1
Exhibit 10.20
[Execution Copy]
364-DAY CREDIT AGREEMENT
dated as of
September 29, 1999
among
METROPOLITAN LIFE INSURANCE COMPANY
METLIFE FUNDING, INC.,
as Borrowers
The LENDERS Party Hereto
THE CHASE MANHATTAN BANK,
as Administrative Agent
CREDIT SUISSE FIRST BOSTON,
as Syndication Agent, Joint Lead Arranger and Joint Book Manager
CITIBANK, N.A.
THE BANK OF NEW YORK,
as Documentation Agents
-------------------------
$5,000,000,000
-------------------------
CHASE SECURITIES INC.,
as Joint Lead Arranger and Joint Book Manager
2
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms...................................... 1
SECTION 1.02. Classification of Loans and Borrowings............. 16
SECTION 1.03. Terms Generally.................................... 16
SECTION 1.04. Accounting Terms; GAAP............................. 16
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments........................................ 17
SECTION 2.02. Loans and Borrowings............................... 17
SECTION 2.03. Requests for Syndicated Borrowings................. 18
SECTION 2.04. Competitive Bid Procedure.......................... 18
SECTION 2.05. Funding of Borrowings.............................. 21
SECTION 2.06. Interest Elections for Syndicated Borrowings....... 21
SECTION 2.07. Termination and Reduction of Commitments........... 23
SECTION 2.08. Repayment of Loans; Conversion of Revolving
Loans to Term Loans; Evidence of Debt.............. 23
SECTION 2.09. Prepayment of Loans................................ 24
SECTION 2.10. Fees............................................... 25
SECTION 2.11. Interest........................................... 26
SECTION 2.12. Alternate Rate of Interest......................... 27
SECTION 2.13. Increased Costs.................................... 28
SECTION 2.14. Break Funding Payments............................. 29
SECTION 2.15. Taxes.............................................. 29
SECTION 2.16. Payments Generally; Pro Rata Treatment; Sharing
of Set-offs. 30
SECTION 2.17. Mitigation Obligations; Replacement of Lenders..... 32
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Organization; Powers............................... 32
SECTION 3.02. Authorization; Enforceability...................... 33
SECTION 3.03. Governmental Approvals; No Conflicts............... 33
SECTION 3.04. Financial Condition; No Material Adverse Change.... 33
SECTION 3.05. Properties......................................... 34
(i)
3
Page
SECTION 3.06. Litigation and Environmental Matters............... 34
SECTION 3.07. Compliance with Laws and Agreements................ 34
SECTION 3.08. Investment and Holding Company Status.............. 35
SECTION 3.09. Taxes.............................................. 35
SECTION 3.10. ERISA.............................................. 35
SECTION 3.11. Disclosure......................................... 35
SECTION 3.12. Margin Stock....................................... 35
SECTION 3.13. Year 2000.......................................... 35
SECTION 3.14. Support Agreement.................................. 36
SECTION 3.15. Acquisition Agreement.............................. 36
ARTICLE IV
CONDITIONS
SECTION 4.01. Effective Date..................................... 36
SECTION 4.02. Each Credit Event.................................. 38
ARTICLE V
AFFIRMATIVE COVENANTS
SECTION 5.01. Financial Statements and Other Information......... 38
SECTION 5.02. Notices of Defaults................................ 39
SECTION 5.03. Existence; Conduct of Business..................... 39
SECTION 5.04. Payment of Obligations............................. 39
SECTION 5.05. Maintenance of Properties; Insurance............... 39
SECTION 5.06. Books and Records; Inspection Rights............... 40
SECTION 5.07. Compliance with Laws............................... 40
SECTION 5.08. Use of Proceeds.................................... 40
SECTION 5.09. Support Agreement.................................. 40
ARTICLE VI
NEGATIVE COVENANTS
SECTION 6.01. Liens.............................................. 40
SECTION 6.02. Fundamental Changes................................ 42
SECTION 6.03. Transactions with Affiliates....................... 42
SECTION 6.04. Net Worth.......................................... 43
(ii)
4
Page
ARTICLE VII
EVENTS OF DEFAULT................................................. 43
ARTICLE VIII
THE AGENTS
SECTION 8.01. Administrative Agent............................... 45
SECTION 8.02. Syndication Agent and Joint-Arrangers.............. 47
SECTION 8.03. Documentation Agents............................... 47
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices............................................ 47
SECTION 9.02. Waivers; Amendments................................ 48
SECTION 9.03. Expenses; Indemnity; Damage Waiver................. 49
SECTION 9.04. Successors and Assigns............................. 50
SECTION 9.05. Survival........................................... 52
SECTION 9.06. Counterparts; Integration; Effectiveness........... 52
SECTION 9.07. Severability....................................... 52
SECTION 9.08. Right of Setoff.................................... 53
SECTION 9.09. Governing Law; Jurisdiction; Consent to
Service of Process................................. 53
SECTION 9.10. WAIVER OF JURY TRIAL............................... 53
SECTION 9.11. Headings........................................... 54
SECTION 9.12. Confidentiality.................................... 54
SCHEDULES:
Schedule 2.01 -- Commitments
Schedule 3.06 -- Disclosed Matters
EXHIBITS:
Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Opinion of Counsel to the Borrowers
Exhibit C -- Form of Opinion of Special New York Counsel to Chase
(iii)
5
364-DAY CREDIT AGREEMENT dated as of September 29, 1999, among:
METROPOLITAN LIFE INSURANCE COMPANY (the "Company") and METLIFE FUNDING INC.
("Funding" and together with the Company, the "Borrowers"); the LENDERS party
hereto; and THE CHASE MANHATTAN BANK, as Administrative Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Acquisition Transactions" means, collectively, the Stock Purchase
Acquisition and the Exchange Program.
"Acquisition Agreement" means the Stock Purchase Agreement dated as
of August 26, 1999 by and between the Company and General American Mutual
Holding Company, pursuant to which the Company has agreed, upon the terms and
conditions set forth therein, to, inter alia, (a) make the Stock Purchase
Acquisition and (b) establish the Exchange Program.
"Adjusted Eurodollar Rate" means, with respect to any Eurodollar
Syndicated Borrowing for any Interest Period, an interest rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO
Rate for such Interest Period (if such Interest Period is of one, two, three or
six months' duration) or the NIBO Rate for such Interest Period (if such
Interest Period is of one or two weeks' duration) multiplied by (b) the
Statutory Reserve Rate.
"Administrative Agent" means The Chase Manhattan Bank, in its
capacity as administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire
in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified;
provided that, for the purposes of Section 9.04(b),
364-Day Credit Agreement
6
-2-
any special purpose funding vehicle that funds itself principally in the
commercial paper market shall not constitute an Affiliate of any Lender.
"Alternate Base Rate" means, for any day, a rate per annum equal to
the greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate
in effect on such day plus 1% and (c) the Federal Funds Rate in effect on such
day plus 1/2 of 1%, provided that during the period from and including November
1, 1999 to and including January 15, 2000, the Alternate Base Rate shall be a
rate per annum equal to the higher of the Prime Rate and the Federal Funds Rate
plus 1.825%. Any change in the Alternate Base Rate due to a change in the Prime
Rate, the Base CD Rate or the Federal Funds Rate shall be effective from and
including the effective date of such change in the Prime Rate, the Base CD Rate
or the Federal Funds Rate, respectively.
"Applicable Insurance Regulatory Authority" means the insurance
department or similar insurance regulatory or administrative authority or agency
of the jurisdiction in which the Company is domiciled.
"Applicable Percentage" means, with respect to any Lender, the
percentage of the total Commitments represented by such Lender's Commitment. If
the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the aggregate principal amount of the Syndicated Loans
held by the Lenders or, if no Syndicated Loans are outstanding, the Commitments
most recently in effect, giving effect to any assignments.
"Applicable Rate" means, for any day, (a) with respect to any
Eurodollar Revolving Loan, 0.325% per annum; (b) with respect to any Eurodollar
Term Loan, 0.625% per annum; (c) with respect to the facility fees payable
hereunder, 0.05% per annum; and (d) with respect to any utilization fee payable
hereunder 0.125% per annum
"Assessment Rate" means, for any day, the annual assessment rate in
effect on such day that is payable by a member of the Bank Insurance Fund
classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the Federal Deposit Insurance Corporation
for insurance by such Corporation of time deposits made in dollars at the
offices of such member in the United States; provided that if, as a result of
any change in any law, rule or regulation, it is no longer possible to determine
the Assessment Rate as aforesaid, then the Assessment Rate shall be such annual
rate as shall be determined by the Administrative Agent to be representative of
the cost of such insurance to the Lenders.
"Asset Securitization" means a public or private transfer of
installment receivables, credit card receivables, lease receivables or any other
type of secured or unsecured financial assets, which transfer is recorded as a
sale according to GAAP as of the date of such transfer.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Administrative Agent,
in the form of Exhibit A or any other form approved by the Administrative Agent.
364-Day Credit Agreement
7
-3-
"Availability Period" means the period from and including the
Effective Date to and including the earlier of the Revolving Credit Maturity
Date and the date of termination of the Commitments.
"Base CD Rate" means the sum of (a) the Three-Month Secondary CD
Rate multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Board" means the Board of Governors of the Federal Reserve System
of the United States of America.
"Borrowing" means (a) Syndicated Loans of the same Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect, or (b) a Competitive Loan or
group of Competitive Loans of the same Type made on the same date and as to
which a single Interest Period is in effect.
"Borrowing Request" means a request by the Borrower for a Syndicated
Borrowing in accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to remain closed; provided that, when used in connection with a Eurodollar Loan
(other than a Eurodollar Loan bearing interest at a rate determined or to be
determined by reference to the NIBO Rate), the term "Business Day" shall also
exclude any day on which banks are not open for dealings in dollar deposits in
the London interbank market.
"Capital Lease Obligations" of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Change in Control" means (a) the acquisition of ownership, directly
or indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof), of shares
representing more than 25% of the aggregate ordinary voting power represented by
the issued and outstanding capital stock of the Company or (b) occupation of a
majority of the seats (other than vacant seats) on the board of directors of the
Company by Persons who were neither (i) nominated by the board of directors of
the Company nor (ii) appointed by directors so nominated. Notwithstanding the
foregoing, it shall not constitute a "Change in Control" hereunder if in
connection with a demutualization of the Company, the Company shall become a
wholly owned Subsidiary of another Person (the "Holding Entity") which,
immediately prior to the effectiveness of such demutualization, is wholly owned
by the Company and in which the eligible policyholders of the Company or other
Persons shall acquire equity or other interests upon such demutualization,
provided that in such
364-Day Credit Agreement
8
-4-
event, (A) each reference in clause (a) of the first sentence of this definition
to the Company shall be deemed to be a reference to the Holding Entity, (B) each
reference in clause (b) of the first sentence of this definition to the Company
shall be deemed to be a reference to the Company and the Holding Entity, and (C)
it shall be a Change in Control after such demutualization if the Company shall
cease to be a wholly owned Subsidiary of the Holding Entity.
"Change in Law" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender (or,
for purposes of Section 2.13(b), by any lending office of such Lender or by such
Lender's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"Chase" means The Chase Manhattan Bank.
"Class", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Syndicated Loans
or Competitive Loans.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Commitment" means, with respect to each Lender, the commitment of
such Lender to make Revolving Loans hereunder, as such commitment may be (a)
reduced from time to time pursuant to Section 2.07 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 9.04. The initial amount of each Lender's Commitment is set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender
shall have assumed its Commitment, as applicable. The initial aggregate amount
of the Lenders' Commitments is $5,000,000,000.
"Competitive Bid" means an offer by a Lender to make a Competitive
Loan in accordance with Section 2.04.
"Competitive Bid Rate" means, with respect to any Competitive Bid,
the Margin or the Fixed Rate, as applicable, offered by the Lender making such
Competitive Bid.
"Competitive Bid Request" means a request by the Borrower for
Competitive Bids in accordance with Section 2.04.
"Competitive Loan" means a Loan made pursuant to Section 2.04.
"Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
364-Day Credit Agreement
9
-5-
"Credit Exposure" means, with respect to any Lender at any time, the
sum of the outstanding principal amount of such Lender's Syndicated Loans.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"demutualization" means the conversion of the Company into a stock
life insurance company pursuant to Section 7312 of the New York Insurance Law,
as amended from time to time. The term "demutualize" shall have a correlative
meaning.
"Disclosed Matters" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.
"Disposition" has the meaning assigned to such term in Section 6.02.
"dollars" or "$" refers to lawful money of the United States of
America.
"Effective Date" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Company or any of its
Subsidiaries directly or indirectly resulting from or based upon (a) violation
of any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure to any
Hazardous Materials, (d) the release or threatened release of any Hazardous
Materials into the environment or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Company, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which
364-Day Credit Agreement
10
-6-
the 30-day notice period is waived); (b) the existence with respect to any Plan
of an "accumulated funding deficiency" (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section
412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of
the minimum funding standard with respect to any Plan; (d) the incurrence by the
Company or any of its ERISA Affiliates of any liability under Title IV of ERISA
with respect to the termination of any Plan; (e) the receipt by the Company or
any ERISA Affiliate from the PBGC or a plan administrator of any notice relating
to an intention to terminate any Plan or Plans or to appoint a trustee to
administer any Plan; (f) the incurrence by the Company or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial withdrawal
from any Plan or Multiemployer Plan; or (g) the receipt by the Company or any
ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the
Company or any ERISA Affiliate of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted Eurodollar Rate (or,
in the case of a Competitive Loan, the LIBO Rate).
"Event of Default" has the meaning assigned to such term in Article
VII.
"Exchange Program" means a program, as provided for in the
Acquisition Agreement, pursuant to which the Company, in consideration of the
transfer by GALIC of certain investment assets to the Company, will offer to
holders of GALIC funding agreements either cash or replacement contracts issued
by the Company.
"Excluded Taxes" means, with respect to the Administrative Agent,
any Lender or any other recipient of any payment to be made by or on account of
any obligation of either Borrower hereunder, (a) income or franchise taxes
imposed on (or measured by) its net income by the United States of America, or
by the jurisdiction under the laws of which such recipient is organized or in
which its principal office is located or, in the case of any Lender, in which
its applicable lending office is located, (b) any branch profits taxes imposed
by the United States of America or any similar tax imposed by any other
jurisdiction in which either Borrower is located and (c) in the case of a
Foreign Lender (other than an assignee pursuant to a request by the Company
under Section 2.17(b)), any withholding tax that is imposed on amounts payable
to such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement (or designates a new lending office) or is attributable to such
Foreign Lender's failure to comply with Section 2.15(e), except to the extent
that such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from such Borrower with respect to such withholding tax pursuant to
Section 2.15(a).
"Federal Funds Rate" means (i) for the first day of an ABR
Borrowing, the rate per annum which is the average of the rates on the offered
side of the Federal funds market quoted by three interbank Federal funds
brokers, selected by the Administrative Agent, at approximately the time the
relevant Borrower requests such Borrowing, for dollar deposits in
364-Day Credit Agreement
11
-7-
immediately available funds, for a period and in an amount, comparable to the
principal amount of such ABR Borrowing and (ii) for each day of such ABR
Borrowing thereafter, or for any other amount hereunder which bears interest at
the Alternate Base Rate, the rate per annum which is the average of the rates on
the offered side of the Federal funds market quoted by three interbank Federal
funds brokers, selected by the Administrative Agent, at approximately 2:00 p.m.
New York City time on such day for dollar deposits in immediately available
funds, for a period and in an amount, comparable to the principal amount of such
ABR Borrowing or other amount, as the case may be; in the case of both clauses
(i) and (ii), as determined by the Administrative Agent and rounded upwards, if
necessary, to the nearest 1/100 of 1%.
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the Company.
"Fixed Rate" means, with respect to any Competitive Loan (other than
a Eurodollar Competitive Loan), the fixed rate of interest per annum specified
by the Lender making such Competitive Loan in its related Competitive Bid.
"Fixed Rate Loan" means a Competitive Loan bearing interest at a
Fixed Rate.
"Foreign Lender" means any Lender that is organized under the laws
of a jurisdiction other than that in which either Borrower is located. For
purposes of this definition, the United States of America, each State thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.
"Funding" means MetLife Funding, Inc., a Delaware corporation.
"GAAP" means generally accepted accounting principles in the United
States of America.
"GAC" mean GenAmerica Corporation, a Missouri corporation.
"GALIC" means General American Life Insurance Company, a Missouri
insurance company.
"Governmental Authority" means the government of the United States
of America, any other nation or any political subdivision thereof, whether state
or local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the
364-Day Credit Agreement
00
-0-
xxxxxxxx of) any security for the payment thereof, (b) to purchase or lease
property, securities or services for the purpose of assuring the owner of such
Indebtedness or other obligation of the payment thereof, (c) to maintain working
capital, equity capital or any other financial statement condition or liquidity
of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
"Hazardous Materials" means all explosive or radioactive substances
or wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Agreement" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty, (j) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances, and
(k) all Surplus Relief Reinsurance ceded by such Person. The Indebtedness of any
Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Index Debt" means senior, unsecured, long-term indebtedness for
borrowed money of the Company that is not guaranteed by any other Person or
subject to any other credit enhancement.
364-Day Credit Agreement
13
-9-
"Interest Election Request" means a request by the Borrower to
convert or continue a Syndicated Borrowing in accordance with Section 2.06.
"Interest Payment Date" means (a) with respect to any ABR Loan, the
last day of each March, June, September and December, (b) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing
of which such Loan is a part and, in the case of a Eurodollar Borrowing with an
Interest Period of more than three months' duration, each day prior to the last
day of such Interest Period that occurs at intervals of three months' duration
after the first day of such Interest Period, and (c) with respect to any Fixed
Rate Loan, the last day of the Interest Period applicable to the Borrowing of
which such Loan is a part and, in the case of a Fixed Rate Borrowing with an
Interest Period of more than 90 days' duration (unless otherwise specified in
the applicable Competitive Bid Request), each day prior to the last day of such
Interest Period that occurs at intervals of 90 days' duration after the first
day of such Interest Period, and any other dates that are specified in the
applicable Competitive Bid Request as Interest Payment Dates with respect to
such Borrowing.
"Interest Period" means (a) with respect to any Eurodollar
Syndicated Borrowing, the period commencing on the date of such Borrowing and
ending on the numerically corresponding day in the calendar month that is (i)
one or two weeks thereafter or (ii) one, two, three or six months thereafter, as
the relevant Borrower may elect, (b) with respect to any Eurodollar Competitive
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as specified in the applicable Competitive Loan Request
and (c) with respect to any Fixed Rate Borrowing, the period (which shall not be
less than 7 days or more than 360 days) commencing on the date of such Borrowing
and ending on the date specified in the applicable Competitive Bid Request;
provided, that
(i) if any Interest Period would end on a day other than a Business
Day, such Interest Period shall be extended to the next succeeding
Business Day unless, in the case of a Eurodollar Borrowing only, such next
succeeding Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding Business Day,
(ii) any Interest Period pertaining to a Eurodollar Borrowing (other
than one that has a one or two week duration) that commences on the last
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of
such Interest Period,
(iii) any Interest Period that would otherwise commence before the
Revolving Credit Maturity Date and end thereafter shall not be available
hereunder,
(iv) any Interest Period that would otherwise end after the Term
Loan Maturity Date shall not be available hereunder and
364-Day Credit Agreement
14
-10-
(v) the Loans comprising any Eurodollar Syndicated Borrowing with an
Interest Period that commences prior to November 1, 1999 and terminates on
or after November 1, 1999 shall be converted to ABR Loans on November 1,
1999.
For purposes hereof, the date of a Borrowing initially shall be the date on
which such Borrowing is made and, in the case of a Syndicated Borrowing,
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
"Lenders" means the Persons listed on Schedule 2.01 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period of one, two, three or six months' duration, the rate per annum
appearing on the Screen at approximately 11:00 a.m., London time (or as soon
thereafter as practicable), two Business Days prior to the commencement of such
Interest Period, as LIBOR with a maturity comparable to such Interest Period. In
the event that the Screen shall cease to report such LIBOR or, in the reasonable
judgement of the Required Lenders, shall cease to accurately reflect such LIBOR
(as reported by any publicly available source of similar market data selected by
such Required Lenders), then the "LIBO Rate" with respect to such Eurodollar
Borrowing for such Interest Period shall be the rate per annum at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of Chase in immediately available funds
in the London interbank market at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period.
"LIBOR" means the rate at which deposits in dollars are offered to
leading banks in the London interbank market.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loans" means the loans made by the Lenders to the Borrowers
pursuant to this Agreement.
"Margin" means, with respect to any Competitive Loan bearing
interest at a rate based on the LIBO Rate, the marginal rate of interest, if
any, to be added to or subtracted from the LIBO Rate to determine the rate of
interest applicable to such Loan, as specified by the Lender making such Loan in
its related Competitive Bid.
"Margin Stock" means "margin stock" within the meaning of
Regulations U and X.
364-Day Credit Agreement
15
-11-
"Material Adverse Change" means any event, development or
circumstance that has had or could reasonably be expected to have a material
adverse effect on (a) the business, assets, property, condition (financial or
otherwise) or prospects of the Company and its Subsidiaries taken as a whole, or
(b) the validity or enforceability of this Agreement or the rights and remedies
of the Administrative Agent and the Lenders hereunder.
"Material Indebtedness" means Indebtedness (other than the Loans),
or obligations in respect of one or more Hedging Agreements, of the Company or
any of its Material Subsidiaries in an aggregate principal amount exceeding
$200,000,000 (or its equivalent in any other currency). For purposes of
determining Material Indebtedness, the "principal amount" of the obligations of
the Company or any of its Material Subsidiaries in respect of any Hedging
Agreement at any time shall be the maximum aggregate amount (giving effect to
any netting agreements) that the Company or such Material Subsidiary would be
required to pay if such Hedging Agreement were terminated at such time.
"Material Subsidiary" means, at any time, (i) Funding and (ii) each
Subsidiary of the Company that as of such time meets the definition of
"significant subsidiary" contained as of the date hereof in Regulation S-X of
the SEC.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"NAIC" means the National Association of Insurance Commissioners and
any successor thereto.
"Net Available Proceeds" means, with respect to any Disposition, the
aggregate amount of all cash proceeds, and the fair market value of all non-cash
consideration, received by the Company directly or indirectly in connection with
such Disposition, net of (a) the amount of any legal, title and recording tax
expenses, commissions and other fees and expenses paid by the Company as a
result of such Disposition, (b) any Federal, state or local or other taxes
payable by the Company as a result of such Disposition, (c) any repayments by
the Company of Indebtedness to the extent that (i) such Indebtedness is secured
by a Lien on the assets that are the subject of such Disposition and (ii) the
transferee (or holder of a Lien on) such assets require that such Indebtedness
be repaid as a condition to the purchase of assets and (d) any liabilities
associated with the assets that are the subject of such Disposition to the
extent such liabilities are retained by the Company.
"Net Worth" means, as at any date, the total amount of equity of the
Company and its Subsidiaries determined on a consolidated basis without
duplication in accordance with GAAP (calculated without giving effect to any
changes from and after the date hereof required by Statement of Financial
Accounting Standards No. 115, Accounting for Certain Investments in Debt and
Equity Securities ).
"NIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period of one or two weeks' duration, the rate per annum (rounded
upwards, if necessary, to the next higher 1/16th of 1%) equal to the interest
rate at which dollar deposits of $5,000,000 and for
364-Day Credit Agreement
16
-12-
a maturity comparable to such Interest Period are offered in immediately
available funds to Chase at the Eurodollar lending offices where its foreign
currency and exchange operations and Eurodollar funding operations are
customarily conducted in the international interbank market at approximately
10:00 a.m. New York City time, two Business Days prior to the commencement of
such Interest Period.
"Other Taxes" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement.
"Participant" has the meaning set forth in Section 9.04(e).
"PBGC" means the Pension Benefit Guaranty Corporation referred to
and defined in ERISA and any successor entity performing similar functions.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 5.04;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the ordinary
course of business and securing obligations that are not overdue by more
than 30 days or are being contested in compliance with Section 5.04;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature, in each case in the ordinary
course of business; and
(e) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
materially detract from the value of the affected property or interfere
with the ordinary conduct of business of any Borrower;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
364-Day Credit Agreement
17
-13-
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Company or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by Chase as its prime rate in effect at its principal office
in New York City; each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective.
"Register" has the meaning set forth in Section 9.04(c).
"Regulations D, U and X" means, respectively, Regulations D, U and X
of the Board (or any successor), as the same may be modified and supplemented
and in effect from time to time.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, Lenders having Credit
Exposures and unused Commitments representing more than 50% of the sum of the
total Credit Exposures and unused Commitments at such time; provided that, for
all purposes after the Commitments expire or terminate, the outstanding
Competitive Loans of the Lenders shall be included in their respective Credit
Exposures in determining the Required Lenders.
"Revolving Credit Maturity Date" means September 27, 2000.
"Revolving Loan" means a Loan made pursuant to Section 2.01.
"SAP" means the accounting procedures and practices prescribed or
permitted by the Applicable Insurance Regulatory Authority or the NAIC.
"S&P" means Standard & Poor's Ratings Group, a division of The
XxXxxx-Xxxx Companies, Inc., and any successor thereto.
"Screen" means the display page 3750 for LIBOR on the Telerate
Service (or on any successor or substitute page of such Service, as determined
by the Administrative Agent); provided that if the Administrative Agent
determines that there is no such relevant display page for LIBOR, "Screen" shall
mean the relevant display page for LIBOR (as determined by the Administrative
Agent) on the Xxxxxx Monitor Money Rates Service.
"SEC" means the Securities and Exchange Commission or any
governmental authority succeeding to its principal functions.
364-Day Credit Agreement
18
-14-
"Securities Transactions" means (a) securities lending arrangements,
and (b) repurchase and reverse repurchase arrangements with respect to
securities and financial instruments.
"Separate Accounts Assets" means, as at any date, the "Separate
Accounts assets" of the Company, determined in accordance with SAP, reported as
such in the Statutory Statements of the Company.
"Statutory Reserve Rate" means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject (a) with
respect to the Base CD Rate, for new negotiable nonpersonal time deposits in
dollars of over $100,000 with maturities approximately equal to three months and
(b) with respect to the Adjusted Eurodollar Rate, for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D). Such
reserve percentages shall include those imposed pursuant to Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"Statutory Statement" means a statement of the condition and affairs
of the Company, prepared in accordance with SAP, and filed with the Applicable
Insurance Regulatory Authority.
"Stock Purchase Acquisition" means the acquisition by the Company of
all of the outstanding common stock of GAC upon the terms and conditions set
forth in the Acquisition Agreement.
"Structured Transaction Liens" means Liens granted by the Company to
(A) a 99%-owned Subsidiary (the "Relevant Subsidiary") in connection with a
structured private investment transaction entered into in September 1999 (the
"Structured Transaction") where (i) in connection with such transaction, such
Liens are assigned to a special purpose Subsidiary of the Company (the "SPV") in
which the Company is the holder of all outstanding obligations (other than
ordinary course administrative expenses and common equity interests) and (ii)
the assets covered by such Liens consist solely of the rights of the Company
against the SPV; and (B) the SPV in connection with the Structured Transaction
which are subordinated to, and exercisable only after, the Liens described in
the preceding clause (A) and which cover only the assets covered by the Liens
described in said clause (A).
"Subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
364-Day Credit Agreement
19
-15-
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.
"Support Agreement" means the Support Agreement dated as of November
30, 1984 between the Company and Funding, as amended and restated effective as
of that date on July 2, 1985.
"Surplus Relief Reinsurance" means any transaction in which the
Company or any Subsidiary of the Company cedes business under a reinsurance
agreement that would be considered a "financing-type" reinsurance agreement as
determined by the independent certified public accountants of the Company in
accordance with principles published by the Financial Accounting Standards Board
or the Second Edition of the AICPA Audit Guide for Stock Life Insurance
Companies (pp. 91-92), as the same may be revised from time to time.
"Syndicated", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans constituting such Borrowing, are
Revolving or Term Loans or Borrowings (i.e. such Loan or Borrowing is not a
Competitive Loan or Borrowing).
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Term Loan" has the meaning set forth in Section 2.08(b).
"Term Loan Maturity Date" has the meaning set forth in Section
2.08(b).
"Three-Month Secondary CD Rate" means, for any day, the secondary
market rate for three-month certificates of deposit reported as being in effect
on such day (or, if such day is not a Business Day, the next preceding Business
Day) by the Board through the public information telephone line of the Federal
Reserve Bank of New York (which rate will, under the current practices of the
Board, be published in Federal Reserve Statistical Release H.15(519) during the
week following such day) or, if such rate is not so reported on such day or such
next preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York City
received at approximately 10:00 a.m., New York City time, on such day (or, if
such day is not a Business Day, on the next preceding Business Day) by the
Administrative Agent from three negotiable certificate of deposit dealers of
recognized standing selected by it.
"Transactions" means the execution, delivery and performance by the
Borrowers of this Agreement, the borrowing of Loans and the use of the proceeds
thereof.
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by
364-Day Credit Agreement
20
-16-
reference to the Adjusted Eurodollar Rate, the Alternate Base Rate or, in the
case of a Competitive Loan or Borrowing, the LIBO Rate or a Fixed Rate.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For purposes
of this Agreement, Loans may be classified and referred to by Class (e.g., a
"Syndicated Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type
(e.g., a "Eurodollar Syndicated Loan"). Borrowings also may be classified and
referred to by Class (e.g., a "Syndicated Borrowing") or by Type (e.g., a
"Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar Syndicated
Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP or SAP, as the case may be, as in effect from
time to time; provided that, if the Company notifies the Administrative Agent
that the Company requests an amendment to any provision hereof to eliminate the
effect of any change occurring after the date hereof in GAAP or SAP, as the case
may be, or in the application thereof on the operation of such provision (or if
the Administrative Agent notifies the Company that the Required Lenders request
an amendment to any provision hereof for such purpose), regardless of whether
any such notice is given before or after such change in GAAP or SAP, as the case
may be, or in the application thereof, then such provision shall be interpreted
on the basis of GAAP or SAP, as the case may be, as in effect and applied
immediately before such change shall have become effective until such notice
shall have been withdrawn or such provision amended in accordance herewith.
364-Day Credit Agreement
21
-17-
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments. Subject to the terms and conditions set
forth herein, each Lender agrees to make Revolving Loans to the Borrowers from
time to time during the Availability Period in an aggregate principal amount
that will not result in (a) such Lender's Credit Exposure exceeding such
Lender's Commitment or (b) the sum of the total Credit Exposures plus the
aggregate principal amount of outstanding Competitive Loans exceeding the total
Commitments. Within the foregoing limits and subject to the terms and conditions
set forth herein, either Borrower or both Borrowers may borrow, prepay and
reborrow Revolving Loans.
SECTION 2.02. Loans and Borrowings.
(a) Each Syndicated Loan shall be made as part of a Borrowing
consisting of Syndicated Loans made by the Lenders ratably in accordance with
their respective Commitments. Each Competitive Loan shall be made in accordance
with the procedures set forth in Section 2.04. The failure of any Lender to make
any Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder; provided that the Commitments and Competitive Bids of the
Lenders are several and not joint, and no Lender shall be responsible for any
other Lender's failure to make Loans as required.
(b) Subject to Section 2.12, (i) each Syndicated Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the relevant Borrower may
request in accordance herewith, and (ii) each Competitive Borrowing shall be
comprised entirely of Eurodollar Loans or Fixed Rate Loans as the relevant
Borrower may request in accordance herewith. Each Lender at its option may make
any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of
such Lender to make such Loan; provided that any exercise of such option shall
not affect the obligation of the relevant Borrower to repay such Loan in
accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any Eurodollar
Syndicated Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $10,000,000. At the time that
each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that
is an integral multiple of $1,000,000 and not less than $5,000,000; provided
that an ABR Borrowing may be in an aggregate amount that is equal to the entire
unused balance of the total Commitments. Each Competitive Borrowing shall be in
an aggregate amount that is an integral multiple of $1,000,000 and not less than
$10,000,000. Borrowings of more than one Type and Class may be outstanding at
the same time; provided that there shall not at any time be more than a total of
10 Eurodollar Syndicated Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrowers shall not be entitled to request, or to elect to convert or continue,
any Borrowing prior to the Revolving Credit Maturity Date if the Interest Period
requested with respect thereto would end after the Revolving Credit Maturity
Date, or any Borrowing if the Interest Period requested with
364-Day Credit Agreement
22
-18-
respect thereto would end after the Term Loan Maturity Date, except that a
Borrower shall be entitled to request, or to elect to convert to or continue as
a Eurodollar Borrowing, any Revolving Borrowing after it has provided notice to
convert the Revolving Loans constituting (or to constitute) such Borrowing to
Term Loans in accordance with Section 2.08(b), so long as such requested
Interest Period would not end after the Term Loan Maturity Date.
SECTION 2.03. Requests for Syndicated Borrowings. To request a
Syndicated Borrowing, the relevant Borrower shall notify the Administrative
Agent of such request by telephone (a) in the case of a Eurodollar Borrowing,
not later than 11:00 a.m., New York City time, three Business Days before the
date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later
than 11:00 a.m., New York City time, one Business Day before the date of the
proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable
and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the relevant Borrower. Each such telephonic
and written Borrowing Request shall specify the following information in
compliance with Section 2.02:
(i) the name of the Borrower and aggregate amount of the requested
Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by
the definition of the term "Interest Period"; and
(v) the location and number of the relevant Borrower's account to
which funds are to be disbursed, which shall comply with the requirements
of Section 2.05.
If no election as to the Type of Syndicated Borrowing is specified, then the
requested Syndicated Borrowing shall be an ABR Borrowing. If no Interest Period
is specified with respect to any requested Eurodollar Syndicated Borrowing, then
the relevant Borrower shall be deemed to have selected an Interest Period of one
week's duration. Promptly following receipt of a Borrowing Request in accordance
with this Section, the Administrative Agent shall advise each Lender of the
details thereof and of the amount of such Lender's Loan to be made as part of
the requested Borrowing.
SECTION 2.04. Competitive Bid Procedure.
(a) Subject to the terms and conditions set forth herein, from time
to time during the period from the Effective Date to but excluding the Revolving
Credit Maturity Date, either Borrower or both Borrowers may request Competitive
Bids and may (but shall not have any obligation to) accept Competitive Bids and
borrow Competitive Loans; provided that the sum of the total Credit Exposures
plus the aggregate principal amount of outstanding Competitive Loans at any time
shall not exceed the total Commitments. To request Competitive Bids, the
relevant
364-Day Credit Agreement
23
-19-
Borrower shall notify the Administrative Agent of such request by telephone, in
the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, four Business Days before the date of the proposed Borrowing and, in the
case of a Fixed Rate Borrowing, not later than 10:00 a.m., New York City time,
one Business Day before the date of the proposed Borrowing; provided that the
Borrowers may submit up to (but not more than) three Competitive Bid Requests on
the same day, but a Competitive Bid Request shall not be made within five
Business Days after the date of any previous Competitive Bid Request, unless any
and all such previous Competitive Bid Requests shall have been withdrawn or all
Competitive Bids received in response thereto rejected. Each such telephonic
Competitive Bid Request shall be confirmed promptly by hand delivery or telecopy
to the Administrative Agent of a written Competitive Bid Request in a form
approved by the Administrative Agent and signed by the relevant Borrower. Each
such telephonic and written Competitive Bid Request shall specify the following
information in compliance with Section 2.02:
(i) the name of the Borrower and aggregate amount of the requested
Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be a Eurodollar Borrowing or a
Fixed Rate Borrowing;
(iv) the Interest Period to be applicable to such Borrowing, which
shall be a period contemplated by the definition of the term "Interest
Period"; and
(v) the location and number of the relevant Borrower's account to
which funds are to be disbursed, which shall comply with the requirements
of Section 2.05.
Promptly following receipt of a Competitive Bid Request in
accordance with this Section, the Administrative Agent shall notify the Lenders
of the details thereof by telecopy, inviting the Lenders to submit Competitive
Bids.
(b) Each Lender may (but shall not have any obligation to) make one
or more Competitive Bids to the relevant Borrower in response to a Competitive
Bid Request. Each Competitive Bid by a Lender must be in a form approved by the
Administrative Agent and must be received by the Administrative Agent by
telecopy, in the case of a Eurodollar Competitive Borrowing, not later than 9:30
a.m., New York City time, three Business Days before the proposed date of such
Competitive Borrowing, and in the case of a Fixed Rate Borrowing, not later than
9:30 a.m., New York City time, on the proposed date of such Competitive
Borrowing. Competitive Bids that do not conform substantially to the form
approved by the Administrative Agent may be rejected by the Administrative
Agent, and the Administrative Agent shall notify the applicable Lender as
promptly as practicable. Each Competitive Bid shall specify (i) the principal
amount (which shall be a minimum of $10,000,000 and an integral multiple of
$1,000,000 and which may equal the entire principal amount of the Competitive
Borrowing requested by the relevant Borrower) of the Competitive Loan or Loans
that the Lender is willing to make, (ii) the Competitive Bid Rate or Rates at
which the Lender is prepared to make such Loan or Loans (expressed as a
percentage rate per annum in the form of a decimal to no more than
364-Day Credit Agreement
24
-20-
four decimal places), and (iii) the Interest Period applicable to each such Loan
and the last day thereof.
(c) The Administrative Agent shall promptly notify the relevant
Borrower by telecopy of the Competitive Bid Rate and the principal amount
specified in each Competitive Bid and the identity of the Lender that shall have
made such Competitive Bid.
(d) Subject only to the provisions of this paragraph, the relevant
Borrower may accept or reject any Competitive Bid. Such Borrower shall notify
the Administrative Agent by telephone, confirmed by telecopy in a form approved
by the Administrative Agent, whether and to what extent it has decided to accept
or reject each Competitive Bid, in the case of a Eurodollar Competitive
Borrowing, not later than 10:30 a.m., New York City time, three Business Days
before the date of the proposed Competitive Borrowing, and in the case of a
Fixed Rate Borrowing, not later than 10:30 a.m., New York City time, on the
proposed date of the Competitive Borrowing; provided that (i) the failure of
such Borrower to give such notice shall be deemed to be a rejection of each
Competitive Bid, (ii) such Borrower shall not accept a Competitive Bid made at a
particular Competitive Bid Rate if such Borrower rejects a Competitive Bid made
at a lower Competitive Bid Rate, (iii) the aggregate amount of the Competitive
Bids accepted by such Borrower shall not exceed the aggregate amount of the
requested Competitive Borrowing specified in the related Competitive Bid
Request, (iv) to the extent necessary to comply with clause (iii) above, such
Borrower may accept Competitive Bids at the same Competitive Bid Rate in part,
which acceptance, in the case of multiple Competitive Bids at such Competitive
Bid Rate, shall be made by such Borrower in consultation with the Administrative
Agent pro rata in accordance with the amount of each such Competitive Bid, and
(v) except pursuant to clause (iv) above, no Competitive Bid shall be accepted
for a Competitive Loan unless such Competitive Loan is in a minimum principal
amount of $5,000,000 and an integral multiple of $1,000,000; and provided
further that if a Competitive Loan must be in an amount less than $5,000,000
because of the provisions of clause (iv) above, such Competitive Loan may be for
a minimum of $1,000,000 or any integral multiple thereof, and in calculating the
pro rata allocation of acceptances of portions of multiple Competitive Bids at a
particular Competitive Bid Rate pursuant to clause (iv) the amounts shall be
rounded to integral multiples of $1,000,000 in a manner determined by the
relevant Borrower in consultation with the Administrative Agent. A notice given
by the relevant Borrower pursuant to this paragraph shall be irrevocable.
(e) The Administrative Agent shall promptly notify each bidding
Lender by telecopy whether or not its Competitive Bid has been accepted (and, if
so, the amount and Competitive Bid Rate so accepted), and each successful bidder
will thereupon become bound, subject to the terms and conditions hereof, to make
the Competitive Loan in respect of which its Competitive Bid has been accepted.
(f) If the Administrative Agent shall elect to submit a Competitive
Bid in its capacity as a Lender, it shall submit such Competitive Bid directly
to the relevant Borrower at least one quarter of an hour earlier than the time
by which the other Lenders are required to submit their Competitive Bids to the
Administrative Agent pursuant to paragraph (b) of this Section.
364-Day Credit Agreement
25
-21-
SECTION 2.05. Funding of Borrowings.
(a) Each Lender shall make each Loan to be made by it hereunder on
the proposed date thereof by wire transfer of immediately available funds by
noon, New York City time, to the account of the Administrative Agent most
recently designated by it for such purpose by notice to the Lenders. The
Administrative Agent will make such Loans available to the relevant Borrower by
promptly crediting the amounts so received, in immediately available funds, to
an account of such Borrower maintained with the Administrative Agent in New York
City and designated by such Borrower in the applicable Borrowing Request or
Competitive Bid Request.
(b) Unless the Administrative Agent shall have received notice from
a Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the relevant
Borrower a corresponding amount. In such event, if a Lender has not in fact made
its share of the applicable Borrowing available to the Administrative Agent,
then the applicable Lender and the relevant Borrower severally agree to pay to
the Administrative Agent forthwith on demand such corresponding amount with
interest thereon, for each day from and including the date such amount is made
available to such Borrower to but excluding the date of payment to the
Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Rate and a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation or (ii) in the
case of such Borrower, the interest rate applicable to ABR Loans. If such Lender
pays such amount to the Administrative Agent, then such amount shall constitute
such Lender's Loan included in such Borrowing.
SECTION 2.06. Interest Elections for Syndicated Borrowings.
(a) Each Syndicated Borrowing initially shall be of the Type
specified in the applicable Borrowing Request and, in the case of a Eurodollar
Syndicated Borrowing, shall have an initial Interest Period as specified in such
Borrowing Request. Thereafter, the relevant Borrower may elect to convert such
Borrowing to a different Type or to continue such Borrowing and, in the case of
a Eurodollar Syndicated Borrowing, may elect Interest Periods therefor, all as
provided in this Section. The relevant Borrower may elect different options with
respect to different portions of the affected Borrowing, in which case each such
portion shall be allocated ratably among the Lenders holding the Loans
comprising such Borrowing, and the Loans comprising each such portion shall be
considered a separate Borrowing. As provided in the definition of "Interest
Period" in Section 1.01, the Loans comprising any Eurodollar Syndicated
Borrowing with an Interest Period that commences prior to November 1, 1999 and
terminates on or after November 1, 1999 shall automatically be converted to ABR
Loans on November 1, 1999. This Section shall not apply to Competitive
Borrowings, which may not be converted or continued.
(b) To make an election pursuant to this Section, the relevant
Borrower shall notify the Administrative Agent of such election by telephone by
the time that a Borrowing Request would be required under Section 2.03 if such
Borrower were requesting a Syndicated
364-Day Credit Agreement
26
-22-
Borrowing of the Type resulting from such election to be made on the effective
date of such election. Each such telephonic Interest Election Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Interest Election Request in a form approved
by the Administrative Agent and signed by the relevant Borrower.
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:
(i) the name of the Borrower and Borrowing to which such Interest
Election Request applies and, if different options are being elected with
respect to different portions thereof, the portions thereof to be
allocated to each resulting Borrowing (in which case the information to be
specified pursuant to clauses (iii) and (iv) below shall be specified for
each resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the relevant Borrower shall be deemed to
have selected an Interest Period of one week's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the relevant Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Syndicated Borrowing prior to the
end of the Interest Period applicable thereto, then, unless such Borrowing is
repaid as provided herein, at the end of such Interest Period such Borrowing
shall be converted to an ABR Borrowing. Notwithstanding any contrary provision
hereof, if an Event of Default has occurred and is continuing and the
Administrative Agent, at the request of the Required Lenders, so notifies the
relevant Borrower, then, so long as an Event of Default is continuing (i) no
outstanding Syndicated Borrowing may be converted to or continued as a
Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Syndicated
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.
364-Day Credit Agreement
27
-23-
SECTION 2.07. Termination and Reduction of Commitments.
(a) Unless previously terminated, the Commitments shall terminate at
the close of business on the Revolving Credit Maturity Date.
(b) Upon the occurrence of either (i) a Change in Control or (ii) a
Disposition of all or any substantial part of the assets of the Company in
connection with a reorganization of the Company and its Subsidiaries in
connection with the establishment of a mutual holding company, the
Administrative Agent shall, at the request of the Required Lenders, by notice to
the Borrowers, terminate the Commitments, and thereupon the Commitments shall
terminate immediately.
(c) The Borrowers may at any time terminate, or from time to time
reduce, the Commitments; provided that (i) each reduction of the Commitments
shall be in an amount that is an integral multiple of $10,000,000 and (ii) the
Borrowers shall not terminate or reduce the Commitments if, after giving effect
to any concurrent prepayment of the Loans in accordance with Section 2.09, the
sum of the Credit Exposures plus the aggregate principal amount of outstanding
Competitive Loans would exceed the total Commitments.
(d) The Borrowers shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (c) of this
Section at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrowers pursuant to this Section shall be irrevocable; provided that a notice
of termination of the Commitments delivered by the Borrowers may state that such
notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Borrowers (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments
shall be permanent. Each reduction of the Commitments shall be made ratably
among the Lenders in accordance with their respective Commitments.
SECTION 2.08. Repayment of Loans; Conversion of Revolving Loans to
Term Loans; Evidence of Debt.
(a) Each Borrower hereby unconditionally promises to pay (i) to the
Administrative Agent for account of each Lender the then unpaid principal amount
of each Revolving Loan made to such Borrower hereunder on the Revolving Credit
Maturity Date, and (ii) to the Administrative Agent for account of each Lender
the then unpaid principal amount of each Competitive Loan made to such Borrower
on the last day of the Interest Period applicable to such Loan, provided that,
to the extent a Borrower shall have elected to convert any portion of the
outstanding Revolving Loans into Term Loans pursuant to Section 2.08(b), such
Term Loans shall mature (and such Borrower hereby unconditionally promises to
pay to the Administrative Agent for the account of each Lender the then unpaid
principal amount of each Term Loan) on the Term Loan Maturity Date.
364-Day Credit Agreement
28
-24-
(b) Each Borrower may, by notice to the Administrative Agent not
later than 11:00 a.m., New York time, one Business Day prior to the Revolving
Credit Maturity Date convert all Revolving Loans made to such Borrower that are
outstanding on the Revolving Credit Maturity Date into term loans (each, a "Term
Loan" and collectively, the "Term Loans"), provided that the aggregate amount of
Revolving Loans converted to Term Loans by the Borrowers pursuant to this
Section 2.03(b) shall not exceed $2,500,000,000. Each Term Loan shall bear
interest, until the payment in full thereof, at the rates provided for in
Section 2.11 and shall otherwise constitute a Syndicated Loan for all purposes
of this Agreement. The relevant Borrower hereby unconditionally promises to pay
to the Administrative Agent for account of the Lenders the unpaid principal
amount of the Term Loans made to such Borrower that are outstanding on the date
(the "Term Loan Maturity Date") that is one year after the Revolving Credit
Maturity Date (or, if such date is not a Business Day, the next preceding
Business Day).
(c) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of each Borrower to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
(d) The Administrative Agent shall maintain accounts in which it
shall record (i) the name of the Borrower and amount of each Loan made
hereunder, the Class and Type thereof and the Interest Period applicable
thereto, (ii) the amount of any principal or interest due and payable or to
become due and payable from each Borrower to each Lender hereunder and (iii) the
amount of any sum received by the Administrative Agent from either Borrower
hereunder for the account of the Lenders and each Lender's share thereof.
(e) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of either
Borrower to repay its Loans in accordance with the terms of this Agreement.
(f) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the relevant Borrower shall prepare, execute and
deliver to such Lender a promissory note payable to the order of such Lender
(or, if requested by such Lender, to such Lender and its registered assigns) and
in a form approved by the Administrative Agent. Thereafter, the Loans evidenced
by such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.09. Prepayment of Loans.
(a) Each Borrower shall have the right at any time and from time to
time to prepay any Borrowing of such Borrower in whole or in part, subject to
prior notice in accordance with paragraph (b) of this Section; provided that no
Borrower shall have the right to prepay any Competitive Loan without the prior
consent of the Lender thereof.
364-Day Credit Agreement
29
-25-
(b) The Borrowers shall notify the Administrative Agent by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Syndicated Borrowing, not later than 11:00 a.m., New
York City time, three Business Days before the date of prepayment, or (ii) in
the case of prepayment of an ABR Borrowing, not later than 11:00 a.m., New York
City time, one Business Day before the date of prepayment. Each such notice
shall be irrevocable and shall specify the name of the Borrower, the prepayment
date and the principal amount of each Borrowing or portion thereof to be
prepaid; provided that, if a notice of prepayment is given in connection with a
conditional notice of termination of the Commitments as contemplated by Section
2.07, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.07. Promptly following
receipt of any such notice relating to a Syndicated Borrowing, the
Administrative Agent shall advise the Lenders of the contents thereof. Each
partial prepayment of any Syndicated Borrowing shall be in an amount that would
be permitted in the case of an advance of a Syndicated Borrowing of the same
Type as provided in Section 2.02. Each prepayment of a Syndicated Borrowing
shall be applied ratably to the Loans included in the prepaid Borrowing.
Prepayments shall be accompanied by accrued interest to the extent required by
Section 2.11.
(c) Upon the occurrence of either (i) a Change in Control, or (ii) a
Disposition of all or any substantial part of the assets of the Company in
connection with a reorganization of the Company and its Subsidiaries in
connection with the establishment of a mutual holding company, each Borrower
agrees that if requested by the Administrative Agent (acting at the request of
Lenders holding more than 50% of the aggregate principal amount of Loans
outstanding hereunder), such Borrower will promptly prepay each Loan, together
with accrued interest; provided that no prepayment of any Competitive Loan shall
be made without the prior consent of the Lender thereof.
SECTION 2.10. Fees.
(a) The Company agrees to pay to the Administrative Agent for
account of each Lender a facility fee, which shall accrue at the Applicable Rate
on the daily amount of the Commitment of such Lender (whether used or unused)
during the period from and including the date hereof to but excluding the date
on which such Commitment terminates; provided that, if such Lender continues to
have any Credit Exposure after its Commitment terminates, then such facility fee
shall continue to accrue on the daily amount of such Lender's Credit Exposure
from and including the date on which its Commitment terminates to but excluding
the date on which such Lender ceases to have any Credit Exposure. Accrued
facility fees shall be payable in arrears on the last day of March, June,
September and December of each year and on the date on which the Loans are paid
in full, commencing on the first such date to occur after the date hereof. All
facility fees shall be computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).
(b) The Company agrees to pay to the Administrative Agent for
account of each Lender a utilization fee, which shall accrue at the Applicable
Rate on the daily aggregate outstanding principal amount of Loans (including
Competitive Loans) of such Lender for each day on which the aggregate
outstanding principal amount of the Loans (including Competitive Loans) equals
or exceeds an amount equal to 33-1/3% of the Commitments. Accrued utilization
fees shall be payable in arrears on the last day of March, June, September and
December of each
364-Day Credit Agreement
30
-26-
year and on the date on which the Commitments terminate, commencing on the first
such date to occur after the date hereof. All utilization fees shall be computed
on the basis of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day).
(c) Each Borrower agrees to pay to the Administrative Agent for its
own account a fee for each Competitive Bid Request submitted by such Borrower
under Section 2.04 in an amount equal to $2,500.
(d) The Borrowers agree to pay to the Administrative Agent, for its
own account, fees payable in the amounts and at the times separately agreed upon
between the Borrowers and the Administrative Agent.
(e) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent for distribution, in
the case of utilization and facility fees, to the Lenders. Fees paid shall not
be refundable under any circumstances.
SECTION 2.11. Interest.
(a) The Loans comprising each ABR Borrowing shall bear interest at
the Alternate Base Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest (i) in the case of a Eurodollar Syndicated Loan, at the Adjusted
Eurodollar Rate for the Interest Period in effect for such Borrowing plus the
Applicable Rate, or (ii) in the case of a Eurodollar Competitive Loan, at the
LIBO Rate for the Interest Period in effect for such Borrowing plus (or minus,
as applicable) the Margin applicable to such Loan.
(c) Each Fixed Rate Loan shall bear interest at the Fixed Rate
applicable to such Loan.
(d) During the period from and including November 1, 1999 to and
including January 15, 2000, all Loans (other than Competitive Loans) shall be
ABR Loans (and all then-outstanding Eurodollar Syndicated Loans shall be
converted to ABR Loans on November 1, 1999).
(e) Notwithstanding the foregoing, if any principal of or interest
on any Loan or any fee or other amount payable by either Borrower hereunder is
not paid when due, whether at stated maturity, upon acceleration or otherwise,
such overdue amount shall bear interest, after as well as before judgment, at a
rate per annum equal to (i) in the case of overdue principal of any Loan, 2%
plus the rate otherwise applicable to such Loan as provided in the preceding
paragraphs of this Section or (ii) in the case of any other amount, 2% plus the
rate applicable to ABR Loans as provided in paragraph (a) of this Section.
(f) Accrued interest on each Loan shall be payable in arrears on
each Interest Payment Date for such Loan and, in the case of Revolving Loans,
upon termination of the Commitments; provided that (i) interest accrued pursuant
to paragraph (e) of this Section shall be
364-Day Credit Agreement
31
-27-
payable on demand, (ii) in the event of any repayment or prepayment of any Loan
(other than a prepayment of an ABR Loan prior to the end of the Availability
Period), accrued interest on the principal amount repaid or prepaid shall be
payable on the date of such repayment or prepayment and (iii) in the event of
any conversion of any Eurodollar Syndicated Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion.
(g) All interest hereunder shall be computed on the basis of a year
of 360 days, except that interest computed by reference to the Alternate Base
Rate at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Alternate Base Rate,
Adjusted Eurodollar Rate, LIBO Rate or NIBO Rate shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest
error.
SECTION 2.12. Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall
be conclusive absent manifest error) that adequate and reasonable means do
not exist for ascertaining the Adjusted Eurodollar Rate, the LIBO Rate or
the NIBO Rate, as applicable, for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders (or,
in the case of a Eurodollar Competitive Loan, the Lender that is required
to make such Loan) that the Adjusted Eurodollar Rate, the LIBO Rate or the
NIBO Rate, as applicable, for such Interest Period will not adequately and
fairly reflect the cost to such Lenders (or Lender) of making or
maintaining their Loans (or its Loan) included in such Borrowing for such
Interest Period;
then the Administrative Agent shall give notice thereof to the Borrowers and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the relevant Borrower and the Lenders
that the circumstances giving rise to such notice no longer exist, (i) any
Interest Election Request that requests the conversion of any Syndicated
Borrowing to, or continuation of any Syndicated Borrowing as, a Eurodollar
Borrowing shall be ineffective, (ii) if any Borrowing Request requests a
Eurodollar Syndicated Borrowing, such Borrowing shall be made as an ABR
Borrowing and (iii) any request by the relevant Borrower for a Eurodollar
Competitive Borrowing shall be ineffective; provided that (A) if the
circumstances giving rise to such notice do not affect all the Lenders, then
requests by such Borrower for Eurodollar Competitive Borrowings may be made to
Lenders that are not affected thereby and (B) if the circumstances giving rise
to such notice affect only one Type of Borrowings, then the other Type of
Borrowings shall be permitted.
364-Day Credit Agreement
32
-28-
SECTION 2.13. Increased Costs.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit
or similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted Eurodollar Rate); or
(ii) impose on any Lender or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans or Fixed Rate Loans
made by such Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan or Fixed Rate Loan (or of
maintaining its obligation to make any such Loan) or to reduce the amount of any
sum received or receivable by such Lender hereunder (whether of principal,
interest or otherwise), then the relevant Borrower will pay to such Lender such
additional amount or amounts as will compensate such Lender for such additional
costs incurred or reduction suffered.
(b) If any Lender determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of return
on such Lender's or the capital or on the capital of such Lender's holding
company, if any, as a consequence of this Agreement or the Loans made to a level
below that which such Lender or such Lender's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy), then from time to time each Borrower will pay to such Lender,
as the case may be, such additional amount or amounts as will compensate such
Lender or such Lender's holding company for any such reduction suffered.
(c) A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section shall be delivered to the
relevant Borrower(s) and shall be conclusive absent manifest error. Such
Borrower(s) shall pay such Lender, as the case may be, the amount shown as due
on any such certificate within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender's right to demand such compensation; provided that no Borrower shall be
required to compensate a Lender pursuant to this Section for any increased costs
or reductions incurred more than 90 days prior to the date that such Lender
notifies the relevant Borrower(s) of the Change in Law giving rise to such
increased costs or reductions and of such Lender's intention to claim
compensation therefor; provided further that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the 270-day period
referred to above shall be extended to include the period of retroactive effect
thereof.
364-Day Credit Agreement
33
-29-
(e) Notwithstanding the foregoing provisions of this Section, a
Lender shall not be entitled to compensation pursuant to this Section in respect
of any Competitive Loan if the Change in Law that would otherwise entitle it to
such compensation shall have been publicly announced prior to submission of the
Competitive Bid pursuant to which such Loan was made.
SECTION 2.14. Break Funding Payments. In the event of (a) the
payment of any principal of any Eurodollar Loan or Fixed Rate Loan other than on
the last day of an Interest Period applicable thereto (including, without
limitation, as a result of a mandatory prepayment under Section 2.09(c) or an
Event of Default), (b) the conversion of any Eurodollar Syndicated Loan other
than on the last day of the Interest Period applicable thereto (including any
conversion thereof on November 1, 1999, pursuant to clause (v) of the definition
of "Interest Period" in Section 1.01), (c) the failure to borrow, convert,
continue or prepay any Syndicated Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under Section 2.09(b) and is revoked in accordance therewith), (d) the failure
to borrow any Competitive Loan after accepting the Competitive Bid to make such
Loan, or (e) the assignment of any Eurodollar Loan or Fixed Rate Loan other than
on the last day of the Interest Period applicable thereto as a result of a
request by either Borrower pursuant to Section 2.17, then, in any such event,
the relevant Borrower shall compensate each Lender for the loss, cost and
expense attributable to such event. In the case of a Eurodollar Loan, such loss,
cost or expense to any Lender shall be deemed to include an amount determined by
such Lender to be the excess, if any, of (i) the amount of interest which would
have accrued on the principal amount of such Loan had such event not occurred,
at the Adjusted Eurodollar Rate (or LIBO Rate, in the case of a Competitive
Loan) that would have been applicable to such Loan, for the period from the date
of such event to the last day of the then current Interest Period therefor (or,
in the case of a failure to borrow, convert or continue, for the period that
would have been the Interest Period for such Loan), over (ii) the amount of
interest which would accrue on such principal amount for such period at the
interest rate which such Lender would bid were it to bid, at the commencement of
such period, for dollar deposits of a comparable amount and period from other
banks in the eurodollar market. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to the relevant Borrower and shall be conclusive
absent manifest error. Such Borrower shall pay such Lender the amount shown as
due on any such certificate within 10 days after receipt thereof.
SECTION 2.15. Taxes.
(a) Any and all payments by or on account of any obligation of each
Borrower hereunder shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if either Borrower shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section) the Administrative Agent or Lender (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) such Borrower shall make such deductions and (iii)
such Borrower shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.
364-Day Credit Agreement
34
-30-
(b) In addition, each Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Each Borrower shall indemnify the Administrative Agent and each
Lender within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent or such
Lender, as the case may be, on or with respect to any payment by or on account
of any obligation of such Borrower hereunder (including Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to the relevant Borrower by a Lender, or by the Administrative Agent on its own
behalf or on behalf of a Lender, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the relevant Borrower to a Governmental Authority, such Borrower
shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
relevant Borrower is located, or any treaty to which such jurisdiction is a
party, with respect to payments under this Agreement shall deliver to such
Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law, such properly completed and executed documentation
prescribed by applicable law or reasonably requested by such Borrower as will
permit such payments to be made without withholding or at a reduced rate.
SECTION 2.16. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs.
(a) Each Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest or fees, or of amounts payable under
Section 2.13, 2.14 or 2.15, or otherwise) prior to noon, New York City time, on
the date when due, in immediately available funds, without set-off or
counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to the Administrative Agent at its offices at 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, except that payments pursuant to Sections 2.13,
2.14, 2.15 and 9.03 shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension. All payments
hereunder shall be made in dollars.
364-Day Credit Agreement
35
-31-
(b) If at any time insufficient funds are received by and available
to the Administrative Agent to pay fully all amounts of principal, interest and
fees then due hereunder, such funds shall be applied (i) first, towards payment
of interest and fees then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of interest and fees then due to such
parties, and (ii) second, towards payment of principal then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Syndicated Loans resulting in such Lender receiving
payment of a greater proportion of the aggregate amount of its Syndicated Loans
and accrued interest thereon than the proportion received by any other Lender,
then the Lender receiving such greater proportion shall purchase (for cash at
face value) participations in the Syndicated Loans of other Lenders to the
extent necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Syndicated Loans; provided that (i) if any
such participations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by either Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans to any assignee
or participant, other than to the Company or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). Each Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against such Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of such Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from
the relevant Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders hereunder that such Borrower
will not make such payment, the Administrative Agent may assume that such
Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders, the amount due. In
such event, if such Borrower has not in fact made such payment, then each of the
Lenders, severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender with interest thereon, for each
day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of the
Federal Funds Rate and a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.05(b) or 2.16(d), then the Administrative Agent may,
in its discretion (notwithstanding any contrary provision hereof), apply any
amounts thereafter received by the Administrative Agent for the account of such
Lender to satisfy such Lender's obligations under such Sections until all such
unsatisfied obligations are fully paid.
364-Day Credit Agreement
36
-32-
SECTION 2.17. Mitigation Obligations; Replacement of Lenders.
(a) If any Lender requests compensation under Section 2.13, or if
either Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.15,
then such Lender shall, upon the request of such Borrower, use reasonable
efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 2.13 or 2.15, as the case may be, in the future and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. Each Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) If any Lender (or any Participant in Loans made by such Lender)
requests compensation under Section 2.13, or if either Borrower is required to
pay any additional amount to any Lender (or any Participant in Loans made by
such Lender) or any Governmental Authority for account of any Lender (or any
Participant in Loans made by such Lender) pursuant to Section 2.15, or if any
Lender defaults in its obligation to fund Loans hereunder, then the Company may,
at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement
(other than any outstanding Competitive Loans held by it) to an assignee that
shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) the Company shall have received the
prior written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans (other than Competitive
Loans), accrued interest thereon, accrued fees and all other amounts payable to
it hereunder, from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or the relevant Borrower (in the case of all other
amounts) and (iii) in the case of any such assignment resulting from a claim for
compensation under Section 2.13 or payments required to be made pursuant to
Section 2.15, such assignment will result in a reduction in such compensation or
payments. A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Company to require such assignment
and delegation cease to apply.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Lenders that:
SECTION 3.01. Organization; Powers. The Company and each of its
Material Subsidiaries is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, has all requisite power
and authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could
364-Day Credit Agreement
37
-33-
not reasonably be expected to result in a Material Adverse Change, is qualified
to do business in, and is in good standing in, every jurisdiction where such
qualification is required.
SECTION 3.02. Authorization; Enforceability. The Transactions are
within each Borrower's corporate powers and have been duly authorized by all
necessary corporate action. This Agreement and the Support Agreement have been
duly executed and delivered by each Borrower and each constitutes a legal, valid
and binding obligation of each Borrower, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions
(other than the Acquisition Transactions) (a) do not require any consent or
approval of, registration or filing with, or any other action by, any
Governmental Authority, except such as have been obtained or made and are in
full force and effect, (b) will not violate any applicable law or regulation or
the charter, by-laws or other organizational documents of either Borrower or any
order of any Governmental Authority, and (c) will not violate or result in a
default under any indenture, agreement or other instrument binding upon either
Borrower or its assets, or give rise to a right thereunder to require any
payment to be made by either Borrower.
SECTION 3.04. Financial Condition; No Material Adverse Change.
(a) The Company has heretofore furnished to the Lenders (i) its
audited consolidated balance sheet and statements of earnings, equity and cash
flows as of and for the fiscal year ended December 31, 1998, reported on by
Deloitte & Touche, LLP, independent public accountants, (ii) its unaudited
summary consolidated balance sheet and summary statements of earnings, equity
and cash flows as of and for the six-month period ended June 30, 1999 and (iii)
an unaudited consolidated balance sheet and income statement for GAC for the
six-month period ended June 30, 1999. The financial statements referred to in
the preceding clauses (i) and (ii) present fairly, in all material respects, the
financial position and results of operations and cash flows of the Company and
its consolidated Subsidiaries, as of the respective dates thereof and for such
respective fiscal periods, in accordance with GAAP. The Company has received the
financial statements referred to in the preceding clause (iii) and nothing
disclosed in said financial statements would cause the Company not to proceed
with the Acquisition Transactions.
(b) The Company has heretofore furnished to each of the Lenders the
annual Statutory Statement of the Company as at and for the year ended December
31, 1998, as filed with the Applicable Insurance Regulatory Authority. Such
Statutory Statement presents fairly, in all material respects, the financial
position and results of operations of the Company , as of the date thereof and
for such year, in accordance with SAP.
(c) Since June 30, 1999 there has been no material adverse change in
the business, assets, property, condition (financial or otherwise) or prospects
of the Company and its Subsidiaries taken as a whole from that set forth in the
respective financial statements referred to in Section 3.04(a).
364-Day Credit Agreement
38
-34-
SECTION 3.05. Properties.
(a) The Company and each of its Material Subsidiaries has good title
to, or valid leasehold interests in, all its real and personal property material
to its business, except for minor defects in title that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Change.
(b) The Company and each of its Material Subsidiaries owns, or is
licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and the use thereof by the
Company and its Material Subsidiaries does not infringe upon the rights of any
other Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Change.
SECTION 3.06. Litigation and Environmental Matters.
(a) There are no actions, suits or proceedings by or before any
arbitrator or Governmental Authority pending against or, to the knowledge of the
Company or Funding, threatened against or affecting the Company or any of its
Material Subsidiaries, (i) as to which there is a reasonable possibility of an
adverse determination and that, if adversely determined, is reasonably likely,
individually or in the aggregate, to result in a Material Adverse Change (other
than the Disclosed Matters) or (ii) that involve this Agreement or the
Transactions (other than the Acquisition Transactions). Other than a proceeding
to obtain required court approval of the Acquisition Transactions in the State
of Missouri, no action, suit or proceeding by or before any Governmental
Authority is pending or, to the knowledge of the Company, threatened, which
would have the effect of preventing the consummation of the Acquisition
Transactions, or of imposing conditions that are reasonably likely, individually
or in the aggregate, to result in a Material Adverse Change. There are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Company, threatened
against or affecting GAC or any of its Subsidiaries, in connection with the
Acquisition Transactions and as to which there is a reasonable possibility of an
adverse determination and that, if adversely determined, is reasonably likely,
individually or in the aggregate, to result in a Material Adverse Change.
(b) Except for the Disclosed Matters and except with respect to any
other matters that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Change, neither the Company nor any of
its Material Subsidiaries (i) has failed to comply with any Environmental Law or
to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law, (ii) has become subject to any
Environmental Liability, (iii) has received notice of any claim with respect to
any Environmental Liability or (iv) knows of any basis for any Environmental
Liability.
SECTION 3.07. Compliance with Laws and Agreements. The Company and
each of its Material Subsidiaries is in compliance with all laws, regulations
and orders of any Governmental Authority applicable to it or its property and
all indentures, agreements and other instruments binding upon it or its
property, except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Change. No
Default has occurred and is continuing.
364-Day Credit Agreement
39
-35-
SECTION 3.08. Investment and Holding Company Status. Neither the
Company nor any of its Material Subsidiaries (other than Funding) is an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940, and Funding is an "investment company" as
defined in such Act that is exempt from the requirements of such Act. Neither
the Company nor any of its Material Subsidiaries is a "holding company" as
defined in, or subject to regulation under, the Public Utility Holding Company
Act of 1935.
SECTION 3.09. Taxes. The Company and each of its Subsidiaries has
timely filed or caused to be filed all tax returns and reports required to have
been filed and has paid or caused to be paid all Taxes required to have been
paid by it, except (a) Taxes that are being contested in good faith by
appropriate proceedings and for which the Company or such Subsidiary, as
applicable, has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Change.
SECTION 3.10. ERISA. Each Plan and, to the knowledge of the Company,
each Multiemployer Plan, is in compliance in all material respects with, and has
been administered in all material respects with, the applicable provisions of
ERISA, the Code and any other Federal or State law, and no ERISA Event has
occurred or is reasonably expected to occur that, when taken together with all
other such ERISA Events for which liability is reasonably expected to occur,
could reasonably be expected to result in a Material Adverse Change.
SECTION 3.11. Disclosure. None of the reports, financial statements,
certificates or other information furnished by or on behalf of the Company to
the Administrative Agent or any Lender in connection with the negotiation of
this Agreement or delivered hereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided that
(a) with respect to projected financial information, the Company represents only
that such information was prepared in good faith based upon assumptions believed
to be reasonable at the time, and (b) the Company is considering selling its
existing U.S. commercial finance operations.
SECTION 3.12. Margin Stock. No part of the proceeds of any Loan
hereunder will be used, whether directly or indirectly, for any purpose that
entails a violation of any of the Regulations of the Board, including
Regulations U and X. Not more than 25% of the value (as determined by any
reasonable method) of the assets of either the Company or Funding is represented
by Margin Stock.
SECTION 3.13. Year 2000. Substantially all programming required to
handle all material dates and date processing, in and following the year 2000,
of (i) the Company's and each of its Material Subsidiaries' computer systems and
(ii) equipment containing embedded microchips (including systems and equipment
supplied by others or with which the Company's or such Material Subsidiaries'
systems interface) and the testing of all such systems and equipment, as so
reprogrammed, has been substantially completed. The above sentence regarding
year 2000 includes only Company-owned software and does not extend to any
third-party devices, operating systems, computers, other software or networks.
The expected cost to the Company and its Material Subsidiaries of such
reprogramming and testing and of the reasonably foreseeable consequences of year
2000 to the Company and its Material Subsidiaries
364-Day Credit Agreement
40
-36-
(including, without limitation, reprogramming errors and the failure of others'
systems or equipment) is not anticipated to result in a Default or a Material
Adverse Change.
SECTION 3.14. Support Agreement. The Company has heretofore
delivered to the Administrative Agent a complete and correct copy of the Support
Agreement, as in effect on the date hereof, including all schedules, exhibits
and annexes thereto. The Support Agreement is in full force and effect and
neither party is in default of any of its obligations thereunder.
SECTION 3.15. Acquisition Agreement. The Company has heretofore
delivered to the Administrative Agent a complete and correct copy of the
Acquisition Agreement, as in effect on the date hereof, including all schedules,
exhibits and annexes thereto. The Acquisition Agreement is in full force and
effect and, to the knowledge of the Company, no party is in default of any of
its obligations thereunder. In addition, the Company has heretofore delivered to
the Administrative Agent a complete and correct copy of the offer to the holders
to funding agreements issued by GALIC pursuant to which the Exchange Program is
to be effected.
ARTICLE IV
CONDITIONS
SECTION 4.01. Effective Date. The obligations of the Lenders to make
Loans hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have received
from each party hereto either (i) a counterpart of this Agreement signed
on behalf of such party or (ii) written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page of this Agreement) that such party has signed a counterpart
of this Agreement.
(b) The Administrative Agent shall have received an opinion,
addressed to it and the Lenders and dated the Effective Date, of Xxxx
Xxxxxxxx, Vice President and Investment Counsel to the Company,
substantially in the form of Exhibit B, and covering such other matters
relating to the Borrowers, this Agreement or the Transactions as the
Required Lenders shall reasonably request. The Borrowers hereby request
such counsel to deliver such opinion.
(c) The Administrative Agent shall have received an opinion,
addressed to it and the Lenders and dated the Effective Date, of Milbank,
Tweed, Xxxxxx and XxXxxx LLP, special New York counsel to Chase,
substantially in the form of Exhibit X. Xxxxx hereby instructs such
counsel to deliver such opinion to the Lenders and the Administrative
Agent.
(d) The Administrative Agent shall have received such documents and
certificates as the Administrative Agent, its counsel or any Lender may
reasonably
364-Day Credit Agreement
41
-37-
request relating to the organization, existence and good standing of each
of the Borrowers, the authorization of the Transactions and any other
legal matters relating to the Borrowers, this Agreement or the
Transactions, all in form and substance satisfactory to the Administrative
Agent and its counsel.
(e) The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Effective Date, including, to
the extent invoiced, reimbursement or payment of all out-of-pocket
expenses required to be reimbursed or paid by the Borrowers hereunder.
(f) The Administrative Agent shall have received evidence that the
financial strength ratings of the Company, as rated by S&P and Xxxxx'x
Investors Service, Inc. are at least AA- (as rated by S&P) or Aa3 (as
rated by Xxxxx'x Investors Service, Inc.).
(g) The Exchange Program shall be in the process of occurring or
shall have occurred in all material respects in accordance with the
applicable acquisition agreements (including having obtained all
governmental and third party approvals necessary in connection with the
Exchange Program and the continuing operations of the Company and its
subsidiaries after giving effect to the Exchange Program, with all
applicable waiting periods having expired without any action being taken
or threatened by any competent authority which would restrain, prevent or
otherwise impose materially adverse conditions on the Exchange Program or
the financing thereof), and the Administrative Agent shall have received a
certificate, dated the Effective Date, to such effect from a Financial
Officer of the Company.
(h) Any governmental and third party approvals necessary in
connection with this Agreement shall have been obtained and any applicable
waiting periods shall have expired without any action being taken or
threatened by any competent authority which would restrain, prevent or
otherwise impose adverse conditions on the financing provided for herein
and there shall not have occurred any adverse action by any regulatory
authority that would prevent the consummation of the Acquisition, and the
Administrative Agent shall have received a certificate, dated the
Effective Date, to such effect from a Financial Officer of the Company.
The Administrative Agent shall notify the Borrowers and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.02) at or prior to 3:00 p.m., New York City time, on
September 29, 1999 (and, in the event such conditions are not so satisfied or
waived, the Commitments shall terminate at such time).
364-Day Credit Agreement
42
-38-
SECTION 4.02. Each Credit Event. The obligation of each Lender
to make a Loan on the occasion of any Borrowing, is subject to the satisfaction
of the following conditions:
(a) The representations and warranties of each of the
Borrowers set forth in this Agreement (other than, after the Effective
Date, in Section 3.04(c) and in Section 3.06) shall be true and correct
on and as of the date of such Borrowing.
(b) At the time of and immediately after giving effect to such
Borrowing, no Default shall have occurred and be continuing.
Each Borrowing shall be deemed to constitute a representation and warranty by
each Borrower on the date thereof as to the matters specified in paragraphs (a)
and (b) of this Section.
ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full, each Borrower covenants and agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other Information. The
Company will furnish to the Administrative Agent and each Lender:
(a) as soon as they are available but in any event within 120
days after the end of each fiscal year of the Company, its audited
consolidated balance sheet and related statements of earnings, equity
and cash flows as of the end of and for such year, setting forth in
each case in comparative form the figures for the previous fiscal year,
all reported on by Deloitte & Touche, LLP or other independent public
accountants of recognized national standing (without a "going concern"
or like qualification or exception and without any qualification or
exception as to the scope of such audit) to the effect that such
consolidated financial statements present fairly in all material
respects the financial condition and results of operations of the
Company and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied;
(b) concurrently with any delivery of financial statements
under clause (a) above or (except as to clause (ii) of this paragraph
(b)) clause (c) or (d) below, a certificate of a Financial Officer of
the Company (i) certifying as to whether a Default has occurred and, if
a Default has occurred, specifying the details thereof and any action
taken or proposed to be taken with respect thereto, (ii) setting forth
reasonably detailed calculations demonstrating compliance with Section
6.04 and (iii) stating whether any change in GAAP or SAP, as the case
may be, or in the application thereof has occurred since the date of
the financial statements referred to in Section 3.04 and, if any such
change has occurred, specifying the effect of such change on the
financial statements accompanying such certificate;
364-Day Credit Agreement
43
-39-
(c) within 5 days after filing with the Applicable Insurance
Regulatory Authority and in any event within 60 days after the end of
each year, the annual Statutory Statement of the Company for such year,
certified by one of its Financial Officers as presenting fairly in all
material respects the financial position of the Company for such year
in accordance with SAP;
(d) within 5 days after filing with the Applicable Insurance
Regulatory Authority and in any event within 60 days after the end of
each of the first three quarterly periods of each year, the quarterly
Statutory Statement of the Company for such period, certified by one of
its Financial Officers as presenting fairly in all material respects
the financial position of the Company for such period in accordance
with SAP; and
(e) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of the Company or any of its Subsidiaries, or compliance with
the terms of this Agreement, as the Administrative Agent or any Lender
may reasonably request.
SECTION 5.02. Notices of Defaults. The Borrowers will furnish
to the Administrative Agent and each Lender prompt written notice of the
occurrence of any Default. Each such notice shall be accompanied by a statement
of a Financial Officer or other executive officer of the Company setting forth
the details of the event or development requiring such notice and any action
taken or proposed to be taken with respect thereto.
SECTION 5.03. Existence; Conduct of Business. The Company
will, and will cause each of its Material Subsidiaries to, do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence and the rights, licenses, permits, privileges and franchises
material to the conduct of its business; provided that the foregoing shall not
prohibit any merger, consolidation, liquidation, dissolution or other
transaction permitted under Section 6.02.
SECTION 5.04. Payment of Obligations. The Company will, and
will cause each of its Material Subsidiaries to, pay its obligations, including
Tax liabilities, that, if not paid, could result in a Material Adverse Change
before the same shall become delinquent or in default, except where (a) the
validity or amount thereof is being contested in good faith by appropriate
proceedings, (b) the Company or such Material Subsidiary has set aside on its
books adequate reserves with respect thereto in accordance with GAAP and (c) the
failure to make payment pending such contest could not reasonably be expected to
result in a Material Adverse Change.
SECTION 5.05. Maintenance of Properties; Insurance. The
Company will, and will cause each of its Material Subsidiaries to, (a) keep and
maintain all property material to the conduct of its business in good working
order and condition, ordinary wear and tear excepted, and (b) maintain, with
financially sound and reputable insurance companies, insurance in such amounts
and against such risks as are customarily maintained by companies engaged in the
same or similar businesses operating in the same or similar locations.
364-Day Credit Agreement
44
-40-
SECTION 5.06. Books and Records; Inspection Rights. The
Company will, and will cause each of its Material Subsidiaries to, keep proper
books of record and account in which full, true and correct entries are made of
all dealings and transactions in relation to its business and activities. The
Company will, and will cause each of its Material Subsidiaries to, permit any
representative designated by the Administrative Agent (and, if a Default shall
have occurred and be continuing, any representatives designated by any Lender),
upon reasonable prior notice, to visit and inspect its properties, to examine
and make extracts from its books and records, and to discuss its affairs,
finances and condition with its officers and independent accountants, all at
such reasonable times and as often as reasonably requested.
SECTION 5.07. Compliance with Laws. The Company will, and will
cause each of its Material Subsidiaries to, comply with all laws, rules,
regulations and orders of any Governmental Authority applicable to it or its
property, except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Change.
SECTION 5.08. Use of Proceeds. The proceeds of the Loans will
be used only for general corporate purposes (including the back-up of commercial
paper issued in connection with the Acquisition Transactions) of the Company and
its Subsidiaries in the ordinary course of business; provided that no part of
the proceeds of any Loan will be used, whether directly or indirectly, for any
purpose that entails a violation of any of the Regulations of the Board,
including Regulations U and X; provided further that no part of the proceeds of
any Loan will be used, whether directly or indirectly, to acquire the capital
stock or business of any other Person without the consent of such Person; and
provided further that neither the Administrative Agent nor any Lender shall have
any responsibility as to the use of any such proceeds.
SECTION 5.09. Support Agreement. The Borrowers will maintain
the Support Agreement in full force and effect, and comply with the provisions
thereof, and will not modify, supplement or waive any of its provisions without
the prior consent of the Administrative Agent (with the approval of the Required
Lenders); provided that any modification, supplement or waiver that reduces or
impairs the support provided to Funding shall require the approval of all
Lenders.
ARTICLE VI
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the
principal of and interest on each Loan and all fees payable hereunder have been
paid in full, each Borrower covenants and agrees with the Lenders that:
SECTION 6.01. Liens. Neither Borrower will create, incur,
assume or permit to exist any Lien on any property or asset now owned or
hereafter acquired by it, or assign or sell any income or revenues (including
accounts receivable) or rights in respect of any thereof, except:
364-Day Credit Agreement
45
-41-
(a) Permitted Encumbrances;
(b) any Lien existing on any property or asset prior to the
acquisition thereof by such Borrower; provided that (i) such Lien is
not created in contemplation of or in connection with such acquisition,
(ii) such Lien shall not apply to any other property or assets of such
Borrower, and (iii) such Lien shall secure only those obligations which
it secures on the date of such acquisition;
(c) Liens on assets acquired, constructed or improved by such
Borrower; provided that (i) such security interests and the
Indebtedness secured thereby are incurred prior to or within 360 days
after such acquisition or the completion of such construction or
improvement, (ii) the Indebtedness secured thereby does not exceed the
cost of acquiring, constructing or improving such assets, and (iii)
such security interests shall not apply to any other property or assets
of such Borrower;
(d) Liens on any property or assets of any Person existing at
the time such Person is merged or consolidated with or into such
Borrower and not created in contemplation of such event;
(e) Liens on any real property securing Indebtedness in
respect of which (i) the recourse of the holder of such Indebtedness
(whether direct or indirect and whether contingent or otherwise) under
the instrument creating the Lien or providing for the Indebtedness
secured by the Lien is limited to such real property directly securing
such Indebtedness and (ii) such holder may not under the instrument
creating the Lien or providing for the Indebtedness secured by the Lien
collect by levy of execution or otherwise against assets or property of
such Borrower (other than such real property directly securing such
Indebtedness) if such Borrower fails to pay such Indebtedness when due
and such holder obtains a judgement with respect thereto;
(f) Liens arising out of Securities Transactions entered into
in the ordinary course of business and on ordinary business terms;
(g) Structured Transaction Liens;
(h) Liens arising out of Asset Securitizations;
(i) Liens on Separate Accounts Assets;
(j) Liens arising out of the ordinary course of the Company's
business that do not secure any Indebtedness; provided that the
obligations of the Company secured by such Liens shall not exceed
$2,000,000,000 at any one time outstanding;
(k) Liens not otherwise permitted by the foregoing clauses of
this Section 6.01; provided that the aggregate principal amount of the
Indebtedness secured by such Liens shall not exceed $3,000,000,000 at
any one time outstanding; and
364-Day Credit Agreement
46
-42-
(l) any extension, renewal or replacement of the foregoing;
provided that the Liens permitted hereunder shall not be spread to
cover any additional Indebtedness or assets (other than a substitution
of like assets) unless such additional Indebtedness or assets would
have been permitted in connection with the original creation,
incurrence or assumption of such Lien.
SECTION 6.02. Fundamental Changes.
(a) Neither Borrower will merge into or consolidate with any
other Person, or permit any other Person to merge into or consolidate with it,
or sell, transfer, lease or otherwise dispose of (in one transaction or in a
series of transactions) all or any substantial part of its assets (excluding
assets sold or disposed of in the ordinary course of business), or (in the case
of the Company) all or any substantial part of the stock of Funding (in each
case, whether now owned or hereafter acquired), or liquidate or dissolve;
provided that, if at the time thereof and immediately after giving effect
thereto no Default shall have occurred and be continuing (i) any Subsidiary of
the Company may merge into the Company in a transaction in which the Company is
the surviving corporation, (ii) Funding may sell, transfer, lease or otherwise
dispose of its assets to the Company, (iii) the Company may sell, transfer,
lease or otherwise dispose of (a "Disposition") any of its assets (other than
any substantial part of the stock of Funding) so long as (x) the Net Available
Proceeds of such Disposition, together with the Net Available Proceeds of all
prior Dispositions since the date hereof, shall not exceed an aggregate amount
equal to 50% of Net Worth as set out in the most recent consolidated financial
statements of the Company delivered pursuant to Section 3.04(a) or Section
5.01(a), as the case may be, prior to such Disposition, or (y) such Disposition
occurs in connection with the reorganization of the Company and its Subsidiaries
in connection with the establishment of a mutual holding company, (iv) the
Company may merge or consolidate with any other Person if the Company is the
surviving corporation, and (v) the Company may demutualize.
(b) The Company will not, and will not permit any of its
Material Subsidiaries to, engage to any material extent in any business other
than (i) businesses of the type conducted by the Company and its Material
Subsidiaries on the date of execution of this Agreement and businesses
reasonably related thereto or (ii) the business of providing financial services.
The Company will at all times remain as the principal operating company for the
Company and its Subsidiaries.
(c) The Company will not acquire all or any substantial part
of the outstanding common stock of GAC or any of its Subsidiaries (or any of
their assets) except in all material respects in accordance with the provisions
of the Acquisition Agreement as in effect on the date hereof.
SECTION 6.03. Transactions with Affiliates. The Company will
not, and will not permit any of its Material Subsidiaries to, sell, lease or
otherwise transfer any property or assets to, or purchase, lease or otherwise
acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except (a) in the ordinary course of
business at prices and on terms and conditions not less favorable to the Company
or such Material Subsidiary than could be obtained on an arm's-length basis from
unrelated third parties,
364-Day Credit Agreement
47
-43-
and (b) transactions between or among the Company and its wholly-owned
Subsidiaries not involving any other Affiliate.
SECTION 6.04. Net Worth. The Company will not, at any time,
permit Net Worth to be less than $9,300,000,000.
ARTICLE VII
EVENTS OF DEFAULT
If any of the following events ("Events of Default") shall
occur:
(a) either Borrower shall fail to pay any principal of any
Loan when and as the same shall become due and payable, whether at the
due date thereof or at a date fixed for prepayment thereof or
otherwise;
(b) either Borrower shall fail to pay any interest on any Loan
or any fee or any other amount (other than an amount referred to in
clause (a) of this Article) payable under this Agreement, when and as
the same shall become due and payable, and such failure shall continue
unremedied for a period of five or more Business Days;
(c) any representation or warranty made or deemed made by or
on behalf of the Company or any of its Material Subsidiaries in or in
connection with this Agreement or any amendment or modification hereof
or waiver hereunder, or in any report, certificate, financial statement
or other document furnished pursuant to or in connection with this
Agreement or any amendment or modification hereof or waiver hereunder,
shall prove to have been incorrect in any material respect when made or
deemed made;
(d) either Borrower shall fail to observe or perform any
covenant, condition or agreement contained in Section 5.02, 5.03 (with
respect to such Borrower's existence), 5.08 or 5.09 or in Article VI;
(e) either Borrower shall fail to observe or perform any
covenant, condition or agreement contained in this Agreement (other
than those specified in clause (a), (b) or (d) of this Article), and
such failure shall continue unremedied for a period of 30 days after
notice thereof from the Administrative Agent to the relevant Borrower
(which notice will be given at the request of any Lender);
(f) the Company or any of its Material Subsidiaries shall fail
to make any payment (whether of principal or interest and regardless of
amount) in respect of any Material Indebtedness, when and as the same
shall become due and payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice, the lapse of
time or both) the holder or holders of any Material Indebtedness or any
trustee or agent on its or their behalf to cause any Material
364-Day Credit Agreement
48
-44-
Indebtedness to become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (g) shall not apply to secured Indebtedness
that becomes due as a result of the voluntary sale or transfer of the
property or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of the Company or any of its
Material Subsidiaries or its debts, or of a substantial part of its
assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Company or any or its Material
Subsidiaries or for a substantial part of its assets, and, in any such
case, such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing
shall be entered;
(i) the Company or any of its Material Subsidiaries shall (i)
voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition
described in clause (h) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Company or any or its Material
Subsidiaries or for a substantial part of its assets, (iv) file an
answer admitting the material allegations of a petition filed against
it in any such proceeding, (v) make a general assignment for the
benefit of creditors or (vi) take any action for the purpose of
effecting any of the foregoing;
(j) the Company or any of its Material Subsidiaries shall
become unable, admit in writing or fail generally to pay its debts as
they become due;
(k) one or more judgments for the payment of money in an
aggregate amount in excess of $200,000,000 (or its equivalent in any
other currency) shall be rendered against the Company, any Material
Subsidiary of the Company or any combination thereof and the same shall
remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed; or
(l) an ERISA Event shall have occurred that, in the opinion of
the Required Lenders, when taken together with all other ERISA Events
that have occurred, could reasonably be expected to result in liability
of the Company and its Material Subsidiaries in an aggregate amount
exceeding $100,000,000 in any year;
then, and in every such event (other than an event with respect to either
Borrower described in clause (h) or (i) of this Article), and at any time
thereafter during the continuance of such event, (A) the Administrative Agent
may, and at the request of the Required Lenders shall, by notice to the
Borrowers, terminate the Commitments, and thereupon the Commitments shall
terminate immediately, and (B) the Administrative Agent may, and at the request
of the Lenders holding
364-Day Credit Agreement
49
-45-
more than 50% of the aggregate outstanding principal amount of the Loans shall,
by notice to the Borrowers, declare the Loans then outstanding to be due and
payable in whole (or in part, in which case any principal not so declared to be
due and payable may thereafter be declared to be due and payable), and thereupon
the principal of the Loans so declared to be due and payable, together with
accrued interest thereon and all fees and other obligations of the Borrowers
accrued hereunder, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrowers; and in case of any event with respect to either
Borrower described in clause (h) or (i) of this Article, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Borrowers accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrowers.
ARTICLE VIII
THE AGENTS
SECTION 8.01. Administrative Agent.
(a) Each of the Lenders hereby irrevocably appoints the
Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms hereof, together with such actions and
powers as are reasonably incidental thereto.
(b) The Person serving as the Administrative Agent hereunder
shall have the same rights and powers in its capacity as a Lender as any other
Lender and may exercise the same as though it were not the Administrative Agent,
and such Person and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Company or any Subsidiary or
other Affiliate thereof as if it were not the Administrative Agent hereunder.
(c) The Administrative Agent shall not have any duties or
obligations except those expressly set forth herein. Without limiting the
generality of the foregoing (a) the Administrative Agent shall not be subject to
any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated hereby that the
Administrative Agent is required to exercise in writing by the Required Lenders
(or such other number or percentage of the Lenders as shall be necessary under
the circumstances as provided in Section 9.02), and (c) except as expressly set
forth herein, the Administrative Agent shall not have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to the
Company or any of its Subsidiaries that is communicated to or obtained by the
Person serving as Administrative Agent or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not taken
by it with the consent or at the request of the Required
364-Day Credit Agreement
50
-46-
Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in Section 9.02) or in the absence of its
own gross negligence or wilful misconduct. The Administrative Agent shall be
deemed not to have knowledge of any Default unless and until written notice
thereof is given to the Administrative Agent by the Borrowers or a Lender, and
the Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made by
any other Person in or in connection with this Agreement, (ii) the contents of
any certificate, report or other document delivered hereunder or in connection
herewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement or any other
agreement, instrument or document, or (v) the satisfaction of any condition set
forth in Article IV or elsewhere herein, other than to confirm receipt of items
expressly required to be delivered to the Administrative Agent.
(d) The Administrative Agent shall be entitled to rely upon,
and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing
reasonably believed by it to be genuine and to have been signed or sent by the
proper Person. The Administrative Agent also may rely upon any statement made to
it orally or by telephone and believed by it to be made by the proper Person,
and shall not incur any liability for relying thereon. The Administrative Agent
may consult with legal counsel (who may be counsel for the Borrowers),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.
(e) The Administrative Agent may perform any and all its
duties and exercise its rights and powers by or through any one or more
sub-agents appointed by the Administrative Agent. The Administrative Agent and
any such sub-agent may perform any and all its duties and exercise its rights
and powers through their respective Related Parties. The exculpatory provisions
of the preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
(f) Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders and the Borrowers. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Borrowers, to appoint a successor. If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent which shall be a bank with an office in New York,
New York, or an Affiliate of any such bank. Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by the Borrowers to a successor Administrative Agent shall be the same
as those payable to its
364-Day Credit Agreement
51
-47-
predecessor unless otherwise agreed between the Borrowers and such successor.
After the Administrative Agent's resignation hereunder, the provisions of this
Section 8.01 and Section 9.03 shall continue in effect for the benefit of such
retiring Administrative Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while it was acting as Administrative Agent.
(g) Each Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender 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 Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any related agreement or any document furnished hereunder or thereunder.
SECTION 8.02. Syndication Agent and Joint-Arrangers. The
Syndication Agent and Joint-Arrangers named on the cover page of this Agreement,
in their capacity as such, shall have no obligation, responsibility or required
performance hereunder and shall not become liable in any manner to any party
hereto. No party hereto shall have any obligation or liability, or owe any
performance, hereunder, to the Syndication Agent and Joint-Arrangers in their
capacity as such.
SECTION 8.03. Documentation Agents. The Documentation Agents
named on the cover page of this Agreement, in their capacities as such, shall
have no obligation, responsibility or required performance hereunder and shall
not become liable in any manner to any party hereto. No party hereto shall have
any obligation or liability, or owe any performance, hereunder, to the
Documentation Agents, in their capacities as such.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Company or Funding, to it at 0 Xxxxxxx Xxxxxx,
Xxx Xxxx, XX 00000, Attention of Xxxxxxx X. Xxxxxxx, Senior Vice
President and Treasurer (Telecopy No. (000) 000-0000), with a copy to
the Company, 0 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention of Xxxxxxx
X. Xxxxxx, Assistant Vice President (Telecopy No. (000) 000-0000);
(b) if to the Administrative Agent, to The Chase Manhattan
Bank, The Loan & Agency Services Group, One Chase Xxxxxxxxx Xxxxx, 0xx
Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention of Xxxxx Xxxxxxx (Telecopy
No. (000) 000-0000), with a copy to The
364-Day Credit Agreement
52
-00-
Xxxxx Xxxxxxxxx Bank, 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention of Xxxxxxx X. Xxxxxxxxx (Telecopy No. (000) 000-0000);
and
(c) if to any Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02. Waivers; Amendments.
(a) No failure or delay by the Administrative Agent or any
Lender in exercising any right or power hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent and the
Lenders hereunder are cumulative and are not exclusive of any rights or remedies
that they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by the Borrowers therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this Section,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent or any Lender may have
had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Borrowers and the Required Lenders or by the
Borrowers and the Administrative Agent with the consent of the Required Lenders;
provided that no such agreement shall (i) increase the Commitment of any Lender
without the written consent of such Lender, (ii) reduce the principal amount of
any Loan or reduce the rate of interest thereon, or reduce any fees payable
hereunder, without the written consent of each Lender affected thereby, (iii)
postpone the scheduled date of payment of the principal amount of any Loan, or
any interest thereon, or any fees payable hereunder, or reduce the amount of,
waive or excuse any such payment, or postpone the scheduled date of expiration
of any Commitment, without the written consent of each Lender affected thereby,
(iv) change Section 2.16(b) or (c) in a manner that would alter the pro rata
sharing of payments required thereby, without the written consent of each
Lender, or (v) change any of the provisions of this Section or the definition of
"Required Lenders" or any other provision hereof specifying the number or
percentage of Lenders required to waive, amend or modify any rights hereunder or
make any determination or grant any consent hereunder, without the written
consent of each Lender; provided further that no such agreement shall amend,
modify or otherwise affect the rights or duties of the Administrative Agent
hereunder without the prior written consent of the Administrative Agent.
364-Day Credit Agreement
53
-49-
SECTION 9.03. Expenses; Indemnity; Damage Waiver.
(a) The Company shall pay (i) all reasonable out-of-pocket
expenses incurred by the Administrative Agent and its Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent, in connection with the syndication of the credit facilities provided for
herein, the preparation and administration of this Agreement or any amendments,
modifications or waivers of the provisions hereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), and (ii) all
out-of-pocket expenses incurred by the Administrative Agent or any Lender,
including the fees, charges and disbursements of any counsel for the
Administrative Agent or any Lender, in connection with the enforcement or
protection of its rights in connection with this Agreement, including its rights
under this Section, or in connection with the Loans made hereunder, including
all such out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans.
(b) The Company shall indemnify the Administrative Agent and
each Lender, and each Related Party of any of the foregoing Persons (each such
Person being called an "Indemnitee") against, and hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses,
including the fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of (i) the use or proposed use of the proceeds of any Loan,
or (ii) any actual or prospective claim, litigation, investigation or proceeding
relating thereto, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses resulted from the gross
negligence or wilful misconduct of such Indemnitee.
(c) To the extent that the Company fails to pay any amount
required to be paid by it to the Administrative Agent under paragraph (a) or (b)
of this Section, each Lender severally agrees to pay to the Administrative Agent
such Lender's Applicable Percentage (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount; provided that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or
asserted against the Administrative Agent, in its capacity as such.
(d) To the extent permitted by applicable law, the Borrowers
shall not assert, and each Borrower hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any agreement or
instrument contemplated hereby, the Transactions, any Loan or the use of the
proceeds thereof.
(e) All amounts due under this Section shall be payable not
later than 10 days after written demand therefor.
364-Day Credit Agreement
54
-50-
SECTION 9.04. Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby, except that the Borrowers may not assign or otherwise
transfer any of their respective rights or obligations hereunder without the
prior written consent of each Lender (and any attempted assignment or transfer
by either Borrower without such consent shall be null and void). Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent, and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided that
(i) except in the case of an assignment to a Lender or an Affiliate of a Lender,
each of the Company and the Administrative Agent must give their prior written
consent to such assignment (which consent shall not be unreasonably withheld),
(ii) except in the case of an assignment to a Lender or an Affiliate of a Lender
or an assignment of the entire remaining amount of the assigning Lender's
Commitment, the amount of the Commitment of the assigning Lender subject to each
such assignment (determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Administrative Agent) shall not
be less than $5,000,000 unless each of the Company and the Administrative Agent
otherwise consent, (iii) each partial assignment shall be made as an assignment
of a proportionate part of all the assigning Lender's rights and obligations
under this Agreement, except that this clause (iii) shall not apply to rights in
respect of outstanding Competitive Loans, (iv) the parties to each assignment
shall execute and deliver to the Administrative Agent an Assignment and
Acceptance, together with a processing and recordation fee of $3,500, and (v)
the assignee, if it shall not be a Lender, shall deliver to the Administrative
Agent an Administrative Questionnaire; provided further that any consent of the
Company otherwise required under this paragraph shall not be required if an
Event of Default under clause (h) or (i) of Article VII has occurred and is
continuing. Subject to acceptance and recording thereof pursuant to paragraph
(d) of this Section, from and after the effective date specified in each
Assignment and Acceptance the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.13, 2.14, 2.15 and 9.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (e) of
this Section.
(c) The Administrative Agent, acting for this purpose as an
agent of the Borrowers, shall maintain at one of its offices in the City of New
York a copy of each
364-Day Credit Agreement
55
-51-
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitment of, and principal
amount of the Loans owing to, each Lender pursuant to the terms hereof from time
to time (the "Register"). The entries in the Register shall be conclusive, and
the Borrowers, the Administrative Agent and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrowers and
any Lender, at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Acceptance and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrowers or
the Administrative Agent, sell participations to one or more banks or other
entities (a "Participant") in all or a portion of such Lender's rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans owing to it); provided that (i) such Lender's obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrowers, the Administrative Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 9.02(b) that
affects such Participant. Subject to paragraph (f) of this Section, each
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.13, 2.14 and 2.15 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section.
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 9.08 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.16(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.13 or 2.15 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Company's prior written consent. A Participant that would be a Foreign Lender if
it were a Lender shall not be entitled to the benefits of Section 2.15 unless
the Company is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrowers, to comply with Section
2.15(e) as though it were a Lender.
364-Day Credit Agreement
56
-52-
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
(h) Anything in this Section to the contrary notwithstanding,
no Lender may assign or participate any interest in any Loan held by it
hereunder to the Company or any Affiliate or Subsidiary thereof without the
prior written consent of each Lender.
SECTION 9.05. Survival. All covenants, agreements,
representations and warranties made by the Borrowers herein and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of this Agreement and the
making of any Loans, regardless of any investigation made by any such other
party or on its behalf and notwithstanding that the Administrative Agent or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid and so long as the Commitments have not
expired or terminated. The provisions of Sections 2.13, 2.14, 2.15 and 9.03 and
Article VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Commitments or the termination of
this Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement and
any separate letter agreements with respect to fees payable to the
Administrative Agent constitute the entire contract among the parties relating
to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 9.07. Severability. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
364-Day Credit Agreement
57
-53-
SECTION 9.08. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lender and each of its Affiliates is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other obligations at
any time owing by such Lender or Affiliate to or for the credit or the account
of the relevant Borrower against any of and all the obligations of such Borrower
now or hereafter existing under this Agreement held by such Lender, irrespective
of whether or not such Lender shall have made any demand under this Agreement
and although such obligations may be unmatured. The rights of each Lender under
this Section are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service
of Process.
(a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) Each Borrower hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement, or for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Administrative Agent
or any Lender may otherwise have to bring any action or proceeding relating to
this Agreement against the Borrowers or their respective properties in the
courts of any jurisdiction.
(c) Each Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement in any court
referred to in paragraph (b) of this Section. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.01. Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON
364-Day Credit Agreement
58
-54-
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Administrative
Agent and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or the enforcement of rights hereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to any assignee of
or Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement, (g) with the consent of the Company
or (h) to the extent such Information (i) becomes publicly available other than
as a result of a breach of this Section or (ii) becomes available to the
Administrative Agent or any Lender on a nonconfidential basis from a source
other than the Company. For the purposes of this Section, "Information" means
all information received from the Company relating to the Company or its
business, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by the Company; provided that, in the case of information received
from the Company after the date hereof, such information is clearly identified
at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
364-Day Credit Agreement
59
-55-
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
METROPOLITAN LIFE INSURANCE COMPANY
By: ________________________________
Name:
Title:
METLIFE FUNDING, INC.
By: ________________________________
Name:
Title:
THE CHASE MANHATTAN BANK,
individually and as
Administrative Agent,
By _________________________________
Name:
Title:
CREDIT SUISSE FIRST BOSTON
By _________________________________
Name:
Title:
By _________________________________
Name:
Title:
364-Day Credit Agreement
60
-56-
CITIBANK, N.A.
By _________________________________
Title:
BANK ONE, NA (MAIN OFFICE CHICAGO)
By _________________________________
Title:
FIRST UNION NATIONAL BANK
By _________________________________
Title:
FLEET NATIONAL BANK
By _________________________________
Title:
MELLON BANK, N.A.
By _________________________________
Title:
CAJA DE AHORROS Y MONTE DE
XXXXXX XX XXXXXX
By _________________________________
Title:
364-Day Credit Agreement
00
-00-
XXXXXXXXXXX XX, XXX XXXX BRANCH
By _________________________________
Title:
FIRST HAWAIIAN BANK
By _________________________________
Title:
DEUTSCHE BANK AG
By _________________________________
Title:
By _________________________________
Title:
XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK
By _________________________________
Title:
STATE STREET BANK AND TRUST
COMPANY
By _________________________________
Title:
364-Day Credit Agreement
00
-00-
XXXXXXXX XXXX, XXXXXXX
Xx _________________________________
Title:
By _________________________________
Title:
WACHOVIA BANK, N.A.
By _________________________________
Title:
BARCLAYS BANK PLC
By _________________________________
Title:
THE NORTHERN TRUST COMPANY
By _________________________________
Title:
MERCANTILE BANK OF ST. LOUIS
By _________________________________
Title:
364-Day Credit Agreement
63
-59-
BANQUE NATIONALE DE PARIS
By _________________________________
Title:
By _________________________________
Title:
ROYAL BANK OF CANADA
By _________________________________
Title:
By _________________________________
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By _________________________________
Title:
BANK OF AMERICA, N.A.
By _________________________________
Title:
SOCIETE GENERALE
By _________________________________
Title:
SANWA BANK LTD.
By _________________________________
Title:
364-Day Credit Agreement
64
-60-
ABN AMRO BANK, N.V.
By _________________________________
Title:
THE BANK OF NOVA SCOTIA
By _________________________________
Title:
US BANK NATIONAL ASSOCIATION
By _________________________________
Title:
XXXXX FARGO BANK
By _________________________________
Title:
WESTDEUTSCHE LANDESBANK
GIROZENTRALE
By _________________________________
Title:
NATIONAL AUSTRALIA BANK LTD.
By _________________________________
Title:
364-Day Credit Agreement
00
-00-
XXXXX XXXXXXXXXXX XXXXXXXX
By _________________________________
Title:
CARIPLO - CASSA DI RISPARMIO DELLE
PROVINCIE LOMBARDE S.P.A.
By _________________________________
Title:
SANPAOLO IMI BANK, NEW YORK BRANCH
By _________________________________
Title:
By _________________________________
Title:
THE BANK OF NEW YORK
By _________________________________
Title:
364-Day Credit Agreement
66
SCHEDULE 2.01
Lender Commitment
------ ----------
Administrative Agent
--------------------
The Chase Manhattan Bank $270,000,000
Syndication Agent
-----------------
Credit Suisse First Boston 265,000,000
Documentation Agents
--------------------
The Bank of New York 260,000,000
Citibank, N.A. 260,000,000
Arrangers
---------
Bank of America, N.A. 200,000,000
Banque Nationale de Paris 200,000,000
Bank One, NA (Main Office Chicago) 200,000,000
Commerzbank AG, New York Branch 200,000,000
Credit Lyonnais New York Branch 200,000,000
First Union National Bank 200,000,000
Fleet National Bank 200,000,000
Mellon Bank, N.A. 200,000,000
Royal Bank of Canada 200,000,000
SANPAOLO IMI Bank, New York Branch 200,000,000
Wachovia Bank, N.A. 200,000,000
Senior Managing Agents
----------------------
Barclays Bank Plc 145,000,000
Deutsche Bank AG, New York and/or 145,000,000
Cayman Islands Branches
--------------------------
Managing Agents
---------------
Banca Commerciale Italiana 115,000,000
The Bank of Nova Scotia 115,000,000
Caja de Ahorros y Monte
de Xxxxx xx Xxxxxx 115,000,000
Xxxxxx Guaranty Trust Company
of New York 115,000,000
National Australia Bank Ltd. 115,000,000
Societe Generale 115,000,000
SunTrust Bank, Atlanta 115,000,000
Co-Agents
---------
Cariplo-Cassa di Risparmio delle
Lombarde S.p.A. 100,000,000
Sanwa Bank Ltd. 100,000,000
Westdeutsche Landesbank Girozentrale 100,000,000
Participants
------------
ABN AMRO Bank, N.V. 50,000,000
First Hawaiian Bank 50,000,000
Mercantile Bank of St. Louis 50,000,000
The Northern Trust Company 50,000,000
State Street Bank and Trust Company 50,000,000
U.S. Bank National Association 50,000,000
Xxxxx Fargo Bank 50,000,000
----------------------------------------------------------------------------
Total $5,000,000,000
Schedule 2.01 -- Commitments
----------------------------
67
SCHEDULE 3.06
DISCLOSED MATTERS
[See Section 3.06]
The Company and certain of its subsidiaries are currently
defendants in approximately 400 lawsuits, including over 40 putative
or certified class action lawsuits, raising allegations of improper
marketing, sales, servicing and administration of individual life
insurance or annuities, which are referred to as "sales practices
claims". Two of these putative class actions are filed in Canada, and
the remainder are filed in the U.S. These cases are brought by or on
behalf of policyholders and others and allege, among other claims,
that individual life insurance policies were improperly sold in
replacement transactions or with inadequate or inaccurate disclosure
concerning the period for which premiums would be payable, or were
misleadingly sold as savings or retirement plans. The classes proposed
in the pending class actions are defined broadly enough, in the
aggregate, to include a substantial number of active and lapsed
policyholders that purchased individual life insurance policies and
annuity contracts and certificates from the Company during the 1980s
and 1990s. In California, Ohio and West Virginia, courts have
certified or deemed certifiable classes on behalf of policyholders in
those states who allegedly did not receive proper notice of
replacement. A California trial court has also certified a class of
California universal life policyholders who were charged amounts
related to the deferred acquisition tax in their costs of insurance.
As discussed below, the settlement announced on August 18, 1999 will
apply to this action. A Federal Court in Massachusetts has certified a
mandatory class involving certain former policyholders of New England
Mutual Life Insurance Company, with which the Company merged in 1996.
The United States Court of Appeals remanded the case to the trial
court for further consideration. A number of the sales practices
claims pending in federal courts have been consolidated as a
multidistrict proceeding for pre-trial purposes in the United States
District Court for the Western District of Pennsylvania and, as to
former New England Mutual Life Insurance Company policyholders, in the
United States District Court in Massachusetts. In another case, a New
York Federal court has certified or conditionally certified some
subclasses of purchasers of the Company's policies and annuity
contracts outside the U.S. and Canada. In the past, the Company has
resolved some of the individual lawsuits through settlement,
dispositive motion or, in a few instances, trial. Most of the current
cases seek substantial damages, including in some cases punitive and
treble damages and attorneys' fees. Additional litigation relating to
the Company's marketing and sale of individual life insurance may be
commenced in the future.
The following table sets forth the number of sales practices
claims pending against Metropolitan Life Insurance Company as of the
dates indicated, the number of claims received by Metropolitan Life
Insurance Company during the periods ending on those
Schedule 3.06 Disclosed Matters
-------------------------------
68
-2-
dates and the total settlement payments made to resolve sales
practices claims during those periods:
At or for the six At or for the years
months ended June 30, ended December 31,
1999 1997 1998
---- ---- ----
Sales practices claims at period
end (approximate) ...................... 511 432 302
Number of claims received during
period (approximate) ................... 79 131 57
Settlement payments during period
(Dollars in millions) (1) ................ $12.0 $10.0 $17.0
-------------------
(1) Settlement payments represent payments made during the period in connection
with settlements made in that period and in prior periods. Amounts do not
include our attorneys' fees and expenses and do not reflect amounts
received from insurance carriers.
On August 18, 1999, the Company announced a settlement resolving
the consolidated class action lawsuit currently pending in the United
States District Court for the Western District of Pennsylvania. The
settlement covers sales practices claims in connection with permanent
life insurance policies and annuity contracts or certificates issued
by the Company pursuant to sales made in the U.S. to individuals
between January 1, 1982 and December 31, 1997. The class covered by
the settlement includes owners of approximately six million in-force
and terminated insurance policies and approximately one million
in-force and terminated annuity contracts.
The settlement should resolve each of the class action lawsuits
relating to sales practices claims described above, other than the
class action lawsuits involving former policyholders of New England
Mutual Life Insurance Company and purchasers of the Company's policies
and annuity contracts outside the U.S. The settlement would also
resolve the individual lawsuits relating to sales between January 1,
1982 and December 31, 1997, although the plaintiffs in those lawsuits
may elect to be excluded from the settlement and pursue lawsuits on an
individual basis against the Company or its subsidiaries.
The court has preliminarily approved the settlement and has
scheduled a fairness hearing on the settlement for December 2, 1999.
The settlement is subject to the court's approval and the resolution
of any appeals that are taken. The settlement permits the parties to
argue to the court that the settlement is unfair if the number of
policyholders who elect, prior to the fairness hearing, to be excluded
from the settlement or to use the claims evaluation procedure
described below exceed specified thresholds.
The settlement provides for three forms of relief. General relief
would be provided, in the form of free death benefits, automatically
to class members who do not elect to exclude themselves from the
settlement or who do not elect the claim evaluation procedures set
forth in the settlement. The claim evaluation procedures permit a
class member to have a claim evaluated by a third party under
procedures set forth in the
Schedule 3.06 Disclosed Matters
-------------------------------
69
-3-
settlement. Claim awards made under the claim evaluation procedures
will be in the form of policy adjustments, free death benefits or, in
some instances, cash payments. In addition, class members who have or
had an ownership interest in specified policies will also
automatically receive deferred acquisition cost tax relief in the form
of free death benefits. Class members covered by the settlement who
elect to exclude themselves from the settlement may pursue lawsuits on
an individual basis against the Company. The settlement fixes the
aggregate amounts that are available under each form of relief.
The Company expects that the total cost to it of the settlement
will be approximately $957 million. This amount is equal to the amount
of the increase in liabilities for the death benefits and policy
adjustments and the present value of expected cash payments to be
provided to included class members, as well as attorneys' fees and
expenses and estimated other administrative costs, but does not
include the cost of litigation with policyholders who are excluded
from the settlement. The Company believes that the cost to it of the
settlement will be substantially covered by available reinsurance and
the provisions made in the Company's consolidated financial
statements, and thus will not have a material adverse effect on our
consolidated financial position or results of operations. The Company
has not yet made a claim under those reinsurance policies and,
although there is a risk that the carriers will refuse coverage for
all of part of the claim, the Company believes this is very unlikely
to occur. The Company believes that it has made adequate provision in
its consolidated financial statements for litigation costs involving
policyholders who are excluded from the settlement.
Regulatory authorities in a small number of states, including
both insurance departments and attorneys general, have ongoing
investigations of the Company's sales of individual life insurance or
annuities, including investigations of alleged improper replacement
transactions and alleged improper sales of insurance with inaccurate
or inadequate disclosures as to the period for which premiums would be
payable. Over the past several years, the Company has resolved a
number of investigations by other regulatory authorities for monetary
payments and certain other relief.
The Company is also a defendant in numerous lawsuits seeking
compensatory and punitive damages for personal injuries allegedly
caused by exposure to asbestos or asbestos-containing products. The
Company has never engaged in the business of manufacturing, producing,
distributing or selling asbestos or asbestos-containing products.
Rather, these lawsuits, currently numbering in the thousands, have
principally been based upon allegations relating to certain research,
publication and other activities of one or more of the Company's
employees during the period from the 1920s through approximately the
1950s and alleging that the Company learned or should have learned of
certain health risks posed by asbestos and, among other things,
improperly publicized or failed to disclose those health risks. Legal
theories asserted against the Company have included negligence,
intentional tort claims and conspiracy claims concerning the health
risks associated with asbestos. While the Company believes it has
meritorious defenses to these claims, and has not suffered any adverse
judgments in respect of these claims, most of the cases have been
resolved by settlements. The Company intends to continue to exercise
its best judgment regarding settlement or defense of such cases. The
Schedule 3.06 Disclosed Matters
-------------------------------
70
-4-
number of such cases that may be brought or the aggregate amount of
any liability that may ultimately be incurred by the Company is
uncertain. Significant portions of amounts paid in settlement of such
cases have been funded with proceeds from a previously resolved
dispute with its primary, umbrella and first level excess liability
insurance carriers. The Company is presently in litigation with
several of its excess liability insurers regarding amounts payable
under the Company's policies with respect to coverage for these
claims. The trial court has granted summary judgment to these
insurers. The Company has appealed. There can be no assurances
regarding the outcome of this litigation or the amount and timing of
recoveries, if any, from these excess liability insurers.
The following table sets forth the number of asbestos personal
injury claims pending against the Company as of the dates indicated,
the number of claims received by the Company during the periods ending
on those dates and the total settlement payments made to resolve
asbestos personal injury claims during those periods:
At or for the six At or for the years ended
months ended June 30, December 31,
1999 1998 1997
---- ---- ----
Asbestos personal injury claims
at period end (approximate) .............. 65,000 72,000 71,000
Number of claims received during
period (approximate) ..................... 14,000 28,000 25,000
Settlement payments during period
(approximate) (1) (Dollars in
millions) ................................ $ 53.5 $ 47.0 $ 27.4
------------------
(1) Settlement payments represent payments made during the period in connection
with settlements made in that period and in prior periods. Amounts do not
include the Company's attorneys' fees and expenses and do not reflect
amounts received from insurance carriers.
The Company has recorded, in other expenses, charges of $499
million ($317 million after-tax), $1,895 million ($1,203 million
after-tax), $300 million ($190 million after-tax) and $162 million
($103 million after-tax) for the six months ended June 30, 1999 and
for the years ended December 31, 1998, 1997 and 1996, respectively,
for sales practices claims and claims for personal injuries caused by
exposure to asbestos or asbestos-containing products. During 1998, the
Company paid $1,407 million of premiums for certain excess of loss
reinsurance and excess insurance policies and agreements providing
coverage for risks associated with such claims. The excess insurance
policies for asbestos-related claims provide for recovery of losses of
up to $1,500 million, which is in excess of a $400 million
self-insured retention. The excess of loss reinsurance agreements
provide reinsurance with respect to sales practices claims made on or
prior to December 31, 1999 and for certain mortality losses. These
reinsurance agreements have a maximum aggregate limit of $650 million,
with a maximum sublimit for sales practices losses of $550 million.
This coverage is in excess of an aggregate self-insured retention of
$385 million with respect to sales practices and $506 million, plus
our statutory policy reserves released upon the death of insureds,
with respect to life mortality losses. The
Schedule 3.06 Disclosed Matters
-------------------------------
71
-5-
asbestos-related policies are also subject to annual and per-claim
sublimits. The Company believes adequate provision has been made in
its consolidated financial statements for the self-insured retentions
under these policies and agreements. Amounts are recoverable under the
policies and agreements annually with respect to claims paid during
the prior calendar year. Although amounts paid in any given year that
are not recoverable under the policies and agreements will be
reflected as a reduction in the Company's operating cash flow for that
year, the Company's management believes that the payments will not
have a material adverse effect on its liquidity. The asbestos-related
policies contain experience funds and reference funds, which provide
for payments to the Company at commutation dates if experience under
the policies to such dates has been favorable, or pro rata reductions
from time to time in the loss reimbursement to the Company if the
cumulative return on the reference fund is less than the return
specified in the experience fund. The excess of loss reinsurance
agreements for sales practice claims and mortality losses contain an
experience fund, which provides for payments to the Company at
commutation dates if experience is favorable at such dates. The
Company believes that the excess of loss reinsurance agreements should
provide coverage for a portion of the multidistrict sales practices
settlement described above, although the Company has yet to file a
claim under those agreements. The increase in liabilities for death
benefits and policy adjustments and the cash payments to be made under
the settlement should be substantially offset by amounts recoverable
under those agreements, as well as amounts provided in the Company's
consolidated financial statements, and accordingly the Company does
not believe that they will have a material adverse effect on its
consolidated financial condition, results of operations or cash flows
in future periods.
A purported class action suit involving policyholders in 32
states has been filed in Rhode Island state court against our personal
lines casualty insurer, Metropolitan Property and Casualty Insurance
Company, with respect to claims by policyholders for the alleged
diminished value of automobiles after accidents. A second purported
class action has been filed in Florida state court against
Metropolitan Property and Casualty Insurance Company by a policyholder
alleging breach of contract and unfair trade practices with respect to
Metropolitan Property and Casualty allowing the use of after-market
parts to repair damaged automobiles. Both suits are in very early
stages of litigation and Metropolitan Property and Casualty intends to
vigorously defend itself against these suits.
Various litigation, claims and assessments against the Company,
in addition to the those discussed above and those otherwise provided
for in the Company's consolidated financial statements, have arisen in
the course of the Company's business, including in connection with its
activities as an insurer, employer, investor and taxpayer. Further,
state insurance regulatory authorities and other authorities regularly
make inquiries and conduct investigations concerning the Company's
compliance with applicable insurance and other laws and regulations.
Schedule 3.06 Disclosed Matters
-------------------------------
72
-6-
In some of the matters referred to above, very large and/or
indeterminate amounts, including punitive and treble damages, are
sought. While it is not feasible to predict or determine the ultimate
outcome of all pending investigations and legal proceedings, it is the
opinion of the Company's management that their outcomes, after
consideration of available insurance and reinsurance and the
provisions made in the Company's consolidated financial statements,
are not likely to have a material adverse effect on the Company's
consolidated financial position. However, given the large and/or
indeterminate amounts sought in certain of these matters and the
inherent unpredictability of litigation, it is possible that an
adverse outcome in certain matters could, from time to time, have a
material adverse effect on the Company's operating results or cash
flows in particular quarterly or annual periods.
Schedule 3.06 - Disclosed Matters
73
EXHIBIT A
[FORM OF]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of
September [___], 1999 (as amended and in effect on the date hereof, the "Credit
Agreement"), among Metropolitan Life Insurance Company, MetLife Funding, Inc.;
the Lenders named therein and The Chase Manhattan Bank, as Administrative Agent
for the Lenders. Terms defined in the Credit Agreement are used herein with the
same meanings.
The Assignor named below hereby sells and assigns, without
recourse, to the Assignee named below, and the Assignee hereby purchases and
assumes, without recourse, from the Assignor, effective as of the Assignment
Date set forth below, the interests set forth below (the "Assigned Interest") in
the Assignor's rights and obligations under the Credit Agreement, including,
without limitation, the interests set forth below in the Commitment of the
Assignor on the Assignment Date and Competitive Loans and Syndicated Loans owing
to the Assignor which are outstanding on the Assignment Date, excluding accrued
interest and fees to and excluding the Assignment Date. The Assignee hereby
acknowledges receipt of a copy of the Credit Agreement. From and after the
Assignment Date (i) the Assignee shall be a party to and be bound by the
provisions of the Credit Agreement and, to the extent of the Assigned Interest,
have the rights and obligations of a Lender thereunder and (ii) the Assignor
shall, to the extent of the Assigned Interest, relinquish its rights and be
released from its obligations under the Credit Agreement.
This Assignment and Acceptance is being delivered to the
Administrative Agent together with (i) if the Assignee is a Foreign Lender, any
documentation required to be delivered by the Assignee pursuant to Section
2.15(e) of the Credit Agreement, duly completed and executed by the Assignee,
and (ii) if the Assignee is not already a Lender under the Credit Agreement, an
Administrative Questionnaire in the form supplied by the Administrative Agent,
duly completed by the Assignee. The [ASSIGNEE/ASSIGNOR] shall pay the fee
payable to the Administrative Agent pursuant to Section 9.04(b) of the Credit
Agreement.
This Assignment and Acceptance shall be governed by and
construed in accordance with the laws of the State of New York.
Assignment and Acceptance
74
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment
("Assignment Date")(1):
Percentage Assigned of
Facility/Commitment
(set forth, to at
Principal Amount least 8 decimals, as a
Assigned (and percentage of the
identifying Facility and the
information as to aggregate Commitments
individual of all Lenders
Facility Competitive Loans) thereunder)
-------- ------------------- ---------------------
Commitment Assigned: $ %
Syndicated Loans:
Competitive Loans:
The terms set forth above and on the reverse side hereof are hereby agreed to:
[NAME OF ASSIGNOR], as Assignor
By:__________________________________
Name:
Title:
--------------
(1) Must be at least five Business Days after execution hereof by all
required parties.
Assignment and Acceptance
-------------------------
75
[NAME OF ASSIGNEE], as Assignee
By:__________________________________
Name:
Title:
The undersigned hereby consent to the within assignment:(2)
[NAME OF BORROWER], THE CHASE MANHATTAN BANK,
as Administrative Agent,
By:_________________________ By:_________________________
Name: Name:
Title: Title:
-----------------
(2) Consents to be included to the extent required by Section 9.04(b) of
the Credit Agreement.
Assignment and Acceptance
-------------------------
76
EXHIBIT B
[Form of Opinion of Counsel for the Borrowers]
September 29, 1999
To the Lenders party to the
Credit Agreement referred to
below and The Chase Manhattan Bank,
as Administrative Agent
Ladies and Gentlemen:
I am Vice President and Investment Counsel of Metropolitan Life
Insurance Company, a New York corporation ("MetLife", together with MetLife
Funding, Inc. ("Funding"), the "Borrowers"), and have acted as such in
connection with the Credit Agreement (364-Day) (the "Credit Agreement") dated as
of September 29, 1999, among the Borrowers, the lenders party thereto and The
Chase Manhattan Bank, as Administrative Agent, providing for loans to be made by
said lenders to the Borrowers in an aggregate principal amount not to exceed
$5,000,000,000 at any one time outstanding. Terms defined in the Credit
Agreement are used herein as defined therein. This opinion is being delivered
pursuant to Section 4.01(b) of the Credit Agreement.
In rendering the opinions expressed below, I have examined the
following:
(a) the Credit Agreement; and
(b) such records of the Company and such other documents as I have
deemed necessary as a basis for the opinions expressed below.
In my examination, I have assumed the authenticity of all documents
submitted to me as originals and the conformity with authentic original
documents of all documents submitted to me as copies. When relevant facts were
not independently established. I have relied upon statements of governmental
officials and upon representations made in or pursuant to the Credit Agreement.
In rendering the opinions expressed below, I have assumed, with respect
to the Credit Agreement, that (except, to the extent expressly set forth in the
opinions below, as to the Borrowers):
(i) it has been duly authorized by, has been duly executed and
delivered by, and constitutes the legal, valid, binding and
enforceable obligations of, all of the parties thereto;
Opinion of Counsel for the Borrowers
77
(ii) all signatories thereto have been duly authorized; and
(iii) all of the parties thereto are duly organized and validly
existing and have the power and authority (corporate or other)
to execute, deliver and perform the Credit Agreement.
Based upon and subject to the foregoing and subject also to the
comments and qualifications set forth below, and having considered such
questions of law as I have deemed necessary as a basis for the opinions
expressed below, I am of the opinion that:
1. MetLife is a mutual life insurance company, duly organized and
licensed and validly existing under the laws of the State of New York.
2. Funding is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware.
3. Each Borrower has all requisite corporate power to execute and
deliver, and to perform its obligations to incur liabilities under, the Credit
Agreement. Each Borrower has all requisite corporate power to borrow under the
Credit Agreement.
4. The execution and delivery by each Borrower of, and the performance
and incurrence by each Borrower of its obligations under, the Credit Agreement
have been duly authorized by all necessary corporate action on the part of such
Borrower.
5. The Credit Agreement has been duly executed and delivered by each
Borrower.
6. The Credit Agreement constitutes the legal, valid and binding
obligation of each Borrower, enforceable against each Borrower in accordance
with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium, rehabilitation, liquidation, fraudulent conveyance
or transfer or other similar laws relating to or affecting the rights of credits
generally and except as the enforceability of the Credit Agreement is subject to
the application of general principles of equity (regardless of whether
considered in a proceeding in equity or at law), including, without limitation,
(a) the possible unavailability of specific performance, injunctive relief or
any other equitable remedy and (b) concepts of materiality, reasonableness, good
faith and fair dealing.
7. No authorization, approval or consent of, and no filing or
registration with, any governmental or regulatory authority or agency of the
United States of America or the State of New York is required on the part of
each Borrower for the execution or delivery by each Borrower of, or for the
performance or incurrence by each Borrower of any obligations or liabilities
under, the Credit Agreement.
8. The execution and delivery by each Borrower of, the performance and
incurrence by each Borrower of its obligations and liabilities under, and the
consummation by each Borrower of the other transactions contemplated by the
Credit Agreement do not (a) violate any provision of the respective charter or
by-laws of each Borrower, (b) with respect to Funding,
Opinion of Counsel for the Borrowers
78
violate any provision of the Delaware General Corporation Law, (c) violate any
applicable law, rule or regulation of the United States of America or the State
of New York, (d) violate any order, writ, injunction or decree of any
Governmental Authority of the United States of America or the State of New York
or any arbitral award applicable to either Borrower of which I have knowledge or
(e) violate or result in a default under, any indenture, agreement or other
instrument of which I have knowledge to which either Borrower is a party or by
which either of them are bound, or give rise to a right thereunder to require
any prepayment to be made by either Borrower.
9. Except for the Disclosed Matters, I have no knowledge of any
actions, suits or proceedings by or before any arbitrator or Governmental
Authority, pending or threatened against either Borrower (a) as to which there
is a reasonable possibility of adverse determination and that, if adversely
determined, is reasonably likely to result in a Material Adverse Change or (b)
that involve the Credit Agreement or the Transactions.
10. The Company is not an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of 1940, and Funding is
an "investment company" as defined in such Act that is exempt from the
requirements of such Act.
The foregoing opinions are subject to the following comments and
qualifications:
(A) I express no opinion as to the enforceability of any of the
indemnification provisions of the Credit Agreement.
(B) I express no opinion as to any provision of the Credit Agreement
that constitutes an agreement solely between the Administrative Agent and the
Lenders or among the Lenders, including, without limitation, Article VIII,
Sections 2.16(c), Section 2.16(d) and 2.16(e).
(C) I express no opinion as to (i) the effect of any laws of any
jurisdiction primarily governing or regulating banks, (ii) the effect of the
laws of any jurisdiction that limit the interest, fees or other charges which
any Lender may impose (iii) Section 9.09 (other than 9.09(a)) of the Credit
Agreement and (iv) any authorization, consent, approval, registration, exemption
or license required under any applicable securities laws (or rules and
regulations thereunder) resulting from any proposed assignment or proposed sale
of participations by a Lender pursuant to Section 9.04 of the Credit Agreement.
(D) The enforceability of provisions in the Credit Agreement to the
effect that terms may not be waived or modified except in writing may be limited
under certain circumstances.
The foregoing opinion is limited to matters of United States federal
law, the Delaware Corporation Law (with respect to Funding) and the laws of the
State of New York.
This opinion is rendered to you pursuant to Section 4.01(b) of the
Credit Agreement and no persons other than you are entitled to rely on this
opinion.
Very truly yours,
Opinion of Counsel for the Borrowers
79
EXHIBIT C
[Form of Opinion of Special New York Counsel to Chase]
September 29, 1999
To the Lenders Referred to Below
and The Chase Manhattan Bank,
as Administrative Agent
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We have acted as special New York counsel to The Chase
Manhattan Bank ("Chase") in connection with the 364-Day Credit Agreement dated
as of September 29, 1999 (the "Credit Agreement") between Metropolitan Life
Insurance Company (the "Company"), MetLife Funding, Inc. ("Funding", and
together with the Company, the "Borrowers"), the lenders party thereto, and
Chase, as Administrative Agent, providing for loans to be made by said lenders
to the Company in an aggregate principal amount not to exceed $5,000,000,000 at
any one time outstanding. Terms defined in the Credit Agreement are used herein
as defined therein. This opinion is being delivered pursuant to Section 4.01(c)
of the Credit Agreement.
In rendering the opinions expressed below, we have examined an
executed copy of the Credit Agreement and assumed its authenticity. When
relevant facts were not independently established, we have relied upon
representations made in or pursuant to the Credit Agreement.
In rendering the opinions expressed below, we have assumed
that:
(i) the Credit Agreement has been duly authorized by,
has been duly executed and delivered by, and
(except to the extent expressly set forth in the
opinions below as to the Borrowers) constitutes
the legal, valid, binding and enforceable
obligations of, all of the parties thereto;
(ii) all signatories to the Credit Agreement have been
duly authorized; and
(iii) all of the parties to the Credit Agreement are
duly organized and validly existing and have the
power and authority (corporate or other) to
execute, deliver and perform the Credit Agreement.
Opinion of Special Counsel to Chase
80
-2-
Based upon and subject to the foregoing and subject also to
the comments and qualifications set forth below, and having considered such
questions of law as we have deemed necessary as a basis for the opinions
expressed below, we are of the opinion that the Credit Agreement constitutes the
legal, valid and binding obligation of each Borrower, enforceable against such
Borrower in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or transfer or
other similar laws and except as the enforceability of the Credit Agreement is
subject to the application of general principles of equity (regardless of
whether considered in a proceeding in equity or at law), including, without
limitation, (a) the possible unavailability of specific performance, injunctive
relief or any other equitable remedy and (b) concepts of materiality,
reasonableness, good faith and fair dealing.
The foregoing opinions are subject to the following comments
and qualifications:
(A) The enforceability of Section 9.03 of the Credit Agreement
may be limited by laws limiting the enforceability of provisions
exculpating or exempting a party, or requiring indemnification of a
party for, liability for its own action or inaction, to the extent the
action or inaction involves gross negligence, recklessness, willful
misconduct or unlawful conduct.
(B) The enforceability of provisions in the Credit Agreement
to the effect that terms may not be waived or modified except in
writing may be limited under certain circumstances.
(C) We express no opinion as to (i) the effect of the laws of
any jurisdiction in which any Lender is located (other than the State
of New York) that limit the interest, fees or other charges such Lender
may impose, (ii) the last sentence of Section 2.16(c) of the Credit
Agreement, (iii) the first sentence of Section 9.09(b) of the Credit
Agreement, insofar as such sentence relates to the subject matter
jurisdiction of the United States District Court for the Southern
District of New York to adjudicate any controversy related to the
Credit Agreement, and (iv) the waiver of inconvenient forum set forth
in Section 9.09(c) of the Credit Agreement with respect to proceedings
in the United States District Court for the Southern District of New
York.
The foregoing opinions are limited to matters involving the
Federal laws of the United States of America and the law of the State of New
York, and we do not express any opinion as to the laws of any other
jurisdiction.
This opinion letter is, pursuant to Section 4.01(c) of the
Credit Agreement, provided to you by us in our capacity as special New York
counsel to Chase and may not be relied upon by any Person for any purpose other
than in connection with the transactions contemplated by the Credit Agreement
without, in each instance, our prior written consent.
Very truly yours,
RJW/WJM
Opinion of Special Counsel to Chase
