Body, as applicable; PROVIDED
that the Borrower shall also pay to such Bank at the time of such prepayment any
amounts required under Section 5.4(a) and Section 5.5 and any accrued interest
due on such amount and any related fees; PROVIDED, HOWEVER, that the Revolving
Credit Commitment of such Bank shall be provided by one or more of the remaining
Banks or a replacement bank acceptable to the Agent and the Borrower in the
exercise of their reasonable discretion; PROVIDED, further, the remaining Banks
shall have no obligation hereunder to increase their Revolving Credit
Commitments. Notwithstanding the foregoing, the Agent may only be replaced in
accordance with Section 10.14 and the Agent must at all times be a Bank
hereunder.
ADDITIONAL COMPENSATION IN CERTAIN CIRCUMSTANCES.
INCREASED COSTS OR REDUCED RETURN RESULTING FROM TAXES,
RESERVES, CAPITAL ADEQUACY REQUIREMENTS, EXPENSES, ETC. If any Law, guideline or
interpretation or any change in any Law, guideline or interpretation or
application thereof by any Official Body charged with the interpretation or
administration thereof or compliance with any request or directive (whether or
not having the force of Law) of any central bank or other Official Body:
subjects any Bank to any tax or changes the basis of taxation with respect
to this Agreement, the Notes, the Loans or payments by the Borrower of
principal, interest, Commitment Fees, Letter of Credit Fees, Agent's Fees or
other amounts due from the Borrower hereunder or under the Notes (except for
taxes on the overall net income of such Bank),
imposes, modifies or deems applicable any reserve, special deposit or
similar requirement against credits or
commitments to extend credit extended by, or assets (funded or contingent) of,
deposits with or for the account of, or other acquisitions of funds by, any
Bank, or
imposes, modifies or deems applicable any capital adequacy or similar
requirement (A) against assets (funded or contingent) of, or credits or
commitments to extend credit extended by, any Bank, or (B) otherwise applicable
to the obligations of any Bank under this Agreement, and the result of any of
the foregoing is to increase the cost to, reduce the income receivable by, or
impose any expense (including loss of margin) upon any Bank with respect to this
Agreement, the Notes or the making, maintenance or funding of any part of the
Loans (or, in the case of any capital adequacy or similar requirement, to have
the effect of reducing the rate of return on the capital of any Bank or any
Bank's parent, taking into consideration the customary policies of any Bank or
any Bank's parent with respect to capital adequacy) by an amount which such Bank
in its sole discretion deems to be material, such Bank shall from time to time
notify in writing the Borrower and the Agent of the amount determined in good
faith (using any averaging and attribution methods employed in good faith) by
such Bank (which determination shall be conclusive, absent manifest error) to be
necessary to compensate such Bank for such increase in cost, reduction of income
or additional expense. Such notice shall set forth in reasonable detail the
basis for such determination. Such amount shall be due and payable by the
Borrower to such Bank ten (10) Business Days after such notice is given.
INDEMNITY. In addition to the compensation required by subsection (a) of this
Section 5.5, the Borrower shall indemnify each Bank against all liabilities,
losses or expenses (including loss of margin and any loss or expense incurred in
liquidating or employing deposits from third parties, including any loss or
expense incurred in connection with funds acquired by a Bank to fund or maintain
Loans subject to the Euro-Rate Option) which such Bank sustains or incurs
hereunder, including:
payment, prepayment, conversion or renewal of any Loan to which the
Euro-Rate Option applies on a day other than the last day of the corresponding
Euro-Rate Interest Period (whether or not such payment, prepayment, conversion
or renewal is mandatory, voluntary or automatic and whether or not such payment
or prepayment is then due);
attempt by the Borrower to revoke (expressly, by later inconsistent notices
or otherwise) in whole or part any notice relating to Loan Requests under
Section 2.6 or voluntary prepayments under Section 5.4; or
default by the Borrower in the performance or observance of any covenant or
condition contained in this Agreement or any other Senior Loan Document,
including any failure of the Borrower to pay when due (by acceleration or
otherwise) any principal, interest, Commitment Fees, Letter of Credit Fees,
Agent's Fees or any other amount due hereunder.
Notwithstanding the foregoing, nothing in the foregoing Section
5.5(b)(i), (ii) or (iii) shall be construed to permit the Borrower to engage in
any action otherwise prohibited hereunder. If any Bank sustains or incurs any
such loss or expense, it shall from time to time notify the Borrower of the
amount determined in good faith by such Bank (which determination shall be
conclusive absent manifest error and may include such assumptions, allocations
of costs and expenses and averaging or attribution methods as such Bank shall
deem reasonable) to be necessary to indemnify such Bank for such loss or
expense. Such notice shall set forth in writing in reasonable detail the basis
for such determination. Such amount shall be due and payable by the Borrower to
such Bank ten (10) Business Days after such notice is given.
SETTLEMENT DATE PROCEDURES.
In order to minimize the transfer of funds between the Banks and the
Agent, the Borrower may borrow, repay and reborrow Swing Loans and PNC may make
Swing Loans as provided in Section 2.1(b) during the period between Settlement
Dates. Not later than 12:00 p.m. Pittsburgh time on each Settlement Date, the
Agent shall notify each Bank of its Ratable Share of the Loans (including both
the Swing Loans made by the Agent and the Revolving Credit Loans made by the
Banks). Prior to 3:00 p.m. Pittsburgh time on such Settlement Date, each Bank
shall pay to the Agent the amount equal to the positive difference, if any,
between its Ratable Share of the Revolving Credit Loans and Swing Loans and its
Revolving Credit Loans, and the Agent shall pay to each Bank its Ratable Share
of all payments made by the Borrower to the Agent with respect to the Revolving
Credit Loans. The Agent shall also effect settlement in accordance with the
foregoing sentence on the proposed Borrowing Dates for Revolving Credit Loans
and may at its option effect settlement on any other Business Day. These
settlement procedures are established solely as a matter of administrative
convenience, and nothing contained in this Section 5.6 shall relieve the Banks
of their obligations to fund Revolving Credit Loans on dates other than a
Settlement Date pursuant to Section 2.8. The Agent may at any time at its option
for any reason whatsoever require each Bank to pay immediately to the Agent such
Bank's Ratable Share of the outstanding Revolving Credit Loans and Swing Loan
(PROVIDED the principal amount of such Bank's Revolving Credit Loans shall not
exceed its Revolving Credit Commitment MINUS its Ratable Share of the Letter of
Credit Outstanding).
6. REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Agent and each of the
Banks that:
ORGANIZATION AND QUALIFICATION. The Borrower is a
corporation, duly organized, validly existing and in good standing under the
laws of Pennsylvania; each Subsidiary of the Borrower is duly organized in the
form of organization stated on SCHEDULE 6.1(C) and is validly existing and in
good standing under the laws of its jurisdiction of organization; each Company
has the lawful power to own or lease its properties and to engage in the
business it presently conducts or proposes to conduct; and each Company is duly
licensed or qualified and in good standing in each jurisdiction wherein the
property owned or leased by it or the nature of the business transacted by it or
both makes such licensing or qualification necessary.
CAPITALIZATION AND OWNERSHIP. The authorized shares of
capital stock of the Borrower consist of 100,000,000 Preferred Shares, none of
which is issued and outstanding, 20,000 Class A Common Shares of which 6,000
shares are issued and outstanding and 900,000,000 Class B Common Shares, of
which 86,337,000 shares are issued and outstanding. All issued and outstanding
shares have been validly issued and are fully paid and nonassessable. There are
no options, warrants or other rights outstanding to purchase any shares except
as described in Section 8.2(u)(i).
SUBSIDIARIES. SCHEDULE 6.1(C) sets forth the name of each of
the Borrower's Subsidiaries, the form and jurisdiction of organization of each,
the owner(s) of its authorized capital stock, and the percentage of issued and
the outstanding shares or interests (referred to herein as the "SUBSIDIARY
SHARES") of each. Each Company has good and marketable title to all of the
Subsidiary Shares it purports to own, free and clear in each case of any Lien
except the pledge of the Subsidiary Shares pursuant to the Pledge Agreement. All
Subsidiary Shares have been validly issued and are fully paid and nonassessable.
There are no options, warrants or other rights outstanding to purchase any such
shares.
POWER AND AUTHORITY. The Borrower has full power to enter
into, execute, deliver and carry out this Agreement and the other Senior Loan
Documents to which it is a party, to incur the Indebtedness contemplated by the
Senior Loan Documents and to perform its obligations under the Senior Loan
Documents to which it is a party and all such actions have been duly authorized
by all necessary proceedings on its part. The Grantors, the Pledgors and the
Companies have full power to enter into, execute, deliver and carry out the
Security Agreement, the Pledge Agreement and the Intercompany Subordination
Agreement, respectively, and to perform their respective obligations thereunder
and all such actions have been duly authorized by all necessary proceedings on
their respective parts.
VALIDITY AND BINDING EFFECT. This Agreement has been and each
other Senior Loan Document, when duly executed and delivered by the Loan Parties
which are parties thereto, will have been duly and validly executed and
delivered by the Loan Parties. This Agreement constitutes, and the Security
Agreement, the Pledge Agreement, the Intercompany Subordination Agreement and
each other Senior Loan Document when duly executed and delivered by the Loan
Parties pursuant to the provisions hereof or thereof will constitute, legal,
valid and binding obligations of the Loan Parties, enforceable against them in
accordance with their respective terms, except to the extent that enforceability
of any of the foregoing Senior Loan Documents may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar Laws affecting the
enforceability of creditors' rights generally or limiting the right of specific
performance.
NO CONFLICT. Neither the execution and delivery of this
Agreement or the other Senior Loan Documents by the Loan Parties nor the
consummation of the transactions herein or therein contemplated or compliance
with the terms and provisions hereof or thereof by them will conflict with,
constitute a default under or result in any breach of the terms and conditions
of the declaration of trust, articles of incorporation, bylaws, partnership
agreement or equivalent documents of any Loan Party or of any Law or of any
material agreement, instrument, order, writ, judgment, injunction or decree to
which any Loan Party is a party or by which it is bound or to which it is
subject, or will result in the creation or enforcement of any Lien whatsoever
upon any property (now or hereafter acquired) of any Loan Party (other than
Liens granted under the Senior Loan Documents); PROVIDED that foreclosure on the
Pledged Collateral or other transfer of the Pledged Collateral under the Pledge
Agreement without obtaining the approvals described in Section 9(b) of the
Pledge Agreement may result in the termination of contracts under the Investment
Company Act.
LITIGATION. There are no actions, suits, proceedings or
investigations pending or, to the knowledge of the Borrower, threatened against
any of the Companies at law or in equity before any Official Body which
individually or in the aggregate may result in any Material Adverse Change. None
of the Companies is in violation of any order, writ, injunction or any decree of
any Official Body which may result in any Material Adverse Change.
TITLE TO PROPERTIES. The real property owned or leased by the
Companies is described on SCHEDULE 6.1(H). Each of the Companies has good and
marketable title to or valid leasehold interest in all properties, assets and
other rights which it purports to own or lease or which are reflected as owned
or leased on its books and records, free and clear of all liens and encumbrances
except Permitted Liens, and subject to the terms and conditions of the
applicable leases. The tangible and intangible personal property relating to
facilities and computers of the Companies (including the leases, computer
software and aircraft) are held by Federated Investors Building Corporation or
another wholly owned Pledged Subsidiary. All leases of property are in full
force and effect and, except as set forth on SCHEDULE 6.1(M), such leases do not
require any consent to consummate the transactions contemplated hereby or to
foreclose on the Pledged Shares.
FINANCIAL STATEMENTS.
HISTORICAL STATEMENTS. The Borrower has delivered to the Agent copies of
the audited consolidated financial statements for the Borrower and its
Consolidated Subsidiaries for fiscal years 1992 through 1994 (the "AUDITED
STATEMENTS"). In addition, the Borrower has delivered to the Agent copies of the
unaudited interim financial statements for the Borrower and its Consolidated
Subsidiaries for and as of the end of November 1995 and the fiscal quarter ended
September 30, 1995 (the "INTERIM STATEMENTS") (the Audited and Interim
Statements being collectively referred to as the "HISTORICAL STATEMENTS"). The
Historical Statements are correct and complete and fairly represent the
consolidated financial condition of the Borrower and its Consolidated
Subsidiaries as of their dates and the consolidated results of operations for
the fiscal periods then ended and have been prepared in accordance with GAAP
consistently applied, subject (in the case of the Interim Statements) to normal
year-end audit adjustments. None of the Companies has any significant
liabilities, contingent or otherwise, or material forward or long-term
commitments that are not disclosed in the Historical Statements or in the notes
thereto, except for the existing potential contingent liability of approximately
$1,400,000 as of the Closing Date to ICI Mutual Insurance Company relating to
the fidelity bond and directors and officers and errors and omissions insurance
coverage provided by ICI Mutual Insurance Company for the Funds and certain
Subsidiaries of the Borrower (the "ICI CONTINGENCY"), and except as disclosed
therein there are no unrealized or anticipated losses from any commitments of
any of the Companies which may cause a Material Adverse Change. Since December
31, 1994, there has been no Material Adverse Change.
FINANCIAL STATEMENTS DERIVED FROM ASSUMPTIONS. Within sixty (60) days after
the Closing Date, the Borrower will deliver to the Agent financial statements of
the Borrower and its Consolidated Subsidiaries for the fiscal years 1996-2001
derived from various assumptions of the Borrower's management (the "FINANCIAL
STATEMENTS DERIVED FROM ASSUMPTIONS"). The Financial Statements Derived from
Assumptions, upon delivery, will represent a reasonable range of possible
results in light of the history of the businesses, present and foreseeable
conditions and the intentions of the Borrower's management.
MARGIN STOCK. None of the Companies engages or intends to
engage principally, or as one of its important activities, in the business of
extending credit for the purpose, immediately, incidentally or ultimately, of
purchasing or carrying margin stock (within the meaning of Regulation U). No
part of the proceeds of any Loan has been or will be used, immediately,
incidentally or ultimately, to purchase or carry any margin stock (except
investments in Funds in accordance with ordinary business operations), or to
extend credit to others for the purpose of purchasing or carrying any margin
stock or to refund Indebtedness originally incurred for such purpose, or for any
purpose which entails a violation of or which is inconsistent with the
provisions of the regulations of the Board of Governors of the Federal Reserve
System. None of the Companies holds or intends to hold margin stock (including
shares in the Funds) such that the aggregate current market value (as defined in
Regulation U) of all such margin stock does not exceed twenty-five percent (25%)
of the value (as determined by any reasonable method) of the consolidated assets
of the Companies.
FULL DISCLOSURE. Neither this Agreement nor any Senior Loan
Document, nor any certificate, statement, agreement or other documents furnished
to the Agent or any Bank in connection herewith or therewith contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein and therein, in light of the
circumstances under which they were made, not misleading. There is no fact known
to any of the Companies which materially adversely affects the business,
property, assets, financial condition or results of operations of the Companies
taken as a whole, which has not been set forth in this Agreement or in the other
agreements, documents, certificates and statements furnished in writing to the
Agent and the Banks prior to or at the date hereof in connection with the
transactions contemplated hereby.
TAXES. All federal, state, local and other tax returns
required to have been filed with respect to the Companies have been filed, and
payment or adequate provision has been made for the payment of all taxes, fees,
assessments and other governmental charges which have or may become due pursuant
to said returns or to assessments received except to the extent that such taxes,
fees, assessments and other charges are being contested in good faith by
appropriate proceedings diligently conducted and for which such reserves or
other appropriate provisions, if any, as shall be required by GAAP shall have
been made. There are no agreements or waivers extending the statutory period of
limitations applicable to any federal income tax return of the Companies for any
period except with respect to the federal income tax return of the Companies for
1991 for which the associated statutory period of limitations was extended until
September 30, 1996.
CONSENTS AND APPROVALS. No consent, approval, exemption,
order or authorization of, or a registration or filing with, any Official Body
or any other person is required by any Law or any agreement in connection with
the execution, delivery and carrying out of this Agreement and the other Senior
Loan Documents by the Loan Parties, except for the filing of financing
statements in the state and county filing offices as listed on SCHEDULE 6.1(M)
attached hereto, all of which shall have been obtained or made on or prior to
the Closing Date unless otherwise indicated on SCHEDULE 6.1(M), PROVIDED that
foreclosure on the Pledged Collateral or other transfer of the Pledged
Collateral under the Pledge Agreement may necessitate obtaining the approvals
described in Section 9(b) of the Pledge Agreement.
NO EVENT OF DEFAULT; COMPLIANCE WITH INTERESTS. No event has
occurred and is continuing and no condition exists or will exist after giving
effect to the borrowings to be made on the Closing Date under the Senior Loan
Documents which constitutes an Event of Default or Potential Default. None of
the Companies is in violation of (i) any term of any declaration of trust,
charter, instrument, bylaw, similar or other organizational or governing
document or (ii) any agreement or instrument to which it is a party or by which
it or any of its properties may be subject or bound where such violation would
constitute a Material Adverse Change.
PATENTS, LICENSES, FRANCHISES, ETC. The Companies own or
possess all the material patents, trademarks, service marks, tradenames,
copyrights, licenses, registrations, franchises, permits and rights necessary to
own and operate their respective properties and to carry on their respective
businesses as presently conducted and planned to be conducted by the Companies,
without known conflict with the rights of others. All material patents,
trademarks, service marks, tradenames, copyrights, licenses, registrations,
franchises and permits of the Companies and the Funds (including all licenses
required under the Investment Company Act and other federal and state securities
laws) are listed and described on SCHEDULE 6.1(O).
SECURITY INTERESTS. The Liens granted or to be granted to the
Agent for the benefit of the Banks pursuant to the Security Agreement and the
Pledge Agreement in the Collateral constitute and will continue to constitute
first-priority perfected security interests under the Uniform Commercial Code as
enacted in each applicable jurisdiction (the "UNIFORM COMMERCIAL CODE") or other
applicable Law entitled to all the rights, benefits and priorities provided by
the Uniform Commercial Code or such Law. The grant of such Liens does not and
will not impair or cause the termination of any investment advisory or other
contracts of any of the Companies under any Law (including the Investment
Company Act). Upon the filing of financing statements relating to said security
interests in each office and in each jurisdiction where required in order to
perfect the security interests described above, taking possession of any stock
certificates evidencing the Pledged Collateral and recordation of the Security
Agreement in the United States Patent and Trademark Office, all such action as
is necessary or advisable to establish such rights of the Agent will have been
taken. There will be upon execution and delivery of the Security Agreement and
the Pledge Agreement and such filings and such taking of possession referred to
in the preceding sentence, no necessity for any further action in order to
preserve, protect and continue such rights, except the filing of continuation
statements with respect to such financing statements within six (6) months prior
to each five (5) year anniversary of the filing of such financing statements,
PROVIDED that foreclosure on the Pledged Collateral or other transfer of the
Pledged Collateral under the Pledge Agreement may necessitate obtaining the
approvals described in Section 9(b) of the Pledge Agreement. All filing fees and
other expenses in connection with each such action have been or will be paid by
the Borrower.
PROCEEDS. The Borrower will use the proceeds of the Loans
only for lawful purposes in accordance with the second recital clause and
Section 6.1(j), and not in contravention of any applicable Law, including the
Investment Company Act, or any other provision hereof.
STATUS OF THE PLEDGED COLLATERAL. All of the Pledged
Collateral consisting of capital stock pledged or to be pledged by the Pledgors
pursuant to the Pledge Agreement is duly authorized, validly issued, fully paid,
nonassessable and owned beneficially and of record by the Pledgor pledging the
same free and clear of any Lien or restriction on transfer, except as otherwise
provided by the Pledge Agreement and except as the right of the Banks to dispose
of the Pledged Shares may be limited by the Securities Act of 1933, as amended,
and the regulations promulgated by the Securities and Exchange Commission
thereunder and by applicable state securities laws, PROVIDED that foreclosure on
the Pledged Shares or other transfer of the Pledged Shares under the Pledge
Agreement may necessitate obtaining the approvals described in Section 9(b) of
the Pledge Agreement. Other than the Subordinated Pledge Agreement, there are no
agreements or understandings with respect to the Pledged Shares of capital stock
included in the Pledged Collateral except the Shareholder Rights Agreement, the
Articles of Incorporation and the Bylaws of the Borrower. The restrictions on
transfer contained in the Shareholder Rights Agreement do not and shall not
restrict the pledge of the Pledged Shares under the Pledge Agreement or the
transfer of the Pledged Shares by the Agent. There are no agreements or
understandings with respect to the Pledged Collateral consisting of capital
stock of any Subsidiaries of the Borrower.
INSURANCE. SCHEDULE 6.1(S) lists all insurance policies and
other bonds to which any of the Companies is a party, all of which are valid and
in full force and effect. No notice has been given or material claim made and no
ground exists to cancel or avoid any of such policies or bonds or to reduce the
coverage provided thereby. Such policies and bonds provide adequate coverage
from reputable and financially sound insurers in amounts sufficient to insure
the assets and risks of the Companies in accordance with prudent business
practice in the industry of the Companies.
COMPLIANCE WITH LAWS. The Companies have complied in all
respects with all applicable Laws, including federal and state securities laws
and Section 17(a) of the Investment Company Act, in all jurisdictions in which
any of the Companies is presently or will be doing business except where the
failure to do so would not constitute a Material Adverse Change.
MATERIAL CONTRACTS. SCHEDULE 6.1(U) lists all material
contracts relating to the business operations of the Companies, including all
employee benefit plans, employment agreements, collective bargaining agreements
and labor contracts (the "LABOR CONTRACTS"), all investment advisory contracts,
investment counseling contracts, Section 12b-1 Plans, distribution agreements,
and administrative service agreements. All material contracts of each of the
Companies are valid, binding and enforceable upon each of the parties thereto in
accordance with their respective terms, and there is no default thereunder with
respect to any of the Companies and, to the Borrower's knowledge, with respect
to parties other than the Companies.
INVESTMENT COMPANIES. None of the Companies is an "investment
company" registered or required to be registered under the Investment Company
Act or under the "control" of an "investment company" as such terms are defined
in the Investment Company Act and none of them shall become such an "investment
company" or under such "control." Each Fund that constitutes an "investment
company" is in compliance in all material respects with all requirements
applicable to an "investment company" under the Investment Company Act.
SOLVENCY. Each of the Companies is, and after consummation of
this Agreement and the other Senior Loan Documents and giving effect to all
Indebtedness incurred hereby and thereby and the Liens granted by the Companies
in connection herewith will be, Solvent, as determined as of the Closing Date.
BENEFIT ARRANGEMENTS.
Neither the Borrower nor any member of the ERISA Group sponsors, maintains
or otherwise contributes to, or has within the preceding five (5) year period
sponsored, maintained or otherwise contributed to, a Defined Benefit Pension
Plan or a Multiemployer Plan.
The Borrower and each member of the ERISA Group are in compliance in all
material respects with any applicable provisions of ERISA with respect to all
Benefit Arrangements. There has been no Prohibited Transaction with respect to
any Benefit Arrangement, or COBRA Violation, which could result in any material
liability of the Borrower or any other member of the ERISA Group. With respect
to each Benefit Arrangement that is a defined contribution plan, the Borrower
and each member of the ERISA Group (A) have fulfilled in all material respects
their obligations under the minimum funding standards of ERISA, if applicable,
or contractual obligations to contribute to such plans, and (B) have not had
asserted against them any penalty for failure to fulfill the minimum funding
requirements of ERISA.
To the extent that any Benefit Arrangement is insured,
the Borrower and all members of the ERISA Group have paid when
due all premiums required to be paid for all periods through and including the
Closing Date. To the extent that any Benefit Arrangement is funded other than
with insurance, the Borrower and all members of the ERISA Group have made when
due all contributions required to be paid for all periods through and including
the Closing Date.
EMPLOYMENT MATTERS. Each of the Companies is in compliance
with the Labor Contracts and all applicable federal, state and local labor and
employment Laws, including those related to equal employment opportunity and
affirmative action, labor relations, minimum wage, overtime, child labor,
medical insurance continuation, worker adjustment and relocation notices,
immigration controls and worker and unemployment compensation, where the failure
to comply would constitute a Material Adverse Change. There are no outstanding
grievances, arbitration awards or appeals therefrom arising out of the Labor
Contracts or current or threatened strikes, picketing, handbilling or other work
stoppages or slowdowns at facilities of the Companies which in any case would
constitute a Material Adverse Change.
ENVIRONMENTAL MATTERS. The Companies are in material
compliance with all applicable Environmental Laws and have not received any
Environmental Complaint from any Official Body or private person alleging that
any of the Companies is a potentially responsible party, and the Borrower has no
reason to believe that such an Environmental Complaint might be received.
EXISTING BUSINESS. The Companies are currently engaged in the
mutual fund, investment advisory, insurance, retirement plan servicing and
financial services business, but with respect to the insurance business, the
Companies' activities are limited to the transfer of risk between buyer and
underwriter and do not include any participation in underwriting exposure,
except as specifically provided in Section 8.2(p)(i) with respect to the
Insurance Subsidiaries.
[INTENTIONALLY OMITTED.]
BROKER FEES. Except as otherwise permitted by Section 8.2(d),
t he Companies do not pay any front-end marketing fees to broker-dealers with
respect to a Fund unless the following three (3) conditions are met: (i) any
front-end marketing fee does not exceed the back-end fee at the time of the
investment in the Fund, (ii) at any time subsequent to the investment in the
Fund, the Companies are entitled to receive cumulative Fund Fees which are not
less than the front-end marketing fee, and (iii) within a period not to exceed
seven (7) years from the investment in the Fund, the cumulative Fund Fees for
such period (excluding any back-end fee) equal or exceed the front-end marketing
fee. For purposes of the foregoing sentence, front-end marketing fees and Fund
Fees shall be expressed as a percentage of the investment in the Fund. SCHEDULE
6.1(CC) lists (i) all the Funds of the Companies under which front-end marketing
fees are paid to broker-dealers, (ii) the amount of front-end marketing fees
paid to broker-dealers both on a Dollar basis for the most recent fiscal quarter
then ended and as a percentage of the investment in the Fund, (iii) the amount
of back-end fees collected by the Companies on a Dollar basis for the most
recent fiscal quarter then ended, and (iv) the amount of Fund Fees due the
Companies both on a Dollar basis for the most recent fiscal quarter then ended
and as a percentage of the investment in the Fund.
UPDATES TO SCHEDULES.
Should any of the information or disclosures provided on any of the
Schedules attached hereto become outdated or incorrect in any material respect,
the Borrower shall promptly provide the Agent in writing with such revisions or
updates to such Schedule as may be necessary or appropriate to update or correct
the same; PROVIDED, unless any such Schedules have become outdated or incorrect
in any material and adverse respect, the Borrower may provide such revisions or
updates on a quarterly basis at the same time as the Borrower delivers its
quarterly compliance certificate in accordance with Section 8.3(d); PROVIDED,
FURTHER, that no Schedule that has become outdated or incorrect in any material
and adverse respect shall be deemed to have been amended, modified or superseded
by any such correction or update, nor shall any breach of warranty or
representation resulting from the inaccuracy or incompleteness of any such
Schedule be deemed to have been cured thereby.
7. CONDITIONS OF LENDING
The obligation of each Bank to make Loans hereunder is subject to the
performance by the Borrower of its obligations to be performed hereunder at or
prior to making of any such Loans and to the satisfaction of the following
further conditions:
FIRST LOANS.
On the Closing Date:
The representations and warranties of the Borrower contained
in Article 6 shall be true and accurate on and as of the Closing Date with the
same effect as though such representations and warranties had been made on and
as of such date (except representations and warranties which relate solely to an
earlier date or time, which representations and warranties shall be true and
correct on and as of the specific dates or times referred to therein), and the
Borrower shall have performed and complied with all covenants and conditions
hereof; no Event of Default or Potential Default under this Agreement shall have
occurred and be continuing or shall exist; and there shall be delivered to the
Agent for the benefit of each Bank a certificate of the Borrower, dated the
Closing Date and signed by the Chief Executive Officer, President, Chief
Financial Officer, Treasurer or Controller of the Borrower, to both such
effects.
There shall be delivered to the Agent for the benefit of each
Bank a certificate dated the Closing Date and signed by the Secretary or an
Assistant Secretary of each of the Companies, certifying as appropriate as to:
all action taken by such Company in connection with this Agreement and the
other Senior Loan Documents to which it is a party, as applicable;
the names of the officer or officers authorized to sign this Agreement and
the other Senior Loan Documents to which such Company is a party and the true
signatures of such officer or officers and, in the case of the Borrower,
specifying the Authorized Officers who are authorized to act on behalf of the
Borrower for purposes of this Agreement and the true signatures of such
officers, on which the Agent and each Bank may conclusively rely; and
copies of its organizational documents, including its declaration of trust
or articles of incorporation and bylaws or partnership agreement, as applicable,
as in effect on the Closing Date certified by the appropriate state official
where such documents are filed in a state office together with certificates from
the appropriate state officials as to the continued existence and good standing
of each of the Companies in each state where organized or qualified to do
business, PROVIDED such certifications of state officials shall not be required
for Federated International Services, Ltd. and Federated International
Management, Ltd.
The Notes, the Intercompany Subordination Agreement, the
Pledge Agreement, the Security Agreement, the Intercreditor Agreement shall have
been duly executed and delivered to the Agent for the benefit of the Banks,
together with all appropriate financing statements, appropriate stock powers and
certificates evidencing the Pledged Collateral. With respect to shareholders of
the Borrower who are Pledgors, there shall be delivered to the Agent, for the
benefit of the Banks, certification of authority and proof of incumbency or
identity reasonably satisfactory to the Agent and its counsel of the officer,
trustee, custodian or other person executing the Pledge Agreement on behalf of
such Pledgor, including signature guarantees in the case of shareholders who are
individuals.
There shall be delivered to the Agent, for the benefit of
each Bank, a legal opinion of outside counsel reasonably acceptable to the Agent
and its counsel (who may rely on the opinions of such other counsel as may be
acceptable to the Agent), dated the Closing Date and in form and substance
satisfactory to the Agent and its counsel in substantially the form of EXHIBIT
J.
All legal details and proceedings in connection with the
transactions contemplated by this Agreement and the other Senior Loan Documents
shall be in form and substance satisfactory to the Banks and counsel for the
Banks, and the Banks shall have received all such other counterpart originals or
certified or other copies of such documents and proceedings in connection with
such transactions, in form and substance satisfactory to the Banks and said
counsel, as the Banks or said counsel may reasonably request.
The Borrower shall pay or cause to be paid, to the extent not
previously paid, to the Agent for its own account, all fees payable on or before
the Closing Date as set forth in that certain letter dated January 31, 1996 and
the costs and expenses for which the Agent is entitled to be reimbursed.
All material consents required to effectuate the transactions contemplated
by the Senior Loan Documents shall have been obtained.
There shall be no Material Adverse Change in the Historical
Statements previously delivered to the Agent since the date of their
preparation; since September 30, 1995, there shall be no Material Adverse
Change; and there shall be delivered to the Agent, for the benefit of each Bank,
a certificate dated the Closing Date and signed by the Chief Executive Officer,
President, Chief Financial Officer, Treasurer or Controller of the Borrower to
each such effect.
The making of the Loans shall not contravene any Law
applicable to the Borrower or any of the Banks, and the Banks and the Agent
shall have received all such certificates and documents in relation thereto as
the Banks and the Agent and their respective counsel shall have reasonably
requested.
No action, proceeding, investigation, regulation or
legislation shall have been instituted, threatened or proposed before any court,
governmental agency or legislative body to enjoin, restrain or prohibit, or to
obtain damages in respect of this Agreement or the consummation of the
transactions contemplated hereby or which, in the Agent's sole discretion, would
make it inadvisable to consummate the transactions contemplated by this
Agreement or any of the other Senior Loan Documents.
The Borrower shall deliver evidence acceptable to the Agent
that adequate insurance in compliance with Section 8.1(c) is in full force and
effect and that all premiums then due thereon have been paid, together with a
certified copy of the Borrower's casualty insurance policy or policies
evidencing coverage satisfactory to the Agent, with additional insured and
lender loss payable endorsements in form and substance satisfactory to the Agent
and its counsel naming the Agent as additional insured and lender loss payee for
the benefit of the Banks.
The Agent shall have received copies of all lien search
results and copies of all filing receipts and acknowledgments issued by any
governmental authority to evidence any recordation or filing necessary to
perfect the Lien of the Agent for the benefit of the Banks on the Collateral or
other satisfactory evidence of such recordation and filing and to evidence that
such Lien constitutes a Prior Security Interest in favor of the Agent for the
benefit of the Banks.
EACH ADDITIONAL LOAN.
At the time of making any Loans (including conversions or renewals
of existing Loans) or issuing any Letters of Credit other than Loans made or
Letters of Credit issued on the Closing Date hereunder and after giving effect
to the proposed borrowings: the representations and warranties contained in
Article 6 and any certificates delivered by any of the Companies after the
Closing Date shall be true on and as of the date of such additional Loan or
Letter of Credit with the same effect as though such representations, warranties
and certifications had been made on and as of such date (except representations,
warranties and certifications which expressly relate solely to an earlier date
or time, which representations, warranties and certifications shall be true and
correct on and as of the specific dates or times referred to therein or made),
and the Borrower shall have performed and complied with all covenants and
conditions hereof; no Event of Default or Potential Default shall have occurred
and be continuing or shall exist; the making of the Loans shall not contravene
any Law applicable to the Borrower or any of the Banks; and the Borrower shall
have delivered to the Agent a duly executed and completed Loan Request or
application for a Letter of Credit as the case may be.
8. COVENANTS
AFFIRMATIVE COVENANTS.
The Borrower covenants and agrees that until payment in full of the
Loans and interest thereon, satisfaction of all of the Borrower's other
obligations hereunder and termination of the Revolving Credit Commitments and
the Swing Loan Commitment, it shall, unless otherwise consented to in writing by
the Required Banks, comply at all times with the following affirmative
covenants:
PRESERVATION OF EXISTENCE, ETC. The Borrower shall maintain,
and shall cause each of its Subsidiaries to maintain, its existence and its
license or qualification and good standing in each jurisdiction in which its
ownership or lease of property or the nature of its business makes such license
or qualification necessary, except as otherwise permitted in Section 8.2(j).
PAYMENT OF LIABILITIES, INCLUDING TAXES, ETC. The Borrower
shall pay and discharge, and shall cause each of its Subsidiaries to pay and
discharge, all liabilities to which it is subject or which are asserted against
it, promptly as and when the same shall become due and payable, including all
taxes, assessments and governmental charges upon it or any of its properties,
assets, income or profits, prior to the date on which penalties attach thereto,
except to the extent that such liabilities, including taxes, assessments or
charges, are being contested in good faith and by appropriate and lawful
proceedings diligently conducted and for which such reserve or other appropriate
provisions, if any, as shall be required by GAAP shall have been made, but only
to the extent that failure to discharge any such liabilities would not result in
a Material Adverse Change; PROVIDED that the Borrower and each of its
Subsidiaries will pay all such liabilities forthwith upon the commencement of
proceedings to foreclose any Lien which may have attached as security therefor.
MAINTENANCE OF INSURANCE. The Borrower shall insure, and
shall cause each of its Subsidiaries to insure, its properties and assets
against loss or damage by fire and such other insurable hazards as such assets
are commonly insured (including fire, extended coverage, property damage,
workers' compensation, public liability and business interruption insurance) and
in such amounts as similar properties and assets are insured by prudent
companies in similar circumstances carrying on similar businesses, and with
reputable and financially sound insurers, including self-insurance to the extent
customary, and against public liability for damages and against other risks
(including errors and omissions) in amounts normally carried by prudent
companies carrying on similar businesses and satisfactory to the Agent, subject
to availability of such insurance coverage. The Borrower shall deliver to the
Agent (x) on the Closing Date, an original certificate of insurance signed by
the Borrower's independent insurance broker describing and certifying as to the
existence of the insurance on the Collateral required to be maintained by this
Agreement and the other Senior Loan Documents and (y) on an annual basis, a
summary schedule indicating all insurance then in force with respect to the
Companies. Such policies of insurance shall contain endorsements, in form and
substance acceptable to the Agent, which shall (i) specify the Agent as an
additional insured or lender loss payee as its interests may appear, as
appropriate (other than with respect to fidelity bond, directors and officers
and errors and omissions coverage) with the understanding that any obligation
imposed upon the insured (including the liability to pay premiums) shall be the
sole obligation of the Companies and not that of the Agent, (ii) provide that
the interest of the Agent and the Banks shall be insured regardless of any
breach or violation by the Companies of any warranties, declarations or
conditions contained in such policies or any action or inaction of the Companies
or others insured under such policies, (iii) provide a waiver of any right of
the insurers to set-off or counterclaim or any other deduction, whether by
attachment or otherwise, (iv) provide that any and all rights of subrogation
which the insurers may have or acquire shall be, at all times and in all
respects, junior and subordinate to the prior payment in full of the
Indebtedness hereunder and that no insurer shall exercise or assert any right of
subrogation until such time as the Indebtedness hereunder has been paid in full
and the Revolving Credit Commitments and the Swing Loan Commitment have
terminated, (v) provide, except in the case of public liability insurance and
workmen's compensation insurance, that all insurance proceeds for losses of less
than $500,000 shall be adjusted with and payable to the applicable Companies for
the repair, restoration and/or replacement of the property in respect of which
such proceeds were received and that all insurance proceeds for losses of
$500,000 or more shall be adjusted with and payable to the Agent for the benefit
of the Banks, (vi) include effective waivers by the insurer of all claims for
insurance premiums against the Agent, (vii) provide that no cancellation of such
policies for non-payment of premium shall be effective until at least ten (10)
days after receipt by the Agent of written notice of such cancellation and no
cancellation of such policies for any other reason nor any change therein (other
than changes in the ordinary course of the insurer's business which will not
reduce the monetary amount of such insurance or materially and adversely affect
the type of coverage provided by such insurance) shall be effective until at
least thirty (30) days after receipt by the Agent of written notice of such
cancellation or change, (viii) be primary without right of contribution of any
other insurance carried by or on behalf of any additional insureds with respect
to their respective interests in the Collateral, and (ix) provide that inasmuch
as the policy covers more than one insured, all terms, conditions, insuring
agreements and endorsements (except limits of liability) shall operate as if
there were a separate policy covering each insured. The Borrower shall notify
the Agent promptly of any occurrence causing a material loss or decline in value
of the Collateral and the estimated (or actual, if available) amount of such
loss or decline. Any monies received by the Agent constituting insurance
proceeds may, at the option of the Agent, (i) be applied by the Agent to the
payment of the Revolving Credit Loans, or (ii) be disbursed to the applicable
Company on such terms as are deemed appropriate by the Agent for the repair,
restoration and/or replacement of property in respect of which such proceeds
were received.
MAINTENANCE OF PROPERTIES AND LEASES. The Borrower shall
maintain, and shall cause each of its Subsidiaries to maintain, in good repair,
working order and condition (ordinary wear and tear excepted) in accordance with
the general practice of other businesses of similar character and size, all of
those properties useful or necessary to its business, and from time to time the
Borrower shall make, and shall cause each Subsidiary to make, all appropriate
repairs, renewals or replacements thereof.
VISITATION RIGHTS. The Borrower shall permit, and shall cause
each of its Subsidiaries to permit, any of the officers or authorized employees
or representatives of any of the Banks to visit and inspect any of its
properties and to examine and make excerpts from its books and records and
discuss its business affairs, finances and accounts with its officers, all in
such reasonable detail and at such reasonable times and as often as any of the
Banks may reasonably request, subject to the provisions of Section 11.12,
PROVIDED that each Bank shall provide the Borrower and the Agent with reasonable
notice prior to any visit or inspection. In the event any Bank desires to visit
or inspect any of the Companies as permitted in the preceding sentence, such
Bank shall make a reasonable effort to conduct such visit or inspection
contemporaneously with any visit or inspection to be performed by the Agent.
KEEPING OF RECORDS AND BOOKS OF ACCOUNT. The Borrower shall
maintain and keep, and shall cause each of its Subsidiaries to maintain and
keep, proper books of record and account which enable the Borrower and its
Subsidiaries to issue financial statements in accordance with GAAP and as
otherwise required by applicable Laws of any Official Body having jurisdiction
over the Borrower or any Subsidiary, and in which full, true and correct entries
shall be made in all material respects of all its dealings and business and
financial affairs.
MAINTENANCE OF PATENTS, TRADEMARKS, ETC. The Borrower shall
maintain, and shall cause each of its Subsidiaries to maintain, in full force
and effect, all patents, trademarks, tradenames, copyrights, licenses,
franchises, permits and other authorizations necessary for the ownership and
operation of its properties and business if the failure so to maintain the same
would constitute a Material Adverse Change.
BENEFIT ARRANGEMENTS. The Borrower shall, and shall cause
each member of the ERISA Group to, comply with ERISA, the Internal Revenue Code
and other applicable Laws applicable to Benefit Arrangements except where such
failure, alone or in conjunction with any other failure, would not result in a
Material Adverse Change. Without limiting the generality of the foregoing, the
Borrower shall cause Benefit Arrangements which are defined contribution plans
maintained by the Borrower or any member of the ERISA Group to be funded in
accordance with the minimum funding requirements of ERISA and shall make, and
cause each member of the ERISA Group to make, in a timely manner, all
contributions due to Benefit Arrangements.
COMPLIANCE WITH LAWS. The Borrower shall comply, and shall
cause each of its Subsidiaries to comply, with all applicable Laws, including
all Environmental Laws, in all respects, including the Investment Company Act,
PROVIDED that it shall not be deemed to be a violation of this Section 8.1(i) as
the result of any failure to comply with any Law if such failure to comply would
not result in fines, penalties, other similar liabilities or injunctive relief
which in the aggregate would constitute a Material Adverse Change.
OWNERSHIP OF SUBSIDIARIES. The Borrower shall keep and
maintain 100% ownership and control of each of its Subsidiaries, except (i)
Passport (in which event control shall be maintained and the percentage of
ownership of at least 50.1% shall be maintained), (ii) Subsidiaries which are
less than wholly owned and which may be created or acquired in the future
pursuant to Section 8.2(h)(iii), and (iii) as otherwise permitted in Section
8.2(j).
USE OF PROCEEDS. The Borrower will use the proceeds of the
Loans only for lawful purposes in accordance with the second recital clause and
Section 6.1(j) and such uses shall not contravene any applicable Law, including
the Investment Company Act, or any other provision hereof.
NEW SUBSIDIARIES. The Borrower shall pledge, and shall cause
each of its Subsidiaries as applicable to pledge, to the Agent for the benefit
of the Banks, the shares of any Subsidiaries hereafter created or acquired by
any of the Companies, and shall cause each such Subsidiary to enter into the
Intercompany Subordination Agreement and (other than registered investment
adviser or broker-dealer Subsidiaries) the Security Agreement and shall cause to
be delivered a legal opinion of such outside counsel reasonably acceptable to
the Agent and its counsel in form and substance satisfactory to the Agent and
its counsel as to the matters set forth on EXHIBIT K.
FURTHER ASSURANCES. The Borrower shall faithfully preserve
and protect, and shall cause each of its Subsidiaries to faithfully preserve and
protect, from time to time, at its expense, the Agent's Lien on and Prior
Security Interest in the Collateral as a continuing first priority perfected
Lien under the Uniform Commercial Code, subject only to Permitted Liens, and
shall do, and shall cause each of its Subsidiaries as applicable to do, such
other acts as the Agent in its sole discretion may deem necessary or advisable
from time to time in order to preserve, perfect and protect the Liens granted
under the Senior Loan Documents and to exercise and enforce its rights and
remedies thereunder with respect to the Collateral.
TRAVEL POLICY. The Borrower shall maintain a policy limiting group travel
by airplane by the Management Shareholders.
NEGATIVE COVENANTS.
The Borrower covenants and agrees that until payment in full of the
Loans and interest thereon, satisfaction of all of the Borrower's other
obligations hereunder and termination of the Revolving Credit Commitments and
the Swing Loan Commitment, it shall, unless otherwise consented to in writing by
the Required Banks, comply with the following negative covenants:
MINIMUM DEBT SERVICE COVERAGE RATIO. The Borrower shall not
permit the Debt Service Coverage Ratio as of the end of each fiscal quarter for
the four (4) fiscal quarters then ended to be less than 1.25 to 1.0.
MINIMUM INTEREST COVERAGE RATIO. The Borrower shall not
permit the ratio of Cash Flow from Operations to consolidated interest expense
of the Borrower and its Consolidated Subsidiaries as of the end of each fiscal
quarter for the four (4) fiscal quarters then ended to be less than the ratio
set forth below for the periods specified below:
PERIOD RATIO
Fiscal Years 1996 and 3.5 to 1.0
1997
Thereafter 4.0 to 1.0
MAXIMUM LEVERAGE RATIO . The Borrower shall not permit the
Leverage Ratio as of the end of each fiscal quarter beginning with the fiscal
quarter ended June 30, 1996 to exceed the ratio set forth below for the periods
specified below:
PERIOD RATIO
Fiscal Year 1996 4.0 to 1.0
Fiscal Year 1997 3.5 to 1.0
Fiscal Year 1998 3.0 to 1.0
Thereafter 2.5 to 1.0
BROKER FEES. The Borrower shall not, and shall not permit any
of its Subsidiaries to, pay front-end marketing fees to broker-dealers with
respect to a Fund unless the following three (3) conditions are met: (i) any
front-end marketing fee shall not exceed the back-end fee at the time of the
investment in the Fund, (ii) at any time subsequent to the investment in the
Fund, the Companies shall have been entitled to receive cumulative Fund Fees
which are not less than the front-end marketing fee, and (iii) within a period
not to exceed seven (7) years from the investment in the Fund, the cumulative
Fund Fees for such period (excluding any back-end fee) shall equal or exceed the
front-end marketing fee. For purposes of this Section 8.2(d), front-end
marketing fees and Fund Fees shall be expressed as a percentage of the
investment in the Fund. Notwithstanding the foregoing, (A) in connection with
the closing of a Fund by any Company, any residual contingent deferred sales
charges may be written off by the Company so long as any such write-off is less
than $125,000 per Fund per class and such write-offs, in the aggregate, do not
exceed $1,000,000 in any fiscal year; and (B) any Company, in its role as
distributor to a Fund which is not advised or sponsored by one or more of the
Companies, may make payments to broker-dealers, on behalf of such Fund, provided
that such payments shall not exceed $2,000,000 in the aggregate at any time
unless any amount in excess of $2,000,000 is fully secured by cash.
INDEBTEDNESS. The Borrower shall not, and shall not permit any of its
Subsidiaries to, at any time create, incur, assume or suffer to exist any
Indebtedness, except:
Indebtedness under the Senior Loan Documents;
Indebtedness under the senior secured Indebtedness in an amount not to
exceed (1) $75,000,000 or (2) if all of the Indebtedness under the Subordinated
Loan Documents is repaid with proceeds of such financing, $100,000,000 (the
"SENIOR NOTES"); PROVIDED that the terms of such Senior Notes shall be no more
restrictive to the Borrower than the terms of this Agreement as determined by
the Agent, the amortization and final maturity of the Senior Notes shall be
acceptable to the Agent and the Intercreditor Agreement (Senior Notes) shall be
executed and delivered to the Agent on behalf of the Banks prior to the closing
of the Senior Notes.
capitalized leases as and to the extent permitted under Section 8.2(o);
existing Indebtedness as set forth on SCHEDULE 8.2(E) (including any
extensions or renewals thereof, PROVIDED there is no increase in the principal
amount thereof as of the Closing Date unless otherwise specified on SCHEDULE
8.2(E));
intercompany Indebtedness which is subordinated to the Loans pursuant to
the Intercompany Subordination Agreement, PROVIDED that regardless of whether
the intercompany Indebtedness would be subordinated to the Loans pursuant to the
Intercompany Subordination Agreement, no intercompany loans (other than Limited
Investments to the extent permitted by Section 8.2(h)(ii)) may be made to the
Insurance Subsidiaries;
any short-term Indebtedness under securities clearing arrangements, secured
by marketable securities and related cash balances with customary loan-to-value
ratios; or
Indebtedness representing all or a portion of the
Permitted Acquisition Payment.
LIENS. The Borrower shall not, and shall not permit any of
its Subsidiaries to, at any time create, incur, assume or suffer to exist any
Lien on any of its property or assets, tangible or intangible, now owned or
hereafter acquired, or agree to become liable to do so, except Permitted Liens.
GUARANTIES. The Borrower shall not, and shall not permit any
of its Subsidiaries to, at any time directly or indirectly, become or be liable
in respect of any Guaranty, or assume, guaranty, become surety for, endorse or
otherwise agree, become or remain directly or contingently liable upon or with
respect to any obligation or liability of any other person, except for the Liens
granted under the Senior Loan Documents, the ICI Contingency subject to increase
up to the amount specified in SCHEDULE 8.2(E) and the guarantee by the Companies
of obligations of the Subsidiaries of the Borrower (other than Passport or any
other Subsidiary which is not wholly owned) to third parties, which obligations
are incurred in the ordinary course of such Subsidiaries' business consistent
with industry practice and not otherwise forbidden by this Agreement; PROVIDED
that, except for Limited Investments, in no event shall the Borrower or its
Subsidiaries become or be liable in respect of any Guaranty, or assume,
guarantee, become surety for, endorse or otherwise agree, become or remain
directly or contingently liable upon or with respect to any obligation or
liability of the Limited Purpose Subsidiaries.
LOANS AND INVESTMENTS. The Borrower shall not, and shall not
permit any of its Subsidiaries to, at any time make or suffer to remain
outstanding any loan or advance to, or purchase, acquire or own any stock,
bonds, notes or securities of, or any partnership interest (whether general or
limited) in, or any other investment or interest in, or make any capital
contribution to, any other person, or agree, become or remain liable to do any
of the foregoing, except:
loans and investments as set forth on SCHEDULE 8.2(H) (including any
extensions or renewals thereof, PROVIDED there is no increase in the principal
amount thereof as of the Closing Date unless otherwise specified on SCHEDULE
8.2(H));
investments in wholly owned Subsidiaries existing on the date hereof and
wholly owned Subsidiaries hereafter created or acquired, PROVIDED all the shares
of such Subsidiaries shall be pledged to the Agent for the benefit of the Banks
under the Pledge Agreement and each such Subsidiary shall comply with the
requirements of Section 8.1(l), PROVIDED, FURTHER, that notwithstanding the
foregoing, only Limited Investments not greater than $1,000,000 in the aggregate
shall be permitted to be made by the Companies in the Insurance Subsidiaries;
investments in (A) Subsidiaries other than Passport,
which are less than wholly owned, but over which the Borrower
maintains control, and (B) corporate entities in which the Borrower does not
maintain control but for which none of the Companies has any liability greater
than its initial investment in such entity and where the activities in which
such entity engages are consistent with the activities set forth in Section
6.1(aa), PROVIDED, that (1) the investments permitted by clauses (A) or (B) of
this Section 8.2(h)(iii), together with any other acquisitions permitted under
Section 8.2(j)(iii), shall not exceed the Permitted Acquisition Payment, (2) the
stock of any such Subsidiary or corporate entity which is owned by the Borrower
or another Subsidiary shall be pledged to the Agent for the benefit of the Banks
under the Pledge Agreement, PROVIDED, however, with respect to investments
pursuant to clause (B) above, such stock must be pledged only upon the request
of the Agent, upon the occurrence of an Event of Default or Potential Default,
and (3) no investments in the Insurance Subsidiaries shall be permitted under
this clause (iii) of Section 8.2(h), since the last proviso in clause (ii) of
Section 8.2(h) shall govern all investments in the Insurance Subsidiaries;
intercompany loans which are subordinated to the Loans pursuant to the
Intercompany Subordination Agreement, PROVIDED that regardless of whether the
intercompany loans would be subordinated to the Loans pursuant to the
Intercompany Subordination Agreement, no intercompany loans (other than Limited
Investments to the extent permitted by Section 8.2(h)(ii)) shall be made to the
Insurance Subsidiaries.
trade credit extended, and loans and advances extended to subcontractors or
suppliers, under usual and customary terms in the ordinary course of business;
advances to employees to meet expenses incurred by such employees in the
ordinary course of business;
Permitted Investments;
loans, advances and investments in Subsidiaries existing on the date
hereof;
Limited Investments in the Special Purpose Subsidiaries so long as the
Limited Investments in all Special Purpose
Subsidiaries do not exceed $500,000 in the aggregate; and
loans by the Borrower or a Subsidiary of the Borrower to First Data
Investor Services, Inc. (or any subsidiary thereof) in an amount not to exceed
$3,000,000 in the aggregate to finance front-end broker fees, PROVIDED that such
loans are unconditionally guaranteed by Fleet Financial Group, Inc. (or any
subsidiary thereof acceptable to the Agent and the Banks) pursuant to a Guaranty
and Suretyship Agreement in form and substance acceptable to the Agent and the
Banks.
DIVIDENDS AND RELATED DISTRIBUTIONS. The Borrower shall not
make or pay, or agree to become or remain liable to make or pay, any dividend or
other distribution of any nature (whether in cash, property, securities or
otherwise) on account of or in respect of any shares of the capital stock of the
Borrower (including the Preferred Shares and the Common Shares), or on account
of the purchase, redemption, retirement or acquisition of any shares of the
capital stock (or warrants, options or rights therefor) of the Borrower, nor
permit any such action to be taken indirectly by any of its Subsidiaries,
except:
[intentionally omitted];
so long as no Event of Default or Potential Default has occurred and is
continuing, the Borrower may repurchase not in excess (i) in fiscal year 1996,
$24,420,000 of the Unpledged Shares (other than the Restricted Stock); (ii) in
fiscal year 1997 and in each fiscal year thereafter during the term of this
Agreement, $2,000,000 of the Unpledged Shares (other than the Restricted Stock)
and, (iii) during the term of this Agreement, $1,000,000 of Restricted Stock;
and at any time, the Borrower may repurchase up to $1,900,000 of the Unpledged
Shares held by Mellon Bank, N.A., as trustee of the Westinghouse Electric
Corporation Master Trust Agreement for the Westinghouse Pension Plan, or any
successor trustee;
Passport or any other Subsidiary which is less than
wholly owned may make distributions as permitted under its
organizational documents; and
during the Borrower's fiscal year 1998 and thereafter, so long as (A) no
Event of Default or Potential Default has occurred and is continuing, and (B)
the Borrower is in compliance with Section 8.2(a), in the case of both clauses
(A) and (B) after giving effect to any such dividend payment, the Borrower may
make dividend payments with respect to the Common Shares in any fiscal year in
an amount not to exceed, on a cumulative basis, $20,000,000 plus 50% of any net
income (or minus 100% of any net loss) of the Borrower and its Subsidiaries from
January 1, 1998 through the date of payment.
LIQUIDATIONS, MERGERS, CONSOLIDATIONS AND ACQUISITIONS. The
Borrower shall not, and shall not permit any of its Subsidiaries to, dissolve or
liquidate or wind-up its affairs, or become a party to any merger or
consolidation, or acquire by purchase, lease or otherwise all or substantially
all of the assets or capital stock of any other person, except:
[intentionally omitted];
any Grantor (other than the Borrower or the Insurance Subsidiaries) may
liquidate into, merge or consolidate with a wholly owned Grantor (other than the
Borrower and the Insurance Subsidiaries) and any wholly owned Subsidiary which
is not a Grantor may liquidate into, merge or consolidate with a wholly owned
Subsidiary which is not a Grantor; and
the Borrower or another Pledged Subsidiary may effect an acquisition of the
capital stock or assets (tangible or intangible) of another person or persons,
so long as (A) such person is a company which engages in the mutual fund,
investment advisory, insurance, retirement plan servicing or financial services
business, (B) if such person is a public company, the acquisition is not hostile
and (C) after giving effect to such acquisition, no Event of Default or
Potential Default shall exist or be continuing and prior to the consummation of
such acquisition, the Borrower shall have provided to the Agent and the Banks
pro forma financial statements for the Borrower and the Consolidated
Subsidiaries, after giving effect to such acquisition, demonstrating such
compliance; PROVIDED, that the cash purchase price (including liabilities
assumed) for any such acquisition or series of acquisitions shall not exceed in
the aggregate through the Revolving Credit Expiration Date $40,000,000 (the
"PERMITTED ACQUISITION PAYMENT"), PROVIDED, FURTHER, that the foregoing dollar
limitation shall not apply to acquisitions in which the only assets being
acquired are the right of one or more of the Companies to receive Fund Fees and
any related contract rights, covenants not to compete, goodwill or other
intangibles so long as (i) any mutual fund generating the Fund Fees which are
being acquired ("TARGET FUND") is merged into an existing fund, (ii) the
composition of the board of directors of any Target Fund is identical to the
board of directors of an existing Fund, or (iii) one or more of the Companies
has entered into a servicing contract with the Target Fund and such contract or
related contracts contain make-whole provisions upon early termination
reasonably acceptable to the Agent.
DISPOSITIONS OF ASSETS OR SUBSIDIARIES. The Borrower shall
not, and shall not permit any of its Subsidiaries to, sell, convey, assign,
lease, abandon or otherwise transfer or dispose of, voluntarily or
involuntarily, any of its properties or assets, tangible or intangible
(including sale, assignment, discount or other disposition of accounts, contract
rights, chattel paper, equipment or general intangibles with or without recourse
or of capital stock, shares of beneficial interest or partnership interests of a
Subsidiary), except:
any sale, transfer or lease of assets by any wholly owned Subsidiary (other
than the Insurance Subsidiaries) to any other wholly owned Grantor (other than
the Borrower or the Insurance Subsidiaries) and any sale or transfer of
Designated Assets by a Subsidiary of the Borrower to a Special Purpose
Subsidiary, in connection with a securitization or other receivables sale
transaction so long as such transaction is non-recourse to any of the Companies;
or any Special Purpose Subsidiary (except for customary recourse provisions,
including recourse to the Designated Assets being sold or transferred).
any sale, transfer or lease of assets which are no longer necessary or
required in the conduct of the Borrower's or any Subsidiary's business resulting
in after-tax proceeds (net of reasonable and customary expenses in connection
with such sale, transfer or lease) not exceeding in the aggregate $1,000,000 in
any fiscal year;
any sale, transfer or lease of assets in the ordinary course of business
which are replaced by substitute assets acquired or leased within the parameters
of Sections 8.2(n) and (o), PROVIDED such substitute assets are subject to the
Banks' Prior Security Interest; and
any sale, transfer or lease of assets, other than those specifically
excepted pursuant to clauses (i) through (iii) above, which is approved by the
Required Banks.
SELF-DEALING. The Borrower shall not, and shall not permit any of its
Subsidiaries to, enter into or carry out any transaction (including purchasing
property or services from or selling property or services to any Affiliate or
other person) except upon arm's-length terms and conditions or as permitted in
Section 8.2(u) or the Shareholder Rights Agreement and in accordance with all
applicable Law (including the Investment Company Act).
BENEFIT ARRANGEMENTS. The Borrower shall not, and shall not permit any of
its Subsidiaries or member of the ERISA Group to:
fail to satisfy the minimum funding requirements of ERISA and the Internal
Revenue Code with respect to any Benefit
Arrangement which is a money purchase pension plan;
request a minimum funding waiver from the IRS with respect to any Benefit
Arrangement which is a money purchase pension plan;
engage in a Prohibited Transaction with any Benefit Arrangement which,
alone or in conjunction with any other circumstances or set of circumstances
resulting in liability under ERISA, would constitute a Material Adverse Change;
commit a COBRA Violation which would constitute a Material Adverse Change;
fail to give any and all notices and make all disclosures and governmental
filings required under ERISA or the
Internal Revenue Code, where such failure is likely to result in a Material
Adverse Change; or
adopt a Defined Benefit Pension Plan or adopt, or otherwise agree to
contribute to, a Multiemployer Plan or a Multiple Employer Plan, PROVIDED that
members of the Controlled Group other than the Companies may incur obligations
under Defined Benefit Pension Plans so long as the total "benefit liabilities"
as defined in Section 4001(a)(16) of ERISA under such Defined Benefit Pension
Plans do not at any time exceed $1,000,000.
LEASES. The Borrower shall not, and shall not permit any of
its Subsidiaries to, rent or lease real or personal property of any other
person, except under usual and customary terms and in the ordinary course of
business; PROVIDED the aggregate rent payable (whether fixed or contingent)
under all leases of the Companies (excluding capitalized leases and rent payable
under the leases for the Companies' premises) in any fiscal year shall not
exceed $10,000,000.
CAPITAL EXPENDITURES. The Borrower shall not, and shall not
permit any of its Subsidiaries to, make any payment in any fiscal year on
account of the purchase or lease of any assets which if purchased would
constitute fixed assets or which if leased would constitute a capitalized lease,
exceeding in the aggregate $20,000,000 (net of any related cash reimbursements
from third parties) in any fiscal year, PROVIDED, to the extent the permitted
amount of $20,000,000 is not fully used in any fiscal year, the unused amount
can be carried forward to the next fiscal year (but not to any succeeding fiscal
year).
CONTINUATION OF OR CHANGE IN BUSINESS. The enterprises
represented by the Companies taken as a whole shall continue to engage in their
respective businesses substantially as conducted and operated by the Companies
during the present fiscal year, and the Borrower shall not permit any material
change in such businesses (i.e., the mutual fund, investment advisory,
insurance, retirement plan servicing and financial services business, and the
business of Federated Bank, as such businesses now exist or may exist in the
future), either directly or indirectly (including by means of loans and
investments), and any change must be in accordance with all applicable Law
(including the Investment Company Act); PROVIDED, that
with respect to the insurance business, the activities of the Companies
shall be limited to the transfer of risk between buyer and underwriter and shall
not include any participation in underwriting exposure; PROVIDED that the
Insurance Subsidiaries may participate in underwriting exposure by reinsuring
property and casualty and errors and omissions products of any insurance company
rated A or better by Standard & Poor's or ▇▇▇▇▇'▇ Investors Service so long as
(A) the Limited Investments in the Insurance Subsidiaries by the Companies
are not greater than $1,000,000 in
the aggregate;
(B) each Insurance Subsidiary shall at all times remain
an Irish corporation, business trust or other entity or a corporation,
business trust or other entity organized under the laws of another foreign
jurisdiction acceptable to the Agent in its sole discretion; and
(C) each Insurance Subsidiary shall purchase per
occurrence and aggregate excess of loss insurance to protect such
Insurance Subsidiary from individual losses and aggregate losses in each
case for all losses above the amount of the Limited Investments in such
Insurance Subsidiary and shall provide evidence in form satisfactory to
the Agent of such insurance coverage to the Agent promptly upon obtaining
such insurance coverage;
the only activities in which the Special Purpose Subsidiaries shall be
permitted to engage are to finance broker commissions with respect to the sale
of proprietary or private label mutual funds administered or distributed by the
Companies and to hold stock of other Special Purpose Subsidiaries, PROVIDED
(A) the Special Purpose Subsidiaries shall not enter
into any agreements which permit any cross-defaults with any of the Senior
Loan Documents and
(B) the Limited Investments in the Special Purpose Subsidiaries by the
Companies are not greater than $500,000 in the aggregate;
the Borrower shall cause the Insurance Subsidiaries and the Special Purpose
Subsidiaries to use every reasonable and practicable means to assure that all
persons having dealings with the Insurance Subsidiaries or the Special Purpose
Subsidiaries shall be informed that the property of the Companies (other than in
the case of an Insurance Subsidiary, the applicable Insurance Subsidiary) or the
shareholders, officers or other agents of the Companies (other than in the case
of an Insurance Subsidiary, the applicable Insurance Subsidiary) shall not be
subject to claims against or obligations of the Insurance Subsidiaries or the
Special Purpose Subsidiaries to any extent whatsoever. The Borrower shall cause
the Insurance Subsidiaries and the Special Purpose Subsidiaries to insert in any
material written agreement, undertaking or obligation made or issued on behalf
of the Insurance Subsidiaries or the Special Purpose Subsidiaries that none of
the Companies (other than in the case of an Insurance Subsidiary, the applicable
Insurance Subsidiary) or shareholders, officers or other agents of any of the
Companies (other than in the case of an Insurance Subsidiary, the applicable
Insurance Subsidiary) shall be liable thereunder, and that the other parties to
such instruments shall look solely to the assets of the applicable Insurance
Subsidiary or the Special Purpose Subsidiary for the payment of any claim
thereunder for the performance thereof; and
the Borrower, FII Holdings, Inc., Federated Services Company and FS
Holdings, Inc. shall not become registered as investment advisers or
broker-dealers.
[INTENTIONALLY OMITTED.]
[INTENTIONALLY OMITTED.]
CHANGES IN OTHER DOCUMENTS. The Borrower shall not amend or
modify any provisions of the Shareholder Rights Agreements, its organizational
documents (including Articles of Incorporation and Bylaws) or the Senior Notes
or any related agreement, document or instrument, without providing at least
fifteen (15) Business Days' prior written notice to the Agent and, in the event
such change would be adverse to the Banks as determined by the Agent in its sole
discretion, obtaining the prior written consent of the Required Banks.
Notwithstanding the foregoing, the Borrower may exercise its right to
unilaterally terminate the Shareholder Rights Agreement, without providing any
prior written notice or obtaining any prior written consent but the Borrower
shall notify the Agent at such time of any termination.
INTERCOMPANY TRANSACTIONS. The Borrower shall not permit
there to be any restriction on the dividends payable by its Subsidiaries except
as otherwise required by Law. The Borrower shall not permit there to be any
intercompany debt owing by the Borrower to its Subsidiaries unless such debt is
subordinated to the Loans pursuant to the Intercompany Subordination Agreement.
No existing business or assets of the Companies shall be transferred or
otherwise diverted to or used for the benefit of Subsidiaries which are not
wholly owned except with respect to continuation of Passport's business, and any
Subsidiaries which are not wholly owned may only be used in connection with
generating new business opportunities (whether in existing areas of business or
otherwise), subject to the provisions of Section 8.2(p).
CHANGE IN OWNERSHIP. The Borrower shall not permit any change
in the ownership of the Borrower (including by means of a public offering
initiated by the Borrower), except:
the issuance of up to 3,093,000 stock options for Class B Shares to the
holders of stock appreciation rights under the Federated Investors Stock
Appreciation Rights Plans for 1994 and 1995 and, after the Closing Date, the
issuance of up to an aggregate of 12,000,000 Class B Shares (adjusted from time
to time to reflect any stock splits, stock dividends, reorganizations or similar
events) to the Profit-Sharing Trust or employees under the Profit-Sharing Trust,
stock options, an ESOP or other employee stock arrangements;
the issuance of Class B Shares or Preferred Shares in connection with
investments or acquisitions permitted under
Sections 8.2(h)(iii) or 8.2 (j)(iii);
transfers of the Pledged Shares may be made among the officers, directors
and employees of the Borrower and its Subsidiaries and their respective family
and affiliates, so long as the transfer is subject to the Pledge Agreement;
the issuance of Class B Shares or Preferred Shares by the Borrower in
connection with a public offering (subject to compliance with any other
applicable section of this Agreement)or transfers of the Unpledged Shares
(whether or not in a public offering) may be made by any holder of the Unpledged
Shares without restriction, so long as the officers, directors, the
Profit-Sharing Trust, employees of the Borrower or its Subsidiaries and the
family and affiliates of the foregoing hold, in the aggregate, at least
24,000,000 of the outstanding Class B Shares (adjusted from time to time to
reflect any stock splits, stock dividends, reorganizations or similar events);
notwithstanding the provisions of this Section 8.2(u), the Borrower shall
not take any action or permit any action to be taken which would result in less
than all of the Class A Shares continuing to be pledged at all times to the
Agent under the Pledge Agreement.
[INTENTIONALLY OMITTED.]
FISCAL YEAR AND ACCOUNTING METHODS. The Borrower shall not,
and shall not permit any of its Subsidiaries to, (i) change its fiscal year from
the twelve (12) month period beginning January 1 and ending December 31 or (ii)
change from the accrual method of accounting.
REPORTING REQUIREMENTS.
The Borrower covenants and agrees that until payment in full of the
Loans and interest thereon, satisfaction of all of the Borrower's other
obligations hereunder and termination of the Revolving Credit Commitments and
the Swing Loan Commitment, it will furnish or cause to be furnished to the Agent
and each of the Banks:
MONTHLY FINANCIAL STATEMENTS. As soon as available and in any
case within forty-five (45) days after the end of each month, its operations
report, including, at a minimum, assets under management by the Borrower and its
Consolidated Subsidiaries, and consolidated financial statements of the Borrower
and its Consolidated Subsidiaries, consisting of a consolidated balance sheet as
of the end of such month and related consolidated statements of operations for
the month then ended and the fiscal year to date, all in reasonable detail.
QUARTERLY FINANCIAL STATEMENTS. As soon as available and in
any event within forty-five (45) days after the end of each fiscal quarter in
each fiscal year, its operations report, including, at a minimum, consolidated
financial statements of the Borrower and its Consolidated Subsidiaries
consisting of a consolidated balance sheet as of the end of such fiscal quarter
and related consolidated statement of operations, retained earnings and cash
flows for the fiscal quarter then ended and the fiscal year through that date,
all in reasonable detail and certified (subject to normal year-end audit
adjustments) by the Chief Executive Officer, President, Chief Financial Officer,
Treasurer or Controller of the Borrower as having been prepared in accordance
with GAAP, consistently applied, and setting forth in comparative form the
respective financial statements for the corresponding date and periods in the
previous fiscal year.
ANNUAL FINANCIAL STATEMENTS. As soon as available and in any
event within ninety (90) days after the end of each fiscal year of the Borrower,
financial statements of the Borrower and its Consolidated Subsidiaries
consisting of consolidated and consolidating balance sheets as of the end of
such fiscal year, and related consolidated and consolidating statement of
operations, consolidated stockholders' equity, consolidated statement of
retained earnings and consolidated statement of cash flow for the fiscal year
then ended, all in reasonable detail and setting forth in comparative form the
financial statements as of the end of and for the preceding fiscal year, and (in
the case of the consolidated financial statements only) certified by Ernst &
Young or another independent certified public accountant of nationally
recognized standing satisfactory to the Required Banks. The certificate or
report of accountants shall be free of qualifications (other than (A) any
consistency qualification, or (B) any qualification relating to an inconsistency
with GAAP, that may result from a change in the method used to prepare
Borrower's financial statements as to which such accountants concur) and shall
not indicate the occurrence or existence of any event, condition or contingency
which would materially impair the prospect of payment or performance of any
covenant, agreement or duty of the Borrower under any of the Senior Loan
Documents, together with a letter of such accountants substantially to the
effect that based upon their ordinary and customary examination of the affairs
of the Borrower, performed in connection with the preparation of such
consolidated financial statements, and in accordance with generally accepted
auditing standards, they are not aware of the existence of any condition or
event which constitutes or would, upon notice or lapse of time, or both,
constitute an Event of Default or, if they are aware of such condition or event,
stating the nature thereof and confirming the Borrower's calculations with
respect to the certificate to be delivered pursuant to Section 8.3(d) with
respect to such financial statements.
CERTIFICATE OF THE BORROWER. Concurrently with the financial
statements of the Borrower furnished to the Agent and to the Banks pursuant to
Sections 8.3(b) and 8.3(c), a certificate of the Borrower signed by the Chief
Executive Officer, President, Chief Financial Officer, Treasurer or Controller
of the Borrower, in the form of EXHIBIT L, to the effect that, except as
described pursuant to Section 8.3(e), (i) the representations and warranties of
the Borrower contained in Article 6 and any certifications delivered by any of
the Companies after the Closing Date are true on and as of the date of such
certificate with the same effect as though such representations, warranties and
certifications had been made on and as of such date (except representations,
warranties and certifications which expressly relate solely to an earlier date
or time) and the Borrower has performed and complied with all covenants and
conditions hereof, (ii) no Event of Default or Potential Default exists and is
continuing on the date of such certificate and (iii) containing calculations in
sufficient detail to demonstrate the Leverage Ratio and compliance as of the
date of the financial statements with the covenants contained in Sections 2.5,
8.1(l) and 8.2(a), (b), (c), (h), (i), (j), (k), (n) and (o).
NOTICE OF DEFAULT. Promptly after the Borrower has learned of
the occurrence of an Event of Default, Potential Default or Material Adverse
Change, a certificate signed by the Borrower's Chief Executive Officer,
President, Chief Financial Officer, Treasurer or Controller setting forth the
details of such Event of Default, Potential Default or Material Adverse Change
and the action which the Borrower proposes to take with respect thereto.
NOTICE OF LITIGATION. Promptly after the commencement
thereof, notice of all actions, suits, proceedings or investigations before or
by any Official Body or any other person against any of the Companies or any of
the Funds or which relates to the Collateral, involves a claim or series of
claims of $1,000,000 or more or which if adversely determined would constitute a
Material Adverse Change.
CERTAIN EVENTS. Written notice to the Agent of (i) any sale
or other transfer of assets as permitted under subsections (i), (ii), (iii) or
(iv) of Section 8.2(k), (ii) any merger, acquisition, consolidation or
liquidation permitted under Section 8.2(j), (iii) any change in the ownership or
management of the Borrower permitted under Section 8.2(u) or (v), (iv) the
creation or acquisition of any new Subsidiaries or investment in any other
corporate entity, such notice to be delivered to the Agent within five (5)
Business Days after occurrence of such event or consummation of such
transaction(s), and in the case of the creation or acquisition of a new
Subsidiary or investment in any other corporate entity, accompanied by the items
specified in Section 8.1(l) to be delivered within thirty (30) calendar days
after the creation or acquisition of a new Subsidiary or investment in any other
corporate entity, and (v) any amendment to the declaration of trust, certificate
or articles of incorporation, bylaws, partnership agreement or other
organizational documents of any of the Companies or the use by any of the
Companies of any fictitious name, it being understood that any such amendments
require at least ten (10) Business Days' prior notice to the Agent and may in
some cases, including any amendment to the Declaration of Trust of the Borrower
which the Agent has determined would be adverse to the Banks pursuant to Section
8.2(s), require the prior written consent of the Required Banks.
OTHER NOTICES, REPORTS AND INFORMATION. At the same time sent
or provided to the holders of the Senior Notes under the Senior Notes and
related documents, all notices and reports provided under the Senior Notes and
related documents (unless already provided pursuant to any other provision of
this Section 8.3). Promptly upon their becoming available to the Borrower, (i)
the annual budget of the Companies, to be supplied not later than fifteen (15)
days prior to commencement of the fiscal year to which it is applicable, (ii)
any reports including management letters submitted to any of the Companies by
independent accountants in connection with any annual, interim or special audit,
(iii) any reports, or notices distributed by any of the Companies to its
shareholders on a date no later than the date supplied to the shareholders, (iv)
upon request, periodic reports filed by any of the Companies with the Securities
and Exchange Commission, (v) periodic reports of examination by the Securities
and Exchange Commission or the National Association of Securities Dealers, Inc.
of any of the Companies and any responses thereto, (vi) any Revenue Agent's
Report and accompanying Statement of Income Tax Examination Changes and any
notice of assessment or deficiency by the IRS within ten (10) days of receipt,
and (vii) such other reports and information as the Banks may from time to time
reasonably request. The Borrower shall also notify the Banks promptly of the
enactment of any legislation or adoption of any Law which may result in a
Material Adverse Change.
NOTICES REGARDING BENEFIT ARRANGEMENTS. Promptly upon
becoming aware of the occurrence thereof, notice (including the nature of the
event and, when known, any action taken or threatened by the IRS with respect
thereto) of any Prohibited Transaction which could subject the Borrower or any
member of the ERISA Group to a civil penalty assessed pursuant to Section 502(i)
of ERISA or a tax imposed by Section 4975 of the Internal Revenue Code in
connection with any Defined Benefit Pension Plan, Benefit Arrangement or any
trust created thereunder.
FINANCIAL STATEMENTS REGARDING THE SPECIAL PURPOSE
SUBSIDIARIES. At the same time that the Borrower provides the quarterly
financial statements required under Section 8.3(b) for the Borrower and its
Consolidated Subsidiaries, it shall also provide quarterly financial statements
of the type required by Section 8.3(b) for the Special Purpose Subsidiaries. At
the same time that the Borrower provides the annual financial statements
required under Section 8.3(c) for the Borrower and its Consolidated
Subsidiaries, it shall also provide consolidated and consolidating annual
financial statements, of the type required by Section 8.3(c), for the Borrower,
its Consolidated Subsidiaries and the Special Purpose Subsidiaries.
NOTICES REGARDING SPECIAL PURPOSE SUBSIDIARIES. Within five
(5) Business Days after the creation of any new Special Purpose Subsidiary, the
Borrower shall provide written notice to the Agent of the creation of any new
Special Purpose Subsidiary, accompanied by the declaration of trust, certificate
or articles of incorporation, bylaws or other organizational documents of the
new Special Purpose Subsidiary.
9. DEFAULT
EVENTS OF DEFAULT.
An Event of Default shall mean the occurrence or existence of any
one or more of the following events or conditions (whatever the reason therefor
and whether voluntary, involuntary or effected by operation of Law):
The Borrower shall (i) fail to pay any principal of any Loan
(including scheduled installments, mandatory prepayments or the payment due at
maturity) or (ii) fail to pay any interest on any Loan or any other amount owing
thereunder or hereunder within two (2) Business Days after such interest or
other amount becomes due in accordance with the terms thereof or hereof; or
Any representation or warranty made at any time by the
Borrower herein or by the Borrower or any other Loan Party in any other Senior
Loan Document, or in any certificate, other instrument or statement furnished
pursuant to the provisions hereof or thereof, shall prove to have been false or
misleading in any material respect as of the time it was made or furnished; or
The Borrower shall default in the observance or performance
of any covenant, condition or provision hereof or of any other Senior Loan
Document and such default shall continue unremedied for a period of five (5)
Business Days after written notice thereof is given to the Borrower by the Agent
at the request of any Bank (such grace period to be applicable only in the event
such default can be remedied by corrective action of the Borrower as determined
by the Agent in its sole discretion); PROVIDED no grace period shall apply to
defaults in the observance or performance of Sections
8.2(a),(b),(c),(d),(i),(j),(k),(p),(r),(u) or Section 8.3(e); or
The Borrower or any other Loan Party shall default in the
observance or performance of any covenant, condition or provision hereof or of
any other Senior Loan Document and such default shall continue unremedied for a
period of ten (10) Business Days after the Borrower or any other Loan Party
becomes aware of the occurrence thereof (such grace period to be applicable only
in the event such default can be remedied by corrective action of the Borrower
or any other Loan Party as determined by the Agent in its sole discretion);
PROVIDED no grace period shall apply to defaults in the observance or
performance of Sections 8.2(a), (b), (c), (d), (i), (j), (k), (p), (r), (u) or
Section 8.3(e); or
A default or event of default shall occur at any time under
the Senior Notes or under the terms of any other Indebtedness (if any) of any of
the Companies, or all or any part of the Senior Notes or other Indebtedness
shall not be paid when due, and such default or event of default or non-payment
continues unremedied for five (5) Business Days after any of the Companies
becomes aware thereof; PROVIDED no grace period hereunder shall apply in any
event where such default, event of default or nonpayment permits the holder of
any Indebtedness of the Companies to accelerate such Indebtedness; or
Any final unappealable judgment(s) for the payment of money
in excess of $1,000,000 in the aggregate shall be entered against any of the
Companies by a court having jurisdiction in the premises and shall remain
unsatisfied for a period of thirty (30) days; or
Any of the Senior Loan Documents shall cease to be legal,
valid and binding agreements enforceable against any Loan Party executing the
same or such Loan Party's heirs, representatives, successors and assigns (as
permitted under the Senior Loan Documents) in accordance with the respective
terms thereof or shall in any way be terminated (except in accordance with its
terms) or become or be declared ineffective or inoperative or shall in any way
be challenged or contested by any Loan Party or cease to give or provide the
respective Liens, security interests, rights, titles, interests, remedies,
powers or privileges intended to be created thereby; or
Within a period of twelve (12) consecutive calendar months,
individuals who were directors of the Borrower on the first day of such period
shall cease to constitute a majority of the board of directors of the Borrower
other than as a result of death, voluntary resignation or retirement.
A proceeding shall have been instituted in a court having
jurisdiction in the premises seeking a decree or order for relief in respect of
any of the Companies in an involuntary case under any applicable bankruptcy,
insolvency, reorganization or other similar Law now or hereafter in effect, or a
receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator
(or similar official) of any of the Companies shall have been appointed
(pursuant to a proceeding or otherwise) or for any substantial part of its
property, or for the winding-up or liquidation of its affairs, and such
proceeding shall remain undismissed or unstayed and in effect for a period of
thirty (30) consecutive days or such court shall enter a decree or order
granting any of the relief sought in such proceeding; or
Any of the Companies shall commence a voluntary case under
any applicable bankruptcy, insolvency, reorganization or other similar Law now
or hereafter in effect, shall consent to the entry of an order for relief in an
involuntary case under any such Law, or shall consent to the appointment or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator, conservator (or other similar official) of itself or for any
substantial part of its property (other than voluntary liquidations permitted
under Section 8.2(j)) or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they become due, or shall
take any action in furtherance of any of the foregoing.
CONSEQUENCES OF EVENT OF DEFAULT.
If an Event of Default specified under subsections (a)
through (h) of Section 9.1 shall occur and be continuing, no Bank shall have any
further obligation to make Loans hereunder and the Agent, upon the request of
the Required Banks, shall by written notice to the Borrower take any or all of
the following actions: (i) terminate the Commitments, (ii) declare the unpaid
principal amount of the Notes then outstanding and all interest accrued thereon,
any unpaid fees and all other Indebtedness (including the stated amount of all
outstanding Letters of Credit of the Borrower to the Banks hereunder and
thereunder to be forthwith due and payable, and the same shall thereupon become
and be immediately due and payable to the Agent for the benefit of each Bank,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived, and (iii) require the Borrower to, and Borrower
shall thereupon, deposit in a non-interest bearing account with the Agent, as
cash collateral for its obligations under the Senior Loan Documents, an amount
equal to the maximum amount currently or at any time thereafter available to be
drawn on all outstanding Letters of Credit, and the Borrower hereby pledges to
the Agent and the Banks, and grants to the Agent and the Banks a security
interest in, all such cash as security for such obligations, provided that upon
the earlier of (x) the curing of all existing Events of Default to the
satisfaction of the Required Banks and (y) payment in full of the Loans,
satisfaction of all of the Borrower's other obligations hereunder and
termination of the Commitments, the Agent shall return such cash collateral to
the Borrower; and
if an Event of Default specified under subsections (i) or (j)
of Section 9.1 shall occur, the Banks shall have no further obligation to make
Loans hereunder, the Commitments shall without any further action terminate and
the unpaid principal amount of the Notes then outstanding and all interest
accrued thereon, any unpaid fees and all other Indebtedness (including the
stated amount of all outstanding Letters of Credit) of the Borrower to the Banks
hereunder and thereunder shall be immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived; and
In case an Event of Default shall occur and be continuing,
any Bank to whom any obligation is owed by the Borrower hereunder or under any
other Senior Loan Document or any participant of such Bank which has agreed in
writing to be bound by the provisions of Section 10.14 and any branch,
subsidiary or affiliate of such Bank or participant anywhere in the world shall
have the right, in addition to all other rights and remedies available to it,
without notice to the Borrower, to set off against and apply to the then unpaid
balance of all the Loans and all other obligations of the Borrower hereunder or
under any other Senior Loan Document any debt owing to, and any other funds held
in any manner for the account of, the Borrower by such Bank or participant or by
such branch, subsidiary or affiliate, including all funds in all deposit
accounts (whether time or demand, general or special, provisionally credited or
finally credited, or otherwise) now or hereafter maintained by the Borrower for
its own account (but not including funds held in custodian or trust accounts)
with such Bank or participant or such branch, subsidiary or affiliate. Such
right shall exist whether or not any Bank or the Agent shall have made any
demand under this Agreement or any other Senior Loan Document, whether or not
such debt owing to or funds held for the account of the Borrower is or are
matured or unmatured and regardless of the existence or adequacy of any
collateral, guaranty or any other security, right or remedy available to any
Bank or the Agent; and
In case an Event of Default shall occur and be continuing,
and whether or not the Agent shall have accelerated the maturity of the Loans of
the Borrower pursuant to any of the foregoing provisions of this Section 9.2,
the Agent on behalf of the Banks may proceed to protect and enforce its rights
by suit in equity, action at law and/or other appropriate proceeding, whether
for the specific performance of any covenant or agreement contained in this
Agreement or the Notes, including as permitted by applicable Law the obtaining
of the EX PARTE appointment of a receiver, and, if such amount shall have become
due, by declaration or otherwise, proceed to enforce the payment thereof or any
other legal or equitable right of the Agent on behalf of the Banks; and
From and after the date on which the Agent has taken any
action pursuant to this Section 9.2 and until all obligations of the Borrower
have been paid in full, any and all proceeds received by the Agent from any sale
or other disposition of the Collateral, or any part thereof, or the exercise of
any other remedy by the Agent, shall be applied as follows:
first, to reimburse the Agent and the Banks for out-of-pocket costs,
expenses and disbursements, including reasonable attorneys' fees and legal
expenses, incurred by the Agent or the Banks in connection with realizing on the
Collateral or collection of any obligations of the Borrower under any of the
Senior Loan Documents, including advances made subsequent to an Event of Default
by the Banks or any one of them or the Agent for the reasonable maintenance,
preservation, protection or enforcement of, or realization upon, the Collateral,
including advances for taxes, insurance, repairs and the like and reasonable
expenses incurred to sell or otherwise realize on, or prepare for sale or other
realization on, any of the Collateral;
second, to the repayment of all Indebtedness then due and unpaid of the
Borrower to the Banks incurred under this Agreement or any of the Senior Loan
Documents, whether of principal, interest, fees, expenses or otherwise, in such
manner as the Agent may determine in its discretion, subject to the provisions
of Section 5.2; and
the balance, if any, as required by Law.
In addition to all of the rights and remedies contained in
this Agreement or in any of the other Senior Loan Documents, the Agent shall
have all of the rights and remedies of a secured party under the Uniform
Commercial Code or other applicable Law, all of which rights and remedies shall
be cumulative and non-exclusive, to the extent permitted by Law. The Agent may,
and upon the request of the Required Banks shall, exercise all post-default
rights granted to the Agent and the Banks under the Senior Loan Documents or
applicable Law.
NOTICE OF SALE.
Any notice required to be given by the Agent of a sale, lease, or other
disposition of the Collateral or any other related action by the Agent, if given
ten (10) days prior to such proposed action, shall constitute commercially
reasonable and fair notice thereof to the Borrower or any other Loan Party.
10. THE AGENT
APPOINTMENT.
Each Bank hereby irrevocably designates, appoints and authorizes PNC to
act as Agent for such Bank under this Agreement to execute and deliver or accept
on behalf of each of the Banks the other Senior Loan Documents. Each Bank hereby
irrevocably authorizes, and each holder of any Note by the acceptance of a Note
shall be deemed irrevocably to authorize, the Agent to take such action on
behalf of such Bank and such holder under the provisions of this Agreement and
the other Senior Loan Documents and any other instruments and agreements
referred to herein, and to exercise such powers and to perform such duties
hereunder as are specifically delegated to or required of the Agent by the terms
hereof, together with such powers as are reasonably incidental thereto. PNC
agrees to act as the Agent on behalf of the Banks to the extent provided in this
Agreement.
DELEGATION OF DUTIES.
The Agent may perform any of its duties hereunder by or through agents or
employees (PROVIDED such delegation is exercised with reasonable care and does
not constitute a relinquishment of its duties as Agent) and, subject to Sections
10.5, 10.6 and 10.7, shall be entitled to engage and pay for the advice or
services of any attorneys, accountants or other experts concerning all matters
pertaining to its duties hereunder and to rely upon any advice so obtained,
PROVIDED reasonable care is used in the selection of the foregoing experts.
NATURE OF DUTIES; INDEPENDENT CREDIT INVESTIGATION.
The Agent shall have no duties or responsibilities except those expressly
set forth in this Agreement and the other Senior Loan Documents and no implied
covenants, functions, responsibilities, duties, obligations, or liabilities
shall be read into this Agreement or shall otherwise exist. The duties of the
Agent shall be mechanical and administrative in nature and shall include the
duty to provide to each Bank an executed original of such Bank's Revolving
Credit Note and an executed original of this Agreement and a copy of the other
Senior Loan Documents; the Agent shall not have by reason of this Agreement a
fiduciary or trust relationship in respect of any Bank; and nothing in this
Agreement, expressed or implied, is intended to or shall be so construed as to
impose upon the Agent any obligations in respect of this Agreement except as
expressly set forth herein. Each Bank expressly acknowledges (i) that the Agent
has not made any representations or warranties to it and that no act by the
Agent hereafter taken, including any review of the affairs of the Borrower or
any Subsidiary of the Borrower, shall be deemed to constitute any representation
or warranty by the Agent to any Bank; (ii) that it has made and will continue to
make, without reliance upon the Agent, its own independent investigation of the
financial condition and affairs and its own appraisal of the creditworthiness of
the Borrower in connection with this Agreement and the making and continuance of
the Loans hereunder; and (iii) except as expressly provided herein, that the
Agent shall have no duty or responsibility, either initially or on a continuing
basis, to provide any Bank with any credit or other information with respect
thereto, whether coming into its possession before the making of any Loan or at
any time or times thereafter.
ACTIONS IN DISCRETION OF THE AGENT; INSTRUCTIONS FROM THE BANKS.
The Agent agrees, upon the written request of the Required Banks, to take
or refrain from taking any action of the type specified as being within the
Agent's rights, powers or discretion herein, PROVIDED that the Agent shall not
be required to take any action which exposes the Agent to legal liability or
which is contrary to this Agreement or any other Senior Loan Document or
applicable Law. In the absence of a request by the Required Banks, the Agent
shall have authority, in its sole discretion, to take or not to take any such
action, unless this Agreement specifically requires the consent of the Required
Banks or all of the Banks. Any action taken or failure to act pursuant to such
instructions or discretion shall be binding on the Banks, subject to Section
10.6. Subject to the provisions of Section 10.6, no Bank shall have any right of
action whatsoever against the Agent as a result of the Agent acting or
refraining from acting hereunder in accordance with the instructions of the
Required Banks, or in the absence of such instructions, in the absolute
discretion of the Agent.
REIMBURSEMENT AND INDEMNIFICATION OF THE AGENT BY THE BORROWER.
The Borrower unconditionally agrees to pay or reimburse the Agent and save
the Agent harmless against (i) liability for the payment of all reasonable and
necessary out-of-pocket costs, expenses and disbursements for which
reimbursement is customarily obtained, including fees and expenses of counsel
and consultants, incurred by the Agent (a) in connection with the development,
negotiation, preparation, printing, execution, administration, interpretation
and performance of this Agreement and the other Senior Loan Documents, (b)
relating to any requested amendments, waivers or consents pursuant to the
provisions hereof, (c) in connection with the enforcement of this Agreement or
any other Senior Loan Document or collection of amounts due hereunder or
thereunder or the proof and allowability of any claim arising under this
Agreement or any other Senior Loan Document, whether in bankruptcy or
receivership proceedings or otherwise, and (d) in any workout or restructuring
or in connection with the protection, preservation, exercise or enforcement of
any of the terms hereof or of any rights hereunder or under any other Senior
Loan Document or in connection with any foreclosure, collection or bankruptcy
proceedings, and (ii) all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against the
Agent, in its capacity as such, in any way relating to or arising out of this
Agreement or any other Senior Loan Document or any action taken or omitted by
the Agent hereunder or thereunder; PROVIDED that the Borrower shall not be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements (a) if
the same results from the Agent's gross negligence or willful misconduct, or (b)
if the Borrower was not given notice of the subject claim and the opportunity to
participate in the defense thereof, at its expense, or (c) if the same results
from a compromise or settlement agreement entered into without the consent of
the Borrower which consent shall not be unreasonably withheld.
EXCULPATORY PROVISIONS.
Neither the Agent nor any of its directors, officers, employees, agents or
affiliates shall (i) be liable to any Bank for any action taken or omitted to be
taken by it or them hereunder, or in connection herewith, including pursuant to
any other Senior Loan Document, unless caused by its or their own gross
negligence or willful misconduct, (ii) be responsible in any manner to any of
the Banks for the effectiveness, enforceability, genuineness, validity or the
due execution of this Agreement or any other Senior Loan Document or for any
recital, representation, warranty, document, certificate, report or statement
herein or made or furnished under or in connection with this Agreement or any
other Senior Loan Document, or (iii) be under any obligation to any of the Banks
to ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions hereof or thereof on the part of the Borrower or
any Subsidiary of the Borrower, or the financial condition of the Borrower or
any Subsidiary of the Borrower, or the existence or possible existence of any
Event of Default or Potential Default. Neither the Agent nor any Bank nor any of
their respective directors, officers, employees, agents, attorneys or affiliates
shall be liable to the Borrower or any other Loan Party for consequential
damages resulting from any breach of contract, tort or other wrong in connection
with the negotiation, documentation or administration of the Senior Loan
Documents or the collection of the Loans.
REIMBURSEMENT AND INDEMNIFICATION OF THE AGENT BY THE BANKS.
Each Bank agrees to reimburse and indemnify the Agent (to the extent not
reimbursed by the Borrower and without limiting the obligation of the Borrower
to do so) in proportion to its Ratable Share from and against all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against the Agent, in its capacity as such, in any
way relating to or arising out of this Agreement or any other Senior Loan
Document or any action taken or omitted by the Agent hereunder or thereunder,
PROVIDED that no such reimbursement shall be required with respect to expenses
incurred by the Agent during the time period through the Closing Date and no
Bank shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
(i) if the same relates to or arises out of the Agent's gross negligence or
willful misconduct, or (ii) if such Bank was not given notice of the subject
claim and the opportunity to participate in the defense thereof, at its expense,
or (iii) if the same results from a compromise and settlement agreement entered
into without the consent of the Required Banks, which consent shall not be
unreasonably withheld.
RELIANCE BY THE AGENT.
The Agent shall be entitled to rely upon any writing, telegram, telex or
teletype message, facsimile, resolution, notice, consent, certificate, letter,
cablegram, statement, order or other document or conversation by telephone or
otherwise believed by it to be genuine and correct and to have been signed, sent
or made by the proper person or persons, and upon the advice and opinions of
counsel and other professional advisers selected by the Agent. The Agent shall
be fully justified in failing or refusing to take any action hereunder unless it
shall first be indemnified to its satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.
NOTICE OF DEFAULT.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Potential Default or Event of Default unless the Agent has
received written notice from a Bank or the Borrower referring to this Agreement,
specifically describing such Potential Default or Event of Default and stating
that such notice is a "notice of default."
NOTICES.
The Agent shall promptly send to each Bank a copy of all notices received
from the Borrower and/or any other Loan Party pursuant to the provisions of this
Agreement or any other Senior Loan Document upon receipt thereof. The Agent
shall promptly notify the Borrower and the other Banks of each change in the
Base Rate and the Base Rate Margin and the effective date thereof.
PNC BANK, NATIONAL ASSOCIATION AND THE BANKS IN THEIR INDIVIDUAL CAPACITIES.
With respect to its Commitments and the Loans made by it, the Agent shall
have the same rights and powers hereunder as any other Bank and may exercise the
same as though it were not the Agent, and the term "Banks" shall, unless the
context otherwise indicates, include the Agent in its individual capacity. PNC
and its affiliates and each of the Banks and their respective affiliates may,
without liability to account, except as prohibited herein, make loans to, accept
deposits from, discount drafts for, act as trustee under indentures of, and
generally engage in any kind of banking or trust business with, the Borrower and
its shareholders, any Subsidiary of the Borrower and their respective
Affiliates, in the case of the Agent, as though it were not acting as Agent
hereunder and in the case of each Bank, as though such Bank were not a Bank
hereunder.
HOLDERS OF NOTES.
The Agent may deem and treat any payee of any Note as the owner thereof
for all purposes hereof unless and until written notice of the assignment or
transfer thereof shall have been filed with the Agent. Any request, authority or
consent of any person who at the time of making such request or giving such
authority or consent is the holder of any Note shall be conclusive and binding
on any subsequent holder, transferee or assignee of such Note or of any Note or
Notes issued in exchange therefor.
EQUALIZATION OF THE BANKS.
The Banks and the holders of any participations in any Notes agree among
themselves that, with respect to all amounts received by any Bank or any such
holder for application on any obligation hereunder or under any Note or under
any such participation, whether received by voluntary payment, by realization
upon security, by the exercise of the right of set-off or banker's lien, by
counterclaim or by any other non-pro rata source, equitable adjustment will be
made in the manner stated in the following sentence so that, in effect, all such
excess amounts will be shared ratably among the Banks and such holders in
proportion to their interests in payments under the Notes, except as otherwise
provided in Sections 4.4 (b), 5.4 or 5.5. The Banks or any such holder receiving
any such amount shall purchase for cash from each of the other Banks an interest
in such Bank's Loans in such amount as shall result in a ratable participation
by the Banks and each such holder in the aggregate unpaid amount under the
Notes, PROVIDED that if all or any portion of such excess amount is thereafter
recovered from the Bank or the holder making such purchase, such purchase shall
be rescinded and the purchase price restored to the extent of such recovery,
together with interest or other amounts, if any, required by Law (including
court order) to be paid by the Bank or the holder making such purchase.
SUCCESSOR AGENT.
The Agent (i) may resign as Agent with the consent of the Borrower, such
consent not to be unreasonably withheld or (ii) shall resign if such resignation
is requested by the Required Banks or required by Section 5.4(b), in either case
(i) or (ii) by giving not less than thirty (30) days' prior written notice to
the Borrower and the Banks. If the Agent shall resign under this Agreement, then
either (a) the Required Banks shall appoint from among the Banks a successor
agent for the Banks, subject to the consent of such successor agent by the
Borrower, such consent not to be unreasonably withheld, or (b) if a successor
agent shall not be so appointed and approved within the thirty (30) day period
following the Agent's notice to the Banks of its resignation, then the Agent
shall appoint, with the consent of the Borrower, such consent not to be
unreasonably withheld, a successor agent who shall serve as Agent until such
time as the Required Banks appoint, and the Borrower consents, which consent
shall not be unreasonably withheld, to the appointment of, a successor agent.
Upon its appointment pursuant to either clause (a) or (b) above, such successor
agent shall succeed to the rights, powers and duties of the Agent and the term
"Agent" shall mean such successor agent, effective upon its appointment, and the
former Agent's rights, powers and duties as Agent shall be terminated without
any other or further act or deed on the part of such former Agent or any of the
parties to this Agreement. After the resignation of any Agent hereunder, the
provisions of this Article 10 shall inure to the benefit of such former Agent,
and such former Agent shall not by reason of such resignation be deemed to be
released from liability for any actions taken or not taken by it while it was an
Agent under this Agreement.
THE AGENT'S FEE.
The Borrower shall pay to the Agent an annual fee (the "AGENT'S FEE")
payable in arrears on the second Business Day of each April, July, October and
January after the date hereof and on the Revolving Credit Expiration Date, as
set forth in that certain letter dated January 31, 1996 between the Borrower and
the Agent.
CALCULATIONS.
In the absence of gross negligence or willful misconduct, the Agent shall
not be liable for any error in computing the amount payable to any Bank whether
in respect of the Loans, fees or any other amounts due to the Banks under this
Agreement. In the event an error in computing any amount payable to any Bank is
made, the Agent, the Borrower and each affected Bank shall, forthwith upon
discovery of such error, make such adjustments as shall be required to correct
such error, and any compensation therefor will be calculated at the Federal
Funds Effective Rate.
BENEFICIARIES.
Except as set forth in Sections 10.5, 10.15 and 10.16, the provisions of
this Article 10 are solely for the benefit of the Agent and the Banks, and the
Borrower or any other Loan Party shall not have any rights to rely on or enforce
any of the provisions hereof. In performing its functions and duties under this
Agreement, the Agent shall act solely as agent of the Banks and does not assume
and shall not be deemed to have assumed any obligation toward or relationship of
agency or trust with or for the Borrower or any other Loan Party.
11. MISCELLANEOUS
MODIFICATIONS, AMENDMENTS OR WAIVERS.
With the written consent of the Required Banks, the Agent, acting on
behalf of all the Banks, and the Borrower may from time to time enter into
written agreements amending or changing any provision of this Agreement or any
other Senior Loan Document or the rights of the Banks, the Borrower or the other
Loan Parties hereunder or thereunder, or may grant written waivers or consents
to a departure from the due performance of the obligations of the Borrower or
the other Loan Parties hereunder or thereunder. Any such agreement, waiver or
consent made with such written consent shall be effective to bind all the Banks;
PROVIDED that without the written consent of all the Banks, no such agreement,
waiver or consent may be made which will:
increase the amount of the Revolving Credit Commitment of any Bank
hereunder;
reduce the scheduled principal payments of any Loan, reduce the rate of
interest borne by any Loan (except as provided
in Section 4.1(b)), or reduce any fees payable to any Bank hereunder;
whether or not any Loans are outstanding, extend the time for payment of
principal or interest of any Loan or any fees payable to any Bank hereunder;
except as permitted under Section 8.2(k) or in connection with the sharing
of Collateral in connection with the Senior Notes, release any Collateral or
other security, if any, for the Borrower's obligations hereunder; or
amend Sections 4.1(c), 8.2(k), 10.6 or this Section 11.1, alter any
provision hereof regarding the pro rata treatment of the Banks hereunder, change
the definition of Required Banks, or change any requirement providing for the
Banks or the Required Banks to authorize the taking of any action hereunder.
NO IMPLIED WAIVERS; CUMULATIVE REMEDIES; WRITING REQUIRED.
No course of dealing and no delay or failure of the Agent or any Bank in
exercising any right, power, remedy or privilege under this Agreement or any
other Senior Loan Document shall affect any other or future exercise thereof or
operate as a waiver thereof; nor shall any single or partial exercise thereof or
any abandonment or discontinuance of steps to enforce such a right, power,
remedy or privilege preclude any further exercise thereof or of any other right,
power, remedy or privilege. The rights and remedies of the Agent and the Banks
under this Agreement and the other Senior Loan Documents are cumulative and not
exclusive of any rights or remedies which they would otherwise have. Any waiver,
permit, consent or approval of any kind or character on the part of any Bank of
any breach or default under this Agreement or any such waiver of any provision
or condition of this Agreement must be in writing and shall be effective only to
the extent specifically set forth in such writing.
REIMBURSEMENT AND INDEMNIFICATION OF THE BANKS BY THE BORROWER;
TAXES.
The Borrower agrees unconditionally upon demand to pay or reimburse to
each Bank and to save such Bank harmless against (i) liability for the payment
of all reasonable and necessary out-of-pocket costs, expenses and disbursements
for which reimbursement is customarily obtained, including fees and expenses of
counsel for each Bank incurred by such Bank (a) after the date of the closing of
the syndication hereunder, in connection with the administration and
interpretation of this Agreement and other instruments and documents to be
delivered hereunder, (b) relating to any amendments, waivers or consents
pursuant to the provisions hereof, (c) in connection with the enforcement of
this Agreement or any other Senior Loan Document, or collection of amounts due
hereunder or thereunder or the proof and allowability of any claim arising under
this Agreement or any other Senior Loan Document, whether in bankruptcy or
receivership proceedings or otherwise, and (d) in any workout, restructuring or
in connection with the protection, preservation, exercise or enforcement of any
of the terms hereof or of any rights hereunder or under any other Senior Loan
Document or in connection with any foreclosure, collection or bankruptcy
proceedings, and (ii) all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against such
Bank, in its capacity as such, in any way relating to or arising out of this
Agreement or any other Senior Loan Document or any action taken or omitted by
such Bank hereunder or thereunder; PROVIDED that the Borrower shall not be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements (a) if
the same results from such Bank's gross negligence or willful misconduct, or (b)
if the Borrower was not given notice of the subject claim and the opportunity to
participate in the defense thereof, at its expense, or (c) if the same results
from a compromise or settlement agreement entered into without the consent of
the Borrower, which consent shall not be unreasonably withheld. The Banks will
attempt to minimize the fees and expenses of legal counsel for the Banks by
considering the usage of one law firm to represent the Banks and the Agent where
appropriate. The Borrower agrees unconditionally to pay all stamp, document,
transfer, recording or filing taxes or fees and similar impositions now or
hereafter determined by the Agent or any Bank to be payable in connection with
this Agreement or any other Senior Loan Document, and the Borrower agrees
unconditionally to save the Agent and the Banks harmless from and against any
and all present or future claims, liabilities or losses with respect to or
resulting from any omission to pay or delay in paying any such taxes, fees or
impositions.
HOLIDAYS.
Whenever any payment or action to be made or taken hereunder shall be
stated to be due on a day which is not a Business Day, such payment or action
shall be made or taken on the next following Business Day (except as provided in
Section 4.2(a) with respect to Euro-Rate Interest Periods), and such extension
of time shall be included in computing interest or fees, if any, in connection
with such payment or action.
FUNDING BY BRANCH, SUBSIDIARY OR AFFILIATE.
NOTIONAL FUNDING. Each Bank shall have the right from time to
time, without notice to the Borrower, to deem any branch, subsidiary or
affiliate (which for the purposes of this Section 11.5 shall mean any
corporation or association which is directly or indirectly controlled by or is
under direct or indirect common control with any corporation or association
which directly or indirectly controls such Bank) of such Bank to have made,
maintained or funded any Loan to which the Euro-Rate Option applies at any time,
PROVIDED that immediately following (on the assumption that a payment was then
due from the Borrower to such other office) and as a result of such change the
Borrower would not be under any greater financial obligation pursuant to Section
5.5 than it would have been in the absence of such change. Notional funding
offices may be selected by each Bank without regard to the Bank's actual methods
of making, maintaining or funding the Loans or any sources of funding actually
used by or available to such Bank.
ACTUAL FUNDING. Each Bank shall have the right from time to
time to make or maintain any Loan by arranging for a branch, subsidiary or
affiliate of such Bank to make or maintain such Loan subject to the last
sentence of this Section 11.5(b). If any Bank causes a branch, subsidiary or
affiliate to make or maintain any part of the Loans hereunder, all terms and
conditions of this Agreement shall, except where the context clearly requires
otherwise, be applicable to such part of the Loans to the same extent as if such
Loan were made or maintained by such Bank but in no event shall any Bank's use
of such a branch, subsidiary or affiliate to make or maintain any part of the
Loans hereunder cause such Bank or such branch, subsidiary or affiliate to incur
any cost or expenses payable by the Borrower hereunder or require the Borrower
to pay any other compensation to any Bank (including any expenses incurred or
payable pursuant to Section 5.5) which would otherwise not be incurred.
NOTICES.
All notices, requests, demands, directions and other communications
(collectively "NOTICES") given to or made upon any party hereto under the
provisions of this Agreement shall be by telephone or in writing (including
telex or facsimile communication) unless otherwise expressly permitted hereunder
and shall be delivered or sent by telex or facsimile to the respective parties
at the addresses and numbers set forth on SCHEDULE 11.6 or in accordance with
any subsequent unrevoked written direction from any party to the others. All
notices shall, except as otherwise expressly herein provided, be effective (a)
in the case of telex or facsimile, when received, (b) in the case of hand
delivered notice, when hand delivered, (c) in the case of telephone, when
telephoned, PROVIDED, HOWEVER, that in order to be effective, telephonic notices
must be confirmed in writing no later than the next day by letter, facsimile or
telex, (d) if given by mail, the earlier of actual receipt or four (4) days
after such communication is deposited in the mails with first class postage
prepaid, return receipt requested, and (e) if given by any other means
(including by air courier), when delivered; PROVIDED that notices to the Agent
and the Banks shall not be effective until received. Any Bank giving any notice
to the Borrower shall simultaneously send a copy thereof to the Agent, and the
Agent shall promptly notify the other Banks of the receipt by it of any such
notice.
SEVERABILITY.
The provisions of this Agreement are intended to be severable. If any
provision of this Agreement shall be held invalid or unenforceable in whole or
in part in any jurisdiction, such provision shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without in any
manner affecting the validity or enforceability thereof in any other
jurisdiction or the remaining provisions hereof in any jurisdiction.
GOVERNING LAW.
Each Letter of Credit and Section 2.10 shall be subject to the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500, as the same may be revised or amended
from time to time, and to the extent not inconsistent therewith the internal
laws of the Commonwealth of Pennsylvania without regard to its conflict of laws
principles and the balance of this Agreement shall be deemed to be a contract
under the laws of the Commonwealth of Pennsylvania and for all purposes shall be
governed by and construed and enforced in accordance with the internal laws of
the Commonwealth of Pennsylvania without regard to its conflict of laws
principles.
PRIOR UNDERSTANDING.
This Agreement supersedes all prior understandings and agreements, whether
written or oral, between the parties hereto and thereto relating to the
transactions provided for herein and therein, including any prior
confidentiality agreements and commitments.
DURATION; SURVIVAL.
All representations and warranties of the Borrower contained herein or
made in connection herewith shall survive the making of the Loans and shall not
be waived by the execution and delivery of this Agreement, any investigation by
the Agent or the Banks, the making of the Loans, or payment in full of the
Loans. All covenants and agreements of the Borrower contained in Sections 8.1,
8.2 and 8.3 shall continue in full force and effect from and after the date
hereof so long as the Borrower may borrow hereunder and until payment of all
amounts due hereunder and termination of the Revolving Credit Commitments and
the Swing Loan Commitment. All covenants and agreements of the Borrower
contained herein relating to the payment of principal, interest, premiums,
additional compensation or expenses and indemnification, including those set
forth in the Notes, Article 5 and Sections 10.5 and 11.3, but not including
third-party claims with respect to which indemnification may be sought under
Section 10.5 or 11.3, shall survive for a period of one (1) year after payment
in full of the Loans and termination of the Revolving Credit Commitments and the
Swing Loan Commitment, and the Banks shall make any claim with respect to the
foregoing within such period, PROVIDED that such period shall be extended with
respect to any matters pending at the end of such one (1) year period. Except as
otherwise provided above, all obligations of the Borrower and the other Loan
Parties to the Banks, including indemnification obligations with respect to
third-party claims under Section 10.5 or 11.3, shall survive the payment in full
of the Loans and of all other obligations of the Borrower and the other Loan
Parties and termination of the Revolving Credit Commitments and the Swing Loan
Commitment.
SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and shall inure to the benefit of the
Banks, the Agent, the Borrower and their respective successors and assigns,
except that the Borrower may not assign or transfer any of its rights and
obligations hereunder or any interest herein except under the circumstances
contemplated under Section 8.1(a). Each Bank may, at its own cost, make
assignments of or sell participations in its Revolving Credit Commitment and any
Loan or Loans made by it to one (1) or more banks or other entities, subject to
compliance with the following requirements of this Section 11.11. The consent of
the Borrower shall be required for any assignment or participation except with
respect to fundings by a branch, subsidiary or affiliate pursuant to Section
11.5, and such consent shall not be unreasonably withheld, it being understood
that the Borrower may reasonably withhold such consent only if it determines in
good faith that the prospective assignee or participant is a significant
competitor, PROVIDED the consent of the Borrower shall not be required upon the
occurrence and during the continuation of an Event of Default or Potential
Default. The consent of the Agent shall also be required for any assignment
except with respect to fundings by a branch, subsidiary or affiliate pursuant to
Section 11.5, and such consent shall not be unreasonably withheld.
Except (i) as otherwise provided in Section 5.4 (b), or (ii) with the
consent of the Agent and the Borrower which consent may be withheld in their
sole discretion, assignments may not be made in amounts less than $5,000,000.
In the case of an assignment, upon the Agent's and the Borrower's consent
thereto and receipt by the Agent from the assignee of (i) a duly executed
Assignment and Assumption Agreement and (ii) a Three Thousand Five Hundred
Dollar ($3,500) assignment fee payable to the Agent, the assignee shall have, to
the extent of such assignment (unless otherwise provided therein), the same
rights, benefits and obligations as it would have if it had been a signatory
Bank hereunder. The Revolving Credit Commitments in Section 2.1 shall then be
adjusted accordingly and, upon surrender of any Note subject to such assignment,
the Borrower shall execute and deliver a new Revolving Credit Note to the
assignee in an amount equal to the amount of the Revolving Credit Commitment
assumed by it and a new Revolving Credit Note to the assigning Bank in an amount
equal to the Revolving Credit Commitment retained by it hereunder.
In the case of a participation, except as specified in Section 9.2(c), the
participant shall not have any rights under this Agreement or any other Senior
Loan Document, all of such Bank's obligations under this Agreement or any other
Senior Loan Document shall remain unchanged and all amounts payable by the
Borrower hereunder or thereunder shall be determined as if such Bank had not
sold such participation. Any participant's rights against the Bank selling such
participation shall be set forth in the agreement executed by such Bank in favor
of such participant and shall not include any voting rights except with respect
to changes of the type referenced in clauses (i), (ii), (iii) or (iv), of
Section 11.1 and in clause (v) of Section 11.1 with respect to amending clauses
(i), (ii), (iii) or (iv) of Section 11.1.
Each Bank may furnish any publicly available information concerning the
Borrower and, on a confidential basis subject to receipt of a confidentiality
agreement in substantially the form of EXHIBIT M, any other information
concerning the Borrower in the possession of such Bank from time to time to
assignees and participants (including prospective assignees or participants),
PROVIDED such assignees and participants agree to be bound by the provisions of
Section 11.12.
CONFIDENTIALITY.
The Agent and the Banks each agree to keep confidential all information
obtained from the Borrower which is nonpublic and confidential or proprietary in
nature (including any information the Borrower specifically designates as
confidential), except as provided below, and to use such information only in
connection with their respective capacities under this Agreement and for the
purposes contemplated hereby. The Agent and the Banks shall be permitted to
disclose such information (i) to outside legal counsel, accountants and other
professional advisors who need to know such information in connection with the
administration and enforcement of this Agreement, subject to receipt of written
undertakings from such persons to maintain the confidentiality, (ii) to
prospective assignees and participants as contemplated by Section 11.11 subject
to compliance with the requirements of that Section, (iii) to the extent
requested by any bank regulatory authority or, with notice to the Borrower to
the extent practicable, as otherwise required by applicable Law or by any
subpoena or similar legal process, or in connection with any investigation or
proceeding arising out of the transactions contemplated by this Agreement, (iv)
if such information is already in the possession of the Bank on a
nonconfidential basis or is currently or becomes publicly available other than
as a result of a breach of this Agreement by the Banks or the Agent or is
currently or becomes available to the Banks or the Agent from a source not
subject to confidentiality restrictions, or (v) the Borrower shall have
consented to such disclosure.
COUNTERPARTS.
This Agreement may be executed by different parties hereto on any number
of separate counterparts, each of which, when so executed and delivered, shall
be an original, and all such counterparts shall together constitute one and the
same instrument.
THE AGENT'S OR THE BANK'S CONSENT.
Whenever the Agent's or any Bank's consent is required to be obtained
under this Agreement or any of the other Senior Loan Documents as a condition to
any action, inaction, condition or event, the Agent and each Bank shall be
authorized to give or withhold such consent in its sole and absolute discretion
and to condition its consent upon the giving of additional collateral, the
payment of money or any other matter.
EXCEPTIONS.
The representations, warranties and covenants contained herein shall be
independent of each other and no exception to any representation, warranty or
covenant shall be deemed to be an exception to any other representation,
warranty or covenant contained herein unless expressly provided, nor shall any
such exception be deemed to permit any action or omission that would be in
contravention of applicable Law (including the Investment Company Act).
CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.
The Borrower hereby irrevocably consents to the non-exclusive jurisdiction
of the Court of Common Pleas of Allegheny County and the United States District
Court for the Western District of Pennsylvania, and waives personal service of
any and all process upon it and consents that all such service of process be
made by certified or registered mail directed to the Borrower at the addresses
provided for in Section 11.6 and service so made shall be deemed to be completed
upon actual receipt thereof. The Borrower waives any objection to jurisdiction
and venue of any action instituted against it as provided herein and agrees not
to assert any defense based on lack of jurisdiction or venue. THE BORROWER, THE
AGENT AND EACH OF THE BANKS HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, SUIT OR
PROCEEDING OR COUNTERCLAIM WITH RESPECT TO THIS AGREEMENT OR ANY OTHER SENIOR
LOAN DOCUMENT OR THE COLLATERAL TO THE FULL EXTENT PERMITTED BY LAW.
LIMITATION OF LIABILITY.
TO THE FULLEST EXTENT PERMITTED BY LAW, NO CLAIM MAY BE MADE BY THE
BORROWER OR ANY OTHER LOAN PARTY OR ANY OTHER PERSON AGAINST THE AGENT AND THE
BANKS, OR ANY OF THEM, OR ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, ATTORNEY
OR AGENT OF THE AGENT OR THE BANKS FOR ANY SPECIAL, INDIRECT, OR CONSEQUENTIAL
DAMAGES (AS DIFFERENTIATED FROM DIRECT AND ACTUAL DAMAGES) IN RESPECT OF ANY
CLAIM ARISING FROM OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY
STATEMENT, COURSE OF CONDUCT, ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION
HEREWITH OR THEREWITH (WHETHER FOR BREACH OF CONTRACT, TORT OR ANY OTHER THEORY
OF LIABILITY); AND THE BORROWER HEREBY WAIVES, RELEASES AND AGREES NOT TO ▇▇▇
UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT
KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.
(b) The parties to this Agreement are expressly put on notice of the
limitation of liability as set forth in the declarations of trust of certain of
the Borrower's Subsidiaries and agree that the obligations assumed by the
Borrower and its Subsidiaries pursuant to this Agreement and the other Senior
Loan Documents be limited in any case to the Borrower and its Subsidiaries and
their respective assets. The parties to this Agreement shall not seek
satisfaction of any obligation of the Borrower or its Subsidiaries under this
Agreement from any of the shareholders of the Borrower, the trustees, officers
or agents of those entities, or any of them, except as contemplated under the
Pledge Agreement and the declarations of trust of certain of the Borrower's
Subsidiaries. Notwithstanding the foregoing, nothing in such declarations of
trust or elsewhere shall prohibit the Agent on behalf of the Banks from pursuing
any remedies against any outside professionals or consultants employed by the
Companies.
TAX WITHHOLDING CLAUSE.
At least five (5) Business Days prior to the first date on which interest
or fees are payable hereunder for the account of any Bank, each Bank that is not
incorporated under the laws of the United States of America or a state thereof
agrees that it will deliver to each of the Borrower and the Agent two (2) duly
completed copies of (i) IRS Form W-9, 4224 or 1001, or other applicable form
prescribed by the IRS, certifying in either case that such Bank is entitled to
receive payments under this Agreement and the other Senior Loan Documents
without deduction or withholding of any United States federal income taxes, or
is subject to such tax at a reduced rate under an applicable tax treaty, or (ii)
Form W-8 or other applicable form or a certificate of the Bank indicating that
no such exemption or reduced rate is allowable with respect to such payments.
Each Bank which so delivers a Form W-8, W-9, 4224 or 1001 further undertakes to
deliver to each of the Borrower and the Agent two (2) additional copies of such
form (or a successor form) on or before the date that such form expires or
becomes obsolete or after the occurrence of any event requiring a change in the
most recent form so delivered by it, and such amendments thereto or extensions
or renewals thereof as may be reasonably requested by the Borrower or the Agent,
either certifying that such Bank is entitled to receive payments under this
Agreement and the other Senior Loan Documents without deduction or withholding
of any United States federal income taxes or is subject to such tax at a reduced
rate under an applicable tax treaty or stating that no such exemption or reduced
rate is allowable. The Agent shall be entitled to withhold United States federal
income taxes at the full withholding rate unless the Bank establishes an
exemption or at the applicable reduced rate as established pursuant to the above
provisions.
CO-AGENTS.
The Co-Agents shall have no rights, obligations or duties under this
agreement other than in their respective capacities as Banks hereunder.
[SIGNATURE PAGE FOLLOWS]
[SIGNATURE PAGE 1 OF 1 TO AMENDED AND RESTATED CREDIT AGREEMENT]
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly
authorized, have executed this Agreement as of the day and year first above
written.
ATTEST: FEDERATED INVESTORS, INC.
By:
Title: Title:
[SEAL]
PNC BANK, NATIONAL ASSOCIATION, individually and as Agent
By:
Title: