$800,000,000
CREDIT AGREEMENT
dated as of
September 16, 1996
among
AT&T Capital Corporation
The Banks Listed Herein
and
Xxxxxx Guaranty Trust Company of New York,
as Agent
TABLE OF CONTENTS
ARTICLE I
SECTION 1.01. Definitions.........................................................1
SECTION 1.02. Accounting Terms and Determinations................................16
SECTION 1.03. Types of Borrowings................................................16
SECTION 1.04. Basis for Ratings..................................................17
ARTICLE II
SECTION 2.01. Commitments to Lend................................................17
SECTION 2.02. Notice of Committed Borrowing......................................17
SECTION 2.03. Money Market Borrowings............................................18
SECTION 2.04. Notice to Banks; Funding of Loans..................................22
SECTION 2.05. Notes..............................................................23
SECTION 2.06. Maturity of Loans; Termination of Commitments......................24
SECTION 2.07. Interest Rates.....................................................24
SECTION 2.08. Facility Fees......................................................28
SECTION 2.09. Optional Termination or Reduction of Commitments...................28
SECTION 2.10. Method of Electing Interest Rates..................................29
SECTION 2.11. Optional Prepayments...............................................30
SECTION 2.12. General Provisions as to Payments..................................31
SECTION 2.13. Funding Losses.....................................................32
SECTION 2.14. Computation of Interest and Fees...................................33
SECTION 2.15. Regulation D Compensation..........................................33
ARTICLE III
SECTION 3.01. Effectiveness......................................................34
SECTION 3.02. Borrowings.........................................................35
ARTICLE IV
SECTION 4.01. Corporate Existence and Power......................................36
SECTION 4.02. Corporate and Governmental Authorization; No Contravention.........36
SECTION 4.03. Binding Effect.....................................................36
SECTION 4.04. Financial Information..............................................37
SECTION 4.05. Litigation.........................................................37
SECTION 4.06. Subsidiaries.......................................................37
SECTION 4.07. Not an Investment Company..........................................38
SECTION 4.08. Full Disclosure....................................................38
ARTICLE V
SECTION 5.01. Information........................................................38
SECTION 5.02. Maintenance of Existence...........................................39
SECTION 5.03. Interest Coverage..................................................40
SECTION 5.04. Debt...............................................................40
SECTION 5.05. Minimum Consolidated Tangible Net Worth............................40
SECTION 5.06 Restricted Payments.................................................40
SECTION 5.07 Negative Pledge.....................................................40
SECTION 5.08. Consolidations, Mergers and Sales of Assets........................43
SECTION 5.09. Use of Proceeds....................................................44
ARTICLE VI
SECTION 6.01. Events of Default..................................................44
SECTION 6.02. Notice of Default..................................................47
SECTION 6.03. Rescission.........................................................47
ARTICLE VII
SECTION 7.01. Appointment and Authorization......................................48
SECTION 7.02. Agent and Affiliates...............................................48
SECTION 7.03. Action by Agent....................................................48
SECTION 7.04. Consultation with Experts..........................................48
SECTION 7.05. Liability of Agent.................................................48
SECTION 7.06. Indemnification....................................................49
SECTION 7.07. Credit Decision....................................................49
SECTION 7.08. Successor Agent....................................................49
SECTION 7.09. Agent's Fee........................................................50
ARTICLE VIII
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair...........50
SECTION 8.02. Illegality.........................................................51
SECTION 8.03. Increased Cost and Reduced Return..................................51
SECTION 8.04. Taxes..............................................................53
SECTION 8.05. Base Rate Loans Substituted for Affected Fixed Rate Loans..........56
SECTION 8.06. Substitution of Bank...............................................57
SECTION 8.07. Compensation.......................................................57
ARTICLE IX
SECTION 9.01. Notices............................................................58
SECTION 9.02. No Waivers.........................................................58
SECTION 9.03. Expenses; Indemnification..........................................58
SECTION 9.04. Sharing of Set-Offs................................................59
SECTION 9.05. Amendments and Waivers.............................................59
SECTION 9.06. Successors and Assigns.............................................60
SECTION 9.07. Collateral.........................................................62
SECTION 9.08. Governing Law; Submission to Jurisdiction..........................62
SECTION 9.09. Counterparts; Integration..........................................62
SECTION 9.10. WAIVER OF JURY TRIAL...............................................62
ii
SECTION 9.11. Confidentiality....................................................62
Exhibit A - Note
Exhibit B - Money Market Quote Request
Exhibit C - Invitation for Money Market Quotes
Exhibit D - Money Market Quote
Exhibit E - Opinion of Counsel for the Borrower
Exhibit F - Opinion of Special Counsel for the Agent
Exhibit G - Assignment and Assumption Agreement
iii
CREDIT AGREEMENT
AGREEMENT dated as of September 16, 1996 among AT&T CAPITAL
CORPORATION, the BANKS party hereto and XXXXXX GUARANTY TRUST COMPANY OF NEW
YORK, as Agent.
W I T N E S S E T H :
WHEREAS, the Borrower (as defined below) has heretofore entered
into a $500,000,000 Credit Agreement dated as of June 30, 1995 with the banks
parties thereto and Xxxxxx Guaranty Trust Company of New York, as agent for such
banks (as in effect on the date hereof, the "Existing Credit Agreement"); and
WHEREAS, the Borrower wishes to enter into this Agreement to
replace the Existing Credit Agreement; and
WHEREAS, upon the effectiveness of this Agreement in accordance
with Section 3.01, the Existing Credit Agreement shall terminate;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein,
have the following meanings:
"Absolute Rate Auction" means a solicitation of Money Market
Quotes setting forth Money Market Absolute Rates pursuant to Section 2.03.
"Accounts Receivable" means (i) any accounts receivable (whether
or not earned by performance), chattel paper, instruments, documents, general
intangibles, trade acceptances, any other rights to receive installment, rental
or other payments for, or relating to amounts due or to become due on account
of, equipment or goods sold or leased or to be sold or leased or services
rendered or to be rendered or funds advanced or loaned or to be advanced or
loaned and other rights to payment of any kind, (ii) any proceeds of any of the
foregoing and (iii) any interest in any property or asset of any kind (whether
of the obligor
under such Accounts Receivable or any other Person) securing the payment of any
item listed in clause (i) hereof.
"Acquisition" means the consummation of the acquisition and the
related transactions contemplated by the Agreement and Plan of Merger dated as
of June 5, 1996 among AT&T, the Borrower, Hercules Limited and Antigua
Acquisition Corporation (a true and correct copy of which, as in effect on the
date hereof, has heretofore been delivered to the Agent) substantially on the
terms described therein.
"Adjusted CD Rate" has the meaning set forth in Section 2.07(b).
"Administrative Questionnaire" means, with respect to each Bank,
an administrative questionnaire in the form prepared by the Agent and submitted
to the Agent (with a copy to the Borrower) duly completed by such Bank.
"Agent" means Xxxxxx Guaranty Trust Company of New York in its
capacity as agent for the Banks hereunder, and its successors in such capacity.
"Applicable Lending Office" means, with respect to any Bank, (i)
in the case of its Domestic Loans, its Domestic Lending Office, (ii) in the case
of its Euro-Dollar Loans, its Euro-Dollar Lending Office and (iii) in the case
of its Money Market Loans, its Money Market Lending Office.
"Applicable Margin" has the meaning set forth in Section 2.07(h).
"Assessment Rate" has the meaning set forth in Section 2.07(b).
"Asset Drop-Down" has the meaning set forth in Section 5.08.
"Assignee" has the meaning set forth in Section 9.06(c).
"AT&T" means American Telephone and Telegraph Company, a New York
corporation, and its successors.
"Bank" means each bank listed on the signature pages hereof, each
Assignee which becomes a Bank pursuant to Section 8.06 or 9.06(c), and their
respective successors.
"Base Rate" means, for any day, a rate per annum equal to the
higher of (i) the Prime Rate for such day and
2
(ii) the sum of 1/2 of 1% plus the Federal Funds Rate for such day.
"Base Rate Loan" means (i) a Committed Loan which bears interest
at the Base Rate pursuant to the applicable Notice of Committed Borrowing or
Notice of Interest Rate Election or the provisions of Article VIII or (ii) an
overdue amount which was a Base Rate Loan immediately before it became overdue.
"Borrower" means AT&T Capital Corporation, a Delaware
corporation, and its successors.
"Borrower's 1995 Form 10-K" means the Borrower's annual report on
Form 10-K for 1995, as filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended.
"Borrower's Latest Form 10-Q" means the Borrower's quarterly
report on Form 10-Q for the quarter ended June 30, 1996, as filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended.
"Borrowing" has the meaning set forth in Section 1.03.
"CD Base Rate" has the meaning set forth in Section 2.07(b).
"CD Loan" means (i) a Committed Loan which bears interest at a CD
Rate pursuant to the applicable Notice of Committed Borrowing or Notice of
Interest Rate Election or (ii) an overdue amount which was a CD Loan immediately
before it became overdue.
"CD Rate" means a rate of interest determined pursuant to Section
2.07(b) on the basis of an Adjusted CD Rate.
"CD Reference Banks" means The Chase Manhattan Bank and Xxxxxx
Guaranty Trust Company of New York.
"Commitment" means, with respect to each Bank, the amount set
forth opposite the name of such Bank on the signature pages hereof, as such
amount may be reduced from time to time pursuant to Section 2.09 or changed
pursuant to Section 9.06(c).
"Committed Loan" means a loan made by a Bank pursuant to Section
2.01; provided that, if any such loan or
3
loans (or portions thereof) are combined or subdivided pursuant to a Notice
of Interest Rate Election, the term "Committed Loan" shall refer to the combined
principal amount resulting from such combination or to each of the separate
principal amounts resulting from such subdivision, as the case may be.
"Consolidated Debt" means at any date the Debt of the Borrower
and its Consolidated Subsidiaries of the type referred to in clauses (i), (ii),
(iv) and (vii) of the definition of "Debt", determined on a consolidated basis
as of such date; provided, however, that any recourse provided by any Person in
connection with any sale, transfer or other disposition by such Person of
Accounts Receivable or of any subsidiary of such Person substantially all the
assets of which are Accounts Receivable which constitutes a "sale" under
generally accepted accounting principles (as in effect at the time of such sale,
transfer or other disposition) shall not, in any event, constitute Consolidated
Debt.
"Consolidated EBIT" means, for any period, the sum of (i)
Consolidated Net Income for such period plus (ii) to the extent deducted in
determining such Consolidated Net Income, the sum of Consolidated Interest
Expense and the provision for income tax for such period.
"Consolidated Interest Expense" means, for any period, the
interest expense of the Borrower and its Consolidated Subsidiaries determined on
a consolidated basis for such period.
"Consolidated Net Income" means, for any period, the net income
(loss) (calculated (a) before preferred and common stock dividends and (b)
exclusive of the effect of any extraordinary or other material non-recurring
gain or loss outside the ordinary course of business) of the Borrower and its
Consolidated Subsidiaries, determined on a consolidated basis for such period.
"Consolidated Subsidiary" means at any date any Subsidiary or
other entity (including a business trust) the accounts of which would be
consolidated with those of the Borrower in its consolidated financial statements
if such statements were prepared as of such date.
"Consolidated Tangible Net Worth" means at any date the sum of
(i) consolidated stockholders' equity of the Borrower and its Consolidated
Subsidiaries, less their consolidated Intangible Assets plus (ii) the Permitted
Minority Interest Amount, all determined as of such date. For purposes of
4
this definition "Intangible Assets" means the amount (to the extent reflected in
determining such consolidated stockholders' equity) of (i) all write-ups (other
than write-ups resulting from foreign currency translations and write-ups of
assets of a going concern business made within twelve months after the
acquisition of such business) subsequent to June 30, 1996 in the book value of
any asset owned by the Borrower or a Consolidated Subsidiary, (ii) all
Investments in unconsolidated Subsidiaries and all equity investments in Persons
which are not Subsidiaries and (iii) all unamortized debt discount and expense,
unamortized deferred charges, goodwill, patents, trademarks, service marks,
trade names, anticipated future benefit of tax loss carry-forwards, copyrights,
organization or developmental expenses and other intangible assets.
"D&P" means Duff & Xxxxxx Credit Rating Co. or any successor
rating agency acceptable to the Required Banks and the Borrower.
"Debt" of any Person means at any date, without duplication, (i)
all obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations of such Person as lessee which are capitalized in
accordance with generally accepted accounting principles, (v) all non-contingent
obligations (and, for purposes of Section 5.07 and the definitions of Material
Debt and Material Financial Obligations, all contingent obligations) of such
Person to reimburse any bank or other Person in respect of amounts paid under a
letter of credit or similar instrument, (vi) all Debt secured by a Lien on any
asset of such Person, whether or not such Debt is otherwise an obligation of
such Person, and (vii) all Debt of others guaranteed by such Person.
"Default" means any condition or event which constitutes an Event
of Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
5
"Derivatives Obligations" of any Person means all obligations of
such Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions.
"Domestic Business Day" means any day except a Saturday, Sunday
or other day on which commercial banks in New York City are authorized or
required by law to close.
"Domestic Lending Office" means, as to each Bank, its office
located at its address set forth in its Administrative Questionnaire (or
identified in its Administrative Questionnaire as its Domestic Lending Office)
or such other office as such Bank may hereafter designate as its Domestic
Lending Office by notice to the Borrower and the Agent; provided that any Bank
may so designate separate Domestic Lending Offices for its Base Rate Loans, on
the one hand, and its CD Loans, on the other hand, in which case all references
herein to the Domestic Lending Office of such Bank shall be deemed to refer to
either or both of such offices, as the context may require.
"Domestic Loans" means CD Loans or Base Rate Loans or both.
"Domestic Reserve Percentage" has the meaning set forth in
Section 2.07(b).
"Drop-Down Subsidiary" has the meaning set forth in Section 5.08.
"Effective Date" means the date this Agreement becomes effective
in accordance with Section 3.01.
"Euro-Dollar Business Day" means any Domestic Business Day on
which commercial banks are open for international business (including dealings
in dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office,
branch or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar
6
Lending Office) or such other office, branch or affiliate of such Bank as it
may hereafter designate as its Euro-Dollar Lending Office by notice to the
Borrower and the Agent.
"Euro-Dollar Loan" means (i) a Committed Loan which bears
interest at a Euro-Dollar Rate pursuant to the applicable Notice of Committed
Borrowing or Notice of Interest Rate Election or (ii) an overdue amount which
was a Euro-Dollar Loan immediately before it became overdue.
"Euro-Dollar Rate" means a rate of interest determined pursuant
to Section 2.07(c) on the basis of a London Interbank Offered Rate.
"Euro-Dollar Reference Banks" means the principal London offices
of The Fuji Bank, Limited, Royal Bank of Canada and Xxxxxx Guaranty Trust
Company of New York.
"Euro-Dollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for a member bank of
the Federal Reserve System in New York City with deposits exceeding five billion
dollars in respect of "Eurocurrency liabilities" (or in respect of any other
category of liabilities which includes deposits by reference to which the
interest rate on Euro-Dollar Loans is determined or any category of extensions
of credit or other assets which includes loans by a non-United States office of
any Bank to United States residents).
"Event of Default" has the meaning set forth in Section 6.01.
"Existing Credit Agreement" has the meaning set forth in the
recitals hereto.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if such day is not a
Domestic Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Domestic Business Day as so published on
the next succeeding Domestic Business Day, and (ii) if no such rate is so
published on such next
7
succeeding Domestic Business Day, the Federal Funds Rate for such day shall be
the average rate quoted to Xxxxxx Guaranty Trust Company of New York on such
day on such transactions as determined by the Agent.
"Fixed Rate Loans" means CD Loans or Euro-Dollar Loans or Money
Market Loans (excluding Money Market LIBOR Loans bearing interest at the Base
Rate pursuant to Section 8.01(a)) or any combination of the foregoing.
"Group" or "Group of Loans" means at any time a group of Loans
consisting of (i) all Committed Loans which are Base Rate Loans at such time or
(ii) all Committed Loans which are Fixed Rate Loans of the same type having the
same Interest Period at such time; provided that, if a Committed Loan of any
particular Bank is converted to or made as a Base Rate Loan pursuant to Section
8.02 or 8.05, such Loan shall be included in the same Group or Groups of Loans
from time to time as it would have been in if it had not been so converted or
made.
"Indemnitee" has the meaning set forth in Section 9.03(b).
"Initial Qualifying Preferred Securities" means the trust
preferred securities issued by Capita Preferred Trust in the form substantially
as described in the Prospectus dated as of August 30, 1996 contained in a
Registration Statement filed prior to the date hereof with the Securities and
Exchange Commission (which Registration Statement has not become effective as of
the date hereof).
"Interest Period" means: (1) with respect to each Euro-Dollar
Loan, a period commencing on the date of borrowing specified in the applicable
Notice of Borrowing or on the date specified in the applicable Notice of
Interest Rate Election and ending one, two, three or six months thereafter, as
the Borrower may elect in the applicable notice; provided that:
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall, subject to clause (c) below, be
extended to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in which case
such Interest Period shall end on the next preceding Euro-Dollar
Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a
8
day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall, subject to clause (c)
below, end on the last Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(2) with respect to each CD Loan, a period commencing on the date of borrowing
specified in the applicable Notice of Borrowing or on the date specified in the
applicable Notice of Interest Rate Election and ending 30, 60, 90 or 180 days
thereafter, as the Borrower may elect in the applicable notice; provided that:
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall, subject to clause (b) below, be
extended to the next succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(3) with respect to each Money Market LIBOR Loan, the period commencing on the
date of borrowing specified in the applicable Notice of Borrowing and ending
such whole number of months thereafter as the Borrower may elect in accordance
with Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall, subject to clause (c) below, be
extended to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in which case
such Interest Period shall end on the next preceding Euro-Dollar
Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
9
(4) with respect to each Money Market Absolute Rate Loan, the period commencing
on the date of borrowing specified in the applicable Notice of Borrowing and
ending such number of days thereafter (but not less than 7 days) as the Borrower
may elect in accordance with Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall, subject to clause (b) below, be
extended to the next succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended, or any successor statute.
"Level I Status" exists at any date if, at such date, the
Borrower's senior unsecured long-term debt is rated A+/A1 or higher by at least
two Rating Agencies.
"Level II Status" exists at any date if, at such date, (a) the
Borrower's senior unsecured long-term debt is rated A/A2 or higher by at least
two Rating Agencies and (b) Level I Status does not exist.
"Level III Status" exists at any date if, at such date, (a) the
Borrower's senior unsecured long-term debt is rated A-/A3 or higher by at least
two Rating Agencies and (b) neither Level I Status nor Level II Status exists.
"Level IV Status" exists at any date if, at such date, (a) the
Borrower's senior unsecured long-term debt is rated BBB+/Baa1 or higher by at
least two Rating Agencies and (b) none of Level I Status through Level III
Status exists.
"Level V Status" exists at any date if, at such date, (a) the
Borrower's senior unsecured long-term debt is rated BBB/Baa2 or higher by at
least two Rating Agencies and (b) none of Level I Status through Level IV Status
exists.
"Level VI Status" exists at any date if, at such date, (a) the
Borrower's senior unsecured long-term debt is rated BBB-/Baa3 or higher by at
least two Rating Agencies and (b) none of Level I Status through Level V Status
exists.
"Level VII Status" exists at any date if, at such
10
date, (a) the Borrower's senior unsecured long-term debt is rated BB+/Ba1 or
higher by at least two Rating Agencies and (b) none of Level I Status through
Level VI Status exists.
"Level VIII Status" exists at any date if, at such date, none of
Level I Status through Level VII Status exists.
"LIBOR Auction" means a solicitation of Money Market Quotes
setting forth Money Market Margins based on the London Interbank Offered Rate
pursuant to Section 2.03.
"Lien" means any mortgage, pledge, security interest or lien.
"Loan" means a Domestic Loan or a Euro-Dollar Loan or a Money
Market Loan and "Loans" means Domestic Loans or Euro-Dollar Loans or Money
Market Loans or any combination of the foregoing.
"London Interbank Offered Rate" has the meaning set forth in
Section 2.07(c).
"Material Adverse Effect" means a material adverse effect on the
consolidated financial position of the Borrower and its subsidiaries.
"Material Debt" means Debt (other than the Loans) of the Borrower
and/or one or more of its Subsidiaries, arising in one or more related or
unrelated transactions, in an aggregate principal or face amount exceeding
$100,000,000.
"Material Financial Obligations" means a principal or face amount
of Debt and/or payment obligations in respect of Derivatives Obligations of the
Borrower and/or one or more of its Subsidiaries, arising in one or more related
or unrelated transactions, exceeding in the aggregate $100,000,000.
"Money Market Absolute Rate" has the meaning set forth in Section
2.03(d).
"Money Market Absolute Rate Loan" means a loan made or to be made
by a Bank pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each Bank, its
Domestic Lending Office or such other office, branch or affiliate of such Bank
as it may hereafter
11
designate as its Money Market Lending Office by notice to the Borrower and the
Agent; provided that any Bank may from time to time by notice to the Borrower
and the Agent designate separate Money Market Lending Offices for its Money
Market LIBOR Loans, on the one hand, and its Money Market Absolute Rate Loans,
on the other hand, in which case all references herein to the Money Market
Lending Office of such Bank shall be deemed to refer to either or both of such
offices, as the context may require.
"Money Market LIBOR Loan" means a loan made or to be made by a
Bank pursuant to a LIBOR Auction (including such a loan bearing interest at the
Base Rate pursuant to Section 8.01(a)).
"Money Market Loan" means a Money Market LIBOR Loan or a Money
Market Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in
Section 2.03(d).
"Money Market Quote" means an offer by a Bank to make a Money
Market Loan in accordance with Section 2.03.
"Moody's" means Xxxxx'x Investors Service, Inc. or any successor
rating agency acceptable to the Required Banks and the Borrower.
"Nomura Group" means Nomura Securities Co., Ltd., a Japanese
company (with its successors), and its Subsidiaries.
"Non-Recourse Debt" of the Borrower or any Restricted Subsidiary
means any indebtedness for borrowed money of the Borrower or any Restricted
Subsidiary, as the case may be, which is secured by any Lien on or payable
solely from the income and proceeds of any property (including, without limiting
the generality of such term, any intangible assets), shares of stock, other
equity interests or debt of the Borrower or such Restricted Subsidiary, as the
case may be, and which is not a general obligation of the Borrower or such
Restricted Subsidiary, as the case may be.
"Notes" means promissory notes of the Borrower, substantially in
the form of Exhibit A hereto, evidencing the obligation of the Borrower to repay
the Loans, and "Note" means any one of such promissory notes issued hereunder.
12
"Notice of Borrowing" means a Notice of Committed Borrowing (as
defined in Section 2.02) or a Notice of Money Market Borrowing (as defined in
Section 2.03(f)).
"Notice of Interest Rate Election" has the meaning set forth in
Section 2.10.
"Parent" means, with respect to any Bank, any Person controlling
such Bank.
"Participant" has the meaning set forth in Section 9.06(b).
"Permitted Minority Interest Amount" means, at any date, the
lesser of (i) the sum, for each issue of Qualifying Preferred Securities, of the
excess of (x) the amount of minority interests of Consolidated Subsidiaries not
included in consolidated stockholders' equity of the Borrower, determined in
accordance with generally accepted accounting principles, attributable to such
Qualifying Preferred Securities minus (y) the aggregate principal or face amount
of securities and other obligations (including guarantees) held by the issuer of
such Qualifying Preferred Securities (or any intermediary issuer) other than (1)
securities or other obligations (including guarantees) of any intermediary
issuer (including those issued by Capita Preferred Funding L.P. to Capita
Preferred Trust in the Initial Qualifying Preferred Securities) or (2)
securities or other obligations (including guarantees) of the Borrower all
payments in respect of which are fully subordinated (including in a bankruptcy,
insolvency or similar proceeding) to the prior payment in full of all principal,
interest, fees and any other amount payable under this Agreement and (ii) 30% of
Consolidated Tangible Net Worth (determined after inclusion of the Permitted
Minority Interest Amount), each determined on such date.
"Person" means an individual, a corporation, a partnership, an
association, a limited liability company, a trust or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"Prime Rate" means the rate of interest publicly announced by
Xxxxxx Guaranty Trust Company of New York in New York City from time to time as
its Prime Rate.
"Qualifying Preferred Securities" means (A) the Initial
Qualifying Preferred Securities and (B) any preferred stock, limited partnership
interests, preferred
13
trust certificates or other preferred equity securities, issued for financing
purposes by the Borrower or its Consolidated Subsidiaries and held by Persons
other than the Borrower and its Consolidated Subsidiaries, and reasonably
similar to the Initial Qualifying Preferred Securities, which securities
(whether described in clause (A) or clause (B)) neither have nor provide the
holders thereof (nor any Person acting on their behalf) with (i) any
required payments of the liquidation preference or other capital amount thereof
or any mandatory redemption or rights of redemption, other than solely at the
option of the issuer (other than an insolvency of the issuer), (ii) any right to
enforce against assets held by the issuer thereof, whether upon a stated date or
upon the happening of a default in payment or other contingency (other than an
insolvency of the issuer), whether or not with the passage of time, or (iii) any
conversion or rights to convert into any securities of the issuer or any other
Person other than into common stock or other Qualifying Preferred Securities of
such issuer, in any case prior to December 31, 2001.
"Quarterly Date" means the last Euro-Dollar Business Day of each
March, June, September and December.
"Rating Agencies" means D&P, Moody's and S&P.
"Reference Banks" means the CD Reference Banks or the Euro-Dollar
Reference Banks, as the context may require, and "Reference Bank" means any one
of such Reference Banks.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"Required Banks" means at any time Banks having at least 51% of
the aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding Notes evidencing at least 51% of the aggregate unpaid
principal amount of the Loans.
"Restricted Payment" means (i) any dividend or other distribution
on any shares of the Borrower's capital stock, including, without limitation,
preferred stock (except dividends payable solely in shares of such capital
stock) or (ii) any payment on account of the purchase, redemption, retirement or
acquisition of (a) any shares of the Borrower's capital stock, including,
without limitation, preferred stock, or (b) any option, warrant or other right
to acquire shares of the Borrower's capital stock, including, without
limitation, preferred stock.
14
"Restricted Subsidiary" means each Subsidiary organized under the
laws of any State of the United States or the District of Columbia no
substantial portion of the business of which is carried on outside of the United
States; provided that each Drop-Down Subsidiary shall be a Restricted
Subsidiary.
"S&P" means Standard & Poor's Ratings Services or any successor
rating agency acceptable to the Required Banks and the Borrower.
"Status" means, at any date, whichever of Level I Status, Level
II Status, Level III Status, Level IV Status, Level V Status, Level VI Status,
Level VII Status or Level VIII Status exists at such date.
"Subsidiary" means any corporation or other entity of which
securities or other ownership interests (whether directly or indirectly in
connection with contract rights) having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by the Borrower (or, if such term
is used with reference to any other Person, by such other Person).
"Termination Date" means September 15, 2001, or, if such day is
not a Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day.
"United States" means the United States of America, including the
States thereof and the District of Columbia, but excluding its territories and
possessions.
"Usage" means at any date the percentage equivalent of a fraction
(i) the numerator of which is the aggregate outstanding principal amount of the
Loans at such date, after giving effect to any borrowing or payment on such
date, and (ii) the denominator of which is the aggregate amount of the
Commitments at such date. If for any reason any Loans remain outstanding after
termination of the Commitments, the Usage for each date on or after the date of
such termination shall be deemed to be greater than 50%.
"Voting Power" means, with respect to any outstanding capital
stock of the Borrower, the power (expressed as a percentage) represented by such
capital stock of the aggregate voting power of all outstanding shares of any
class of capital stock of the Borrower having
15
ordinary voting power, including the power to vote for election of the members
of the Board of Directors (and, if any class thereof has power to designate
members of the Board of Directors or any special committee thereof, the power so
to designate).
"Wholly-Owned Restricted Subsidiary" means any Restricted
Subsidiary all of the shares of capital stock or other ownership interests of
which (except directors' qualifying shares) are at the time directly or
indirectly owned by the Borrower.
SECTION 1.02. Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with United States generally accepted accounting principles as in
effect from time to time, applied on a basis consistent (except for changes made
in consultation with the Borrower's independent public accountants) with the
most recent audited consolidated financial statements of the Borrower and its
Consolidated Subsidiaries delivered to the Banks; provided that, if the Borrower
notifies the Agent that the Borrower wishes to amend any covenant in Article V
to eliminate the effect of any change in generally accepted accounting
principles on the operation of such covenant (or if the Agent notifies the
Borrower that the Required Banks wish to amend Article V for such purpose), then
the Borrower's compliance with such covenant shall be determined on the basis of
generally accepted accounting principles in effect immediately before the
relevant change in generally accepted accounting principles became effective,
until either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Borrower and the Required Banks.
SECTION 1.03. Types of Borrowings. The term "Borrowing" denotes
the aggregation of Loans of one or more Banks to be made to the Borrower
pursuant to Article II on the same date, all of which Loans are of the same type
(subject to Article VIII) and, except in the case of Base Rate Loans, have the
same Interest Period or initial Interest Period. Borrowings are classified for
purposes of this Agreement either by reference to the pricing of Loans
comprising such Borrowing (e.g., a "Euro-Dollar Borrowing" is a Borrowing
comprised of Euro-Dollar Loans) or by reference to the provisions of Article II
under which participation therein is determined (i.e., a "Committed Borrowing"
is a Borrowing under Section 2.01 in which all
16
Banks participate in proportion to their Commitments, while a "Money Market
Borrowing" is a Borrowing under Section 2.03 in which the Bank participants are
determined on the basis of their bids in accordance therewith).
SECTION 1.04. Basis for Ratings. The credit ratings to be
utilized in the determination of a Status are the ratings assigned to unsecured
obligations of the Borrower without third party credit support. Ratings assigned
to any obligation which is secured or which has the benefit of third party
credit support shall be disregarded.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend. Each Bank severally agrees, on
the terms and conditions set forth in this Agreement, to make loans to the
Borrower pursuant to this Section from time to time on and after the Effective
Date and prior to the Termination Date in amounts such that the aggregate
principal amount of Committed Loans by such Bank at any one time outstanding
shall not exceed the amount of its Commitment. Each Borrowing under this Section
shall be in an aggregate principal amount of $50,000,000 or any larger multiple
of $5,000,000 (except that any such Borrowing may be in the aggregate amount
available in accordance with Section 3.02(b)) and shall be made from the several
Banks ratably in proportion to their respective Commitments. Within the
foregoing limits, the Borrower may borrow under this Section, prepay Loans to
the extent permitted by Section 2.11, and reborrow at any time prior to the
Termination Date.
SECTION 2.02. Notice of Committed Borrowing. The Borrower shall
give the Agent notice (a "Notice of Committed Borrowing") not later than 10:30
A.M. (New York City time) on (x) the date of each Base Rate Borrowing, (y) the
second Domestic Business Day before each CD Borrowing and (z) the third
Euro-Dollar Business Day before each Euro-Dollar Borrowing, specifying:
(a) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Domestic Borrowing or a Euro-Dollar
Business Day in the case of a Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing,
17
(c) whether the Loans comprising such Borrowing are to bear
interest initially at the Base Rate or at a CD Rate or a Euro-Dollar
Rate, and
(d) in the case of a Fixed Rate Borrowing, the duration of the
initial Interest Period applicable thereto, subject to the provisions of
the definition of Interest Period.
SECTION 2.03. Money Market Borrowings.
(a) The Money Market Option. In addition to Committed Borrowings
pursuant to Section 2.01, the Borrower may, as set forth in this Section,
request the Banks to make offers to make Money Market Loans to the Borrower
prior to the Termination Date. The Banks may, but shall have no obligation to,
make such offers and the Borrower may, but shall have no obligation to, accept
any such offers in the manner set forth in this Section.
(b) Money Market Quote Request. When the Borrower wishes to
request offers to make Money Market Loans under this Section, it shall transmit
to the Agent by telex or facsimile transmission a Money Market Quote Request
substantially in the form of Exhibit B hereto so as to be received no later than
10:30 A.M. (New York City time) on (x) the fourth Euro-Dollar Business Day prior
to the date of Borrowing proposed therein, in the case of a LIBOR Auction or (y)
the Domestic Business Day next preceding the date of Borrowing proposed therein,
in the case of an Absolute Rate Auction (or, in either case, such other time or
date as the Borrower and the Agent shall have mutually agreed and shall have
notified to the Banks not later than the date of the Money Market Quote Request
for the first LIBOR Auction or Absolute Rate Auction for which such change is to
be effective) specifying:
(i) the proposed date of Borrowing, which shall be a
Euro-Dollar Business Day in the case of a LIBOR Auction or a
Domestic Business Day in the case of an Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which shall
be $5,000,000 or a larger multiple of $1,000,000,
(iii) the duration of the Interest Period applicable
thereto, subject to the provisions of the definition of Interest
Period, and
18
(iv) whether the Money Market Quotes requested are to set
forth a Money Market Margin or a Money Market Absolute Rate.
The Borrower may request offers to make Money Market Loans for more than one
Interest Period in a single Money Market Quote Request. No Money Market Quote
Request shall be given within five Euro-Dollar Business Days (or such other
number of days as the Borrower and the Agent may agree) of any other Money
Market Quote Request.
(c) Invitation for Money Market Quotes. Promptly upon receipt of
a Money Market Quote Request, the Agent shall send to the Banks by telex or
facsimile transmission an Invitation for Money Market Quotes substantially in
the form of Exhibit C hereto, which shall constitute an invitation by the
Borrower to each Bank to submit Money Market Quotes offering to make the Money
Market Loans to which such Money Market Quote Request relates in accordance with
this Section.
(d) Submission and Contents of Money Market Quotes. (i) Each Bank
may submit a Money Market Quote containing an offer or offers to make Money
Market Loans in response to any Invitation for Money Market Quotes. Each Money
Market Quote must comply with the requirements of this subsection (d) and must
be submitted to the Agent by telex or facsimile transmission at its offices
specified in or pursuant to Section 9.01 not later than (x) 4:00 P.M. (New York
City time) on the fourth Euro-Dollar Business Day prior to the proposed date of
Borrowing, in the case of a LIBOR Auction or (y) 9:30 A.M. (New York City time)
on the proposed date of Borrowing, in the case of an Absolute Rate Auction (or,
in either case, such other time or date as the Borrower and the Agent shall have
mutually agreed and shall have notified to the Banks not later than the date of
the Money Market Quote Request for the first LIBOR Auction or Absolute Rate
Auction for which such change is to be effective); provided that Money Market
Quotes submitted by the Agent (or any affiliate of the Agent) in the capacity of
a Bank may be submitted, and may only be submitted, if the Agent or such
affiliate notifies the Borrower of the terms of the offer or offers contained
therein not later than (x) one hour prior to the deadline for the other Banks,
in the case of a LIBOR Auction or (y) 15 minutes prior to the deadline for the
other Banks, in the case of an Absolute Rate Auction. Subject to Articles III
and VI, any Money Market Quote so made shall be irrevocable except with the
written consent of the Agent given on the instructions of
19
the Borrower.
(ii) Each Money Market Quote shall be in substantially the
form of Exhibit D hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan for which each
such offer is being made, which principal amount (w) may be greater than
or less than the Commitment of the quoting Bank, (x) must be $5,000,000
or a larger multiple of $1,000,000, (y) may not exceed the principal
amount of Money Market Loans for which offers were requested and (z) may
be subject to an aggregate limitation as to the principal amount of
Money Market Loans for which offers being made by such quoting Bank may
be accepted,
(C) in the case of a LIBOR Auction, the margin above or below the
applicable London Interbank Offered Rate (the "Money Market Margin")
offered for each such Money Market Loan, expressed as a percentage
(specified to the nearest 1/10,000th of 1%) to be added to or subtracted
from such base rate,
(D) in the case of an Absolute Rate Auction, the rate of interest
per annum (specified to the nearest 1/10,000th of 1%) (the "Money Market
Absolute Rate") offered for each such Money Market Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the quoting
Bank with respect to each Interest Period specified in the related Invitation
for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(A) is not substantially in conformity with Exhibit D hereto or
does not specify all of the information required by subsection (d)(ii);
(B) except as provided in subsection (d)(ii)(B)(z) contains
qualifying, conditional or similar language;
(C) except as provided in subsection
20
(d)(ii)(B)(z) proposes terms other than or in addition to those set
forth in the applicable Invitation for Money Market Quotes; or
(D) arrives after the time set forth in subsection (d)(i).
(e) Notice to Borrower. The Agent shall promptly notify the
Borrower of the terms (x) of any Money Market Quote submitted by a Bank that is
in accordance with subsection (d) and (y) of any Money Market Quote that amends,
modifies or is otherwise inconsistent with a previous Money Market Quote
submitted by such Bank with respect to the same Money Market Quote Request. Any
such subsequent Money Market Quote shall be disregarded by the Agent unless such
subsequent Money Market Quote is submitted solely to correct a manifest error in
such former Money Market Quote. The Agent's notice to the Borrower shall specify
(A) the aggregate principal amount of Money Market Loans for which offers have
been received for each Interest Period specified in the related Money Market
Quote Request, (B) the respective principal amounts and Money Market Margins or
Money Market Absolute Rates, as the case may be, so offered and (C) if
applicable, limitations on the aggregate principal amount of Money Market Loans
for which offers in any single Money Market Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later than 10:30 A.M.
(New York City time) on (x) the third Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction or (y) the proposed
date of Borrowing, in the case of an Absolute Rate Auction (or, in either case,
such other time or date as the Borrower and the Agent shall have mutually agreed
and shall have notified to the Banks not later than the date of the Money Market
Quote Request for the first LIBOR Auction or Absolute Rate Auction for which
such change is to be effective), the Borrower shall notify the Agent of its
acceptance or non-acceptance of the offers so notified to it pursuant to
subsection (e). In the case of acceptance, such notice (a "Notice of Money
Market Borrowing") shall specify the aggregate principal amount of offers for
each Interest Period that are accepted. The Borrower may accept any Money Market
Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Money Market Borrowing
may not exceed the applicable amount set forth in the related Money
Market Quote Request,
(ii) the principal amount of each Money Market
21
Borrowing must be $5,000,000 or a larger multiple of $1,000,000,
(iii) acceptance of offers may only be made on the basis of
ascending Money Market Margins or Money Market Absolute Rates, as the
case may be, and
(iv) the Borrower may not accept any offer that is described in
subsection (d)(iii) or that otherwise fails to comply with the
requirements of this Agreement.
(g) Allocation by Agent. If offers are made by two or more Banks
with the same Money Market Margins or Money Market Absolute Rates, as the case
may be, for a greater aggregate principal amount than the amount in respect of
which such offers are accepted for the related Interest Period, the principal
amount of Money Market Loans in respect of which such offers are accepted shall
be allocated by the Agent among such Banks as nearly as possible (in multiples
of $1,000,000, as the Agent may deem appropriate) in proportion to the aggregate
principal amounts of such offers. Determinations by the Agent of the amounts of
Money Market Loans shall be conclusive in the absence of manifest error.
SECTION 2.04. Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Borrowing, the Agent shall
promptly notify each Bank of the contents thereof and of such Bank's share (if
any) of such Borrowing and such Notice of Borrowing shall not thereafter be
revocable by the Borrower.
(b) Not later than 12:00 Noon (New York City time) on the date of
each Borrowing, each Bank participating therein shall make available its share
of such Borrowing, in Federal or other funds immediately available in New York
City, to the Agent at its address referred to in Section 9.01. Unless the Agent
determines that any applicable condition specified in Article III has not been
satisfied, the Agent will make the funds so received from the Banks available to
the Borrower by 3:00 P.M. (New York City time) on the date of such Borrowing at
the Agent's aforesaid address.
(c) Unless the Agent shall have received notice from a Bank prior
to the date of any Borrowing that such Bank will not make available to the Agent
such Bank's share of such Borrowing, the Agent may assume that such Bank has
22
made such share available to the Agent on the date of such Borrowing in
accordance with subsection (b) of this Section 2.04 and the Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so made
such share available to the Agent, such Bank and the Borrower severally agree to
repay to the Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Borrower until the date such amount is repaid to the Agent, at (i) in the
case of the Borrower, a rate per annum equal to the higher of the Federal Funds
Rate and the interest rate applicable thereto pursuant to Section 2.07 and (ii)
in the case of such Bank, the Federal Funds Rate. If such Bank shall repay to
the Agent such corresponding amount, such amount so repaid shall constitute such
Bank's Loan included in such Borrowing for purposes of this Agreement.
SECTION 2.05. Notes. (a) The Loans of each Bank shall be
evidenced by a single Note payable to the order of such Bank for the account of
its Applicable Lending Office in an amount equal to the aggregate unpaid
principal amount of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the Agent,
request that its Loans of a particular type be evidenced by a separate Note in
an amount equal to the aggregate unpaid principal amount of such Loans. Each
such Note shall be in substantially the form of Exhibit A hereto with
appropriate modifications to reflect the fact that it evidences solely Loans of
the relevant type. Each reference in this Agreement to the "Note" of such Bank
shall be deemed to refer to and include any or all of such Notes, as the context
may require.
(c) Upon receipt of each Bank's Note pursuant to Section 3.01(a),
the Agent shall forward such Note to such Bank. Each Bank shall record the date,
amount and type of each Loan made by it and the date and amount of each payment
of principal made by the Borrower with respect thereto, and may, if such Bank so
elects in connection with any transfer or enforcement of its Note, endorse on
the schedule forming a part thereof appropriate notations to evidence the
foregoing information with respect to each such Loan then outstanding; provided
that the failure of any Bank to make any such recordation or endorsement or any
error in making the same shall not affect the obligations of the Borrower
hereunder or under the Notes. Each Bank is hereby irrevocably authorized by the
Borrower so to endorse its
23
Note and to attach to and make a part of its Note a continuation of any such
schedule as and when required.
SECTION 2.06. Maturity of Loans; Termination of Commitments.
(a) The Commitments shall terminate on the Termination Date, and all Committed
Loans shall mature, and the principal amount thereof shall be due and payable,
on such date.
(b) Each Money Market Loan included in any Money Market Borrowing
shall mature, and the principal amount thereof shall be due and payable, on the
last day of the Interest Period applicable to such Borrowing.
SECTION 2.07. Interest Rates. (a) Each Base Rate Loan shall
bear interest on the outstanding principal amount thereof, for each day
from the date such Loan is made until it becomes due, at a rate per annum equal
to the Base Rate for such day. Such interest shall be payable quarterly in
arrears on each Quarterly Date and on the Termination Date, and, with respect to
the principal amount of any Base Rate Loan converted to a CD Loan or a
Euro-Dollar Loan, on each date a Base Rate Loan is so converted. Any overdue
principal of or interest on any Base Rate Loan shall bear interest, payable on
demand, for each day until paid at a rate per annum equal to the sum of 1% plus
the rate otherwise applicable to Base Rate Loans for such day.
(b) Each CD Loan shall bear interest on the outstanding principal
amount thereof, for each day during each Interest Period applicable thereto, at
a rate per annum equal to the sum of the Applicable Margin for such day plus the
Adjusted CD Rate applicable to such Interest Period; provided that if any CD
Loan or any portion thereof shall, as a result of clause (2)(b) of the
definition of Interest Period, have an Interest Period of less than 30 days,
such portion shall bear interest during such Interest Period at the rate
applicable to Base Rate Loans during such period. Such interest shall be payable
for each Interest Period on the last day thereof and, if such Interest Period is
longer than 90 days, at intervals of 90 days after the first day thereof. Any
overdue principal of or interest on any CD Loan shall bear interest, payable on
demand, for each day until paid at a rate per annum equal to the sum of 1% plus
the rate applicable to Base Rate Loans for such day.
24
The "Adjusted CD Rate" applicable to any Interest Period means a
rate per annum determined pursuant to the following formula:
[ CDBR ]*
ACDR = [ ---------] + AR
[ 1.00-DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
----------
* The amount in brackets being rounded upward, if
necessary, to the next higher 1/100 of 1%
The "CD Base Rate" applicable to any Interest Period is the rate
of interest determined by the Agent to be the average (rounded upward, if
necessary, to the next higher 1/100 of 1%) of the prevailing rates per annum bid
at 10:00 A.M. (New York City time) (or as soon thereafter as practicable) on the
first day of such Interest Period by two or more New York certificate of deposit
dealers of recognized standing for the purchase at face value from each CD
Reference Bank of its certificates of deposit in an amount comparable to the
principal amount of the CD Loan of such CD Reference Bank to which such Interest
Period applies and having a maturity comparable to such Interest Period.
"Domestic Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including without limitation any
basic, supplemental or emergency reserves) for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of new non-personal time deposits in dollars in New York City having a
maturity comparable to the related Interest Period and in an amount of $100,000
or more. The Adjusted CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Domestic Reserve Percentage.
"Assessment Rate" means for any day the annual assessment rate in
effect on such day which is payable by a member of the Bank Insurance Fund
classified as adequately
25
capitalized and within supervisory subgroup "A" (or a comparable successor
assessment risk classification) within the meaning of 12 C.F.R. ss. 327.4(a)
(or any successor provision) to the Federal Deposit Insurance Corporation (or
any successor) for such Corporation's (or such successor's) insuring time
deposits at offices of such institution in the United States. The Adjusted CD
Rate shall be adjusted automatically on and as of the effective date of any
change in the Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during each Interest Period applicable
thereto, at a rate per annum equal to the sum of the Applicable Margin for such
day plus the London Interbank Offered Rate applicable to such Interest Period.
Such interest shall be payable for each Interest Period on the last day thereof
and, if such Interest Period is longer than three months, at intervals of three
months after the first day thereof.
The "London Interbank Offered Rate" applicable to any Interest
Period means a rate of interest determined by the Agent on the basis of at least
two offered rates for deposits in United States dollars for a period equal to
such Interest Period commencing on the first day of such Interest Period
appearing on the Reuters Screen LIBO Page as of 11:00 A.M. (London time) on the
day that is two Euro-Dollar Business Days prior to the first day of such
Interest Period. If at least two such offered rates appear on the Reuters Screen
LIBO Page, the rate with respect to each Interest Period will be the arithmetic
average (rounded upwards to the next 1/16th of 1%) of such offered rates. If
fewer than two offered rates appear, the "London Interbank Offered Rate" in
respect of any Interest Period will be the average (rounded upward, if
necessary, to the next higher 1/16 of 1%) of the respective rates per annum at
which deposits in United States dollars are offered to each of the Euro-Dollar
Reference Banks in the London interbank market at approximately 11:00 A.M.
(London time) two Euro-Dollar Business Days before the first day of such
Interest Period in an amount approximately equal to the principal amount of the
Euro-Dollar Loan of such Euro-Dollar Reference Bank to which such Interest
Period is to apply and for a period of time comparable to such Interest Period.
(d) Any overdue principal of or interest on any Euro-Dollar Loan
shall bear interest, payable on demand, for each day from and including the date
payment thereof was due to but excluding the date of actual payment, at a rate
per annum equal to the sum of 1% plus the rate applicable to
26
Base Rate Loans for such day.
(e) Subject to Section 8.01(a), each Money Market LIBOR Loan
shall bear interest on the outstanding principal amount thereof, for the
Interest Period applicable thereto, at a rate per annum equal to the sum of the
London Interbank Offered Rate for such Interest Period (determined in accordance
with Section 2.07(c) as if the related Money Market LIBOR Borrowing were a
Committed Euro-Dollar Borrowing) plus (or minus) the Money Market Margin quoted
by the Bank making such Loan in accordance with Section 2.03. Each Money Market
Absolute Rate Loan shall bear interest on the outstanding principal amount
thereof, for the Interest Period applicable thereto, at a rate per annum equal
to the Money Market Absolute Rate quoted by the Bank making such Loan in
accordance with Section 2.03. Such interest shall be payable for each Interest
Period on the last day thereof and, if such Interest Period is longer than three
months, at intervals of three months after the first day thereof. Any overdue
principal of or interest on any Money Market Loan shall bear interest, payable
on demand, for each day until paid at a rate per annum equal to the sum of 1%
plus the Base Rate for such day.
(f) The Agent shall determine each interest rate applicable to
the Loans hereunder. The Agent shall give prompt notice to the Borrower and the
participating Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.
(g) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Agent as contemplated by this Section. If any Reference Bank
does not furnish a timely quotation necessary to determine an interest rate in
accordance with this Section, the Agent shall determine the relevant interest
rate on the basis of the quotation or quotations furnished by the remaining
Reference Bank or Banks or, if none of such quotations is available on a timely
basis, the provisions of Section 8.01 shall apply.
(h) The "Applicable Margin" with respect to any Euro-Dollar Loan
or CD Loan at any date is the applicable percentage amount set forth in the
table below based on the Status and Usage on such date:
27
====================================================================================
Xxxxx Xxxxx Xxxxx Xxxxx Xxxxx Xxxxx Xxxxx Xxxxx
X II III IV V VI VII VIII
Status Status Status Status Status Status Status Status
------------------------------------------------------------------------------------
CD Loans
Usage
(pound)50% 0.255% 0.270% 0.290% 0.335% 0.360% 0.425% 0.450% 0.625%
Usage
> 50% 0.305% 0.320% 0.340% 0.385% 0.410% 0.475% 0.500% 0.725%
------------------------------------------------------------------------------------
Euro-
Dollar
Loans
Usage
(pound)50% 0.130% 0.145% 0.165% 0.210% 0.235% 0.300% 0.325% 0.500%
Usage
> 50% 0.180% 0.195% 0.215% 0.260% 0.285% 0.350% 0.375% 0.600%
====================================================================================
SECTION 2.08. Facility Fees. The Borrower shall pay to the Agent
for the account of the Banks ratably a facility fee at the Facility Fee Rate.
Such facility fee shall accrue from and including the Effective Date to but
excluding the Termination Date (or earlier date of termination of the
Commitments in their entirety), on the daily aggregate amount of the Commitments
(whether used or unused). Accrued facility fees shall be payable quarterly on
each Quarterly Date and upon the date of termination of the Commitments in their
entirety.
The "Facility Fee Rate" at any date is: (i) 0.070% if Level I
Status exists at such date, (ii) 0.080% if Level II Status exists at such date,
(iii) 0.085% if Level III Status exists at such date, (iv) 0.090% if Level IV
Status exists at such date, (v) 0.115% if Level V Status exists at such date,
(vi) 0.150% if Level VI Status exists at such date, (vii) 0.175% if Level VII
Status exists at such date and (viii) 0.250% if Level VIII Status exists at such
date.
SECTION 2.09. Optional Termination or Reduction of Commitments.
The Borrower may, upon at least three Domestic
28
Business Days' notice to the Agent, (i) terminate the Commitments at any time,
if no Loans are outstanding at such time, or (ii) ratably reduce from time to
time by an aggregate amount of $25,000,000 or any larger multiple of $5,000,000,
the aggregate amount of the Commitments in excess of the aggregate outstanding
principal amount of the Loans. The Agent shall promptly notify each Bank of any
such notice received by the Agent.
SECTION 2.10. Method of Electing Interest Rates. (a) The
Loans included in each Committed Borrowing shall bear interest initially at the
type of rate specified by the Borrower in the applicable Notice of Committed
Borrowing. Thereafter, the Borrower may from time to time elect to change or
continue the type of interest rate borne by each Group of Loans (subject in each
case to the provisions of Article VIII), as follows:
(i) if such Loans are Base Rate Loans, the Borrower may
elect to convert such Loans to CD Loans as of any Domestic
Business Day or to Euro-Dollar Loans as of any Euro-Dollar
Business Day;
(ii) if such Loans are CD Loans, the Borrower may elect to
convert such Loans to Base Rate Loans or Euro-Dollar Loans or
elect to continue such Loans as CD Loans for an additional
Interest Period, in each case effective on the last day of the
then current Interest Period applicable to such Loans; and
(iii) if such Loans are Euro-Dollar Loans, the Borrower
may elect to convert such Loans to Base Rate Loans or CD Loans or
elect to continue such Loans as Euro-Dollar Loans for an
additional Interest Period, in each case effective on the last
day of the then current Interest Period applicable to such Loans.
Each such election shall be made by delivering a notice (a "Notice of Interest
Rate Election") to the Agent at least three Euro-Dollar Business Days before the
conversion or continuation selected in such notice is to be effective (unless
the relevant Loans are to be converted from Domestic Loans to Domestic Loans of
the other type or continued as Domestic Loans of the same type for an additional
Interest Period, in which case such notice shall be delivered to the Agent at
least two Domestic Business Days before such conversion or continuation is to be
effective). A Notice of
29
Interest Rate Election may, if it so specifies, apply to only a portion of the
aggregate principal amount of the relevant Group of Loans; provided that (i)
such portion is allocated ratably among the Loans comprising such Group and (ii)
the portion to which such notice applies, and the remaining portion to which it
does not apply, are each $50,000,000 or any larger multiple of $5,000,000.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such
notice applies;
(ii) the date on which the conversion or continuation selected in
such notice is to be effective, which shall comply with the
applicable clause of subsection (a) above;
(iii) if the Loans comprising such Group are to be converted, the
new type of Loans and, if such new Loans are Fixed Rate Loans,
the duration of the initial Interest Period applicable thereto;
and
(iv) if such Loans are to be continued as CD Loans or Euro-Dollar
Loans for an additional Interest Period, the duration of such
additional Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period.
(c) Upon receipt of a Notice of Interest Rate Election from the
Borrower pursuant to subsection (a) above, the Agent shall promptly notify each
Bank of the contents thereof and such notice shall not thereafter be revocable
by the Borrower. If the Borrower fails to deliver a timely Notice of Interest
Rate Election to the Agent for any Group of Fixed Rate Loans, such Loans shall
be converted into Base Rate Loans on the last day of the then current Interest
Period applicable thereto.
SECTION 2.11. Optional Prepayments. (a) The Borrower may, upon
at least one Domestic Business Day's notice to the Agent, prepay the Group of
Base Rate Loans (or any Money Market Borrowing bearing interest at the Base Rate
pursuant to Section 8.01(a)) in whole at any time, or from time to time in part
in amounts aggregating $50,000,000 or
30
any larger multiple of $5,000,000, by paying the principal amount to be prepaid
together with accrued interest thereon to the date of prepayment. Each such
optional prepayment shall be applied to prepay ratably the Loans of the several
Banks included in such Group or Borrowing.
(b) The Borrower may, upon at least three Domestic Business Days'
notice to the Agent, in the case of a Group of CD Loans or upon at least three
Euro-Dollar Business Days' notice to the Agent, in the case of a Group of
Euro-Dollar Loans, prepay the Loans comprising such a Group on the last day of
any Interest Period applicable to such Group, in whole at any time, or from time
to time in part in amounts aggregating $50,000,000 or any larger multiple of
$5,000,000, by paying the principal amount to be prepaid together with accrued
interest thereon to the date of prepayment. Each such optional prepayment shall
be applied to prepay ratably the Loans of the several Banks included in such
Group.
(c) Except as provided in subsection (a) above, the Borrower may
not prepay all or any portion of the principal amount of any Money Market Loan
prior to the maturity thereof except with the prior consent of the Bank making
such Loan and subject to Section 2.13.
(d) Upon receipt of a notice of prepayment pursuant to this
Section, the Agent shall promptly notify each Bank of the contents thereof and
of such Bank's ratable share (if any) of such prepayment and such notice shall
not thereafter be revocable by the Borrower.
SECTION 2.12. General Provisions as to Payments. (a) The
Borrower shall make each payment of principal of, and interest on, the Loans and
of fees hereunder, not later than 12:00 Noon (New York City time) on the date
when due, in Federal or other funds immediately available in New York City, to
the Agent at its address referred to in Section 9.01. The Agent will promptly
distribute to each Bank its ratable share of each such payment received by the
Agent for the account of the Banks. Whenever any payment of principal of, or
interest on, the Domestic Loans or of fees shall be due on a day which is not a
Domestic Business Day, the date for payment thereof shall be extended to the
next succeeding Domestic Business Day. Whenever any payment of principal of, or
interest on, the Euro-Dollar Loans or the Money Market LIBOR Loans shall be due
on a day which is not a Euro-Dollar Business Day, the date for payment thereof
shall be extended to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in
31
another calendar month, in which case the date for payment thereof shall be the
next preceding Euro-Dollar Business Day. Whenever any payment of principal of,
or interest on, the Money Market Absolute Rate Loans shall be due on a day which
is not a Euro-Dollar Business Day, the date for payment thereof shall be
extended to the next succeeding Euro-Dollar Business Day. If the date for any
payment of principal is extended pursuant to this Agreement or by operation of
law or otherwise, interest thereon shall be payable for such extended time.
(b) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Banks hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each Bank on
such due date an amount equal to the amount then due such Bank. If and to the
extent that the Borrower shall not have so made such payment, each Bank shall
repay to the Agent forthwith on demand such amount distributed to such Bank
together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Agent, at the Federal Funds Rate.
SECTION 2.13. Funding Losses. If the Borrower makes any payment
of principal with respect to any Fixed Rate Loan or any Fixed Rate Loan is
converted to a Base Rate Loan (pursuant to Article VI or VIII or otherwise) on
any day prior to the last day of an Interest Period applicable thereto, or if
the Borrower fails to borrow, continue, convert or prepay any Fixed Rate Loans
after notice has been given to any Bank in accordance with Section 2.04(a),
2.10(c) or 2.11(d), the Borrower shall reimburse each Bank as provided in the
following paragraph for any resulting loss or expense incurred by it (or by a
Participant in the related Loan), including (without limitation) any loss
incurred in obtaining, liquidating or employing deposits from third parties, but
excluding loss of the Applicable Margin or any other margin for the period after
any such payment or conversion or failure to borrow or prepay.
A certificate of each Bank setting forth such amount or amounts
(including the computation of such amount or amounts) as shall be necessary to
compensate such Bank or a Participant for the out-of-pocket expenses incurred by
such Bank or such Participant shall be delivered to the Borrower and such amount
or amounts may be reviewed by the Borrower. If the Borrower, after receipt of
any such
32
certificate from such Bank, disagrees in good faith with such Bank on
the computation of the amount or amounts owed to such Bank pursuant to this
Section 2.13, such Bank and the Borrower shall negotiate in good faith to
promptly resolve such disagreement. Any payment required to be paid to such Bank
pursuant to this Section 2.13 shall be paid within 30 days after demand is made
therefor (or if there is a disagreement, after such disagreement is resolved).
Each Bank shall have a duty to mitigate the damages to such Bank that may arise
as a consequence of such funding losses described above to the extent that such
mitigation will not, in the judgment of such Bank, entail any cost or
disadvantage to such Bank that such Bank is not reimbursed or compensated for by
the Borrower.
SECTION 2.14. Computation of Interest and Fees. Interest based on
the Prime Rate hereunder shall be computed on the basis of a year of 365 days
(or 366 days in a leap year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All other interest and
fees shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day).
SECTION 2.15. Regulation D Compensation. For so long as any Bank
maintains reserves against "Eurocurrency liabilities" (or any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of such Bank to United
States residents), and as a result the cost to such Bank (or its Applicable
Lending Office) of making or maintaining its Euro-Dollar Loans is increased,
then such Bank may require the Borrower to pay, contemporaneously with each
payment of interest on the Euro-Dollar Loans, additional interest on the related
Euro-Dollar Loan of such Bank at a rate per annum up to but not exceeding the
excess of (i)(A) the applicable London Interbank Offered Rate divided by (B) one
minus the Euro-Dollar Reserve Percentage over (ii) the rate specified in clause
(i)(A). Any Bank wishing to require payment of such additional interest (x)
shall so notify the Borrower, in which case such additional interest on the
Euro-Dollar Loans of such Bank shall be payable to such Bank at the rate and
place indicated in such notice with respect to each Interest Period commencing
at least three Euro-Dollar Business Days after the giving of such notice and (y)
shall furnish to the Borrower at least five Euro-Dollar Business Days prior to
each date on which interest is
33
payable on the Euro-Dollar Loans an officers' certificate setting forth the
amount to which such Bank is then entitled under this Section 2.15 (which shall
be consistent with such Bank's good faith estimate of the level at which the
related reserves are maintained by it).
ARTICLE III
CONDITIONS
SECTION 3.01. Effectiveness. This Agreement shall become
effective on the date that each of the following conditions shall have been
satisfied (or waived in accordance with Section 9.05):
(a) receipt by the Agent of counterparts hereof signed by each of
the parties hereto (or, in the case of any party as to which an executed
counterpart shall not have been received, receipt by the Agent in form
satisfactory to it of telegraphic, telex, facsimile transmission or
other written confirmation from such party of execution of a counterpart
hereof by such party);
(b) receipt by the Agent of a duly executed Note for the account
of each Bank dated on or before the Effective Date complying with the
provisions of Section 2.05;
(c) receipt by the Agent of evidence satisfactory to it that
no loans are outstanding under the Existing Credit Agreement;
(d) receipt by the Agent of an opinion of the General Counsel or
any Assistant General Counsel of the Borrower, substantially in the form
of Exhibit E hereto;
(e) receipt by the Agent of an opinion of Xxxxx Xxxx & Xxxxxxxx,
special counsel for the Agent, substantially in the form of Exhibit F
hereto; and
(f) receipt by the Agent of all documents the Agent may
reasonably request relating to the existence of the Borrower, the
corporate authority for and the validity of this Agreement and the
Notes, and any other matters relevant hereto, all in form and substance
satisfactory to the Agent;
34
provided that this Agreement shall not become effective or be binding on any
party hereto unless all of the foregoing conditions are satisfied not later than
September 20, 1996. The Agent shall promptly notify the Borrower and the Banks
of the Effective Date, and such notice shall be conclusive and binding on all
parties hereto. The Banks that are parties to the Existing Credit Agreement,
comprising the "Required Banks" as defined therein, and the Borrower agree that
the commitments under the Existing Credit Agreement shall terminate in their
entirety simultaneously with and subject to the effectiveness of this Agreement
and that the Borrower shall be obligated to pay on the Effective Date the
accrued facility fees thereunder to but excluding the date of such
effectiveness.
SECTION 3.02. Borrowings. The obligation of any Bank to make a
Loan on the occasion of any Borrowing is subject to the satisfaction of the
following conditions:
(a) receipt by the Agent of a Notice of Borrowing as required
by Section 2.02 or 2.03, as the case may be;
(b) immediately after such Borrowing, the aggregate outstanding
principal amount of the Loans will not exceed the aggregate amount of
the Commitments;
(c) immediately before and after such Borrowing, no Default
shall have occurred and be continuing; and
(d) the representations and warranties of the Borrower contained
in this Agreement (except the representation and warranty set forth in
Section 4.04(c)) shall be true in all material respects on and as of the
date of such Borrowing.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the facts specified in clauses
(b), (c) and (d) of this Section.
35
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The Borrower is a
corporation duly incorporated, validly existing and in good standing under the
laws of Delaware, and has all corporate power and all governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted except those which the failure to have would not have a Material
Adverse Effect.
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower of this
Agreement and the Notes are within the Borrower's corporate power, have been
duly authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or official and do not
contravene, or constitute a default under, any provision of applicable law or
regulation or of the certificate of incorporation or by-laws of the Borrower or
of any material agreement, judgment, injunction, order, decree or other material
instrument binding upon the Borrower or result in the creation or imposition of
any Lien on any asset of the Borrower.
SECTION 4.03. Binding Effect. This Agreement constitutes a valid
and binding agreement of the Borrower and the Notes, when executed and delivered
in accordance with this Agreement, will constitute valid and binding obligations
of the Borrower, in each case enforceable against the Borrower in accordance
with their respective terms, except as the same may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium and similar laws
affecting creditors' rights generally and by general principles of equity
(regardless of whether considered in a proceeding in equity or at law).
36
SECTION 4.04. Financial Information.
(a) The consolidated balance sheet of the Borrower and its
subsidiaries as of December 31, 1995 and the related consolidated statements of
income, changes in stockholders' equity and cash flows for the fiscal year then
ended, reported on by Xxxxxx'x & Xxxxxxx and set forth in the Borrower's 1995
Form 10-K, a copy of which has been delivered to each of the Banks, present
fairly, in all material respects, the consolidated financial position of the
Borrower and its Consolidated Subsidiaries as of such date and the consolidated
results of their operations and cash flows for such fiscal year, in conformity
with generally accepted accounting principles.
(b) The unaudited consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries as of June 30, 1996 and the related unaudited
consolidated statements of income and cash flows for the six months then ended,
set forth in the Borrower's Latest Form 10-Q, a copy of which has been delivered
to each of the Banks, present fairly, in all material respects, the consolidated
financial position of the Borrower and its Consolidated Subsidiaries as of such
date and the consolidated results of their operations and cash flows for such
six-month period, in conformity with generally accepted accounting principles
for interim financial information applied on a basis consistent with the
financial statements referred to in subsection (a) of this Section.
(c) From June 30, 1996 through the Effective Date there has been
no material adverse change in the consolidated financial condition of the
Borrower and its Consolidated Subsidiaries.
SECTION 4.05. Litigation. There is no action, suit or proceeding
pending against, or to the knowledge of the Borrower threatened against, the
Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official in which there is a reasonable probability
of an adverse decision which would have a Material Adverse Effect, or which in
any manner draws into question the validity or enforceability of this Agreement
or the Notes.
SECTION 4.06. Subsidiaries. Each of the Borrower's Consolidated
Subsidiaries which is a corporation is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate power and all
37
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted, except those which the failure to have would
not have a Material Adverse Effect.
SECTION 4.07. Not an Investment Company. The Borrower is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 4.08. Full Disclosure. No written information heretofore
furnished by the Borrower to the Agent or any Bank pursuant to Section 4.04 is,
and no written information hereafter furnished by the Borrower to the Agent or
any Bank pursuant to Section 5.01 contains or will contain any material
misstatement of any material facts.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment
hereunder or any amount payable under any Note remains unpaid:
SECTION 5.01. Information. The Borrower will deliver to each of
the Banks:
(a) within 105 days after the end of each fiscal year of the
Borrower, a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such fiscal year and the
related consolidated statements of income, changes in stockholders'
equity and cash flows for such fiscal year, setting forth in each case
in comparative form the figures as of the end of and for the previous
fiscal year, all reported on in a manner acceptable to the Securities
and Exchange Commission by Coopers & Xxxxxxx or other independent public
accountants of nationally recognized standing;
(b) within 60 days after the end of each of the first three
quarters of each fiscal year of the Borrower, a consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries as of the end of
such quarter and the related consolidated statements of income for such
quarter and the related consolidated statements of income and cash flows
for the portion of
38
the Borrower's fiscal year ended at the end of such
quarter, setting forth in the case of such statements of income in
comparative form the figures for the corresponding quarter and in the
case of such statements of income and cash flows the corresponding
portion of the Borrower's previous fiscal year, all certified as to
fairness of presentation, generally accepted accounting principles and
consistency by the chief financial officer or the chief accounting
officer of the Borrower, subject to normal year end adjustments;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of
the chief financial officer or the chief accounting officer of the
Borrower (i) setting forth in reasonable detail the calculations
required to establish whether the Borrower was in compliance with the
requirements of Sections 5.03, 5.04 and 5.05, inclusive, on the date of
the consolidated balance sheet included in such financial statements and
(ii) stating whether any Default exists on the date of such certificate
and, if any Default then exists, setting forth the details thereof and
the action which the Borrower is taking or proposes to take with respect
thereto;
(d) promptly after the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and
proxy statements so mailed; and
(e) promptly after the filing thereof, copies of all reports on
Forms 10-K, 10-Q and 8-K (or their equivalents) which the Borrower shall
have filed with the Securities and Exchange Commission.
SECTION 5.02. Maintenance of Existence. The Borrower will
preserve, renew and keep in full force and effect its corporate existence except
as otherwise permitted under Section 5.08.
39
SECTION 5.03. Interest Coverage. The ratio of Consolidated EBIT
to Consolidated Interest Expense will not, for any period of four consecutive
fiscal quarters, be less than 1.25 to 1.
SECTION 5.04. Debt. Consolidated Debt determined at the end of
any fiscal quarter will not exceed 1,000% of Consolidated Tangible Net Worth
determined at the end of such fiscal quarter, and Consolidated Debt determined
at the end of any fiscal month which is not the last month of a fiscal quarter
will not exceed 1,000% of the greater of (i) Consolidated Tangible Net Worth
determined at the end of the most recently ended fiscal quarter or (ii)
Consolidated Tangible Net Worth determined at the end of such fiscal month.
SECTION 5.05. Minimum Consolidated Tangible Net Worth.
Consolidated Tangible Net Worth shall be at least $500,000,000 plus an amount
equal to 50% of Consolidated Net Income for each fiscal quarter of the Borrower
and its Consolidated Subsidiaries ending after June 30, 1996 (but on or prior to
the date of determination) for which Consolidated Net Income is positive (but
with no deduction on account of negative Consolidated Net Income for any fiscal
quarter of the Borrower and its Consolidated Subsidiaries).
SECTION 5.06 Restricted Payments. Neither the Borrower nor any
Subsidiary will declare or make any Restricted Payment unless, both before and
after giving effect thereto, no Event of Default under any of paragraphs (a),
(b), (d), (e), (f), (g), (h) or (i) of Section 6.01 shall have occurred and be
continuing.
SECTION 5.07 Negative Pledge. Neither the Borrower nor any
Restricted Subsidiary will create, assume or suffer to exist any Lien on any
asset now owned or hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement securing Debt
outstanding on the date of this Agreement (or Debt issued or incurred
pursuant to commitments outstanding on the date of this Agreement) in an
aggregate principal or face amount not exceeding $230,000,000;
(b) Liens on property of, or on any shares of stock or Debt of,
any corporation existing at the time such corporation becomes a
Restricted Subsidiary and
40
not created at the request or with the consent of the Borrower and in
contemplation of such event;
(c) Liens on property, shares of stock, other equity interests,
or Debt existing at the time of acquisition or repossession thereof by
the Borrower or any Restricted Subsidiary and not created at the request
or with the consent of the Borrower and in contemplation of such event;
(d) Liens on physical property (or any Accounts Receivable
arising in connection with the lease thereof), shares of stock, other
equity interests, or Debt acquired (or, in the case of physical
property, constructed) after the date hereof by the Borrower or any
Restricted Subsidiary, which Liens are created prior to, at the time of,
or within 180 days after such acquisition (or, in the case of physical
property, the completion of such construction or commencement of
commercial operation of such property, whichever is later) to secure any
Debt incurred or assumed for the purpose of financing all or any part of
the cost of such acquisition (or such construction);
(e) any Lien on any asset of any corporation existing at the time
such corporation is merged or consolidated with or into the Borrower or
a Restricted Subsidiary and not created in contemplation of such event;
(f) Liens arising in the ordinary course of the Borrower's or
such Restricted Subsidiary's business which (i) do not secure Debt or
Derivatives Obligations, (ii) do not secure any obligation in an amount
exceeding $25,000,000 and (iii) do not in the aggregate materially
detract from the value of its assets or materially impair the use
thereof in the operation of its business;
(g) Liens on Accounts Receivable of the Borrower or any
Restricted Subsidiary arising from or in connection with transactions
entered into by the Borrower or such Restricted Subsidiary after the
date hereof or on Accounts Receivable acquired by the Borrower or such
Restricted Subsidiary after such date from others, which Liens are
created prior to, at the time of, or within one year after such Accounts
Receivable arise or are acquired or, if later, the completion of the
delivery or installation of the equipment or goods or the rendering of
the services or
41
the advancement or loaning of funds relating thereto (i)
as a result of any guarantee, repurchase or other contingent (direct or
indirect) or recourse obligation of the Borrower or such Restricted
Subsidiary in connection with the discounting, sale, assignment,
transfer or other disposition of such Accounts Receivable or any
interest therein, or (ii) to secure or provide for the payment of all or
any part of the investment of the Borrower or such Restricted Subsidiary
in any such Accounts Receivable (whether or not such Accounts Receivable
are the Accounts Receivable on which such Liens are created) or the
purchase price thereof or to secure any debt (including, without
limitation, Non-Recourse Debt) issued, incurred, assumed or guaranteed
for the purpose of financing or refinancing all or any part of such
investment or purchase price;
(h) Liens on cash and cash equivalents securing Derivatives
Obligations, provided that the aggregate amount of cash and cash
equivalents subject to such Liens at no time exceed $25,000,000;
(i) Liens in favor of the Borrower or any Restricted
Subsidiary;
(j) Liens in favor of the United States of America or any State
thereof or the District of Columbia, or any agency, department or other
instrumentality thereof, to secure progress, advance or other payments
pursuant to any contract or provision of any statute;
(k) Liens to secure Non-Recourse Debt in connection with the
Borrower or any Restricted Subsidiary engaging in any leveraged or
single-investor or other lease transactions, whether (in the case of
Liens on or relating to leases or groups of leases or the particular
properties subject thereto) such Liens be on the particular properties
subject to any leases involved in any of such transactions and/or the
rental or other payments or rights under such leases or, in the case of
any group of related or unrelated leases, on the properties subject to
the leases comprising such group and/or the rental or other payments or
rights under such leases, or on any direct or indirect interest therein,
and whether (in any case) (i) such Liens be created prior to, at the
time of, or at any time after the entering into of such lease
transactions and/or (ii) such leases be in existence prior to, or be
42
entered into by the Borrower or such Restricted Subsidiary at the time
of or at any time after, the purchase or other acquisition by the
Borrower or such Restricted Subsidiary of the properties subject to such
leases;
(l) Liens securing any extension, renewal or replacement (or
successive extensions, renewals or replacements), in whole or in part,
of any Debt or other obligation secured by any Lien permitted by any of
the foregoing clauses of this Section; provided, however, that any such
extension, renewal or replacement shall be limited to all or a part of
the property or assets which secured the Debt or other obligation so
extended, renewed or replaced (plus any improvements on such property)
and that the amount of such Debt or other obligation secured thereby is
not increased; and
(m) Liens not otherwise permitted by the foregoing clauses of
this Section securing Debt in an aggregate principal or face amount at
any date not to exceed 10% of Consolidated Tangible Net Worth.
Notwithstanding the foregoing, for purposes of this Section, a Lien shall not be
deemed to be created (i) solely by virtue of an Asset Drop-Down or (ii) on any
Accounts Receivable that are treated as having been sold by the Borrower or any
of its Subsidiaries under applicable generally accepted accounting principles
applied in accordance with Section 1.02.
SECTION 5.08. Consolidations, Mergers and Sales of Assets. The
Borrower covenants that it will not merge or consolidate with any other
corporation or sell or convey all or substantially all of its assets to any
person (other than such a sale or conveyance to a Subsidiary or any successor
thereto (such a sale or conveyance being called an "Asset Drop-Down")), unless
(i) either the Borrower shall be the continuing corporation or the successor
corporation or the person which acquires by sale or conveyance substantially all
the assets of the Borrower (if other than the Borrower) shall be a corporation
organized under the laws of the United States of America or any State thereof
and shall expressly assume the due and punctual payment of the principal of and
interest on all the Notes according to their tenor, and the due and punctual
performance and observance of all of the covenants and conditions of this
Agreement to be performed or observed by the Borrower, by one or more
agreements, reasonably satisfactory in form to
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the Required Banks, executed and delivered to the Agent by such corporation, and
(ii) the Borrower or such successor corporation, as the case may be, shall not,
immediately after such merger or consolidation, or such sale or conveyance, be
in default in the performance of any such covenant or condition. In the event of
any Asset Drop-Down after the date of this Agreement, any subsequent sale or
conveyance of assets by a Subsidiary to which assets were transferred in such
Asset Drop-Down (a "Drop-Down Subsidiary") will be deemed to be a sale or
conveyance of assets by the Borrower for purposes of this Section 5.08.
SECTION 5.09. Use of Proceeds. The proceeds of the Loans made
under this Agreement will be used by the Borrower for general corporate
purposes, including, without limitation, the repayment of maturing commercial
paper and other Debt of the Borrower and the consummation of the Acquisition.
None of such proceeds will be used for the purpose of buying or carrying any
"margin stock" within the meaning of Regulation U.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following
events ("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of any
Loan, or shall fail to pay within five Domestic Business Days of the due
date thereof any interest on any Loan, any fees or any other amount
payable hereunder;
(b) the Borrower shall fail to observe or perform any covenant
contained in Section 5.02, 5.03, 5.04, 5.05, 5.06, 5.07 or 5.08;
(c) the Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by
clause (a) or (b) above) for 30 days after notice thereof has been given
to the Borrower by the Agent at the request of the Required Banks;
(d) any representation or warranty made or deemed made by the
Borrower in this Agreement or in any certificate delivered pursuant to
this Agreement shall
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prove to have been materially incorrect when made (or deemed made
pursuant to Section 3.02);
(e) the Borrower or any Subsidiary shall fail to make any payment
of principal or interest in respect of any Material Financial
Obligations when due or within any applicable grace period;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Debt or enables the holder
of such Debt or any Person acting on such holder's behalf to accelerate
the maturity thereof (unless such acceleration or right to accelerate in
respect of such event or condition has been validly waived by or on
behalf of such holder by waiver then in effect);
(g) the Borrower shall commence a voluntary case seeking
liquidation, reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an
involuntary case seeking such relief commenced against it under any such
law, or shall make a general assignment for the benefit of creditors, or
shall admit in writing its inability generally to pay its debts as they
become due;
(h) an order for relief shall be entered against the Borrower
under the federal bankruptcy laws as now or hereafter in effect in an
involuntary case or other proceeding seeking liquidation, reorganization
or other relief with respect to it or its debts or seeking the
appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and such
decree or order shall remain undismissed and unstayed for a period of 90
days;
(i) at any time prior to the consummation of the Acquisition,
AT&T shall cease to be the direct or indirect beneficial owner of at
least 75% of the Voting Power;
(j) at any time from and after the consummation of the
Acquisition, both (A) and (B) below shall occur:
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(A) (x) the Nomura Group shall cease to be the direct or
indirect beneficial owner of at least 40% of the Voting Power, or
(y) any person or group of persons (within the meaning of Section
13 or 14 of the Securities Exchange Act of 1934, as amended)
(other than the Nomura Group) shall have acquired on any date
beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under said
Act) of shares of capital stock of the Borrower with a greater
Voting Power than the Voting Power of shares of which the Nomura
Group is the direct or indirect beneficial owner;
and
(B) any person or group of persons (as defined in clause
(A) above) (other than the Nomura Group) shall have acquired
beneficial ownership (as defined in clause (A) above) of shares
of capital stock of the Borrower with 30% or more of the Voting
Power, or during any period of 12 consecutive calendar months,
individuals who were directors of the Borrower on the first day
of such period and any new director (x) whose election by the
board of directors of the Borrower or nomination for election by
the Borrower's stockholders was approved by a vote of at least a
majority of the directors then still in office who either were
directors at the beginning of such period or whose election or
nomination for election was previously so approved or (y) who was
elected to fill a vacancy on such board of directors created in
connection with a spin-off or public offering of common stock of
the Borrower, prior to the date of consummation of such spin-off
or public offering, shall cease to constitute a majority of the
board of directors of the Borrower;
then, and in every such event, the Agent shall (i) if requested by Banks having
more than 50% in aggregate amount of the Commitments, by notice to the Borrower
terminate the Commitments and they shall thereupon terminate, and (ii) if
requested by Banks holding Notes evidencing more than 50% in aggregate principal
amount of the Loans, by notice to the Borrower declare the Loans (together with
accrued interest thereon) to be, and the Loans (together with accrued interest
thereon) shall thereupon become, immediately due
46
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower; provided that in the case of any
of the Events of Default specified in paragraph (g) or (h) above, without any
notice to the Borrower or any other act by the Agent or the Banks, the
Commitments shall thereupon terminate and the Loans (together with accrued
interest thereon) shall become immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower.
SECTION 6.02. Notice of Default. The Agent shall give notice to
the Borrower under Section 6.01(c) promptly upon being requested to do so by the
Required Banks and shall thereupon notify all the Banks thereof.
SECTION 6.03. Rescission. If at any time after termination of the
Commitments and/or acceleration of the maturity of the Loans pursuant to Section
6.01, the Borrower shall pay all arrears of interest and all payments on account
of principal of the Loans which shall have become due otherwise than by
acceleration (with interest on principal at the rates specified in this
Agreement) and all Defaults (other than nonpayment of principal of and accrued
interest on the Loans due and payable solely by virtue of acceleration) shall be
remedied or waived pursuant to Section 9.05, then upon the written consent of
the Required Banks and notice to the Borrower, such termination of the
Commitments and/or such acceleration and their consequences may be rescinded and
annulled; but such action shall not affect any subsequent Default or impair any
right or remedy consequent thereon. The provisions of the preceding sentence are
intended merely to bind the Banks to a decision which may be made at the
election of the Required Banks; they are not intended to benefit the Borrower
and do not give the Borrower the right to require the Banks to rescind or annul
any acceleration hereunder, even if the conditions set forth herein are met.
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ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization. Each Bank
irrevocably appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement and the Notes as are
delegated to the Agent by the terms hereof or thereof, together with all such
powers as are reasonably incidental thereto.
SECTION 7.02. Agent and Affiliates. Xxxxxx Guaranty Trust Company
of New York shall have the same rights and powers under this Agreement as any
other Bank and may exercise or refrain from exercising the same as though it
were not the Agent, and Xxxxxx Guaranty Trust Company of New York and its
affiliates may accept deposits from, lend money to, and generally engage in any
kind of business with the Borrower or any Subsidiary or affiliate of the
Borrower as if it were not the Agent hereunder.
SECTION 7.03. Action by Agent. The obligations of the Agent
hereunder are only those expressly set forth herein. Without limiting the
generality of the foregoing, the Agent shall not be required to take any action
with respect to any Default, except as expressly provided in Article VI.
SECTION 7.04. Consultation with Experts. The Agent may consult
with legal counsel (who may be counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
SECTION 7.05. Liability of Agent. Neither the Agent nor any of
its affiliates nor any of their respective directors, officers, agents or
employees shall be liable for any action taken or not taken by it in connection
herewith (i) with the consent or at the request of the Required Banks or (ii) in
the absence of its own gross negligence or willful misconduct. Neither the Agent
nor any of its affiliates nor any of their respective directors, officers,
agents or employees shall be responsible for or have any duty to ascertain,
inquire into or verify (i) any statement, warranty or representation made in
connection with this Agreement or any borrowing hereunder; (ii) the performance
48
or observance of any of the covenants or agreements of the Borrower; (iii) the
satisfaction of any condition specified in Article III, except receipt of items
required to be delivered to the Agent; or (iv) the validity, effectiveness or
genuineness of this Agreement, the Notes or any other instrument or writing
furnished in connection herewith. The Agent shall not incur any liability by
acting in reliance upon any notice, consent, certificate, statement, or other
writing (which may be a bank wire, telex, facsimile transmission or similar
writing) believed by it to be genuine or to be signed by the proper party or
parties.
SECTION 7.06. Indemnification. Each Bank shall, ratably in
accordance with its Commitment, indemnify the Agent, its affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrower) against any cost, expense (including counsel fees
and disbursements), claim, demand, action, loss or liability (except such as
result from such indemnitees' gross negligence or willful misconduct) that such
indemnitees may suffer or incur in connection with this Agreement or any action
taken or omitted by such indemnitees hereunder.
SECTION 7.07. Credit Decision. Each Bank acknowledges that it
has, independently and without reliance upon the Agent or any other Bank, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking any action under this Agreement.
SECTION 7.08. Successor Agent. The Agent may resign at any time
by giving notice thereof to the Banks and the Borrower. Upon any such
resignation, the Borrower shall have the right to appoint a successor Agent from
among the Banks. If no successor Agent shall have been so appointed, and shall
have accepted such appointment, within 30 days after the retiring Agent gives
notice of resignation, then the retiring Agent may, on behalf of the Banks,
appoint a successor Agent, which shall be a commercial bank organized or
licensed under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $300,000,000. Upon the
acceptance of its appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become
49
vested with all the rights and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation hereunder as Agent, the provisions of this Article
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent.
SECTION 7.09. Agent's Fee. The Borrower shall pay to the Agent
for its own account fees in the amounts and at the times previously agreed upon
between the Borrower and the Agent.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period for any CD
Loan, Euro-Dollar Loan or Money Market LIBOR Loan:
(a) the Agent is advised by the CD Reference Banks or, under the
circumstances contemplated by the final sentence of the definition of
London Interbank Offered Rate, the Euro-Dollar Reference Banks that
deposits in dollars (in the applicable amounts) are not being offered to
such Reference Banks in the relevant market for such Interest Period, or
(b) in the case of CD Loans or Euro-Dollar Loans, Banks having
50% or more of the aggregate principal amount of the affected Loans
advise the Agent that the Adjusted CD Rate or the London Interbank
Offered Rate, as the case may be, as determined by the Agent will not
adequately and fairly reflect the cost to such Banks of funding their CD
Loans or Euro-Dollar Loans, as the case may be, for such Interest
Period,
the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, (i) the obligations of the Banks to
make CD Loans or Euro-Dollar Loans, as the case may be, or to convert
outstanding Loans into CD Loans or Euro-Dollar Loans, as the case may be, shall
be suspended and (ii) each outstanding CD Loan or Euro-Dollar Loan, as the case
may be, shall be converted into a Base Rate Loan on the last day of the then
current Interest Period applicable thereto. Unless
50
the Borrower notifies the Agent at least one Domestic Business Day before the
date of any Fixed Rate Borrowing for which a Notice of Borrowing has previously
been given that it elects not to borrow on such date, (i) if such Fixed Rate
Borrowing is a Committed Borrowing, such Borrowing shall instead be made as a
Base Rate Borrowing and (ii) if such Fixed Rate Borrowing is a Money Market
LIBOR Borrowing, the Money Market LIBOR Loans comprising such Borrowing shall
bear interest for each day from and including the first day to but excluding the
last day of the Interest Period applicable thereto at the Base Rate for such
day.
SECTION 8.02. Illegality. If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or any change
in any applicable law, rule or regulation, or any change in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Bank (or its Euro-Dollar Lending Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or impossible for any
Bank (or its Euro-Dollar Lending Office) to make, maintain or fund its
Euro-Dollar Loans and such Bank shall so notify the Agent, the Agent shall
forthwith give notice thereof to the other Banks and the Borrower, whereupon
until such Bank notifies the Borrower and the Agent that the circumstances
giving rise to such suspension no longer exist, the obligation of such Bank to
make Euro-Dollar Loans, or to convert outstanding Loans into Euro-Dollar Loans,
shall be suspended. Before giving any notice to the Agent pursuant to this
Section, such Bank shall designate a different Euro-Dollar Lending Office if
such designation will avoid the need for giving such notice and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. If such notice
is given, each Euro-Dollar Loan of such Bank then outstanding shall be converted
to a Base Rate Loan either (a) on the last day of the then current Interest
Period applicable to such Euro-Dollar Loan if such Bank may lawfully continue to
maintain and fund such Loan to such day or (b) immediately if such Bank shall
determine that it may not lawfully continue to maintain and fund such Loan to
such day.
SECTION 8.03. Increased Cost and Reduced Return. (a)x XxXx on or
after (x) the date hereof, in the case of any Committed Loan or any obligation
to make Committed Loans or (y) the date of the related Money Market Quote, in
the case of any Money Market Loan, the adoption of any applicable
51
