EXHIBIT 10.(i)(L)
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CREDIT AGREEMENT
DATED AS OF SEPTEMBER 27, 1996
AMONG
SIGNATURE FINANCIAL/MARKETING, INC.,
THE BANK OF NEW YORK
AND
THE BANK OF NOVA SCOTIA
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TABLE OF CONTENTS
Section Page
ARTICLE I DEFINITIONS........................................ 1
1.1 Certain Defined Terms.................................. 1
1.2 Other Interpretive Provisions.......................... 13
1.3 Accounting Principles.................................. 14
ARTICLE II THE CREDITS....................................... 15
2.1 Amounts and Terms...................................... 15
2.2 Notes.................................................. 15
2.3 Procedure for Borrowing................................ 15
2.4 Conversion and Continuation Elections.................. 15
2.5 Optional Prepayments................................... 16
2.6 Repayment.............................................. 17
2.7 Interest Rates......................................... 17
2.8 Computation of Interest................................ 18
2.9 Payments by the Borrower............................... 18
2.10 Sharing of Payments, Etc.............................. 18
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY.......... 19
3.1 Taxes.................................................. 19
3.2 Illegality............................................. 20
3.3 Increased Costs and Reduction of Return................ 21
3.4 Funding Losses......................................... 21
3.5 Inability to Determine Rates........................... 22
3.6 Survival............................................... 22
ARTICLE IV CONDITIONS PRECEDENT.............................. 22
4.1 Conditions To Initial Borrowing........................ 22
(a) Credit Agreement................................. 22
(b) Notes............................................ 22
(c) Guaranty......................................... 23
(d) Resolutions; Incumbency.......................... 23
(e) Organization Documents; Good Standing............ 23
(f) Legal Opinion.................................... 23
(g) Payment of Existing Signature Note............... 23
(h) Certificate...................................... 23
(i) Fees............................................. 23
(j) Other Documents.................................. 24
4.2 Further Conditions to Borrowing........................ 24
(a) Notice of Borrowing or Conversion/Continuation... 24
(b) Continuation of Representations and Warranties... 24
(c) No Existing Default.............................. 24
ARTICLE V REPRESENTATIONS AND WARRANTIES..................... 24
5.1 Corporate Existence and Power.......................... 24
5.2 Corporate Authorization; No Contravention.............. 25
5.3 Governmental Authorization............................. 25
5.4 Binding Effect......................................... 25
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Section Page
5.5 Litigation............................................. 26
5.6 No Default............................................. 26
5.7 ERISA Compliance....................................... 26
5.8 Use of Proceeds; Margin Regulations.................... 27
5.9 Title to Properties.................................... 27
5.10 Taxes................................................. 27
5.11 Financial Condition................................... 28
5.12 Environmental Matters................................. 28
5.13 Regulated Entities.................................... 28
5.14 No Burdensome Restrictions............................ 29
5.15 Copyrights, Patents, Trademarks and Licenses, etc..... 29
5.16 Subsidiaries.......................................... 29
5.17 Insurance............................................. 29
5.18 Full Disclosure....................................... 29
ARTICLE VI AFFIRMATIVE COVENANTS............................. 30
6.1 Financial Statements................................... 30
6.2 Certificates; Other Information........................ 31
6.3 Notices................................................ 31
6.4 Preservation of Corporate Existence, Etc............... 32
6.5 Maintenance of Property................................ 33
6.6 Insurance.............................................. 33
6.7 Payment of Obligations................................. 33
6.8 Compliance with Laws................................... 34
6.9 Compliance with ERISA.................................. 34
6.10 Inspection of Property and Books and Records.......... 34
6.11 Environmental Laws.................................... 34
6.12 Use of Proceeds....................................... 34
6.13 Guaranties............................................ 34
ARTICLE VII NEGATIVE COVENANTS............................... 35
7.1 Limitation on Liens.................................... 35
7.2 Disposition of Assets.................................. 36
7.3 Consolidations and Mergers............................. 37
7.4 Loans and Investments.................................. 37
7.5 Limitation on Indebtedness............................. 38
7.6 Transactions with Affiliates........................... 39
7.7 Use of Proceeds........................................ 39
7.8 Contingent Obligations................................. 39
7.9 Lease Obligations...................................... 39
7.10 ERISA................................................. 40
7.11 Change in Business.................................... 40
7.12 Accounting Changes.................................... 40
ARTICLE VIII EVENTS OF DEFAULT............................... 40
8.1 Event of Default....................................... 40
(a) Non-Payment...................................... 40
(b) Representation or Warranty....................... 40
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Section Page
(c) Specific Defaults................................ 41
(d) Other Defaults................................... 41
(e) Cross-Default.................................... 41
(f) Insolvency; Voluntary Proceedings................ 41
(g) Involuntary Proceedings.......................... 42
(h) ERISA............................................ 42
(i) Monetary Judgments............................... 42
(j) Non-Monetary Judgments........................... 42
(k) Change of Control................................ 43
(l) Guarantor Defaults............................... 43
(m) MW Credit Agreement Event of Default............. 43
(n) Minimum Net Worth................................ 43
(o) Impairment....................................... 43
8.2 Remedies............................................... 43
8.3 Rights Not Exclusive................................... 44
ARTICLE IX MISCELLANEOUS..................................... 44
9.1 Amendments and Waivers................................. 44
9.2 Notices................................................ 44
9.3 No Waiver; Cumulative Remedies......................... 45
9.4 Costs and Expenses..................................... 45
9.5 Borrower Indemnification............................... 45
9.6 Payments Set Aside..................................... 46
9.7 Successors and Assigns................................. 46
9.8 Participations, etc.................................... 46
9.9 Confidentiality........................................ 47
9.10 Set-off............................................... 48
9.11 Automatic Debits of Fees.............................. 48
9.12 Notification of Addresses, Lending Offices, Etc....... 48
9.13 Counterparts.......................................... 48
9.14 Severability.......................................... 49
9.15 No Third Parties Benefited............................ 49
9.16 Governing Law and Jurisdiction........................ 49
9.17 Waiver of Jury Trial.................................. 49
9.18 Entire Agreement...................................... 50
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SCHEDULES
Schedule 1.1 Guarantor Subsidiaries
Schedule 2.1 Commitments
Schedule 5.5 Litigation
Schedule 5.7 ERISA
Schedule 5.11 Permitted Liabilities
Schedule 5.12 Environmental Matters
Schedule 5.16 Subsidiaries and Minority Interests
Schedule 5.17 Insurance Matters
Schedule 7.1 Permitted Liens
Schedule 7.4 Investments
Schedule 7.5 Permitted Indebtedness
Schedule 7.8 Contingent Obligations
Schedule 9.2 Lending Offices; Addresses for Notices
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Notice of Conversion/Continuation
Exhibit C Form of Compliance Certificate
Exhibit D Form of Legal Opinion of Borrower's Counsel
Exhibit E Form of Promissory Note
Exhibit F-1 Form of MW Guaranty
Exhibit F-2 Form of Insurance Subsidiary Guaranty
Exhibit F-3 Form of Non-Insurance Subsidiary Guaranty
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CREDIT AGREEMENT
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This CREDIT AGREEMENT is entered into as of September 27, 1996 among
Signature Financial/Marketing, Inc., a Delaware corporation (the "Borrower")
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and The Bank of New York ("BNY") and The Bank of Nova Scotia ("BNS" and together
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with BNY, the "Banks).
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WHEREAS, the Banks have agreed to make available to the Borrower a credit
facility upon the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
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1.1 Certain Defined Terms. The following terms have the following
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meanings:
"Affiliate" means, as to any Person, any other Person which, directly
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or indirectly, is in control of, is controlled by, or is under common
control with, such Person. A Person shall be deemed to control another
Person if the controlling Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of
the other Person, whether through the ownership of voting securities, by
contract, or otherwise.
"Agreement" means this Credit Agreement, as amended or modified from
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time to time.
"Attorney Costs" means and includes all fees and disbursements of any
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law firm or other external counsel, the allocated cost of internal legal
services and all disbursements of internal counsel.
"Banks" has the meaning specified in the introductory clause hereto.
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"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
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U.S.C. (S)101, et seq.) as amended from time to time.
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"Base Rate" means, for any day, the higher of: (a) 0.50% per annum
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above the latest Federal Funds Rate; and (b) the rate of interest in
effect for such day as publicly announced from time to time by the
Reference Bank as its "reference rate." (The "reference rate" is a rate
set by the Reference Bank based upon various factors including the
Reference Bank's costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans,
which may be priced at, above, or below such announced rate.)
Any change in the reference rate announced by the Reference Bank shall
take effect at the opening of business on the day specified in the public
announcement of such change. The Reference Bank shall notify the Banks and
the Borrower of the "reference rate" and any change therein.
"Base Rate Loan" means a Loan that bears interest based on the Base
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Rate.
"Borrowing" means the borrowing hereunder consisting of Loans of the
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same Type made to the Borrower on the same day by the Banks under Article
II, and, other than in the case of Base Rate Loans, having the same
Interest Period.
"Borrowing Date" means the date on which the Borrowing occurs under
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Section 2.3.
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"Business Day" means any day, other than a Saturday, Sunday or other
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day on which commercial banks in New York City or Chicago are authorized or
required by law to close, which is a day on which dealings are carried on
in the London interbank market.
"Capital Adequacy Regulation" means any guideline, request or
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directive of any central bank or other Governmental Authority, or any other
law, rule or regulation, whether or not having the force of law, in each
case, regarding capital adequacy of any bank or of any corporation
controlling a bank.
"Change of Control" shall be deemed to have occurred at such time as:
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(i) General Electric Capital Corporation ceases to own on a fully-diluted
basis the percentage of each class of the capital stock of MW which is
owned by it on the Closing Date on a fully-diluted basis, (ii) MW ceases to
own 100% of the capital stock of the Borrower on a fully-diluted basis or
(iii) the Borrower ceases to own, directly or indirectly, 100% of the
capital stock of any Subsidiary of the Borrower on a fully-diluted basis.
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"Closing Date" means the date on which all conditions precedent set
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forth in Section 4.1 are satisfied or waived by the Banks.
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"Code" means the Internal Revenue Code of 1986 as amended from time to
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time, and regulations promulgated thereunder.
"Commitment", as to each Bank, has the meaning specified in Section
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2.1.
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"Compliance Certificate" means a certificate substantially in the form
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of Exhibit C.
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"Contingent Obligation" means, as to any Person, any direct or
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indirect liability of that Person, whether or not contingent, with or
without recourse, (a) with respect to any Indebtedness, lease, dividend,
letter of credit or other obligation (the "primary obligations") of another
Person (the "primary obligor"), including any obligation of that Person (i)
to purchase, repurchase or otherwise acquire such primary obligations or
any security therefor, (ii) to advance or provide funds for the payment or
discharge of any such primary obligation, or to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net
worth or solvency or any balance sheet item, level of income or financial
condition of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such
primary obligation of the ability of the primary obligor to make payment of
such primary obligation, or (iv) otherwise to assure or hold harmless the
holder of any such primary obligation against loss in respect thereof
(each, a "Guaranty Obligation"); (b) with respect to any Surety Instrument
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issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings or payments; (c) to purchase
any materials, supplies or other property from, or to obtain the services
of, another Person if the relevant contract or other related document or
obligation requires that payment for such materials, supplies or other
property, or for such services, shall be made regardless of whether
delivery of such materials, supplies or other property is ever made or
tendered, or such services are ever performed or tendered, or (d) in
respect of any Swap Contract. The amount of any Contingent Obligation
shall, in the case of Guaranty Obligations, be deemed equal to the stated
or determinable amount of the primary obligation in respect of which such
Guaranty Obligation is made or, if not stated or if indeterminable, the
maximum reasonably anticipated liability in respect thereof, and in the
case of other Contingent Obligations, shall be equal to the maximum
reasonably
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anticipated liability in respect thereof. Notwithstanding the foregoing,
Contingent Obligations shall not include any obligations of a Subsidiary of
the Borrower where the primary obligor is a customer of such Subsidiary and
such obligation is incurred in the ordinary course of business.
"Contractual Obligation" means, as to any Person, any provision of any
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security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or
agreement to which such Person is a party or by which it or any of its
property is bound.
"Conversion/Continuation Date" means any date on which, under Section
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2.4, the Borrower (a) converts Loans of one Type to another Type, or (b)
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continues as Loans of the same Type, but with a new Interest Period, Loans
having Interest Periods expiring on such date.
"Default" means any event or circumstance which, with the giving of
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notice, the lapse of time, or both, would (if not cured or otherwise
remedied during such time) constitute an Event of Default.
"Designated Leases" means that certain Purchase and Master Lease
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Agreement, dated as of January 13, 1995 among certain lessors referred to
therein, MW, Lechmere, Inc. and Credit Lyonnais, Chicago Branch and that
certain Purchase and Master Lease Agreement, dated as of March 15, 1995
among certain lessors referred to therein, MW, Lechmere, Inc. and Sumitomo
Bank Leasing and Finance, Inc., each as amended or modified.
"Dollars", "dollars" and "$" each mean lawful money of the United
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States.
"Environmental Claims" means all claims, however asserted, by any
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Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release or
injury to the environment.
"Environmental Laws" means all federal, state or local laws, statutes,
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common law duties, rules, regulations, ordinances and codes, together with
all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental, health, safety and
land use matters.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
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regulations promulgated thereunder.
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"ERISA Affiliate" means any trade or business (whether or not
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incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code
for purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
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Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a
Pension Plan subject to Section 4063 of ERISA during a plan year in which
it was a substantial employer (as defined in Section 4001(a)(2) of ERISA)
or a cessation of operations which is treated as such a withdrawal under
Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the
Borrower or any ERISA Affiliate from a Multiemployer Plan or notification
that a Multiemployer Plan is in reorganization; (d) the filing of a notice
of intent to terminate, the treatment of a Plan amendment as a termination
under Section 4041 or 4041A of ERISA, or the commencement of proceedings by
the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or
condition which might reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the
Borrower or any ERISA Affiliate.
"Eurodollar Reserve Percentage" has the meaning specified in the
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definition of "LIBO Rate".
"Event of Default" means any of the events or circumstances specified
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in Section 8.1.
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"Exchange Act" means the Securities and Exchange Act of 1934, as
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amended from time to time, and regulations promulgated thereunder.
"Existing Signature Note" means the Promissory Note dated January 2,
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1996 of the Borrower payable to the order of MW in the principal amount of
$101,886,491.23 on or before June 30, 2002.
"FDIC" means the Federal Deposit Insurance Corporation, and any
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Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate set forth in the
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weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including
any such
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successor, "H.15(519)") on the preceding Business Day opposite the caption
"Federal Funds (Effective)"; or, if for any relevant day such rate is not
so published on any such preceding Business Day, the rate for such day will
be the arithmetic mean as determined by the Reference Bank of the rates for
the last transaction in overnight Federal funds arranged prior to 9:00 a.m.
(New York City time) on that day by each of three leading brokers of
Federal funds transactions in New York City selected by the Banks.
"FRB" means the Board of Governors of the Federal Reserve System, and
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any Governmental Authority succeeding to any of its principal functions.
"GAAP" means generally accepted accounting principles set forth from
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time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants
and statements and pronouncements of the Financial Accounting Standards
Board (or agencies with similar functions of comparable stature and
authority within the U.S. accounting profession), which are applicable to
the circumstances as of the Closing Date.
"Governmental Authority" means any nation or government, any state or
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other political subdivision thereof, any central bank (or similar monetary
or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
"Guarantors" means MW and each Subsidiary of the Borrower listed on
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Schedule 1.1 hereto.
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"Guaranty" means the guaranty executed by the Guarantors in
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substantially the form of Exhibit F-1, F-2, or F-3.
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"Guaranty Obligation" has the meaning specified in the definition of
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"Contingent Obligation."
"Indebtedness" of any Person means, without duplication, (a) all
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indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than
trade payables entered into in the ordinary course of business on ordinary
terms); (c) all obligations with respect to Surety Instruments; (d) all
obligations evidenced by notes, bonds, debentures or similar instruments,
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including obligations so evidenced incurred in connection with the
acquisition of property, assets or businesses; (e) all indebtedness created
or arising under any conditional sale or other title retention agreement,
or incurred as financing, in either case with respect to property acquired
by the Person (even though the rights and remedies of the seller or bank
under such agreement in the event of default are limited to repossession or
sale of such property); (f) all obligations with respect to capital leases;
(g) all net obligations with respect to Swap Contracts; (h) all
indebtedness referred to in clauses (a) through (g) above secured by (or
for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien upon or in property (including
accounts and contracts rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such
Indebtedness; and (i) all Guaranty Obligations in respect of indebtedness
or obligations of others of the kinds referred to in clauses (a) through
(g) above.
"Indemnified Liabilities" has the meaning specified in Section 9.5.
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"Indemnified Person" has the meaning specified in Section 9.5.
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"Independent Auditor" has the meaning specified in subsection 6.1(a).
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"Insolvency Proceeding" means (a) any case, action or proceeding
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before any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, rehabilitation,
dissolution, winding-up or relief of debtors, or (b) any general assignment
for the benefit of creditors, composition, marshalling of assets for
creditors, or other, similar arrangement in respect of its creditors
generally or any substantial portion of its creditors; undertaken under
U.S. Federal, state or foreign law, including the Bankruptcy Code.
"Interest Payment Date" means, as to any LIBO Rate Loan, the last day
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of each Interest Period applicable to such Loan and, as to any Base Rate
Loan, the last Business Day of each calendar quarter and each date such
Loan is converted into another Type of Loan, provided, however, that if any
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Interest Period for a LIBO Rate Loan exceeds three months, the date that
falls three months after the beginning of such Interest Period and after
each Interest Payment Date thereafter is also an Interest Payment Date.
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"Interest Period" means, as to any LIBO Rate Loan, the period
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commencing on the date of such Loan or on the Conversion/Continuation Date
on which the Loan is converted into or continued as a LIBO Rate Loan, and
ending on the date one, two, or three months thereafter as selected by the
Borrower;
provided that:
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(a) if any Interest Period would otherwise end on a day that is
not a Business Day, that Interest Period shall be extended to the
following Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month, in which event
such Interest Period shall end on the preceding Business Day;
(b) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at
the end of such Interest Period; and
(c) no Interest Period for any Loan shall extend beyond the
Maturity Date.
"IRS" means the Internal Revenue Service, and any Governmental
---
Authority succeeding to any of its principal functions under the Code.
"Lending Office" means, as to any Bank, the office or offices of such
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Bank specified as its "Lending Office" or "Domestic Lending Office" or
"LIBO Lending Office", as the case may be, on Schedule 9.2, or such other
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office or offices as such Bank may from time to time notify the Borrower.
"LIBO Rate" means, for any Interest Period, with respect to LIBO Rate
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Loans comprising part of the same Loan, the rate of interest per annum
(rounded upward to the next 1/16th of 1%) determined by the Reference Bank
as follows:
LIBO Rate = LIBO
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1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means for any day for any
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Interest Period the maximum reserve percentage (expressed as a
decimal, rounded upward to the next 1/100th of 1%) in effect on such
day (whether or not
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applicable to any Bank) under regulations issued from time to time by
the FRB for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with
respect to Eurocurrency funding (currently referred to as
"Eurocurrency liabilities"); and
"LIBO" means the rate of interest per annum determined by the
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Reference Bank to be the arithmetic mean (rounded upward to the next
1/16th of 1%) of the rates of interest per annum at which deposits in
Dollars in the approximate amount of the amount of the Loan to
continued as, or converted into, a LIBO Rate Loan and having a
maturity comparable to such Interest Period are offered to the
Reference Bank in the London interbank market at approximately 11:00
a.m. (London time) two Business Days prior to the commencement of such
Interest Period.
The LIBO Rate shall be adjusted automatically as to all LIBO Rate
Loans then outstanding as of the effective date of any change in the
Eurodollar Reserve Percentage.
"LIBO Rate Loan" means a Loan that bears interest based on the LIBO
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Rate.
"Lien" means any security interest, mortgage, deed of trust, pledge,
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hypothecation, assignment, charge or deposit arrangement, encumbrance,
lien (statutory or other) or preferential arrangement of any kind or nature
whatsoever in respect of any property (including those created by, arising
under or evidenced by any conditional sale or other title retention
agreement, the interest of a lessor under a capital lease, any financing
lease having substantially the same economic effect as any of the
foregoing, or the filing of any financing statement naming the owner of the
asset to which such lien relates as debtor, under the Uniform Commercial
Code or any comparable law) and any contingent or other agreement to
provide any of the foregoing, but not including the interest of a lessor
under an operating lease.
"Loan" means an extension of credit (whether the initial Borrowing or
----
a continuation/conversion thereof) by a Bank to the Borrower and may be a
Base Rate Loan or a LIBO Rate Loan (each, a "Type" of Loan).
----
"Loan Documents" means this Agreement, the Guaranties, the Notes, any
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fee letter and all other documents delivered to the Banks in connection
herewith.
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"Margin Stock" means "margin stock" as such term is defined in
------------
Regulation G, T, U or X of the FRB.
"Material Adverse Effect" means (a) a material adverse change in, or a
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material adverse effect upon, the operations, business, properties,
condition (financial or otherwise) or prospects of the Borrower or the
Borrower and its Subsidiaries taken as a whole or MW and its Subsidiaries
taken as a whole; (b) a material impairment of the ability of the Borrower
or any Guarantor to perform under any Loan Document and to avoid any Event
of Default; or (c) a material adverse effect upon the legality, validity,
binding effect or enforceability against the Borrower or any Guarantor of
any Loan Document.
"Maturity Date" means the earlier to occur of: (a) March 1, 1997;
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and (b) the date on which the Obligations are due and payable in accordance
with the provisions of this Agreement.
"Multiemployer Plan" means a "multiemployer plan", within the meaning
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of Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA
Affiliate makes, is making, or is obligated to make contributions or,
during the preceding three calendar years, has made, or been obligated to
make, contributions.
"MW" means Xxxxxxxxxx Xxxx & Co., Incorporated.
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"MW Credit Agreement" shall mean either or both of the Long Term
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Credit Agreement and/or the Short Term Credit Agreement, each dated as of
September 15, 1994, among MW, various banks, and various agents, as amended
to and including September 6, 1996, and with the consent of the Banks, as
further amended or modified from time to time; provided, that any increase
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in the aggregate commitments thereunder which is provided for therein shall
not be deemed an amendment or modification.
"Note" means any promissory note executed by the Borrower in favor of
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a Bank pursuant to Section 2.2, in substantially the form of Exhibit E.
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"Notice of Conversion/Continuation" means a notice in substantially
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the form of Exhibit B.
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"Obligations" means all advances, debts, liabilities, obligations,
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covenants and duties arising under any Loan Document owing by the Borrower
or any Guarantor to any Bank or any Indemnified Person, whether direct or
indirect (including those acquired by assignment), absolute or
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contingent, due or to become due, now existing or hereafter arising.
"Organization Documents" means, for any corporation, the certificate
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or articles of incorporation, the bylaws, any certificate of determination
or instrument relating to the rights of preferred shareholders of such
corporation, any shareholder rights agreement, and all applicable
resolutions of the board of directors (or any committee thereof) of such
corporation.
"Other Taxes" means any present or future stamp or documentary taxes
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or any other excise or property taxes, charges or similar levies which
arise from any payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any other
Loan Documents.
"Participant" is defined in Section 9.8.
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"PBGC" means the Pension Benefit Guaranty Corporation, or any
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Governmental Authority succeeding to any of its principal functions under
ERISA.
"Pension Plan" means a pension plan (as defined in Section 3(2) of
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ERISA but not including any Multiemployer Plan) subject to Title IV of
ERISA which the Borrower sponsors, maintains, or to which it makes, is
making, or is obligated to make contributions, or in the case of a multiple
employer plan (as described in Section 4064(a) of ERISA) has made
contributions at any time during the immediately preceding five (5) plan
years.
"Permitted Liens" has the meaning specified in Section 7.1.
--------------- -----------
"Person" means an individual, partnership, corporation, business
------
trust, joint stock company, trust, unincorporated association, joint
venture or Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section 3(3) of
----
ERISA) for its employees, consultants or former employees which the
Borrower sponsors or maintains or to which the Borrower makes, is making,
or is obligated to make contributions with respect to its employees,
consultants or former employees and includes any Pension Plan.
"Pro Rata Share" means, as to any Bank at any time, the percentage
--------------
equivalent (expressed as a decimal, rounded to the ninth decimal place) at
such time of such Bank's Commitment divided by the combined Commitments of
all Banks.
-11-
"Reference Bank" means BNY.
--------------
"Reportable Event" means, any of the events set forth in Section
----------------
4043(b) of ERISA or the regulations thereunder, other than any such event
for which the 30-day notice requirement under ERISA has been waived in
regulations issued by the PBGC.
"Requirement of Law" means, as to any Person, any law (statutory or
------------------
common), treaty, rule or regulation or determination of an arbitrator or of
a Governmental Authority, in each case applicable to or binding upon the
Person or any of its property or to which the Person or any of its property
is subject.
"Responsible Officer" means the chief executive officer, chief
-------------------
financial office or the president of the Borrower or any Guarantor, or any
other officer having substantially the same authority and responsibility;
or the chief executive officer, the chief financial officer, the senior
vice president (finance) or the treasurer of MW, or any other officer
having substantially the same authority and responsibility.
"SAP" means, as to any Subsidiary of the Borrower which is an
---
insurance company, the statutory accounting practices prescribed or
permitted by the insurance department of the state in which such Subsidiary
is domiciled.
"SEC" means the Securities and Exchange Commission, or any
---
Governmental Authority succeeding to any of its principal functions.
"Subsidiary" of a Person means any corporation, association,
----------
partnership, joint venture or other business entity of which more than 50%
of the voting stock or other equity interests (in the case of Persons other
than corporations), is owned or controlled directly or indirectly by the
Person, or one or more of the Subsidiaries of the Person, or a combination
thereof. Unless the context otherwise clearly requires, references herein
to a "Subsidiary" refer to a Subsidiary of the Borrower.
"Surety Instruments" means all letters of credit (including standby
------------------
and commercial), banker's acceptances, bank guaranties, shipside bonds,
surety bonds and similar instruments.
"Swap Contract" means any agreement (including any master agreement
-------------
and any agreement, whether or not in writing, relating to any single
transaction) that is an
-12-
interest rate swap agreement, basis swap, forward rate agreement, commodity
swap, commodity option, equity or equity index swap or option, bond option,
interest rate option, forward foreign exchange agreement, rate cap, collar
or floor agreement, currency swap agreement, cross-currency rate swap
agreement, swaption, currency option or any other, similar agreement
(including any option to enter into any of the foregoing).
"Taxes" means any and all present or future taxes, levies, imposts,
-----
deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Bank, such taxes (including income
taxes or franchise taxes) as are imposed on or measured by each Bank's net
income by the jurisdiction (or any political subdivision thereof) under the
laws of which such Bank is organized or maintains a lending office.
"Type" has the meaning specified in the definition of "Loan."
----
"Unfunded Pension Liability" means the excess of a Plan's benefit
--------------------------
liabilities under Section 4001(a)(16) of ERISA, over the current value of
that Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the
applicable plan year.
"United States" and "U.S." each means the United States of America.
------------- ----
"Wholly-Owned Subsidiary" means any corporation, association,
-----------------------
partnership, joint venture or other business entity of which (other than
directors' qualifying shares required by law) 100% of the voting stock or
other equity interest of each class having ordinary voting power, and 100%
of the voting stock or other equity interest of every other class, in each
case, at the time as of which any determination is being made, is owned,
beneficially and of record, by the Borrower, or by one or more of the other
Wholly-Owned Subsidiaries, or both.
1.2 Other Interpretive Provisions. (a) The meanings of defined terms are
-----------------------------
equally applicable to the singular and plural forms of the defined terms.
(b) The words "hereof", "herein", "hereunder" and similar words refer
to this Agreement as a whole and not to any particular provision of this
Agreement; and subsection, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
-13-
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(ii) The term "including" is not limiting and means "including
without limitation."
(iii) In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and including";
the words "to" and "until" each mean "to but excluding", and the word
"through" means "to and including."
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or regulation
are to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation.
(e) The captions and headings of this Agreement are for convenience
of reference only and shall not affect the interpretation of this Agreement.
(f) This Agreement and other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters. All
such limitations, tests and measurements are cumulative and shall each be
performed in accordance with their terms.
(g) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Banks and the
Borrower and are the products of all parties. Accordingly, they shall not be
construed against the Banks merely because of the Banks' involvement in their
preparation.
1.3 Accounting Principles. (a) Unless the context otherwise clearly
---------------------
requires, all accounting terms not expressly defined herein shall be construed,
and all financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied.
(b) References herein to "fiscal year" and "fiscal quarter" refer to
such fiscal periods of the Borrower.
-14-
ARTICLE II
THE CREDITS
-----------
2.1 Amounts and Terms. Each Bank severally agrees, on the terms and
-----------------
conditions set forth herein, to make a single Loan to the Borrower on the
Closing Date in an aggregate amount not to exceed such Banks' Pro Rata Share of
$101,886,491 (the Bank's "Commitment"). Amounts borrowed which are repaid or
----------
prepaid by the Borrower may not be reborrowed.
2.2 Notes. The Loan made by each Bank shall be evidenced by a Note. Each
-----
Bank shall endorse on the schedules annexed to its Note the date and amount of
each payment of interest and principal made by the Borrower with respect
thereto. Each Bank is irrevocably authorized by the Borrower to endorse its
Note and each Bank's record shall be conclusive absent manifest error; provided,
--------
however, that the failure of a Bank to make, or an error in making, a notation
-------
thereon with respect to any Borrowing or repayment shall not limit or otherwise
affect the obligations of the Borrower hereunder or under any such Note to such
Bank.
2.3 Procedure for Borrowing. The Borrowing shall be made upon the
-----------------------
Borrower's irrevocable written notice delivered to the Banks in the form of a
Notice of Borrowing (which notice must be received by the Administrative prior
to 3:00 p.m. (New York City time) on the Closing Date, specifying (a) the amount
of the Borrowing, which shall be in an aggregate minimum amount necessary,
together with other amounts provided by the Borrower, to repay in full all of
the obligations of the Borrower under the Existing Signature Note; and (b) the
requested Borrowing Date, which shall be a Business Day. On the Borrowing Date,
each Bank will make the amount of its Pro Rata Share of the Borrowing available
to the Borrower by wire transfer in accordance with written instructions
provided to such Bank by the Borrower.
2.4 Conversion and Continuation Elections. (a) The Borrower may, upon
-------------------------------------
irrevocable written notice to the Banks in accordance with subsection 2.4(b):
-----------------
(i) elect, as of any Business Day, in the case of its Base Rate
Loans, or as of the last day of the applicable Interest Period, in the case
of its LIBO Rate Loans, to convert any such Loans into Loans of any other
Type; or
(ii) elect, as of the last day of the applicable Interest
Period, to continue any of its Loans having Interest Periods expiring on
such day;
provided, that if at any time the aggregate amount of LIBO Rate Loans is
--------
reduced, by payment, prepayment, or conversion of part thereof to be less than
$5,000,000, such LIBO Rate Loans shall
-15-
automatically convert into Base Rate Loans, and on and after such date the right
of the Borrower to continue such Loans as, and convert such Loans into, LIBO
Rate Loans shall terminate.
(b) The Borrower shall deliver a Notice of Conversion/Continuation to
be received by the Banks not later than 9:00 a.m. (New York City time) at least
(i) three Business Days in advance of the Conversion/Continuation Date, if the
Loans are to be converted into or continued as LIBO Rate Loans; and (iii) one
Business Day in advance of the Conversion/Continuation Date, if the Loans
are to be converted into Base Rate Loans, specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Loans to be converted or
continued;
(C) the Type of Loans resulting from the proposed
conversion or continuation; and
(D) other than in the case of conversions into Base Rate
Loans, the duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to LIBO
Rate Loans, the Borrower has failed to select timely a new Interest Period to be
applicable to such LIBO Rate Loans, or if any Default or Event of Default then
exists, the Borrower shall be deemed to have elected to convert such LIBO Rate
Loans into Base Rate Loans effective as of the expiration date of such Interest
Period.
(d) All conversions and continuations shall be made ratably according
to the respective outstanding principal amounts of the Loans with respect to
which the notice was given held by each Bank.
(e) Unless the Banks otherwise agree, during the existence of a
Default or Event of Default, the Borrower may not elect to have a Loan converted
into or continued as a LIBO Rate Loan.
(f) After giving effect to any conversion or continuation of Loans,
there may not be more than two different Interest Periods in effect.
2.5 Optional Prepayments. Subject to Section 3.4, the Borrower may without
-------------------- -----------
any other premium or penalty, at any time or from time to time, ratably prepay
Loans in whole or in part, in minimum amounts of $10,000,000 or any multiple of
$1,000,000 in
-16-
excess thereof (or, if less, the remaining principal amount thereof). The
Borrower shall deliver a notice of prepayment in accordance with Section 9.2 to
-----------
be received by the Banks not later than 9:00 a.m. (New York time) (i) at least
three Business Days in advance of the prepayment date if the Loans to be prepaid
are LIBO Rate Loans, and (ii) at least one Business Day in advance of the
prepayment date if the Loans to be prepaid are Base Rate Loans. Such notice of
prepayment shall specify the date and amount of such prepayment and whether such
prepayment is of Base Rate Loans, LIBO Rate Loans, or any combination thereof.
Such notice shall not thereafter be revocable by the Borrower. The Borrower
shall make such prepayment and the payment amount specified in such notice shall
be due and payable on the date specified therein, together with accrued interest
to each such date on the amount prepaid and any amounts required pursuant to
Section 3.4.
-----------
2.6 Repayment. The Borrower shall repay to the Banks on the Maturity Date
---------
the aggregate amount of all Obligations outstanding on such date.
2.7 Interest Rates. (a) With respect to each Loan, the Borrower hereby
--------------
promises to pay interest on the unpaid principal amount thereof for the period
commencing on the date of such Loan until such Loan is paid in full, as follows:
(i) While such Loan is a Base Rate Loan, at a rate per annum
equal to the Base Rate from time to time in effect; and
(ii) While such Loan is a LIBO Rate Loan, for each Interest
Period, at a rate per annum equal to the LIBO Rate applicable to such
Interest Period, plus 1.5% per annum.
(b) Interest on each Loan shall be paid in arrears on each Interest
Payment Date. Interest shall also be paid on the date of any prepayment of
Loans under Section 2.5 or 2.6 for the portion of the Loans so prepaid and upon
----------- ---
payment (including prepayment) in full thereof and, during the existence of any
Event of Default, interest shall be paid on demand of the Banks.
(c) Notwithstanding subsection (a) of this Section, while any Event of
Default exists or after acceleration, the Borrower shall pay interest (after as
well as before entry of judgment thereon to the extent permitted by law) on the
principal amount of all outstanding Loans, at a rate per annum which is
determined by adding 2% per annum to the rate otherwise in effect hereunder for
such Loans; provided, however, that, on and after the expiration of any Interest
-------- -------
Period applicable to any LIBO Rate Loan outstanding on the date of occurrence of
such Event of Default or acceleration, the principal amount of such Loan shall,
-17-
during the continuation of such Event of Default or after acceleration, bear
interest at a rate per annum equal to the Base Rate plus 2%.
(d) Anything herein to the contrary notwithstanding, the obligations
of the Borrower to any Bank hereunder shall be subject to the limitation that
payments of interest shall not be required for any period for which interest is
computed hereunder, to the extent (but only to the extent) that contracting for
or receiving such payment by such Bank would be contrary to the provisions of
any law applicable to such Bank limiting the highest rate of interest that may
be lawfully contracted for, charged or received by such Bank, and in such event
the Borrower shall pay such Bank interest at the highest rate permitted by
applicable law.
2.8 Computation of Interest. (a) All computations of interest for Base
-----------------------
Rate Loans to the extent based on the "reference rate" shall be made on the
basis of a year of 365 or 366 days, as the case may be, and actual days elapsed.
All other computations of fees and interest shall be made on the basis of a 360-
day year and actual days elapsed (which results in more interest being paid than
if computed on the basis of a 365-day year). Interest and fees shall accrue
during each period during which interest or such fees are computed from the
first day thereof to the last day thereof.
(b) Each determination of an interest rate by the Banks shall be
conclusive and binding on the Borrower in the absence of manifest error.
2.9 Payments by the Borrower.
------------------------
(a) All payments to be made by the Borrower shall be made without
set-off, recoupment or counterclaim. Except as otherwise expressly provided
herein, all payments shall be made by the Borrower directly to each Bank at its
Lending Office. All payments by the Borrower to the Banks shall be ratable
according to each Bank's Pro Rata Share. Any payment received by a Bank later
than 3:00 p.m. New York time shall be deemed to have been received on the
following Business Day and any applicable interest or fee shall continue to
accrue.
(b) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other than a
Business Day, such payment shall be made on the following Business Day, and such
extension of time shall in such case be included in the computation of interest
or fees, as the case may be.
2.10 Sharing of Payments, Etc. If, other than as expressly provided
-------------------------
elsewhere herein, any Bank shall obtain on account of
-18-
the Loan made by it any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise) in excess of its Pro Rata Share
of the Obligations, such Bank shall immediately purchase from the other Bank
such participations in the Loan made by them as shall be necessary to cause such
purchasing Bank to share the excess payment pro rata with each of them.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
--------------------------------------
3.1 Taxes. (a) Any and all payments by the Borrower to any Bank under
-----
this Agreement and any other Loan Document shall be made free and clear of, and
without deduction or withholding for any Taxes. In addition, the Borrower shall
pay all Other Taxes.
(b) The Borrower agrees to indemnify and hold harmless each Bank for
the full amount of Taxes or Other Taxes (including any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this Section) paid by the
Bank and any liability (including penalties, interest, additions to tax and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted. Payment under this
indemnification shall be made within 30 days after the date the Bank makes
written demand therefor.
(c) If the Borrower shall be required by law to deduct or withhold any
Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Bank, then:
(i) the sum payable shall be increased as necessary so that
after making all required deductions and withholdings (including deductions
and withholdings applicable to additional sums payable under this Section)
such Bank receives an amount equal to the sum it would have received had no
such deductions or withholdings been made;
(ii) the Borrower shall make such deductions and withholdings;
(iii) the Borrower shall pay the full amount deducted or
withheld to the relevant taxing authority or other authority in accordance
with applicable law; and
(iv) the Borrower shall also pay to each Bank for the account of
such Bank, at the time interest is paid, all additional amounts which the
Bank specifies as necessary to preserve the after-tax yield the Bank would
have received if such Taxes or Other Taxes had not been imposed.
-19-
(d) Within 30 days after the date of any payment by the Borrower of
Taxes or Other Taxes, the Borrower shall furnish the Banks the original or a
certified copy of a receipt evidencing payment thereof, or other evidence of
payment satisfactory to the Banks.
(e) If the Borrower is required to pay additional amounts to any Bank
pursuant to subsection (c) of this Section, then such Bank shall use reasonable
efforts (consistent with legal and regulatory restrictions) to change the
jurisdiction of its lending office so as to eliminate any such additional
payment by the Borrower which may thereafter accrue, if such change in the
judgment of such Bank is not otherwise disadvantageous to such Bank.
3.2 Illegality. (a) If any Bank determines that the introduction of any
----------
Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has asserted
that it is unlawful, for any Bank or its applicable lending office to make LIBO
Rate Loans, then, on notice thereof by the Bank to the Borrower, any obligation
of that Bank to make LIBO Rate Loans shall be suspended until the Bank notifies
the Borrower that the circumstances giving rise to such determination no longer
exist.
(b) If a Bank determines that it is unlawful to maintain any LIBO Rate
Loan, the Borrower shall, upon receipt by the Borrower of notice of such fact
and demand from such Bank, prepay in full such LIBO Rate Loans of that Bank then
outstanding, together with interest accrued thereon and amounts required under
Section 3.4, either on the last day of the Interest Period thereof, if the Bank
-----------
may lawfully continue to maintain such LIBO Rate Loans to such day, or
immediately, if the Bank may not lawfully continue to maintain such LIBO Rate
Loan. If the Borrower is required to so prepay any LIBO Rate Loan, then
concurrently with such prepayment, the Borrower shall borrow from the affected
Bank, in the amount of such repayment, a Base Rate Loan.
(c) If the obligation of any Bank to make or maintain LIBO Rate Loans
has been so terminated or suspended, the Borrower may elect, by giving notice to
the Bank that all Loans which would otherwise be made by the Bank as LIBO Rate
Loans shall be instead Base Rate Loans.
(d) Before giving any notice under this Section, the affected Bank
shall designate a different lending office with respect to its LIBO Rate Loans
if such designation will avoid the need for giving such notice or making such
demand and will not, in the judgment of the Bank, be illegal or otherwise
disadvantageous to the Bank.
-20-
3.3 Increased Costs and Reduction of Return. (a) If any Bank determines
----------------------------------------
that, due to either (i) the introduction of or any change (other than any change
by way of imposition of or increase in reserve requirements included in the
calculation of the LIBO Rate or in respect of the assessment rate payable by any
Bank to the FDIC for insuring U.S. deposits) in or in the interpretation of any
law or regulation or (ii) the compliance by that Bank with any guideline or
request from any central bank or other Governmental Authority (whether or not
having the force of law), there shall be any increase in the cost to such Bank
of agreeing to make or making, funding or maintaining any LIBO Rate Loans, then
the Borrower shall be liable for, and shall from time to time, upon demand, pay
to such Bank, additional amounts as are sufficient to compensate such Bank for
such increased costs.
(b) If any Bank shall have determined that (i) the introduction of any
Capital Adequacy Regulation, (ii) any change in any Capital Adequacy Regulation,
(iii) any change in the interpretation or administration of any Capital Adequacy
Regulation by any central bank or other Governmental Authority charged with the
interpretation or administration thereof, or (iv) compliance by the Bank (or its
lending office) or any corporation controlling the Bank with any Capital
Adequacy Regulation, affects or would affect the amount of capital required or
expected to be maintained by the Bank or any corporation controlling the Bank
and (taking into consideration such Bank's or such corporation's policies with
respect to capital adequacy and such Bank's desired return on capital)
determines that the amount of such capital is increased as a consequence of its
Commitment, loans, credits or obligations under this Agreement, then, upon
demand of such Bank to the Borrower, the Borrower shall pay to the Bank, from
time to time as specified by the Bank, additional amounts sufficient to
compensate the Bank for such increase.
3.4 Funding Losses. The Borrower shall reimburse each Bank and hold each
--------------
Bank harmless from any loss or expense which the Bank may sustain or incur as a
consequence of:
(a) the failure of the Borrower to make on a timely basis any payment
of principal of any LIBO Rate Loan;
(b) the failure of the Borrower to continue or convert a Loan after
the Borrower has given (or is deemed to have given) a Notice of Conversion/
Continuation;
(c) the failure of the Borrower to make any prepayment in accordance
with any notice delivered under Section 2.5;
-----------
(d) the prepayment (including pursuant to Section 2.6) or other
-----------
payment (including after acceleration thereof) of a LIBO
-21-
Rate Loan on a day that is not the last day of the relevant Interest Period; or
(e) the automatic conversion under Section 2.4 of any LIBO Rate Loan
-----------
to a Base Rate Loan on a day that is not the last day of the relevant Interest
Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its LIBO Rate Loans.
3.5 Inability to Determine Rates. If Banks determine that for any
----------------------------
reason adequate and reasonable means do not exist for determining the LIBO Rate
for any requested Interest Period with respect to a proposed LIBO Rate Loan, or
that the LIBO Rate applicable pursuant to subsection 2.6(a) for any requested
-----------------
Interest Period with respect to a proposed LIBO Rate Loan does not adequately
and fairly reflect the cost to any Bank of funding such Loan, the Banks
will promptly so notify the Borrower. Thereafter, the obligation of the Banks
to make or maintain LIBO Rate Loans hereunder shall be suspended until the Banks
revoke such notice in writing. Upon receipt of such notice, the Borrower
may revoke any Notice of Conversion/Continuation then submitted by it. If the
Borrower does not revoke such Notice, the Banks shall convert or continue the
Loans, as proposed by the Borrower, in the amount specified in the applicable
notice submitted by the Borrower, but such Loans shall be made, converted or
continued as Base Rate Loans instead of LIBO Rate Loans.
3.6 Survival. The agreements and obligations of the Borrower in this
--------
Article III shall survive the payment of all other Obligations.
-----------
ARTICLE IV
CONDITIONS PRECEDENT
--------------------
4.1 Conditions To Initial Borrowing. The obligation of each Bank to fund
-------------------------------
the Borrowing hereunder is, in addition to the conditions set forth in Section
-------
4.2, subject to the condition that the Banks have received each of the
---
following, in form and substance satisfactory to each Bank, and in sufficient
copies for each Bank:
(a) Credit Agreement. This Agreement executed by each party thereto;
----------------
(b) Notes. The Notes executed by the Borrower;
------
-22-
(c) Guaranty. The Guaranties executed by MW and the other Guarantors;
--------
(d) Resolutions; Incumbency.
-----------------------
(i) Copies of the resolutions of the board of directors of each
of the Borrower and MW authorizing the transactions contemplated hereby,
certified as of the Closing Date by the Secretary or an Assistant Secretary
of the Borrower or MW; and
(ii) A certificate of the Secretary or Assistant Secretary of
each of the Borrower and MW certifying the names and true signatures of the
officers of the Borrower or MW authorized to execute, deliver and perform,
as applicable, this Agreement, and all other Loan Documents to be delivered
by it hereunder;
(e) Organization Documents; Good Standing. Each of the following
-------------------------------------
documents:
(i) the articles or certificate of incorporation and the bylaws
of the Borrower and MW as in effect on the Closing Date, certified by the
Secretary or Assistant Secretary of the Borrower or MW, as the case may be,
as of the Closing Date; and
(ii) a good standing certificate for the Borrower from the
Secretary of State (or similar, applicable Governmental Authority) of its
jurisdiction of incorporation, dated as of a recent date;
(f) Legal Opinion. An opinion or opinions of counsel to the Borrower
-------------
and MW and addressed to the Banks, substantially in the form of Exhibit D;
---------
(g) Payment of Existing Signature Note. Evidence of payment by the
----------------------------------
Borrower of all of the indebtedness under the Existing Signature Note;
(h) Certificate. A certificate signed by a Responsible Officer, dated
-----------
as of the Closing Date, stating that:
(i) the representations and warranties contained in Article V
---------
are true and correct on and as of such date, as though made on and as of
such date; and
(ii) no Default or Event of Default then exists or would result
from the Borrowing;
(i) Fees Evidence of payment of all fees required by any fee letter;
----
and
-23-
(j) Other Documents. Such other approvals, opinions, documents or
---------------
materials as the Banks may request.
4.2 Further Conditions to Borrowing. The obligation of each Bank to make
-------------------------------
its Loan or to continue or convert any Loan under Section 2.4 is subject to the
-----------
satisfaction of the following conditions precedent on the Borrowing Date or the
relevant Conversion/Continuation Date:
(a) Notice of Borrowing or Conversion/Continuation. The Banks shall
----------------------------------------------
have received a Notice of Borrowing or a Notice of Conversion/Continuation, as
applicable;
(b) Continuation of Representations and Warranties. The
----------------------------------------------
representations and warranties in Article V shall be true and correct on and as
---------
of such Borrowing Date or Conversion/ Continuation Date with the same effect as
if made on and as of such Borrowing Date or Conversion/Continuation Date (except
to the extent such representations and warranties expressly refer to an earlier
date, in which case they shall be true and correct as of such earlier date); and
(c) No Existing Default. No Default or Event of Default shall exist
-------------------
or shall result from such Borrowing or continuation or conversion.
Each Notice of Borrowing and Notice of Conversion/Continuation submitted by the
Borrower hereunder shall constitute a representation and warranty by the
Borrower hereunder, as of the date of each such notice and as of each Borrowing
Date or Conversion/Continuation Date, as applicable, that the conditions in this
Section 4.2 are satisfied.
-----------
ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
The Borrower represents and warrants to each Bank that:
5.1 Corporate Existence and Power. The Borrower and each of its
-----------------------------
Subsidiaries:
(a) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation;
(b) has (or, as to the Guaranties by Subsidiaries, will have within
fifteen (15) days after the Closing Date) the power and authority and all
governmental licenses, authorizations, consents and approvals to own its assets,
carry
-24-
on its business and to execute, deliver, and perform its obligations under the
Loan Documents;
(c) is duly qualified as a foreign corporation and is licensed and in
good standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
or license; and
(d) is in compliance with all Requirements of Law; except, in each
case referred to in clause (c) or clause (d), to the extent that the failure to
do so could not reasonably be expected to have a Material Adverse Effect.
5.2 Corporate Authorization; No Contravention. The execution, delivery
-----------------------------------------
and performance by the Borrower and each Guarantor of this Agreement and each
other Loan Document to which the Borrower or such Guarantor is party, have been
(or, as to the Guaranties by Subsidiaries, will be within fifteen (15) days
after the Closing Date) duly authorized by all necessary corporate action, and
do not and/or will not:
(a) contravene the terms of any of the Borrower's or such Guarantor's
Organization Documents;
(b) conflict with or result in any breach or contravention of, or the
creation of any Lien under, any document evidencing any Contractual Obligation
to which the Borrower or such Guarantor is a party or any order, injunction,
writ or decree of any Governmental Authority to which the Borrower or such
Guarantor or their property is subject; or
(c) violate any Requirement of Law.
5.3 Governmental Authorization. Except as contemplated in Section 6.13,
-------------------------- ------------
no approval, consent, exemption, authorization, or other action by, or notice
to, or filing with, any Governmental Authority is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, the Borrower or any Guarantor of the Agreement or any other Loan
Document.
5.4 Binding Effect. This Agreement and each other Loan Document to which
--------------
the Borrower or any Guarantor is a party constitute (or, as to the Guaranties by
Subsidiaries, will constitute within fifteen (15) days after the Closing Date)
the legal, valid and binding obligations of the Borrower or such Guarantor to
the extent it is a party thereto, enforceable against the Borrower or such
Guarantor in accordance with their respective terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, or similar laws affecting
the
-25-
enforcement of creditors' rights generally or by equitable principles relating
to enforceability.
5.5 Litigation. Except as specifically disclosed in Schedule 5.5, there
---------- ------------
are no actions, suits, proceedings, claims or disputes pending, or to the best
knowledge of the Borrower, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against the Borrower or its
Subsidiaries or any of their respective properties which:
(a) purport to affect or pertain to this Agreement or any other Loan
Document, or any of the transactions contemplated hereby or thereby; or
(b) if determined adversely to the Borrower or its Subsidiaries, would
reasonably be expected to have a Material Adverse Effect.
No injunction, writ, temporary restraining order or any order of any nature has
been issued by any court or other Governmental Authority purporting to enjoin or
restrain the execution, delivery or performance of this Agreement or any other
Loan Document, or directing that the transactions provided for herein or therein
not be consummated as herein or therein provided.
5.6 No Default. No Default or Event of Default exists or would result
----------
from the incurring of any Obligations by the Borrower. As of the Closing Date,
neither the Borrower nor any Subsidiary is in default under or with respect to
any Contractual Obligation in any respect which, individually or together with
all such defaults, could reasonably be expected to have a Material Adverse
Effect, or that would, if such default had occurred after the Closing Date,
create an Event of Default under subsection 9.1(e).
-----------------
5.7 ERISA Compliance. Except as specifically disclosed in Schedule 5.7:
---------------- ------------
(a) Each Plan and to the knowledge of Borrower, each Multiemployer
Plan is in compliance in all material respects with the applicable provisions of
ERISA, the Code and other federal or state law, except to the extent
noncompliance could not reasonably be expected to result in a Material Adverse
Effect. Each Plan and to the knowledge of Borrower, each Multiemployer Plan
which is intended to qualify under Section 401(a) of the Code has received a
favorable determination letter from the IRS and to the best knowledge of the
Borrower, nothing has occurred which would cause the loss of such qualification.
The Borrower and each ERISA Affiliate has made all required contributions to any
Plan and each Multiemployer Plan subject to Section 412 of the Code, and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code
-26-
has been made with respect to any Plan and to the best of Borrower's knowledge
Multiemployer Plan.
(b) There are no pending or, to the best knowledge of Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan and to the best of Borrower's knowledge Multiemployer
Plan which has resulted or could reasonably be expected to result in a Material
Adverse Effect. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan and to the knowledge of
Borrower, each Multiemployer Plan which has resulted or could reasonably be
expected to result in a Material Adverse Effect.
(c) (i) Except for any event which would not reasonably be expected to
result in a Material Adverse Effect, no ERISA Event has occurred or is
reasonably expected to occur; (ii) no Pension Plan has any Unfunded Pension
Liability; (iii) neither the Borrower nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any liability under Title IV of ERISA with respect
to any Pension Plan or Multiemployer Plan (other than premiums due and not
delinquent under Section 4007 of ERISA); (iv) neither the Borrower nor any ERISA
Affiliate has incurred, or reasonably expects to incur, any liability (and no
event has occurred which, with the giving of notice under Section 4219 of ERISA,
would result in such liability) under Section 4201 or 4243 of ERISA with respect
to a Multiemployer Plan; and (v) neither the Borrower nor any ERISA Affiliate
has engaged in a transaction that could be subject to Section 4069 or 4212(c) of
ERISA.
5.8 Use of Proceeds; Margin Regulations. The proceeds of the Loans are to
-----------------------------------
be used solely for the purposes set forth in and permitted by Section 6.12 and
------------
Section 7.7. Neither the Borrower nor any Subsidiary is generally engaged in
-----------
the business of purchasing or selling Margin Stock or extending credit for the
purpose of purchasing or carrying Margin Stock.
5.9 Title to Properties. The Borrower and each Subsidiary have good
-------------------
record and marketable title in fee simple to, or valid leasehold interests in,
all real property necessary or used in the ordinary conduct of their respective
businesses, except for such defects in title as could not, individually or in
the aggregate, have a Material Adverse Effect. As of the Closing Date, the
property of the Borrower and its Subsidiaries is subject to no Liens, other than
Permitted Liens.
5.10 Taxes. The Borrower and its Subsidiaries have filed all Federal and
-----
other material tax returns and reports required to be filed, and have paid all
Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their properties, income or assets
otherwise
-27-
due and payable, except those which are being contested in good faith by
appropriate proceedings and for which adequate reserves have been provided in
accordance with GAAP. There is no proposed tax assessment against the Borrower
or any Subsidiary that would, if made, have a Material Adverse Effect.
5.11 Financial Condition. (a) The audited consolidated financial
-------------------
statements of the Borrower and its Subsidiaries dated December 31, 1995, and the
related consolidated statements of income or operations, shareholders' equity
and cash flows for the fiscal year ended on that date:
(i) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly noted
therein;
(ii) fairly present the financial condition of the Borrower and
its Subsidiaries as of the date thereof and results of operations for the
period covered thereby; and
(iii) except as specifically disclosed in Schedule 5.11 or as
-------------
otherwise incurred in the ordinary course of business by the Subsidiaries
of the Borrower that are insurance companies, show all material
indebtedness and other liabilities, direct or contingent, of the Borrower
and its consolidated Subsidiaries as of the Closing Date, including
liabilities for taxes, material commitments and Contingent Obligations.
(b) Since December 31, 1995, there has been no Material Adverse
Effect.
5.12 Environmental Matters. The Borrower conducts in the ordinary course
---------------------
of business a review of the effect of existing Environmental Laws and existing
Environmental Claims on its business, operations and properties, and as a result
thereof the Borrower has reasonably concluded that, except as specifically
disclosed in Schedule 5.12, such Environmental Laws and Environmental Claims
-------------
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
5.13 Regulated Entities. None of the Borrower, any Person controlling the
------------------
Borrower, or any Subsidiary (other than Signature Investment Advisors, Inc.) is
an "Investment Company" within the meaning of the Investment Company Act of
1940. The Borrower is not subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act,
any state public utilities code, or any other Federal or state statute or
regulation (other than applicable insurance regulations) limiting its ability to
incur Indebtedness.
-28-
5.14 No Burdensome Restrictions. Neither the Borrower nor any Subsidiary
--------------------------
is a party to or bound by any Contractual Obligation, or subject to any
restriction in any Organization Document, or any Requirement of Law, which could
reasonably be expected to have a Material Adverse Effect.
5.15 Copyrights, Patents, Trademarks and Licenses, etc. The Borrower or
-------------------------------------------------
its Subsidiaries own or are licensed or otherwise have the right to use all of
the patents, trademarks, service marks, trade names, copyrights, contractual
franchises, authorizations and other rights that are reasonably necessary for
the operation of their respective businesses, without conflict with the rights
of any other Person. To the best knowledge of the Borrower, no slogan or other
advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed, by the Borrower or any
Subsidiary infringes upon any rights held by any other Person. Except as
specifically disclosed in Schedule 5.5, no claim or litigation regarding any of
------------
the foregoing is pending or threatened, and no patent, invention, device,
application, principle or any statute, law, rule, regulation, standard or code
is pending or, to the knowledge of the Borrower, proposed, which, in either
case, could reasonably be expected to have a Material Adverse Effect.
5.16 Subsidiaries. The Borrower has no Subsidiaries other than those
------------
specifically disclosed in part (a) of Schedule 5.16 hereto and has no equity
-------------
investments in any other corporation or entity other than those specifically
disclosed in part (b) of Schedule 5.16 except for investments in the ordinary
-------------
course of business by any Subsidiary of the Borrower.
5.17 Insurance. Except as specifically disclosed in Schedule 5.17, the
--------- -------------
properties of the Borrower and its Subsidiaries are insured with financially
sound and reputable insurance companies not Affiliates of the Borrower, in such
amounts, with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and owning similar properties
in localities where the Borrower or such Subsidiary operates.
5.18 Full Disclosure. None of the representations or warranties made by
---------------
the Borrower or any Subsidiary in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of the Borrower or any Subsidiary in connection with the Loan
Documents (including the offering and disclosure materials delivered by or on
behalf of the Borrower to the Banks prior to the Closing Date), contains any
untrue statement of a material fact or omits any material fact required to be
stated therein or necessary to make the statements made therein, in light of the
-29-
circumstances under which they are made, not misleading as of the time when made
or delivered.
ARTICLE VI
AFFIRMATIVE COVENANTS
---------------------
So long as any Bank shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, unless the Banks waive
compliance in writing:
6.1 Financial Statements. The Borrower shall deliver to each Bank, in
--------------------
form and detail satisfactory to such Bank:
(a) as soon as available, but not later than ninety days after the end
of each fiscal year, a copy of the audited consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for such year, setting forth in each case in comparative form the figures
for the previous fiscal year, and accompanied by the opinion of Xxxxxx Xxxxxxxx
LLP or another nationally-recognized independent public accounting firm
("Independent Auditor") which report shall state that such consolidated
---------------------
financial statements present fairly the financial position for the periods
indicated in conformity with GAAP applied on a basis consistent with prior
years. Such opinion shall not be qualified or limited because of a restricted
or limited examination by the Independent Auditor of any material portion of the
Borrower's or any Subsidiary's records and shall be delivered to such Bank
pursuant to a reliance agreement between the Banks and such Independent Auditor
in form and substance satisfactory to the Banks;
(b) as soon as available, but not later than forty-five days after the
end of each of the first three fiscal quarters of each fiscal year, a copy of
the unaudited consolidated balance sheet of the Borrower and its Subsidiaries as
of the end of such quarter and the related consolidated statements of income,
shareholders' equity and cash flows for the period commencing on the first day
and ending on the last day of such quarter, and certified by a Responsible
Officer as fairly presenting, in accordance with GAAP (subject to ordinary, good
faith year-end audit adjustments), the financial position and the results of
operations of the Borrower and the Subsidiaries;
(c) As soon as available, but in any event within 30 days prior to the
beginning of each fiscal year of the Borrower, a copy of the plan and forecast
(including a projected closing consolidated balance sheet, income statement and
funds flow statements) of the Borrower for each month of such fiscal year;
-30-
(d) As soon as possible, but in any event within ninety (90) days
after the end of each fiscal year of each of the Subsidiaries of the Borrower
which is an insurance company, a copy of the annual statement of such Subsidiary
for such fiscal year prepared in accordance with SAP and accompanied by the
certification of a Responsible Officer that such financial statement presents
fairly, in accordance with SAP, the financial position of such Subsidiary for
the period then ended; and
(e) As soon as possible, but in any event within sixty (60) days
after the end of each of the first three fiscal quarters of each fiscal year of
each of the Subsidiaries of the Borrower which is an insurance company, a copy
of the quarterly statement of such Subsidiary for such fiscal quarter, all
prepared in accordance with SAP and accompanied by the certification of a
Responsible Officer that all such financial statements present fairly in
accordance with SAP the financial position of such Subsidiary for the periods
then ended.
6.2 Certificates; Other Information. The Borrower shall furnish to each
-------------------------------
Bank:
(a) concurrently with the delivery of the financial statements
referred to in subsection 6.1(a), a certificate of the Independent Auditor
-----------------
stating that in making the examination necessary therefor no knowledge was
obtained of any Default or Event of Default as to accounting matters, except as
specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 6.1(a) and (b), a Compliance Certificate executed by
------------------ ---
a Responsible Officer;
(c) promptly, copies of all financial statements and reports that MW
sends to its shareholders, and copies of all financial statements and regular,
periodical or special reports (including Forms 10K, 10Q and 8K) that MW or the
Borrower may make to, or file with, the SEC;
(d) promptly, such additional information regarding the business,
financial or corporate affairs of the Borrower or any Subsidiary as any Bank may
from time to time request; and
(e) concurrently with the declaration of any dividends or
distributions or the agreement to make any advances by the Borrower to MW, a
notice of the amount and proposed date of any dividend, distribution or advance.
6.3 Notices. The Borrower shall promptly notify each Bank:
-------
(a) of the occurrence of any Default or Event of Default, and of the
occurrence or existence of any event or
-31-
circumstance that foreseeably will become a Default or Event of Default;
(b) of any matter that has resulted or may result in a Material
Adverse Effect, including (i) breach or non-performance of, or any default
under, a Contractual Obligation of the Borrower or any Subsidiary; (ii) any
dispute, litigation, investigation, proceeding or suspension between the
Borrower or any Subsidiary and any Governmental Authority; or (iii) the
commencement of, or any material development in, any litigation or proceeding
affecting the Borrower or any Subsidiary, including pursuant to any applicable
Environmental Laws;
(c) of the occurrence of any of the following events affecting the
Borrower or any ERISA Affiliate (but in no event more than 10 days after such
event), and deliver to each Bank a copy of any notice with respect to such event
that is filed with a Governmental Authority and any notice delivered by a
Governmental Authority to the Borrower or any ERISA Affiliate with respect to
such event:
(i) an ERISA Event which would result in a material liability
to Borrower;
(ii) a material increase in the Unfunded Pension Liability of
any Pension Plan;
(iii) the adoption of, or the commencement of contributions to,
any Plan subject to Section 412 of the Code by the Borrower or any ERISA
Affiliate; or
(iv) the adoption of any amendment to a Plan subject to Section
412 of the Code, if such amendment results in a material increase in
contributions or Unfunded Pension Liability.
(d) of any material change in accounting policies or financial
reporting practices by the Borrower or any of its consolidated Subsidiaries.
Each notice under this Section shall be accompanied by a written
statement by a Responsible Officer setting forth details of the occurrence
referred to therein, and stating what action the Borrower or any affected
Subsidiary proposes to take with respect thereto and at what time. Each notice
under subsection 6.3(a) shall describe with particularity any and all clauses or
-----------------
provisions of this Agreement or other Loan Document that have been (or
foreseeably will be) breached or violated.
6.4 Preservation of Corporate Existence, Etc. The Borrower shall, and
----------------------------------------
shall cause each Subsidiary to:
-32-
(a) preserve and maintain in full force and effect its corporate
existence and good standing under the laws of its state or jurisdiction of
incorporation;
(b) preserve and maintain in full force and effect all governmental
rights, privileges, qualifications, permits, licenses and franchises necessary
or desirable in the normal conduct of its business except in connection with
transactions permitted by Section 7.3 and sales of assets permitted by Section
----------- -------
7.2;
---
(c) use reasonable efforts, in the ordinary course of business, to
preserve its business organization and goodwill; and
(d) preserve or renew all of its registered patents, trademarks, trade
names and service marks, the non-preservation of which could reasonably be
expected to have a Material Adverse Effect.
6.5 Maintenance of Property. The Borrower shall maintain, and shall cause
-----------------------
each Subsidiary to maintain, and preserve all its property which is used or
useful in its business in good working order and condition, ordinary wear and
tear excepted, except as permitted by Section 7.2. The Borrower and each
-----------
Subsidiary shall use the standard of care typical in the industry in the
operation and maintenance of its facilities.
6.6 Insurance. The Borrower shall maintain, and shall cause each
---------
Subsidiary to maintain, with financially sound and reputable independent
insurers, insurance with respect to its properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons.
6.7 Payment of Obligations. The Borrower shall, and shall cause each
----------------------
Subsidiary to, pay and discharge as the same shall become due and payable, all
of their respective obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets, unless the same are being contested
in good faith by appropriate proceedings and adequate reserves in accordance
with GAAP are being maintained by the Borrower or such Subsidiary;
(b) all lawful claims which, if unpaid, would by law become a Lien
upon its property; and
-33-
(c) all Indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness.
6.8 Compliance with Laws. The Borrower shall comply, and shall cause each
--------------------
Subsidiary to comply, in all material respects with all Requirements of Law of
any Governmental Authority having jurisdiction over it or its business
(including the Federal Fair Labor Standards Act), except such as may be
contested in good faith or as to which a bona fide dispute may exist.
6.9 Compliance with ERISA. The Borrower shall, and shall cause each of
---------------------
its ERISA Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification; and (c) make all required contributions to
any Plan subject to Section 412 of the Code.
6.10 Inspection of Property and Books and Records. The Borrower shall
--------------------------------------------
maintain and shall cause each Subsidiary to maintain proper books of record and
account, in which full, true and correct entries in conformity with GAAP
consistently applied shall be made of all financial transactions and matters
involving the assets and business of the Borrower and such Subsidiary. The
Borrower shall permit, and shall cause each Subsidiary to permit,
representatives and independent contractors of any Bank to visit and inspect any
of their respective properties, to examine their respective corporate, financial
and operating records, and make copies thereof or abstracts therefrom, and to
discuss their respective affairs, finances and accounts with their respective
directors, officers, and independent public accountants, all at the expense of
the Borrower and at such reasonable times during normal business hours and as
often as may be reasonably desired, upon reasonable advance notice to the
Borrower; provided, however, when an Event of Default exists any Bank may do any
-------- -------
of the foregoing at the expense of the Borrower at any time during normal
business hours and without advance notice.
6.11 Environmental Laws. The Borrower shall, and shall cause each
------------------
Subsidiary to, conduct its operations and keep and maintain its property in
compliance with all Environmental Laws.
6.12 Use of Proceeds. The proceeds of the Existing Signature Note were
---------------
used by the Borrower to acquire Amoco Enterprises, Inc., Amoco Motor Club, Inc.
and Amoco Enterprises Canada, Limited. Concurrently with the Borrowing
hereunder, the Borrower shall use the proceeds of the Loans to repay the
Existing Signature Note.
6.13 Guaranties. Within fifteen days of the Closing Date, the Borrower
----------
shall cause each Guarantor to deliver to the Banks
-34-
(a) a certificate of the Secretary or Assistant Secretary of each Guarantor, as
to (i) copies of the resolutions of its board of directors authorizing its
Guaranty, (ii) the names and true signatures of its officers authorized to
execute, deliver and perform its Guaranty, and (iii) its articles or certificate
of incorporation and bylaws, and (b) an opinion of counsel acceptable to the
Banks as to the due authorization, execution, delivery and validity of the
Guaranties (such opinion to be in form and substance satisfactory to the Banks).
ARTICLE VII
NEGATIVE COVENANTS
------------------
So long as any Bank shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, unless the Banks waive
compliance in writing:
7.1 Limitation on Liens. The Borrower shall not, and shall not suffer or
-------------------
permit any Subsidiary to, directly or indirectly, make, create, incur, assume or
suffer to exist any Lien upon or with respect to any part of its property,
whether now owned or hereafter acquired, other than the following ("Permitted
---------
Liens"):
-----
(a) any Lien existing on property of the Borrower or any Subsidiary on
the Closing Date and set forth in Schedule 7.1 securing Indebtedness outstanding
------------
on such date;
(b) any Lien created under any Loan Document;
(c) Liens for taxes, fees, assessments or other governmental charges
which are not delinquent or remain payable without penalty, or to the extent
that non-payment thereof is permitted by Section 6.7, provided that no notice of
-----------
lien has been filed or recorded under the Code;
(d) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other similar Liens arising in the ordinary course of business
which are not delinquent or remain payable without penalty or which are being
contested in good faith and by appropriate proceedings, which proceedings have
the effect of preventing the forfeiture or sale of the property subject thereto;
(e) Liens (other than any Lien imposed by ERISA) consisting of pledges
or deposits required in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other social security
legislation;
(f) Liens on the property of the Borrower or its Subsidiary securing
(i) the non-delinquent performance of bids,
-35-
trade contracts (other than for borrowed money), leases, statutory obligations,
(ii) contingent obligations on surety and appeal bonds, and (iii) other non-
delinquent obligations of a like nature; in each case, incurred in the ordinary
course of business;
(g) Liens consisting of judgment or judicial attachment liens,
provided that the enforcement of such Liens is effectively stayed and all such
liens in the aggregate at any time outstanding for the Borrower and its
Subsidiaries do not exceed $500,000;
(h) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto or interfere
with the ordinary conduct of the businesses of the Borrower and its
Subsidiaries;
(i) Liens securing obligations in respect of capital leases on assets
subject to such leases, provided that such capital leases are otherwise
permitted hereunder;
(j) Liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of set-off or similar rights and
remedies as to deposit accounts or other funds maintained with a creditor
depository institution; provided, that (i) such deposit account is not a
-------- ----
dedicated cash collateral account and is not subject to restrictions against
access by the Borrower or any Subsidiary in excess of those set forth by
regulations promulgated by the FRB, and (ii) such deposit account is not
intended by the Borrower or any Subsidiary to provide collateral to the
depository institution;
(k) deposits by the Subsidiaries of the Borrower which are required
by applicable regulation or in the ordinary course of business; and
(l) Liens arising in the ordinary course of business for sums being
contested in good faith and by appropriate proceedings and with respect to which
adequate reserves are being maintained in accordance with GAAP, or for sums not
due, and in either case not involving any deposits or advances for borrowed
money or the deferred purchase price of property or services.
7.2 Disposition of Assets. The Borrower shall not, and shall not suffer
---------------------
or permit any Subsidiary to, directly or indirectly, sell, assign, lease,
convey, transfer or otherwise dispose of (whether in one or a series of
transactions) any property (including accounts and notes receivable, with or
without recourse) or enter into any agreement to do any of the foregoing,
except:
-36-
(a) dispositions of inventory, or used, worn-out or surplus equipment,
all in the ordinary course of business;
(b) the sale of equipment to the extent that such equipment is
exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are reasonably promptly applied to the
purchase price of such replacement equipment;
(c) dispositions not otherwise permitted hereunder which are made for
fair market value; provided, that (i) after giving effect to any such
--------
disposition, no Default or Event of Default would exist, (ii) the aggregate
sales price from such disposition shall be paid in cash, (iii) the assets which
are subject of such disposition do not include accounts or notes receivable and
(iv) the aggregate value of all assets so sold by the Borrower and its
Subsidiaries, together, shall not exceed in any fiscal year $5,000,000 (except
that in fiscal year 1996, the aggregate value of all such assets can be in
excess of $5,000,000 but shall not exceed $10,000,000);
(d) dispositions of investments permitted by Section 7.4(d); and
--------------
(e) sales by the Borrower of accounts receivable pursuant to the
Retail Credit Program Agreement or MWCC Receivables Purchase Agreement (each as
defined in the MW Credit Agreement).
7.3 Consolidations and Mergers. The Borrower shall not, and shall not
--------------------------
suffer or permit any Subsidiary to, merge, consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions all or substantially all of its assets (whether now owned
or hereafter acquired) to or in favor of any Person, except:
(a) any Guarantor may merge with the Borrower; provided, that the
--------
Borrower shall be the continuing or surviving corporation, or with any one or
more Guarantors; and further provided, that if any transaction shall be between
--------
a Subsidiary and a Wholly-Owned Subsidiary, the Wholly-Owned Subsidiary shall be
the continuing or surviving corporation; and
(b) any Subsidiary may sell all or substantially all of its assets
(upon voluntary liquidation or otherwise), to the Borrower or another Wholly-
Owned Subsidiary.
7.4 Loans and Investments. The Borrower shall not purchase or acquire, or
---------------------
suffer or permit any Subsidiary to purchase or acquire, or make any commitment
therefor, any capital stock, equity interest, or any obligations or other
securities of, or
-37-
any interest in, any Person, or make or commit to make any Acquisitions, or make
or commit to make any advance, loan, extension of credit or capital contribution
to or any other investment in, any Person including any Affiliate of the
Borrower, except for:
(a) investments in cash equivalents and short term marketable
securities;
(b) extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale or lease of goods or services in the ordinary
course of business;
(c) extensions of credit and investments by the Borrower or any
Subsidiary of the Borrower to any of the Guarantors which are not insurance
companies or by any Guarantor to another Guarantor which are not insurance
companies;
(d) extensions of credit and investments in the ordinary course of
business by Subsidiaries of the Borrower;
(e) advances to MW;
(f) investments set forth on Schedule 7.4;
------------
(g) other investments not exceeding $2,000,000 in the aggregate;
(h) intercompany advances among the Borrower and its Subsidiaries for
administrative and operational services being provided by the Borrower or one of
its Subsidiaries; and
(i) investments and extensions of credit by the Borrower to any
Subsidiary of the Borrower which is not either (i) an insurance company or (ii)
a Guarantor, in an aggregate amount not exceeding $20,000,000.
7.5 Limitation on Indebtedness. The Borrower shall not, and shall not
--------------------------
suffer or permit any Subsidiary to, create, incur, assume, suffer to exist, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement;
(b) Indebtedness consisting of Contingent Obligations permitted
pursuant to Section 7.8;
-----------
(c) Indebtedness existing on the Closing Date and set forth in
Schedule 7.5;
------------
(d) Indebtedness incurred in connection with leases permitted pursuant
to Section 7.9; and
-----------
-38-
(e) Indebtedness permitted by subsection 7.4(c).
-----------------
7.6 Transactions with Affiliates. The Borrower shall not, and shall not
----------------------------
suffer or permit any Subsidiary to, enter into any transaction with any
Affiliate (other than a Wholly-Owned Subsidiary of the Borrower and Scrip Plus,
Inc.), except upon fair and reasonable terms no less favorable to the Borrower
or such Subsidiary than would be obtained in a comparable arm's-length
transaction with a Person not an Affiliate of the Borrower or such Subsidiary.
7.7 Use of Proceeds. The Borrower shall not, and shall not suffer or
---------------
permit any Subsidiary to, use any portion of the Loan proceeds, directly or
indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or otherwise
refinance indebtedness of the Borrower or others incurred to purchase or carry
Margin Stock, (iii) to extend credit for the purpose of purchasing or carrying
any Margin Stock, or (iv) to acquire any security in any transaction that is
subject to Section 13 or 14 of the Exchange Act.
7.8 Contingent Obligations. The Borrower shall not, and shall not suffer
----------------------
or permit any Subsidiary to, create, incur, assume or suffer to exist any
Contingent Obligations except:
(a) endorsements for collection or deposit in the ordinary course of
business;
(b) Swap Contracts entered into in the ordinary course of business as
bona fide hedging transactions;
(c) Contingent Obligations of the Borrower and its Subsidiaries listed
in Schedule 7.8;
------------
(d) the Guaranties; and
(e) Contingent Obligations incurred in the ordinary course of
business by Subsidiaries that are insurance companies.
7.9 Lease Obligations. The Borrower shall not, and shall not suffer or
-----------------
permit any Subsidiary to, create or suffer to exist any obligations for the
payment of rent for any property under lease or agreement to lease, except for:
(a) leases of the Borrower and of Subsidiaries in existence on the
Closing Date and any renewal, extension or refinancing thereof;
(b) operating leases entered into by the Borrower or any Subsidiary
after the Closing Date in the ordinary course of business; and
-39-
(c) capital leases other than those permitted under clause (a) of this
Section, entered into by the Borrower or any Subsidiary after the Closing Date
to finance the acquisition of equipment; provided, that the aggregate net
--------
present value of all future rental payments for all such capital leases shall
not exceed in any fiscal year $10,000,000;
7.10 ERISA. The Borrower shall not, and shall not suffer or permit any of
-----
its ERISA Affiliates to: (a) engage in a prohibited transaction or violation of
the fiduciary responsibility rules with respect to any Plan which has resulted
or could reasonably expected to result in liability of the Borrower in an
aggregate amount in excess of $500,000; or (b) engage in a transaction that
could be subject to Section 4069 or 4212(c) of ERISA.
7.11 Change in Business. The Borrower shall not, and shall not suffer or
------------------
permit any Subsidiary to, engage in any material line of business substantially
different from those lines of business carried on by the Borrower and its
Subsidiaries on the date hereof.
7.12 Accounting Changes. The Borrower shall not, and shall not suffer or
------------------
permit any Subsidiary to, make any significant change in accounting treatment or
reporting practices, except as required by GAAP, or change the fiscal year of
the Borrower or of any Subsidiary.
ARTICLE VIII
EVENTS OF DEFAULT
-----------------
8.1 Event of Default. Any of the following shall constitute an "Event of
---------------- --------
Default":
-------
(a) Non-Payment. The Borrower fails to pay, (i) when and as required
-----------
to be paid herein, any amount of principal of any Loan, or (ii) within two
Business Days after the same becomes due, any interest, fee or any other amount
payable hereunder or under any other Loan Document; or
(b) Representation or Warranty. Any representation or warranty by the
--------------------------
Borrower or any Subsidiary made or deemed made herein, in any other Loan
Document, or which is contained in any certificate, document or financial or
other statement by the Borrower, any Subsidiary, or any Responsible Officer,
furnished at any time under this Agreement, or in or under any other Loan
Document, is incorrect in any material respect on or as of the date made or
deemed made; or
-40-
(c) Specific Defaults. The Borrower fails to perform or observe any
-----------------
term, covenant or agreement contained in any of Section 6.1, 6.2, 6.3, 6.9 or
----------- --- --- ---
6.13 or in Article VII; or
---- -----------
(d) Other Defaults. The Borrower fails to perform or observe any
--------------
other term or covenant contained in this Agreement or any other Loan Document,
and such default shall continue unremedied for a period of 20 days after the
earlier of (i) the date upon which a Responsible Officer knew or reasonably
should have known of such failure or (ii) the date upon which written notice
thereof is given to the Borrower by any Bank; or
(e) Cross-Default. (i) MW, any of its Subsidiaries, the Borrower or
-------------
any Subsidiary of the Borrower (A) fails to make any payment in respect of any
Indebtedness or Contingent Obligation (other than in respect of Swap Contracts)
or lease obligations under the Designated Leases, having an aggregate principal
amount (including undrawn committed or available amounts and including amounts
owing to all creditors under any combined or syndicated credit arrangement) of
more than $5,000,000 when due (whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise) and such failure continues after
the applicable grace or notice period, if any, specified in the relevant
document on the date of such failure; or (B) fails to perform or observe any
other condition or covenant, or any other event shall occur or condition exist,
under any agreement or instrument relating to any such Indebtedness or
Contingent Obligation or lease obligation under the Designated Leases, and such
failure continues after the applicable grace or notice period, if any, specified
in the relevant document on the date of such failure if the effect of such
failure, event or condition is to cause, or to permit the holder or holders of
such Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause such Indebtedness or Contingent Obligation or lease
obligation under the Designated Leases to be declared to be due and payable
prior to its stated maturity, or such Contingent Obligation to become payable or
cash collateral in respect thereof to be demanded; or (ii) there occurs under
any Swap Contract an early termination date resulting from (1) any event of
default under such Swap Contract as to which MW, any Subsidiary of MW, the
Borrower or any Subsidiary is the defaulting party or (2) any termination event
as to which MW, any Subsidiary of MW, the Borrower or any Subsidiary is an
affected party, and, in either event, the swap termination value owed by MW, any
Subsidiary of MW, the Borrower or such Subsidiary as a result thereof is greater
than $5,000,000; or
(f) Insolvency; Voluntary Proceedings. MW or the Borrower or any
---------------------------------
Subsidiary of MW (i) ceases or fails to be solvent, or generally fails to pay,
or admits in writing its
-41-
inability to pay, its debts as they become due, subject to applicable grace
periods, if any, whether at stated maturity or otherwise; (ii) voluntarily
ceases to conduct its business in the ordinary course; (iii) commences any
Insolvency Proceeding with respect to itself; or (iv) takes any action to
effectuate or authorize any of the foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency
-----------------------
Proceeding is commenced or filed against MW or the Borrower or any Subsidiary of
MW, or any writ, judgment, warrant of attachment, execution or similar process,
is issued or levied against a substantial part of MW's or the Borrower's or any
MW Subsidiary's properties, and any such proceeding or petition shall not be
dismissed, or such writ, judgment, warrant of attachment, execution or similar
process shall not be released, vacated or fully bonded within 60 days after
commencement, filing or levy; (ii) MW or the Borrower or any Subsidiary of MW
admits the material allegations of a petition against it in any Insolvency
Proceeding, or an order for relief (or similar order under non-U.S. law) is
ordered in any Insolvency Proceeding; or (iii) MW or the Borrower or any
Subsidiary of MW acquiesces in the appointment of a receiver, trustee,
custodian, conservator, liquidator, mortgagee in possession (or agent therefor),
or other similar Person for itself or a substantial portion of its property or
business; or
(h) ERISA. (i) An ERISA Event shall occur with respect to a Pension
-----
Plan or Multiemployer Plan which has resulted or could reasonably be expected to
result in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $500,000;
(ii) the aggregate amount of Unfunded Pension Liability among all Pension Plans
at any time exceeds $500,000; or (iii) the Borrower or any ERISA Affiliate shall
fail to pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multiemployer Plan in an aggregate amount in excess of
$500,000; or
(i) Monetary Judgments. One or more non-interlocutory judgments, non-
------------------
interlocutory orders, decrees or arbitration awards is entered against the
Borrower or any Subsidiary involving in the aggregate a liability (to the extent
not covered by independent third-party insurance as to which the insurer does
not dispute coverage) as to any single or related series of transactions,
incidents or conditions, of $500,000 or more, and the same shall remain
unsatisfied, unvacated and unstayed pending appeal for a period of 10 days after
the entry thereof; or
(j) Non-Monetary Judgments. Any non-monetary judgment, order or
----------------------
decree is entered against the Borrower or any Subsidiary which does or would
reasonably be expected to have a
-42-
Material Adverse Effect, and there shall be any period of 10 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or
(k) Change of Control. There occurs any Change of Control; or
-----------------
(l) Guarantor Defaults. Any Guarantor fails in any material respect
------------------
to perform or observe any term, covenant or agreement in its Guaranty; or the
Guaranty of any Guarantor is for any reason partially (including with respect to
future advances) or wholly revoked or invalidated, or otherwise ceases to be in
full force and effect, or any Guarantor or any other Person contests in any
manner the validity or enforceability thereof or denies that it has any further
liability or obligation thereunder; or any event described at subsections (f) or
(g) of this Section occurs with respect to any Guarantor; or
(m) MW Credit Agreement Event of Default. Any Event of Default (as
------------------------------------
defined in the MW Credit Agreement) shall occur; or
(n) Minimum Net Worth. The net worth of the Borrower and its
-----------------
Subsidiaries (calculated on a consolidated basis in accordance with GAAP) is
less than $450,000,000 at any time; or
(o) Impairment. The Banks in good faith believe that the prospect of
----------
payment of all or any part of the Obligations evidenced by the Notes is
impaired.
8.2 Remedies. If any Event of Default occurs, the Banks may,
--------
(a) declare the Commitment of each Bank to be terminated, whereupon
such Commitments shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower; and
(c) exercise all rights and remedies available to the Banks under the
Loan Documents or applicable law;
provided, however, that upon the occurrence of any event specified in subsection
-------- -------
(f) or (g) of Section 8.1 (in the case of clause (i) of subsection (g) upon the
-----------
expiration of the 60-day period mentioned therein), the obligation of each Bank
to make its Loan shall automatically terminate and the unpaid principal amount
of all outstanding Loans and all interest and other
-43-
amounts as aforesaid shall automatically become due and payable without further
act of any Bank.
8.3 Rights Not Exclusive. The rights provided for in this Agreement and
--------------------
the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
ARTICLE IX
MISCELLANEOUS
-------------
9.1 Amendments and Waivers. No amendment or waiver of any provision of
----------------------
this Agreement or any other Loan Document, and no consent with respect to any
departure by the Borrower therefrom, shall be effective unless the same shall be
in writing and signed by the Banks and the Borrower and then any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
9.2 Notices. (a) All notices, requests and other communications shall be
-------
in writing (including, unless the context expressly otherwise provides, by
facsimile transmission, provided that any matter transmitted by the Borrower by
facsimile (i) shall be immediately confirmed by a telephone call to the
recipient at the number specified on Schedule 9.2, and (ii) shall be followed
------------
promptly by delivery of a hard copy original thereof) and mailed, faxed or
delivered, to the address or facsimile number specified for notices on Schedule
--------
9.2; or, as directed to the Borrower, to such other address as shall be
---
designated by such party in a written notice to the other parties, and as
directed to any other party, at such other address as shall be designated by
such party in a written notice to the Borrower and each Bank.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon the third Business Day after the date
deposited into the U.S. mail, or if delivered, upon delivery; except that
notices pursuant to Article II or IX shall not be effective until actually
---------- --
received by each Bank.
(c) Any agreement of the Banks herein to receive certain notices by
telephone or facsimile is solely for the convenience and at the request of the
Borrower. The Banks shall be entitled to rely on the authority of any Person
purporting to be a Person authorized by the Borrower to give such notice and the
Banks shall not have any liability to the Borrower or other
-44-
Person on account of any action taken or not taken by the Banks in reliance upon
such telephonic or facsimile notice. The obligation of the Borrower to repay
the Loans shall not be affected in any way or to any extent by any failure by
the Banks to receive written confirmation of any telephonic or facsimile notice
or the receipt by the Banks of a confirmation which is at variance with the
terms understood by the Banks to be contained in the telephonic or facsimile
notice.
9.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay
------------------------------
in exercising, on the part of any Bank, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege.
9.4 Costs and Expenses. The Borrower shall:
------------------
(a) whether or not the transactions contemplated hereby are
consummated, pay or reimburse within five Business Days after demand (subject to
subsection 4.1(g)) for all costs and expenses incurred by each Bank in
-----------------
connection with the development, preparation, delivery, administration and
execution of, and any amendment, supplement, waiver or modification to (in each
case, whether or not consummated), this Agreement, any Loan Document and any
other documents prepared in connection herewith or therewith, and the
consummation of the transactions contemplated hereby and thereby, including
reasonable Attorney Costs incurred by such Bank with respect thereto; and
(b) pay or reimburse each Bank within five Business Days after demand
for all costs and expenses (including Attorney Costs) incurred by them in
connection with the enforcement, attempted enforcement, or preservation of any
rights or remedies under this Agreement or any other Loan Document during the
existence of an Event of Default or after acceleration of the Loans (including
in connection with any restructuring regarding the Loans, and including in any
Insolvency Proceeding or appellate proceeding).
9.5 Borrower Indemnification. Whether or not the transactions
------------------------
contemplated hereby are consummated, the Borrower shall indemnify and hold each
Bank and each of its respective officers, directors, employees, counsel, agents
and attorneys-in-fact (each, an "Indemnified Person") harmless from and against
------------------
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses and disbursements (including Attorney
Costs) of any kind or nature whatsoever which may at any time be imposed on,
incurred by or asserted against any such Person in any way relating to or
arising out of this Agreement or any document
-45-
contemplated by or referred to herein, or the transactions contemplated hereby,
or any action taken or omitted by any such Person under or in connection with
any of the foregoing, including with respect to any investigation, litigation or
proceeding (including any Insolvency Proceeding or appellate proceeding) related
to or arising out of this Agreement or the Loans or the use of the proceeds
thereof, whether or not any Indemnified Person is a party thereto (all the
foregoing, collectively, the "Indemnified Liabilities"); provided, that the
----------------------- --------
Borrower shall have no obligation hereunder to any Indemnified Person with
respect to Indemnified Liabilities resulting solely from the gross negligence or
willful misconduct of such Indemnified Person. The agreements in this Section
shall survive payment of all other Obligations.
9.6 Payments Set Aside. To the extent that the Borrower makes a payment
------------------
to the Banks, or the Banks exercise their right of set-off, and such payment or
the proceeds of such set-off or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required (including
pursuant to any settlement entered into by such Bank in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
Insolvency Proceeding or otherwise, then to the extent of such recovery the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such set-off had not occurred.
9.7 Successors and Assigns. The provisions of this Agreement shall be
----------------------
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Borrower may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of each Bank.
9.8 Participations, etc. (a) Any Bank may at any time sell to one or
--------------------
more commercial banks or other Persons not Affiliates of the Borrower (a
"Participant") participating interests in any Loans, the Commitment of that Bank
------------
and the other interests of that Bank (the "originating Bank") hereunder and
under the other Loan Documents; provided, however, that (i) the originating
-------- -------
Bank's obligations under this Agreement shall remain unchanged, (ii) the
originating Bank shall remain solely responsible for the performance of such
obligations, (iii) the Borrower shall continue to deal solely and directly with
the originating Bank in connection with the originating Bank's rights and
obligations under this Agreement and the other Loan Documents, and (iv) no Bank
shall transfer or grant any participating interest under which the Participant
has rights to approve any amendment to, or any consent or waiver with respect
to, this Agreement or any other Loan Document, except to the extent such
amendment, consent or waiver would postpone or delay
-46-
any date fixed for payment of principal, interest, fees or other amounts
hereunder or reduce the principal of or rate of interest specified herein. In
the case of any such participation, the Participant shall not have any rights
under this Agreement, or any of the other Loan Documents, and all amounts
payable by the Borrower hereunder shall be determined as if such Bank had not
sold such participation; except that, if amounts outstanding under this
Agreement are due and unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall be deemed to have the right of set-off in respect of its participating
interest in amounts owing under this Agreement to the same extent as if the
amount of its participating interest were owing directly to it as a Bank under
this Agreement.
(b) Notwithstanding any other provision in this Agreement, any Bank
may at any time create a security interest in, or pledge, all or any portion of
its rights under and interest in this Agreement and the Note held by it in favor
of any Federal Reserve Bank in accordance with Regulation A of the FRB or U.S.
Treasury Regulation 31 CFR (S)203.14, and such Federal Reserve Bank may enforce
such pledge or security interest in any manner permitted under applicable law.
9.9 Confidentiality. Each Bank agrees to take and to cause its Affiliates
---------------
to take normal and reasonable precautions and exercise due care to maintain the
confidentiality of all information identified as "confidential" or "secret" by
the Borrower and provided to it by the Borrower or any Subsidiary under this
Agreement or any other Loan Document, and neither it nor any of its Affiliates
shall use any such information other than in connection with or in enforcement
of this Agreement and the other Loan Documents or in connection with other
business now or hereafter existing or contemplated with the Borrower or any
Subsidiary; except to the extent such information (i) was or becomes generally
available to the public other than as a result of disclosure by a Bank, or (ii)
was or becomes available on a non-confidential basis from a source other than
the Borrower or any Subsidiary; provided, that such source is not bound by a
--------
confidentiality agreement with the Borrower known to the Bank; provided,
--------
however, that any Bank may disclose such information (A) at the request or
-------
pursuant to any requirement of any Governmental Authority to which the Bank is
subject or in connection with an examination of such Bank by any such authority;
(B) pursuant to subpoena or other court process; (C) when required to do so in
accordance with the provisions of any applicable Requirement of Law; (D) to the
extent reasonably required in connection with any litigation or proceeding to
which any Bank or their respective Affiliates may be party; (E) to the extent
reasonably required in connection with the exercise of any remedy hereunder or
under any other Loan Document; (F) to such Bank's independent auditors and other
professional advisors; (G)
-47-
to any Participant, actual or potential, provided that such Person agrees in
writing to keep such information confidential to the same extent required of the
Banks hereunder; (H) as to any Bank or its Affiliate, as expressly permitted
under the terms of any other document or agreement regarding confidentiality to
which the Borrower or any Subsidiary is party or is deemed party with such Bank
or such Affiliate; and (I) to its Affiliates.
9.10 Set-off. In addition to any rights and remedies of the Banks
-------
provided by law, if an Event of Default exists or the Loans have been
accelerated, each Bank is authorized at any time and from time to time, without
prior notice to the Borrower, any such notice being waived by the Borrower 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 by,
and other indebtedness at any time owing by, such Bank to or for the credit or
the account of the Borrower against any and all Obligations owing to such Bank,
now or hereafter existing, irrespective of whether or not such Bank shall have
made demand under this Agreement or any Loan Document and although such
Obligations may be contingent or unmatured. Each Bank agrees promptly to notify
the Borrower after any such set-off and application made by such Bank; provided,
--------
however, that the failure to give such notice shall not affect the validity of
-------
such set-off and application.
9.11 Automatic Debits of Fees. With respect to any fee, or any other cost
------------------------
or expense (including Attorney Costs) due and payable to any Bank under the Loan
Documents, the Borrower hereby irrevocably authorizes such Bank to debit any
deposit account of the Borrower with such Bank in an amount such that the
aggregate amount debited from all such deposit accounts does not exceed such fee
or other cost or expense. If there are insufficient funds in such deposit
accounts to cover the amount of the fee or other cost or expense then due, such
debits will be reversed (in whole or in part, in such Bank's sole discretion)
and such amount not debited shall be deemed to be unpaid. No such debit under
this Section shall be deemed a set-off.
9.12 Notification of Addresses, Lending Offices, Etc. Each Bank shall
------------------------------------------------
notify the Borrower in writing of any changes in the address to which notices to
such Bank should be directed, of addresses of any Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of such
other administrative information as the Borrower shall reasonably request.
9.13 Counterparts. This Agreement may be executed in any number of
------------
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
-48-
9.14 Severability. The illegality or unenforceability of any provision of
------------
this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
9.15 No Third Parties Benefited. This Agreement is made and entered into
--------------------------
for the sole protection and legal benefit of the Borrower, the Banks, and their
permitted successors and assigns, and no other Person shall be a direct or
indirect legal beneficiary of, or have any direct or indirect cause of action or
claim in connection with, this Agreement or any of the other Loan Documents.
9.16 Governing Law and Jurisdiction. (a) THIS AGREEMENT AND OTHER LOAN
------------------------------
DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF ILLINOIS; PROVIDED THAT THE BANKS SHALL RETAIN ALL RIGHTS ARISING UNDER
FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF ILLINOIS OR
OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWER AND THE BANKS CONSENTS, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF
THOSE COURTS. EACH OF THE BORROWER AND THE BANKS IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
--------------------
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE BORROWER AND THE BANKS EACH WAIVE
PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE
BY ANY OTHER MEANS PERMITTED BY ILLINOIS LAW.
9.17 Waiver of Jury Trial. THE BORROWER AND THE BANKS EACH WAIVE THEIR
--------------------
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR
PARTICIPANT, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.
THE BORROWER AND THE BANKS EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION
SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING,
THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS
WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER
PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
9.18 Entire Agreement. This Agreement, together with the other Loan
----------------
Documents, embodies the entire agreement and understanding among the Borrower
and the Banks, and supersedes all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Chicago, Illinois by their proper and duly
authorized officers as of the day and year first above written.
SIGNATURE FINANCIAL/MARKETING, INC.
By: ______________________
Title: ___________________
THE BANK OF NEW YORK
By: /s/
-------------------------
Title: ______________________
THE BANK OF NOVA SCOTIA
By: /s/
-------------------------
Title: ______________________
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